JPOW, Fidelity Launches Stablecoin, HSBC tokenized gold, LiFi CEO calls in w/ ETHGas & Galaxy VC

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>> Government likely weighed on economic activity last [snorts] quarter. >> No change. >> But these effects should be reversed as the reopening boosts. >> J maintains Fed fund rate. No change in the labor market suggests that conditions may be stabilizing after a period of gradual soft rate was 4.4% in December and has changed little in recent months. Job gains have remained low. Total non-farm payrolls declined at an average pace of 22,000 per month over the last three months. Excluding government employment, private payrolls rose at an average pace of 29,000 per month.

A good part of the slowing in the pace of job growth over the past year reflects a decline in the growth of the labor force due to loweration and labor force participation >> though labor demand has clearly softened as well. Other indicator I wonder if this is going to be bullish for the marketing. Another thing that came out today was little change in recent months. >> Bessent saying that they're not going to intervene in the >> significantly from its highs in mid 2020. I'm not sure if you saw somewhat Arthur Hayes post longer run >> goal potential intervention. Estimates based on the consumer price index indicate that total PCE prices rose 2.9% over the 12 months ending in December and that excluding the volatile food and

energy categories core PCE prices rose 3.0%. These elevated readings largely reflect inflation in the goods sector which has been boosted by the effects of tariffs. In contrast honestly appears to be continuing the economy from the numbers perspective declined from last year's peaks as reflected in both survey honestly >> most expectations they should cut with our 2% inflation goal.

>> No >> well >> our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. Inflation is still >> today's meeting [clears throat] the target range for the federal >> unemployment is like upwards of 4%. Since last September, we've lowered our rate of 75 basis points or 34 of a percent inflation estimates of neutral. >> Even though inflation's a bit high knew that% >> as soon as the next Fed share comes in, they're just going to be absolutely nuking rates. So he had it in his best interest to just kind of try to

>> additional adjustments to our >> kind of try to just you know avoid excessive cutting before the balance of risks >> you know before the next guy comes in >> is not on a preset course >> kind of my vibe here we will make our decisions on a meeting bymeating basis >> to conclude the Fed has been assigned two goals for monetary policy maximum employment and stable prices we remain committed to supporting maximum employment bringing inflation sustainably to our 2% % goal and keeping longerterm inflation expectations well anchored. Our success in delivering on these goals matters to all Americans. We at the Fed will continue to do our jobs with objectivity, integrity, and a deep commitment to serve the American people.

>> 2% inflation. >> I look forward to your questions. >> Oh, that was quick. Will those hands go up? >> Chris Rugabber at Associated Press. Thank you. Um I wanted to ask that you know you attended the Supreme Court uh hearing last week. >> Gosh, the mention markets are probably firing right now. >> Treasury Secretary Scott Best on it. >> Can you say why you >> Oh, they're asking him about the court case. >> Pay attention to the subpoena. >> So, let me start with I I [clears throat] don't respond to comments by other >> I don't respond to comments by other officials. He says >> it's just not appropriate to do that. I will tell you why I attended. Um, I would say that that case is perhaps the

most important legal case in the Fed's 113 years. Most important legal case >> and I, as I thought about it, I thought uh it would might be hard to explain why I didn't attend. >> Uh, in addition, um, Paul Vulker went to a Supreme Court case famously and I guess 1985 or so. So, it's precedented and, uh, I thought it was an appropriate thing and I did it. >> Great. And then just quickly follow on uh the job market. Uh you mentioned last month that the household survey might be distorted. Um [clears throat] and you also mentioned the potential for o uh overounting jobs.

Uh which would suggest that we're still in a negative hiring pace. Um so do you see that drop in the unemployment rate as solid? >> Amazon cut 16,000 workers yesterday. >> What's the basis for saying that? that's been bound to happen. >> Yeah. Really two questions. One is so we're we're getting through the the distortions in the data from the shutdown, what however big they were in November, they're smaller in December. So we're getting to a place where they're no longer material. They're still there, but it's a tweak here and there. Um the reason why we why we changed the statement, let me pull it out. um uh was was simply uh we it's it used to say that judges that downside

risks to employment rose in recent months. So we saw you know data coming in which suggests some signs of stabilization. I wouldn't go too far with that but some signs of stabilization there also some signs of continued cooling and uh so we thought that was no longer an accurate description of the data. In addition, the outlook for economic activity has improved to clearly improved since the last meeting and that should matter for for labor demand and for employment over time. So for those two reasons, we thought we would take that language out of the statement.

>> Nick, >> remember that Supreme Court case? If Lisa Cook gets cooked, market cops. >> Nick Chimmer, the Wall Street Journal. Uh, Chair Pal, you've generally avoided engaging with political controversies directly and the video statement on January 11th was a departure. What made this different and are you concerned it could draw the institution further into >> Arthur calls this guy the Fed whisperer. >> So today on uh uh I'm simply going to refer you to the statement that I made on January 11. I'm not going to expand on it or repeat it. So, uh, I'm just not going to this is really about the press conference and and and, uh, the economy and what we did today, but and some ancillaries, but I'm not going to be getting into that.

>> Can you say whether the Fed has responded to the subpoenas? >> I have nothing for you on that today. >> Wow. They're just hammering on the subpoenas. Mike >> Michael McKe from Bloomberg Radio TV. Have you made a decision and whether you would remain as a governor of the Federal Reserve? And if so, would you tell us what it is? And if not, when might we anticipate a decision? >> Uh, no. And uh I really once again looking for you on that today. Al does not want to talk about >> uh why why would you uh want to leave at all under the circumstances >> again >> I don't want to get into that's not

something I'm there's a time and place for these questions and and uh but not not something I'm going to be getting into today. Thank you. >> Thank you. Um Claire Jones, Financial Times. Thanks a lot for for taking my questions. Um, in another one that might, you know, >> lead to a similar answer, um, >> we've seen quite big movements in the dollar over recent days. What do you think is driving the US currency lower and have you been at all concerned just by the extent of the volatility we've seen this week? Thank you.

>> So, Claire, as you probably know, you know, we we don't comment on the dollar. really the administration especially the Treasury Department has the job of oversight over over the the currency and so and exchange rates and all that. We don't comment on that. It's not our not our role. Um so I have nothing for you. >> But I mean what's your [clears throat] view on the market movements? I mean what do you think behind them is diversifying? Is it >> Yeah, I just don't question moves it around. >> Um I it's just it's just not appropriate for us to do so really. The Treasury Department has that. It's their their role, their Bailey Wick, and and we stay off it. We do monetary policy and some other things, but we don't we don't

comment on the dollar. >> We do billion dollar renovations to our buildings. >> That's it. >> We don't comment on the dollar. >> Hi, Chair Pal Neil with Axios. Um, obviously no SCP in this meeting, but in light of the slight firming up of the language around growth in the labor market in the statement, should we assume that the timeline for any further rate cuts is push back compared to what people might have thought in December? Well, first of all, if if you look at the incoming data since the last meeting, um clear improvement in the outlook for growth. The the data have come in and sentiment, the the beige book, everything comes in suggesting that >> book is happy about that.

>> I wonder if our growth >> uh inflation performed about as expected and as I mentioned, some of the labor market data came in suggesting, you know, were evidence of stabilization. So it's overall a stronger forecast. my Iranian question is just >> uh but but in terms of timing the pacing of any additional easing >> we haven't made um >> what we say was that after this meeting after the three recent rate cuts we're well positioned >> we're buying more and more Bitcoin for face on both sides of our dual mandate not going to trace the metals based on the usal of risk

haven't made any decisions about future meetings. >> I think America is the crypto capital of the world. >> The economy is growing at a solid pace. The unemployment rate has been broadly stable and inflation remains somewhat elevated. So, we'll be looking to variables and the way for us >> Steve >> Steve Leman CNBC and sticking with questions you answer. Thank you. Uh >> boy, >> you had previously, I believe, described the current policy rate being at the higher end of neutral. And if you look at the longer run, the SCP and the longer run rate, 16 of 19 officials are actually below there on their long run.

Is the Fed still in a process of bringing it down towards a middle range of neutral? And what would it take to get there? So, I the count I did was that four of the 19 were at or above that. Maybe I missed by one, but I thought I thought it was four. Um, and if you look at the um the dealer survey, it was 10 out of 58 where we're at or above. So, you're right. It's it's it's the high higher end of the range. What we say is it's it's within the range of plausible estimates. This is this is the higher end of that range, but so for some people, they think it's it's neutral. I think and many of my colleagues think it's hard to look at the incoming data and say that policyy's significantly restrictive at this time.

It may be it may be fully neutral or it may be somewhat you know it's in the eye of the beholder and of course no one knows any precision >> um pulling back. >> So is that you had follow up? I get what you're saying, but um >> but my bags, sir, my bags are just officials. The Fed being in a a mode of bringing it down eventually over time. Are you still in that mode or is this a place to hang out? >> Yeah. No, I would say if you look at the SCP from from December, you most people had additional normalization, but at the same time, we've done a lot of the process of normalizing. A good piece of it is done with 75 basis points and before that 100. It's 175 basis points.

we've cut since we began cutting in September of 2024. So you've moved now to, you know, 3 point Fed funds is running just a little below 3.65%. Um, so you've moved a good way and we think we're well positioned here to watch how the economy performs. Look at the data. We're not making decisions about future meetings, but we we do think we're well positioned after those three cuts to to >> He may never cut rates again. We might not get our next rate cut until the next uh from Bloomberg News. Uh to what extent the did the committee discuss the possibility of cutting at this meeting or in March and how are you all thinking about the conditions that would merit

another rate cut? Is there broad agreement on the on the committee about what it would take? >> Good question. >> So there was broad support on the committee for holding today. Broad I would say including among non- voters. So that's where that was. Of course, some people did want to cut and and and dissented. >> Desenting is just a normal thing these days. It's kind of crazy >> for for holding today. Um we're not trying to articulate, you know, a test for what for when to next cut or whether to cut at the next meeting. Um you know, what we're saying is we're well positioned uh as we make decisions meeting by meeting, looking at the incoming data, evolving outlook and all that. And um you know we're in a

position where um you know we have to we still have some tension between employment and inflation but it's less than it was. I think that the upside risks to inflation and the downside risks risks have probably both diminished a bit. So u you know we'll be looking at that. It's about how you weigh uh the risks to the two goals and and and how big those and quantify them. And so there are different views on the committee and you know we'll find our way forward as >> goal just keeps going. Edward >> Gold doesn't care about JPAL. Thank you.

