🚨LIVE: MSTR In Trouble?! PURR Gamma Squeeze w Globalflows. Markets w/ Mando, Then RE & ZAMA Join

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[music] Heat. Heat. [music] >> [music] >> Thank you. [music] Lord, [music] we'll see you around the timeline.

Feels [music] good to be back. I think the rollup is one of the [music] most premier media brands in crypto and Andy and Robbie are great experts at everything they talk about and it's my favorite podcast. >> [music] >> adding it to my library every day. >> Potentially multi-chain deployments. We are at the connect [music] day one here. I'm testing from base. [music] [music] >> [music]

[music] >> Heat. [music] Heat. [music] >> [music] [music] >> JP Morgan, Black Rockck, 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. Andy's bullish. I'm bullish. We're bullish. [music] [music] >> [music] [music]

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

is headed to the top. If we're not already at the top, we're going to the top. >> Roll up is my favorite. >> People from all walks of life, all over the world, all over this industry come together for the roll up. [music] [music] >> [music] [music]

>> Zoom out. The institutions aren't coming. They're simply here. It's the golden age of crypto, guys. Get right. Let's go. [music] >> Welcome to the next. See you on the show. >> Bang. Welcome back, ladies and gentlemen, to the tokenization tower, the nest. We are broadcasting live from the financial capital world. You're watching the rollup. Today is June 2nd. We have a great show ahead after Bitcoin touches 66.9K.

Wow. Wow. >> Market is in a very, very funky spot here. Is it ever? >> Have we ever seen a quote unquote alt season without Bitcoin doing well or at least just holding the line? >> I don't know, man. But Zcash looks great and people are I mean, Sailor nuking Micro Strategy into Bitcoin dumping into Zcash pumping is like the recipe for why why Zcash even exists. So, we got Dark Vox. What's up, man? Alish, it's going to rock so much. Let's go. Let's up.

Let's go. Let's go. Let's go. >> Um, all right, Rob, we had a great show. Oh, >> yeah. >> Uh, we've got a we at at tokenization tower. We've got Capital Flows and James Rosenthal calling in. Um, we've got Yeet, co-founder of RE and others, uh, and Zama after their interesting USDC court situation. As always guys, we are at the Nest powered by our friends at Plume building the onchain infrastructure for asset management with their vault product, the Nest. Visit plume network.xyz to learn more about that guys. Uh Rob, which one are you most excited about today? Got a lot more guests today than we do uh in the past.

>> I think the guests today are pretty indicative of where the market stands. I mean, right, first off, we got capital flows uh talking about this gamma squeeze. I'm excited to hear about this because this is like we had such a long stint in the technology world of fintech. I mean that's basically where we're at these days and now we're kind of back in the finance side of things which feels >> whether it feels good or bad. It just kind of feels like we haven't been here in a while because the animal spirits were gone. So it feels like >> they're back though.

>> The animal spirits are back for a very select cohort of the market. And I'm excited uh to kind of dig into what the financial aspects of this are because I mean gamma squeeze is still a very technical concept, something to wrap your head around, but obviously very much more in the financial side of this world than the technology side of this world. So I'm excited for gamma. Uh I'm excited for the gamma squeeze conversation with capital flows. Uh I think Mando is going to be a great follow on to that. He's been trading this market very actively. Uh and then you know we have uh some more of our founder stories right and trials and tribulations in this industry with Zama and Re. Uh, so I think these are all very very relevant conversations as far

as where we're at today. And generally I think you know Zama is going to contribute to this privacy conversation. And I don't know about you but I'm continuously hearing more and more projects, companies, coins that are popping up in this, you know, revenue producing fundamental area. >> It keeps happening. I mean I put out a tweet about it today. I was like um there's kind of like two two types of things happen. There's uh tokens that are have no revenue, no bid that will continue to struggle and suffer. And then there's tokens that have a strong concentrated bid that will continue to rise and run. And guys, we've been talking about these a bunch.

Um you know, NE's doing well. Hype's doing well. Zcash kind of on a different world here in a different kind of landscape. Um so China says divergence of Bitcoin and hype. Let's go hype. I agree. I mean, how about divergence of Bitcoin hype, ETH, soul? How about Bitcoin, ETH, Soul, and anything that isn't, you know, in that major cap uh or camp with Hype or with Zcash or with Near? I mean, Arthur came on the show and was, you know, bullposting this to us and here we are and, you know, this trifecta is holding up like at basically break even when Bitcoin is breaking down to 67K. So, as always guys, our topics are powered by Treasure. Visit treasure.io, IO. Use code rollup 10 to

get yourself a hardware wallet. Secure those coins. Ladies and gentlemen, you do not want to be using hot wallets or centralized exchanges. Um, let's get into the markets and weather. Before we do, let me tell you about FRA. Building infrastructure for the future of onchain money. Open stable border list. Visit frack.com to learn more. Guys, as always, we are in the chat on YouTube. I see you guys. Let us know what you want us to ask. the gamma squeeze people that are coming on first, Capital Flows and uh James Rosenthal, they're going to be talking to us about what is happening on the Hyperlid Strategies DAT next. Before we do, it is 73°. It's sunny. It's beautiful. My pits are not sweating, which is great. Actually, maybe there are a tiny bit. Um but but it is pretty

