Hivemind: Have We Bottomed, Bitcoin's Quantum Threat & Hyperliquid Unlocks

Transcript

Nothing said on the hive mind is a recommendation to buy or sell securities or tokens. This podcast is strictly forformational purposes only and any views expressed by anyone on the show are solely our own opinions, not financial advice. [music] Hello everyone and welcome back to another episode of the Hivemind podcast. Uh no Jose again today. So we brought on Simon from the DeFi team at uh Deli Research. I am of course Cedus, head of research at Deli. We got Jason, head of markets and Yan Ventures partner. Um so

today is Wednesday, December 3rd, 10:30 a.m. Uh BTC is back over 92K. We have uh you know we've had a day or two of not complete terrible price action. Um do we think this is like a Santa rally going into year end or what do we think Jason? >> I mean it's definitely early two or I'm I'm I'm optimistic that we get some relief right Santa rally. I don't know if it's like the whole month, but like I'm optimistic. We've had like three weeks roughly of just pretty much straight down with um some pretty big OI wipes at various points. Um

positioning's completely wrecked. Equities are, you know, kind of holding in there, pushing back to all-time highs. Um, we're starting to see, you know, TGA spend after the shutdown pick up again. There's I I'm cautiously optimistic. Um, I mean, I've boughten a couple of the dips that have kept on dipping uh in the last month and a half. But kind of like that that South Park meme, right? Like I didn't hear no bell. Uh, I don't know. 90 like a a really key level for me I guess like if I was to like pick one would be like this like 90 like this like 93 and a half. It's kind of like 93 and a half 94. It's like

pretty much like the yearly open. Um it's like the 30-day rolling VWOP. It's like the 30-day there's just like a bunch of like moving averages. It's just like the yearly open a very you know psychological level for the market. So like um we're also kind of breaking back into you know the the the 90 to like 110k range that we've spent quite a bit of time in. So like if we could you know kind of hold around here and then start breaking back and going green on the year into year end I think there's like a decent chance we have a a good little bit of relief uh for Bitcoin. um some alts are picking up right you've seen some like good moves out of you know pump which is like one

was up like I don't know 20 something% yesterday hype is kind of holding up well even with like the unlocks which we'll probably get into um later on in this conversation like Zcash is kind of you know bouncing after being down for a like there I don't know it looks to me like it's too early to tell but I'm I'm cautiously optimistic and I've I've started adding back on on a on a couple things uh for for that kind of trade to manifest, but I will cut that [ __ ] so fast if we roll over uh and take out daily lows and stuff like that. So, >> yeah, there was a good I thought there was a good piece by Dorman at Arca or maybe it wasn't by Dorman, but somebody at Arca about just like it's hard to explain the selling that's been

happening, you know? [snorts] Yeah. >> Um I guess you can you can obviously everybody thinks it's an October it's an October 10th aftermath thing which is probably true and somebody has been there has been an aggressive seller but uh I don't know it's been so aggressive for so long it would make sense to see some relief with that. I would say though that with it being December, >> yeah, >> we talked about this on the research call yesterday, right? >> We're like >> stuff that's down a lot this year, it's probably not the time. Maybe they like maybe it will, maybe it will, but you got to think that stuff that's been hammered this year is such an easy like tax law selling in in December. Um, but again, that could also I remember like

soul in 2022 uh after FTX blew up. Um the low was like when it traded to $8 was like December 29th or 30th I think and that was basically just someone puking before the year end and then it was back over $20 like the second week of January. So I think I think one note too on like the point you made about no one really knowing why we've gone down or gone down so much too like obviously like there's this quantum narrative going around which sort of like is just FUD maybe but like makes sense. Um, but I think something like no one on crypto Twitter or like within crypto has really talked

about is [snorts] like the Chinese real estate market is like doing so [ __ ] right now like terrible and like these guys all need to just like maybe maybe that can explain some of it too because >> all the Chinese whales selling above 100K because the real estate market is >> oh like like actually like yeah like legitimately >> I mean right all the selling came from Binance. >> Yeah. So I think that is something that like no one has talked about that could maybe be a weight on the market too. >> Yeah. My dad asked me uh yesterday. He's like, "Why is the market weak?" I heard like something to do with Japan. [sighs] [gasps] I was like, I don't know. I had to explain like the end carry trade.