>> Uh thank you, Mr. Chairman. Edward Lawrence from Fox Business. Has the effects of tariffs tariffs are hitting now moves through the economy on prices? >> A lot of it has. So basically [clears throat] uh there are many different estimates and and they're all highly uncertain, but most of the overrun uh in goods prices is from tariffs. And that's actually good news because if it weren't from tariffs, it might mean it's from demand and and you know that's that's a harder problem to solve. We we do think tariffs are likely to move through and be a one-time price increase. So most of the overshoot if you if you were to take that out, you'd get and you would I mean inflation core PC inflation is running just a bit above

2% x the effects of tariffs on goods. And the other good news is if you look away from goods and look at services, you do see ongoing disinflation in in all the categories of services. So that's a healthy development. So that's what's going >> uh the effects of um of tariffs flowing through goods prices peaking and then starting to come down assuming there are no new major tariff increases that that are done. expect to see over the course of 92% if we see that >> that right now no change we can lose% also if we see something that suggests that the labor market is

not stabilizing that in fact it's the down risks reemerge or or the data just get worse we'd have to look at both of those we have a two-sided mandate >> if I could um if President Trump [clears throat] does pick a new Fed chairman before May um what does that look like how would you work with that person and what does that transition period look like >> I don't have anything for you on that. I you know that's will depend on on Congress's actions and things I can't speculate on. >> Howard >> Howard Schne with Reuters. Thank you for taking our questions. Um given the changes in the statement and all you've said so far, is it is it fair to describe uh risks to your to both sides of the bandaid as roughly balanced right

now? And is the next move necessarily down? I'd say that the the upside again the upside risks to inflation and the downside risks to risks to employment have diminished but there they still exist. So there's still some tension between the mandates. >> Are they fully in balance? Uh hard to say. Hard to say. And you know we we again we think our policyy's in a good place. Um, I've just discussed reasons why we might change our policy and, you know, we'll just have to see how the data lead us.

>> I'm wondering you you you a minute ago you said you felt expectations were consistent with your with your mandate that the two and the 10-year break evens have moved quite notably in the last uh couple of weeks I believe. Uh, is there any concern on that front? I mean, the I I recently looked at at all all of the both survey and market-based short-term inflation expectations have come way down. You know, they they they were in a good place at the beginning of last year. They spiked around liberation day and now they fully retraced in the last few months. So, that's very comforting.

And the longer term inflation expectations have remained in places that are, you know, very consistent with 2% inflation over time. So expectations are have been solid and they they reflect, you know, confidence in in the return to 2% inflation. >> Andrew, >> apologies [clears throat] if this is a little bit repetitive, but in the past you've said that the reason you cut rates was that the risk to the labor market was greater than the risk to the inflation side. Is that still true? >> You know, we haven't made You're right.

We we uh we saw the labor market weakening and we acted and I think that was the appropriate thing to do. We have you know we will always act to to address what we see as uh the economy moving away from our goals. Uh risks to both of the variables are a little less. I think that the upside risk to inflation again a little bit less and the downside risk to employment a little less. Um, I just would say that I I'm not making a judgment about how, you know, one of them is more at risk than the other, just that the risks to both of them have have diminished.

>> Okay. Thanks. Um, BIS wrote a paper last summer which concluded that global investors were hedging their dollar exposures in ways that previously they they hadn't because of policy uncertainty. Do you agree with BIS? We really don't see much at all about that that whole that whole story. There's just not a lot of data that that suggests that there's much to that. >> Thanks, Anna. >> Anna Swanson with the New York Times. Um, can you talk more about what you would need to see in the labor market to conclude it's time to resume easing? Do you need to see further deterioration in the labor market or would it be enough for inflation to soften? So we'll always be looking at both things and so there

could be combinations, infinite numbers of combinations that would cause us to want to move. Certainly a weakening labor market would be an argument for loosening. But what's happening with inflation? If inflation were at the same time getting worse, you know, you just you just have a very difficult situation there. So we'll be looking at both. Clearly a weakening labor market calls for cutting. A stronger labor market says that that the rate rates are in a good place. We'll have to be making similar judgments too on inflation though. >> And if inflation does pick back up and the labor market doesn't show further signs of deterioration, is it there a chance that you could raise rates rather than simply remaining on hold? What would you need to see to consider hiking?

>> We don't we don't take things off the table, but it isn't anybody's base case right now, anybody's base case that the next move will be a rate hike. But, you know, ultimately we'll do we'll do what we think is the right thing. But that's that's not where people's expectations are right now. Victoria. >> Hi, Victoria Aguido with Politico. Um, I I wanted to ask, you've talked in the past about concerns about the US fiscal trajectory, and we've seen in the Japanese bond market a lot of turmoil recently, uh, in part due to concerns over their their fiscal and and long-term economic outlook. So, do you worry that the US could at some point find itself in a situ similar situation to Japan, whether for fiscal or

demographic reasons? you know, over time you've seen that US rates have remained pretty they haven't moved a lot really for a while, but they haven't moved a lot uh because of what's been happening in Japan. Um so it's more of an overtime thing. The US federal budget deficit is, you know, uncontroversially on an unsustainable path. The level of debt is not unsustainable. It's very much sustainable, but the path is unsustainable. And the sooner we work on it, the better. But um you know right now the we're running a very large deficit at essentially full employment and um so the fiscal picture needs to be addressed and it's not really being addressed. So uh that's important. I I

I'm not in any way connecting it to some sort of near-term market event, but u ultimately it's something we'll have to deal with and that you know in the end in the endgame that's that's where you wind up is in some kind of a difficult thing. But that's that's not where we are. It's not what Japan is either. But uh it's certainly not where we are right now. >> Does it reduce the effect of your rate cuts that longerterm rates have overall not really budged that much? >> I I wouldn't say that. You know, the thing is um I mean technically higher longerterm rates means less accommodated financial conditions. But remember many many things move longer term rates. It's not and it's not mostly what happens on the short end. There can

be effects of longerterm rates from our moving our policy around but you know it's much more you know assessments of the fiscal path and fiscal policies and and risks and things like that that move the tenure around. You can you can look back at and find periods where we've been very actively moving the the policy rate and over the course of a year and over the course of that year the tenure is exactly where it started. So, it's not there's not a tight link between, you know, 10-year rates and and the overnight rate.

>> Elizabeth, >> thanks so much. Elizabeth Schelsey with ABC News. Republican Senator Tom Tillis, who sits on the Senate Banking Committee, said he will block any Fed nominee, including the chair, until this investigation into you is resolved. Do you support this move by the senator, and what conversations have you had with the senator? >> I I've got nothing for you on that. More broadly, what would happen to American households if the Federal Reserve loses its ability to operate independent from politics? >> So really the the point of of independence is not to protect policy makers or anything like that. It just is that every advanced economy democracy in the world has come around to this common

practice. It's just an institutional arrangement that is that has served the people well and that is to to have a separation between uh to not have direct elected official control over the setting of monetary policy and the reason is that monetary policy can be used you know through an election cycle to to affect the economy in a way that will be politically worthwhile. So this isn't I'm not talking about the US context this is every advanced economy democracy of any size. So it's a it's a good practice. It's pretty much everywhere among among countries that look at all like the United States. And I think if you lose that um it's first of all it would be hard to restore the credibility of the institution. If

people lose their faith that we're we're we're making decisions, you know, only on the basis of our of our assessment of what's best for for everyone for for the wide public rather than trying to benefit one group or another. If if you lose that, it's going to be hard to retain it. And we we haven't lost it. I I don't believe we will. I certainly hope we won't. But it's very important. And the reason it's important is that it's enabled central banks generally not to be perfect, but to serve the public well. >> You're confident it can maintain that independence at this point.

>> Yes. I mean, I'm strongly committed to that and so are my colleagues. Archie >> Archie Hall from the economist on that sort of stabilization of the labor market question. How much do you see the weakening we saw over the past 6 months year as a kind of data mirage around immigration and the government shutdown and so on that's now resolved or how much have we seen a kind of real underlying firming up in the state of the labor market do you think? Well, part of it is to your point, part of it just is that that uh labor supply, growth in labor supply has come to essentially a halt from a fairly fast uh uh clip of growth over the last couple

of years driven by immigration and then that the halt being driven by a very sudden stop in immigration. So many outcomes were possible with that. Um you know, supply came way down. It turns out that demand for labor also came down a very similar amount, maybe just a little bit more, which is why the unemployment rate has gone up. So I don't know whether that's a coincidence or not, but that's that's what's happened with with that part. But if you look at other um uh things like for example the just to pick a couple um the conference board's measure of job availability that came out I don't know was it yesterday or today but uh you know it shows ser it's a survey showing that that workers feel

like job availability is it's a very low reading just one reading but it's an indication of softening uh people part-time for economic reasons uh which is a category within the broader U6 category measure um has moved up significantly. So there there are lots of I could go on and on. There are lots of little places that suggest that the labor market has softened. Uh but part of but you're right part of payroll jobs softening is that both the supply and demand for labor has has come down. Growth in those two have have come down. So that that makes it a difficult time to read the labor market. Um you know so imagine they both came down a lot to the point where there is no job growth.

