Hyperliquid, Venice and Zcash: the Milk Road PRO analysts on cycle leaders

Transcript

But I think for sustainable growth long term, you need the big allocators because these are the people that actually run finance. You need them to use your products. I don't think that they're using Salana today. Um, and I don't know that they're using Hyperlid yet either, but if that happens, then absolutely I think Hyperlid will surpass Salana. Privacy coins, AI projects, and perpetuals. With Bitcoin holding its ground and the Clarity Act finally moving through Congress, there is a lot happening in crypto these days. You just have to know where to look. Hello and welcome to the Milk Road Show, the podcast that's here to remind you that hyperlid and energy drink are two very different things. I'm your host, John Gill, and today is Thursday, May 21st, and today we are doing another exciting edition of the Milk Road Pro analyst crypto research meeting. Once a week, we

huddle up to talk about what's up in crypto. I always learn a lot from these conversations. I'm sure you all will, too. So, if that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it. Today's episode is brought to you by Cape, the privacy first mobile carrier. Feros, the layer one built for Real Fi and Nexo, earn interest, borrow and trade crypto. Without further ado, welcome to the Milk Road Pro research meeting. Kyle Reedhead, Martin, how are you gentlemen this morning? What is top of mind for you guys today? >> What's going on, guys? I mean, Nvidia printed 80some billion for the last quarter of revenue. How can we talk about anything else other than that?

>> Yeah, it's holding up the whole global economy by itself. Martin, how are you feeling today? >> Yeah, I'm feeling pretty good. I have some hype backs, so I'm pretty happy to see my backs pumping. >> Yeah. Well, maybe let's start with Hyperlid. There have been some ETF launches or ETP launches, I guess, whichever one you want to call them. Um, for spot hyperlid, uh, the demand has been insighting. It's comparable to the the demand we saw for the spot Bitcoin ETFs when those came out. As a result, hype is now breaking above $56. Uh, what do you guys think? Is this a local top here on these ETF launches for Hyperlid, or is it just going to go straight to $100? Martin, let's start with you.

You've been really bullish on perpetuals. What do you think happens here? >> It's pretty funny because we keep talking about Hyperlquid all the time and Kyle is always like, I want to buy this token. I just don't know when. >> It rips every time. >> Yeah. Yeah. >> We have been bullish on stable coins and perpetuals like for months or maybe years. No, months. And uh now the spotlight is on pers. So when you uh check Hyperlquid or lighter, they are both just through the roof. And but I I have to say I went to check their product if there are new users coming in or if there is more volume generated on

their platforms and it's not. So I'm not 100% sure what's driving all that sudden spike in prices. I assume it's just, you know, a normal rotation from one sector to the other. And so I'm not sure that this uptrend is is going to last. So I I still have some hype back. So don't get me wrong. So I I'll be happy when hype keeps going up. I just think that this is not sustainable. And yes, there might be some digital asset treasuries now buying high whatever. But still at the end of the day, what are the users buying and is that business still worth the price that it's currently priced in

or not? And like eventually like I was long-term holder of hype and I sold some of that because I think the recent price performance was just way too much and also the current valuation it's already 15 billion market cap and you know if if you compare it to like Western Union Clara like other things that have you know hundreds of millions of users as well and they are trading like two to five billions. So you start to see like okay um what is going on here and are are those multiples justifiable and so you know I'm rather cautious taking some chips from the table and yeah I I would love to see if

it keeps going up. >> Kyle, are you going to find an entry on this? >> I mean if you compare it to Ethereum it's still very much undervalued. Ethereum is worth 255 billion. Hyperlid only 15 billion. uh looks like it's got a long ways to go. What what I actually think is happening is one so I think some of this move in Hyperlid is justified. The the deal with Coinbase um basically diversifies their revenue. So it gives them a second revenue stream which is nice, right? Like a lot of their revenues or most of the revenues just came from um from fees of the blockchain. Uh and then now they have sort of like stable coin revenues as well. So they're starting to diversify um similar to like what Coinbase has done over the over the the past years.

So, I think the market liked that, right? Um, and then I think they just launched a few ETFs u which have performed quite well. They've had some good inflows. Um, probably more of a short-term thing than anything. Um, just as people wanted to get some exposure. So, I think that's probably why the price has gone up. I think if crypto moves up from here, maybe we get, you know, John, you mentioned at the beginning of the show, you know, Clarity Act is is kind of coming through. Maybe something's going to happen there. There is some hints at maybe there being this like strategic Bitcoin reserve announcement coming I think like in early June. I don't know if that's just it's full speculation but maybe that comes like if crypto happens to catch a bid then I think Hyperlid probably continues. But if it doesn't, which it

hasn't in months, I really think what's going on outside of a little bit of repricing and hype because of the things I just mentioned, I honestly think it's people just, you know, rotating from their ETH bags or their Salana bags, uh, maybe even their Bitcoin bags into into hype, uh, right, or into Zcash or like these other things that are catching some, um, some interest because there's not a lot of net new capital coming into the crypto ecosystem to be honest. Like, there just isn't. Uh, and so what this is is just people rotating from within the crypto exist, which honestly has been what's happened in crypto for the last like I don't know three whatever years. Like it's been a while of this.

