LIVE From The Empire State Building: Introducing The Nest & The Digital Asset Regime Shift

Transcript

[music] [music] [music] 17 floor. [music] >> [music] >> We'll see you around the timeline.

Feels good to be back. [music] I think The Rollup is one of the most premier media brands in crypto and I love listening to them. I think Andy and Robbie are great [music] experts at everything they talk about and it's my favorite podcast. >> Potentially multi-chain deployments. [music] >> We are at Dev Connect day one here. I hope you guys [music] [music] [music] >> [music]

[music] >> Heat. Heat. [music] >> [music] [music] [music] >> JP Morgan, Black Rock, DTCC, Fidelity, the entire thing was just institutions.

It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. >> HE SAID IT. HE FINALLY SAID IT. SO BULLISH. It >> is bullish. I'm bullish. We're bullish. [music] [music] >> [music] [music]

>> Heat. Heat. [music] >> [music] >> Heat. Heat. [music] [music] >> [music] [music]

>> Corolla [music] is headed to the top and we're Not already at the top. We're going to the tongue. We're on fourth floor today. We're going to be on floor one and then we're heading straight to the moon. Boys, roll is my favorite. [music] [music] [music] >> [music] [music]

>> Zoom out. The institutions aren't coming. They're [music] simply here. It's the golden age of crypto, guys. Get right. Let's go. [music] >> Welcome to the nest. See you on the show. >> Yes, sir. >> TV. Welcome to the >> Empire State Building, >> the tokenization tower, the home of Neo Finance >> and the new home of the rollup, >> guys, where the convergence happens between finance and digital assets live from the financial capital of the world.

Guys, this is our new HQ. This is the new studio. Uh, >> this is the Nest. >> Welcome to the Nest. Couldn't have done it without Plume and their amazing team. Uh, this amazing space. So, >> and and our amazing team. We've got several guys outside. I mean, shout out to everyone watching behind the scenes. Shout out to everyone who's been a part of the show leading up to this. You guys are all part of the rollup family and this is a big moment for everyone. >> So, this is the new setup for us, guys. The the industry is changing. We're going to go through a lot of this today. Uh we're going to get into today's topics and kind of walk through what we're doing today on on the show. But a big part of this is about the regime change in the space happening. Um and

it's happening fast. Um this is the new rollup. Look, I got the haircut. [laughter] We got the white collar shirts on. >> I might have got a nice watch. Hyperlink was at 34 today. I mean, I don't know how you can be angry. >> Yeah. And we're going to talk a lot more about it. Let's get into uh the show for today. >> All right, let's get to the uh topics of the day, guys. Um again, we're live here in the Empire State Building. It has a ton of history. Uh stoked to bring you guys that as well. Um we have Vaness and just again the big the big topic is the regime shift today and kind of uh exemplifying that with our brand as well as just our space the our attire just the and and just the whole way the space

is going right like >> well the the the space has changed several times. It feel you know people like to talk about cycles but the reality is that these are evolutions and the industry goes through evolutions frequently if not every few years and we are in the middle of a really really uh an inflection point right and a paradigm shift that's happening in the in in the industry uh and the regime change is something that we're going to be talking a lot more about >> uh and that there's so much that goes into that it encompasses so much our topics for today overwhelmingly is this paradigm shift >> regime shift. Uh it is introducing the nest. Uh and then we're going to give you guys a little bit of a history lesson when it comes to the Empire State.

>> Yep. Yep. That'll be fun. This is one of the most iconic buildings in the world. If you see me looking up at here, I've got a 50-in HD TV on. Uh guys, let's see the behind the scenes view. Let's show the audience what we're looking at in the space, guys. Um the day. Just wanted to show you guys that that TV. So guys, we're going to introduce the Nest today. Uh we just did, but we got more to kind of talk to you guys about. We're going to do a little Empire State history lesson. Um

this is a iconic building again, guys. >> King Kong. >> Yes. King Kong, uh, Gotham City's out there. Batman, it's the center of finance. Why don't we also, while we're introducing the nest, just point out some of the things that are happening behind us here. >> Yeah. So, I've got a direct view of the Statue of Liberty. >> Yes. It's beautiful sunny day here in New York. Shout out to Treasure for powering today's topics. We've got the World Trade Center singular back behind. We've got Brooklyn. >> Rob, you can see Jersey City out of your window.

>> Jersey City. I believe this is uh across. Is this the Hudson River? >> Yeah, >> this is the East River. We have the East River over here. We got the Hudson River over here. >> Uh I I can see uh far and wide here. We're just going to be continuing to point things out. Beautiful view of the Statue of Liberty and like you said, the One World Trade Center. Yeah. >> Um guys, we got Empire State history lesson. We've got the digital assets regime shift. Uh and then we're going to talk about what's next for us as a brand, as a company, and really as an industry because like this is the regime shift that's happening and it will continue to happen and it is a bit of a reality that we need to accept. Parts of it are brutal, but a lot of it you can

get really optimistic about. So again, shout out to Treasure for today's topics. Uh powering some of the best hardware wallets in the game. >> Hardware wallets very secure. I still use my Treasure. It's uh I think it's the best hardware wallet in the game. >> Yeah. >> Uh let's do it. Let's roll into today's show >> into introducing the Nest. So um guys, obviously we're here at the Nest. Um first episode being streamed from our new studio. Um we have we are inside the Empire State Building. We're on the 77th floor. Um this is the the Nest by Plume, which is also one of their product lines for their RWA product Nest. uh bringing on a lot of private credit. They just

had a cool partnership with Perina. Uh there's more coming there. That's their kind of private private credit vault product. This is our custom logo, custom brand space. It's also the tokenization tower and the home of Neo Finance. >> Yes. Than the Neo Finance Nest, right? And we've talked a lot about Neo Finance on the show. It is epitoatly the convergence point. Uh and we feel like what better place to bring you guys into the convergence point other than the center of finance itself in the Empire State Building in New York City. Uh >> it's a physical hub, right? It it's where the leaders of digital assets and finance are going to converge, right? A big part of our brand here and a big part of this regime shift, which I'm sure we we'll get into more, is really

just about how these industries which were so separated are now just are they're one. Yeah. Right. Like I mean just today we had uh I think it was the NASDAQ announced that they were going to be uh allowing for tokenized asset tradings that are uh available on the NASDAQ on Kraken. Y >> uh you know I put a post about it. It's absolutely ripping and it's just like a perfect example of how these industries are one and so this point in time is very unique and this space is the convergence point for the leaders in digital assets and in finance. There's been multiple quantum leaps in the past when we've uh ultimately worked towards integrating these two worlds together.

You can point that the launch of the Bitcoin ETF as one of the foray when these industries started to collide. Now we're really in the heat of the next uh inflection point, the next convergence between these two worlds as more and more traditional and legacy venues on board into blockchain rails and they end up tokenizing all of these assets. And there's an entire rabbit hole, slippery slope. This is just the tip of the iceberg. So we'll we'll get into it really what this means a little bit later. >> Yeah. I mean our I I think our goal here was building a place for investors, founders, builders to meet and talk.

Right. So uh we'll be hosting >> both physically and virtually. Right. >> Right. Right. We we'll be hosting a networking event uh during DAS, guys. So if you're you're around for DAS, you'll see that now on the side events main list. Um, and the whole goal here is to bridge that gap. And and so there's no better place in the world to do it than New York. There's no better building, we think, in the entire country. I I don't know if there's a more iconic building in the entire country than the Empire State. >> Not be a more iconic building in the entire world, especially as it relates to uh finance and innovation. New York City is the home of that.

>> Um, and I'll just speak to, you know, the Roll-Ups brand a little bit on this note. I think we are the most credibly neutral and one of the most innovative media brands uh in the space as a whole and I think that is partly why we've been able to bring together so many leaders from disparit industries. Crypto as a whole in the past has been a place where technology and finance has collided. uh now I think we're seeing a lot more adoption on the finance uh realm and we're seeing a lot more of this openness and this willingness to converge and I think uh the rollup is uniquely positioned to be the home uh of this convergence and bridge between these two worlds.

>> Yeah man I mean I think it's it's pretty clear that uh what is happening in the space is going to kind of usurp just the onchain world as it is today. We have this agentic finance growth that's absolutely exploding for stable coins and payments. You've got agents coming online with openclaw and ironclaw from near. You've got this growth that's happening that uh is going to grow and it's going to grow outside of crypto and we'll talk about it more. Um it was a wild weekend for oil traders on Hyperlid. We'll we'll get into that. Um let's check on on some of the weather.

