Hivemind: AI Frameworks, Bitcoin L2s, and Death of OG Memes

Transcript

there's a small number of people in Silicon Valley and Tech circles and the terminally online who understand what AI is going to do and what it means for the for the world how big it is and I think over the next few years the rest of the world is going to realize that and I really think it's going to be the biggest bubble in financial like like history we basically made it a bet when it was like two bucks or something two bucks go above $33.40 and after the week after the election I got crushed so I said I would I would wear this this is a good time I would wear this on the podcast so right now you look good yeah you look cute you look really good dude nothing set on the hive mind is a recommendation

to buy or sell Securities or tokens this podcast is strictly for informational purposes only and any views expressed by anyone on the show are solely our own opinions not Financial advice [Music] hi everyone and welcome to another episode of the hive mind podcast the goal of the podcast is to provide an inside look into what we like to call the Del hive mind bringing together some of our brightest Minds from each of the divisions to share insights Alpha and [ __ ] posts today Yan's at a wedding so we have uh an unusual crew I think it's the first time we've had us four on

together cedis parabus uh heads up our institutional research arm regular on the hive mind um Yan's not here and we have Duncan the the prodigious um shitcoin scavenger an investor and Jason who um is head of markets for the research Division and obviously me uh I head up Deli Labs our protocol r& drr focused on incubating and accelerating New web3 Primitives so it's been a very volatile week in crypto maybe we can start by just talking a bit about markets like right now we're recording on Wednesday um at about 400 p.m GMT uh bitcoin's back up near 100K we've had a bit of a bounce from the lows

where it touched below 90 U maybe Jason you want you want to kick us off with like just just quickly what happened with with the macro why we're pumping today the CPI I know it's not particularly interesting maybe we can rush through it and then just get everyone's takes on where we are and whether anything's changed for you and and your thesis yeah for sure um so yeah like Jose just said it's been a pretty volatile couple weeks actually right uh pretty much dating back to the start of the year we had we had a sell off pretty much with the fomc at the end of December uh we were at 100 a I'm pretty sure I was that maybe one of the last times I was on I was like yeah markets look great and then within a couple hour within a couple hours we nuked from like

100k down to low 90s and then to start the year we had a nice little pump which sold off everybody got liquid in the last hive mind we were like had the most bullish targets ever for crypto in 25 and proceeded the market proceeded to dump pretty much the same same yeah we have a we have we have an excellent track record when it comes to uh bull posting on here well I think we were bull posting the AI Frameworks and stuff and then they all got cut in half and like the next couple days wait when was for that back now they're so back now my my big takea away from the dump and so are we kind of like we're whatever digressing here um my be a take away from like the dump and this rebound here

is that like nothing has changed fundamentally with like sectors and what people are interested in like the things that are outperforming the most on the bottom are virtual in a6z right um you're still seeing Bitcoin outperform most things um you're not really seeing like some broad defi rotation old memes or still not really doing much it seems like that's kind of a sector that people aren't interested anymore so from my perspective it's just it's it's same old it was just we had this wipe out and some of it was Mac related and then other like the other stuff was we talked about this last time a lot of these charts were kind of nutty

over the past few weeks and it like people you know things that go up a lot have to come down by a decent chunk too it's just like these are the way things go so yeah I don't really think there's been any material changes from my opinion from my point of view and like now you know Trump's coming in Monday so yeah I generally agree I mean we had that like pretty big liquidation what was it I guess on Monday this week where we kind of tested like 89 or something like that and a lot of that was like positioning you you kind of had like the news last week of like the doj trying to sell six billion dollars of of their was like fake or regurgitated or like yeah

still not exactly sure what what was going on with that but right like the closer you get to the inauguration without anything like materializing from that obviously is probably bullish right because if if it was real and they were planning on selling but they don't sell by time Trump comes into office they're most likely not going to sell so that's you know uncertainty removed from the market right like kind of what s said like I don't think anything's really changed I think most of what you've seen from the start of the year to now has just been kind of like really jittery positioning trying people trying to like I don't know either front run the inauguration front run news uh getting wiped out because of the you know heighten volatility you've you've you've

had like volatility in trafi too with like the S&P too so it's not just crypto it's been it's been a pretty volatile couple weeks I just yeah I don't think anything's really changed and I think with you know the the macro prints coming in today like uh better than expected I think it kind of increases you know more near-term targets I am slight like it's kind I I guess it's like kind of counterintuitive like the more you run up into like an event like the more likely the event becomes like a more like a sell the news in the short term right so like in terms of like the inauguration on Monday like if Bitcoin keeps running up from now until then like I would be kind of worried that like it materializes in some kind of like

mediate term drisking kind of like what you saw with the ETFs we ran up into the ETF approval a couple days later we sold off and then we resumed uh you know up only back up to like like 60 70k so like if if we continue running up in the next couple days like I'll probably be more worried about an immediate term selloff on the inauguration versus if we kind of just like puts around and maybe like do a little bit of consolidating beforehand um but then again right like Trump could come in and just like start off with a ton of executive orders like he did in 2016 some of those aimed at crypto which will move the market like Market's not that liquid compared to

everything else and if he if he was able to move trafi markets last time around he he'll be a he'll move these markets much much more easily yeah people like are asking me my Outlook and I'm just like sending them the photo of Donald Trump Jr with sailor and like the fact that like Baron Trump's like into cryto like all of his kids and his like entourage is into crypto and it just feels like um I don't know I saw this thing on Twitter could totally be not true but kind seems to check out if all of his children are in crypto where like Trump looks at the Bitcoin price and he kind of sees it as like the stock market for young people um again I don't know if that's true or not I think it's a