Um, there's just not much interest uh outside of Bitcoin though. I would even say like Bitcoin hasn't had a whole lot of interest recently. Even the ETFs have had outflows the last two weeks. So outside of Sailor's like $2 billion bid last week. I don't really know who else is buying Bitcoin at the moment. So there's a lot of capital coming into this ecosystem. it's all going into AI. Um, and so, yeah, it's hard for anything to move, but there's there's a couple things that are getting some sort of interest and some sort of rotation, but as Martin said, and the thing that I don't love about it right now is there are no metrics really going up for Hyperlid or Zcash to be honest, which is the other one doing quite well. The only one that actually has growth. Um, so their price uh appreciation kind of

makes sense as Venice, which I'm sure we'll talk about in this uh because I want to pick your guys' brains on that. But like they at least have growth in their subscriptions and their revenues and their users. So like, okay, it kind of makes sense. Um, but but Hyperlid doesn't. Um, so I don't know. We'll we'll see. It needs to cross the chasm of getting more users outside of crypto. Um, and and really start to generate more activity and volumes. Um, and right now it's it's kind of been stagnant for for a while. If you're not seeing this, you're trading blind right now. There are real moves happening behind the scenes that most people don't see until it's way too late. Inside Milkro Pro, you can track exactly what our analysts are buying, selling, and what's on their watch list before it moves. You can try

it out for just a dollar for 7 days. The link is in the description. >> Kyle, I want to ask you your thoughts on this. A lot of people are speculating that these big movers you've just highlighted here, Zcash, Hype, which are now number 10 and 11 on Coin Market Cap by Market Cap, uh, are, you know, let's say at risk of or getting closer to flipping Salana. And there's a lot of speculation on crypto Twitter about this. I think, as you point out, there's a lot of rotation of just capital that's already in crypto. But what do you think the likelihood of that is of something like Hyperlquid 15 billion eventually going up and flipping Salana, which is now at around 50 billion market cap?

What do you think of that that that possibility there? >> Oh, it's a good question. I haven't actually thought about that recently. Um, look, I think Salana went So, I sold my Salana back in I think it was December. Our community hated me for it. Uh, and now I keep seeing a bunch of messages going, "Dang, I wish I listened to Kyle back then because Salana's what 85 bucks." Uh, so it hasn't moved in a very long time. Um, so can Hyperlid pass on? I think what needs to happen is anything in crypto decentralized finance the whole point of it is to build new financial rails and who uses financial rails more than anyone is institutions it's it's the companies that have the large capital right so I think Salana overindexed on a

bunch of small users that have like $100 in their wallet and want to trade that real fast that's not what finance is really built for um so if you're going to build financial services financial products financial technologies, you want to do that for the biggest capital uh allocators in the world. And Salana kind of I think made the mistake on that. Now, it worked during the time when there was just craziness around memecoins and we had a bunch of retail here. And I'm sure that will come back at some point, but I think for sustainable growth long term, you need the big allocators because these are the people that actually run finance. You need them to use your products. I don't think that they're using Salana today.

Um, and I don't know that they're using Hyperlid yet either, but if that happens, then absolutely I think Hyperlid will surpass Salana. Um, I don't know that they will yet, but I do think Hyperlid at least has uh is gaining some interest and some trust there and some awareness in in kind of Wall Street. And I think they're starting to build products that Wall Street would actually want to use. Per on oil, pers on silver, per on, you know, many different real world assets. I think that they are getting close to kind of like crossing that chasm which not many in crypto have. Like Ethereum obviously has, Bitcoin has, but in a different way, you know. Um, and then I would say like Sky has, right? That's why they're the the third or the largest yield generating stable coin. They they

sort of like built the trust and and managed risk well enough that like big capital allocators will put 10 million, 100 million uh even more than that into their their stable coin. There's just not a lot of protocols in crypto that has managed to kind of build that trust. Hyper liquid's still kind of new, which is why I don't want to say for sure they will. Um, but if they start to kind of make that move and cross that chasm, then yeah, I think they could for sure. >> Gotcha. So, if they get the big capital, the big players, then they got a chance at flipping Salana. Salana's also playing for that. So, it's not a foregone conclusion. Martin, I want they are >> Yeah, Martin, I want to ask you about something here. Uh, Hyperlquid obviously big per sts performing really well.

Lighter is another per uh DEX that you've been very bullish on and I think you said that the day you sold it finally broke out. It's up over 50% on the week. Uh how are you reacting to this? Are you going to reenter your position on lighter or just how are you feeling? Uh how's the FOMO feeling right now for you? >> Did I did some something wrong? And this could be expected that all the perpetuals are all of a sudden just going to pump. Probably not. like I the pump started like couple days after the announcement of Coinbase and Circle. So I don't know like yes I I I I lost some uh upside there but I'm still fine. Like for me it's more about like I was able

to find a good product and like that the the fact that I sold early is just a different mistake than when I would you know analyze it and like think that this is not a good but it shows that people might also uh pay attention to this. So that's one thing and but I also wanted to comment uh that Solana versus Hyperlquid I think they are still both trying to target different audience because we we shouldn't forget that hyperlquid is still managed by like 25 validators at this point and they are all collocated in one place. So if I'm Visa or Galaxy, I'm not going to build on top