>> But it's more scary too because nobody knows why, which is like kind of weird. But I mean, it seems like we're maybe hopefully, knock on wood, moving out of that. But >> I think that that's usually the case though for something that's not fundamentally tied to something. It's very momentum heavy. Um, then you get that memes like if you ever ask why Bitcoin's pumping on any random day. Um, but yeah, I I mean you saw a lot of distribution uh higher from from the long-term whales, right? And so that kind of got absorbed by Sailor, but now he's out of dry powder. I think there was like peak FUD between Sailor Tether and all these other things that um spook the market and the bid just disappears. And I think

um you basically, you know, signal for market reversal is when you get bad news and price doesn't really dip. So um kind of waiting on that to see a more proper reversal in sentiment. But it it feels like we're just massively oversold. If you look at, you know, RSIs and and other just broader trend indicators, feels like we're definitely due for a bounce. The the question is just the the degree of it. Um, I think a lot of people are kind of reluctant to be overly bullish, right? And and that feeds on itself. And so you're going to have profit taking and if people think others are going to take profit, it it it naturally becomes reinforcing. And so, um, yeah, it seems like bounce here and then I I have no idea on a on a short-term basis. Um,

obviously still bullish on on Bitcoin, the asset class in the long run, but it's just hard to to really predict anything on a on a week-to-eek basis. Um, it seems like Sailor's out of the market for quite some time. you've you've gotten rid of the the risk of him being insolvent, which I guess we can transition a bit to that is is you know, the recent news came out where um you know, one concern with the the structure was the fact that he bought preferred which are or raise cash through preferred which are effectively debt in the sense that they acrue interest and and so um the concern was always, you know, if if he did too much and and and how would he service the debt? would he

need to sell Bitcoin because he's been deploying all his free cash into into BTC and so how is he actually going to be able to do that and so uh recently came out uh they they created a presentation basically signaling that they have uh about two years worth of of cash in uh in for for interest and so there is no real short-term solveny risk right part of the reason I think we sold off and it's not this is just a consensus take is just he's no longer really able to deploy a bunch of cash.

But there's so there's either sailor's buying, right? And then there's there's sailor uh sailor like as a bullish component, neutral or bearish, right? I think it was he was bullish for a while and then we immediately flipped to bearish rather than being at neutral because the concern was okay now the debt's going to come due and he needs cash and and he doesn't have it. But I think there was a decent amount of uh relief that that came from that presentation because we we transitioned from bearish from micro strategy being bears to to neutral uh to the market, right? And so if you have uh which basically means I think it's going to be harder to to move into new highs um but it's we're less likely to create new lows as well. So, it just kind of

reinforces this rangebound position we're in because he's a bit of a non-factor in the market for some time, you know, with unless we get a rally in Micro Strategy or uh All right. And so, like, how do you get that? It's it's probably the the main way is just through S&P uh ad, which I think gets announced in uh the middle of the month. >> That seems so I don't know. It seems so unlikely right now. Um, >> I think I also think this is kind of the part of the market where things go viral that get blown out of proportion, you know. Um, you saw that exactly with the Tether and uh, strategy and there's there's realistic like concerns in both

of these scenarios. I'm not saying that there's not like it's true that Tether there is risk with Tether right now if once you like play the whole thing out and talk about all their other entities and like the amount of USDT that's actually permanently lost and all this stuff the risk is kind of low but it is true that it's not like other stable coins and that they do have all assets that are partly backing Tether but people take that like what >> Tether F is just like I don't know I I feel like we're we're at like 90k still how how are people like calling for like the fall of Tether? They just raised a 500 bucks.

>> I mean, it is it is managed not the way you would want a stable coin to be managed like in a vacuum. However, once you take the holistic view of everything and again the fact that like how much Tether has just been lost probably that's just free money for Tether for the rest of like any private key with lost Tether that is free leverage for Tether, right? Because it's never going to be redeemed, right? And they might know internally, they probably they definitely have internally like metrics around like estimated how much is lost and all this. Anyways, and then the seller thing too. People see like sell Bitcoin, they saw that for the first time and then it's like oh it's all over, right? Um but it's like h you know you you got to wait

um a long time in a bad scenario. Like you got to wait one to two years in a shitty market the whole time for them to kind of get there. And so if you're like, "Oh, I'm gonna I'm gonna buy when sellers like liquid." It's like, I don't know. What are you waiting for, right? Like just stop thinking about crypto. Just go like do something else. Um but yeah, the other one you brought up was quantum. I don't think quantum is a re any reason for the weakness recently. Although I do think that quantum is something that you'll see more and more people talk about. because it is it does seem quantum was always this thing that was like um we don't know if we can do it and is

it like this science fiction thing that will never exist. A lot of people still believe that but there are you are seeing a lot of smart engineers come out saying that it's moved from a theoretical problem to now the actual hardware side of it. Like there's a lot of smart people in quantum that are convinced that yes, quantum computers are possible now, which is a pretty big change over the last even like two years. There's a lot of Nick Carter had this good piece on it and there's like prediction markets on when the first quantum computer would be released and I think originally it was like 2050 or something and now it's gone down to like early 2030s maybe or like mid 2030s or

something. Um, and so you're going to hear about this a lot more. You're also going to see a lot of people shilling other stuff with like this narrative, right? Um, and the but the thing is the quantum why quantum is an interesting problem for Bitcoin is that like yes, there's a tech problem here where you need to move everybody to postquantum signatures. Um, and so you need to develop that tech, right? And then you need to get all these people to move and quantum signatures are very expensive and Bitcoin's throughput Bitcoin's throughput is low and so there's like all these operational things with it. But the thing that makes it so different for Bitcoin is that you