pretty believable story given all of like his kids and um like young people he he's very close to are are into crypto and the ability for him to move you know the stock market versus crypto you know it's a lot easier like Jason said for him to move crypto and if he like uses that as like a scoreboard for like young people talks about being the next crypto the first crypto president or Bitcoin president um I think that there's like a lot of levers he could pull to to help crypto out but obviously we've had like a massive runup after the election and we're just digesting it here and I think yeah really the magnitude of of the move we'll have is kind of dependent on the like what Trump actually does with

crypto and then also the levers like he has like people he's appointed pull within um like the bigger macro market like the like Scott Benson what what he does as a treasury secretary and stuff yeah um I'm I'm pretty much on the same page felt like a pretty good kind of buying opportunity having this dump before Trump trump gets elected I think the it's like pretty easy to just take a left curve take on Trump being elected there's a lot of easy wins he can have with with crypto there's literally a crypto bll happening in Washington like this thing went from the the industry that no one wanted to touch that was

just like overwhelmingly hated now there's a crypto Bowl there's going to be like a crypto advisory Council we have a crypto andar just just don't overthink it I think um it feels like like Trump is is definitely bullish CPT I mean obviously the be case is that um he he doesn't deliver anything which would be not unheard of for a politician to make promises that they don't keep it's sort of the Playbook and Trump in particular it doesn't seem like the most trustworthy guy um but I I just think it it aligns with his interests to to do so most likely so I'm I'm I'm pretty bullish and I actually bought a bunch of the AI framework coins that I'm missed on this on this uh dump um just because

yeah I don't know my take on it Remains the Same like I think there's a lot of vapor with the with the AI agentic framework things but um I just think AI itself is going to be the biggest Narrative of 2025 like my My overall take is just that we're going to get AGI in 2025 like the capex numbers by the hyperscalers are just absurd like Microsoft on their own are going to spend 80 billion pretty much all the other hypersal scalers are spending every single dollar of free cash flow on on capex for to to build out compute to train AIS um you have like inference time compute now and I I just think the progress in 2025 is actually going to accelerate from 2024 we're going to get AGI um right now mean so AGI to me means um like matches or exceeds human level

capability across a variety of fields and and probably also has like some agentic capabilities which means they can take actions on on your behalf but like basically like a PhD level intelligence across like every field uh that can act as a research assistant like an investment analyst like this kind of thing and to me it's like right now there's a small number of people in Silicon Valley and Tech circles and determinately online who understand what AI is going to do and what it means for the for the world how big it is and I think over the next few years the rest of the world is going to realize that and I really think it's going to be the biggest bubble in financial like like history just because like it has the

strongest fundamentals right out of and and it's easiest to tell big stories around the things with the strongest fundamentals right you've never had a technology with I think this strong fundamentals this early on like the revenue that that open a is generating and I think the revenue that that the coding assistants in particular are going to generate and so I I just think like uh even with strong fundamentals humans can always obviously like get will always get over excited about things they always be cycles and I I just think AI is in at the beginning of like I think the the big AI bubble is is sort of yet to come and to me it's like inevitable that that just even even if you assume that crypto AI has no fundamentals whatsoever which which I don't think is the case like we've made the case for the fundamentals of them

we've published research about it don't need to go over that but even if you think it has no fundamentals I just think the flows on their own like H how do you play this AI narrative like the the the mag 7 are really overpriced you can't like gamble well they're not overpriced but they're they're actually pretty cheap compared to Tel in in 2000 but you can't really gamble your way out of the underclass by buying big Tech right and then stock picking is really hard people think it's kind of a rigged game VC is not available to 99.9% of the population so what's left punting on crypto AI coins um and and I just think the sector like the agentic sector is at 10 Bill the crypto AI as a whole is at 50 bill and I just think it's GNA as we said in the predictions episode it's

just going to keep going up and you want to have own the just a basket of the the fastest horses I think I mean this has been my thesis on it from the beginning is I didn't have a good thesis on it but it just seemed pretty obvious that it was going to get a lot bigger and it's kind of like you know like eight first research second It's Kind it's kind of like Get exposure to whatever seems hot and then when something real comes make sure you like identify that within the sector but you're kind of just like betting on the sector to grow at the same time what you saw over the past like week before today is a good um what's the word I'm looking for like

a good thing to keep in mind that you know I think a lot of people have this thesis that they're not really sure how these things are going to keep value and so when you see sell-offs especially when they run up a lot like they are pretty vicious um and so I imagine throughout this year like you know I'm definitely not dying in handing AI coins like all year um I think you're going to get some pretty vicious wipes like you've seen there's been some pretty nasty rotations on chain like I've seen people talking about this one framework two days ago when the other coins were down a bunch and now those ones are all up a lot and this one's down 50% in like two days right and so it's

definitely uh yeah I don't know it's again I I agree I think it's going to get a lot bigger I still think it's kind of it seems like the leaders now are you know virtual in n6z but I don't think that they have some insane like stronghold on it uh it seems like it can be challenged pretty easily to me and it's like the TOA thing right it's like why aren't people buying to and it's like to was the only game in town for a while and now there's a lot of things that actually people are using and were valued like and don't have the crazy emissions right and so I think the same thing goes for like virtual AI 16z all the other ones um that I don't think