of Hyperlquid. But like Visa and Galaxy, they are building on top of Solana. And like we can go back all the way to Ethereum because you know even athereum is just it's the most decentralized network in the world. And what's the value of that? I don't really know. So like you know for me as a retail user when I want to trade somewhere I pro I can go to Solana. I can go to hyperlquid, I can go to lighter and most people don't don't really care about you know the security of the chain but I do. So if I trade these days like Solana is secured enough for me but I still prefer lighter

because I can just use my native Ethereum or USDC use it as collateral and trade on lighter. I don't need to bridge anywhere. So that's why like that's why I liked later uh in the first place and I still do. I was just not sure that who is going to buy that because there are some token unlocks coming up uh later this year and I I wasn't still sure either that there are still some money coming in. Uh but it seems like they are. I'm not sure those are new money. I think it's as Kyle said just rotating from one narrative to the other. So yeah, >> I think it's just a trade following Hyperlid. Hyperlid has a bit of progress

with their ETFs and with their or their ETP products and their um in that partnership with Coinbase. And so lighter being the second uh biggest per it. It's kind of got to pump alongside Hyperlift. That's just how crypto works. >> All right, I want to ask some questions about Venice and about Zcash. One more question about PES before we move on. Our Milk Road mailman Chevy wrote a newsletter for the Milk Road uh newsletter about these huge IPOs that are coming this year. SpaceX, OpenAI, possibly Anthropic. Um, a lot of people are looking forward to trading these once these IPOs happen. However, he pointed out that the perpetuals contracts for these are already live on Hyperlid. What are your guys' thoughts on this? Do you think that people should wait for the IPOs and trade the spot markets? Do you think that there's a

place for these perpetuals on these preIPO stocks? how you think about this for yourselves and just yeah what do you think about this Kyle let's start with you on this one >> so I don't um for the reason that you two weeks ago or a week ago Anthropic came out and said that all these um sort of secondary markets for anthropic do not um like count as actual stock uh and so I think when that when they that was released um the the perpetuals and the in the uh secondary markets of these went down like 20 30% uh even though the valuation of anthropic didn't actually change. It probably went up because their AR goes up every single week. Um, and so it's just you're kind of betting on absolutely nothing. Um, and that's just not the risk that I want to take

with my money. Um, so it kind of doesn't make sense. So I would wait personally. Still don't know that I would buy even when it IPOs. We'll have to see what price they they come live at. Um, but uh, yeah, it's it's too much risk for me. There's no regulation around it. um if they really end up being worth nothing, who's going to be on the hook for that? It's probably going to be the the bag holders. It's not going to be the companies that are managing it. Um it's going to be those just holding the assets. Those assets just going to go to zero. So, I don't know. It doesn't seem worth the the risk. So, yeah, I wouldn't do it.

>> Okay. Martin, what about you? >> For for me, it's more a it's more like a signal. I can look at prediction markets or pips and like, okay, what what this market telling me? And so if they think that you know SpaceX is about to IPO around two trillion then it's some information I can I can work with because I was looking at some stock who has 2% share in SpaceX and the price is based on some valuation of the SpaceX but it was assuming just 1.5 trillion valuation but if it's really like higher then I might be able to buy the stock and just you know get that upside. So

it's like giving me those signals that I could not necessarily go and buy that but I could apply that you know signal somewhere else. So >> right. >> Yeah. >> Gotcha. Okay. So there's information there but there's an elevated amount of risk. So maybe pay attention but be careful with your capital. Uh guys I want to pivot to this Venice token VVV. Um you know I think it was just over three months ago this thing was trading below $4. I think it was in the $2, $3 range and now it's over $17. It's getting close to $18. Um, just got listed on Robin Hood crypto as well. So, there's a lot of capital chasing this, a lot of attention on this. Um, and a lot of growth, too. Like I think Martin, you said that they they've just crossed over

3 million users for Venice. Uh, talk to me about this AI project. Is this another one of these like flash in the pan narrative catching pumps? You know, this intersection of AI and crypto, or do you think there are real legs here? Martin, I think you've been watching this closely. Let's start with you. What do you think on Venice? >> Can we give context as to what Venice is first just for the listeners for anyone who hasn't used it or knows what it is? Martin, do you know have you used it before? >> I haven't. But like in a nutshell, I think it gives you access to all the AI frontier models in a priv private way. So like you know your data are not exposed to anyone. So like probably when you are using open AI or clot these days like they can see

your message history and like everything you do and when is here to build that privacy layer on top of that. So whenever you interact with any you can choose whatever model you want. So it's not just open AI, it's like many others even like all these open source models from China and all that kind of uh models are available there and it just gives you that privacy level that many people appreciate as it appears on their recent growth. >> Do you lose any features from that though? So for example, one of the biggest features that I love about these LLM models is the fact that it has memory of all the things that I've talked about. Does it still have that or because of the privacy layer, does it