Is that full employment? In a sense, it is. If if demand and supply are in um are are in balance, you know, that you could say that's full employment. At the same time, does it do we really feel like that's that's a maximum employment economy? Uh you know, it's a challenging it's very challenging and quite unusual situation. >> Thanks. And and one more on growth and the kind of strong growth outlook you're strengthening growth outlook you're now seeing. How much of that is the fiscal stimulus we're seeing from the beautiful bill, the tax cuts and and all of that? >> So, you're seeing it already. You don't have much of the fiscal I think the outlook, you're right, it's it's financial conditions and it's u it's fiscal policy for 26. Um, but you've got strong consumption that's been happening

before financial conditions have been supportive, but before the fiscal uh uh effects really are shown. So essentially the economy has once again surprised us with its strength not for the first time uh and you know consumer spending although it's you know it's uneven across income categories but consumer spending overall numbers are good and um we're benefiting from the you know from the AI buildout of data centers that's that's another thing we're benefiting from but economy overall growth is growth is um is on a solid footing it looks like and and it's not just those things It's it's just the consumers the consumer is filling out, you know, surveys that sound really negative and

then spending. So, there's been a disconnect for some time between downbeat surveys and, you know, reasonably good spending data. >> Thanks, Cher Pal. Christine Romans from NBC News. You talked about how consumer spending is uneven. The president calls inflation defeated and solved. The FOMC says it's a somewhat elevated inflation, but you talked about those customer survey or those consumer sentiment surveys and public opinion polls that show that most families say the cost of living is still issue number one. What is the conversation around the table with your colleagues about how wealthier consumers seem to be driving so much of the economy and why so many families

still feel like they just can't make ends meet after 5 years of rising prices? What is that discussion like? >> So, a couple things. one, there's something something to it in in that we know that um higher income households that tend to own real estate and tend to own stocks, you know, securities and those assets have been going up in value and and you know, increases in wealth do support spending over time. So, and that's that's clearly a part of the story. We also know that for some time now, for you know, a year or more, we've been hearing from u retailers, for example, that serve lower income customers, whether it be food or the big box stores or any they're saying the

same thing, which is our consumers are looking to economize. They're they're trading down from brands and they're buying less and changing their buying habits and that kind of thing. So we're seeing that and that's that is a reality of what we're seeing. They're still consuming but but um they're they're feeling it in a different way. I would say more broadly on affordability we you know we have a vast network uh through the reserve banks and also through the board of governors where we talk to small and large businesses and and households. And so we do hear a lot about affordability and we take we take that very seriously and we take it to heart because you know our job is one of our jobs is price stability and so you

know the the best thing we can do for for people who are feeling that squeeze is to keep inflation under control and you know frankly to finish the job of getting inflation back down to 2%. >> You mentioned the AI buildout as being a positive for economic growth this year. I wonder as you look at the weakest year last year for job creation of a nonrecession year since like 2003, are you concerned about AI maybe supplanting more entrylevel work and entry level jobs? And how does that play into your what you're watching about the labor market?

>> You know, so everyone of course is watching AI and the deployment and you know trying to understand exactly what's happening. Um and there's a wide range of possibilities. It's it's hard to say. We're and of course anyone who uses it is amazed at at what it can accomplish, right? So, uh, every every technological wave will will eliminate some jobs and and create other jobs. And it's always been the case if you look back wave after wave after wave. There will be some disruption, but ultimately technology uh increases productivity which is the basis for rising wages. And it may not all happen immediately but over time it's what it's what enables incomes to rise over time is rising productivity. So will and we always ask

well this this is going to be different you know is is it going to be different and we we don't know um and we may in any case see in the short term uh jobs that are being eliminated by the capabilities of AI we may see that um we just don't know what the overall effect is going to be. So how to think about it in in ter in macroeconomic terms it's very hard you know we we can look at the aggregate data uh we can we can analyze for example the the there is some connection it appears between the um low hiring rate for recent college grads uh and AI but it's not the the the main or only driver. Um, you hear large companies though saying many of them

saying that they either won't be hiring for some time or that they're hiring less or that they're laying people off and they they tend to refer to AI uh when they when they do that. So, we're all watching and learning and it could could certainly have pretty significant effects on the economy, the workforce, and our society. Um, we don't really have the tools to address the concerns that may arise, but we have a lot of people who who alltime highs. Uh, nothing ever happens,

camp wins again. I didn't I guess nobody heard me there. >> No, no one heard you. You want to go on that rant again? >> Yeah, nothing ever happens. The the nothing ever happens camp wins again is all I was saying. Carts are where they are. Gold's new alltime highs. What's new? I was on a meeting earlier with uh someone that said uh the day the the price on Christmas of Bitcoin is the same. Let's uh stop Jerome Powell in the background, please. Uh I had a I had a call with someone today that said uh the price of Bitcoin on Christmas was the same as the price of Bitcoin yesterday.

Like a month later, nothing happened. It was like >> Yeah. Nothing ever happens. >> It was like January. It didn't even exist. It's like it didn't even happen. >> Yeah. Um, >> so hey, it's all good though. It's honestly for the better. I think uh some calmness in in the Jerome Pal world is good for the coins, good for the assets. Uh, I honestly just think that Yeah, I mean everything is going to new alltime highs. Trump is the White House literally posted 7,000 point um new new all-time high for uh for uh the S&P.

It's like Deb is posting Deb is talking about the price type of vibe. Um, so man, I don't know, man. I saw this tweet from Crypto Yield Info. Uh, guy's the OG. Okay, time to step out of retirement. He's definitely like nine figs if not like high eight figs just from DeFi. There's no end to USD basement. Gold, silver been good, but now expensive and people starting to look elsewhere. Suspect Bitcoin will double in price surprisingly fast in coming months. Ethan also follow. I mean, dude, talk dirty to me.

I mean, man, >> I want it. >> Nothing more I want in this world than the be in New York in March and Bitcoin breaking out alltime highs rather than breaking, you know, 70k to the downside. Trust me, crypto yield info. I'm ready. >> Some of us have been in this camp for a long time. Some of us have been accumulating, you know, while we've been at these levels. um >> have h like why does it not look like anyone's been accumulating? It looks like no one's been accumulating anything and and we're literally just not moving.

>> I don't know. I think accumulation tends to happen at bottoms and that's usually what happens to kind of backs stop downside so that you don't have something continuing to slide down. You actually have it kind of carve out and bottom. I'm not a TA god or anything, but that's generally how before things go up, they generally have to stop going down. >> They go and they have to hold where they're at for a little bit and then they go back up. And that's usually how, you know, gravity works, >> dude. These freaking this gold chart is just shocking. Like, wow. Wow. Had I I mean, wow. And and just to think that uranium is next >> followed by followed by uh copper is insane. Like I literally had the thesis

of all thesises given to me when I was 21 years old and I just didn't have enough size and didn't buy in enough. I was too busy trading shitcoins. >> Good thing you're going to have another trade come around. It's the same reason nine figure people had come out of retirement. There's always another trade. That's why you don't have to chase. Guys, I bought Zcash at like $700. >> I remember seeing it launch on Paloni X when one Zcash was seven Bitcoin. I'm glad I didn't I didn't ape in on the first candle of Zcash. I didn't spend seven Bitcoin on one, but I did ape in about 700 because I was chasing. Right.

Yeah. And I think it just goes to show like stick to your stick to your guns. Don't ape in anything just because you see the speculative froth aping into it. Everyone's got a better entry than you do. >> Yeah. >> And so in like I've been I've been buying Bitcoin for the last three months while it's been going down. I've been buying and buying and buying and I think instead of buying gold and silver and copper and uranium, I'm just going to continue to buy Bitcoin because it's what I know. It's it it follows the same pattern of the debasement trade and these things tend to move progressively from asset class to asset class.

>> No, look, I totally agree. Um, it's just more of like it's more of like I feel like it's a good idea to have uh different fiat debasement buckets. >> Yes, I I agree with you on that. I I do. I feel massive FOMO on gold and silver, but then I'm like, "Oh, like I'm in. I'm good." >> And again, like, okay, so talk to me. Talk to me as a no rocker. A pet rock. I don't have any pet rocks. >> Yeah. >> Talk to me like, >> "Dude, gold to 10k."

>> Oh my god. Like, >> go to $10,000. 8,000 >> because look, I agree with the premise, right? That these are all part of the debasement trade. We see fiat what's happening to it. We all believe this is the direction that it's headed. So, so a a basket of assets to protect against the basement makes perfect sense >> as a no rocker. >> How do I like where's the entry? >> I have no idea, but it's not right now. >> That's what I'm saying. So, like >> it's you got to wait for the rotation to happen, right? That's going to come. Um I mean, look, gold has had one, two, three, four, five, six, eight green candles in a row.

>> Weekly, monthly, >> dailies, >> dailies. weekly has been four in a row. Four massive Johnny's. Massive Johnny's. I mean, dude, I I don't even know. It's just crazy. Like, I saw Tether announced today Pico bottom of of the last accumulation range. >> Tether uh said that they're gonna they're gonna do how much? I want to get the number right. Tether to invest up to 15% of its portfolio into gold. So, >> dude, I think if Bitcoin and ETH move here, the we're going to get the catch-up straight. It's it's coming.

It's we're we're close. We got to be close. >> I like the people who are charting and pricing Bitcoin and ETH in >> gold terms because they're getting smoked. >> Getting absolutely smoked. >> Smoked. >> But in dollar terms, just holding the line. So once that rotation I just what's the argument against the rotation >> dude that people don't see Bitcoin and Ethereum as a store of value asset and it's it's already Bitcoin already went 8 to 10x off the lows from the last cycle and it it basically did what gold and silver are doing but a year and a half ahead of time. So the catchup is

actually usually it happens the other way around. >> So it's actually gold catching up to Bitcoin. >> Gold catching up to Bitcoin. >> Yes, that is the bearish the thesis. >> But I don't know if I buy it, man. >> I don't know. I could see it because you know the more innovative assets, the riskier assets and gold is just a larger market cap. It's just statistically less risky than than Bitcoin. Those tend to move slower, right? like a larger ship takes, you know, it's more more difficult to navigate. So, it takes more to move more move gold. You would expect Bitcoin to move first.

>> Uh, yeah, that would be the goal. Um, >> well, not necessarily the goal. I mean, in this case, as a Bitcoin bag holder, the goal is that Bitcoin moves second and gold rotates into Bitcoin. >> Let's get Philip's take. We Let's bring Phil up. They've they've had a sick race. Um, and we have a lot to to talk about. So, Phil, welcome. Welcome to the show man. >> Andy. Hey, Robbie. Long time no see. Good to be here, man. >> It's been a while. >> Do you own any any gold or silver? Phil, are you a are you a no rocker on this move or do you own some rocks?

>> If I own some rocks? >> Yeah, some gold and silver. >> Gold and silver. >> Shiny rocks. >> No, no, no, no, no, no, no, no. I >> No shiny rocks. I you know like I have kept myself far away from the trenches uh the past two three years actually like not good man anything >> good good to see you >> yeah likewise >> so tell us about the race Phil first of all >> thank you well the the race is kind of old news to be honest >> we raced this we raised this uh beginning last year and the year prior and we waited for a good time to announce it uh to push something else.

