Institutional Capital Is Reshaping Crypto | Analyst Round Table

Transcript

the fundamentals are fantastic and and so don't fight it, you know. Um these things are are finally picking up on their promise of like hitting these huge TAMs. You're starting to see like some evidence of that. It's like you're going to start seeing these revenues come in and like why would you fade it? Like why would you say no? This this is silly once traditional industry is finally coming here and spending money and now you want to disregard it. Like it just it just doesn't make sense to me. A quick shout out to today's sponsor, Katana. We'll hear more about Katana and their ongoing pre-eposit campaign later today, but for now, let's get into the episode.

[Music] Nothing said on Zerox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio, Ryan, and our guests may hold positions in the company's, funds, or projects discussed. Hey guys, welcome back to another episode of Zerox Research. Today I'm joined by the classic trio. We've got Bach, Picacio Mode, Bach and Ryan Cash Flows Connor. Sorry, dude. I mean, we could we could do like Salv Pacio mode. Picacio, but I don't know if it it doesn't hit as hard. The salv and we've got uh Casual Conor's back on.

We've missed him. Good to see. Good to be back. Last uh last week, Ryan, I kind of um I spilled the tea a little bit that we needed you to have a break for a week or so. Your lines were getting a little repetitive uh revealed versus state of preference. So, we wanted you to kind of hit the grindstone a little bit, come up with some new some new ideas and come back fresh. Hopefully, that's what we get today. Um I want to jump in with you though. You missed out on the live stream. We had David Hoffman on from bank list last week. We talked about ETH comps to like global GDP, things along these lines.

Um, I know you were a little upset about that in the Telegram, but the the main thing I want to get into is this like concept that we're in a we're experiencing a revenue meta. I think that's that's kind of been an idea that's been floating around on the timeline. Um, that we're moving in we're in a revenue meta that's somehow a temporary thing. Um, I'd love to get some takes here. I I think maybe one of the big takeaways for me just to start things off is like just given how the crypto markets have been historically like a lot of retail participation a lot of like narrative driven things. Um we've historically not really been in a strong position of like evaluating fundamentals but that's been that's been changing in you know the recent months and years. Uh I guess I'm just curious

on your general takes about you know the the current revenue meta that we've been that we've entered. Yeah. So, uh, first on the, um, on the me being upset about the ETH valuation stuff, I'm not upset. I promise you I'm not upset. I I I do think though that like like like we're just trying to help, right? Like I think the criticisms like like if if we didn't like ETH the asset and we wanted it to keep going down, we'd let them keep doing the things that make it go down like not generating any revenue and and then having these silly um um marketing pitches which aren't going to work with institutional

investors, right? So we're simply pointing out the flaws and like that probably means that you want people to change. Um, so it's it's not with like it's it's not we're not doing it to shout at the crowd and tell them they're wrong. We're trying to write the ship, I think. So that's like kind of the one point I wanted to make. Um, with respect to the revenue meta, like yeah, I think look, I when I when I started in crypto or when I started poking around, you couldn't find that data. it was impossible to find and people were kind of like investing on the only thing that they had which was like incorrect TVL data like at best you had it for a handful of assets and you know we were

all kind of the whole industry was kind of confused as to what these things like the correct valuation framework for these things um but that's becoming increasingly clear as these things generate revenue and the revenues more often or are increasingly flowing to the token and If a thing has cash flows, you can value it on the basis of those cash flows. So, um I I you know, I think the meta I think the revenue meta is framing is interesting because it like highlights the weird path dependency of crypto.

Um like path dependency can be a real [ __ ] for a large like um like a large subset of investors. they can get really be because you know path dependency is so unpredictable and moves so slowly like it could force you to take your eye off the ball. So like I think of like Tradfi with respect to tech. Tech started out as really volatile and risky and then like as late as 2016 2017 there were still people in Tradfi, professional money managers who were saying that like Google's too risky. Yet like Google's revenue during the great financial crisis fell like 3%. Right?