warm down here in New York. Rob, how's it going down there in Florida? >> Yeah, same here. Feels good. We're going to break the suit out here back very soon. expect to see uh you in a suit as well when we go talk to these hedge funds in Connecticut. >> Yes, sir. >> Uh excited for that. It is beautiful down here. Blue skies, sun. Couldn't ask for anything better. I am excited about the new spot in Florida. Uh I have a woodpecker that pecked a hole in my roof, so I'm going to I'm going to patch that after the show today. >> Uh but otherwise, everything is uh bright, sunny, another beautiful day in Florida.

>> As always, guys, all our weather is powered by our friends at relay.link. Use relay.link to swap tokens across multiple chains from one interface. Better UX for you and all of your crypto experience. Let's get into weather into the markets. Before we do, let me tell you about dinari, our tokenized equities partner here on the rollup. Powering tokenized equities and bringing real world stocks on chain. The dogs even love them. To explore onchain access to public markets, visit dinari.com. Rugrat says he's bullish on Zama, ticker Zama. We actually are too. Uh it's kind of an understated dark horse in the uh privacy rally, Rob. Like I mean it's kind of I mean if you look at the chart real quick on Zama. It's probably not

doing the best today. Um but it's whoa it got that breakout. It got that breakout above that level that we were talking about last week, guys. So we were talking about that what like three and a half cents level. >> Yeah, that's where they went live is about 3.3 cents. >> And so last Friday it broke up to about four cents. Now it's retesting that level. Ladies and gentlemen, I don't know if you believe in TA. Some of us do, some of us don't. But uh Zama's retesting its highest level of resistance as support at about three and a half cents right now. Looks pretty good. I think Zama looks pretty good.

Near looks great. I bought at a little higher yesterday on on the show. I think you guys uh can recall that if you guys were watching there yesterday. But Rob, I mean, I think the story for today is Sailor is just destroying destroying Bitcoin. >> Man, I can't chalk it up to just Sailor. I think Sailor, you know, selling 32 Bitcoin, $2.5 million when he owns a I mean, hundreds of he owns billions and billions of this asset. The selling itself isn't what caused Bitcoin to slide. I think the war is causing this. The macro environment, people are unsure. Generally, they don't know where the liquidity environment goes from here. All of this combined with the prospect that sailor might sell more.

That is what I think is leading Bitcoin down. And I think you do have this rotation from Bitcoin to Zcash. I think that is what is getting people excited. People are valuing Zcash based on a percentile of Bitcoin. So all of this combined I think is leading um to this >> catch up 10% today guys. >> Yeah, I think that's going to continue. And I think you have these two camps. You have one camp led by hyperlquid which is the revenue producing and this is led by stocks. It's led by just pure businesses. The market becoming more sophisticated and uncorrelated. Uh this is leading to segmentation and this is leading to hyperlquid kind of dragging up all of the revenue producing assets with it. Uh because this is not you know

just a generally favorable macro environment liquidity environment. That's what's causing a very very segmented market to rise because this you just can't ignore the the healthiness of this business and it's causing us to look further down this risk curve. You know we talked about cards uh call out things like aerot drone you know you can look at other things even derive derive is one that I want to talk to the these capital flows about because I see that people are buying calls and puts options on hyperlid on chain with derive and I know this plays into the game of squeeze thesis in addition to the dats. So, I I I think there's a lot here. Like, there's there's plays that are coming out. We I mean, we had Anom yesterday, Rob literally say he thinks alt season's going to be here. Uh, Bitcoin's going to

kind of slowly dwindle down. Alt season's here. I mean, guys, look look at these numbers. Doesn't look great. You know, if you've been watching the show, we don't really hold a lot of uh soul. I mean, I don't really hold much ETH. I have a little bit of Bitcoin in the, you know, never sell, but I mean, it's it's hype. It's Zcash. It's near. until something changes with these three assets, I don't see why why there is a need to really try to do much else. We're gonna get the guys up to talk about PER. Um, so we've got Capital Flows and James Rosenthal um coming up and and it is it is this idea of a a gamma squeeze that they've been writing about on their Substack. They have a great stream, guys. So, before they come in, I'm going to show their stream. Look

at Capital Flows on X and on YouTube. These guys are doing a daily show. They do I don't know how they make such good graphics and animations every single day. Like it's absolutely insane. Um we're going to get them up and we're we're going to talk about what's happening with PER, the Hyperlquid Strategies company, uh which is which is the upcoming uh potentially one of the biggest trades in the cycle. Um, so Rob, what do you got for me before we bring them up?