do have like potentially 20% or so of the supply that could be stolen, right? And there's no no tech no tech can fix that problem, right? Like as soon as Qday comes, Bitcoin, the protocol, the, you know, social consensus needs to decide what are we doing with these lost coins? What are we doing with Satoshi's coins, right? Because they're not going to be moved. And so they're just a honeypot. And this is why quantum is you're just going to hear it more and more every year that goes on. And the closer that Quantum gets to becoming a reality, you're going to hear this more and more, right? Um because a decision needs to be made on

what you do with the coins. And from my perspective, there's really just the two options. It's like you burn them all essentially. And maybe you just completely burn them or maybe you use them for like tail end inflation to keep the 21 million. I don't know. Like but that's one option. And then the other option is just let whoever steals them steal them, right? Uh but there's nothing else you can do. you can't move them on behalf of other people, right? And so it's uh yeah, this is something you're going to hear more and more and will it weigh on Bitcoin price action? Like I don't know, maybe my I'm curious what you guys think, but I think that if this day comes that social consensus, there's going to be a lot of people that don't

recognize the the new Bitcoin, but I'm pretty sure the majority of money that's in this thing is going to just render those coins like burnt or not, you know, a part of Bitcoin because I don't know if you can deal with like getting 20% of the supply stolen, especially if It depends who the actor is too, right? Like like I guess it's different if Microsoft steals it versus the US government versus North Korea, right? There's all these different scenarios of who's the one that steals Satoshi's coins. But um yeah, people are talking about it more because it seems like it's realistic now that this day is going to come. U but it's funny like I had some thread on

Quantum and I had some guy just like telling me I was like fdding and this is not a real thing. It's never going to happen. So >> yeah, I agree. It definitely feels a lot less like theoretical and more more more real, right? I mean, you just see how quickly AI is moving and like just how like things can change so much in a month. And yeah, I wouldn't be surprised to see like the quantum stuff pick up. It doesn't even seem like people are talking about quantum that much like generally within or outside of crypto. Like I do think this is uh >> I mean quantum stocks this year went ham, right? And like it's mostly those are scams but like people are people are thinking about this area.

>> Yeah. >> So basically is the the risk is that um or I guess the question is basically in what order do things happen? Is it an event where we find out there's a breakthrough because the coins were stolen or or would there be a breakthrough and someone says aha we should steal the coins? Because if it's the former, then there's not really much you can do because you're you're reacting and and okay, you can try and get something through, but like that it's just going to zero for a little bit basically. >> Well, you can you can start migrating people first of all over the next like 5 10 years to quantum resistant addresses and then I think yeah like the one of the risks

is that the the smart way to steal these coins is you don't steal them all at once. If you have a quantum computer, right, you slowly >> it's kind of like that like enigma machine type [ __ ] from World War II. Like if you like use it, like you get it and you use it, then everybody knows you have it, so you get like one good shot, right? And like are you going to use that on Bitcoin or like nuclear codes or some [ __ ] I mean, I think you you probably Yeah, I guess the math is is like how long you can get away with it. But the thing is, Bitcoin is so liquid that you could like snap zap bidside liquidity and obviously nuke it, but you can extract quite a bit. Whereas, you know, you run the risk of someone discovers

that because basically you have to find lost coins, right? Like how how would you do it? You'd find lost coins and then you you'd take them and hope that no one would notice. You you gradually take them. Otherwise, like if you're taking active coins, that's going to get exposed pretty quickly. So you have to source lost ones and the thing is how do you find lost ones? You look at you know really old UTXOs and those will trigger Twitter alerts in a heartbeat. >> Uh any you know the an interesting uh target you could do is Binance because basically anybody who uh has a public key on chain is uh stealable. That's like the distinction that makes it. So a lot of Bitcoin UTXOs, the public key on chain is hashed. And so you actually

can't really steal those with a quantum computer. That's why the old ones are so vulnerable because they were like Satoshi mined a lot of coins to public key. It was like mine to public key and then so so a big exchange is actually one. But I guess like the like you could take all of Yeah, it's it's there's probably some coins that are active but their public key is on chain, you know, that are more vulnerable and you start with those and then you like slowly work through Yeah. you work through the ones that are less likely to out you as uh having a quantum computer. But there comes Yeah, there you even you

could even fork before Q day. You could even fork before Q day, but that's way harder to do, I think, socially because people won't believe that it's actually coming right? >> Yeah. I mean, the other thing is like there there it's not as if you have an immense amount of DEX side liquidity for Bitco Bitcoin, right? You need to do it on a sex and that's that's where you probably get boned. Like the second that gets exposed, Exchange just locks the account and then that's that. >> Yeah. It's interesting though. I don't know. We're going to hear about this more and more and you're going to see some crazy proposals about this. I know there's already a bunch of protocols.