Let's check on the markets, guys. It's a beautiful sunny day here in New York. Um, we're gonna get into into that, but before we do, um, >> sponsored by Relay. It's a beautiful day. >> Shout out to Relay. >> It is sunny. >> Best crosschain swaps in crypto. Uh, very proud partner to have there on the crosschain swap side. It's 67 degrees at the tokenization tower. >> Yeah. And uh, look, I think you can you can relay yourself down the Hudson, down the East River. You can relay yourself down the street to a nice pint. >> It's almost rooftop season in New York. >> Beautiful day. Relay is the sponsor of rooftop season in New York. And it it is a beautiful day for you.

>> Zero rain. Feels like Feels like 67. Feels feels like 87 in the studio right now. I'll tell you that much. Um 8 mph wind southwest. >> It's a little breezy. It's a little breezy. >> Rob's got some breeze going on. It's perfect. It's perfect. Got incredibly lucky with the weather. Uh and uh you know, last time I was in New York, I caught a little bit of snow, but I avoided most of the snowtorm. >> Snowtorms were insane. >> It was It was incredible. Most of the snow has melted. The sun being out today, it being a bit warmer has melted off more of the snow. I know New Yorkers are happy about that.

>> First thing I heard when I landed here was, "Man, the snow's melted. Let's Let's go. >> Yep. Yep. All right, guys. Let's have a quick look at some of the markets as well." Again, crazy weekend with oil that we're going to get into. Uh talk about kind of what's been happening on that side of things. >> Um let's have a look at at some of the prices here. >> We're green across the board now. Obviously, Hyperliquid is leading the charge. Uh we don't have them on the board today, but we've got Bitcoin and ETH that are pretty much holding those lines. Bitcoin just under uh 70,000. ETH just around 2,000. It sort of oscillates back and forth there. These are the level levels that we've stuck to since we drew down.

>> Yeah. It's been like 2 months here, hasn't it? >> Yeah. Um, and so I think, you know, the more that we uh the more time that we spend at these levels, uh, and the more that, you know, ultimately we we see some sort of >> You're trying to call the bottom right now. >> It's difficult. I mean, obviously, I'm I'm more I feel like we're closer to the bottom here than we were at 80. Um, but >> you're trying to call the bottom of >> Look, man, >> he's trying to call the bottom. >> Look, I uh I've I've liked the strategy that I've been using up until this point. DCA.

>> Good little DCA. Just eased into the markets. Um, you know, we sold quite a bit higher here, which is nice. Obviously, getting a chance to buy a bit lower. Uh, but I'm not in a position where I can just call bottom and buy the peak bottom. >> I mean, and there's no rush, right? >> I don't have your technical analysis skills, so I couldn't I couldn't possibly. >> I'm just I'm just riding hype right now. >> So, just DCA and just just lower the average entry on things that I want to hold for a decade. >> Yep. Yeah. And I think that's kind of again another like thematic that we'll explore on the show is there's not going to be as much like short-term stuff here. We don't really have opinions on short-term price uh action. We don't really care actually. We we we just want

to zoom out here. >> Speaking of zooming out, our sponsor Zama is working on transcendental technology. Really, you know, thinking about this on a one to five year time horizon, you're going to kind of miss the the goal when it comes to FHE and privacy. thinking about this on a 10 to 20 year time horizon, you really start to understand how we're going to incorporate privacy and FHE technologies into the broad landscape of both finance technology. Think AI privacy, our our friends at Nearcom, we had a tremendous conference over in San Francisco. Zama's working on FHE, which is sort of a counterpart to ZK, and that's how a lot of these privacy and and privacy preserving algorithms, >> you know, it's like it's kind of the

unlock that that the space needs. like we we've got the scale. >> The UX is getting far better just because of like all of these kind of Neoank apps and trading trading terminals and these types. Y >> uh we just don't have privacy yet. And so uh it's it's the part of this kind of regime shift of this institutional adoption and this kind of growth. It it it's problematic right now because we don't have a consistent privacy solution. So guys, shout out to Zama. Confidential transfers and and encrypted stable coins right now on on Ethereum.

>> This is another big uh trend that we're seeing from institutions. They need privacy. They don't just want they need it in order to be regulatory compliant. Uh a lot of these institutional asset managers and providers work with several uh other asset managers. They work with several banks. Uh banks don't like when other banks are viewing their deposits and their flows and their transfers. Privacy is crucial for these institutions. >> All right, guys. Uh that's the weather and and the markets today. It's a nice spring day in New York. We'll see how long this lasts. Um you know, it's been uh it's been it's been pretty kind of kind of like up and down. Kind of by bipolar. So, uh that's the market's kind of the same. Um so, again, zoom out. Uh we're zoomed out. We're thinking about,

you know, the 5 to 10 year time horizon here. Um, >> and you'll you'll notice here on this show, we'll start to breach into, you know, obviously we covered digital assets first and foremost. Yeah. >> One thing I saw earlier today was $800 million got wiped out from the stock market >> from that oil trade, right? >> I might be missing an order of magnitude to be honest with you, it might have been 800 billion. I want to fact check myself from that from that oil trade. >> Yeah. And and so, you know, we're going to start to uh we're going to start to compare and contrast a little bit uh you know, what is happening in the digital asset market uh and what what is happening in some more of the legacy equity market. Excuse me. Just want to correct myself. $900 billion wiped out

from the US stock market at open. >> Uh that's that was from that oil debacle which was which was all the price discovery for that happened on Hyperlid this this weekend. Arthur Hayes put out an article $150 $150 per hype by August. Before we get into the market and the general conversation podcast style here with Rob and I. Um guys, quick historical context on the Empire State Building. Completed in 1931, was built during the Great Depression. It took 410 days. One of the fastest buildings to ever be created of this size. Um it was the tallest building in the world for nearly 40 years which is pretty insane.

>> Pretty incredible. Over 100 million visitors, >> dude. Every day downstairs, it's so funny. We've been walking up here to like go and set up the space and all this, >> bringing suitcases and cameras and lighting. >> All these tourists walking in, taking photos with the murals. >> I passed a line out around the corner for people to get into the observatory deck, which takes them straight to the top. Obviously, we have another entrance here where we come in. Um, and it's a symbol of American ambition and economic power, which is, you know, part of what we're seeing in the digital asset market as well.

>> We need clarity to get past. >> We need clarity, but we're also seeing less international conferences. Uh, Consensus Miami is something that, you know, as a personal Miami resident, I'm uh, you know, very, very excited about because I think we're going to see a lot more American conference goers, especially this year. >> And obviously stable coins and what that does for the US dollar. Absolutely. I mean this has been a long time associated building with New York finance global finance at large. Um >> think about think about how many financial conversations have happened in this like how many what is the total deal size of deals that have been closed >> what is the economic value that has been created >> the GDP of the of this building is larger than countries

>> dude you're dude like the deals that have gotten done in this building >> yeah larger than the GDP of some countries and again like a part of this is that you know this this unique position that we're at is really just about where this next financial stack is going to be created. Uh, and it feels very juxtaposed almost to come back to this space and kind of be pushing forward this new financial system in such a historic landmark. Um, it's this building has stood at the intersection of commerce, capital markets, and corporate power for so long. If you guys know King Kong, obviously King Kong was filmed at, you know, with the Empire

State Building. Um, >> Spider-Man was shooting webs on the Empire State Building, swinging through >> one of the original Spider-Man's, right? Yeah. >> Probably the best. >> So, like there's just a lot of culture here. There's a lot of um real real happening and um yeah, I mean, we're just very grateful. of the most recognized uh to the Plume team and uh to all of our production teams helped us to put this together >> and to all of our sponsors and to all of the guests that have appeared on the show. >> Yeah. >> Um I mean we couldn't have done it ourselves. Uh you know Andy and I started this we met in college in 2017 >> uh in the University of Florida Bitcoin Club. Y >> uh what do you think you would have said

if if I would would have told you that six years later we'd be doing the doing this from the Empire State Building? No, I think it's more like nine years, right? That was 2017. >> Yes. Yes, we started. >> We started the roll up about six years ago. >> Um, we were we filmed our first podcast with just audio only. >> Just recorded a Zoom. >> Just recorded a Zoom and yeah, we had we had no clue. We were just kind of scrapping around DeFi and Uniswap and figuring out what that looks like. >> Figuring out is exactly what we were doing.