get rid of that memory? Because ultimately for it to have my memory, it needs to store my data somewhere. Um, I don't know. I'm just asking this. >> I don't really know to be honest. Yeah, it's a good question. >> I Yeah, I I think I I'd have to look into the details of how this exactly works, but I think that the the point of it is to not track your data. So they're they're probably not storing that in the same way um that you would >> for you as the user maybe um we should we should look into this but anyway because that's just a key feature right like I I use claude for example and I connect it into everything so it knows my calendar it's I'm transcribing this podcast right now so it always has it has like a a a reading of every single

conversation that I have it's connected into my Slack and so whenever I go to cloud I can just like ask it. Hey, what am I missing? What was I supposed to do last week? Like, whatever. And it just knows and it's so helpful. So, I don't know if it loses that feature. I would imagine it doesn't. Um, but if it did, that would be a big big problem, I would think. >> Yeah, agreed. But the recent growth is pretty pretty big. I think they are adding like um single uh millions single digits millions uh revenue per week. So um I think right now they are about 150 million um annualized revenue which is >> 134 million.

>> 134 million. Yeah. >> But the problem is that >> 2.6 million last week. >> The problem is that most people still see this company through the crypto lens. And so like they're looking at revenue multiples and say like hey this is pretty cheap. But you need to be aware of what kind what type of revenue that is and is there some what are the costs. So like you know hyperlquid makes 600 million in revenue annualized and you can say that they have almost zero operational cost because they are just a small team and that's it. But here what's happening on the back end is that

they are just rerouting your your questions to those uh big uh to to the AI models and WIS needs to pay for that. So like I'm not sure what's their you know um margins there but I would assume that it's it's much much lower. And so for me it's a I'm not as bullish as everyone else right now because I think it's just a privacy AI rapper that like you know it's one update from cloud or open AI and all that well the proposition of Venice can be gone. Um so it's interesting I'll probably pay

attention to it and I will learn more but like I'm not that full piled like everyone else. So, let me just right now it's revenues. >> Sorry, just before you go on, Kyle, I just want to read this into the record. Venice achieves long-term conversation memory without storing data on its central servers by keeping all chat history and context strictly on the you user's local device. So, that's what it does. It doesn't send it to the large models, keeps it on your local. Um, so yeah, continue there. I just wanted to read that for the listeners. >> So, combining the the numbers we just talked about, the 134 million per year, this is obviously um annualized. This is not what they're actually making right now. That's on subscription revenue. So from the users, they also have API revenue. So the estimate right now is they're about 200 million uh in

annualized revenue when you combine the two and uh the market cap is 800 million. Um fully fully diluted valuation is 1.4 billion. So like that's a for an AI product that's an insane multiple. Now again kind of like what you said Martin, how sustainable is this product? Can it be like it's not hard for Claude or whoever to just like add add in a privacy feature? I would imagine it's not hard. I guess I don't know for sure from a technical standpoint. Um so the question is like how big of a mo also my always thing about crypto is like how many people actually care about this? You know of the users of of chat GBT and of cloud and all that like how many of them

really really care about this? I would bet it's a it's a lot smaller of a TAM than just like an AI user in general, right? So, um that's just my my take on that. But >> your phone carrier knows more about you than your best friend does. Where you go, who you call, when you sleep, and they're selling all of it. AT&T, Verizon, T-Mobile, they've all been caught leaking data or cashing in on it. And your VPN, your encrypted messaging app, they can't fix what's broken at the network level. That's where Cape comes in. Cape is America's privacy first mobile carrier. Same premium coverage you'd expect, built with privacy from day one. Your phone's network identifier rotates every 24 hours, so you look like a different subscriber every day. Call logs are deleted after 24 hours. You get

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rates, lower borrowing costs, and crypto cashback on trades. Benefits usually reserved for loyalty program members. Get started at milkroad.com/nexo. So, let me ask you a question about this cuz, you know, Martin said people are looking at this through a crypto lens. What do you think is driving the speculation here? Is it the privacy piece? Is it the AI piece? Is it the AI and crypto piece? Like, what what is so valuable or special about Venice here that's causing this like pump and all this attention? I mean it's just the privacy standpoint right it's the fact that none of the other frontier models have this and so if you care about privacy it is it is a great solution uh the other thing is it's it's an aggregator of all the different models right uh and so if I want to I don't know do some research you know if you're

tied into claude you know maybe claude isn't as good as doing research as I don't know Gemini or Grock or whatever like they all kind of have certain things that they might be better at and so Venice does a good job of kind of aggregating and choosing different models depending on what it needs which I think is a is a product, but I think Perplexity does that as well. Um, so it's not like it's the only one doing that. Um, so it's really just the privacy layer is the the big unlock here. Now, I do think it is mainly crypto people that have heard of Venice and that use it, which is once again the pro like it's great. There's like this like community of people that care about privacy that will that will use this and and so it seems like that's working. Can they cross the chasm into

the mainstream world? This is always the thing about crypto is like if you don't move out of crypto there's this is all for nothing right and this is the problem is most things in crypto don't have the ability whether it's because of marketing or positioning or just like I don't know their product isn't actually good enough to move to the rest of the world right and I'm not talking Wall Street here this just needs to go into like the everyday people that use chatbt this is more like Silicon Valley can you get out to those people if you can okay we we are on to something here and this product can go much much much bigger Right? Because if you look at how much, you know, how many users Claude and um ChachiBT has like these numbers are massive. So, can they eat some of that share? If they can,