Like it it stopped being a risky asset because the fundamentals of the business changed. Like global advertising went on to Google. it became an incredibly sticky and predictable business and the the path dependency there people got lost in it. They couldn't handle it. They thought that things were never going to change because tech was risky. Therefore, tech would always be risky. Um and I think the revenue meta people are doing that with revenues, right? They think it's this temporary thing or they think it's just another narrative that we're going to cycle through when in fact that's just how it works. and we're finally there in crypto when we've matured to the point where we can start looking at revenues and hey it's a it's a new game and um you got to adapt. Uh,

I think I I generally agree here and it seems like what you mentioned with tech, I mean, it feels like the path dependency of crypto has seems like we're primed to maybe play out some of those kind of outcomes again where you've got early maybe more unsophisticated minded or just like, you know, early retail investors thinking that the game can continue on like indefinitely just like on a pure narrative like no fundamentals basis. Um, and then maybe you still have folks on the, you know, maybe institutions who avoid due to concerns over risk even as like revenues and and growth and fundamentals of some of these assets like really pick up and improve. Um, one thing, uh, I mean kind of a joke, but

like I'm personally I'm excited for the growth meta. I can't wait for that one. Um, you know, probably a few other metas that are are, you know, primed to come along. I I think we could probably walk through like, you know, investing 101 and and pick up all the different meaningful acronyms like let's have the cash flow meta and just walk through some of these things and I think that's probably how we're primed to kind of go through the next couple of years honestly. The the EBA meta is coming. It's coming. I I I have kind of a different take on this. I agree with you guys obviously, but um I've said this before as well, but in crypto we like cuz I think it's very retail dominated.

We overcorrect a lot. Um, so what's probably going to end up happening is everyone's going to be circle jerking to revenue when the reality is like revenue is only part of the game and then there's a lot of other stuff to consider um that you need to look at like even in please correct me if I'm wrong Ryan but even in the traditional even in like equities um it's not always about purely revenue and fundamentals and stuff like there's Clearly a lot of narrative driven um price action narrative driven price action speculation driven price action. I mean yes obviously it's very difficult to

like value that. Um and I don't mean like we should go off of store of value type of plays the way that some people are arguing for. But what I mean is like if you're I'd say like a regular investor, it probably you probably shouldn't overcorrect and only index on revenue and because crypto's still like it's still very heavy news driven, very heavy narrative driven. So I think there's some things that you people should continue to consider and continue to do. Um although um like in my mind it's like 90 last cycle let's say was 90% narrative speculation driven now it's like I don't

know 60% 40%. Um and the remainder has been filled up by um fundamentals and revenue as opposed to like it hasn't all gone away. I think my personal opinion the interesting thing is that in trady markets um it all the narratives all tie back to some sense of some sensible framing of value um and the valuations don't get silly right so like as a crypto person you should be planning for that future state valuations don't get silly is they get no they don't get silly Is circle valuation silly today or is that like

normal? Circle I I don't know what it's trading at 160. So right but these are these are the outliers that we can all point to um that are easy to identify um and probably like Palanteer like we I was actually trying to load Kifin before this for some reason. It's like I feel like it's like down today. most of I'm getting like request failed stuff, so whatever. I can't pull up the the comps for Palunteer. Um, but no, it it all it all kind of makes sense. And you have a band on these things. So like in I think it was in the um it was in the dot bubble and Amazon was trading at 100 times

sales and it was framed as the most expensive piece of equity in human history. Um I've I'm only um aware of another public company that traded that high which was Snowflake in um in besides like micro caps that no one pays attention to like Snowflake traded at 150 times sales when it went public and for a lot of uh 21 and 22 and um so like that's kind of the upper band whereas these things trade at like insane valuations on like tens of thousands of dollars in revenue. So you get like this absurdly high multiple and like so like there's a band, right? And even the things that do trade on narrative or trade on narrative trade in

some mostly reasonable band. They're like there are forces pulling it to where it needs to go over the long term. You even saw that with like a GME, right? It eventually came back down to earth. So like you're and you're seeing that in crypto markets today where the things are eventually coming back down to earth. Um you're seeing them um find a fundamental floor or trying to find that fundamental floor. So um it just it's not as pronounced. You don't get a 10x in a month in in Tradfi because there there are forces that will write the ship or correct the mis valuation.