learning about the space >> and that's been the kind of through line for everything right has been trying to educate folks on what's happening in certain sectors. So we were most interested in DeFi. We we wanted to learn ourselves figured that we' do it in public came over to kind of more of the infrastructure conversations more of the technical modular that kind of space that design. Um and then now kind of pioneering this new crossover of agentic tokenized finance right like this is where innovation is happening at scale is is inside of tokenization stable coins payments and then also in the overall um aentic space right all these agents coming on chain this is where a lot of the innovation and a lot of the

education we think is required and so yeah I mean if you had if you had told me that >> six years ago we'd be in the Empire State Building with our knew our first office space, our first HQ. I I probably wouldn't have have, you know, thought it would could be true. >> And you know that there was plenty of ups and downs along the way, you know, a as we were going from, you know, recording this audio only podcast on Zoom to getting our first few guests to then, you know, traveling around the world and doing the rollup from these conferences. Uh there's been plenty of ups and downs. You're absolutely right about the throughine. Uh it started because Andy and I wanted to learn more about the space. We felt there was a lot of opportunity here. We were extremely interested. Uh it piqued our interest

because uh I have a math background. Andy has an you know finance e economics uh e-commerce and marketing background. And so uh there was a lot of uh very genuine curiosity and overlap uh between our skill sets and we we felt that deploying it in this space was one of the highest ROI things that we could do. We felt that learning was going to be the best use of our time so that then you know we could we could end up figuring out what it was where we could provide value. Uh and from there uh we've really followed our genuine cur this is just a piece of advice that I would give to anyone starting out on their entrepreneurial journey is is follow your curiosity because that's exactly what we did and it did not

>> it didn't come easy all the time. I remember just a few months ago we were a bit disillusioned you know we we saw you know obviously prices going down obvious you know hurts hurts morale but the market was so apathetic uh crypto did not have crypto and I mean that choice of words very specifically had very little product market fit and we we knew that there was going to need need to be some changes. Um and so coming here like you said where capital markets and commerce take place has given us what I feel like is a new life. It really feels very refreshing to be in a place and to get the opportunity to speak to people which we will have you know over the coming weeks and months. People that I feel excited to learn about

>> excited to learn from and and excited to talk to once again. uh because that has been every time that we we start to lose that um once we we we feel the push to get that back and then I feel like uh the brand is is off to the races once again. >> Yep. Yep. I I mean I agree. So guys, we're stoked to be here. We wanted to have this conversation today about the ongoing regime shift in in in in the space. I mean, it's if it's not abundantly clear by the sentiment gap between crypto Twitter and the institutions and just like the general adoption, you know, I think it's it's going to be abundantly clear. Um, so we're going to kind of start into a more

kind of like long form uh conversation setting here and open up some of this regime shift overall. And let's start with what happened this weekend as a start, right? Uh obviously you know uh there's this war going on in Iran and uh unfortunately we have uh a lot of oil production in that part of the world and that is leading to oil prices flying. And so the price of oil went from about $65 a barrel all the way up to about $110 a barrel um over the over the last two weeks or so. And this weekend we saw a massive massive shift in this weekend and last weekend in price discovery for

markets that are closed on the weekend and like oil. >> And if you think about it, there's a broader shift happening about how how these markets are reacting due to the crazy nature of the kind of administration that we're currently in. Right? So, there's this consistent news barrage in the world today. I I like to think of it as like a 24-hour amnesia where something happens in 24 hours that is like a mindblowing event that would be a once per month 5 years ago that happens every day now it seems. And so this is leading to markets being far more volatile to more wars to more things more headlines like everything

has been compressed into a headline. And so what this has done is that it has created a lot of opportunity for markets on the weekend. Um and markets on on the weekend are increasingly becoming something that the NYC has pushed that we've seen uh people uh from uh ICE push obviously today with Kraken and NASDAQ. And so I think just to start off this regime shift is a more volatile world is leading to a a much a stronger desire to trade 24/7. Well, I think you're right that we're compressing a lot more substance. Things that would normally take a lot of time are now taking much

shorter time. This is attributable to several reasons. I think one is the internet. Uh I think faster communications, uh faster transportation, uh and and generally a more connected world than ever before. Um and you know, there was previously this 12-day war, right? It was over in 12 days. you know, 50 100 years ago, these wars are drawn out. So now things are getting compressed in real time and they're happening much much more frequently. Um I think also, you know, if we're looking at this relative to the markets, we're thinking about how price discovery happens. And I think that is part of the key the the cornerstone of this conversation which is uh a thesis that actually Salana ran with for a long time of always trying to be you know

approaching the speed of light so that they were one of the fastest paths of uh information and lowest latency. Yeah. >> Uh and what that allowed for is the quickest price discovery. Uh and if you can get liquidity behind price discovery, liquidity begets more liquidity. uh and price discovery ultimately is pushing the needle. Uh so what you're what you're alluding to and what happened over the weekend is that obviously traditional markets were closed. Y >> uh and we're having developments not in Europe because Europe takes the weekends off but here [laughter] in America and over in the Middle East we had de developments happening over the weekend.

Uh you know the straight of Hermoose which is where a lot of you know the oil travels I believe it's 20% of the entire world uh travels through this very narrow straight. Iran is threatening saying that, you know, they're going to torpedo uh any any boats that cross through the straight. Uh America and Trump is saying, "Hey, we'll give you protection. We'll give you an escort along the straight. Don't worry about Iran's threats. Keep the oil flowing." Uh >> the insurance markets are starting to say, "Hey, if you travel through this straight right now, we're not going to insure you." That is causing even with this police escort. And so that is causing a lot of these boats to uh effectively say, "No, we're not going to travel." that slows down the supply and the production of oil uh leading to uh

obviously demand hasn't shifted. You know, everyone still needs uh still needs oil, still needs gas. And so >> maintaining demand uh short supply >> price flies. >> Price flies. And so price appreciation flew over the weekend where all other markets were closed. the only market venue that was open. Obviously, in a more open competitive landscape, you're going to be pushing the pushing the edge on latency techn, you know, getting closer to bare metal, these sorts of things. The the legacy markets are making it in extremely easy for Hyperlid because it was just the only liquid venue that was open trading these assets. And so, yes, Hyperliquid uh was the venue of choice for price discovery of oil uh over the weekend.

>> Yeah. I mean and and the platform itself has processed I mean trillions of dollars uh in in in trading volume. Uh it surpassed Coinbase in annual volume. Uh also something with regards to the sign of the times again these tokenized commodity markets are hitting a massive scale right now. Um partially because crypto markets are far less volatile currently and less appealing. And so, uh, you know, over the weekend, there was actually more that the top five pairs on Hyperlid were non-crypto pairs.

Yeah. For the first time in a while, which is again a sign of of of the times part of this regime shift. I'm not saying that that's always going to be the case. In fact, it's probably not going to be the case most of the time. But the fact that the top five pairs over the weekend was showing that they weren't crypto pairs is a sign that in investors, speculators, asset owners want to speculate on these markets on the weekend just generally 24/7 and they want to do it in in a place that has good volume, good uh high levels of open interest, and they want to do it at scale. I think increasingly we're going to see those types of assets higher among the volume ranks on crypto exchanges.

>> Yeah. And and I mean you you see it right like BitGet we had their CEO on and she was talking about how they are the universal exchange now. Uh they just listed a bunch of gold pairs and these types bybits doing it. Binance has it. >> Remember this is part of the neo finance thesis. Remember the neo finance thesis is essentially an acceleration of the assets that have typically been the most liquid and the most traded for centuries. Oil, gold, silver. These are the assets that people want to trade. We're not suggesting that we're going to take XYZ crypto, you know, uh, equity token and it's going to become the most liquid traded venue ever. Right.

>> No. Yeah. >> What we're suggesting with the Neo Finance thesis is that we're going to improve the rails. The platform through which these assets trade is going to be exponentially faster. Yeah. >> More affordable. It's going to settle quicker. It's going to unlock latent liquidity. And it's going to be composable with all of the other venues that are currently disperate. Yeah. And so part of the NEO finance thesis is that we're taking these these highquality assets, the assets that move most of the capital in legacy markets and in the neo finance market on chain >> and we're going to be innovating them.