>> Um, I don't have any more purr for you. I think you're bagged up enough there. Uh, the biggest trade upcoming of this cycle, I think. Yeah, there's two camps. There's this camp led by Hyperlid. All of the equities, the ETFs, all of the revenue producing coins kind of fall into that bucket. Hyperlid is leading the pack. The other side of this is AI and on that side you have near Zcash this sovereignty privacy thesis zama grass right we've heard people kind of going down the risk curve on these two spectrums uh I like this market it's fun because this is what separates winners and losers you get uncorrelated if you do your due diligence you kind of do your research you can actually get some outperformance here um and ultimately I do think it's very telling to see these

things hold up in the face of Bitcoin coming down and this morning was just >> if if we do get some sort of rally in the majors macro environment improves, I tend to think these are the sectors that are best fit for outperformance even when the general market conditions flip. So, I'm excited. >> Forget a rally. How about just Bitcoin back up to 70K? My goodness, that's all that's all that it seems like we really need. Rob, let's bring him up. We got Capital Flows. We got James Rosenthal. Let's bring him up. Let's give him some love. Get him fired up, guys. welcome to the show. Um, James, thank you. Just to start off for the $10. That was, you know, you did not need to do that yesterday. Thank you, man.

>> Hell yeah. Got to support the other uh the other creators out there. Now, I'd like it back because I'm poor now because I have a Bitcoiner and I'm not sure what to do. If you don't mind, I'll send that Venmo request back real quick. [laughter] >> No problem there. We support you. Yeah. Thanks for coming on, guys. been uh big fans watching both of both of you both on the show. Capital Flow has been following your ex account. Uh just to disclosures, we have a massive position in per over here as well. So we have people in the chat that have been very bullish on this and what really caught our attention was this idea of this gamma squeeze. Um but you know before we get into the purge trade, I

would just love to hear a bit about your backgrounds. You know, how long have you been trading? How did you guys get into this space? give us a bit of uh a bit of the rundown. >> Yeah. Well, I appreciate you guys having both of us on. I mean, I love the I love the energy of the live stream that you guys are doing. I think it's just a special place. I mean, few people can really pull it off. Um, and you know, we're we're still going through the trial and error, figuring it out, and we're just having a blast, you know. So uh the entire you know I think I started you know capital flows I guess it's in 2023 now and the entire goal that I had with it is mapping the macro regime and then taking asymmetric bets within that and it's you know a very you know simple

kind of goal and there's a lot of complexity along the way but at the end of the day you know I've always focused on interest rates macro liquidity the credit cycle And I've always had to do it from a risk-taking perspective for either hedging interest rate risk, taking directional views and interest rates or you know anything in that realm. And so there's always been the necessity to say what are the actual drivers, what's my risk and what are the largest factors that are moving markets. And so, you know, I've built an entire, you know, suite of strategies and, you know, knowledge over the years. And then I started Capital Flows, uh, in 2023. And that's basically the entire breakdown of the macro regime that we're mapping and

also the main bets that you take within that because at the end of the day, you know, I I believe that diversification is the enemy of exceptional returns, right? you shouldn't expect to outperform the market or have exceptional returns if you diversify it across, you know, a bunch of subpar assets. And so that's really the starting point that, you know, I have for everything. And then myself and James uh James can talk about a little bit about his his story but you know we started actively live streaming more um you know earlier uh I guess this year now and we have just been focused on taking all the models that I've built all the knowledge that we have and synthesizing it down from a risk takers

perspective to say what are the specific bets that we want to take because we're here as risk takers and so that's really been the the focus and you know the thesis that we have been laying out now on hyperlquid and on purr the entire goal that that we had was we don't just want to explain the thesis we want to provide every single tool necessary to execute on that thesis in terms of quantitative models and then also qualitative thinking. what is the what is the base of knowledge and you know even emotional mindset you need to have to go from you know just having these

small swings in your account to bigger swings and what it means to get paid to hold risk. So that's really the I would say that the overview of capital flows. I'll let you know James add in there for you know the kind of experience he's had and all the kind of reps he's had over the years and how he kind of connects that into those those macro research pieces. >> Yeah. So I think I think one thing you guys probably have right is you complement each other well right you have a good back and forth. Like I have to stare at a frog every day. So that's a little bit worse [laughter] for me, right? You guys get to stare at each other, which I don't know what's worse, you know? But I come from more of like a scalping trading. I was a poker player,

you know, the the kind of standard poker player found his way to trading thing, right? And I like to think about the philosophy of trading, the metas, the vibes, the feel, right? And uh Floss comes at it more from a bottomup perspective from the foundation of the price of money in the world, right? So he comes from here, I come from there and we try to work our way towards a very sharpened execution to take big bets, right? And I think that's what we're all here to do. Like educated guesses on financial markets and you know coming into the content space is pretty interesting. Um and I I really think it's it's cool. Um it it gives me

a little something else to focus on rather than to just be spewing money around all day. I'm sure you guys feel that too. However, like you go to the bathroom, you buy near or whatever. That's you still have a little bit of that in you. So, um I think it's >> small position. Small position. >> Yeah. Yeah. Sure. Sure. Sure. Um but I I think it's super fun. I think a lot of people are getting value out of it. They show up every day. They get to learn a little bit about uh how to build their macro foundation. They get to talk about the execution and the mindset they bring to all of their trades. And we all can move forward and hopefully provide that value.