they have some insurmountable moat or something and so it's uh yeah you just got to be like paying attention all the time what do you think the moat currently is for things like ai6 Z or virtuals because obviously like they are the current leader right now like it's kind of Undisputed at least from from where we stand today so like what is that is it just that you know AI 16z GitHub everybody's using it like virtual proxy like I think virtuals is probably a strong I think like virtuals is a safer of the two um virtuals has like it actually has built-in value Cru like to today they announced over the next 30 days they're

topping like 30 40 mil at like current prices of the agent tokens um they have this you know they I don't think the pairing with virtual is like that big of a value sync but the fact that like you need to pay in Virtual to launch these agents and everything um is good a6z is totally it's just like pure you're just kind of betting on the fact that Eliza is a is a very used framework and that uh there'll be a way to like monetize that it's definitely um a6z is definitely overall just like more of like a shizo um it's like the cathedral and the bizaar right and so Cathedral is virtual and bizar is a6z and it also kind of

just goes with like Bas or like etherum versus salana too right um Salon is definitely more like bizarre type it's a bit more all over the place so yeah I don't know at the end of the day too it's like these agents this is the first narrative too that you've kind of seen people not really care about what chain it's on I mean obviously there's always going to be people that care about that but you're seeing more and more people like not care too much because at the end of the day what are you really putting on chain with these agents it's like for a6z it's just their fund or whatever uh for virtual it's like the liquidity pools and stuff but you know a lot of the agent a lot of the code is

like offchain and there's no re like these these agents can do things on different chains so it's mostly just like where you're trading trading the tokens and everything right so um I think it's just tension basically is the the main Moe right like cuz your your ability like the Launchpad is the is really the thing that captures value here and your ability to charge value as a Launchpad is based on how many users and eyeballs you you can bring to the Token right and whether that's more than than what you're charging that's the reason binance can charge projects three to 10% of their their supply to do launch pools right and virtuals is proving that they're they're able to to do that and I think that's really the only mode and that's

going to be very very I think fickle so I agree with you said there's going to be brutal rotations not sure I'll I'll catch them um I'm hoping that that there will be time to to sort of see different things coming different different platforms emerge and and be able to to kind of drisk because you yeah like the tows I think is a really good example and I think the current leaders will get toed like uh you know there there's right now they're the way to bet on this narrative and there's going to like better ways are going to emerge and also new narratives within AI are going to are going to emerge and so once you see that happen um I think it's it's wise to kind of keep reallocating so it's definitely like a trade here rather than something I think you can you can safely

hold for the for the long term at least for me I haven't seen any of the teams for various different reasons that I'm like really confident backing um for the long term yeah like I think you can say oh I want to own the picks and shovels but you can't be certain that these picks and shovels are still the picks and shovels and like by the end of the year right yeah like pump fun has had like is pretty pretty dominant on that side of of the launchpads like why you don't think virtuals can can keep that up for a while or well from what I understand their actual Frameworks aren't really that good um and so it's more so the ease of launching them that has been the reason

a lot of people have used it but a like the Thousand X guys they launched a uh agent and they launched it through virtuals but they switched to Eliza framework recently so it's still in it's still a virtuals agent right and it's still like paired with virtual and it's still on base and everything but the actual framework the actual Tech they're using is Eliza the worst thing you can do with with this stuff is go use the products yeah like I think like you saw that with THX like there were super bullish virtuals and then they like used the product they switched to a6z and like on the last PA they sounded way less bullish virtuals and I think that's a mistake a lot of people are going to make in this in this market which sounds

ridiculous but um unfortunately or fortunately it's it's sort of it's sort of true and like the other thing with virtuals and the AI coins is I kind of tweeted this today but I was like uh bearish and uh just for the reasons that that we've discussed on the p and then I spoke to a bunch of other people smart people and I so a lot of others were bearish too um and that's when I realized I was the middle of the bell curve and uh and there was a lot of people still left to buy this thing because at some point on Twitter it looked like this was all people were talking about and everyone had had bought um but actually when I spoke to people I realized there was actually a lot of sidelined kind of bears uh people who didn't really believe in the

narrative and that also gave me some more conviction to to sort of to ape The Narrative is definitely there it's just like there's definitely money like you said gonna be chasing this stuff it's just like right now these are the only like credible things to buy that like perceived as credible things to buy so it's kind of like all the money's flowing into them versus if there's more credible things that launch in the future that like actually have more of a long-term business or are better more remote I think like those will probably do really well yeah we had a podcast like I don't know two three months ago or something we talking about meme coins

you know if they're good bad whatever my my thing then was like I think this meme coin capital is waiting for something to buy and it's not like it always wants to trade meme coins and it's kind of just playing this Hot Potato game until something comes it does seem like the AI stuff is is this and I'm curious Jason's take on like the OG memes because it's like objectively they have been quite like weak and I also don't really see people I see Morad on Twitter still you know talking about believing in stuff but I don't see a ton of people talking about the like OG memes anymore right it maybe I don't know maybe this

is like a temporary thing um but it does seem like a lot of attention has shifted from those yeah real quick before I give you my thoughts on that um I know we we kind of had a little discussion in some of our Deli chats um yesterday or the day before around Larry's tweet and I kind of wanted to get your guys' take on it because you guys are more in the weeds with this stuff and he pretty much said uh I'm going to read it right here it said the crypto AI agent Frameworks have little to no technical Merit any big tech company can recreate the same functionalities in no more than a few weeks uh versal AI for one is strictly better Tech AI 16 doesn't even break into the top 10 in GitHub starts uh yet valued at over 1 billion so kind of