We're going to bring them on chain >> and so we'll get better assets onchain as a result of this phenomenon as well. Uh we'll get different types of assets on chain, better types. And the the big thing here, so to kind of like round out this first point about this regime shift, how to position. Obviously, we're both hyperlquid bulls. We we own hype, but these markets represent trillions of dollars in annual trade with tens of billions of dollars in futures volume, right? And so if you just think about h like how these these percentages of these markets start to come on chain, it's just like so obvious that uh the market volume that is being done just on uh per in crypto is going to be uh first

kind of like joined by and growing together. But I think that the that the volume of these as you're saying these larger better assets higher quality assets is going to grow >> supersede the volume of the per on on uh crypto assets. And >> the other thing here is that to to kind of finalize this point and move on from hyperlquid and kind of this tokenized commodities trading is perpetual futures do not exist in traditional stock exchanges. They have futures contracts that have expirations.

you need to roll them over. Uh they this doesn't exist in this world in these markets. And so once again guys, we're here in the Empire State Building. We are bringing the convergence of these of these two industries together. This is going this is going to be an accelerant for investors, stock brokerage. Once you kind of learn about this, you are really intrigued as to how it happens, funding rates, uh how it all happens. And so something something to note for us. It's like we're used to it, right? And and I think for people to understand is that it's important to untangle the asset from the underlying infrastructure. And so we've we've learned this because uh when it comes to digital assets, you know, you've got what people typically

call crypto. You know, they refer to two things. And ultimately that leads to a lot of confusion. What they refer to is the asset, think Bitcoin, and then think the Bitcoin blockchain. >> Y >> asset and blockchain are two fundamentally different things. [snorts] We're seeing this play out with the more legacy asset class, the high quality asset class as well. And so I think what we're going to continue to see is the invention of new modalities, uh the invention of new infrastructure. Per is a technology. Per is a piece of infrastructure. You know, you can apply this to any asset class. You can apply per you can apply blockchain rails and and that application of that infrastructure is going to improve the liquidity, the composability and the

speed and the latency of any asset class. And that's why this is ultimately inevitable. We believe it's inevitable. And this is going to be a transgression over time where we're going to see more and more of the assets traded on these more liquid venues. Ultimately, it's going to it's going to positively impact the bottom line of whoever is trading these assets. you're going to be able to unlock risk and liquidity risk when you're doing T+2. You [clears throat] have the cost of money. You have to ensure some of these overnight things. You have custody risk, counterparty.

>> So ultimately, we're removing risk by putting things onto more liquid venues and and and more secure exchanges. Uh and then we're going to be opening up the abundance of capital in these markets. And so I think there's an evolution here. Yes, we're going to see high quality assets. We're going to see more high-quality assets on chain. >> Those high-quality assets are going to end up getting access to capital uh and lower settlement times, quicker, faster settlement times. What does this mean? I think is the next question. >> What is this? So, yeah. What does this mean for, you know, because if we go to like tokenized treasuries, these are, you know, these are >> one 1 billion, two billion, three billion coming on chain massively, right?

>> Markets are building huge. USYC from circle is big as well. Those are the big >> um this is a whole another. So that's per that's onchain price discovery that's going to happen how to position. We told you what our position is. We told you how we think about it. I don't look at any of the I don't have really any other positions in any of the other perplexes. I this is a winner takes most market. I think there's going to be three winners right now. It looks like hyperlquid lighter and variational or aster. But again I I I don't know. We'll see how that whole space plays out. Um, but this next trend is like the big big pie too. So like the per pie is massive.

I think it's something to definitely focus on. The the tokenization and and kind of like market infrastructure pie here is is huge, >> right? H how would you describe uh what is the value of tokenizing assets like like why is having tokenized gold or tokenized uh equities uh trading why is that valuable? >> It's it's a lot of the same value proposition that we've been talking about for years and and a lot of that is composability. Okay. >> Uh and a lot of that is the innovation of lower lower settlement times faster uh and and more affordable. Um and it's it's eliminating a lot of the risks that clog up the system both in terms of time and cost. Uh and so as you're thinking

about um yes high quality assets coming on chain uh that does two things. One it brings these assets into a place uh where they become composable with the entire asset universe that is already existing on chain. Uh what that does is it allows these venues to become composable with one another. You can then take positions and use them as collateral and borrow against them and unlock liquidity against them which is currently not possible in the existing legacy financial system. You can think uh you know you have your Schwab, you have your bank account, you have maybe a fast cash like a Venmo or a cash app. Uh these are all disparit venues, right? A lot of these brokerages these venues uh

they don't talk to each other. There's not a common language, right? On the blockchain, right? We operate on distributed ledgers, meaning that all of the validators, all of the nodes that are communicating across all the blockchains, all of those speak a common language. On Ethereum, it's the ERC20 stand token standard. Uh other blockchains have other token standards, but ultimately once things are onchain, they become a lot more composable with one another. Uh they end up speaking a common language. Yeah. And then they can they can start to communicate with one another, these systems themselves. And that means that we can start to unlock value that was currently not there before. they hap that happens faster uh and then we can apply that value into more assets. So you can think that you know once we once we have these uh

assets on chain you become uh you you start to eliminate a lot of the risks that that uh start to make costs in terms of speed and and uh capital. Yeah. >> And then you can also start to apply the unlocked value into more positions. Y >> uh I'm of the uh of the perspective of essentially you've got two asset classes. Uh you already spoke about per uh and and all of the high quality assets like gold and oil that are coming on chain. Then you have non-speculative assets and we're we're seeing the entire private credit market come on chain as well.

>> Yeah. >> And show some cracks as well. >> Exactly. And so I believe that now once this is moving onchain, you know, the the old adage when FTX collapsed was that if FTX was on chain, we would have seen the cracks a lot sooner, >> right? >> And so we can see a lot deeper into the system itself, who owns the risk, who owns the assets, and then ultimately we can make make determinations based on that. So first off, we're unlocking a lot of liquidity once we have tokenization. The second is that we're improving a lot of the risk profiling that happening that happens across the entire industry. And so on the risk profile prof profiling side, we're going to be saving a lot of time and money.

And then on the on the composability side, we're going to be unlocking a lot of latent capital. Ultimately, these two things are improving the bottom line for companies like BlackRock and Fidelity. And >> we've seen it. I mean, >> we've seen it. They're embracing stable coins. are embracing digital assets for a reason. It's because it just it makes perfect business sense. It improves their bottom lines twofold. >> Yep. Yeah. I mean, so that's kind of tokenization as this pillar of the brand that we have that we're going to be covering that we think is part of this regime shift in a positive optimistic way. And and I think the the kind of next and uh parallel is stable coins, right? Is just this, you know, we're sitting over 300 billion. Yeah. Uh I

think uh USDS just cracked uh 11 billion uh so just kind of broke through that 10 billion uh kind of level there. that tether is obviously in the in the first place here. Circles up and and so this is a major area for businesses, right? Because they are going to be able to lower their credit card fees that they have to pay those costs. Uh any sort of failed card payments, uh agentic micro payments and and and agents using credit cards and stable coins onchain. uh and just the amount of money being transferred for uh you know global payments, remittances, this whole this whole category is just going to keep keep growing and so stable coins is very clearly part of the regime shift. Um,

and so I think if you think about per uh tokenized assets and tokenization and stable coins, you have a winning portfolio to like think about how to allocate to. And it's not easy right now. And there's some per companies that you can allocate to. Tokenizing, there's a couple, but a lot of these are kind of more in the private sector. Um, and then stable coins. Obviously, you've got, you know, the skies, the Athenas as part of our N7 it sky. Obviously, Circle has a stock, not financial advice, but that those are like the big three of this uh regime shift that that I think is important.

>> Okay. So, I I see your mental model. You got per uh you've got stable coins, uh and you got tokenization. I think those are three very very key pillars. Yeah. >> Um the way I I'm seeing this regime shift is almost more of a progression. And so I I think of it as okay, stable coins are extremely important and now we have regulation and it's becoming even more accepting of stable coins. Uh once we have stable coins and high quality assets, right, tokenization is the absolute foundation of a lot of this because ultimately uh this infrastructure uh it can support >> really anything and everything. The key is filling it up with high quality things uh through which we can start to

transact and we can we can use as value and we can start to create more value as a result of it. And so once you have these assets on chain and I mean both the speculative assets in terms of the the high quality you know oil, gold things that you know are some of the most liquid venues also equities you know US equities one of the most liquid traded asset classes in the world. Once you have these speculative high-quality assets and you have non-speculative cash instruments, treasuries, private credit, these sorts of things, uh you end up with a lot of value that is essentially sitting on blockchain rails.