this is huge, right? Right now, I don't think they are. I don't think if you ask anyone outside of crypto, they will know what Venice is. And so, that's the thing is can they can they move past the cryptoverse because the crypto world is so small and I don't think crypto people fully understand that. Like crypto Twitter means nothing to the rest of the world and it's such a small user base that it doesn't give value to companies. Do you know what I mean? Like you can't compare a Venice to a Claude uh or to a Tachi BT because it has this little niche group of people and that's it, right? And so it has to be able to move past it. And honestly, crypto is a bad tag to have. So like for example, we run PR for a lot of companies in crypto.

It's really really hard to get them on mainstream media. We have to actually when we pitch media, we can't use the words crypto. We can't. As soon as we do that, it's automatic. No open, no response. No one wants it. The only time that mainstream media wants to cover anything to do with crypto is an exploit. And so as soon as an exploit happens with a inboxes are filled, hey, can we get whoever on to talk? And we're like, no, we don't want to talk about that stuff, but hey, do you want to talk about this cool product or this growth? And they're like, no. So it's it's it's um I crypto people don't realize this. It's [ __ ] hard to build a business if you're in crypto and expand past it. Um, and we've see it because we work with so many of these big crypto companies. So,

that's it's a Venice needs to tell a message that is not about crypto. They happen to have a token, which is cool and all, but like that shouldn't be around their message and it should not be a cryptoreated product, which I don't think they're doing. It needs to be about privacy and AI, which is which I think is what they're leaning into. >> Martin, what's your take on all this? >> Again, I just want to remind that those are just revenue. So it's the same case like for OpenAI and Antropic. We only see their revenues but we don't know how much money they are burning. And I I would assume that at this point both of those companies are still not profitable even though we all use them, right?

Because the costs are just >> supposedly Anthropic put up its first profit quarter. >> Yeah. I don't know if that's actually true. Um, but it sounds like they did around I think it's like 600 million uh with I think 10 billion in revenue for the quarter. Um, so again this is not audited financials. We don't actually know but it sounds like maybe they are. Yeah, but I saw that their deal with um SpaceX or XAI and the numbers are just ridiculous and it's because they were sleeping a lot and like OpenAI were closing all these deals to get you know the compute but Entropic didn't and now it's like oh [ __ ] we need to do

something here as well because so many times their servers are off and we are like oh man what should I do? But that's one of the things about Venice is they're not they're not an actual LLM model themselves. So they don't need to spend all the the the compute, right? So now obviously their costs are are tokens I would imagine because they're the ones using uh claude. >> They are paying claude or open AAI and Yeah, >> exactly. Now they would have some sort of deal and some enterprise deals. Like they wouldn't be paying the same rates that we're paying for tokens. Um but tokens are not cheap these days either and they're they're kind of going up in price at the moment. So, um I don't know if they're necessarily profitable, but they definitely don't have the overhead like an anthropic or an OpenAI does,

which is is a big benefit. I would say this is actually kind of the strategy that Apple's supposed to do, but they've just not done it. I remember I was in um an Apple store half a year ago, maybe maybe a year ago, and I was like talking to the guy um because I was getting my MacBook uh fixed or something, and I was like, "Why do you guys not like have any LM models? Like, what are you guys doing?" And he's like, "Well, we're actually going to be the aggregator of them all. So when you use your phone or you talk to Siri, it's going to it's going to aggregate all the different models. That's like our plan." And I was like, "Okay, that's a sick idea. Let's see how that goes." They just never done it. Um, but that's exactly what Venice is doing. So again, I think the Venice

product is sweet and I do think they're probably a lot more profitable than uh than an Open AI. >> Do you think there's a moat around this? Because it seems like, you know, just like you said, other people could aggregate this. Maybe there's a way to add a privacy feature pretty easily into other things. Is there a defensible moat here that either of you see or or do you think it's too early to say? >> Yeah, it's a good question. I don't think that there's a true moat yet. Um I guess I don't fully What I need to do is look into like what is this privacy layer? How hard is this to do? Um but either way, no tech is really uh uh a moat at this point. Now, can they What they do have is first mover advantage. They don't have a lot of

competition in what they're doing. I don't think there's any other privacy first LLMs that are aggregators. There's barely even any other aggregators, right? So like they do have a good product. So can they drive a lot of users to it? If they can, these things can be somewhat sticky, especially as um they've recently launched agents. So one thing I think that is it was very easy to move from one LM model to the next when all you did was chat with it, right? Because you can just go to your, you know, grock and say, "Hey, can you just summarize everything we've ever talked about or give me your memory?" it'll put it into an MD file for you and you just go put it in claude. I literally just did this like two days ago. Um so like zero moat on that.