curious like do you guys like agree with that do you think it's like directionally right but it doesn't really matter because there's no way for anybody to get exposure to this stuff outside of like Jose said mag 7even or these types of uh crypto related projects yeah I think it's like kind of what I just said it's like there these are the only things to buy that seem credible and like so much money because this is such a big narrative wants to chase this um and especially like so much money relative to how big these things are and the liquidity on them yeah that's basically my take too for what it's worth we're we're currently doing and again I'm I'm um not a Dev but we are currently doing a deep dive into all the

platforms um Us in research so labs in research and we have some some some devs looking at it so looking to get a lot more conviction on this kind of uh over the next few weeks as as we dive deeper and figure out like what the actual technical trade-offs are between some of these platforms um Larry's probably right um although although it's not saying much that like a big tech company can recreate it in in a few weeks right like that's sort of pretty pretty high bar um but yeah I kind of agree with Duncan and then on memes uh I sort of share the same my my opinion at the time was that AI is just a bigger meme than than all of than a dog with a hat right and it's easier to tell big stories and

get people excited about about memes that have at least some possibility of fundamentals and I kind of still think that and and I do think um you're going to see just like a shift not just from memes but from from from most kind of sectors in in crypto towards I think most flows will will go into Ai and 2025 but I think memes more so just because it's sort of more direct I don't know I think people were were like I just think AI agent memes are sort of superior to to traditional memes and I think the memes you can tell around this are much bigger but I'm very curious to hear your take Jason um yeah so I think uh probably generally agree like I think it's like

not necessarily like maybe a function of them being better memes it's just like I just think the market got tired of like to ced's point just kind of got tired of aping memes for a year right like over a year almost um there's only like so much fun you can have buying fog or dog with hat or Bonk or whatever right like like I it's like great to make money everybody loves doing that it's fun yeah but like at the end of the day most people like I generally think want to buy something that at least has like a tangible value or at least a path to it right what no I I do like just because I think that

doesn't mean I'm going to buy those things when the market is obviously telling you that's not what people care about at the time like you can hold these two beliefs at the same time right they're not mutually exclusive and I think that's generally what makes a a a decent tactical Trader is like doesn't really matter what I believe or want to be true what matters is what the market is telling you right and so for like most of 2024 the market was telling you like for whatever reason you could ascribe any reason to it that it preferred memes whether or not that's because you didn't have new people coming in is that because people are front running what they saw in previous Cycles is that because the regulatory

environment sucked like whatever it is whatever the actual reason is nobody will ever like fully know it just like the market was telling you this is the sector it liked and since November or uh I guess mid November roughly with with like goat um the market has clearly been telling you it it likes Ai and I kind of agree with Jose like back then I was talking like I'm like goat is not an agent like truth terminal is an agent but goat the coin is a meme right like I was getting getting not into arguments but I was getting into these long like back and forths in our Del chats I'm like it's not a it's not it's nothing other than a meme and I do hold that belief for most of these things still like most of them are still just memes with more complex stories I guess like

Jose said that you could tell um does that mean OG memes are dead forever no I I don't think so right like I think a bunch of OG memes are probably going to do General well um what do you mean o like the memes that were March I think are kind of cooked no no not like I think most memes and I think most of these agents too are are going to be cooked right like someone needs to tell the coinbase listing team that memes are uh kind of dead at this point I I yeah yeah everything you're saying makes sense to me I think I think honest yeah a big part of it is just it's a new game people like having new games game right that's good way of putting it yeah but

just like look at like a doge chart for example like Doge doesn't look topped to me well Doge I feel like is a bit of an exception to uh I think it's I think it's a good Benchmark for General memes I know but like Doge has fundamental drivers sir The Meta has like no the meta's definitely shifted has shifted and the easy money is an agents and AI for sure but I I don't think like does that mean I would be buying Bonk above two billion or whiff above no probably not but does that mean all memes are done no I just I don't think they're going to be like kind of what I wrote about in the year ahead like I just

don't think they're going to be the only sector that's like worth putting your money in this year I think there's going to be others and by definition that's bearish relative for memes right because they were the only thing that people really were aping last year and now for whatever reason oh Trump's coming in so you could buy fundamental coins because now a bunch of people are going to be more okay with investing in crypto so I could maybe look at defi coins or or things like Athena or you know now that we have a crypto and aiar in the White House like maybe I just buy all the AI coins because there's going to be some bullish Catalyst there right like yeah well yeah I think that you know over a long enough period of time anything that

doesn't have an actual business like outside of a few things that have like reached escape velocity and like mind share velocity like Bitcoin or Doge right like yeah but like there's I like they're trying to do something right but like for the vast majority of things you know if you don't have a business behind them they are probably going to Trend toward zero overtime and especially with the rate of which new launches are happening that being said I have lost a bet to Jason on with even though it's at $1.70 right now so I got we basically made a bet when it was like two bucks or something two bucks yeah go above $340 and after the week after the

election I got crushed so I said I would I would wear this this is a good time I would wear this on the podcast so right now you look good yeah you look cute you look really good dude Jason are you happy dun hat wasn't there a full dog suit that was discussed at some point there was I couldn't find one like he dis ordered me to have but it's at a170 now which is like you know to me all this stuff is gonna get crushed I do I know lost that that's why I have the Hat on I do believe so I do agree with your point about in the long run stuff without like an actual fundamental case