Actually, Deli Consulting, I haven't read it yet, but they released something today on somebody that's kind of working in this uh area. And then there's also like will Bitcoin Core actually implement quantum changes too. Um you know so I see some people talk about like well we'll save the people that can be saved and it's like well 20% of the coins get stolen. I don't care who migrates like they're not saved. So that's why it's like a way bigger issue.

Um but yeah. Yeah, definitely got to look more into quantum over the next little while. >> Yeah. What happens first? Like quantum or or economic security becomes an issue for Bitcoin? >> I don't think economic security will ever be a real realistic issue for Bitcoin because it'll just move to like proof of authority where like the exchanges and like Black Rockck and everybody just, you know, mine at a loss maybe or Right. Um >> it's pretty easy. >> I don't know. I I feel like that the the difficulty of of getting that across is being underestimated.

There's obviously going to be the people that say like it's no longer a thing and and you you have there's going to be a decent attrition from some of the holder base. >> I mean, hey, you can kill two birds with one stone. You can just steal the Satoshi coins and use them as perpetual inflation. Like, and then that fixes the security budget and the quantum thing. I know a lot of people aren't going to like that, but uh it's a it's an option. you know the the the the argument against you know at the end of the day a theft is taking place right like either the social consensus burns them which is theft in a sense or an actual attacker steals them theft. So it's like who do you want who do you want to be the beneficiaries of this

theft right a single entity or the greater good in a sense and uh people will be like oh well you can't fork it because then you know that that ruins the fundamental use case of Bitcoin. It's like you property rights and your keys your coins and this is no longer true anymore. And uh I think it's like it's more nuanced than that. It's like, well, you actually don't. They're not actually your keys anymore because somebody else has them now. >> So, [snorts] I don't know. I don't know. We can move on from quantum, though. But it's something that's something I keep Yeah. looking way more into.

>> Please share more articles as you come across them. >> Yeah, we'll go read that deli one. Although, I don't know if that's I think that's on a protocol that's related to it. Um, >> I think another thing that's like maybe under discussed is sort of like a similar vein, but it's like having money on chain seems less and less worth it than it ever has, especially with like like AI and like smart contracts sort of just like look looking for like exploits all day long and especially after like you just see just got hacked uh balancer before like stream it just like it really that's scary and I think as AI gets better it becomes more and more like okay like North Korea is just on like deep tech all day like sending in

like smart contracts. It's just like, dude, at what point is it just like keep my money on like uh a centralized exchange or what? >> For sure. There's also like there was that report by Seal and I think they said like North Korean engineers make up like 15 20%. Right. And think about all the closed source protocols that are out there. Like I have money in close like Salana has a lot of they're getting better but like historically everything on Salana was closed source. Um, again, it's getting better now, but there's still there's a lot of there's protocols that have money in that's closed source.

And it's entirely possible that like some North Korean dude just has the keys to that protocol and is just going to drain it one day. And you have to think about these kind of things like you it's like you need multi multiple addresses, multiple blockchains, multiple assets. It's like, you know what I mean? It's uh definitely I agree with you though like holding coins on centralized exchanges um like self custody is good but not all the time. You know, it's having your having your assets custodied is actually really nice and having like time locks on when you're allowed to access them and not being able to have like one

signature sent your net worth in one transaction, right? like these are not really features to me. Um but yeah, so what was it? Anthropic has like this really really cool uh report. I think it's probably put in reads. Um but yeah, agents found like $5 million in smart contract ex exploits um since March, I think. Um which is kind of insane. Uh and so like >> about five million >> four and a half. Yeah.

>> Yeah. >> Uh which is kind of insane, right? Because these things like like this is the worst they'll ever be at it. >> Yeah, that's Yeah, that's what I'm saying. It's like that and also like how much incremental like you should be getting like extra like more yield for the risk you're taking, which I think like is a similar sort of like parody to like the altcoin like sort of like industry as a whole. It's just like you're taking so much risk and even if it does like play out well, you're probably not getting paid like based on the risk you're taking. It's like okay, you have this these staples on chain, you might like you're getting XYZ yield, but is that yield justifiable based on like really all the risk of smart