However, where the moat starts to come where not even moat but stickiness is connectors and agents. So connectors are where um and I talked about this earlier where you connect your claude into like your Google calendar and into your Gmail and then into your like uh your transcriptions. It's like all those those just take a while to set up. So, it's a little bit more annoying to move from one platform to the next when you've got like 20 things or 50 things connected into all the applications you use, right? It's just like it's really annoying, especially when you connect APIs and stuff. So, like that's a little bit of stickiness. And then agents is a really big thing. Once you start to get agents doing things for you, the last thing you want to do is like move to another platform and reset up all those

agents because there's it takes a while to get those things set up and working properly and like understanding what they need to do. And Venice just recently launched that. They're all launching this, so don't get me wrong, but again, if you can get these users in, get them connecting, get them with their agents, it's going to be harder for them to move from one LLM to the next. So, what Venice needs to do is just go ham on marketing and get some users right now. Um, and that's really what's the first mover advantage on this is kind of their their their moat, but that doesn't last very long. Um, so that's the big thing I think they need to do.

>> Gotcha. >> Yeah, I agree. I think right now they're at the sweet spot where they can combine like privacy, AI, and crypto. And so like the story is pretty compelling, but when you start to dig deeper and ask the questions whether it's sustainable, do they have some defensible business or not, that's when it gets interesting. And I think they're not there yet. >> Well, we had the founder of Venice and Thor Chain, Eric Vor. He's on the Milk Road uh crypto podcast not too long ago. So, if anybody missed that episode, I recommend you go check it out. Um, but I I want to ask about privacy because, you know, another thing that's been pumping a lot that we've talked about once or twice. Um, but I want to ask more questions on is this Zcash um narrative, which has been around for a long time,

both as a product and as a narrative, but is catching a bid here in a very serious way. Um, and there's been a lot of uh VC capital going in this direction too, which I think I want to call out. There's uh been, you know, A16Z and other VC firms have been raising capital, deploying it towards projects that are trying to offer some kind of privacy solution. Um Zcash specifically though is leading the pack on this. It's up over 100% in a month. It's over $700 or it's closing in rather on $700, which is I believe a local all-time high, not an all-time high. Um but what is the take on the privacy narrative here? How much higher is Zcash going to go?

Martin, let's start with you. What do you think about privacy and the value this creates and what's driving the Zcash pump here? I probably have a very differentiated take than everyone else because I think that in the previous cycle everything was about decentralization and we wanted everything decentralized and now it seems like privacy is is the winner here and we need everything private but I'm not so sure that that's the case that like everyone needs a privacy for I don't know if you use agents or if you pay for something like even today if you pay for something is it private or is it not like can your banker see what you

what you buy so I think it's just very overhyped thing and it's it's it's a narrative trait I think and for Zcash like right before this call I I was um sharing with um on our discord the charge of Zcash that the activity was just through the roof like couple months ago and it's just down only from then. So I don't know what's driving the the price of that right now but >> bunch of >> I'm definitely >> bunch of on social media.

>> Uh yeah, look I I think privacy for money is important but Zcash is not a blockchain that people are using for their money. Uh and so it's it's a privacy layer on a blockchain that no one uses. Who cares, right? Uh so like what you need is is a platform that again financial services are run by institutions with large capital that like that's where the money is in in financial services. Okay, these are the black rocks of the world, the stripes of the world, the you know so on and so forth. And so like where they put their capital and where the capital is being moved there that's the stuff that matters in the financial world. Um and you know they're building on Ethereum

and Salana and things like that. And so like you know they're starting to move their capital and their businesses and stuff on chain but they're doing that on on Ethereum or on Salana. They are not doing that on Zcash. And so like Ethereum needs a privacy layer, right? Um and you know anyone anywhere where there's actual money and users like that needs a privacy layer. Zcash doesn't have anything being built on it. So like you're you're making privacy for nothing. It already is private because there's no one over there. I can go do a transaction on Zcash and whether it's privacy or not, no one's going to know because nobody gives a [ __ ] about Zcash.

So I just like I don't see and and then it's not like it's a great tech to like build programmable finance on like a Salana is or or like what Ethereum is building, right? So it's it it doesn't have the capabilities to build the new financial system on top of it. So what's the point of it, right? Um, so it just to me it doesn't make sense as a real product for the world, especially for the future. I think it's full narrative, full hype. I don't think privacy is a hype. Like, yes, privacy definitely makes sense. We're seeing it with Venice, right? Um, it makes sense when people use things a lot. Uh, whether it's finance or it's data, you need privacy, but you need privacy on on products that actually matter. And Zcash

doesn't have a product that matters to the world. So, I think it's privacy for nothing right now. I think every chain will have, you know, private like that option%. >> So, >> yeah. Yeah. >> Yeah. So, I just think it's a it's a hype cycle on privacy. Uh, and I don't think it's going to go well. >> Trillions of dollars in real world assets are stuck offchain. Real estate, commodities, private credit, all locked behind outdated systems that weren't built for a global 24/7 economy. The fix, bring those assets onchain. Problem is, most blockchains weren't designed for that either. Feros is. It's a layer 1 purpose-built for Real Fi, a real world financial infrastructure that lets assets be tokenized, verified, and traded at institutional scale. We're talking parallel execution for serious