isn't really going to last I think with infra we are fully entering this era with infra that if there's not a long-term Revenue story like people are not going to buy the token um I really do believe that like l1s and infr tokens are starting to get valued by the actual economics that they generate right I think that you know you look at blockworks put out some of these charts yesterday um out of all the applications in in crypto over 50% of Revenue now is driven by salana applications from an rev perspective like economics to a specific chain

salana is like 40 50% or something like that if if like by the end of the year salana is like 80% in both of these metrics it's very hard for me to believe that you know these softer intangible non-quantifiable metrics um like I'm starting to actually believe in so Soul potentially flipping eth whereas I was I never really believed in that before I thought Soul was definitely very undervalued versus eth um but I do believe that it could happen because when if if it gets to the point where it's like 80% of revenues are coming from salana it's like so you're just

tell metrics what are the two metrics like Revenue that applications generate which isn't that's not like to one to one but it's a good it's like chain GDP people are kind of terming it the other one's R which is the most objective measure of like economic value that a chain is generating right so like if salana is doing 80% of the industries if 80% of the like Revenue being generated in the industry is some salana it's very hard for me to see like why would it not actually flip at that point because then you're just you're just going off of these softer you know well theorem has more developers or theorem is more decentralized or you know theorem has all these rollups but none of these

things are direct hard metrics that actually specifically are linked to the Token right like the only thing linked to the Token is the feed like the in the economics that it generates right everything else is like a softer metric and so I am very curious if like these metrics keep going they're just going in One Direction it's very hard to see like things can definitely change on a dime it happens a lot in this industry and it could definitely happen with salana maybe like their scaling hits a hits a bottleneck or maybe fire dancer is a big disappointment or something like that but if they do continue on this track I don't know there's like a real discussion that ends up happening when

it's doing so much more Revenue than everything else I think what you're saying makes total sense and we saw like a bubble in infra tokens like high FTV low float and memes now maybe it's going to be in the current AI meta obviously AI as a whole is not um like it could be really big but like the current tokens that that are are going crazy right now it just like over time the market is going to return to like some sort of equilibrium and like these fundamental coins are GNA have buyers at a certain floor price if they're generating Revenue ver versus like these meme coins or these like insanely overvalued infr tokens like you you know it's very hard

to put a floor on them because they make like no money and you have to use these more like subjective metrics versus the market can like rally around more objective like data um for these other things so I completely agree with you and I think it's like a good sign of a maturing Market that these like infra tokens that were insanely overvalued or these high FTV low flow tokens or these meme coins are you know losing Steam and then people are focusing on things that actually you know have more real businesses attached to them and make fundamental sense I do think though like first of all I think there's a lot of flows with the metrics like revenue generated by

apps um like I looked into it it looks like it's just mainly accounting for for dex's and like onchain money markets and stuff um and like or or is do you know if pump fun for instance is is is counter for in that Athena included on the eum side yeah yeah so and and what they're taking like um what what's where you getting the stat from actually uh block works as a dashboard okay yeah I need to look into that see what's ethereum they have at 17.9% Salon is 56.8 base is 8.7 BNB 4 arbitr 1% but it's just like you see the

salana like the percentage just keeps going big it just keeps growing more and more and the same thing's happening with RV with salana it's like R is like you know first of all it doesn't all acre to salana right like part is is accre to uh no that goes to salana jto takes a small sliver off to like the own but that's not included in rev all of that is directly tributal to like stakers sets what but then there's also like um the fact that you know as Salon me actually gets fixed you have something

like PBS or whatever won't this RV go down quite a lot um well if you do like app specific sequencing then yeah theoretically like the this will go down because more will go to the applications versus salana right um I think people are I think app specific sequencing is this new meme that like crypto researchers love this thing and I think it's kind of oversold in the sense that people believe that apps will just take 100% of the economics that they generate on the Chain but to me it's pretty clear that it's not that like there is a there

is a synergistic relationship between the application and the L1 and the validators and there's some sort of like bargaining here and right now yes the L1 takes all 100% of it that's not going to last but even if the L1 takes like 30% of that and the app takes 70% of that in the long run and then you just get way more applications anyways because you keep scaling the chain they it's still the math still works out that it's like very beneficial for the L1 right so I do believe that in the long run apps and app I do I do like app specific sequencing more than app chains um because you do keep it on the same shared state but there's still a lot of trade-offs with specific this [ __ ] term um there's still a lot of trade-offs like you are

inventing it's like you know every time you invent one of these new kind of like um me mechanisms it's another like centralizing force in in a sense too right and so yeah I do think that like unich chain is the first one that is doing pure app sequencing from like day one um so that's I'm very interested to see like how uni chain does because because you know as we talked about before the main reason people always say to make app chains is to like capture all your own economics right and it's also like when you look at the E like the GDP chart you know all the most profitable apps are on ethereum and people will look at that and say yeah they should

make their own app chain it's like what like you're literally going against what the fundamentals are telling you like the most profitable apps are on salana like why would they leave like like because oh because they can capture more me you're not thinking about the tradeoffs of doing that and like if pump went and made like pump works well just because it's on salon and like yes maybe in like a hypothetical perfect world in the long run it'll be better as its own chain or something but it's just like yeah yeah like you're tapping into that pool of capital on on the shared State and just like I do think that's probably a big part of it it's really it's like what this is all about right it's like

the shared State like who I don't know how much Shar State matters I think yeah I don't know I just don't think you you see that mattering that much I think salana mainly is just a great product like it's it's fast it works well like I'm I'm definitely bullish so but I do think l2s are like l2's had a great year when when you look at l2's as as the aggregate it's just that there's no token to ape and it doesn't benefit eth right as a product yeah but you had a bunch I mean tvl across l2's like doubled I think it started off at something like 22 and it's at 4 B base puts customer deposits on base that's the majority of their tvl I don't think where'd you get that

