How do Protocols Retain Users After Airdrops? | Analyst Round Table

Transcript

I just realized Pacho has like really nice eyebrows like really thick welldefined eyebrows boss boss man before we get into today's episode just a quick disclaimer the views Express on this podcast by either myself or any guests are their personal views and do not represent the views of any Associated organization nothing in this episode should be construed or relied upon as Financial technical tax legal or other advice all right let's jump into the episode all right guys welcome back to another episode of ZX reseearch the Brock research team is back to bring you another analyst round table today is Monday March 25th this episode will be going out on Wednesday March 27th and we are joined by Brick and picachio fresh

back from our digital asset Summit to jam on the latest Market happenings kicking it off to myself for a news and governance update first things first polygon zkm mayet went down due to L1 vogs I think this is something that we've seen happen a little more recently especially with blobs coming online I think basically the thesis is that blobs basically increase the sort of validator like requirements just because they basically do make the blocks bigger and with that comes a few more extra vrs and one of those vorks resulted in the ZK ebm minute going down for I think it was quite an extended period of time actually roughly 10 hours or so and then just a few other things on sort of like

the air drop point side of things edifi announced points season two and it's quite a hefty amount of the entire token Supply it's 5% of the total token Supply and I feel like this is a trend that you're going to see more and more as protocols sort of struggle with how do I keep my users around after the first air drop and I guess the natural conclusion is to make the second round of air drops bigger than the first round and similarly Blast has distributed brass gold but they basically distributed this not to users but to Big Bang witness which was sort of their ecosystem incubation SL haathon competition and to various main ad deps and I think that's just something that you're going to see

more and more you know at the end of the day you need both users and dabs it doesn't make sense that you just completely forget about dabs in your whole like air drop process so yeah any thoughts on any of those guys I think the blast one is super interesting like I wouldn't say I'm the heaviest on chain user ever or whatever but um like the way blast did it has kind of incentivized me to just go on the chain and like try new things and I think it was super cool that like uh yeah protocols like got some incentives but then what they decided to do or if I've understood correctly is that they just like redistribute them to like their users so then you get like your

kind of per protocol incentives and like people are incentivized then to use kind of everything that's gotten like points or whatever you want to call them because like once one project runs out then people just go to the next one and like try those out so it's like a great way to introduce the whole ecosystem and yeah been super interesting to like try everything out yeah in the same vein I saw for the first time uh hearing uh Rumblings I guess of this L2 called mode which is built on the op stack and it's kind of like a little bit similar to Bass and they're doing a 5% airdrop of the the total Supply to to early users and there's different kpi Milestones so I think they just hit 200 mil of tvl DCF

God was actually the one who put this one on my radar but I find that super interesting too just because optimism defi is like mids at best no offense like there's just not a ton to do over there like I I either go to base or I'm not really using the op stack much at all um so kind of keeping my eyes out for blast like uh I guess narratives in the op stack ecosystem all right we got a few other news and governance updates the first is more on the new side of things it's ethos which is sort of a hybrid between uh ethereum and Cosmos is sort of like a security coordination there um for CS powered by E security but they've secured $4.7 billion dollars in stake commitments and that's broken down as I

think2 billion dollar from EDI $1.2 billion from Renzo protocol one billion from puffer 400 million from kelpin 100 million from swell and I think you just just going to see more and more news like these uh come out over the next few weeks or months for example I think the gr is another code un C ABS that got State commitments to and I'm sure there's like a huge amount of BD games happening behind the scenes as all of these abses go to all of these different lrts or reaking protocols and basically say hey can you like commit your stake to us because you know at the end of the day it's a nice sexy number to see that your abs is secured by like billions and billions of like assets um something

else on the governance side of things fax is proposing a fee switch um this goes pretty contrary to what they were doing in the past especially with sort of their whole real world asset shift if I'm not wrong their entire goal was to not turn on a fe so that they would approve sort of protocal Revenue and bring FRS so that it's fully backed again but this goes completely against that point and you know they have the FRS of rollups they want to reach some insane amount of TBL by the end of the year and have like also an insane amount of like rollups for like layer threes but basically there's a lot happening and I think many would argue probably too much happening there um so that's

what's happening on fractor fund and lastly on the dydx fund uh the proposal went to to stake 20 million dydx tokens from the treasury with stride which I think is a pretty big win for stride notably I think though dydx will not be Auto compounding the sort of dydx or the usdc rewards from staking liquid staking this right uh um instead they'll just be keeping sort of like the acov rewards in the treasury whereas for normal liquid dyx stakers they would continuously compound the usdc rewards but yeah any thoughts on FX atos or dydx guys I mean for FR I'm not that familiar

with the whole ecosystem or the like uh application itself but yeah it seems that they're really announcing a lot of changes all the time and uh like trying to make things happen but uh yeah I guess the market really isn't I don't know how to put it believing day anymore maybe because like they introduce all of this stuff and then no reaction ever comes uh which maybe is a good indication of like maybe they're focusing on too much or spreading like too thinly uh because I think near had a similar problem at one point where like they were implementing a lot of stuff and announcing new things but then uh a lot of things never materialized or got changed around a lot

and then it's hard to like create a clear picture of what your project or blockchain does uh so yeah I think it's interesting that they're like introducing all of these cool things but at the same times you need to like execute at some point as well to you know make things happen yeah I don't think anybody's really that familiar with FX since they keep launching something new every like three days um but I agree with brick I mean it's just they're launching way too much stuff even though like I really like the FX team and I love like I've I would read up a lot on them over like the past year but now I'm kind of getting tired of it to the point that I feel like they're constantly launching

something new and I I don't even think it's necessarily like narrative chasing I think it's more so just that they don't necessarily know exactly where they want the product to go and like brick said the market doesn't seem to like where they're planning on going so I hope that they can somehow simplify it and I mean like to be honest I just I maybe like focus on the L2 instead of the l3s first and then move from there yeah but I think that's also a good like uh like a indication of a lot of players may be staking Capital through layer but not really knowing what's happening or