throughput, compliance baked in from day one, and infrastructure that actually connects onchain and off-chain systems. They've got a $10 million incubator backing builders who want to make real a reality. Join the Atlantic Ocean test net and start building at milkroad.com/faros network. So I think I see something a little bit different than both of you here, but I want to get your thoughts on this. So what I'm seeing happen is sort of an existential crisis happening in the digital asset investor community and in the user base. So Kyle, I think you're you're right on the money here. What's driving all of this is the need to bring institutions into digital assets. And in order to do that, a lot of projects are coming up with rational privacy is what they kind of call it, but privacy

solutions, which allows institutions to conduct business on these public blockchain ecosystems while still maintaining a degree of anonymity and privacy. In order to do that, you kind of have to compromise some of these, you know, cipher punk values in certain ways. And so, like, I think Ethereum is a great example of this right now. We've just seen some major departures from the lead developers of the Ethereum protocol devs. Um, there's a shakeup going in the leadership at the Ethereum Foundation. Metallic this week tweeted out that Ethereum needs to come up with a privacy solution directly on the L1 as opposed to using like Aztec network which is an L2 specifically because they want to bring capital from institutions into the Ethereum L1 to drive value to the ecosystem to the asset. But this is

obviously controversial and uh some of the compromisees that have to go into this to get this institutional capital I think is causing this sort of um existential crisis. And I think that what you're seeing in Zcash is people saying like, "Hey, Bitcoin is being taken over by Wall Street. I want to go into something that's a cipher punk asset and and they're seeking Zcash." Um, and you're seeing this in different ways. So like the other other things that investors have invested in recently, VCs, um, Canton Network, uh, Tempo, Arc, right, from Circle, their L1, all of these things have privacy solutions, but they're also a little bit compromised on the decentralization. So, to me, I think what we're seeing is this sort of like existential crisis and some capital going and voting in one direction, some capital going voting in

another. Um, and it's it's not yet clear to me what's going to happen, but like Kyle said, the the people with the biggest wallets usually get their way. Um, and so that's kind of what's happening, but I I don't know how crypto comes through this and what it looks like on the other side. What do you think of that? >> So, like I I think you're right and they're so people are experimenting. My problem is is Zcash is an 11 billion asset. You don't hold 11 billion experiments, right? Like when a company is worth 11 billion. It's a very supposed to be a very legit company with real revenues like providing a real service. That's not Zcash, right? That's not most most things in crypto are just experiments and we let them get valued at such ridiculous numbers that anyone

with any ability to think logically about markets would look at that and go, "Holy [ __ ] I'm never going to put my money in an 11 billion experiment. That is absolute stupidity." But that's what crypto does. So, I don't know. If everyone wants to be stupid and invest in stupid experiments, then go for it. I'm just not touching that. Oh, well, >> every time if you've been in this business long enough, you see that 99% of them don't work out. Um, and so I just, you know, to me, I don't want to do that.

>> Sure. Yeah. I think there's a clear need, but it doesn't necessarily mean that these valuations are justified. So, makes sense. Um, Martin, I want to ask both of you quickly here what you're looking at doing in your portfolios recently. But Martin, before we go on to portfolio moves and changes, anything you want to say to kind of wrap up this privacy conversation here? We said enough. We >> covered. Okay. Well, then let's ask that question then. Martin, uh, you, you know, you sold some lighter, you got some cash on hand. What are you looking at? I think you also took some profits on Hyperlid. Um, what are you looking at doing in your portfolio this week, anything that's got your attention, your eye right now?

>> I think I will buy more Figure today probably. Uh I I was listening the other day podcast with the founder of Figure and I just love the way he thinks about like the company and what they should be doing, how they should leverage blockchains, what's their mode. Um, so I think I'm going to add more figure to my portfolio because I think it the the upside potential is just huge and I think it's still not priced as it should be because most of the things that are growing like for startups and fintex you keep seeing a rule 40 which means your revenue growth and your

uh profitability your margins and if you if it's above 40 then you are like solid. Okay. So you are like check you are fine you are in growth stage that's okay that's what the market wants but figure is growing like that that rule of 40 uh it's rule 140. So figure is just like growing like nuts and like destroying everyone else right now despite you know the whole crypto sort of right now is the crypto sentiment is you know somewhere um in the bare market sort of but figure just keeps growing like nuts and yeah I'm just going to add more figure.

>> Gotcha. Okay so there's still a lot of value happening. You just got to know where to look. Figure is a place to look. Uh thanks for that Martin. I'll keep watching your portfolio moves. Kyle, anything you're looking at? Are you going to get a position in Hyperlid here or do you think you've missed that train? >> Yeah, I definitely not going to now at these prices, unfortunately. But I mean, I was saying that back earlier, too. Uh, so I I'm just I'm just out on the purchase rate, unfortunately. Um, I I'm finding it increasingly inconsistently hard to put capital in the crypto ecosystem, uh, in digital assets. I think it's it's it's just so difficult.