>> Yeah. Well, to everybody watching this, um guys, check out their channel, their ex, all of that we'll put in the description and you guys will see it in the after hours stuff. But guys, let's get right into it. people are most kind of taken aback by this idea of this kind of digital asset treasury company per the only one that's you know very profitable well there's only two and the you know they're both uh in the hyperlquid ecosystem and people are wondering about this idea of a GameStop style run and GameStop had this insane run where you know there was all this shorting and all this all this call buying and all these, you know,

positions being blown out, market makers having to adjust their inventories, etc., etc. And so, you guys have kind of labeled this as the gamma squeeze possibility for PER, and how there's a couple asymmetric factors happening on Hyperlid, the asset right now. And so, let's start kind of here in just get a bit of an understanding of what this kind of gamma squeeze is, and then we can talk a bit about the other factors as well. Why do you guys believe that there's a GameStop or potential GameStop style run on this per stock and what does that really kind of mean behind the scenes like in the context of understanding how financial markets work?

>> Yeah, I think that it all starts with when you have credit getting issued into the system, a lot of short positioning has to get squeezed out. There is a systematic mechanical element for positioning in the market where equity long short shops a lot of different factor flows a lot of different sector flows they are forced to move out the risk curve this is mechanical in the system it's very well documented but the question is when is it happening and you know 2021 GameStop that occurred in the context of a credit cycle meltup I think that's one of the most misunderstood facts where you know even though you had a short squeeze. Short squeeze happen all the time. I mean, if you're an

activist investor, if you're a short seller, if you are operating financial markets, you know, short squeeze happen all the time. You get squeezed out of markets. You get squeezed out of a position. You know, these equity long short shops are always pushing against each other and, you know, trying to move the market around to be able to realize their P&L. But we saw something even greater in 2021 where it was all major shorts getting squeezed out at the same time. And you have to ask why and that's because there was a surplus of money in the system. And so first you need to set the context which is we are seeing almost an exact parallel in terms of the credit cycle. That's why you know we quantify all of these macro flows with

you know really high quality statistical models and research every single day on capital flows in the live streams and the research to say okay what's the context so right now we are seeing liquidity increase very significantly that sets the context and then within that we've said you know hyperlquid is the most disruptive asymmetrical bet that is taking place in financial markets And you would say like, well, how in the world do you know that? How can you make such a a an aggressive claim about that? And I think that's a really important question. You should ask hard questions. And the fact that we have hyperlid rallying and melting up to an all-time high as Bitcoin is at lows in itself indicates it is differentiated

in its nature. And then you add on top of that, we are moving through this crypto regulatory side where perpetuals are a brand new financial product that is already executing and pulling capital in. Every single major Wall Street bank is staring at Hyperlquid every single day. If you talk to anyone in I mean I guess you guys are in New York, right? Y >> you talk to anyone in New York that's trading on a desk, you know that they have Hyperlid up. You know, especially over the weekend. And so it's kind of like every institution gets to look through kind of the the glass window of what's happening in the market, but they're not able to touch it because of a regulatory hurdle.

>> And you know, fundamentally the largest changes in financial markets occur when regulatory changes take place. And so Hyperlquid is in my view on the precipice of getting added to the entire regulatory environment which is the largest financial market in the world. And on top of all of that, this where it comes the purr and the bet and everything. PUR in my view is the best expression of being long the hyperlquid regulatory edition in the world right now because it is the primary point of access. It is the largest treasury holding company for

hyperlquid tokens. And what I love about this is that everyone who has been involved in the crypto space or financial markets, they have this negative stigma toward treasury companies, which I love. Like that's perfect >> because it's pulled everyone off sides and all they can think about is sailor and micro strategy going down and stretch and I'm just like that's perfect because you're extrapolating that scenario to this one which is just going to pull more people in when it actually squeezes. >> And so perr is you know they have leadership that is pretty exceptional overall. They've done what no other treasury company has done, which is buy back their own shares and create shareholder value instead of diluting shareholders. And so you have all these

things stacking up. You have the credit cycle environment. You have hyperlquid. You have perr. On top of all that, which there's a reason why Goldman Sachs bought PER and not the ETF. Right now add on top of all of that, the option market on PER is the only place in the world to get liquid exposure. There's maybe other niche exchanges or something like that to where people will make a market but at the end of the day the most liquid place that if someone wants to get exposure and buy out of the money calls on hyperlquid it is only going to take place on per.