like what the narratives will be and I think for a lot of people like now it's just a default that like uh ENT layer will drop some kind of token or through some like ABS that being IGN da like drop a token and then it will do quite well but my thesis is that like this stuff let's say in the next 12 months will be like so much bigger than anybody could imagine like it will just be engraved into pretty much everything uh regarding ethereum yeah I agree with Victor I think you're going to see like similar to like TBL Wars like every ABS is just going to flex this like vanity metric of how much State commitment they have

behind their abs and it's just going to be sort of this measuring like a competition and I think yeah like most users have no idea what they are sort of depositing or weaking into I bet you if I asked like every single ion your depositor out there 80% of them probably wouldn't know what the Acron AVS stands for whether that's a problem probably but I also know aan is like really aware of the situation and sort of like the risk that LTS present to both like I and theum as a whole as you know sort of like the quote unquote like Leverage that being introduced through some of these like Loop trades and so yeah uh I think we will continue to have no idea what is happening I do think that

there'll be a lot more increased education in the space um either from M themselves are sort of like external third party contributors but yeah I I expect it to keep gr though yeah but also got to say that I feel that a lot of these lrts are maybe a good addition to the game because many of them will be like trying to optimize how they allocate capital and a lot of them are like adapting these like optimization models where they're trying to optimize for the best best risk reward ratio which probably is a better way to allocate Capital than just having people like randomly throw in stuff into like different operators and abss so uh yeah

I mean I think those are pretty good for the industry overall let me follow up there then like you say like sort of developing this portfolio based on risk reward ratio what do you think the risk is and what do you think the reward is because for half of these abss they haven't even thought to like the slashing mechanism you really have no clue what the token rewards are going to look like so what do you think like actually being discussed other than like is your project legit Tech during the BD cars yeah I mean it's gonna gaunlet has at least one good like blog post about this and they go through like their kind of risk reward model and it's going to be based on stuff like perceive the risk and I guess historical

performance of the avss so to answer your question like right now I don't think it's possible because you don't as you said like if you don't know the slashing conditions you can't like optimize the model in the way you should and it's impossible to say so I think yeah that's actually a good point like a lot of people maybe don't realize that the first I don't know a few weeks will be the riskiest for when a new like ABS launches because you simply don't have any historical data uh to go off and also like one maybe big factor that people don't really think about is that like it's impossible to really Define the risk or like you kind of have to you

know estimate something and like to be able to I guess put it into a model so uh yeah you can't be perfect with it but I'd still argue that it's much better than just like randomly picking out a V s's are like securing as many as you can with your Capital I've got a dumb question for you guys too so if if you went to withdraw what you deposited in enan Lair let's say you deposited St and they unwrap it when you go to withdraw that can you just withdraw it in eth or are you withdrawing it in Ste like I'm just trying to think through because I've been saying since the beginning I just see the main risk here being the the peg of these lrts to the underlying eth

given how many layers of of Leverage you kind of have on top and I could see that being a problem where they dpeg 20 30 40 cents off the dollar so what does that process look like like are you actually withdrawing Ste no matter what or do you get out eth like yeah you you withdraw the um the liquid token the liquid steak token so if you do steak de you withdraw steak de but it takes seven days it's not like a oh can I just have it now it's like block to block so I don't know how many blocks exactly but when I withdra with seven days okay I I think there's some differences between how like projects implement this but at least a few I've looked at this like you deposit Ste into

the LRT project and then the project itself like goes and un Stakes the Ste like you would normally do so then you just have you're holding basically eat and then you first stake that natively and then restake it uh through layer and then the LRT project just like uh gives you back their LRT derivative yeah if we have different answers on that question then I'm pretty sure retail has no clue what they're going to get back when they eventually withdraw to you but all right we're going to move on to a quick word from squid thanks to our fantastic sponsor dydx all right guys for this week's dydx segment we have big co-founder from

squid bgo thanks for coming on big hey thanks for having me guys all right I'm going to dive right into it I feel like I'm seeing squid rouer more and more lately when interacting with various stab front ends can you explain what squid rer is and how AAR fits in perhaps as a starting point yeah sure so squid is a crush chain swap critical we let you get any asset on one chain to any another in under 20 seconds and this all starts with axo which is a think of it like an internet for blockchains it's a network which connects every blockchain uh has really nice D simplied way of doing it it has 75 validators and they verify messages between chains once you

have Axel's Network you can build applications on top of it we thought the most useful application would be to allow you to have any asset in your wallet on any chain and interact with any application in one click because we think the the super of crypto is that you can have really strong ownership like DX perfect example of this they build a an exchange that instead of a centralized exchange where say FTX ears your money or or doesn't earn your money as it t out um you own your money and you can verify it so people are really focusing on this ownership side of crypto but the other superpower of crypto is interoperability where you have an application and value that's

associated with that application and you can use it in you can plug it into any other application like seamlessly um and this is a big lift up from the traditional Finance World say where you have maybe some value in atino where I am right now and would be able to use that in Australia um so we want to have all value across the world like instantly be able to um uh exchange or communicate with other products and like byproducts we can transact AI agents can transact this this the future we want and so what we thought we needed was a oneclick way of using this value in any application with then let's swap value into something that the application might recognize and then also um in DX's

case for example we deposit that value into into an account and you can start trading and yeah we've we've done about 1.2 billion dollar of spot volume in the last year partnered with a few hundred protocols right now connecting 65 chains I think yeah that's super helpful context so how specifically is squid router related to dydx I've seen squid Integrations across a lot of different purpose dexes so i' would also be interested to hear like what is your expansion strategy like how do you decide which daps you want to plug into with Squid rer yeah dydx is the perfect example of the of our use case because they built an entire app chain just for their use