Yeah. Yeah. I think I think that makes sense. I think that's a good point. Yeah. I mean, broadly, I think that that's Pharaoh's trying to force the convo in that direction a little bit with the the outliers. But I I think you make a point here. It's like, you know, I don't know if you can you can't have a whole industry full of outliers. So, naturally, you would expect that, you know, there can be a Bitcoin, there can be a this that, but it it it can't be thousands of assets with billions and maybe trillions of market cap. Yep. I I totally agree. Um, and also the fundies are fantastic. Like why is everyone fighting them? Um, Hyperlid, uh, Salana, um, a bunch of the deep ends now are funies fundamentals. Yeah, I thought it

was like fund managers. This is a revelation to me. Please continue. Sorry. I've been slacking fundies to you for like 15 straight months. I was like, why is this dude super into fyo capital like that? Um yeah, that's not false. But yeah, so yeah, the the fundamentals are fantastic and and so don't fight it, you know. Um these things are are finally picking up on their promise of like hitting these huge TAMs. You're starting to see like some evidence of that. Um you're seeing like really cool announcements coming out of Deepin. Hivemappers had a bunch.

They have a bunch of Fortune 500 uh and re and they're going to announce some Fortune 20 companies. like you're going to start seeing these revenues come in and like why would you fade it? Like why would you say no this this is silly. Um f like once like all this good stuff starts happening now you want to like once traditional industry is finally coming here and spending money and now you want to disregard it. Like it just it just doesn't make sense to me. I think a lot of people are also scared though because a lot of tokens don't look great, but they very well.

I agree with that. And then you get stuck. You wish you were playing a certain type of game and then it's not that game anymore. Like in like 2022, that's that sucked because the game changed. Um a lot of the macro data changed. um the things that got rewarded in the market changed, growth outperformed forever and then value started outperforming and it was like [ __ ] the game is changing. Like now these old stuffy companies are doing well and yeah it really sucked to be a part of that environment. Um but you have to use your reason and be like hey what's going to happen going forward and as a growth investor you see what technology is doing and how it's going to enable just these you know massive outcomes and more efficient companies.

Um but then so that's like you know why you would flip from value to growth on the trady side. But in crypto it's like here's your reason. Most assets trade in a certain way. Crypto starting to trade in a certain way. Most capital on planet earth you know values things a certain way and to fight that I think is I think you're just uh you're hurting yourself. Yeah. I think it's going to be increasingly difficult for like if you're an Avalanche fan, Polygon fan, like these are tokens that have historically traded on narratives that have traded very well on narratives, but now there's a big shift towards valuation, revenue, whatever. And then

they kind of struggle. They don't really have anything backing them. like it used to be, oh, we're making a partnership with Starbucks or, oh, we're building out institutional subnets or chains or whatever, and then nobody cares about it anymore because we kind of know it's not real. Like, I think before there was like a very slight chance that it was real, but now it's like, okay, if it's is real, who the [ __ ] cares? Yeah, you would have wanted to see some some traction in the numbers and to not see that show up. Like I think a lot of the prior cycle like larger projects are it's kind of easy to maybe sip through some of those where it's like you know this thing is still at you know x billion valuation and yet the network is

like a ghost town type of vibe. Um they're going to have a tough time right unless they can turn that into something like I don't know Charles Hoskinson can only be so loud. I don't know unless the you know the network can turn some turn some revenues out of its out of its picture. The other thing too is like we're at this transition of like narrative to fundamentals but we're also at this transition point of like tokens being worthless to tokens having that value actually directed to them. So you kind of have to like sift through those as well. Like in some cases something could be generating a re revenue and you know it's not going to the token. So you have to ask yourself that second

question of like is this worth investing given that given that consideration. Yeah. You got to get um familiar with the disclosures and the the value acrruel mechanisms and people are waking up to that. I mean and but the funds it's like who are we talking to right like we're talking to retail in this very moment but the funds know all this stuff. It's not new to them. Every in every investment manager is on board. And if you look at the Coinbase data, who's trading the most on that plat on that platform, who's doing the most volume is decisively funds, right? So, we we were in this interesting moment for a while where um retail was most of the volume, but I think we're seeing increasing evidence that that probably isn't going to be the case.

Try 7525. So, we should normalize toward that over over some time. Yeah, that makes sense. It is still retail driven though. Ryan Goner has to admit this. It depends on which asset. Like Bitcoin's probably not retail driven anymore. No, it's not. Uh I I don't know. I could be wrong on that. But I I think you have to think about it asset by asset. Like Bitcoin is probably like 6040 maybe maybe 7525.