>> The thing about money is that it's not it doesn't just sit, it moves. And so there's a velocity to this capital through which can become >> so much faster and and so much more efficient on blockchain rails. And so my mental model is okay yes first uh tokenize all of the assets the the speculative assets the high quality assets uh and and you know the cash instruments uh once these things are on chain then we have the plethora of defi neoi mechanisms that we've been studying since we were defi slate and so what what we have here is we have the mechanisms like the a like the skies like a lot of the decentralized

exchanges that we're now seeing get wide adoption from the most important most, you know, reputable asset managers and financial institutions in the world. These are the building blocks, the DeFi Legos. If you think back to DeFi summer 2020, these are the the building blocks of a new financial system of a of a token standard. So yes, tokenize all the assets, make sure that all of these disperate venues can speak to one another and they speak the same token standard and then start applying the DeFi building blocks that we know and love because we've been in this industry. But now you have high quality assets, extremely liquid assets with trillions of dollars of market cap in both speculative and cash instruments

flowing through some of these mechanisms. >> And so let's think and so so let's get to this, right? So that is a a really good point because right now we're valuing a lot of these DeFi applications, especially the ones that we've been tracking in NEO finance and just a lot of these onchain protocols and blockchains just for the understanding that we're using crypto assets in them and not that we're going to bring billions and billions and billions of treasuries and private credit units and CLOS's and onchain and be able to put that in Morpho and loop that thing like you know a 100 times.

put it in a you know use it across a set of of applications like like Pendle, Hyperlquid, Lighter, etc. All of these kind of like financial primitives on chain, they've been thought about and valued right now as kind of like what is what can be done with the crypto collateral, but not what will be done if all of the assets in the world essentially slowly but surely come into these applications. And so before we get there, this is and and you know on that topic, this is the cause I believe of this massive sentiment uh disparity right now, right? And so this is part of this regime shift is that we have a massive sentiment disparity on I call

like CT token bare market and institutional mania. And so what happened is that there's been this large amount of theoretical value created in crypto, right? The total market cap peaked around 4 trillion at the end of last cycle, right? We we saw all these different tokens, all these blockchains, all this venture funding. We've built a ton of infrastructure and a lot of kind of groundwork for the space, right? But we haven't really thought that deeply about actually capturing that value. And so there is this deep fear right now of institutions or whomever with large distribution channels, Robin Hoods, Revolutes, etc. coming in creating a PC for their you know onchain

endeavor and capturing the majority of the value because they own the user relationship. They own that application. So what we've seen is you've seen companies like lighter have gone and integrated with Robin Hood. Revolute is is building on Polygon for example. So you're seeing this kind of like DeFi mullet play out where you've got the distribution partner and the uh D5 protocol underneath. But there are many many many many tokens and protocols that are literally generating zero revenue. Have got a ton of funding. They have maybe 12 to 24 months of runaway left in the current market or less.

and they have very little users and they're kind of the brutal reality is that it's kind of over for them. So, >> and so I want to be optimistic here, >> but >> let me let me let me give you a reason to be optimistic. >> And we're not like there are there's a lot of fat that is going to get trimmed as this regime shift happens with clarity passing with Yeah. So, we're just going through this rapidly. >> It it certainly is. And I think I think this is a I think this is a a very important tangent uh into uh value acrruel. Um which is that uh you you mentioned that you know a lot of these protocols essentially the the teams and

the companies that look you know maybe they have research fetish you know maybe they're they're doing things for valiant reasons according you know to their own complex u you know you you said that they h they haven't thought deeply about value acrruel. Yeah. um it's capturing the value that they've created. Like we've built these blockchains and and we had this metaf's law idea where like there was these network effects that would drive a lot of these values to these L1s. >> It's yet to be seen if that's going to happen. I think clearly congestion fees and gas fees across all blockchains as a revenue source have decreased significantly. I'm not sure that the L1 trade is alive at all anymore. I don't think it is. Um, and there there's so that's kind of like one whole like

network effectbased thing. But yeah, how do you capture value in this space and the problem is that there's these larger institutions or firms that are going to come in and capture a lot of the value that that has been built by cryptonatives open source and so there's this really nasty sensation. >> I don't think I don't think that's a problem. I think they're going to create a lot of value and that's why they're going to capture a lot of it. What you have to do is you have to have a regulatory regime. >> Yeah. that allows you to capture value. >> Yeah, >> that's why they haven't been capturing value. It's not because they haven't been thinking deep. Some teams haven't been thinking deeply about it, right?

But they were going to a lot of the teams didn't have product market fit and that's why they didn't have revenue. You have other you have other companies that felt like they had to sufficiently decentralize and that was the the >> that's over, dude. Decentralization. >> It's over because we have a regime shift. We have a we have >> at least until the coming for the coming years. It's not over but like the whole like I'm very glad Ethereum is still push and metallic still pushing for censorship resistance and all these from the highest level but like dude that whole like Dows are done. It is a hierarchical top down decision-m on product and scale and speed. You're competing against fintexs. You're

competing against 3,000 person firms. >> Yeah. Yeah. There's no more fugazi about Dows and decentralization. That's over. >> Absolutely. I'm not a huge part of this. >> I'm not fighting you on that. But the the part that I am I am thinking about and talking about is is uh where equity meets token. And that is a part that has started to evolve very very significantly over the coming months or in the past few months and and continuing. Uh and that is a ve that's a cornerstone of this this regime shift. Yeah. Uh and that's because that that's why Dows were created in the first place. Maybe you know there was Vitalik had some philosophical arguments as to why Dows are important. We all believe in decentralization as maybe a decision-making mechanism but as a corporate treasury strategy no it

doesn't make any sense. And so Dows existed so that they could you could put up some fugazi you know uh uh facade in front of a protocol that actually did have some revenue that you could pass back to the [laughter] token but that's not happening anymore. >> OKX just raised at a $25 billion valuation. Yeah. >> And the token is trading at $1.8 billion. >> This is a change as well. they will likely be merged to one to one and I don't know how that's going to look for like back setting that and like setting like going back and looking at all these protocols figuring out how to actually allocate the you know those but this this is coming together and it's

going to happen because like let's say Coinbase launches base you've got base token coinbase stock you've got this like weird thing going on it's just going to be one um and I generally think that that there's protocols like backpack pack are doing this. They're actually giving away equity um to people in their I believe in their airdrop or in their points program. So they're they're like re like this is going to come together and I think that's also a big part of the regime shift >> and it's going to it's going to weed out a lot of teams. >> Let's drill into this Coinbase example because this is one that people like to use a lot. Let's say you know Coinbase launches the base token. Let's also say that Coinbase tokenizes their stock and now they have a tokenized coin stock.

>> Yeah, I know. base is the L2, but you can buy coin on chain, you can buy base onchain. >> So then Coinbase has a token and they have a base token. So they have two tokens. >> It's weird. >> So So value acrruel ends up and you know you have different assets for different folks, right? So you can have an onchain audience buy the base token, you can have an off-chain audience buy the coin token, but once these two things start to intermingle, ultimately you're going to have to look into uh where the revenue is coming from, right? Where is it going? And that is that is the question here that I would be looking into as a shareholder or as a token holder. And I would be looking for clarity on where my revenue sources are coming from because ultimately the way

that these things are valued normally this, you know, these these token stocks, these PTOE ratios, right? Like I'm looking at how much revenue you have and what are the chances that you can start you can solidify those revenues and grow them over five years, seven years, right? Then you're trading seven times earnings or five times earnings. Well, so Hyperlid came in with the Trump administration earlier uh in I think it was it was about a year and a bit ago and um they said we're going to buy all the revenues. We're going to buy back the tokens with all the revenues.

Trump's in office. We don't care. We're going to do it. That completely shifted the entire landscape of of tokens, Trump and Hyperlquid. And now there are there are tens of thousands of tokens with zero revenues. Yeah. And they have zero pass back. And there is those tokens are are are done. >> I'm not disputing. >> They're done. And so that part of this like part of this regime shift as an investor in this asset class is >> you have to have a consolidated portfolio. Like there is no room for uh distributed kind of spray and prey narrative based tokens. I don't think that that that's really gonna come back in any major way. I think there are actual investable assets right now that are doing very very strong revenues,

doing buybacks, have have open programmable uh transparent financial data and are doing it at an institutional scale. And the a lot of this industry is not going to make it past this phase. And there's a lot to be optimistic about because those winners that what that do win will acrue a lot of market value and there will be a lot of upside for those over a longer period of time. But as you say right now these these assets they're just not like equities. They don't have a claim on cash flows. There's no direct ownership rights and this will change with clarity. And so clarity is kind of this line in the sand. Right? Let's talk about clarity because it's a big part of how this is going to shift. big thing

right now that's holding it up is stable coin yield, right? But Clarity is going to give us a framework to understand what digital assets can and can't do with regards to yield passback with with regards to all these, you know, different types of um crypto asset frameworks. And I think it's going to be an obvious thing that marks the bare market like a line in the sand of the bare market. It'll be like you >> are you calling bottoms? >> You didn't buy you didn't buy when clarity act passed at 46K at 66K. meeting. Clarity passed in 2026. Dows obviously set the bottom for the 2027 to 2029 run. Duh. Um, right. But I think clarity is this line in the sand that's going to be this is going to mark the regime shift because it's going to be

like, "All right, guys. Here's what's available and allowed and legal. Go build." And that is going to once again force the hand of teams that aren't prepared for it. So, we've been living in this in this fugazi bubble. Y >> and it's changing rapidly >> and the roll up we couldn't have done it without the guests who have come on the show two of my favorite guys two of my favorite guests that we've had on multiple times have been uh Hib uh you know founder of Dragonfly and and Santi uh you know founder at Inversion uh one thing that I I I love about these guys is that you know they they draw upon their experience in capital markets as a whole. Um, you know, Hib's got a background in poker and he's, you know,

take takes more of a a venture perspective on the market. And Santi takes a very pragmatic investor point of view. And so, um, if I'm looking at these things, I have to choose, am I hid or am I Santi? If I'm Santi, I'm looking at things as a PE. I'm looking what is their revenue now? And how what is the likelihood that they're going to be growing that revenue and how long can they be protecting that revenue and or growing it over the over time? that is gonna factor into some PE calculation. I'll come up with a valuation. Yeah. If I'm h I'm thinking >> what is the chances that this thing ever gets revenue?