but um it was difficult for users say on ethereum to get the E onto the exchange to now start trading a vdx um and we're helping them by we swap on say Unis swap bridge fire axela swap on osmosis bridge fire ABC all these things the user would have had to previously do themselves to get onto idx uh we do it for them in one click and that problem happens to be basically there for every application in crypto um because we have all these different rollups and chains around the place um any application is usually limited to having users just on the chain that they exist on like users of ethereum or users

of arbitrum users of the cosmos and where really easy sell because we come to basically any applicational protocol and we can say uh you can increase your total addressable Market to basically everyone in crypto so the the people our expansion strategy is really with everyone I mean we've we focused on defi to start with like we focused on dexes and we're partnered with most dexes around crypto in on the chain that we support and then derivatives dexes with the next one use case there is depositing margin into your account from any chain um we're also working in nfts so you can buy an nft on any chain with any token and one clip this sort of stri colle check out

experience um lending gaming we're we're working everyone it's a really nice um open world that we get to working nice that's all super interesting and I'd love to see you guys sort of passed across my time saying like squid always Powers these really seamless experiences I guess last question that's slightly out there would you bu any chance have any token Alpha for some of our listeners I can't confirm the existence or non-existence of a token um but I can um yeah the the users like the community should get involved with with our Discord and Twitter and we have we're really proud of making everything fun so

we'll be coming out with some fun experiences soon which which everyone should engage with one more quick question too I know we only have like another minute here but I noticed that there's V1 and V2 do you mind uh diving into like what exactly the difference is between V1 and V2 squid yeah totally so V2 is still in beta and is going to be releasing pretty soon it's um it's a huge upgrade in how the routing Works um so originally squid was purely you would route bya usdc you'd always Bridge usdc Swap and it was very limited in number of uh say the number of Pops you do with dydx that's a special case where we actually go from ethereum toward mot to

Noble to DX and it's like this really complex transaction which we package but we built that specifically for them and this is V2 is super generic so we're expecting this world where there's potentially thousands of chains and rollups and everyone has their own rollup for their application there's tons of scaling happening and we needed something which was going to connect everything in one click so it's it's really a technical upgrade so that we can support those things like l3s all these op stock things that coming we've got rollups and Celestia like you will need to bridge multiple times probably and so we're we're doing that and it's also going to be way faster um needs to

be super Snappy like go you get a quote swap get your assets in 20 in like 10 seconds two seconds even um so yeah that's what we're just focusing on like now we've hit the use case really nicely and we're just leveling up the technical routs awesome well we will have to get you on sometime for a full episode fig but thank you so much for coming on we will see you uh hopefully in the future awesome thanks for having me on all right guys now moving on to our hot seat Cruise drone segment this week I'm going to shoot it over to Brick first who's going to give us a dash Roundup from blockworks very own digital asset Summit yes sir so um went to dash last week was a super super great experience unsurprisingly like most of the people

you talk to are quite eoric right now and still believe that the market has more space to run um but also like I guess a big difference uh with other conferences I've been to is that like at Das you had more people who were uh super focused on the intersection between tradify and crypto and then also more um like focused on the how the like crypto markets are structured uh which I or what I mean by that is like oh how are how is money flowing and like where's volume going and things like that it wasn't of course there were uh some super tech focused people also but

not as much as the other uh conferences I've been to and it was pretty I don't know refreshing or like cool to see also people who aren't as like uh you know just Tech focused people and kind of being in the industry without maybe knowing every single detail that's happening underneath and actually a lot of people I talk to said that they don't even trade crypto that much uh on their like individual accounts which was quite a big surprise to me so that kind of signals to me that uh the industry is here to stay because now you start getting more and more people who are here to like do it as a day job instead

of like trying to make it big with uh our true trading then another takeaway would be that big banks are still like definitely playing around in the field and like they're going to implement that like their own structures talk to a lot of different people who said that like they're working on in their Banks like internal divisions for like crypto payments or like trying to implement some kind of a structure where the banks customers themselves can like have a native kind of way to get access to crypto um but then yeah that got me thinking that that might lead to maybe some kind of fragmentation or like uh

you will still have some kind of a tradify factor even when like the banks come on chain because everybody won't be like using the same systems and uh I'm not sure how they're gonna they're probably gonna be uh well connected through some like technology way but still like it's not going to be as you know idealistic as within crypto where like everything basically can be connected then when it comes to some vs I talk to it seems that like uh the private markets have quite quickly followed what's happening in the public and everyone's kind of expecting that uh yeah as I said earlier that everything

will run up so like given um like private rounds have gotten more expensive and it's now harder than ever to kind of get into these private rounds uh and that's how projects are able to like raise so much money and a few vs even said that they're not GNA like invest that heavily anymore because they feel that the Market's overheating and they just want to take a like super long perspective so they're going to wait for like the next opportunity um then also talk to some dead people uh and their biggest concern was like yeah we already have some institutions here who do deals and like use these products but it's still super small

which is why like the market is pretty inefficient from time to time and like few big pain points there are that there aren't enough like trfi like products yet so like or like these derivatives like interest rate swaps or like more complimented dead products um or of course they also exist to a certain degree but it's like you can't access that capital or you can't access those projects yes yet as an institution um and yeah interest rates uh are sometimes or that's why interest rates sometimes are like out of or you they could basically be arbitr if

you wanted to but um it's also like hard to close this differen is because because like it's so hard to like access some of these parts of the market I don't know if that made any sense but uh yeah and then maybe my last point would be something that effort Capital has been talking about since we came back from Das as well is that Meme coins are like a super hot narrative still like you would have some super big institutions or like regulatory people even talking about I don't know bnk or we or whatever and uh I think that's a big signal that like meme coins really have a lot of