>> Yeah. I mean, the counter though is that you can use these to also build more bulletproof designs as well. And so, you know, the the people that are taking shortcuts on the long tale of of these, you're definitely taking, you know, risks that you're probably not getting compensated for. But on the, you know, more mainstream uh designs and and kind of buildouts, it should be defensible. I mean, like that was the idea that was that exists with Balancer and others that, you know, you thought if they haven't been hacked yet, they should be >> bulletproof. But I don't think those things have been like battle tested with models. It's mostly been kind of audit firms which is yeah still nuts because it's like creative stuff that you just

haven't thought of. It's not like this is a very obvious mistake in the code. It's it's like combining multiple uh attack vectors to to kind of create a an opening. >> That's what like the year one was. But like the lindiness of like an OG D5 protocol like balancer just like getting thrown out the door really makes you question like every like Yeah. I mean, it's it's definitely kind of I mean, yeah, it's definitely worrisome. And also, like when you read that article, it said like at least half of the um attacks this year from humans could have at least been conducted with these agents, right? So, like it's just like I don't know. It's kind of it's kind of insane. Um,

and it's just like an area I have like zero expertise or or or like um real knowledge. Like I just don't know how to really underwrite um the risks with it. Um it's it's like that that that article that Yan shared or I don't know who initially shared it but like it was one of those like like what the [ __ ] type articles. When I read this, I was like, "This is actually kind of scary because like the I think like the main takeaway is like this is the worst that they will ever be at exploiting or or being used in this way, right?" Um, and so yeah, I don't think you can take lindiness as like a given at any at any point. I don't think like

Yeah, I don't know. It's it's sobering. It's a sobering kind of like that with quantum. It's just like gez like I'm just getting bombarded by machines and there's nothing I can do about it. Yeah, I think that what is [clears throat] you know a few months ago I think the consensus was kind of changing that smart contract hacks were kind of like over at this point and it was more so social engineering hacks like front end like the bybit hack was a front-end attack right so it was kind of this understanding that oh attackers are moving to more sophisticated um front-end type stuff or maybe just like pure infiltration stuff, right, with like employees working at a place because smart contracts have been so

battle tested now that they're so good and then you've seen these two in the last on OG protocols in the last month and I think that it just like kind of resets the clock, right? Um I think that reversible, you know, transactions are 100% going to be a real thing pretty soon. Um >> they are in Tradfi, right? like it's a very >> there are standards out there that you can do. I remember when I don't know if it was like 2020 21 or something but these kids from some you know some school I don't know Stanford or something came out with reversible ERC20 and everybody lost their [ __ ] They're

like, "Well, you don't all these uh [ __ ] university kids like they don't understand the point of crypto and you know the the the use case is that there is no reversibility all this stuff, but you see more and more people talk about it now like >> not on like ma on the ETH if mainet like come on that that that should not Yeah, I don't know. I guess it depends how you could roll them out. But that just seems to go against like a lot of principles. Uh, well, I think you can like opt into it. If if you let the user opt into it, then it's good. Like if somebody if there's like a reversible USDC, well, USDC is always, I guess, reversible like, but like >> die was an example. Like there's a reversible die and there's a non-reversible and you can choose as the

user what you want. I think most users are going to choose reversible because they're not worried about getting blacklisted or anything, right? And then I guess you create a new set of problems there because anybody that's not using the reversible one is like, "Oh, why aren't you using reversible one?" Right? But I don't know what's uh what's the deal with hype. Big unlocks. Big unlocks. It's like 9 million what? A month for the next 9 million hype tokens or 9.9 million hype tokens.

um a month for the next what 24 months or so couple billion dollars of of of token unlocks. But um we're writing about this a little bit in the year ahead. Somebody had like a a really good tweet about it um that kind of went over what the post unlock actions were. Um >> wait, it's 9 million tokens per month? No, I think I missed. No, no, no, no. I think I missed >> so much. That would be a third of a billion a month.

>> Um, it's like three. Yeah. No, no, no. It is. It's about like $300 million at least the the initial one was. >> So, uh depending on what day you use price, but so effectively the team sent or like the uh the post unlock actions are as follows. uh OTC sales or what we expect to be OTC sales were um about 600,000 hype tokens which was about 23% um which was sent to Flowesk which is why people assume that they were sold OTC uh about 235,000 hype was rest across four wallets um in 15 wallets about 900,000 hype uh was just held and hasn't uh hasn't been

moved or or there's been no action taken with that and then the team rest 850,000 hype via Hyperlabs. Um, so that's what they did with this initial unlock. And I guess like my playbook or like the way that I'm thinking about this is I'm just going to kind of wait and see um how the market digests this one and then what they do with the next one or two before I'm like comfort comfortably able to extrapolate out further and what sell pressures um and things might look like and and how much is offset by um protocol revenue like builder fees, HIPP3, all that stuff. Um, so that's kind of like what I'm looking at over the next like month or two is like what they do next month and the month after.

Is it the same? Is it different? Um, and then kind of extrapolate out, look at hype, revenues, fees, buybacks, and just kind of see what the what the net pressure might look like all else equal. >> But yeah. Do do you think at all about like a season two or any like >> they will like there's there's there there are I think they will at least there's there's tokens earmarked for it. Um they're probably still counting like points and stuff in the background. Yeah, I think that's um on the cards. I don't think it's like a priority um for them, but uh I do think that will come out at some point.