There's a there's a ton of ARB funds in the US that are and you know RAS that are buying that thing or or moving the price. Um it's not what I think Mike Mike showed a chart of Mike showed a chart of like the parabolic BTC moves over time and they were so violent and up and violent and up and now this last one is like kind of just like a grind. It looks a lot you know and the volatility's come down. Bitcoin's volatility was like 150% annualized. Now it's in the 30s or the 40s. There was a period in 2025 where Bitcoin's realized volatility was lower than the S&P 500.

So you're starting to see like this asset normalize. Yep. You heard it here, folks. Bitcoin is better risk adjusted compared to the S&P 500. Put your money in it. Make the biggest trade of your life. All right. [ __ ] risk of your life right now. This episode is sponsored by Katana. If your assets are sitting idly, they're dead. Katana is built from the ground up to bring your bags back to life. Get started with Katana by joining their pre-eposit campaign before mainet launches at the end of this month.

Follow the links in today's show notes to get started. This episode is brought to you by Ledger, the global leader in digital asset security. Celebrating 10 years of innovation, Ledger remains the most secure hardware wallet for your crypto and login. trusted by 7 million users and securing 20% of the world's digital assets. Follow the link in today's show notes to grab your ledger now. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. I think another another trend somewhat related is um what we're seeing with like this crossover between centralized exchanges and decentralized exchanges, this like sex kind of relationship. Um we've seen it with Binance and like BSC chain. We've seen it with Coinbase and Base um and what

they're doing with like permission pools and also just like these integrations with the exchange and then just like stuff that happens on chain like the Morpho integrations they have for um getting loans against BTC. Um, Bybit also just recently announced uh this weekend I want to say uh Breal or Bal byreal um incubated by Bybit born on Salana. They're launching a DEX but like multi-product DeFi platform it seems like on Salana. So you'll have a DEX here um using CLMM and RFQ hybrid routing, but then also a launchpad, some vaults for yield like they're they're

seems like they're maybe a bit serious here about actually having like this onchain multi-product DeFi platform. I I I think that one kind of raises some questions about like, you know, I thought Mantle was maybe supposed to be sort of like their chosen location, but perhaps like just lack of traction. Like I don't know, they just see that activity is happening on other networks. Like maybe you should just go to where the activity is. Um but either way, I think it's interesting to see this continuation of this of this trend. Um Coinbase has been like making moves here, right? um their morpho integration.

They're like starting to play around with their announcements around them using like uni v4 hooks to do permission pools. Um basically like connecting more of what's happening on the exchange like the centralized exchange for customers to uh like an onchain kind of backend operation here. So it's like connecting their onchain and and off-chain like liquidity and trading. Um, I'm curious if you guys had any thoughts about this in general. Like to me, one of the big thing like I would just expect every exchange to go in this direction, but the the thing we've seen in the past, right, is like launch a chain, own the chain, get the users on the chain. It's interesting that they've chosen to go with Salana here. You know, Binance has

BSC, Coinbase has base. Does this make sense for them? Is that like the right move? It's free money. Like, that's literally it, right? It's it's free money. Like, I'm sure either Solana did some form of incentive for them or they're just going to make money on fees. Like, it's free money, so why wouldn't you just launch on Solana? Um, but I I think that's it. I I don't know about the Bit game plan to be honest with you. They are a big centralized exchange. Um, they actually I think they're right above OKX. Um, by the way, I only take Binance, Bybit,

OKX, Kraken seriously because I think the other ones kind of fake their volume. Um, so I think it's right above OKX. I mean, they're clearly doing something. I know they're like card is actually used quite often. Um, they're like the buy bit card. Um, so I think they're just like trying to expand more and more the same way that Coinbase is. Um, I don't know if they're trusted as much though. So, we'll see. Um, and with the mantle thing, I mean, you know, like if there's nothing happening on a chain, you can't really launch a swap on a chain because since the goal is to make some form of money.

So, I don't know. Like you can't la No, but it's true. I don't know. I don't have any hot takes on this because it's like to me it makes sense. Like if you're going to launch an app, like if I was a VC and somebody came up to me and said, "Hey man, I'm building out this AMM for Manta." I say, "Why? What are you going to do there?" The goal The goal is to make some form of money. Fantastic. Back to revenues, baby. Right back to revenues. Well, it's either revenues or they're getting paid by an an incentive program or grant program or something else or they might like they might be entering Salana to like potentially launch an LST eventually or

have like some validator or something like they want to make money somehow which is why they're going on Salana. You can't make money on other chains. I I think it's interesting. I mean, it's the obvious kind of, you know, you you should want to do this as an exchange with a with an active user base who wants to trade and take risk. If you're doing pers, you you have that. So, you should try to funnel them to other products. And um you know, buy bit, I don't know if they were riskaverse because they could have done this earlier. Binance was the least risk averse and then you know, Coinbase, it took them some time to do it and whatever. Um but yeah, it makes sense to try out a chain. It's a nice call option. Um I assume it's pretty cheap.