Well, it's it's like fighting gravity. Um, and it's like, why do that when you have so much momentum in the AI infrastructure buildout? And I mean, you know, you look at the estimates that just came out from from Goldman Sachs like two days ago. They're expecting $8 trillion of AI infraend uh in the next six years. So, it's like I don't know what more signal people need to diversify outside of crypto. Um, and and just go where there's going to be 8 trillion spent, you know, 1.2 trillion next year. Um, so, you know, I've been diversifying out of crypto for the last year. I I will say, um, I want to be very bullish on crypto at these current

prices. You know, Bitcoin's at like 76,000 I think as we're recording. ETH is at um I don't know like 2100 or something. So like I'm not saying it's a bad time to be buying crypto by any means. Like we are we are in the as you said Martin like sentiment is real bad which is always the best time to be buying which is why I still hold Bitcoin and ETH in my portfolio and some other a few other crypto assets. I just to keep adding is just um it's a struggle to me because I you know you got Nvidia made 81 billion uh last quarter up like almost 90% year-over-year. It's a $5 trillion company growing 90% revenues year-over-year. How can any industry compete with that? It can't. Like it

just really can't. And so I just I struggle to be sitting here digging through the like, you know, finding a needle in the hay stack of something in crypto that's like going to pump when you can just go into AI and um and you can just see that all the world's capital is going there right now. So it it's a struggle to me to be wanting to add to any of my crypto bags at the moment. >> Yeah. The only thing >> the only thing I just want to add one more thing is like again clarity act should be a bullish moment for crypto I think um maybe whatever happens if this strategic Bitcoin reserve thing happens but I I don't really know if it will um otherwise I'm struggling to see what the big catalyst is for for crypto in the in the near term outside of these very

niche things like what Martin's talking about with Figure we've talked about with Sky. So like bringing credit on chain, bringing you know tokenization and stable coins on chain. Um these are great but again like all of stable coins coming on chain is growing slower about 50% of the speed of what Nvidia's revenues are growing on its own. Right? So the entire stable coin market grew by 50% last year. Nvidia grew by 90%. So, it's like, okay, I can try to find the needle and hast stack in stable coins, which is the best thing we have in all of crypto, but it's growing at 50% of the rate of just Nvidia, the biggest company in the entire world. So, it's like in comparison just it doesn't really make a lot of sense.

>> Yeah. So, I think for myself, the way I think about this is I don't necessarily disagree with everything you said. Um, but I think I have a different way of trying to play this. And you know, for our audience, you can see how all of our pro analysts are navigating these markets by joining our pro community. It's $1 for 7 days to get in there, look at everybody's portfolios, and see all the different products and services we're offering um to add value for our community. But the way I'm thinking about this is that uh all the attention, energy, and capital is on AI right now. And I think, you know, as you guys have pointed out, a lot of the earnings and growth of a lot of these major AI companies do justify this. However, I think that that industry is inherently very volatile. it's priced to perfection

and they can't all win, right? So, there's I think there's a lot of risk and a lot of short-term risk. Like a year ago, it looked like open AAI was going to kind of like run away with everything. Then, you know, it turned out that anthropic strategy of focusing on enterprises and not retail consumers. Um, it turned out to be more effective at generating revenue and now anthropic has kind of like leaprogged OpenAI in a lot of ways and I expect that to continue. You know, Google has their own strategy. there's just a lot of players and a lot of competition and it's not yet clear to me where that long-term value stays, how defensible Nvidia's moat is into the future for forever. Um, so there's just a lot of unknowns there and it's a lot of capital moving really quickly. Whereas, you know, if you look

at digital assets, I think, you know, we've got a new chairman of the Federal Reserve who's given a directive to allow crypto uh companies and businesses to engage with the US financial system really for the first time. Um, we've got the SEC saying they're like speedrunning um, approval for tokenizing basically the entire western economy. Um, and we've got the secretary of the treasury very bullish on getting stable coins, USD stable coins to two to four trillion dollars by the end of Trump's term. And and you know, this Clarity Act coming through gives a lot of uh, clarity for investors, but also for new products and services to be launched. and Wall Street is hiring, investing, and pivoting their companies in a way that they they do not do this kind of thing. Like this is like the internet finally coming for Wall

Street. Um, and so to me, it feels like one of these times where speculation, enthusiasm, euphoria is all in another part of the market and the fundamentals in crypto have never been stronger. The outlook has never been uh cleaner for the next 5 years. So, it's it's one of the best like to me riskrewards to just take a longer view on this asset class and then just be patient. Um because that way I don't have to be overtrading my book and getting emotional or panicking. I can just accumulate and and huddle and chill. So that that's my strategy. Kyle, Martin, all of our other pro analysts have different ones and there's not a right or wrong answer.

Everyone has kind of like figure this out for themselves. Um so that that's just kind of how I'm playing this. I wanted to kind of close with a little bit on that there. Um gentlemen, this has been another very insightful and exciting research meeting. I think that there's finally some big things pumping in crypto, which is always fun to talk about. Uh, thank you both for joining. Uh, for anybody listening, you're welcome to join our pro community for just a dollar. Hop into Discord and ask more questions there. But, uh, otherwise, we will see you all in the next research meeting. Thanks for joining us. Stay safe, stay educated, stay bullish, and we'll see you all on the next episode of the Milk Road Show. Thanks for being here, everyone. Bye.

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