So, pull all of those factors together and we are already beginning to see a gamma squeeze take place, which simply means that if you buy a call on per, someone has to sell you that call and they're going to sell it to you against the inventory that they have or it's going to be a market maker. I'm not a market maker, okay? But I could sell a call against the core position that I have and take that risk to give some of that upside and the potential that it gets called away. But broadly speaking, the majority of option flow in markets is market makers. And when you have a lot of people buying out of the money calls and you have V begin to rise and you have, you know, gamma begin to shift, that systematically forces them

to buy the underlying stock and hedge their risk, which in itself pushes up the stock. And that's why we have had we had the largest day of volume on Friday of last week into the close as we had the initial push of that gamma squeeze. Now we are seeing an escalation of that that is really actually even more aggressive than I initially originally anticipated. And that is escalating because we are having higher strikes listed. So if you think about it, you know, right now we have we had strikes up to 18 bucks as of yesterday. Now, today we actually have strikes even higher. And when you have those strikes, >> how high

>> strikes right now are? I believe they're going up to >> 23 23 bucks. >> 23 and capital flows. Where where are you seeing uh the the market for for options on this? >> Um what do what do you mean like where where >> like if we wanted to buy options on per where could we do? So >> any any any broker any broker you can I mean Schwab TD Maritrade I use Interactive Brokers um you know I mean I pull them up on Bloomberg you can like look at the you can look at the market kind of anywhere you can buy calls anywhere you would buy per stock you could yeah buy I mean I'm sure Robin Hood has it I don't use Robin Hood but I'm sure they have it. So I think that what is taking place is we are seeing an

escalation of all these factors converging at the same time and hyperlquid has become the only game in town right like everyone in crypto realizes it everyone in tradi realizes it and if you have this convergence which we are I mean we're seeing the convergence we just need to see it in its full effect where you have credit cycle pumps in more money which we're already seeing >> because interest rates are not high enough then add if you have hyperl liquid get added to the United States in a regulatory framework which I think is very possible in the next 60 days and then stack on top of that you have this low really constrained tight float stock per that is accelerating its option flow and it's the only place that people can

buy calls stack on top of all of those that like you have incredible meme potential just for per itself because of the aura around hyperl it it is the anti-establishment disruptor of this current time. There's a reason why there's no VC money in in Hyperlid. There's no there's nobody shilling it because they're not getting paid in tokens. There's a reason why you don't see it on podcasts. And the fact that I don't see it on podcasts and the fact that people won't talk about it is because they don't have a bag. They don't have a position. It's kind of that uh I I I did this kind of a post where you know in like the big short Michael Bur is like okay well where are you marking my position? They're like oh

well it's still against you. And then they're like okay well we finally have marked your position. And he goes oh so you've established a net short position yourself so that you can mark mine. And she's like I don't know what to tell you Mr. Bur. So that's kind of like what we're at right now >> where you know we are escalating everything. All these factors are converging and once we mark Hyperlid to kind of the true value that it has once Citadel, Jane Street, all these big market makers come in, it's going to really defy, I think, gravity, expectations, reality, and every single thing.

>> Yeah. And I think you, you know, you said it may go to $350 this year. And perhaps that's a you know bullish bullish bull case but you know pers outperformed by to this I think to the tune about 90% um since early December and this what we're talking about here now is just basically there's going to be a desire for just to understand exactly the gamma squeeze there's going to be a desire to buy out of the money calls for people that want to have you know strikes in this 18 to 20 to 23 range or higher as the kind as the stock, you know, climbs up, market makers need to have an inventory of this stock to be able to sell calls to these

call buyers. And so, the idea of the gamma squeeze is that there needs to be a consistent bid on the inventory to be able to fill the demand of the call buying by a market maker to sell them those calls. And so this just gives you this kind of persistent uh strong bid based on the demand for these calls in a stock that has very very low float. And so you get this kind of like shock to the system where there's not enough you know supply left of the stock uh because of all the demand for the call buying. Is that like the like the 101 like the high level?

>> Yeah, that's that's exactly right. I think that the the convergence of all those factors and with the gamma squeeze is is the gamma squeeze is the tail scenario that creates a GameStop like scenario that is still underappreciated. I there's some you know what I traded the GameStop squeeze and I remember it very clearly. We squeezed out all shorts before we made the actual run up. >> Yeah. So, we took out the majority of short interest and people hedged their shorts before we even had the actual rally to $120.

But the key thing on AMC, on GameStop, on all these meme stocks during 2021, if you traded them, then you knew that once we traded up to the highest strike in GameStop, you basically sold your position and got out, especially on an intraday basis. And that's what I was doing because, you know, once you bid bid up and you hit the highest strike, you don't have a gamma squeeze above that typically. I mean, you can a little bit here and there, but those are the things that create those squeezes. And if you look at GameStop and options that were listed in that time, >> that's the exact thing that is driving the GameStop push. And I think that there was maybe so much more meme

potential around GameStop and all the aura around that. The parallel is that there is so much fundamental backing for PUR as a stock >> that almost comparably replaces maybe what we're seeing is we're you know we're not seeing you know GameStop go across every news or excuse me PUR go across every news channel right now. It has the potential to do that, but we have so much more fundamental backing. What happens if Hyperliquid gets added to a regulatory framework overnight? We get a tweet from from Trump on it and then Hyperlid bids 100%. What happens, you know, >> comes out. All right.