Um, but my my initial my initial thoughts uh since since uh November 29th or 30th is like I don't know obviously Bitcoin has rallied well. Hype has has moved um pretty nicely as well over the last couple days since the unlock. Um and I just think it's like um I think it's it's good, right? because there's a lot of uncertainty around what the team would do um heading into these unlocks and what that sell pressure would look like. There's a lot of speculation uh and uncertainty on Twitter and obviously right like it's hard to underwrite that uncertainty and now that you kind of have some clarity and then you know give it another month

or two to to kind of cement what that looks like. I think um the I think uh the expectation was probably for for more net sell pressure than we're currently seeing. So I think it's probably generally um not like a bullish unlock, but I think like expectations were probably a little bit more bearish than what the reality is. >> You also just got like the DAT approval yesterday. >> Yeah, true. Um but I don't we don't talk about DATs right now. Dats [laughter] Yeah. Yeah, for sure. For sure. It It doesn't hurt. Absolutely.

>> Well, until >> until it does. Uh so yeah, I don't know. Uh as a relatively large hype holder, and it's, you know, probably my biggest position. Um yeah, I'm I'm comfortable holding. Obviously, you have long-term capital gains for a lot of people. Um it's one of the only tokens that's up relatively significantly over the years. So you you know might get profit taking into year end kind of like we saw with soul um in 2023 into 2024 I think. Um so so you know maybe that happens into your end but like generally all of the metrics around around it are are doing

um very well uh ecosystems growing all of the additional revenue sources and and things from like uh HIP3 build their fees builder like all of it um is is encouraging. So yeah, uh if I had to I I think I said this on the research call, right? Like if somebody was like gun to your head, you have to hold a crypto token and it can't be Bitcoin or Cash or Stables, like what would it be? Like hype isn't far down the list at all. Um so yeah, uh that's kind of my takeaway on it having briefly looked at it over the last couple days.

>> Yeah, that's fair. That makes sense. I think uh I think what makes this unlock trickier is that it is uh saw the team who have also some of them have done really well already and they don't have mandates to like return profit to investors right so when you get unlocks when all the unlocks are going to investors it's like yeah those are probably going to be dumped pretty aggressively but since you know so much is Jeff and like the other founders and you know some of them are for sure going to sell especially ones that employees that I mean they don't have a lot of employees but like people are going to lock in their they're you

know they're going to secure the bag but there's also you see this with like every billionaire every really rich person they still have a ton of equity in their original business right um so yeah maybe maybe if it dumps into year end maybe it's actually a good like does it like spot if you don't have any yet like me I don't own any like maybe if it dumps hard maybe uh >> I don't know maybe it's worth a shot there we'll see >> maybe that's why they're doing native lending they just borrow against their hive >> yeah do the like bill from curve strategy >> what I was thinking about this do you guys know when the lighter TG is because

I think it will be interesting to see like what the market forces lighter to do on like a buyback like how can you like hyperlquid has set the bar so high on that front where it's like if they don't do either way more in fees or a similar level of five act will underwhelm like >> I don't know if the percent matters that much you'll it'll just adjust right if it's 50 versus 97 it'll just trade at you know 2x the the multiple basically >> yeah yeah yeah no but that that is will be interesting to see >> but no I think like every per exchange has to do buybacks now Like you can't do a perfect exchange and like not do buybacks.

>> Yeah. >> Yeah. Um Khi's been making some big news recently. I don't know if you've seen this. Couple interesting things. One of them is that they're tokenizing all the prediction markets on Salana, which is pretty cool. So I guess if you're a >> What does that exactly like mean? Like >> I think that they're So they're going to use like prop AMM market makers. So you don't have to you don't have to I mean Calcia is like a centralized >> Yeah.

>> This is like their push on chain as they're doing Salana, right? >> Um so you can just use like Phantom and I don't know maybe you'll have to I don't know if you'll have to KYC and stuff. Maybe. >> Um but then I think the more interesting one is today they announced a partnership with CNN. And so this is kind of the thing that people talk about prediction markets like in five years are there going to be prediction markets on every news site, right? And uh this is kind of seems like the step towards making that a reality, right? So CNN has like a car well CNN doesn't do car chases, but like hypothetically, let's say there's like a car chase. You could have this live prediction market on like how long does this car chase go on for, right? Because that's what society needs

is betting on car chases live. Um >> but yeah, that's like definitely and they raised a ton, man. They just raised a billion at like a 15 bill valuation. >> Um, so much >> I don't get it. >> What do you What do you Wait, what do they need the the money for? What are they Are they like building something? >> I mean, you take that money when you can get it is basically rule number one. >> What do they spend it on? Have you seen all the affiliate badges? >> Well, they don't charge fees like it's really expensive to market make these markets. I mean, now that you have two of them, they can kind of use each other. But that was always the issue for Poly Market was they had to just burn a lot of investor capital to to pay for liquidity because it's not something