>> And I think you can look at the crypto market and you might hear us use the word crypto as a whole a little bit less these days. But when we talk about crypto, we refer to essentially the altcoin complex, right? because we're untangling crypto and blockchain and we're treating the crypto asset class as effectively the altcoin complex. We're treating Bitcoin, ETH, hype, revenue generating coins and tokens as high quality assets, right? And then we're going to see high quality assets from outside of crypto come onchain and join the Bitcoin and ETH and Hyperliquid.

>> Yeah, >> I have to ask myself, am I hib or am I Santi? Right. And if I'm and if I'm looking at the altcoin complex, I can say, okay, yes, this thing doesn't have any revenue. Now, there's a chance, maybe a good chance that it goes to zero. But then the venture, the hive in me says maybe this thing gets revenue one day. Yeah. In which case, I'm willing to take a flyer. Right now, the fact that they've already launched a token and maybe it's on, you know, it's it's, you know, in the market altcoin complex, >> that is probably premature. I think we're going to start to see a lot later token generation events.

>> Uh because ultimately the way to do this thing is first you launch your product, then you get product market fit, you get some revenue, then you you go public if you will, which is effectively >> I agree because I think that the pendulum is swung too far right now on the revenue meta side. Like it's funny that I put that out like so long ago. I think it was like early last year. Um, and you know, we had everyone was everyone is now looking at the revenues of companies and like doing PTE and like trying to map out what the forecast is going to be. It's like look, it's kind of gone too far a bit. It I think we we will get some of those network effects, metaf's law, future revenue generation runs and different assets and like the

market will shift back towards like more optimistic thinking. But as soon as like any of this bear hits, it's just so bang bang bang on like here's what it is now. Here's what we're looking at. And so I think that that that that has shifted too far and I think it'll come back. >> That sounds that sounds reasonable. I I want to answer the L1 uh trade kind of thesis here. >> Yeah. >> Um I think the L1 trade as we know it is over, but I think there's going to be a new there's a new L1 trade brewing. It is a it's this token it's a combination of a tokenization trade and an L1 trade.

It's the New York Stock Exchange, but you know, first they're going to tokenize, but they're going to do it on their own chain, >> right? That's the new L1 trade. It's the New York Stock Exchange launching tokenized equities on the New York Stock Exchange L1, if you will. >> Yeah. >> How you get exposure to that is a different question. >> Well, that's why that's why I think there's this massive uh drag in sentiment because there is no >> people are they're they're shut out. They're shut out of getting exposure to >> that's the biggest problem right now >> and that's why we're here. That's the biggest problem >> because this is how >> I think the L1 trade will will shift though. It'll shift towards the agentic finance trade.

>> There's gonna be like there's gonna be like a like hopefully there's a strong demand for blockspace increase as agents become more and more able to interact on chain. >> I think that could drive some real blockace demand. Yes. >> Um but but but if I'm an agent, I'm just going to find the cheapest chain always. And so those things generate a lot of revenue and take a more volume based approach. >> Well, then there then the whole kind of like like the burn could come back for Ethereum. Other L1's could get their >> you know uh actual uh transaction count up. You can start to get more of that metap law network distribution model. So I think the like agents could save the L1 and L2 trades.

>> Um but I have zero interest in participating really in a lot of those uh assets. The other thing here is that on the venture side I think is is really important to talk about when it comes to this regime shift is that um a lot of these tokens are just meant to go down only because of their uh unlock structure. Yeah. >> Um and so I think that there's unfortunate uh unfortunate reality for the venture of the space. There's only going to be like five to seven VCs that are going to be able to raise a big enough rounds in the future I I think to be able to actually do series A or like actual large scale like 15 $25 million checks to Paradigm Dragonfly Han A16Z framework

and I mean I don't know maybe a couple others some small ones um that will get anywhere I Paradigm and Dragonfly just announced big rounds or or the at least Paradigm announced the desire to A16Z did. So there's also a massive consolidation in the venture funding of the space. >> Well, I'd imagine that a lot of uh uh LPs could be a little bit more uh enthralled with AI these days and this is what I think >> they also want more liquid strategies.

Sure. Is is what I've heard. So, two things on the venture side that I think were interesting as far as the regime shift. Um, spoke to a guy at drinks the other night. Uh, big prominent VC is deploying their fund three large scale and um, he basically said that we're not doing any deals unless they have a clear path to revenue. >> I mean, sounds like a real business model >> didn't exist a year ago, a year and a half ago or like two years ago. So that was a big kind of it was like if there's no clear path to revenue, if they're not already making revenue, we're just not even like not even uh considering it. So I thought that was that was interesting.

And then yeah, I think there's a lot of drag. I think that's another reason for the sentiment shifted that there's this AI takeover of of interest of speculative interest at large. >> Yeah. So Agentic tokenized finance is the final frontier in this progression that I've been talking about, right? Once we bring all the high quality assets on chain and we tokenize them, then we put them into our DeFi mechanisms that have now been resilient uh and we unlock a lot of the composability and the liquidity and we get a much richer sense of the risk profile.

>> Um then the third piece of this be and and AI is getting here. Uh the third piece of this is vaults. >> Um >> risk managers are extremely excited about vaults. uh had Matt Hugan on from Bitwise uh and he mentioned about why Black Rockck is getting so deeply invested in the space >> and it the reason is because uh Black Rockck missed out on the entire ETF business and so he he kind of went wound back time a little bit uh and walked me through uh the mutual fund uh complex of the early 1990s and 2000s. uh what happened back then was essentially that you had uh you know socialized losses and and it was a very uh inefficient

structure and so mutual funds kind of ran the world but they weren't perfect. Uh then you had the invention of the ETFs and it's pretty interesting to hear a lot of the commentary around digital assets and tokenization these days was very similar to the to the conversation around ETFs in like the mid two like 2000 2005 that that kind of era. Uh and so so Black Rockck uh was essentially sitting back on their heels almost like Apple is with this whole AI race. Uh Apple sitting on a lot of cash, you know, might be apples to oranges, but Black Rockck uh didn't get involved in ETFs right away. Uh they kind of sat back on their haunches because they were major beneficiaries of the mutual fund uh landscape at the time. Uh then 2008 came came around. Uh major bank uh I

forget which one it was, but they had to sell their ETF business. uh it was the previous owner of Eyesshares and Black Rockck at the time because they were sitting on all that cash uh they were able to come in and purchase the entire Eyesshares ETF business uh from from this previous bank and that ultimately put Black Rockck in a position where yes, they weren't the innovators or the creators of the ETF uh you know landscape uh as it were but they were able to come in and buy it right and so now uh Matt from Bitwise believes that Black Rockck is getting so deep into crypto because they don't want to miss out on this next thing that they saw like just like they saw happen with

ETFs. You know, they they felt like they missed the boat on ETFs. Uh they kind of got lucky, if you will. Uh but they were able to buy the Eyesshares ETF business. Now they have a more well-rounded business that way, but now they're they're, you know, putting their their first step forward. uh and they're getting more involved uh deeply with crypto tokenization and digital assets >> is the biggest and that takes us into kind of like how these these firms are going to get into vaults as well. >> Exactly. And so now uh once you have the high quality assets on chain and you have composable liquid venues for these uh you have the the DeFi building blocks, the Legos of the the lend borrow and the decentralized exchanges. you have everything you need for the vault complex. Yeah. And and the vault complex

is essentially an asset manager's dream because asset managers are able to come in and normally they have to do really manual processes. They have to call someone if they need to liquidate something. They need to they need to, you know, uh uh rebalance these positions manually. It's a lot of it's essentially their entire job, right? So now if you it's essentially like the AI version for asset managers. You put this thing into a vault. You can have a very very broad swath of vaults that you can cater to your clients. You can have a risk-on vault, a risk off vault. This one can generate yield. This one has this ro risk profile. This one has speculative assets. This one has quad quality assets. All kinds of different

vault complexes that you can create as an asset manager. The final piece of this which >> yeah, I think this is a big part of the regime shift. It's like uh there's a there's a bit of a kind of like a black box happening >> where these firms come on chain. They don't really want to get involved. They don't want to do it themselves. You got trusted curators uh the the gauntlets, the Rockaways of the world. They provide very solid uh parameters and frameworks. Um and you're getting better yields than you are offchain. And so that's kind of like a really interesting thing is that um that's part of the of this regime shift is that there are better yields on chain with some more risk. You got smart contract risk, you got DeFi protocol risks coming down.