>> Just look at look at XRP. Look at what happened with XRP and the regulatory changes. >> Let's get your guy here, man. [laughter] >> Hey, man. Once he goes, you got to let him go. you know, that's that's how you do this. You know, you get them on a rant, you let them you let them breathe. Uh, but I I mean, I I just want to add though that like I do feel like, you know, especially you guys are deep into the crypto streets, right? I I am as well. And there is this um this apathy, this this uh small-minded thinking right now because of the environment we've been in for quite some time. And I I keep imploring even myself to remember to think bigger, to think outside of crypto, to think of like, okay, hey, per or uh Hyperliquid gets added to the

states, if the story is told in the proper way, if the Wall Street's bets and the Redditors come around to it, it's the cat thing, it's the whatever, they realize what the buyback mechanism here is. they realize what vaults are and IPO season and uh people talking about trading fees like oh my god there's a short squeeze potential there's a low float there's only one place to do that what are the strikes and like wait we've been seeing trillion dollar companies every day staring us in the face and then they're going to come over here and they're going to say wait a second this thing's at a what valuation and it's being used for what like I just say like you got to think a little bit bigger and remember what is po we we sometimes forget what is

possible and how reflexive things can be. And if you get the reflexive feedback, you I mean you guys just before we got on were talking about the resilience of this sector, right? Like if you get Bitcoin to have a bid, if you get this um rush into midterms where the administration is throwing the absolute kitchen sink at keeping this thing going, if you get Trafi just rotating money around, like you can't tell me this isn't a possible occurrence here, >> right? It's not maybe it's not your base case or maybe you're not even exposed to this, but like you got to think about the potential tail that's growing on the right side there and we just try to keep iterating on that tail and we think it's growing and growing and growing in a

potential situation here. So that's um Cigar says why would the demand be driven by options only if no demand to buy options then there's no gamma squeeze. I think the answer to that I'll you know I'll try is just basically that that's just one of the factors here. The other factors right is that we get you know Hyperlquid has this regulatory moment or it just continues its run um or just you know uh Bob Diamond and David Shamish just continuing to execute at a very high level. Maybe you guys can fill that in though. You know if there's no demand for options then obviously this gamma squeeze kind of won't happen.

Um, >> and I want to ask maybe just uh not an entirely orthogonal question here, but kind of a second part to this is we're seeing more and more uh option, not options, not the right word here, but vehicles to express uh exposure to hyperlid. Um, given ETFs, I think Grayscale is coming out with an ETF and we already saw Bitwise. As more options become available for getting exposure to hyperl, does that dilute the potential options volume that we could see on PER specifically? Totally. I think that's a a super important question because to be clear, if if the information changes, we should change our mind, right? So to your point, if we have factors that change in the flows, then you need to shift your

position. I mean, as as a trader, like that is your goal. What I would say on a hyper on the hyperlquid side and then I'll connect it to purr is that the baseline for hyperlquid not getting added to the United States is that it continues to print the same amount of money it is on a monthly basis. If you get like you know here's the thing if you get some type of regulatory news that hyperlquid is not getting added to the United States will it pull back a little bit? Yeah, sure. But overall we're seeing it move in lock step with the cash flows that it's generating. I mean, we just saw over the last week more volume for HIP 3 flow into stocks and things in, you know, as they're as they're trading, you know, IPOs on Hyperlid.

You know, more capital has flowed into that and volume has come to that on the Hyperlquid platform than it has in crude. So, basically, crude provided all of these returns for the pullback, which by the way, you know, hyperlquid and perr rallied when the equity market sold off earlier this year. That should tell you something. So that is the baseline, right? The baseline is it continues to provide cash flow, right? So you almost have this positive carry call option. So that's that's number one. And then number two on the per side, the leadership of PUR needs to continue to execute in the same way that they have to provide excess returns above hyperlquid. You know, there's a reason why since the ETFs have been launched,

PER has still outperforms. And I'll give you one easy example is one the the leadership has actively been buying and selling the shares of the company not to just accumulate more tokens but to create shareholder value. It's very different than what every other DAT is doing. So I think that's number one. An ETF doesn't have that optionality or ability to do that. And you you would say okay well they would have to have skill to do that. They would have to actually show that they're adding shareholder value. And what we saw last week and you know part of the week before is that the leadership of PER executed so well in their active trading operations that they added more cash to

the balance sheet at the same time as adding per excuse me hyperlquid to the balance sheet at the same time and they didn't dilute shareholder value at all. Basically, we they are taking advantage of the premiums and discounts in the market almost like trading their balance sheet actively like a hedge fund. And you know, I think one of the most bullish things is that we're moving into this period of time for PER where everyone is worried about these warrants and the new shares that are going to get issued and and potential dilution on top of that.