So [laughter] >> um no um yeah was a was a race. Uh lots of conviction for Multicoin. Very great to see good partners on this and yeah very happy about it and Defi keeps on growing. So uh uh fits the journey. We're on a good track. Phil before we get into everything happening with LeFi and and in the entire interop space and Neo banks and all this thing >> like from a from someone who just raised a significant amount of capital you know we're talking about our personal like portfolio allocations how do you manage you know what whatever the size of the raise was how do you manage that size of capital right do you have treasury management a third party partner or do you guys manage it yourself how do you think through that you know management

strategy of the portfolio >> so obviously um over the past five years. So overall we have raised $52 million and obviously the the temptation to invest into certain things. May it be partners we implement and we bring orderflow to or may it be certain yield options we have been very tempted in in very in in a vast amount of directions. However um we we we came back to not taking any risk literally. Um so we have a little bit um in in yield bearing um options essentially but very conservative um because this space is just too unpredictable and it would be

just too bad if anything happens and uh then the company dies because uh running out of funds and or puts me under unnecessary pressure to raise under uh uns. So no, we really don't do much here >> and we have a finance team, a very capable one and they make sure and really also diversify the risk even between banks. Even if a bank would would die, we we would be good. >> It it makes sense. I mean it's difficult enough uh managing you know a company a business running and building products to do that and manage a hedge fund is is that much more difficult.

>> Yeah, it's it's already risky, man. you you see these lucky example they invest early into certain something that for sure goes up right I think we have parked something uh in in ETH for example we did something like that in the past um but that's like as risky as we were willing to go and was when ETH was obviously at the bottom um so we did things there but >> there's there's so many of those ICOs back in like the file coin era like 2017 2018 that raised in ETH and just sat on it and you know that was their treasury management ended up paying off but >> is another one.

>> Yeah. Yeah. [laughter] >> So, Phil, man, we've been uh we've been pioneering this idea of neo finance, which I think that you guys are firmly getting yourselves really really deeply into, which is just kind of moving away from this kind of crosschain aggregation idea to more of like markets on chain, not just chains. Um, right. There's been this proliferation of stable coins, RWAs, onchain capital markets, tokenization, a lot of these kind of flows are happening and like the the gap here is kind of the the the convergence of legacy finance and DeFi. We're calling it neo finance. What is changing as you guys are building and prioritizing the product, right? I think you share this vision, you share this

idea of um, you know, kind of seeing all all assets come on chain. you are also seeing this kind of neo finance uh convergence happening. You know, it's not just about the, you know, 25,000 DeFi power users anymore. There's a large breadth of institutional capital funds, allocators, and other folks offchain that, you know, we're really trying to bring onchain. How do you think about uh the product strategy going forward now that we're in sort of a a bit more of a complex and a complicated world and and also a bit more of a challenging world with regards to uh you know competition as well as just generally where the capital flow is coming in. How do you think about the the product strategy as it compares to you know maybe like a couple years ago?

>> Yeah. Wow. There's a lot to unpack actually and I think uh interrupt is no longer a feature. It's like the default, right? Like being multi-chain is the default not only for blockchains. So blockchains today they launch and uh being connected to um other blockchains is the day one necessity um to onboard your users like no one would uh would would um take this burden onto the user. He figure out how to bridge to us. All of this is coming native via the the ecosystem native interface nowadays. Um so um so these this these relationships to messaging bridges, liquidity networks and everything around that um these relations are established very very early far beyond far be um far um earlier than the launch and and that's

just that's just the default right um for for LeFi um not much has changed in that regard right like we said 2021 this space is going to fragment for two major reasons one is for a physical reason right blockchains themselves are not scalable enough. And um if we compare this to databases, so in data databases are execution environments like blockchains um and people often don't realize that but if you go into advertising and real-time bidding for example and this is the process which determines when you visit a website and which advertising is shown to you. This has to happen so fast. It is programmed into the database. There's no code

around the database. is literally executed within the database. So the database is an execution environment and the blockchain is the same but the data is public. Um so therefore we going to have databases slashblockchains um specifically for certain use cases data types if you think about data types vector data graph data all of that all of this is yet to come but we foraw that back then. And the second big reason is obviously economic, right? Um, so you want to have control. You might want to have it for compliance or simply value acrruel. And we see this playing out with like Stripe and Tempo, Circle and ARC, Robin Hood, Robin Hood chain. It's it's it's crazy. And and there are so many economic incentives to own the full stack, own the blockchain, especially as

institutions just getting their feet wet with the space and trying to figure things out, right? They don't want to take too many risks. So if they can own the chain day one, they have all the power to close it down, see who is allowed um to actually deploy protocols or liquidity or land transactions on that chain. Um and that's the safe way to get into this. That ultimately means maximum fragmentation and this is being um welcomed by the glue in between which is are the messaging bridges layer zero Axel uh wormhole hyperlane on so on with their own tokens and chain link also heavily leaning into it um so more and more multi-chain token standards and all

of that is crazy and I don't know if you've ever thought about that but there will be something new which we haven't talked about yet and it will be token classes I'll just drop it like that. Token classes, we have seen multi-chain tokens. Um, but if you think about that certain reward assets somehow need to be represented on chain in a standardized fashion. So if JP Morgan and Goldman Sachs are tokenizing stocks, they need to agree on a set of meta information that's being represented on chain, right? And this might differ across nations, across different organizations and um collectives of organizations. And so there is a whole new process of defining standards that that will is

going to happen again more fragmentation and more reason for LeFi to simply double down on what we have been doing which is like massive aggregation across everything that swaps moves provides data around assets. Um and we have done that pretty successfully with over 800 B2B partners today. And yeah product strategy wise aggregation super hard to scale. We are adding another thing to it which is essentially uh intense um or an auction system an open network for solvers where anyone can plug themselves in with their own liquidity. Um this essentially extends our existing aggregation. Our aggregation will it's not a stop gap. We will keep on doing this but uh we extending this with an open uh solver network. Um so yeah

there's a lot. Yeah, you guys are doing quite a bit and I think you know you you talk about the token classes which I think is actually a really important piece because all the things that we saw with ETH on a bit bunch of different chains wrapped staked ETH on optimism and all all these different variations of these assets. We then saw it with stable coins again. We saw all kinds of different stable coins. All of these are basically just the dollar. Some of them have different risk parameters. We need to we need to abstract that away but also expose that some of these are not the same and figure out the UX complexities there and and I think you're absolutely right with RWAS we're going to see this happen all over again.

Yeah, go ahead. >> I'm calling a new meta. It's not interop it's interchangeability. >> Interchangeability. Tell us what you mean by that. It's essentially if you have all these art as chains again stocks are being tokenized right by different parties and there are or other financial products and there are certain parameters to this. We need to make sure that these things are interchangeable, right? Um that that one stock might be tradable with the other one and uh in certain scenarios that might not be possible because they're like, "Hey, we are launching on a permission network on Canon um which which you can't even access." But then there are certainly uh other players that um I have seen multiple parties already issuing um tokenized Tesla stocks, right? I somehow

want to work with them. If the money market is somewhere else, I need to be able to to use these different representations interchangeably. And if you look at stable coin fragmentation, right, there we have the very same problem. It's all dollar packed. So why can't I trade them one for one? So stable coin clearance is a huge problem. And we see companies like glacis um and and um many others just like trying to take care of that. So I think interchangeability will become a meta around any kind. So K KYC and AML are important pieces to this especially if they are on permission chains supposedly that would be because you know they would have to gatekeep access in order to process KYC and AML before someone's able to own one of these assets. how as

an aggregator and Levis is is kind of in charge of the interchangeability both at the blockchain level as well as at the asset level and there was someone great uh shout out to Rashene who told us this I don't know if he was the one that came up with it but he said uh it's all just asset issuers and bridges and so at a certain point we have all these assets they exist on a lot of different chains they're just bridges back and forth we need some way to bridge or aggregate these assets that might originate from different providers ers as someone who's running an aggregation and orchestration service how do you anticipate bringing assets together from disparit ecosystems like permission blockchains I think it will start so the way we look at at at

defi from the top and defa for us includes rwas okay like this is like the next wave that enters into essentially hopefully right we want to make sure like this is happening uh I would say we look at this in different categories of rails Defi native rails are permissionless, open, vast, right? And then there will be privacy rails which will be needed for institutions to do their thing, right? And there will certainly also be like compliant rails, AML rails where we know all the liquidity pools are safe, um not tainted, uh everything has been KYCed. Um I'm really looking forward to a solution around shared KYC. Um but uh

yeah obviously it's a huge coordination and aggregation effort to identify uh liquidity flows and sources. Um and then making sure we can represent this overarching rail across different ecosystems and across uh different solutions from trading venues to bridges to um issuance. >> Yeah. Um, Phil, I'm I'm curious what you think about uh the the kind of stable coin payments landscape. We saw in a recent Artemis report that uh stable coin payments have absolutely exploded from a B2B perspective. And I figured that you guys have your your uh hands full there with clients that want to do stable coin payments for tons of different reasons from uh something like

a wallet connect pay for merchants, something for like paying their employees, paying uh you know uh service providers, etc. Talk to us about your your role in the stablecoin payment landscape. This is something that's going to just keep growing in the B2B sense as well as with stablecoin cards. Um, I know you guys are really kind of getting into the Neo Bank world as well with some of your clientele. What is this? What does this actually look like from the back end for for you guys? Are you facilitating stable coin payments? Are you facilitating transactions in neo banks? How do you kind of think about the importance of of this and the growth of this sector? anyone any so so first of all on the demand side obviously uh we have been the the biggest cost

savings are in international payments of any kind remittance for example or salary payments um for eS um um all these service providers around that they massively profit from stable coins settlements much cheaper foreign exchange can essentially be skipped in in in many in many ways or just be be done much more efficiently and faster um so uh this is where the demand is coming from and then how Defi engages here well many of these new stable coins are issued as multi-chain assets and while Stargate for example provides an or layer zero provides an API uh for all their OFTs which was not always the case by the way um others don't do that yet so there's a lot of manual aggregation

effort necessary and then u also um still we see uh these payment providers partnering with different chains So depending on where they want to have their stable coins settled, you need a variety of routes to make that possible. Um so aggregation here really is the key solution for many of these players to settle their payments, get access to any kind of stable coin. Also to change their mind because we see large players like PayPal with PIUSD um incentivizing ecosystem players to use them, right? Providing higher yield and that might uh get some smaller startups to change their mind and settle in a different stable coin. Why not? Um, and we see multiple of these incentives. So, here

Lifa really gives you full flexibility. >> Philip, uh, you know, the the interop space and the crypto space and as a whole has changed quite a bit as of lately. You know, this institutional adoption is quite beneficial for some of these companies. We've also seen some companies that still have not found product market fit. They're laying off people. You know, they're they're, you know, maybe getting acquired if they're lucky and and, you know, setting up shop that way. But by and large, it really feels like there's this bifurcation that's happening um for the people that are are kind of see where the world is going and those who have failed to adapt. I'm curious, have you made any key adaptations as of lately within LeFi to prepare yourself for this institutional wave?