like not I don't want to say staying power but mind share maybe it's the better word uh yeah it was pretty funny to hear like people in suits uh talking about meme coins I don't know if bacho wants to add anything yeah about the meme coins um I don't know if you guys remember but slurf launched that morning that like I think the first morning or the second morning that we were at that and I remember like by midday I had I was like over hearing people in suits talking about it but I mean like slurf was pretty big because it it pumped and then also the dev was crying on spaces so it was like it got really popular really quickly but it was

still kind of like a culture like a shock like brick said to hear like people talk about meme coins um and like even on the panels they were talking about meme coins and stuff so I agree that it's definitely like here to stay apart from that I I think the only thing that I really noticed then this is something that I think about a lot is like when these guys come in what like interest do they have in crypto like how much interest they have in crypto and from what I saw is like the I don't like the higher ups the big guys they like understand crypto but they're like oh ethereum is like a little bit exotic like etc etc but then like their analysts are like really really in the Tren and they like they know everything

and they're very like interested in everything so like those were the guys that would often talk about slurf um so it was like that was kind of interesting to me because I think on CT you hear a lot about like oh how like banks are going to come in but they don't like that or like the suits are going to come in but they don't necessarily know about it I I don't think that's true maybe that was true last cycle but now like these people are obviously like in the space on their free time and like also they understand it a lot better than we might imagine I think there's a lot to bre down there I I really like Big's point about how these people probably just do it as their day job rather than punting on Pas at home I think that's a very

good sign actually because it means that these people are likely here and thinking about how to incorporate blockchain technology into their jobs their companies rather than just thinking about like the financial and speculative nature of crypto which is what it's really focused on right now uh to be honest and definitely agree on the meme coins I think like there's a degenerate inside every person uh and I guess that came out in full force during during digital ad Summit private Market valuations I think we've all seen that it's gten pretty crazy in the past few months we've seen these large raises whether that's like espresso Elixir eclipse and I mean like I can there like1 million do raise from like a single VC like that's

probably like one of the largest like of like I'm not sure whether you say like private markets are overheating but if you're like an investor at this point you're probably thinking that there's probably better risk return just from investing in liquid markets or secondaries rather than private markets and totally agree on the Deb market fund right I think we have seen like the early Innings of like people thinking about like rwa on CH whether that's just like token treasury or actual like for example credit pools such as like Maple or Goldfinch but like in the grand scheme of those Market it's still really really small like private Credit in tradice Hobby like I don't have a number but I'll say like hundreds of billions whereas in crypto it's probably like one

billion Max and I think there's still a lot of operational processes sort of like counterparty R like legal RIS like what contracts you sign What entity are you interacting with is it a dow the protocol or sort of like a offshore entity that crypto's still figuring out but I do expect crypto to figure it out sooner or later but it's just super exciting to hear that you know the institutions whether that's like super chafi institutions or super Crypton native institutions that are here and they're are at least actively interested in this industry rather than just completely writing it off and I can imagine the large part of that was due to the ETF approval back in January yeah definitely agree there but I find the the inflated private round

valuations to be kind of surprising because I have defi llama pulled up right now and I'm looking at the raises tab we topped in October of 2021 at $7.1 billion doll raised during that month alone and today you see during February there was 800 million so we're looking at like an order of magnitude Less in private round fundings amounts and I I don't know it's just like you'd think that this gets a whole lot crazier before people are passing on private round deals but it's tough to really diagnose because obviously there's a bit of a lag between private money raised and public markets Trading yeah that's a good point and actually when you think about it like when I said

that the private Market is overheating I meant more like valuations are going up uh and not like the amount of capital raised itself but that's a super good point because like interesting that if a lot of or some vs are already feeling that uh they're paying a lot to get just get in or like how the valuations are high and compared to like the last cycle we still aren't like seeing as much money raised in total um maybe that means that some players are never coming back or like we we will never see a as much of a you know craze going on in the private markets as we saw in the last cycle but we'll see what happens yeah it

could be timing too like we obviously had that March 2020 huge dip it was the middle of covid so maybe that funding kind of got pushed back further in the cycle and this time it feels a little bit scarier to you know make a private investment because you think all right I got a one-year Cliff after the token launches that could be in six to 12 months I'm going to be waiting here for two years and bitcoin's already at alltime highs like that feels like kind of a shitty deal at this point in the cycle so maybe it's just apples to oranges comparison I think there's also another thing that would be interesting to look at so one is like sort of deployment right Sam you put that number of 8 point whatever billion in February 2021 versus like 800 million in the current month that's one aspect the

other aspect would be how much are people raising for their funds because in 2020 2021 that got pretty ridiculous like the amount that some like first time like uh GPS were able to base for the like crypto funds obviously that was a function of sort of like the low interest rates during the co era and interest rates are at a very different place right now from where they were like two or three years ago so it be interesting to see whether these funds are able to do these like Mega raises again or that they're not able to do these Mega raises because I think the top was like a6z announcing they're like in total they raised like 4.5 billion across their like four crypto funds last cycle and I don't think you see something of that order of magnitude

this cycle again just because of a different like Market environment but also be something to pay attention to I think that might also be like a um consequence of the fact that I'm guessing last cycle a lot of funds couldn't really reliably deploy all of the capital they had like then you have to start doing some weird deals and you're like inevitably gonna get burned on that stuff so maybe I'm just guessing here but maybe a lot of managers got a bit you know wiser on that sector and decided to you know what like I'm just going to raise as much as I think I can reliably deploy and be happy with them I don't know I think it might just

be we just haven't hit that VC fomo yet where they're like oh I have to have crypto Investments um so I don't I think it might just we're just not doing a left translative cycle like everybody's saying it is it's just going to get sillier and sillier is my take I think another Factor could also just be AI like AI was not a thing in the co era whereas I would guess in the past one year like VCF F mode and based for AI funds to like incredible degree and you see that in these uh fundraisers and these Investments I mean like today it was announced that FTX was selling two-thirds of this anthropic of the anthropic state for like 800 million or