>> Uh and yeah, you know, the amount of exploits and things have came significantly down. Uh but but there are better yields on chain with these vaults. Yeah, remember we can once we have a better understanding of the risk profile because we can actually see where these the money is on chain, we bring a lot of those risks down as making sure they're resilient, they're audited, you know, as we have uh you know larger institutions come into the space and and they deploy thousands of engineers at their fingertips on the code that is underpinning this. Black Rockck has obviously done due diligence on Uniswap. That's why they're partnering Apollo with Morpho. We're going to continue to see those risks, those smart contract risks come down and we're going to see uh risk uh dispersion. Uh we're going to have a better understanding of that. So, we're

going to minimize those risks. That's going to lead to less losses. It's going to also lead to uh faster settlement times and quicker latency. Uh and then we're going to unlock a lot of the value, right? And these are ultimately positive things for the bottom line. The last piece of this puzzle, AI is the final frontier in this puzzle. just to close the loop on vault. I think that this is something that is going to be very exciting. People are very bold up about RWA looping. They really want to see this happen. Um it's going to keep happening. Uh I keep I've talked to multiple people about this. A lot of these private credit cracks, a lot of these institutional products.

>> Yeah. >> I think a lot of these firms think that they're going to come on chain and just like dump their products on the onchain ecosystem and the the distribution that they get from this onchain audience. Just something to note guys like I you know uh think about why why these firms are wanting to come on chain to get more aum to get more fees to sell you more products like it it's a really nice time to be at the forefront of this uh convergence but um when you think about the incentives a bit more uh you you understand why the sentiment gap exists such that we built all this open source technology and then there's there's a bit of a vampire attack happening from

the side. >> I uh look, I think, you know, there might be people that are disillusioned with what they thought crypto was and is and you know, where it's going. >> Um I'll just say like I've been in this space for you know we we've been in the space almost 10 years. >> Yeah. >> Right. >> Uh each right. Um and the best way to get exposure is to build something. I I would encourage people to become entrepreneurs, especially in the era of AI. Yeah.

>> Um it's not that you can just buy an asset that got teddy and ride it to the top anymore. >> Um you may realize where this this space is going. You may realize where the industry is headed. Uh but you may feel like there's no way for you to partake in the upside of it because there's not some instrument for you to buy. But there is. Create your own instrument. Create a company. go where the convergence is happening. Seek out, you know, a lot of the value that you think is coming and provide, you know, your own your own contributions to it and I think you can capture a lot of upside that way as well.

>> Dude, before we get into AI, um let's talk about the the regime shifts about culture and conferences. >> Um think like culture- wise, right? So, there's a bit of a clash happening right now. Um, Vitalik even put in one of his recent posts to like take your suit off. >> Go, you know, leave your like uh high status slop membership club or something and like go and, you know, be free, right? And at the same time, you've also got the rapid professionalization of the space. We're in the Empire State Building.

>> We are quite >> This is the beginning of our of our attire. you you see you're going to see NFT PFPs go for uh the space at large. You're going to see the conference strategy change. You're going to see the culture change. Like like I don't know, there's just going to there's just these budding of heads of like keeping crypto fun, weird, and cipher punk versus like >> the industry is growing up like from an age perspective, right? Like we our first conference we were probably like 18 or 19. There was people in the industry from that age all the way to like 30. Now those people are, you know, anywhere from like 26, 27 to 45. Yeah.

And so the a like the industry itself is growing up. So I don't know. I'm just curious anything on like the culture side. Like what do you how do you expect this regime change to impact culture conferences um and how the space is going to grow there? >> Look, it's pretty obvious where we sit on this topic. We are quite literally in an ivory tower. >> Okay? I mean like the walls are painted ivory and we're on the 77th floor of a to of the tokenization tower. So you know we are embracing this right uh with open arms. Um but it doesn't mean we're abandoning our values. Right.

Correct. Um >> that's the important part. >> Yeah. So uh you know we are transforming along with our industry. I think also part of it is becoming malible and adaptable. Yeah. uh but never never uh sacrificing on the things that you hold you know uh very very important to you. Yeah. Uh personally uh I'm a believer in this technology. I'm also a strong believer in uh technology and I think uh the blockchain is uh very important technology. I think it's extremely innovative. Uh people are going to use technologies for very different things.

Uh some people are going to use blockchains for decentralized social media and NFTTS. Other people are going to use it for, you know, getting three more basis points to their bottom line because they can reduce the risk profile of their assets. I think both of those are extremely positive use cases. >> Yeah. So, use use the technology. Uh, understand it, appreciate it. There's going to be sub cultures. >> Yeah. >> Subgroups always like with anything. >> Yeah. Um, when it comes to, you know, >> I I'll just add a little bit more color there because, >> you know, the subgroups typically have found their own venues to to inhabit and so but on the blockchain that's not necessarily the case. This thing is

decentralized by nature. You can have two disparate worlds that are composable with one another. >> Well, right, inclusion works both ways, right? Like if you are include everyone into an a space into a an a a a financial stack uh you can also kind of like ch you you include all and then you can choose what you want to be >> right like you can be whatever you want to be in the space >> um and so I think what right like what I'm trying to say is that in like yes you can be accepting to all but there's going to be these subcultures that form like within look I think it's about your strategy right if you're a protocol, a product, a business. Who's your audience? Who do you need to sell to?

Who are you trying to build a recurring, you know, revenue source with? Who's your customer? Where where are they? Are they at ETH Denver? Are they Spork Wales? Are they developers? Are they at uh, you know, Money 2020? Are they at, you know, in Vegas at a fintech conference? Are they at Simon uh Simon Taylor's NerdCon? Are they at Consensus Miami? Is it at like a Cybos? Like, who's your customer? who are you trying to uh uh play with and like kind of target and then adjust your strategy to that. But I think at large like >> there is a growing up like you will not be taken seriously I don't believe unless you have a very refined brand that shows legitimacy and credibility shows a a understanding of the professionalization and and kind of uh

growth of the space and is is not like this narrative driven hype thing like we're so beyond past that. So, look, I think like my my thing is like the culture is shifting. People are growing up. The space is growing up. We're all growing up and maturing. And look, we're trying to do our part. I think everyone's going to going to do that because at the end of the day, like we haven't been taken seriously by the world like just finally like we're getting a lot of this adoption happen. I think like a big part of this uh regime shift is that there's going to be a trimming of a lot of the hocus pocus and a lot of the kumbaya and a rising of of the professional of the professional >> like this that's just like how I think about it.

>> I uh I think I so I agree with with all of that and I I think part of the reason why that's happening is because AI is taking a lot on the peripheries. >> Yeah. >> Uh let's talk about that. It's reshaping company operations. So just trans tr this kind of the transition here of of AI here is like um on on the culture and conference side of things >> you have AI is so amorphous it's so weird and it can be used for so many different things that at the extremes it looks a lot weirder than crypto. Crypto back in you know 2016 to 2020 was just as it was it was a lot more new than AI.