>> How about not not having a shitcoin? It's probably a good start. [laughter] >> Uh how have we changed? I mean, we saw all the changes. We you you started with what's happening in that space with like companies dying and laying there all that right let's start there maybe um yeah the real winners are are certain providers that focus on very specific goto market strategies let's pick relay as an example they uh said like okay uh for three four years people have been complaining about the lack of decentralization um of of bridges and calling them unsafe you know what let's keep it fully centralized fast and cheap as possible where we do

everything on our own balance sheet. So while it is the by the book most unsafe design um at the same time we're not taking any users risks we are just doing everything with our own capital. So fair enough, right? That plus going for the long tail, being as centralized as they are, they were able to just tackle new L2s um like really really fast, right? Really, really fast. It was very scalable for them and that's how they entered the market. Cheap, fast, and we are the longtail and now they're going for the big fishes. Um so interesting strategy like well executed. Uh uh at the same time we see other people copying that. So gas as an example, they

came from a different angle. They were like specializing not on bridging per se. They were like, let's just solve on fronting gas on chains. There just been a gas solution. So gas like had support for 100 chains and then that's how they got a huge user base. They just needed a little bit like a dollar or two of gas on a new chain. Um they just focus on that so they could take more risks because the amounts that were being bridged were so small. So they did that first. then built distribution and now they are transforming into a bridge allowing larger transfers very also very different strategy and then obviously I think like a Stargate is heavily leaning into of um transfers and and all of that so so we see more specialists the

generalists have been dying um and uh it is really clear that now the space starts consolidating and what matters is distribution distribution ution power is king and that also counts for lea right like this is where we also see our power nowadays we have so much flexibility in terms of how we structure our business um how we operate how we want to execute over the next two years because we are in power in many ways and that's the same feeling others are having with their position um and uh yeah I think this is all that counts nowadays and it's really hard depending on your existing market positioning to go up and win more distribution if your sole focus

was B2C for example >> B2C interfaces the loyalty in crypto we know the loyalty crypto is very dimin is very small right >> yeah Phil are you going to be in New York this year at all >> oh I'm constantly in New York uh next time 9th to the 15th yeah I'm going in and out uh I know we should have a beer again um I uh I will be yeah I'll be in February 9th to 15th I'll be back um otherwise I've always been just like for two nights for dinner for investor meetings, whatever, customer meetings.

Um but um and then I aim to move permanently in March. >> Yeah, man. Come March, we are uh we're going to have a surprise for you and uh we will be uh we will be doing a show upgrade. So we'll see you there. We'll see you for a beer. We'll see you for inerson show. >> And Phil, one of the one of the things I really appreciate about your appearance is I'm sure you know people come on the show and they just talk their book. I really appreciate how you comment on the entire landscape out there, right? You didn't just come on talk about Levi. Came on gave like real concrete ideas and thoughts about everything that's happening in the interop space at large.

So really really appreciate you coming on today. >> No, of course. Thank for the opportunity. I always love chatting with you guys. I like I when I'm with you especially I'm always getting a little bit you know like there is there's so little there are so few things in the space that are sustainable and you know we we partnered we started partnering like from day one and so much time has passed we have survived you have survived so many bare markets so I'm kind of proud of all of us and I'm very happy to be here so really just excites me from the bottom of my heart >> yeah Phil same here man much love see you in New work uh in about a month, man. So stoked on it.

>> Yeah. I'll see you soon. Thank you, guys. >> Thank you. See you. >> Bye. >> All righty, guys. Up next, we've got Kevin Lepo, the founder of ETH Gas. I believe they're doing an airdrop today. Uh let me just double check that out. Uh for all of you guys who have used the ETH or the gas.WTF website, you know how much gas you've spent. Um, yeah. I mean, some of these, let's see. Let's see. Let's see. Let's see. I think we should get the info from Kevin here shortly.

We're going to get him up. Think >> so. >> And, uh, and let's, let's bring him up and let's get this show started. He is going to be here in just a sec. >> Um, yeah. I mean, >> gas.WTF is always a doozy, man. I remember checking what is >> what >> you can uh >> you can see the ETH gas on uh on ethg.com uh community and you'll see that it's you can see your personal gas report.

Kevin, welcome to the show, man. I I know it's late over there. Thanks for calling in. >> Hey, Andy. Good uh good morning from Hong Kong. >> Good morning, GM, sir. Good morning from Hawaii. Um >> good morning from Florida. >> Yeah. [laughter] Yes. >> Coming in worldwide today. >> Big week for ETH gas. >> Uh following a $12 million raise from uh led by Polychain in that you guys announced in December of 2025. Uh now ETHAS is really trying to make Ethereum um real time. I mean something that we talked about with Justin Drake at large and and is reducing the slot times. Uh figuring out ways to get closer and closer to single slot finality for L2s.

um even thinking about ZKVMing or ZKFIL L1. Um also you guys have a big launch which is rewarding a lot of Ethereum users this week. So where do we start Kevin? Maybe you can give us a rundown of the philosophy and principle of why you're building ETH gas, what it aims to do and a bit about yourself. I think that's a great great place to hop in there. >> Yeah, for sure. Um absolutely. So I guess at a high level you have uh well in the real world we have commodity markets right like we have uh we trade oil gas energy pork bellies you know and a whole bunch of other things right um and these markets exist because uh uh well basically they reduce a lot of risk

in the ecosystem right like there's suppliers who need to kind of manage their cash flow their offtake there's uh buyers who also need to manage their uh their demand as well so it just kind of reduces risk within the ecosystem and fundamentally Eventually you uh you kind of like eliminate cartels. You know there's a lot of people who kind of control you know the real world commodity markets uh just as we're seeing now with some of the precious metals. Um but uh similarly you know we need that in crypto at a high level and of course uh block space is well Ethereum's block space is the most high-grade and scarce you know like if it doesn't exist then ethereum is worth zero all the tokens on it are worth zero and like a trillion dollars is just

wiped out if we don't have Ethereum block spaces. we need a market to be able to trade this. And so that's like the core infra piece, the core fundamental. And and what we've done is we've said like, well, now that we can kind of like acquire and hold on to block block space, like what else could we do with it? And so this is where the real-time part comes into it, which is that like, you know, previously it's all about like me uh which is just like extracting and front running, you know, like the everyday person. So you have these sophisticated traders who are watching trades in the meool and they see like oh Andy's going to buy this NFT I'm going to snipe him right whatever it might be right so uh that's kind of been how it just people took that as the

status quo and so we thought well what if we just took a block um you know validators are intended to run on like Raspberry Pies those are not the most robust machines but what if we took a block uh attached it to a high-owered machine and cut it into hundreds of pieces and So when you cut this 12-second block into many pieces, we can provide like an update or like a like a synthetic update every 50 or 100 milliseconds. And so instead of just trading once over 12 seconds, you could trade like a 100 times, you know, like two, five, 10 or 100 times. And effectively, Ethereum is like a real-time blockchain. And so it's you get faster confirmations than all its L2s. You get faster confirmations than

all its L1's. uh it doesn't change any of the security guarantees. It's uh it may not be up for 100.00% of the time. Maybe it's 99.5% of the time, but you know, for the most part, it looks, feels, and acts like the fastest blockchain out there. So, like that's ridiculous when you think about it. You have the, you know, kind of largest, most decentralized blockchain, which is also the fastest. And so, that's what we're doing. Uh my background just for uh just quickly is I spent 12 years in trifi led financial engineering at Morgan Stanley. Um went off built a tech company and uh DeFi summer came along and well >> here I am trying to make changes in >> nerds sniped us all. Okay. So, so you

guys are effectively creating like a blockbased futures market where you can have everyday users. The idea is their transactions can confirm in milliseconds instead of seconds. Hopefully reducing predatory MEV, keeping transaction ordering, you know, open permissionless in the same way that it it is. Um, and also ideally creating a better UX, right? And like doing this requires um a lot of work on the on the L1 as you've said. Um can you talk to us about kind of what the idea here is for getting buy in on this, right? Like how are you going to get validator uh participation?