>> Yeah. What I would say is that we are we are already seeing the amount of shareholder value they're adding in and again this is reflected in per outperforming hyperlquid not only prior to the ETFs but post to ETFs we are seeing them um you know I I believe that they are going to likely trade dilution and begin to execute in their credit facility and basically I I don't think they're going to really dilute shareholders a ton maybe a little bit maybe it'll be a combination of a couple. But what happens if the market realizes, oh, we just took the credit facility and bought back all these shares so that it doesn't dilute shareholders. It actually just adds a little bit of credit risk so all those

shares are not going to hit the market. Now, you have them still continuing their active trading operation, maybe adding some more hype if we have any pullbacks or we have a a significant premium. And what I would say is that take all those factors together and the fact that all of them would have, you know, the leadership would have shares of the company, they're not going to want to dilute it, you know, they're still going to execute their operations, but they're not going to want to dilute their own position, right? They're not going to want to say like what, you know, say like, oh, well, if we, you know, go up forever, can't they dilute into infinity? And at the end of the day, they're not incentivized to do that as long as they hold their position. So, if they start selling their position, the insiders start selling significantly

and exiting, that will be a sign to maybe adjust. But, we're seeing everything set up and stack where you would still want to be long per as opposed to an ETF. And that's that's what my position is. >> James, anything to add there? No, just that it would be really interesting if people are watching per and hyperlquid and you start to see purr decouple in a way because of this like technical squeeze action which is just going to attract more attention to that and it could kind of feed on itself there just because of this the structure of it not because like it's so much better you know whatever. So, I think I think all of this is just like all these

like notches and chapters to this story and I think um I think it's just good to think about and I'm excited. We'll see how it goes. I know you guys are exposed pretty heavily, too. So, I'm hoping it works out for you guys >> as well. We're all in this together. I got one more one more question here. Uh as it it kind of feels like the elephant in the room. It's it's you know kind of Hyperlid obviously has all of these tailwinds. per has tailwinds beyond this. The elephant in the room feels like Bitcoin is kind of weighing us down >> and I'm curious and and capital flows this may contradict something that you had brought up as as you know one of the base premises of this thesis is the positive liquidity environment because

rates are not high enough. Why is Bitcoin not cooperating if rates are too low? Why are we seeing Bitcoin melt down? And can Hyperliquid and therefore PUR continue to accelerate into these tailwinds despite Bitcoin's lack of cooperation? >> I think that's such a good question because I think the answer to that is going to provide the framework for signals you want to watch every single day. So I would say there there's two things to to understand about that. Number one, um you know, sense the lows in Hyperlid at the low 20s. My view is that HIP 3 volume will outpace crypto volume on hyperlquid. And as you have a higher and higher share of HIP 3 volume

and now HIP 4 volume [snorts] relative to the kind of traditional market on or crypto market on hyperlquid, you are going to have more and more fees come from you know hip 3 traditional markets, perpetuals, especially as we move into this entire IPO phase of SpaceX and anthropic. I mean those are going to put way more volume through than a lot of crypto coins in my view. So I think at you're you're basically rebalancing all of Hyperlid away from Bitcoin right now, which is why it's diverged, right?

There's a reason why Hyperlid is up year to date so much and Bitcoin is down. And then even on the day today, right? Maybe it's dragging on it a little bit, but there's a reason why PER is, you know, basically flat to up right now. I think that's part of the thesis. Hyperlids, you know, maybe down a little bit, flat, and Bitcoin is is selling off. It's it's an indication of everyone is rebalancing not only their positions in hype hyperlquid and and bitcoin but also in their trading capital and saying you know what I want to trade traditional markets more and we're seeing that people are going from you know a lot of crypto different trades into Nvidia into Oracle into all these other things on

the hyperl platform it's all it's all there so >> I I would say you know that That's really key on that side. Um, and then yeah, the other question you had it was it was on what what was the other question? Sorry. >> Essentially, Bitcoin getting weighed down uh or or Bitcoin weighing down this market and if if we do have positive liquidity conditions, why is you know why why is Bitcoin noting that? >> Totally. So, I think this goes back to we just did a stream on this yesterday when we talked about the gamma squeeze. the the entire Bitcoin framework is connected to liquidity and liquidity has been increasing but there is no guarantee that that liquidity will flow

to Bitcoin. Bitcoin needs to Bitcoin you the burden of proof is on Bitcoin, right? Like the if it is truly a meta and the asset that it says that it is, it doesn't need anyone else to tell you what it is. It will tell you who you know who it is itself. And you know we are seeing liquidity in the system increase. Let's say we increase liquidity by a billion dollars. That billion dollars investors have to say where do I want to put this? Do I want to put it in Bitcoin or do I want to put it in Nvidia or do I want to put it in these AI plays or the robotics play? Do I want to save it for SpaceX? And you know, capital is never evenly distributed through the financial system. And so, you know, Bitcoin has not proved itself as a disruptor in this

cycle. It has not proved itself as a winner take all for the amount of change that is taking place. It has all been about the AI trade now robotics now a lot of uh you know especially capital moving out the risk curve into the Russell where it the the Russell is the primary beneficiary of all the capex spending that's taking place and that's why you know I think even on the dayto-day it's outperforming you know tech names other other other kind of changes as well. So I would just say that Bitcoin the the burden of proof is on Bitcoin if it's truly a signal about the state of monetary conditions. It is telling you that it is not providing