from them they put customer deposits on base that's where they do the accounting so like how is that like a real fundamental driver that's just a centralized exchange doing their accounting on their own proprietary blockchain it's like well and then and then hyper liquid is a big reason for I guess H liquid is like couple bill it's not crazy um yeah yeah I don't know like uh and you had a bunch of L2 announcements right like there's it's just proving to have product Market fit with Builders who have successful ambitious Builders have successful products and want to build an ecosystem whether it's like penu or like Athena Network um like there's there's a bunch

of I think examples I think people are going this route more and more um yeah none of those are live though wait I have a question for cedus if you if there's like a wallet that has really good chain abstraction ux do you think that this stuff matters less like that's my argument basically yeah I do think it's mainly ux rather than actual shared State you can never I mean you can never do chain abstraction you can never it'll never be the same as if everything was on one state machine because there's inherent latency between using different so it it would be nice to like yeah do everything for instance like the lighthouse app portfolio portfolio tracker that's like chain abstraction in a sense you don't do anything with it but it consolidates all your stuff

across all these different chains right that's like very nice and so it's very nice to yeah if you could use all your different chains from one thing front end uh from one front end yes but if you're but still if you're ever going to go between State machines it's you're always going to have degraded performance right is that that definitely feels like the end game is like for at least like consumer crypto like monetizing yeah I do think it's I do think though chain abstraction is more of a problem than a solution like I think that it it is it has become because of bad design choices that have led the industry to this path basically but like not creating performance scalable blockchain systems but I don't

think so just even if you had a performance scalable blockchain system that it's never going to be able to house everything right like you you're you're going to have some amount of sharding that needs to happen like even on on salana this is happening so you do need uh like I don't think it's I mean ethereum clearly made some bad design decisions but but I think you would end up here regardless um yeah I don't know I'm bullish salana and I'm bullish l2s and I think in 2025 we're gonna have like at least one big financial institution announced they're doing their own L2 um and I think it's going to be the preferred path for most like successful Builders who want to build an ecosystem and for like institutions going going what's the why is like so why

is a example why why is like okay let's say black rock makes an L2 like why is that interesting to you I mean they could put like a bunch of tokenized Securities on there right a bunch of their like they they could do a bunch of stuff they couldn't do anywhere else but it's basically just this like private blockchain narrative coming back it's like yeah but there's there's gonna be clearly there it's going to be um like transfer restrictions on on tokens and and all of that but there's going to be a lot like if Securities are to go on chain that's how they're going to be put on chain like you can't you can't have Securities trade permissionless on chain and I think nl2 is like a really good solution to do that and and a bunch of other stuff so I I just think both are

going to grow um and I think l2's had a had had a good year I I need to go look at the bass stuff to see how much of TV growth came from came from bass um I know the arbitrum guy was going off on Twitter on this for a while because he was really pissed at like how disingenuous it was saying were like the leaders in tvl because they were just putting customer deposits on it all right so I guess like what's the what's the takeaway for people from this like I don't know how did we get into how did we get into this I'm bullish on the I think that like I think it's clear like performing chains is what everybody realizes now is you want something with like low latency high throughput and that's it and so you know all these new

chains coming out are basically like this I think the last gen l2s are going to struggle that is my biggest takeaway there's a lot of them that do I wrote about this in the INF for year head there's only three l2s that do more TPS than ethereum like think about that yeah that's kind of insane ethereum is very limited in it's throughput it does like 12 TPS and that's just telling you that it's not a technical reason why they're lower it's a demand reason right and you just see these these economies of scale where the winners just keep winning wait what what do you mean by that it's I mean the demand is the reason why they're not doing more TPS right like they they can do more TPS they just AR they just aren't because there's no

demand for them and like you're you're going to see you know I think Mega eth will probably do pretty well when it comes out and where's a lot of that Capital going to come from it's probably going to come from a lot of the existing l2s right there's not a lot of eth that John Shar wrote about this recently too like there's not even a lot of e that's actually bridged to l2s yet yeah like 2.5% yeah super interesting so sadus is bullish Soul eth Jose what are you bullish Soul eth or you're like how are you like I understand your opinions Nuance but like is there really a way to express that in the market or not really not really I mean initia is probably the cleanest way to to to express it but it's not available to people I'm also

just bullish on like apps people like the AI agent stuff this is like a non it's kind of it is INF but it's also not it's like when I said earlier about about people not caring about it stuff is on like b or Soul that's kind of what this is and I'm excited for stuff like that I like I am excited to not care about the like the tribes as much right um the the weird thing for me has always been like a lot of people didn't think salana was going to do well because they thought like Tech didn't matter which was always like a really weird point of view to me and I think that like the tech clearly matters now and you're seeing the entire industry going to these per making performance systems um so I think like my main takeaway is like there's we have no

excuses not to create like good apps right so let's See's see I like I like that last line in the the INF year head report yeah I could tell that cedus wrote that he's like the infra is built let's build some kickass [ __ ] or something something like that um I think switching topics uh to wait what yeah the Bitcoin dominant stuff just some Market things like what what what's everyone's take going into 2025 you know regulatory environment easing up uh is there going to be more of an ALT uh run or are we still like this Bitcoin dominance has been a