something which means that there's someone else on the other side buying their stake at whatever valuation anthropics trading at and so yeah I think that's probably another reason I think there's a lot of like high net worth individuals too who previously maybe would throw 100K check to you know this friend of a friend who's in crypto and starting a VC fund but now it's like okay you can just buy Bitcoin ETFs in a portfolio in your you know regular brokerage account so I I don't know I see both sides I could see the Picacho we just haven't seen that VC fomo yet or I could also see like there's simply just more Avenues to invest and you no longer need to maybe put those checks into like a a more private allocator fund but it'll be fun to

watch yeah the thing is for me VC almost always seems like a forced buyer to an extent because they have all this money they have to deploy so I'm almost wondering if it's like if it's just not that time yet where they have to start like they haven't we're still I don't want to say it because it's a bit of a mean by I'm wondering if we're still relatively early in the cycle that they haven't had to like raise those funds and be like oh like I have to deploy this as well and that's when you see like because you see this with like not just F like VC funds but also like chains where they're like oh like I have X amount of money I have to throw it into some form of like program some form of incentive thing

it's like that fomo I just that's what I think it's like they're kind of like forced to deploy and it's just not that time yet all right I think that's a good segue into my hot seat this week I've got Trad fi dunkers on the ETF outflows last week I'm actually stealing this from a tweet from fou so be sure to give him a follow he is a a account he's been nailing the macro side of things but last week we saw 900 million of net outflows from Bitcoin spot ETFs and some folks have been kind of cheering on X Twitter about how the most recent runup was basically driven by unsustainable demand for Bitcoin ETFs but um as F likely or rightly pointed out like what they kind of fail to realize is2 billion

dollar of the net or of outflows were from gbtc and no one on CT really understands how the Genesis bankruptcy proceedings are actually going so that could be related potentially and this also came during a week when a lot of people were very Unsure how the fomc meetings last week were going to go and it it wound up going pretty pretty darn well the fomc turned out to be pretty positive with language from pal signifying QT tapering cuts through the the end of the year like one two maybe three um so yeah generally positive language from pal despite the the more than hot inflation numbers we've been getting as of late and today's Monday the 25th as we said a few times and the coinbase premium returned which is historically signified spot ETF um

inflows so we'll see if that correlation holds up but gbtc is down to about 20 billion dollar of AUM and you have like macro guys like Joseph Wang who used to work at the FED who I personally follow pretty closely uh for macro signal if you will uh and he thinks that the global cutting cycle is just now starting and he's predicting like Pro positive price action ac across risk on asset classes so pair that with the having in you know less than a month there's definitely a lot to be bullish about but again we keep talking about meme coins like that does typically sign signify froth in the market so it's this is just like a tough Market to navigate honestly and it feels like everyone every other day is like gone skitso on

us and like one day everyone's bullish one day everyone's bearish and there's been some pretty crazy sentiment swings so I guess just spot and chill is the is the takeaway because it's it's just a hard Market to try and time if you will and I think you're probably better off just holding the bags you have conviction in like like bricko says time in the market not timing the market yeah I definitely agree with what lot Sam say I mean as much as I would like to see 500 million in that infos every day and Bitcoin just grind up 3% like day after day after day I don't think that's a realistic scenario at some point it had to slow down or even go NE negative so call this like info consolidation or whatever you want the

market does need to take a breeder from time to time I do think that one interesting thing that I feel like I've noticed at least in the past like few weeks or months is that CT is like flipping like bullish and bearish a lot more frequent than last cycle it feels like last cycle it would at least take like maybe like one or two weeks before like people just went like turbo b like turbo bear but this cycle and especially the past few weeks it feels like that's happening like every few days I don't know what to make of that um to be honest I'm not going to pretend to like understand like CT like social sentiment analysis but that's just something to uh pay attention to and I'm also not going to pretend to like know my Maco stuff

but I don't know the MMC seemed pretty positive too I don't know to me it seems that each cycle like people are saying that oh this cycle we're flip-flopping much more like Market sentiment is changing but I just feel that that might be I don't know what to call it re ecy bias where like at least to me last CLE I remember the same thing happening because I was just kind of getting more used Twitter and like getting more more on there and I would do my own stuff trading on the side and then hop on Twitter and I'm like hm last day every or yesterday everybody was super bullish now everybody flipped like what's happening here I don't get this mindset because I'm definitely not like a

short-term Trader and yeah I'm seeing it this cycle as well so I feel that that's always happening and that's I don't know why I can't do that day trading thing or like where you flip flop every day you like pick a side or pick you're either bullish or bearish and then you go with that for the next few months that's my Pro tip yeah it's also interesting just on the BTF Bitcoin ETF flows is that every other ETF had inflows every single day net other than grayscale so it's literally just grayscale as the source of sell pressure and to like the social sentiment seeming a little bit more flippy floppy this cycle than last as you were saying Ren I think that'd probably be attributable to the fact

that people are more heavily allocated to meme coins that have you know 50% intraday moves regularly so that's what I'd attributed to personally it also might be that now we have like it's over where so back is very like memeified so you're always seeing that and you're kind of always thinking about that as well but it's definitely all like most likely is because people are facing like 50% down swings on The Daily and then they're like it's over it's definitely easier to like flipflop right now because of the like ETF flows it's kind of a Nord star you can follow where like oh today we had like I don't know 10 billion

outflows uh maybe not that much hopefully but just a few hundred million not or like tens of milons not a few billi yeah just doing example here but you know what I mean like it's easier to you know start flip-flopping if you see you have a like clear Market Nar or like kpi kind of that you're following so it's easier to like change your mind just based on that because I guess last cycle a lot of people were thinking about the interest rates and those of course don't change them often or as violently maybe no I think that's actually a very good point right like last cycle thinking about like whether you want to feel like