Um but we the interesting the most interesting thing is just the allegiance with Salana. We've said that um Salana's disadvantaged because they do not have a chain that they are partnered with. Um you want someone with powerful distribution kind of funneling um new users to your chain. I think Phantom has been that for Salana and I'm always thinking about like you know what matters more having a centralized exchange or a wallet. Um I think as a company you probably want both but it's it's good to see that Salana finally has that now like the Coinbase base thing the you know Binance did it first but then Salana was doing it with FTX and

that was a fantastic relationship. It really got them to where they are. Um, unfortunately, you know, it didn't work out work out well in the interim, but it was a really important strategic thing and now they have it. So, we'll see. We'll see what that does. I think by bits the fourth or third or fourth biggest exchange by volume. Not a bad partner to have. Yeah. Uh, pull up the metrics. We actually have it on block works. But yeah, if you look in recent weeks and months like by bit consistently up there regularly in terms of overall exchange spot volumes um typically yeah third fourth position up there. Obviously Binance you know way up ahead of the pack but um you know by total volume I mean they are surpassing Coinbase for

example. So, it's definitely a meaningful from a number standpoint, like the maybe the amount of flow that they can push on chain should be very meaningful. Uh I do think it it it's just interesting that it challenges this notion that um everyone in this space seem to have that all of these exchanges like you know with what Binance and Coinbase did there was this kind of assumption that uh every exchange would go ahead and like launch their own branded chain and obviously many of them did and kind of tried to do that but um since they're just going to be launching products on Salana directly rather than like creating their own chain environment to do this Um, I don't know.

It seems like they're going just sort of like more directly at the users rather than worrying about this underlying infrastructure question, which I think has been for the longest time it's been like the it's been like the main idea, right? Like you launch your own chain and then you own the whole stack and then you can do whatever you want with it. But I don't know, we're seeing more and more that just like building the best app that you can drive a ton of revenues without needing to necessarily own everything. Well, before you could make more money by launching infrastructure and now it's not that anymore. Yeah, you could raise a lot, right? And now you can just make a lot of money with a good app. Even not even without raising. I mean, if you run a six month to one year program, you're taking fees.

Yeah. That's just money into your pocket. And then if it doesn't work out, you say, "Oh, no. it didn't work out. This chain has actually always been separate to us. Therefore, we are launching on this other chain and that's it's fine. Like that's completely okay. I'm not trying to like say that it's morally or ethically wrong. I think it's like if they want to make as much money as possible. If they can offer a good product, why shouldn't they be able to make as much money as possible? That's not Yeah. And I I mean I the other part there I guess is if you're operating many of the valid validators in the set and then you've got you know maybe validator commissions or the staking rewards earned from that as well. There was clearly some you know money-making opportunity in the past. It

was a big thing but with the dilution of so many chains like I I guess it was kind of a natural outcome to get to this point. Uh but Ryan I I think you made a great point here like in something we've covered recently is like you know this isn't the first example of this Kraken doing X stocks on Salana for example like tokenized stock trading um with back with the backed team but I don't know where I I feel like we're seeing a little bit of a trend here. This is something we tal you mentioned that we talked about it like having those exchange relationships and now it seems like that um the exchanges are like just they're just coming on chain on their own terms and going to the the best venues at the moment and and it's and it's under discussed within the ETH

debate as well like ETH is being pushed to the background by the wallets and the exchanges. It's not the favorite place to offboard to and you need you need like a foundation that is willing to acknowledge that that matters and position to make sure that I still I still offboard through ETH because it's dirt cheap because nobody else uses it. Just I made an ETH transaction today. I paid three bucks, four bucks. What did you do? I mean, that is dirt. I mean, I guess that's one would depending on what you're doing. That could be cheap depending on how many figs you have.