where it's easy to market make because they can't go and and put on a an offsetting position on another platform. Like there is only one place this market exists and so it's very expensive to market make and that's basically what they have to spend a lot of money on. I feel like Kashi has like a real competitive threat with Robin Hood like cutting them out of the loop too. That is just like I don't know seems like a big deal given a majority of their volume the past two months has come directly through Robin's front end and it's all sports. That's that's the other thing where I think [snorts] poly market is a bit differentiated where like some there there's more like unique markets that people are actually trading where like the poly market stuff is all sports. So there is a regulatory risk there still I think even if it's like

yeah we'll see >> uh you can effectively get better odds through poly market than you can through a house because the house is taking the other side and and so they need to bake in a higher spread because of the risk whereas poly market it's peer-to-peer and so it's tighter spreads because the counterparty is just another trader. No, 100%. But at that's at the same time it's like the sports betting is taxed so heavily and like being the com like if you're going after like core government government revenue it's kind of just like and it's like a vice industry. I feel like that will be I mean that just kind of hurts the margin I guess where right now >> I mean you've kind of seen that right like I think I saw a tweet from like the one of the executives of like the Indian

Gaming Association like applauding all these lawsuits against Koshi and trying to get another one launched in California. So I think that's like >> like obviously like it's kind of like lame behavior to just like you know go after people with you know lobbying regulatory action against them but at the same time I probably might do the same if I was you know a casino person magnet or something right like >> 100%. This is like not like yeah crypto. >> So I don't know I've I've never used Koshi actually. I've only ever ever used Poly Market. Um, >> have you done like real money?

>> No, not really. Like a couple thousand dollars on like uh just random [ __ ] >> Yeah. >> I've used Kelsey to like live bet sports game through Robin Hood and it was actually like amazing. It's crazy. Yeah. >> IRA right next to like the college basketball live like you know contract. Uh yeah, it was good. >> Yeah, live sports betting. That's one of those things that feels like it's not going to be around for much longer. Just like that. >> Uh it's like a little bit too >> What do you mean? It's like even more parabolic than it's ever got.

>> Yeah. The problem is if if you take away sports like live sports betting or sports betting in general, like sports viewership gets cut by like twothirds. >> It's Yeah. It's really bad that that is like the reality now. the premier sponsor of all the leagues is like >> you're just like watching sports games and you get like these notifications on your phone like would you like to bet if the next shot is going to be a three-pointer? It's like [laughter] >> yeah, I got an edge here. >> Like, yeah, okay, I'll throw 20 bucks on that. And then just like over and over again, I don't know. I don't know, man.

We'll see how this stuff goes. I'm skeptical that the way sports betting is right now is going to be the form in five years. It's not gonna I'm not I'm not saying it's gonna be like illegal or like decriminalized or any criminalized or anything. I'm just saying the the access these days and like the in-your-face pushing of it. I don't know. I think it's like realistic risk. And I think politically it's pretty easy to actually get through. I think most people would agree that like sports betting is kind of like a turnoff when you're watching the games. It's kind of a turnoff. I don't know. It's like >> the issue is also if you think about the incentive structure there are there's a lot of money and interest in having it continue and and there's of course some in in not but it's like multiple orders

of magnitude more capital and interest in in maintaining yeah this as a as a viable thing >> who yeah like what's the incentive on the other side like who is making money on sports betting not being legal. Oh, it's not I mean, no, it's not about making money. It's about like preventing >> But that's where like the incentive like Don mentioned. It's just like who >> I know you the UK has done some pretty big studies on this and it's pretty bad like uh the the the trajectory of life path. >> I mean Don Jr. is on the board of Koshi and Poly Market. So like >> I think they see the risk too. Probably >> playing on both sides. Smart.

Do you think that uh calcium poly market are going to stay the two obviously like how much market share do you think a third one can really >> I think Robin Hood will probably end up winning in general or something like I everything I've heard about like people who have like talked about poly market like uh have like expressed that they don't like they think uh it's not as like it's it's incumbency isn't as like solidified as as a lot of people would think. Um I I also think like prediction markets, they're super early, right?

Like they've just kind of proved it out. Like very rarely is the first one that like to do something ends up being the the winner at it. Um and I wouldn't be surprised to see like a Robin Hood or or even like a Twitter or something eventually come in and implement prediction markets and and kind of take over most of the pie. Yeah, it's not insanely technically difficult, right? And so it's just whoever owns the user, I think, is is most likely to kind of dominate that. >> Yeah, that I I do think that yeah, Twitter, we talk about like creating these super apps and everything in crypto.

Um, I think that Twitter, even though they have no crypto or even finance angle yet, actually is the easiest path to doing all this because they have like the most important part, which is just like the social distribution and users. So, I do think you'll see X, I mean, you can easily build it right into X, too, right? >> Yeah. Right. Well, because they also have like, you know, they're leaning into like streaming games and stuff too. So like for like the sports betting type ang like for that they have it for politics like yeah it's it seems like a very seems like a like almost like a match made in heaven like all of like

this like fint twit crypto Twitter like all of like these huge communities of of people live on Twitter and what better way to market kind of prediction markets and directly to the cohort of people who are interested in those types of you events or outcomes. Like it it seems very clear like that. It's a good match. I don't know if they'll do it or if it's like a priority, but like it seems and like Robin Hood like obviously I think is just like well positioned.