positive or negative or like optimistic or pessimistic like it was hard to find like a metric other than like the price itself you know you can't look at the rainbow chart like MVR Z or whatever like those like random metrics like coin holder days but this cycle there's like the net inflows and that's a really easy metric you know like positive number good negative number bad and it feels like everyone's like attached themselves to that number as a sentiment indicator I I totally disagree gbtc was literally the exact same thing last cycle like the premium yeah or not even the premium just like the the dollar AUM like it was the exact same thing everyone was posting charts like oh my gosh like another 500 million of inflows into GB

like it's it's the same exact thing just re-engineered and and now fully regulated sure I think that's a a fair take through I think that's a good point to move it on to bachio who do you have in the hot SE Kone this week I have two people teams in the cool Throne this week I have firstly the Ando team who launched Ando GM a couple I think last week that's has like completely ruined my sense of time so I think it's either last week or the week before um Ono GM Ono Global markets um apply name allows you to trade Global tokenized assets um including equities and stocks which is kind of

not what they used to do they used to only allow usdy which is a yield bearing stable coin and O USG which is tokenized governance debt um now they've moved on to tokenize stocks and equities and I'm really happy that they did this because there's kind of like a lack of tokenized equities and private equities on chain and I'm not sure if this is like a demand issue or a supply issue it's probably a demand issue uh to be honest but either way it's good that they're at least expanding more and recently they also did uh expanded to sui and Solana so the highr put chains I overall I've just been like over the past few months I've been very excited with Fondo because even though the real world asset

narrative kind of died down like only naturally because meme coins are pumping and no one really cares about like 7% or like 4% on chain or something um but yeah I don't think that tokenized equities will become popular this cycle but I do think that Ando has that like Mandate of Heaven for tokenization and real world assets where it's like the protocol for it so I'm I'm quite excited to see what they're going to continue to do um and my second one is with the parallel team and their launch of AI agents in or their potential launch of AI agents in game in eight to 11 months where so they recently released a white paper for parallel colony which is a AI

agent LED SL based space exploration game where you basically chat to your AI agent and say hey can you build like X or can you invade Sam's Colony today and then they do it or they can refuse to do it or they can say actually I don't want to invade Sam's Colony I'd rather invent invade Ren's Colony um but with parallel Colony they're also launching wayfinder which is the AI agent framework which I think is the cooler um part of their announcement it's like basically it allows AI agents to interact with the blockchain um it's supposedly launching on Solana although everything is kind of like preemptive at

this point because not everything is solidified it still has a ways to go um but overall I'm quite excited and they're meant to emit 45% of the wayfinder token prompt which is the name is undecided to Prime ecosystem I don't know how they're going to plan on doing that from what I've seen on CT it's supposed to be like a caching system which is basically you stake your Prime tokens and you earn prompt but I think we still have to wait and that's likely going to be like at least they're saying quarter four this year I don't think that's going to be the case I think it's like um start of next year but it's I mean this is definitely the coolest um onchain game that I've at least like heard of it over

the last few months everything else is like stardo value but value but yeah you need at least 100 Grand in Investments to get a couple of seeds so this one should do relatively okay okay starting with uh Ando i I do agree that like tokon treas is probably just the largest use case today um but I do think like tokenize equities and just I'm not saying like tokenize everything guys like definitely like not just like tokenize like every single Airbnb tokenize like every like house tokenize every like just random things and put on the blockchain but at least from like a super m perspective right like if you are trading equities on your stock Brokers today you can sell your Equity I think it's now T plus1 settlement and

then you're going to take another one or two days to go through like the Fiat banking system and then you need to like transfer to your bank account and then from your bank account to like your centralized exchange and then like onra through your centralized exchange like that's a pretty decent time that could have been invested in the market and so just like cutting out those processes by tokenizing equities on chain seems like a good first step obviously there's like probably additional risk and Trust assumptions involved but it does seem like Ono's going a pretty like damn regulatory route you know they're adhering to all of the regulations they have kycs they're registering all these funds and I don't think it takes off just

because like you know like equities aren't that interesting when compared to like the upside that crypto offers but in the long term I think that's kind of the blue case of tokenization right like crypto and more specifically like blockchain systems or blockchain technology reduces the settlement time their fiction to like trade between assets and hopefully one day like offer permission is access to all of these investment opportunities just because in the US it's easy but in a lot of the other parts of the world it can still be surprisingly hard to access like us equities to be honest like even in developed countries yeah I got to give a big hat to just off the rip to whoever the CMO is over at Ando because Ando GM is 10

out of 10 marketing I love that brand but I just think back and get PTSD to the days of Mir getting served at some conference that was a equity trading platform called me in the Tera ecosystem and then I also think to gains Network D listing equities specifically because of the regulatory risk so I don't know if they're working with like a big fund like a black rock or some sorts to like go through all this or or how closely they're working with Regulators but like for me I don't want to touch it just because of those risks yeah I get what you mean I think Ono is the thing is I don't want to say anything because I don't want to jinx it but from what I've seen and how they've worked in the past is like they work

relatively closely with regulation um obviously this is just me inferring I don't know I I haven't asked them but like with o USG and stuff it was pretty serious I read over their like docs and stuff and their like notices and it's seemed like they were doing everything the right way um but obviously as you said it's like I also think regulation has cleared up a bit more like if you see black rock Etc potentially launching stuff on like they had an ethereum $100 million fund or something so it's like it's kind of easing up so I think it should be better but you still never know so I get what you mean and it's also like kind of you like like you never know you like things could change in a month that's what the SEC is doing

so yeah my takeaway with both of these themes is that like if you have a good product and then execute well on the like BD front the market will take notice into you uh especially with I'd say Ono because although I haven't like done very deep Research into it I always see that uh or I'm guessing I'm not the only one in the market who's like not being super into like this vertical but then when they like launch a new product or like somehow advertise it they always seem to like make a perfect job out of