Um and how does this maybe affect their revenues or like what are what is the incentive model that you need to get right in order for this to actually work? I know we've heard a lot of people try to make implementations to the L1. Getting validator buyin is hard. there needs to be proper incentives thought out sustainably longer term. Talk to us about kind of like the incentive model that you've created or that you've thought about deeply to try to get this right. >> Yeah. So there's um actually it's not that hard. [laughter] >> Okay, good. Like you think about it like you're a validator um or you're you know the big DATs you have like Bitmine, Sharplink and whatnot, right? Like like what is their job? They're taking ETH and they're putting it to work. you know, that just means they're st that just means they're staking it and

they're earning let's say 3% yields for for argument sake. >> U it's very competitive. So if you can pay 3.05% or 3.1% they'll all shift to this new this new strategy, right? So it's hyper sensitive to the yield, they just want to get paid more and um and generally they don't want to be hurting hurting people hurting Ethereum, right? They want to be kind of like doing something that's at least positive for the environment. And so uh that's the main motivator on that side. Now, um, we're already paying more than that 3%. Uh, we're paying about like we are paying that between 3.05 or 3.1. It is consistently above the status quo returns. And the goal is to pay about a percent higher. So, it's not just like one or two basis points, but it's like

paying a percent or 2% higher. And the question is how do we get there? And so, this comes from what real time unlocks. And so, you think of okay, we have all these DAPs like we have this entire ecosystem. We have um you know like DAPs, users, validators, everyone. And you think like okay let's start with like unis swap for example like unis swap people currently trade once every 12 seconds now they can trade like three times five times 10 times. What does that mean for unis swap? And it means they make two to three times more money uh the LPS at least. And so LPs already pull in about 1.2 billion in fees a year. So unis swap alone could pull in $34 billion in fees. So that unlock $34

billion is effectively 3% for validators. Now now where does that revenue go? So say like unis swap takes you know the lion share of it. We take a little bit validators take a little bit but that's just from unis swap alone. And so that's how we get there right. So unis swap benefits. There's people like you know you and I clicking buttons or tapping our phone to trade. you know, we might pay like a little bit more to get that real-time experience. You have um lending protocols. So like a could u reduce their risk with like liquidations. You know, they don't have 12 seconds to um you know, basically force liquidations. You have much smaller windows. So it just it benefits everyone. And what is that quantum? If unis swap is, you know, a few billion,

maybe it's five billion across the market. And how does that get shared? Like it's it's like an almost instant unlock, right? So again, that's where the money comes from. That's where the validators benefit. The only everyone basically everyone wins except the snipers. >> So are how do you get Tom Lee to buy into this? Like do you have to like call him up and be like hey Tom I need you to vote yes on this? >> No they don't they don't need to do much basically. Yeah. So they are uh you know and a lot of the big the big DATs they basically have these uh node operators running the infrastructure for them and node operators you know you might have in the US like like Coinbase for example or like Kraken or uh like Block Damon Figment and so on and you know overseas

like Pier 2 uh P2P etc right so it's basically them running historically like dumb infra it's kind of like you just set it and forget it and pick the status quo but um yeah they basically kind of just need to flick a switch it takes about half an afternoon like like four hours >> to kind of switch over to this. And in in this new environment, >> you make more. You're not hurting Ethereum with you're not supporting me. You're supporting like real-time trading. There's like no front running. Like 95% of me disappears. So like what's there to lose?

>> So yeah, how do we get their attention? >> But we come on like this [laughter] at like, you know, four in the morning my time and we just kind of get the word out there, right? >> Tomley, if you're listening, this is a no-brainer. Yeah, I mean it it's like like who who doesn't want to make more and do good for Ethereum? Ke >> Kevin, I got maybe a dumb question like you know Ethereum making it real time I think makes a ton of sense like you're saying you can chop this up LPS make more money you can trade more within a block uh validators make more. It's like a win-win you know for all the good guys as far as the block space futures market. My dumb question is don't we already have ETH? Like doesn't ETH allow us to buy like inclusion in a block or

part be you know become part of a block? Isn't that effectively a measurement as far as how valuable block space is? Why do we need another monetary instrument to measure the value of blockspace? >> So there's well there's there's two parts to this. Um one is just like securing your place in the block, right? So there's a lot of uncertainty around like hey there's a block coming up. [snorts] um you know, I've sent some order flow to this block builder or and maybe not this other block builder. I don't want to leak information and so like is my trade going to go through? Yes or no? I don't know. And so this just gets you certainty, right? Um and again, like a lot of these decisions are made on the fly by searchers and snipers, right? And so like it's it's also kind of changing

the meta there. The the other aspect to this is that um you you think about what this unlocks, right? like uh the words are kind of like crypto institutional finance and bringing like RWA's real world um participants on chain and this comes back to Morgan Stanley days and so the broader trady world consists of and I'm going to simplify this of course you have like equity markets and you have fixed income crypto is largely like an equity-like market in the sense that you have all these tokens kind of going up and down there's no concept of fixed income at like the very foundation but but now we have it right if validators can effectively sell their block space, you know, 5 minutes, 10 minutes, and into the future further. They're effectively doing like fixed rate

staking. And that is the kernel of like a yield curve of a term structure that we're embedding at at the very core of Ethereum itself. And so there's a number of factors at play. One is simply blockbased futures. We have validators and the users who have less risk. There's more certainty to landing your trades on chain, but we're actually building the foundation of a of a yield curve, like a native yield curve on Ethereum. So I think that's a huge unlock. I I think of Ethereum as like the euro in some sense. You have this like this other super national, this other economy. People are moving their assets into this Ethereum world and uh now we can do it more predictably. Now pension funds, insurance companies with longdated um you know asset liability management.

They can come into crypto and do Ethereum based pensions and insurance plans and it's a whole another world. So you know why do we need it? It's it has its function in the com very commodity-like aspects, but it has its function also unlocking different types of financial instruments. >> Yeah. Yeah. Kevin, do you um do you have anything to say about the the token strategy with regards to the gas spending and kind of thinking about how to allocate to the gas guzzlers of Ethereum over the last fiveish years. Um you know, that was an interesting dynamic there. I think it aligns with the product vision here that you've laid out. what's your what's your kind of reasoning or hypothesis behind the way

that you guys wanted to structure this gas token reward system? >> Yeah, so uh we've had our first airdrop and uh we're not done. Now the the background there is that like we were looking at like like airdrops and like you know we we only have so much capacity in in from an airdrop perspective right now you have who are the users who've kind of made Ethereum what it is right and and there's many people out there but you go back a few years ago and people were paying like a hundred bucks in gas and 200 bucks like unreasonably so for these NFTts that are you know [clears throat] not not worth as much now that are worth less than the fastly spent itself. But like had we not had that we would not have like pushed

the limits on Ethereum. We would not have the entire well we would not have like the roll up like roadmap. We wouldn't have L2s. We wouldn't have shifted like all that capacity wouldn't have been constrained to have to be forced to have all these L2s, right? And so what's that done is it forced basically like the L2 road map. It alleviated pressure on the L1. There's been a chance for L1 to kind of catch their breath. And as you mentioned earlier, you have like ZKVMs and be able to be able to prove blocks in real time. So now the L1 is caught up to some degree. You know, you have much more band like gas is going to go hopefully to 200 million, 300 million this year, 10 times larger. We're going to be real time as well. So 2026 is a hyperscaling year. Um so yeah, it comes back to those

people who made Ethereum really what it is and kind of trying to reward them as best we can. And you know, we can't we can't pay them back for all the gas they've spent over time. Uh you know, I mean, we'll see how our token does. I don't know what that is like like a thousandx return. So, uh no promises, right? But, you know, like you know, we'll do what we can, but it was basically aligning with them. And so, we wanted them to uh benefit to some degree, but secondly, um acrew governance. >> Yeah. >> Because like like how how do we >> as I mentioned earlier, this is a big unlock, right? the DAPs benefit, people benefit, validators benefit, and for those users who again made Ethereum what it is, I want them to have a say in

this. And so, we're just getting started. We'll do things along like people who trade within a real-time environment. How can we, you know, drop them stuff for just like trying things out? Um, there's a lot in the pipeline. >> Is it is it too late to um is it too late to claim the airdrop for the community who's >> It is. Well, I mean, they can still claim, but they had to have uh basically participated in our campaigns a while back. >> Okay, got it. So, the gas report campaign, >> correct? Yeah. >> Unlock your personal gas report. Sweet. >> Yeah. Basically breaks down like how you spend gas and uh well, and and how much.

>> Some some guys are like 500 ETH. They're just like, >> "Oh my gosh, >> that's scary. >> That's scary." >> What does your What does your gas report look like? What is your like Kevin from DeFi summer? >> It's It's pretty uneventful. It's It's like 20 27 ETH, so it's it's not not off the charts. I I wasn't big into the kind of the NFT craze. It was more just conventional just like >> I'm gonna >> I'm just going to swap a little bit here and there. So, >> the NFT minting got people good, huh? >> Yeah.

>> Yeah. I remember that. That one other side mint was insane. And again, thank thank you for your service to whoever whoever participated in that, [laughter] >> right? >> Yes. >> Do you think there's any truth to the burn these days? You know, all the EIP1559, the merge and ultrasound money thesis, like do you think ETH ultimately becomes deflationary as a result of burning some of that excess gas spent? >> Uh, we'll see. Um, I mean, it's it's I I I don't have a strong view. um you know we have we have more capacity we have the definitely I think the ability to burn more gas um you know I think with

what we're doing absent what we're doing >> you know gas prices drop significantly like we're in a like 0 point uh >> I should you know 0 point something market today right >> it's tiny yeah >> which is which is great but the most important thing that builders and we can do is uh find an ability to drive more utility and demand to Ethereum, right? So, so here we are saying like on the one hand you have block space and the the L2 road map basically like reducing gas fees on L1 but at the same rate here we are saying like now you can trade 10 times in the block right so that absolutely increases demand for the L1 itself and is that going to cause more

burns yes right it's going to cause the base fee to rise a little bit more we will see more burns and so um where is that balance going to be you know like TBD we'll find out. But um yeah, you basically have two parts of you have like the bandwidth on one part, you have the throughput on the other part. And so as our um you know, as the block space increases, prices are going to go down. But as we drive demand up through a bit better UX, it's going to kind of offset that. So we'll see where it goes. >> Well, Kevin, man, I know it's late. We we're going to let you get back to uh sleep or I don't know if you're just going to stay up for the rest of the day now and just make it a make it a

powerful one, but >> I was planning on joining. >> Thanks for having me. All right, >> congrats on the on the successful launch, man. It looks great. Um, and yeah. Yeah, we we we need more of this implementation on the L1. I think a lot of people want to see this happen. So glad that you're pioneering this. >> Thank you for having me. It's been great. >> See you next time, Kevin. >> All right, guys. We'll take a quick commercial break and be back with our next guest and we'll wish Kevin a goodbye. See you guys in a second. Yeet is built for big moments. The most fun you'll ever have with your crypto.

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stablecoin infrastructure for the digital finance era. Visit fra.com to learn more today. [music] Yeet is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. >> [music] >> Not your keys, not your [music] coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, [music] if you are still using hot wallets in 2025, 2026, you are missing the entire point. Secure

your coins. [music] Get a Treasure at treasure.io. Go anywhere onchain instantly with relay.link. Relay is closing in on 10 billion transferred. Go to relay.link to bridge your [music] assets now. Money shouldn't wait for Mondays. Following his real upgrade, Polygon is now one of the fastest chains for stable coin transfers and [music] payments.