>> I read in their earnings it's like the fastest growing business they've ever had. So it's just like okay we have to why are we like giving away this? >> Yeah. It's just too much leakage, right? It just Yeah. Yeah, I'd love to hear the thesis for investing in Kelshi and Poly Market at 10 12 whatever their age respectives raising at like >> you need like what what is the degree of winning you have to do to get uh an outcome that justifies the risk of this thing kind of just melting >> I don't know Paradigm's done a lot of really rich valuations right they just have so much money >> the vision is like so easy to like like sell I feel like because you can

you can sell a pretty crazy dream with like with prediction markets and you can't say that about too too many things and you're already seeing like traction even though it's not profitable but I can sort I wrap my head around it. I think but that's that's the pitch at the series A to get to the like 10 maybe 11 figure val like now it's like okay how does this become a cash flowing business when you're doing it at these vals because it's no longer visual >> yeah how do you turn how does how does a prediction market be worth over 100 bill >> I mean I don't know are you are you buying a Zcash dip >> I I actually did buy a little bit uh of Zcash

at 320 or some [ __ ] >> I mean, Zcash is just I'm uh every once in a while there's something that I buy that I'm like, I'll ride this to zero. And honestly, a lot of times I do ride it to zero. [laughter] And uh but Zcash is the latest under that bucket where I'm just not I'm not going to get like shaken out, you know? >> I mean, I'm just gonna see what happens. >> Monero is, you know, the privacy thing. It's just been grinding up slowly. It's just continuing to grind up. >> Yeah. the chart that's going that way instead of that way. Kind of crazy. I haven't seen anybody talk about it besides like the Monero and Zcash guys just yelling at each other um >> on Twitter.

>> I don't know, man. Zcash went up from like 30 bucks to 750 in like a month and a half. >> So 60 what what was this like a 60% draw down or so? It's I don't know. >> Yeah, it's perfect. >> But you're going to get the hopefully the the W lost stat soon. That's gonna >> Well, isn't it already? Haven't they already been buying? They did, I think, one and a half percent of the supply at like 250 or 280 and they want 5%. So, >> great, I guess. I don't know. I [ __ ] hate debts. Um, >> and you got a hopefully a Zcash ETF coming. I mean, >> yeah, the Grayscale conversion. Maybe that's part of the weakness is people are shorting.

>> You know, it's gonna be called, right? >> ZODL is going to be the ticker for it. >> Yeah, that's a good one. Well, why would you buy Zcash if there's like a 30% like spot when there's you can get a 30% discount now? Um, and >> yeah, the risk is that it doesn't get um the risk is that it doesn't get converted and there's high fees and now you're just kind of stuck with this thing, right? And then it goes like way bigger discount. So >> that was the risk with all of them, right? like buying GBTC at 20% or so discount. The risk was that like crypto

is so a favor and they're never going to let this thing convert. It's just going to run down to zero over time. >> There there is a big risk too. It's like one of like the check the key check boxes for an ETF approval is like the assets futures have been trading on like a regulated futures exchange and Zcash not listed anywhere on shore. So that is maybe yeah we'll see. Yeah, but that was a previous regime where it's it's different now. >> I was just looking at XMR. Uh Monero is at seven and a half bill FDV. U Zcash is around five. Monero doesn't really trade anywhere. Like it's it's doing one 1/8 to one ninth of volume of Zcash despite

being 50% higher FTV. And I was just looking at the markets. It's basically Kraken. I mean, Kcoin is probably the biggest and then after that it's just nothing. >> I mean, Monero is like actually a crime coin right? >> Whereas Zcash is trying Zcash is trying to be like >> egalitarian thing you've ever seen >> like like compliant privacy in a sense even though it's not >> freedom. It's it is on like on the volume note like Zcash is I think still like the third most like highly traded pair on like hyperlid like it's doing like 200 mil a day which is you know even now >> I mean maybe in this maybe in this regime hyperlid counts so go up prove

the ETF you know. >> Yeah. >> All right guys wrap it here. Thought it was a good uh good chat. Um, we'll see everybody. I get in a couple weeks and then it's holiday breaks. Uh, you know, we got the deli yearhead reports coming out next week. We got markets at the end of the week and then we got apps and infrastructure the week after. So, will be a lot of fun. And then I think we're going to do some stuff around that in the new year, too. So, uh, yeah, hopefully um, you know, no, I'm going to put some milk and cookies out. Hopefully get this Santa rally going stronger. But uh yeah, see everybody in a couple weeks.

>> See you guys. >> See you. >> See you. >> [music]