it and I guess the token launch event was also done in a way that like basically you know got the Market's attention and nothing super bad has happened maybe on the contrary the token has done quite well so yeah might take way is just that like if you have a good product and you're able to advertise it you're right now going to do very well in crypto yeah I think that's the power of sort of like marketing yourself and somehow becoming the category leader I think when most people think rwa these days they just think on no I at least I like don't really think of anything else and there's a lesson to be learned in there for like marketing and trying to

become the category leader I don't think there's like a defined playbook for it but definitely like something that most prodos are trying to do um and then moving on to sort of like the prime parallel side of things vacha did you say that they're gonna launch in eight to 11 months or did I hear that wrongly uh what whatever quarter four is is early but I I don't think it's gonna launch in quarter four like because usually with these games I I love the like the parallel team and I think they're like great but like realistically usually with products you got to give like teams plus four minus not minus four plus four um so I think they'll likely take their

time but I think it makes sense it's the AI agent game so yeah I mean that seems pretty far out I would be worried that by the time they launch to be honest like kind of the the fun is over and the Market's kind of died a little but I don't know fingers cross hopefully they ship it in time I do think that AI agents like X gaming is really interesting uh obviously there's that like one super famous paper that came out from Stanford of like multiple AI agents interacting in this like stard valy type world and I think that paper captured a lot of people's attention and parallel seems to be sort of like the leading uh team that's trying to

implement this into gamepl it's so hard for me to Envision like it there's like two scenarios like one is like really bearish like the AI agents like don't work like they just keep on like not listening to you you ask them like go build something you're like no I'm kind of tired I don't want to build it and you're going to be like what is this I'm trying to get you to do you know um but then the other is like the obvious bluecase you know it's is like really fun seamless experience you have these like hilarious interesting interactions and even even if this game doesn't work out I do think like overall long term it's going to be an really interesting chend to pay attention to I wouldn't be too surprised if five years down the road as sad as it sounds like kids have

this like sort of like friend buddy in the game that they like just constantly interact with and like it's just completely powered by AI agents and that's sort of like their only outlet for everything all sorry this is getting a bit depressing but basically I do think that there's a lot of like day-to-day like AI interactions AI agent interactions that people will have in the future yeah that made me really sad R but the first thing is my be scenario as well like CU with chat GPT and stuff sometimes you have to for like beg it to do something for you you're like hey please do this like I'll give you a reward or something because or else it just gets lazy and doesn't do anything so I'm worried that it's going to be the same thing with um the AI agents but I'm my biggest worry is that it's just going

to be like interesting for like a month and that's it like if I was parallel that would be my worry because I feel like for strategy games and like Colony games you want to be like as like in control as possible like I want to do things my way be like be it role playing or be it like Min maxing being as efficient as possible and like at the end of the day I don't know if me saying to an AI agent to do something that way is gonna do it for me um but yeah that's my like big worry is that's just not going to be that much fun after a month I'm such a mid curver on this I just I see chat gbt is useful don't get me wrong but like I'm not using it every single day and like they found it that

company in 2015 you know like that was nine years ago so now you're telling me that there's going to be onchain AI agents interacting with the blockchain and doing all these huge new use cases that are super underexplored and it's only an 8 to 11th month development time frame like that just that doesn't sound right to me yeah but do you remember that like first um AI generated video it's like Will Smith eating spaghetti and it looks like horrible and like versus the recent AI generated videos and it just looks like an actual movie so like these things grow super exponentially so I think I mean there's definitely like a risk that it's just not as good as it should be in8 to 12 months I just think like it's getting very very fast to the point that I think

it's going to get a bit scary next year hopefully not as like scary as what Ren described with my children having to speak to a AI Avatar all the time but it will get scary so we're gonna see how everything works out yeah I just hope uh or it would be super cool if they get it implemented by that time and then I would imagine that uh going back to the point of you having to like beg the AI agent to like do something for you or whatever like one would hope that you could change the friction of or maybe the frequency or how like negative the AI agent is you know what I mean so that if a player wants to like be able to you know have a super smooth no uh like uphill battles

to do within the game experience then you can just like draw the friction down cuz to me this kind of seems like a super big possibility of creating something like I don't know Sims on steroids and just like simple games with that use an AI agent that give you like so many more possibilities for the player I mean uh to do stuff and that's like a big unlock I feel like but that's my question if you're a player playing a game what is the difference between playing Sims and playing this new parallel Colony wayfinder whatever it's called game it's like to the user you don't even understand like it feels like

you're interacting with a hardcoded bot that's making random decisions based on a random number generator like it it doesn't actually do anything for the user okay so I I think I need to give a bit more context here so the each agent has its own archetype from what I've understand and B like based on the white paper it has its own archet type so if I own let's say Avatar 75 and I give it certain prompts and I I play with it for like six months it has its own archetype but it also develops its own memories with me so it has its own like ways that it understands instructions prompts histories memories it's experienced relationships and when I sell that one to Brick it keeps those like it's embedded

in the token ID so that's like the benefit versus with Sims where it's like and also I mean I I don't know like Sam I I don't know how to convince you of that because it's like to me it's so clear that it's like completely different to Sims and you're like what if it's like Sims I don't know it could be I'm not sure but like it's supposed to not be it's like Chad GPT versus Google what chat GPT is like Google technically if you just Google stuff but it's like also like quite different in my opinion yeah no this this conversation for the listeners is deeply rooted on our morning calls every morning at 9:32 I I've been a uh a bit of an AI naysayer and it's likely because I don't have any bags so I'm