Relentless March up since uh you know if everyone if anyone wants to pull it up from themselves they can just look up BTC DOD on trading view or coin gecko has a tab for it but it's been a Relentless March up since like 2022 it was at 40% in 2022 it peaked at 61% couple weeks after the election right now we're at 58% and we had a little bit of an ALT season between November and and the start of December but it's kind of like what we saw in in March like is that going to be the new regime where Bitcoin puts in kind of a temporary top in March it was at like 72k then it just chops around between 70 and 60 uh while alts uh kind

of all bleed out or do we think this is like a more powerful cycle that's going to bring a new capital and and have alts actually outperform yeah I don't really know I think I think BTC Dum could like stay the same and you still see alts like way out perform just because you're seeing the smaller stuff do well yeah and like if BGC does what we all kind of predicted it would do this year in the end of year then Al will like absolutely RIP just even if BTC dominance goes up right so I don't know if it matters as much honestly um going going forward but but um I do think you think it's like what's gonna be different from March

like when BTC puts in its top like in 21 and 22 like we kind of saw alt go really nuts there right versus in March we saw BTC put in his top and then most alts just get crushed as BTC Consolidated but that's typically when like alt season happens so I don't think we have an ALT season again I think that concept is like over I just think you have like massive dispersion of of uh of of performance on stuff that that has like strong fundamentals and narratives and stuff that doesn't yeah I agree with that yeah I think that's a pretty good take um I don't know how long ago this was but it

was on some podcast or something we recorded probably like five six months ago we're all like kind of going around just giving our predictions for what BTC dominance as top would be which is really just like pretty much eth BTC right like it's mostly that well it's becoming less of like you know xrp's up their B&B so obviously Bitcoin versus like three other coins right like you could have the whole AI sector 10x and start making a small dent in BTC Dom right um so it's mainly just like I like the way I think about it is like what's your outlook on that kind of ratio right

and when I think about it from that perspective like I do think Bitcoin probably outperforms eth this year um especially like especially if you get some kind of like actual executive orders around you know SBR things like that um which is a very bold prediction hased yeah it's uh I mean I predicted that last year too right and like it did and I I think you I don't think it'll be as wide of an out performance I do think eth will do much better this year uh by virtue of uh like the regulatory environment crypto-friendly president etc etc right you're already seeing that

with flows with ETF flows um but I think I don't know I initially thought it would top around like like 66 to 68% and this was like six months ago I'm not sure we get that high uh because I think the you know outperformance or whatever will be significantly less than it was this past cycle or this past year um but I'm not sure the top is necessarily in like I I could see BTC Dum going back up to like 62 is 63 before rolling over like if it goes like 125 150 like I could I could see that happening uh and and BTC Dum making a move like that but I kind of agree with Jose like I don't think it's going to be like like you

know that like chart that's been going around for like six years now where it's like phase one phase two phase three phase four like all season whatever like I I don't I don't think that's going to happen I think it's mostly what we saw last year right like except you're gonna have more than just one sector doing well which was means so you're gonna have a couple because risk appetite is higher across the board and just for context so uh BDC dominance in like January 2021 73% and it got all the way down to 40% versus like the biggest run we've had in the past few years is this run that just happened from November to December which was 61% down to 55% so it's like the magnitude of the Run was

like literally nearly 10x the size 8X 10x the size in 2021 which is when we saw like all the out one all the altel ones just going absolutely bananas so it's it's kind of crazy like the difference in in the magnitude of the move that we've experienced yeah um I also think Bitcoin l2s could be a dark horse this year honestly like you've never seen Bitcoin and I think that could like do a lot of damage to eth if if it takes off um like you've never really seen bitcoiners do anything with their Bitcoin I think wbtc Peak was like 6% of Bitcoin Supply was

like what what they got and you had pretty attractive and and that's arguably like the most trustworthy multi- in in crypto with bitgo and stuff at least it was at the time I think all these current l2s that are pretty much multi sigs haven't gotten that much adoption but I do think in in 2025 we we might see some actual like stage two ZK 2s launching on bitcoin whether it's like citria which is a portfolio company or like Alpin labs and I know there's a few others working on it too um and I think the effect of that could be huge because bitcoiners really do seem to care about security um and like the Tam for this is massive yeah John charb has has a good post on this but like

obviously Bitcoin is like five times bigger than than than eth so you know Tam is five times bigger there but like Bitcoin l2s don't just enable scalability like the eth L2 do l2s do they also enable programmability right like on eth L one you can still do stuff you still have Smart count contracts you can't do anything on bitcoin L1 so like a Bitcoin L2 is such a bigger unlock because not only do you you get much greater relative gain in scalability you also gain like programmability and so I think even if you had like one or two% of Bitcoin uh go on chain and start doing things like that is a massive that that would like flip in eel 2vl by like a few multiples and so I don't know I think that's a pretty interesting like

thing thing to watch the the first so I think it was from gour like 6 months ago or something he was the first one I heard make the point about how like Bitcoin rollups are actual just extensions of Bitcoin because of this point like you do have the programmability and everything and so they are very different it is a very different like construction um that ethereum rollups who just essentially do the exact same thing as ethereum right just faster um yeah and so it is yeah I am excited to to see how Bitcoin rollups do I've never believed in the people would always say bitcoiners don't want to use D5 bitcoiners want don't want to do anything with their Bitcoin and like