Dirt cheap for Ryan Connor. For me, it's half the transaction value. Shout out to today's sponsor, Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions, just real yield and sequencer fees routed back to DeFi users. Incubated by Polygon Labs and GSR. Katana is launching with a notable ecosystem of primitives, assets, and partners like Morpho, Chainlink, and more. Be early to Katana by joining the pre-eposit campaign for mainet opens at the end of this month. Follow the links in today's show notes to get started.

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this is super interesting. like I don't know people aren't it doesn't really seem like there's a ton of traction for AO for example but pre-markets for the pump token went live um there's like no volume on this thing so I really I don't know how much you can really use it as any kind of signal but um is this AO yeah on AO the current price is listed at $6 I'm assuming they would they're they're assuming a one billion token supply which would put it at six billion FTV but the 24-hour volume is 78,000 and the OI is only there's only 12,000 in OI. So, it's literally zero. Um, so I don't I don't know that we can I don't know we can really use this as

an indicator. Um, but at the very least, I mean, it seems like this is coming very soon. I I don't think there's any confirmed dates out there, but the rumors came out. There was a lot of discussion. Yes, Pocachio, it's this week. next week, right? Like it's in either this week or next week. One would assume, but there's we've got like no confirmed date. I think even post like Blockworks article about tenative details about sale and whatnot. I don't think there's many publicly confirmed details from the team yet. So, um, but it seems like market is like prepared like this is coming. Um, and I I see two prevailing there's two prevailing

themes. It's either like this is the top of all Salana and memes forever, like the pump fund liquidity event like ruins the trenches forever. And then um the other side seems to just be like why would you not want to own like the most profitable app on Salana or like well I think you can do both sides to be fair like at four bill it's a buy but you can also say I [ __ ] hate Salana it's going to zero you know you can do both sides I think here like for me pump is still a buy now I'll I'll assess afterwards seeing how the chain continues to do.

But like it doesn't have to be one or the other. You can buy it at four bill, sell it at whatever you want. 12 to 15 is my price target. Not financial advice. Um, but it doesn't mean you don't have to think Solana. It's I think a lot of people including me want for Solana season to be dead because it's a little bored of it. But it might not happen. Yeah. I mean, I think based on the current rumors, like if 20 if there's if there's 25% revshare to the token, then I mean, it would put it at like uh 30

price to earnings. You could call maybe you could call it earnings because the token wouldn't have any costs necessarily or sales, but figure that out at some point as well. That's a huge thing that we don't do at all. Like we don't do any expenses into anything. We just assume it's always zero. Yeah. I think the difficult part in this scenario is like if hypothetically the labs entity is doing the dev work and that they're like eating all the costs, but then they're taking 75% of the revenue and then just like shooting 25% at the token. then like hypothetically in that scenario the token might there might not be any costs for like the token per se but in the overall picture there are obviously costs it's just

weird the way that this plays out I think it's like a trunch thing um um it's like pure cash flow to the token but then you have to yeah there's a bunch of assumptions to be had but yeah I I think I I like that you said that you can you can bet against Salana and bet on pump um I I think more folks should realize that um the I think that the people saying that it's over once the token launches those are the revenue meta people.

Um it's a very backward and hyperlquid bulls. Yeah, it's it's it's like why Hyperlid was the correct play. We start and then I'll do my diet, right? Why would the ICO of a project lead to the destruction of a market? Um, in 2021 rules, maybe that makes sense. People take their money and run and view something as some qualitative top signal, but the market's gotten more sophisticated. Um yeah, the revenue meta people are the the memecoin is over are memecoins are

over pe people. Um and those are the same folks who said the same thing in February and then it just didn't happen. Um no point in investing on what you want to happen. It's what's most will it's what uh will likely happen. And I think that giving a bunch of Salana people a lot of money um doesn't make it likely that a market will stop functioning. Yeah, I I mean I agree on that point like there's a lot of what is and what should be type of thinking uh in this space still. I think it's kind of related honestly to the narrative versus fundamentals um idea as well. But I agree Ryan. I think the the really big question for me is just this

again back to revenue like what is the revenue picture here. What is the actual kind of token structure relevant to the labs entity? Like I think this is going to continue to be one of like the biggest questions going into the next few years of crypto. And as we've seen, we've talked about Morpho a few times in the past few weeks um what they're doing like you know basically buying out the labs entity as a wholly owned subsidiary. um like underneath the token um which is pretty interesting like maybe one of the first to go in that like very strong uh like token only stance. Um would love to see more do that because yeah I mean you just have to bake into these extra expectations of you know