AI has been around for 40 50 years. You got a reinforcement learning and you know different machine learning tactics been used for a long time but AI in the modern context is actually newer than crypto and so crypto [cough and clears throat] and I mean digital assets blockchain not necessarily the altcoin complex that we think is dying but you know crypto as a whole the culture of it has solidified it's grown up and it's you know I think what happens as it grows up is that it it solidifies and it kind of like reaches this final form where it's like okay when something's and think about like a a kid, right? When it's in kindergarten, people ask, "What do you want to be for, you know, you can be an astronaut, race car, drive, whatever, you it's so broad, it's such a broad spectrum of things that, you know, you

kind of have the ability to do any one of those." Crypto was in that position, right? When it was extremely new, it could have been anything. Yeah. >> Right. But now that as it's matured and gotten older, it's kind of gotten pigeonholed a little bit. >> Not in a bad way, but it's solidified into what it is actually. All right. And I think that is that is going to continue to happen. It's going to continue to oify into the thing where it really has found its its product market fit as a as an industry. >> Yeah. And I mean it's it's reductive to say it's just finance, but clearly any sort of like all the re revolution revolutionalization of finance is going to be where the value is mostly going to happen right now. Like it's kind of like

this annoying step that we're in where it's like everyone's got to grow up. We need to ship products that work. We need to onboard in in institutional flows, tokenized assets, stable coins, T bills. We got to do all this all this stuff. And then we we we'll get to a point where we have this like burgging onchain economy. Y >> um but we're in this like annoying middle ground right now where prices aren't moving. >> Yeah. It's called a bare market where we actually have to do the work. >> Adoption is flying but prices aren't moving and then like it's like the weirdest most like >> the only weird bare market. I'll just comment on on the you know it's only finance thing. It's only in so far as the best example of this is prediction markets. It's it's in so far finance in so far as prediction markets are finance

but they're also like really >> like there are tools and tactical things that you can use for things outside of finance when it comes to probabilities and and >> understanding the future outcomes of things. And so I think yes right now it's only finance maybe we get somewhere else. Yeah. >> Um, but you know, just to close my previous point was that, you know, crypto was new. When it was new, it was weird. It could have been anything. Now it's solidified. It's matured and it's essentially grown into what it is going to be. AI now is extremely new. It can be anything. You can use it for anything. It's getting very weird at the boundaries. And I think new people, like younger people are going into AI and they're using it for very weird things because they can use it for very You

can't really use crypto for anything very weird right now. and that's getting reflected in the culture. >> Um, >> I think this es and flows. AI is going to grow into itself. It's going to get sort of like >> less interesting. Crypto can, you know, then grow and expand and blossom into a new new fold. Yeah, >> I think something that Yeah, go ahead. >> No, I was just going to say I mean it's JP Morgan had massive layoffs. Yeah. >> Amazon Prime Video had massive layoffs. >> Um, Jack Dorsey's company Square massive layoffs or block. Um, so it's it's happening too and >> well both of these Yeah.

>> Yeah. >> both of these things are happening and this is this is what I wanted to talk about the final frontier here for this progression of the industry as I see it over the coming 5 years. >> Yeah. >> Um, >> put the high quality assets on chain. Put those high quality assets into DeFi mechanisms. Put those uh structured products into vaults and allow asset managers to manage them. And then make the asset managers AI. And once you have AI agents managing vaults made up of complex looping strategies, yield strategies, risk curated strategies, structured products of high quality assets, you end up with the new financial system.

>> Yeah. >> Yeah. So that is what I'm extremely excited about. I think it takes place on a 5year time horizon, but ultimately I think >> five years I think it's more like 5 to 15. >> 5 to 15 years. >> Yeah. >> Well, look, I think a lot of assets are getting tokenized. You're seeing price discovery happen in real time on Hyperlid. A lot of these RWAs are starting to become composable with the rest of DeFi. And you have Open Claw that people are using for very weird things. So yes, AI agents managing vaults made up of high quality structured products. I think are a very weird use case for AI agents right now, but I think >> 5 years is a long time, man. I think the world can change a lot in >> authentic finance is certainly a part of this regime shift. It's it the it's the

the usage of AI internally for your company's work, whatever that looks like. The usage of um actually using agents on chain, that's finally accelerating. Like we're finally getting agents on chain, right? Like it's coming. >> Yeah. >> Um and the the the intersection of building smart contracts with agents and AI. This is all this is all kind of like correlary to like these big categories that we define. So, if I was to kind of like put a summary on the regime shift and um kind of close us out here, per tokenization, stable coins, major things to be very optimistic about in the current state of affairs. There's zero reason to be bearish on these. These

trends are going to rapidly accelerate. If you've been following our NEO finance kind of outlook, we've covered a lot of these assets and we've also just covered kind of this at at hole that's happening. So, that is really exciting. vaults also a really nice touch to kind of like add on to that. >> Yeah, I would I would structure a lot of those same advancements of our industry on a timeline because ultimately I think there are things that are prerequisites to the things that will come after that and I think you can't have AI agents until you have vaults and I think you can't have vaults until you have DeFi mechanisms with high quality assets and and you can't have high quality assets on chain unless those are tokenized. And so that brings us to a really good point which is so that th those three kind of

buckets there plus vaults. It's genius >> per tokenization coins and vaults. >> It's that and then it's clarity act passing. It's it's it's genius being implemented. That's kind of like a progression that's going to happen as well on that timeline. And that all this is already starting to happen but that is causing the mass wipe out of a lot of fat in the industry. We're bearish on a lot of tokens on a lot of teams with no revenue. I'm just not excited about it. There's there no investable cases in it which that is leading to a consolidation in venture in venture funding in venture the ability for VCs to raise. We're going to see a lot of consolidation

there. We're not going to see a lot of these VCs like you know shut down office but we're we're going to see them turn into more like liquid liquid kind of like broader macro cycle traders investors. I I think this is happening, right? So, the revenue meta is going to keep happening. We're going to see that, but but this pendulum has shifted, right? The pendulum has shifted a bit too far to like let me go on DeFi llama and analyze exactly your revenue forecast. Look at your PTE. We'll see some of that Metcap's law optimistic network effect trade return and that's probably going to be driven by the agentic side of things.

>> Yeah. >> Um I I really do think you know PERS are an important part part of this. Clarity is an important part of this. These are accelerants. >> Um, and I think ultimately, yeah, we're progressing along this timeline. It's it's up to everyone who works in this industry and the regulators, everyone who contributes to this as far as how fast we accelerate down this timeline. >> Yeah. And so what this looks like from a portfolio perspective is less asset ownership. It looks like trying to own really quality assets in those three sectors in and potentially in the >> Yeah. You're structuring this as three sectors. I see this more as a progression.

>> Okay. Okay. But ultimately ultimately what I think I think this is is you know you have your perspective I have my perspective we're talking about the same thing >> 100%. It's neo finance >> 100%. It's neoance. It's the it's the convergence where >> digital assets is meeting finance and it's happening. And so just kind of keep rounding out and summarize this. >> It's the evolution of finance itself. >> Correct. >> Right. As high quality assets evolve into programmable money. Yes. Right. As we have programmable collateral in DeFi and in mechanisms like vaults, we end up with high quality assets that are the next iteration of the things that they were. It's before, you know, it's when gold was, you know, something just

plucked up, you know, in the Hudson River. You got to go to California for that. But, you know, you you would take it and then it was an ETF and then it was a tokenized product and then it's a tokenized product that earns some yield in a vault and then an AI agent manages that tokenized product. And so what we're talking about is really >> evolution, but that's what the regime shift is. It's not a single point in time. It's this ongoing thing that has been happening. You could say since 1010 or since Hyperlord launched or since the administration came in, but it's been happening. It's going to like that is that is what's happening and like we're just kind of in the middle of it helping people navigate through it and it's not it's it's big change and there's there's a lot of like more brutal realities to

it, but there's a lot of things to be optimistic about. I think again on the culture side, on the business side, it's the era of the mature sophisticated kind of professional brand. It's not this this hype fugazi decentralization DAO structure. It's structured hierarchal decision-m fast execution oriented user oriented uh results. It's it it's focusing on conferences and branding and conversations that actually matter to who your customer is. Um, and unfortunately in every bare market, it means being somewhat like, you know, firm with, you know, what your bottom line is, what's going on, who you're who you're supporting. But through all of

this, through all of this kind of somewhat pessimistic side of this regime shift, there's so much to be excited about because we will get into a time where we will see a lot of value be consolidated into really quality assets on chain. We already see a couple and this will provide multi-year to decade long investment opportunities with tokens that look more like equity with claim on cash flows with real rights. This will provide you to own wealth and store wealth not just in Bitcoin but in in other assets. It will provide a magnificent onboarding of a lot of assets on chain. A full tokenized uh revolution of the way assets are traded and managed and settled. It'll be it

will bring a rise of capital formation that will drive such value and such democratized access to opportunities that we've never seen before. There's a lot to be optimistic about. We got to get through this regime shift. You got to know how to position for it. As an investor, you have to be willing to be adaptable and to recognize what's happening in the space. We're going to try to help you guys do that day in and day out here from the Empire State Building live on World TV. >> We're going to continue to learn as much as possible. We're going to be speaking to extremely knowledgeable people in the industry that are going to be coming into the Empire State Building. They're going to be here in the nest and we're

going to be sharing all of these conversations with you uh as a very very important part of the rollup. You couldn't have done it without you guys. Guys, hope you enjoyed the first show from the Empire State Building, the regime shift. It's on. We're here. Thanks for watching. See you next time. Thanks guys. [music]