that's always been kind of nonsensical to me like sure there's some loud people on Twitter who would like never do that but this is a two plus trillion dollar asset there's a lot of people that want to you know even just getting loans like just have a be able to get a loan against your BTC on chain like without doing any rapping you know no um can I ask you a question so my current understanding is the like you can you still need a trust like a trusted bridge right now if you want to do this but if opat goes through then you can do a trustless bridge with with some of these Al you like yeah like validity proofs and stuff so like ZK so you still need a change to

bitcoin um to make it there's some other there's some other stuff that's like not using opcat which off the top of my head I can't don't remember exactly it's like some separate offchain process I think but yeah but the Opie cat's been in like Bitcoin testnet for like a year or something so some people are saying like it could come in 2025 yeah I mean so it was in the protocol I think at the beginning right and then it got taken out um because there's some like catastrophic bug that it enabled um but now it's uh not that's like not a concern anymore so now there's all this yeah energy to kind of bring it back I think Stark starkware Stark net is a big Dark Hour Dark Horse for Bitcoin l2s like obviously there's

all these new ones coming out but Stark net is doing a lot with the opcat and that's a pretty easy you know once that goes through they can just start posting proofs to to bitcoin um so yeah there's definitely tons of energy in this sector uh which is cool to see and it's like only beneficial for Bitcoin there's there's like no even if people use even if people don't use Bitcoin da and they're just posting proofs to bitcoin um you know because using Bitcoin da they're going to be pretty shitty rollups um but yeah so so when do you think we'll actually see it like is

there the tools right now to see it now or no the bridges are still trusted uh I think you'll have non you'll have non got stuff this year I think so I think that's the plan um I'm not sure what stage they're going to come out on actually this would be a good report like a good catchup like where all the ver Bitcoin l2s I know we have a Bitcoin L2 report it's a it's like almost a year old though now yeah be nice to get a an update because I do think it's like super important be a good report I need to catch up on this anyway that that would be super bearish that that that's another like thing that would be super bearish eth if if Bitcoin l2s took off I feel like or yeah what percentage of like Bitcoin holders do you think um want to use

these things like put their put their Bitcoin in smart contracts take loans against it obviously it's you know there there are risks associated with doing so but if it's if it's a trustless bridge uh I feel like a lot more people be coming let's say let's say 2 let's say 2.5% that's 50 bill right there it's like you don't need a big percentage to do it uh also also people will buy Bitcoin to then do it too that you know yeah so it's not just like the current holders that I I think there's like 10,000 Bitcoin right now in the current bitcoin l2s like the which B stuff yeah and and like Bob and and and all the

other ones so I do think that can can like 10x or something with if if it's not a multisig like yeah I think bitcoiners actually care actually really care about this and because that a lot of these are going to go evm so you could literally have if you had like a ZK Bridge or you know something trust minimized even an up to Mystic bridge and then like some really proven code base like an a code base or a Morpho code base where you know you could just deposit your Bitcoin and borrow like usdc or or something like that or even like a maker like CDP on your Bitcoin I do think that stuff would get would get some traction yeah I guess you don't really need that much to make it super worthwhile right yeah I'm always

interested in this one because uh like I could see the argument for people not wanting to you know put their Bitcoin in in things but also like anybody who's in finance like you know borrowing what what did blocki get up to in terms of yeah that's deposits yeah that's kind of where I was going like I wonder like I mean with with you know Bitcoin ETFs going live obviously there's crypto custody solutions that exist with like you know CFI or not even C just like traditional Finance right I would imagine they're also going to um they're also going to extend credit solutions for crypto assets specifically Bitcoin so I'm I'm curious like what the what the breakdown

is going to be like are more people going to gravitate towards uh these more crypto native Solutions or are they going to go to places like JP Morgan where you know it's centralized obviously um but you do have more recourse if something God forbid goes wrong right um like will like will all the people who are like in trafi buying Bitcoin now either through ETFs or whatever like will they like what will they go towards because I think that's the majority of where Bitcoin demand is coming from in the next in the future generally um not really crypto native so I'm just curious it's not something that's like actionable in any way I'm just kind of interested to see how it

plays out over the next couple years because it's something that like I think about like I have all this like not all of this like I don't have that much Bitcoin but like I have Bitcoin like I don't know what the best way to get liquidity on it in the future is because like I never want to sell it obviously um kind of like sailor but getting liquidity on it I'm kind of like sailor like that yeah you know pretty much the same with with our Stacks uh uh but like getting liquidity on it in you know tax advantage ways is like obvious land is I think is so right now if I go to bitcoin layers. org there is 32 billion that is off Bitcoin in

like there's I mean a lot of these have very like there so like Merlin has 21,000 BTC which is good amount there's like you know this is counting everything like the amount on ethereum right the amount on Arbitron base salana um what's interesting is that they don't have Babylon on here yeah like Bob Bob is this Bitcoin rollup it has 2,600 um yeah Bitcoin layers. org has this is actually quite a bit yeah it's like 32 Bill and these are none of these are like real like except for lightning Network

which it's like it just has like lightning Network's issues their usability and everything but security wise it's like it's actually it's good across the board um these are all like very insecure things so then like think about if you actually get real solutions that come out right yeah that's actually a lot all right do we want to we want to wrap it yeah let's wrap um nice this is this was a good one in the end didn't seem like we had much to talk about but uh we we did it although we didn't have our Revenue debate really uh we can continue that maybe next time it's also a shame we didn't have Yan here for the AI framework uh stuff because he's he's

been all over this he definitely deep yeah thanks guys for for for joining and Jason for for filling in for Yan another great episode and I'll see all you guys again in in two weeks yeah see you everyone bye [Music]