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Holiday is unified crypto payments. Give your users more wherever they are. Go to holiday.xyz to never write a smart contract again. Open, stable, borderless. Frack is building the next generation of stablecoin infrastructure for the digital [music] finance era. Visit fra.com to learn more today. Yeet is built for big moments. The most fun you'll ever have with your crypto.

Go to yeet.com to yeet into your next game. Not your keys, not your [music] coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, [music] if you are still using hot wallets in 2025, 2026, you are missing the entire point. Secure your coins. [music] Get a treasure at treasure.io. Go anywhere onchain instantly with Relay.link. Relay is closing in on 10 billion transferred. Go to relay.link to

bridge your [music] assets now. Money shouldn't wait for Mondays. Following his real upgrade, Polygon is now one of the fastest chains for stable coin transfers and [music] payments. Visit Polygon Technology to learn more. KHI is the world's largest [music] prediction market. You can trade on anything in all 50 states. Go to call sheet.com to trade today.

Talk to AI like your lawyer or your doctor or your therapist. Yours, private and here today. Visit near.ai to have a fully private chat experience. Havachi is fast and private per [music] trading secured by ZK with Celestia underneath. Go to habachi.xyz to start trading today. Looking for yield that stands out?

Infinify gives you just that. Deposit stable coins and earn far more than the current savings rate. Infinifi is a battle tested, reliable DeFi platform that is ready to go. Head to infinifi.xyz. Holiday is unified crypto payments. Give your users more wherever they are. Go to holiday.xyz to never write a smart contract again. Open, stable, borderless. Frack is building the next generation of

stablecoin infrastructure for the digital finance era. Visit fra.com to learn [music] more today. Yeet is built for big moments, the most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. [music] Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its [music] new wallet. Guys, if you are still using hot wallets in 2025, 2026, you are missing the entire [music] point. Secure

your coins. Get a Treasure at treasure.io. Go anywhere onchain instantly with relay.link. Relay is closing in on 10 billion transferred. Go to relay.link to bridge your assets now. All right, Andy went to go jump out of a plane, but instead we've got Will from uh Galaxy Digital, Galaxy Ventures arm at Galaxy Digital to chat about capital allocation in 2026 and beyond with gold ripping central banks dropping the dollar, accumulating metals in Bitcoin.

Like the big question is whether or not we're going to get the catch-up trade on on Bitcoin and the tokens. Um Will, you're a friend of the show. You've been been here before. Welcome back, man. >> Thank you so much. exciting to uh be here in 2026. I think this will be a good year for for everybody who who's listening to the show. >> Absolutely, man. Well, um you guys had a great year in 2025. Uh like you were saying behind the scenes, you guys had some key themes that, you know, I'm quite curious to see and hear whether or not you think those are going to roll over or you think we're going to get, you know, a fresh set. So, yeah, tell us first, you know, what went well in 25, what didn't go so well, and then, you know, we'll we'll look forward to 2026.

Yeah, I think um you know we set out with the start I think last time we chatted on the on the podcast we talked a little bit about Fund one the fundraising process you know transitioning Galaxy from a balance sheet investing firm and a sort of a tra trading and investment firm as a public company to doing um externalized with funds and and that process. you know, we set we went into fund one um thinking like payments would be our key theme, right? We were we were seeing this was in, you know, winter sort of Jan, Feb, March 2024.

Bridge had just raised their series A, you know, um there were tons of companies that were sort of getting founded around that time. We were incubating a company around that time that was in the payments and tokenization spaces. is we then backed a company in March of 2024 uh rail uh which then got bought by Ripple over the past summer. We thought payments like crossber payments was going to be the key theme for the fund um and the use cases of stable coins and crossber payments you know and and that that that's been true and that has been a key idea you know just last night I was on the phone with a company in China um and they're they're moving payments uh cross borders from China to Latam in

one to two minutes they said and and usually I've heard it fast or slower because of some of the end end nodes and so like that stuff is real settlement across borders is happening very quickly with stable coins the thing that surprised us in 202 was the emergence of this cards category um where um you know and that was really into the back half of 2024 even but the emergence of of stable stable coins not as a payment instrument but as a dollar access mechanism in in um in emerging markets. Um and the the the use case of of stable coins and then the connection to the card as a way to spend people's savings balances in emerging markets who

are holding you know uh alternatives to a local currency. That's really the story with businesses like Rain and Red Pay, you know, which are portfolio companies. That sort of took us took us by surprise in some ways. Um, and we, you know, invested heavily in that category. And that was actually kind of our key category and key theme in in 2025. You know, um, we were, you know, series A investors in Rain uh, in Jan. We were series A investors in Red Pay in October. I guess it was in December of 2024 >> and um I think that became because of the the the the fat margins of interchange visav the comparatively

lower take rates of crossber you know B2B payments that actually became a really interesting category really quick um and so you know company a couple companies in that bucket went on to raise series B's and then you know rain announced a series C recently and so we've participated in uh um sort of uh you know the the uplift uplift from that and the growth in those markets. Um and so that was a key theme in 2025. I don't think that stops in 2026. Uh to be clear, I think you know that use case is um here and going to continue to grow.

the the TAM is essentially, you know, the the global consumer who would rather hold their money in US dollar stable coins than say, you know, Thaibot or um, you know, Viet Vietnamese dong or, you know, or, you know, or Mexican peso or even would rather hold their dollars on the internet than, you know, in their bank account because they've got a crappy, you know, regional bank um, who with a bad user experience. And so I think that that will that will continue to to to play out and those markets are big. Um I think it's the themes for 2026 in some ways. One of them is an expansion of that um you know an expansion of that category which is like we think I guess going into the fund we

thought stable coins were about it was it was a lot about payments and moving money fast across borders. And actually we're in some ways coming to the realization that you know stable coins are in part about bank deposits and they're about um banking everybody uh and everything sort of the internet becoming a bank uh and that's been a core realization that I think translates into those card businesses but I think continues to be true as you look into categories like lending um you know how do you generate margin uh or net interest margin on people's savings things uh in different ways and so onchain lending lending and uh servicing and securization which is a sort of

slightly different point. Um uh so these are some of our key themes in you know 2026 equity perpetuals uh as well. So um yeah I don't know that's kind of how we think. >> Yeah that that's great. I mean that that sets us the scene here for how you and Galaxy are thinking about 2026 and you know how you can take a theme and a thesis around payments and sort of develop it, evolve with it. Maybe it doesn't play out exactly how you think it will but still end up having quite a few wins in a category and then it sort of offshoots into several other categories. Like you said, stable coin cards, you end up taking more of a B2B approach with stable coin payments.

tokenized deposits is something we're hearing more about. And so it sort of has grown into, you know, several offshoots that are now positioned to do quite well um in 26 and beyond. >> And yeah, >> I think the territory is just like really um really rich. Like you can walk in as an investor to a category where you have a thesis and then be surprised on the in the ways in which the thesis evolves if the market size is big enough to allow that to happen and the like opportunity set in the frontier of innovation is rich enough. I mean I think this with stable coins that's certainly true. I think lending markets and you know um I think Ave and Morpho you know really pioneered and and and

Maple and and others really pioneered interesting stuff that like now we're going to get that that tree start to branch out. >> Yeah. um in those kind of markets. Uh in my in my view in in 2026, especially as they converge with stable coins and you know this concept that people are all across the world, especially in emerging markets, replacing their, you know, deposits at their banks with, you know, a stable coin over the internet in a in a multi-IG wallet or in a um you know, in an MPC wallet for institutions or just in a hot wallet in MetaMask and what, you know, whatever. And so um I think that's a that's a really there's going to be a rich frontier of innovation that happens there as people

want to get yield on those assets. And then you know how do you allocate um uh between managers and curators of the the yield who create different opportunities you know Athena not to go into an entirely different direction but like as a you know Athena is running one just one trade right which is the basis trade on Bitcoin. there's a lot of other trades in the world with a lot, you know, that generate a lot more alpha uh that people have historically been tapped out of and and and could theoretically use it as a savings instrument. So, I'm excit we're we're pretty excited for the like frontier of innovation that will come and just kind of spiral from here. Um >> uh but that all requires the market

being big enough, the regulatory environment being you know like available for those changes to happen and um the the entrepreneurs being you know in a position to design things that are that are interesting. So >> yeah. >> Um >> absolutely >> that's how I think about about 2026. Uh practically um to tokenization is another interesting area. Um >> we've and I think tokenization merges in some of those onchain lending categories as well. But like we yesterday our um company Tenbin announced their seed round. Uh we led their led their $7 million round. Yuki the founder he's been in the you know crypto space. Um, you know, the CEO has been in the crypto

space for a long time as a researcher at Cella, as an investor at Fenbushi. Jake the CTO, um, you know, at Spearbit. And so these guys have been in the in the industry for for a while, realizing that, okay, instead of tokenizing an SPV, like an interest with within an SPV, let's tokenize a position on the CME instead, right? was in some ways the insight that Guy and Athena had originally which is like let's tokenize a position a short position um a short future position on you know buy bit and Binance and and actually Yuki's applying that kind of principle to gold and >> um and FX you know currencies and then

and then wrapping that onchain and then that's when it becomes interesting because you throw it in a and morpho and pendle and that's where you get the composability so there's there's going to be a ton of cool stuff Superstate another portfolio company had announced their round early this year uh their series B. We a series A investor with them and >> also you know followed on the series B at Galaxy. We've got close ties with you know Superstate and really love the team and think they're really innovating in the issuance of you know public common share tokenized common shares um and at at the transfer agent level and so it's feels like a good time I think to be a crypto entrepreneur and also an investor in the space. We had Jim on just a couple of days ago talking about the

series B um talking about you know tokenized equities and and it sounds like you've got you guys have both sides covered and >> as you know we've >> been building out this thesis around NEO finance and it it feels like there's really two buckets and and it came as a result of you know the DeFi frontier being so rich that it has now exploded into a tree of you know all of these all of these these categories which include the RWAs, the tokenization protocols, the stable coins, all of these things all sort of tend to fall into, you know, two buckets of quality assets, which is something that, you know, we feel like we've been missing for so long. We had we've got Bitcoin, we've got ETH, now