if the labs team is is taking most of the revenue like are they actually iterating the product are they going to continue to build and expand here? you would expect with such like a highly revenue generating application that they would, but um I mean we've seen in the past that uh you know the the leading app in a category like kind of is a winner and hangs out and doesn't maybe iterate as hard and and they kind of fall off and and competitors rush in. So, um, I feel like, you know, OpenC might be one of the strong examples there where they kind of just sort of choked the bag and let like Blur, for example, come in and just kind of vampire and take a bunch of their market share for a time period. I don't think there Yeah. I mean, Danny, would you say

that there's evidence of them any evidence of that happening with Pump? Like, the team seems pretty motivated. I think that they have over over 50 employees now. And um I think you were tweeting over the weekend that uh the pump uh mobile UI is quite good, which is like what we've identified as like the the core thing that they need to do to really increase the economics there. Yeah, I like what I'm seeing. Like I think they're moving in the right direction. I tried like I remember trying the app day one and it was kind of awful. like I don't know why you would have used it at the initial launch over you know like a trading bot that that's that have existed for a long time now but um they've been adding features that I think are interesting um and

obviously they've got the live like they've got the live streams kind of incorporated in there and then they have like news and like this movers tab which is like their own algo for coin discovery um for like tokens that are hot or what have you um similar to other like you know you've got Photon like meme scope for example and Axioms like I don't know what they call it. I don't know if they call it movers or something else, but they they have a similar thing where like all of these bots, right? They have their token discovery feeds. Um but it seems like they've been making improvements in the areas. Yeah. where I would want to see improvements and they're clearly like very like strongly focused on this idea of like live streaming and becoming like a kind of like a community platform which

you know I won't say is like you know there's definitely not a guarantee of success there. I think that's a very hard niche to break into. Um, I've written about this, but uh, you know, if you want that sort of like crazy outcome and and if they are successful, then yeah, I mean, then 4 billion sounds like a great price to pay, but we'll just have to see, you know, I want to see them keep iterating. It's nice that I mean that it shows you they're also serious a serious team and that the token isn't like it's not a stupid valuation.

It's very it's reasonable under most scenarios where you assume certain value flowing which way. So yeah, I think I think they're doing a lot of the right things. Yeah, I think floor bill is fine. Yeah. What's the target B? 20 12 15 tr 100. That's for pump chain. He's getting the Elliot wave patterns. He's drawing it up. Dude, I'm on the Fibonacci. You wouldn't get it. But the 2.523 shows that it's going to 100, Bill.

No, I think it's going to flip hype, you're saying? Or is hype going to go to like 300? Like, if pump's at 100, I don't even want to think about where hype is. I mean, Kobe said hype's going to 150 to 200. That's everything I need. This episode is brought to you by Marinade. Marinade is focused on developing staking technology that strengthens the Salana network and connects soulholders with the best staking rates available with solutions for both DeFi and Trady, including liquid and native staking, as well as direct enterprise integrations. Marinade's high performance staking delegation platform brings billions in liquidity and security to the sole market. To learn more, follow the link in today's show notes. And thanks again to Marinade for sponsoring today's

episode. Algo Kit 3.0 0 includes all the tools and open source resources you need to unleash the power and performance of the Algrand blockchain. Access a resilient network with instant finality, consistently high throughput and low fees, and layer 1 features like atomic swaps and native assets. No smart contracts required. Whether you're building D5 protocols, enterprise solutions, or nextG dabs, Algo Kit has all the tools you'll need to build faster, safer, and smarter. Start building with Algo Kit today by following the link in today's show notes. As always, investments in blockchain technology involve risk.

Terms and conditions apply. Do your own research. What do you think about the the buyback on hype? It's is it actually 98% of revenues? You can see it's all on chain. Okay. Is it? And what do you think about it? Reading it. I'm not saying I don't believe it, but I'm asking you to clarify. It's 97%. Um, I do this like once a week now because every time people come on we talk about this. But my thoughts on buybacks in general are this. I get this general idea that if you are a company you should reinvest in growth. That to me makes sense. You don't expect startups to

pay out dividends. But but and this is where I think the crypto um like narrative and uh fundamentals kind of get uh intermixed in crypto value acrruel is very difficult. Um well it's not difficult now but it used to be very difficult and we've had this like big gap between equity and token and then equity usually trumps token. Um, so I think in general most tokens should do some form of value acrruel for 15 to 20% because it's a good narrative to have. It means that the token isn't

useless. Um, for the hype thing, 97% is quite high, but also it means there's a permanent 2 mill bid per day, which is great. Um, so I'm happy about that. But I do think that there's an argument that can be made that's like why aren't they invest reinvesting in this into growth? But I imagine they're already quite rich. I think they have a good team. I don't know.