excited to see picachio retire in in one and a half years off of his AI Colony agent you're just too old to get it 27 man that's like 40 in crypto terms so yeah you're you're probably right but uh who else do we have left for the hot seat cool thrs Ren I think it's just you I got my last Hot Seat but I'll make this fairly quick um so I got Bas in the hot seat um last week they ran into some pretty crazy fees um so post 444 I think most vop saw a pretty significant decrease in transaction fees most of them were seeing sub one cent fees credit due um but then base went super crazy due to increased demand for

transactions and I guess block space and their median gas she spiked up to more than $1.5 which is probably higher than where it was pre 4844 um but yeah I think this happened for a few reasons the lower fees likely resulted in this increase in demand and also just like Bas season kind of really kicked off last week with DJ farasa all of these like meme coins and for context there was this one day where base did a whopping 1.57 million in transaction fees and they paid only $5,000 to post data to ethereum in comparison to the other l2s which I think probably made like less than six figs in transaction fees a day like it

was really really crazy that day um but yeah a lot of users were basically paying ridiculous amounts of transaction fees and coinbase wallet also as a thing where that once you send a transaction you aren't able to replace the same transaction with the same nons with a higher transaction fee so you're kind of just left waiting for transaction fees to come down and your transaction to eventually go through so Jesse from the Bas and a lot of other people on Twitter were super cognizant of this issue and basically boils down to that we sort of scale The Da Side partially and now we're running into this like problem of execution because the L2 execution view was the component that was really high

um so Bas is working on a few things right now the gas Target is relatively low it's around 2.5 M gas um per second and base is basically at its current Target capacity which it can support and that's kind of determined basically by its not infrastructure and sequencer you can't jack that up without juicing up sort of like the sequencer no infrastructure requirements so they're doing some low testing right now but I think what they're saying is that they can really easily raise the base gas Target by two to three times um and then long term they really want to do a whole host of different things right so you're seeing like parallel pathing work I'm not really sure what that means to be honest um but hopefully that helps them

achieve a medium-term goal of 400 Xing the gas limit but obviously that comes with higher da posting costs and I don't know what medium term is for clarity it could be like two years it could be 10 years um but yeah and there's also other things to consider right if you're increasing throughput it leads to a faster rate of State growth and it it's still early days right I think the evm has historically been a relatively constrained execution environment and that's kind of showed for at least only for one day uh for base and you know you're seeing all of these like evm compatible par execution blockchains whether has like say Monet or an L2 that such as like Eclipse that uses the svm but I think one question that I'm

interested to see is like obviously like something will always be the bottleneck but what will be the bottleneck after execution in would it go back to like da would it go back to something else would it just go back to for example like sh like Hardware kind of deal with whatever you want to expect from a blockchain um I don't have a complete take on how to move on from here other than just like increasing gas limits make the blocks bigger in the short term but it'll be interesting to see how L2 sort of tackle this especially if they want to eventually have a decentralized sequencer set that doesn't have like insanely High Hardware requirements yeah the only thing I would add here is I think B should be in the

cool Throne honestly not not a hot seat like yes like unfortunately the EVMS like rints and in terms of execution and and transaction fees is on on the hot seat but at the end of the day it's pretty crazy how quickly activity over there is growing and that there's actual demand from people to to go over there and try some stuff and I know a lot of people have been Shilling friend Tech because they were on there early they own a lot of keys and points are coming and and there's a lot of funny memes around it so that's something that's a catalyst and then you've got dgen and other meme coins definitely like exploding today hopefully that lasts through Wednesday when this airs but you see the tvl grow from you know zero to 1 billion it took a very long amount of time I see you

have this written down here and it was 203 days and then to get from 1 billion to two it was only 23 days which is just mindboggling growth to be honest so definitely a big fan of Base yeah I agree it's like this is a good problem to have versus like if your chain goes down and people don't realize it for 10 hours like it's this is like what you want is like people complaining that it's fees are too high um but I I'm I Westy might get really upset with me but I feel like it'll be da costs um next if they fix this is will be the issue because from what I understand uh with my limited understanding of ethereum is that next

like what they implemented 4844 is good for da but it's not like it doesn't actually do anything it's just like the precursor to doing stuff and then in two years they're going to do Dan sharting which is when you actually fix um da costs so yeah but yeah to Echo what Sam said I I don't think B should be in the hot seat probably just maybe like the evm should be in the hot seat base has been on an absolute F I think Jesse has been quite literally Relentless right that guy is like just a force byone and the amount that he's contributed to the growth and development of that ecosystem is just tremendous right this guy is's in the chats This Guy's in the discords

he's just like on a complete insane like BD and ecosystem growth grind and it's been really really impressive to watch like the amount of work that he's done in order to building out base and sure like a lot of it is speculative right now you know you have all of these mem coins but one like the culture he's built up I mean like meme coin aping is still culture at the end of the day uh it's pretty impressive and too I do think that you are going to see a relatively so surprising amount of actually interesting apps whether interesting in the sense of like it's a new use case or interesting in the sense of like it's a use case that actually Mak sense for like the seven billion human beings out there rather than like the 100,000 onchain users today so I mean all the best space I I hope they I

really hope they sort of make this like coin basis L2 like Vision play out right especially considering they have 114 million verified users yeah I mean for me the main takeway is still that we're kind of lucky that crypto hasn't grown uh from a user perspective uh like a million x or 100x or whatever like a huge amount because you could just not or we're not ready for that kind of a demand crease yet uh which we likely will be at some point but right now I'm quite happy where like the amount of usage is and I think a lot of people don't realize that

when they're out there on on Twitter yelling that there's no real use case we don't have enough users yet but the users right now are just super different from what you're seeing like tradify markets or whatever other vertical and yeah I'm quite happy with like how things are looking right now so just give infrastructure maybe a bit more time to like get up to speed and then let's look again what happens yeah you don't want t million users on the blockchain right now I think you have like a 0.1% success rate in landing your transaction in like one hour it'll be just completely broken but I think

that's a good point to close out for this week so break Picacho thank you so much for coming on thanks for having us see you [Music] guys