we've got stable coins and yield on those tables, but the long tale of assets in crypto are just not investable. And now we're bringing on >> we're bringing on equities. We're bringing you tokenized equities to the to the table. And then we've got, you know, essentially fixed income, which is the entire other side of the equation where, you know, bringing bringing fixed income on chain looks like stable coin products built in with DeFi yield sources. Um, but also like exogenous yield sources so that it's not just rehypothecation and leverage and emissions that is paying that yield. And so we believe that DeFi really grew into this really robust landscape of NEO finance. And what that looks like is, you know, a Cambrian explosion of neo

banks which provide the user experience that people are looking for when they're accessing these some the these sorts of products. But it also is the quality assets underneath which we think is generally going to take, you know, the current crypto landscape and and turn it into a much more mature, professional, legitimate, you know, landscape overall. And so it seems as if Galaxy Ventures kind of has things on both sides, right? you guys have uh the uh you know tokenized equities portion of the equation as a bridge between the legacy financial markets and and you know the modern tokenized financial markets and then also from the fixed income side of things you know you guys you know with Tenbin are are tokenizing some of these ETF positions and correct me if I'm

wrong but what that does is it provides a stable source of yield as a result of income that's paid via this ETF position. >> Yeah. Yeah. I mean, so 10 ten how it works is they take a position on a futures exchange that's essentially paying uh you know pay paying you right um so they're if they're going long the future they're getting paid to go long the future >> and they actually one of the things you can do um and not to frontr run Yuki and the team on this but one of the things that's interesting you can do is you can actually because you can um you know use only a percentage of the pull position in margin you can keep the remainder on chain earning in sort of low yield building vaults and uh so earning if you have let's say

>> you know 3x margin you actually retain 66% on chain yielding in you know a morpho vault or or or something else that that that's demonstrabably low risk right and so you're replicating essentially the the um you know the exposure to to gold or Mexican peso or Brazilian raale without actually you know in some ways you are holding the spot um like the CME is abstracting all the custody of those positions away from you like the custody of the gold which is something that Paxos with their Paxos gold product or Tether with their Tether Gold product is like tokenizing and giving to you. The CME is is um you know abstracting all that away because you're just taking a position on a regulated

you know high highly liquid exchange. It also brings liquidity to the position out of the box because issuance and redemption is essentially a trade right on that on that exchange. Now, I would say on Tenbin, they're not not really on the um fixed income side as much as they are on the um I guess in some ways they've got the variable yield, which is a a feature, but they're kind of on the tokenization. I guess where do they fit? They're neither debt nor equity, right? they're more like commodities and currencies is how maybe so a third category >> I do think and we will have you know further announcements on the fixed more fixed income side where you know we made an investment uh which I which I won't you know I I I I won't uh frontr run ourselves here but we made an investment

in December that we're pretty excited about where um there's you know some um component of onchain loan servicing right so the the workflows that you'd see in traditional asset back lending are actually getting brought on chain once you bring like loan servicing. So paying agent, calculation agent, verification agent, these you know uh service providers who will actually go in and check that all the like payments are being made to the right people in the waterfall and all of the you know the numbers are right and you know and and payments are being made on time and administering all of the like fund flows in these SPVS that really power you know asset back lending aspect securization. uh like all that can be done on a blockchain full stop.

And then once you bring those flows on blockchains um you can securitize them, you can create secondary markets around them. And so >> we made a really exciting investment um in December on that on that front. So we're trying to bring it all together like in one >> portfolio um with some of these you know some of these key ideas. But um you know definitely it's been it's been an exciting time and hopefully it's you know it's the it continues to be the right valuation environment and everything else to make such investments. So >> will you you're just going to have to come back and talk to us about about this investment that you guys made in December.

>> Maybe maybe with the founder. Yeah >> absolutely would love to. Yuki you know is a friend of the show as well. We're we're we were an investor in Cella. Uh so uh yeah shout out Yuki. He's always welcome as well. open invitation and >> well, you know, I just a couple things left is, you know, >> we're going all in on this NEO finance thesis. It seems as if, you know, the underlying components here you guys are investing in as well. >> Yeah. >> I'm curious, give me your brutally honest feedback on Neo Finance as as an asset allocator in the space. You know, one you're doing a great job there at Galaxy Ventures. So, I'm quite curious to get, you know, your your unique perspective on on this thesis.

>> Yeah. Um, the bear case or just the generally just brutally honest, like curious where where your head is at and just your perspective on on kind of this, you know, this next frontier of what of DeFi and legacy finance ultimately coming together into what we believe is is where there's product market fit for a lot of tokenized products. Yeah, look, I think you guys hit the nail on the head um actually with the term like the I will say it's a term of art because I think it'll stick um uh in some ways the same way fintech did back in you know early days like we had a view and I think it's like other people have the view too so I'm not it's not like a unique view per se but like there was a view in 2022

that you know we had built really interesting protocols uh a and you you know, at the at the time compound and unis swap and chamino and you know, all these interesting protocols and there were like very few interesting assets to trade to trade on them, right? Like it was basically like you could trade and move around the assets that represented the ownerships and the protocols themselves. So, it was this highly circular phenomenon. Um, but in some ways a parallel financial system was being built, right? That was different and in a lot of ways better than the traditional financial services industry where you know to move a you know a payment across borders you need to like get like six banks involved and

it's going to take you you know depending on what corridors it's going to take you three business days right so like clearly we were operating in under like better financial infrastructure and I think the view and the issue was the quality of assets in that environment were like significantly worse right you don't have Apple right you don't have the ability to own an own own a company's equity on on on chain and move them around in DeFi and trade them and lend them and you know get an interest rate derivative permissionlessly on them and you know send it around to your friend you know across borders and I think that transition is still happening. We're not by any means like fully there. Um I think the quality of tokenized assets on chain still needs a lot of work. um in terms of on one hand

the distribution of of tickers that are available on chain and on the other hand um you know for the wrapped assets which have broad distribution of tickers like what you don't really have is like high quality legal guarantees right because you're kind of doing pass through to some Cayman SPV and you know and and so there's some like some big caveats to make there and and I think but I think that that process is is underway um and I think it will it will happen over time. um you know that that'll need a positive regulatory environment that'll need you know when in a politic says you know like project crypto like I want to bring every ticker on chain like that's what you want to be hear hearing but I

think you know the neo finance speaks to the idea that um you know finance run on a shared ledger is a better system than finance run on um on distinct ledgers whether that you think about that as bank deposits and you G, you know, systemically important banks and regional banks for payments. Uh, or if you think about that as the DTCC versus, you know, the South Korean or Hong Kong, you know, stock, you know, stock systems and and tickers there like and how dis discombobulated those are with ADRs and, you know, ETFs and so so um I think there's a belief at least in

our team and and broadly at Galaxy that those things will get fixed over time. there's massive, you know, phase shifts uh underway in a lot of ways. Hopefully, it should get better for the consumer and I think it will get better for the consumer. Um and when those platform shifts happen, we want to be investing in the companies uh that are um you know making them happen. And at Galaxy broadly like we want to be contributing to that from an institutional infrastructure perspective and making sure we're helping you know uh some some of our clients are banks and ass large asset managers in the existing world and and we want to make sure they navigate that those transitions smoothly as well, right? And um and so we're not myopically focused on disrupting banks

and asset managers. Uh but we will back them. We will back the companies disrupting them if they are going to get disrupted, right? Uh and so uh that's I don't know how we kind of conceptualize it. So I think it's absolutely spot on. Neo finance you heard it here first. The rollup uh coined it coined the term uh send it send it uh to everybody is basically what I what I would say. >> Get get distribution on that ticker. Neo Finance. >> Neo Finance. You guys issue it on chain. Put put it in the smart contract so nobody else can steal it.

>> You got it, man. Well, uh, well, it's always a pleasure having you join us. Um, always a unique perspective. Uh, you know, coming from, uh, a bridge that also sits, you know, at the cross-section of of legacy finance. Like you said, you're talking to banks. you know, you're helping them disrupt themselves before they get disrupted, which uh I think is is something that they they certainly appreciate and we appreciate you coming on and sharing uh your wisdom with us. So, uh whenever it comes time to to announce that that next uh that next portfolio company, you just just join us here. We we'll be happy to have you.

>> Yeah, we will definitely do that. Um that that'll be a good one. I think you'll like uh the founder is fantastic, so I think that'll be a good episode. >> Awesome. Thank you so much, Will. All right. >> Really appreciate it. We'll see you next time. >> Thanks, Robbie. See you. >> Cheers, man. >> Bye. >> All right, guys. There it is. Will's a G. Um, obviously making making waves uh in the in the investing landscape as a primary, you know, asset allocator in the space. Galaxy Digital is one of the, you know, the biggest tickers when it comes to the public equities markets with with crypto in mind. These guys are leading the charge. Um, and you know, obviously they're playing uh with their venture investments in the tokenized world. Superstate, we had Jim on just a

couple days ago. They're doing great work. Um, and you know, we anticipate that a lot more of these products are going to be brought on chain. You know, there's not a ton of asset classes out there, right? And so when we think of quality assets, these are the ones. It's fixed income. It which is the entire world of of stable coins plus yield equals fixed income. And then we've got uh we've got equities. We saw New York Stock Exchange. They're going to bring all the equities. Superstate Securitize bringing all the equities. Um and you know, we've also got the likes of, you know, the the the the best and brightest out there that are bringing commodities and currencies on chain and and you know, obviously the the king makers of crypto, Bitcoin, ETH are are not going

anywhere. So guys, that's it. Another phenomenal show. Um, and uh, always a pleasure with the guys that we had on today. Philip from Levi is a is a great friend of the show. Kevin from ETH Gas. They're doing great things on the L1 and and Will is a good friend from Galaxy Ventures as well. Always a pleasure, guys. Andy, don't die. Jumping out of an airplane. Hopefully he he he stays alive to co-host with me again tomorrow, guys. We will we'll be right back here tomorrow. So, we'll see you then. and another great show.

See you next time. Cheers, guys. >> [music]