Like they're clearly still working on the product. So I'm not sure if like or like and they're it's going well. So, I'm not sure if if they have to I don't know. It's complicated. Is this like a They own a ton of the token. So, yeah, they own price to go up is like basically being paid a big fat salary. Yeah, they own 30% plus of the token. So, do they have a foundation with grants and stuff?

They have a foundation. I think they've allocated 0.8% 8% to grants. I It's just so weird that you're making all this money and you want to just give so much of it back. Like it implies that they're making, you said they're 2 million a day in buy pressure. Um, so they're only keeping 40k. They're not keeping it. That goes to the HLP. So they're only putting 40k a day. So they're not keeping any of it. They don't keep any money token. They don't keep any of the buyback. Well, whatever the fee is, it goes to the buyback and they shall be whatever the revenue is.

Yeah. It's like you're just trading, you're trading for illiquidity, right? Because if they want to fund an acquisition or a bigger business, you have to take the token and market sell it and then do that thing. Yeah. Or maybe they'll do like an equity deal. I don't know. But then then you have to realize gains. I don't it doesn't seem like to be honest with you I don't know how they do it like this is a like they don't even keep 5% which is a bit insane to me like I think if they did 90% buyback 3% HLP 7% into like this labs fund or whatever you get what I'm trying to say and if it was putting in

like like I would have had like a mill by now probably it it'll be interesting uh Hyperlid um and Salana. Um I think that's it are probably like getting money managers to talk about them now. Hype a few pretty high-profile ones. It'll be interesting to hear them talk about this hype buyback. I like to hear their thoughts. Yeah, we'll see. It's very different to I think a lot of other ways that crypto's been done this and I think people kind of like it. Yeah. Works towards them. Like a month ago, hypo was at $9.

Yeah. I mean, I I feel like you mentioned the big question in there is just like if growth needs to involve acquisitions or purchases of certain things. I mean, it's just kind of a question mark, but so far it's been going well. I guess we will we'll keep watching. Um, cool. I think we can call it there, guys. Uh, something we didn't talk about. Will they keep watching from the sidelines? We'll keep watching. Well, not from the sidelines. I guess you pull up the uh blockworks.co disclosures and I think there are several several team members who are not on the sidelines. I do not own any hyperlquid. Full disclosure. Ryan Connor, what about you?

One last topic. It's not a real topic, but next week is permissionless. This is quite literally your last chance to get your tickets. Take the biggest [ __ ] risk of your life right now. Come to Permissionless Brooklyn next week, the 24th through the 26th. We're all going to be there. Bunch of the Blockworks guys, a ton of the Blockwork Works guys, the Orics Research guys. I think all of us are going. All of Block Works Research is gone. All of Research is going to be there. If not, yeah. If not, everyone then like most will be there. Come out and see us. Come out, hang out at the 0x Research Arena. Uh, it's for you. It's for the fans. Use code0x10. 10% off tickets. Link in the description. I don't know what the

prices are anymore. Like, this is They might The ticket prices might even have gone up. So, like, you know, get your tickets, come out, see us next week. It's going to be a jam, man. Ryan, what are you excited about? I'm excited to meet Boach and mo him in real life. That's I can't wait for that. Um, a lot of the team's going to be there. Global team all in one place. That's what I'm most excited about. Seeing how tall everyone actually is. I like that. Ray was shocked that I wasn't short. A man lit. He was He unironically said this to me. Oh, you're not tall, are you? Well, I'm taller than you.

Define tall. What's tall? Well, I'm I'm six foot. in the in the general univer like in worldwide a pull up worldwide average heights man don't laugh at me Danny no what I'm saying is I'm not saying I'm tall I'm saying Ryan met me and said wow you're not short I think he expected me to be short come to New York next week permissionless get your tickets 0x10% off get your tickets we will see you there we'll all be there have a great night have a great evening have a great day we will see you guys next [Music]