excess value above the current change that is taking place. And so we would need to see a shift for that begin to to unfold. I think that's something that a lot of people don't want to hear, but that's really the the the state of things, especially as software. So, think about it. The most disrupted sector in the financial market over the last year has been software. And now we're bidding back up in software and Bitcoin is diverging from software now, which tells you that even when we're repricing some of this disruption in the software space because everyone realizes you need better data to train these AI models, even with that change and that

repricing, Bitcoin can't catch a bed, which shows its inability to adapt until we move into a new market environment. So, it's not to be bearish Bitcoin. It's just to say that it's not providing enough robustness to the disruption taking place and it's telling you that in its own in its own kind of testimony for how it's relating to other assets. >> Yeah. Uh, a good friend of ours says that Bitcoin is the most honest macro asset, which is quite interesting as it pertains to what you're saying. James.

>> Yeah, just just on that note, I think that was a great technical way of saying Bitcoin is struggling to find the narrative, right? Like we're always latching on to these new correlations, these new fractals, and then they fall apart and we go find another one. So, bit I like that framing of like Bitcoin will tell you when Bitcoin matters and right now it's telling you that it's just not at the forefront of a capital allocator's mind. But to your point, Rob, I think it is important. Like, do you remember a couple months ago when everybody was talking about, wow, like this was a 7 million $7 million fee day on Hyperlid. This was an $8 million fee day on Hyperlid. We're seeing two and$3 million days pretty consistently. But like if you do catch a bid in the crypto

ecosystem, we're going to start seeing those posts again during like IP like imagine Bitcoin bidding, alts bidding, and IPO season, the the types of fees that we're going to see out of Hyperlid. And again, this goes back to what we were talking about. That's going to feed into the ETFs. That's going to feed into PER. That's going to feed into this whole thesis, right? So, I do think it will help uh buoy what we're doing now. And you know, every day I look up at the sky and I wake up and I think like is this going to be the day? And then I come in and it's just like I sapuku myself at the dusk. So, [laughter] >> man, um you know, one of the one of the things there that people used to say about perplexes, right? you know, we had DYDX and they kind of had their

tokconomics not in the right spot. GMX kind of did some things right but couldn't get all all the listings right. Hyperlids, you know, it's kind of learn from from a lot of these previous iterations. And um the one thing that that people, you know, would say is that Perpex's struggle in bare markets because their fees are relying on volume. But as we just talked about, right, like because the because Hyperlid has diverged from simply just the crypto market, it's it's not gone down the same bare market path as the rest of the previous perplexes because of this. And this was like easily the most important breakthrough. I had I had Shamas here like two months ago in the studio and he was like the moment that HIP3 started, you know, firing was the moment that the

entire that the entire thesis changed from our fund and our firm and just globally. And so I think it's hard to understate that. And that kind of gets me to something that a couple of the audience is is asking which is basically like do we think that Hyperlid could be impacting or could be uh comparatively with the CME, the S&P, the CBOE and ICE in the future. You know, perhaps this is a multi-year outlook and I I don't know the timeline for this per position, right? But when you guys think about the path that Hyperlquid's on and just generally onchain per like do you do you guys see this as you know not comparing to Binance and bybit but really subsuming a lot of the global financial

flows from some of the largest you know platforms and venues today. Is that too ambitious? You know what's the thought there? I think that the I think that understanding, you know, the CME, URX, ICE, all the major exchanges is super important in this context. But what I will say is that, you know, Hyperlquid is really not meant to be a zero someum game between other traditional financial exchanges. And I think it's set itself up incredibly well for that. I think the only thing honestly it's a a threat to are the prediction markets and I think the prediction markets are you know trying

to figure out how exactly they can adapt to that and um but what what I would say is that for for the hyperlquid side and as it relates to these other exchanges I think these other exchanges are going to figure out how exactly to operate and adapt in whether that's through builder codes, whether that is through arbitrage, whether that is through being able to hedge their risk different ways. I think that the entire environment for hyperl is not zero sum, especially as long as we have futures as the main product. you know, futures, futures rolls, all the volume that's in there.

You know, if you trade the rules, if you follow all of the the flow that goes across those in the order book, you [snorts] know that there's, you know, a lot of different arbitrageages taking place between different exchanges, between different products and there is a unique contribution that Hyperlid has that, you know, you know, the CME and URX, they have advantages that Hyperlid doesn't have and vice versa. Hyperlquid has advantages that they don't have. And so I think what is going to be very powerful are all of the builders on the Hyperlid blockchain that understand how to merge the two. And those people are going to make an

astronomical amount of money, >> especially if they integrate it with builder codes so that someone can actually have margin and have, you know, post margin at the CME or their broker and be able to have that margin still operate on hyperlquid or onchain or something like that. That'll be really revolutionary for how margin and cross collateralization and your you netting out of of of uh of your balance sheet for your trading book works. And so I view it as very positive sum. I don't I don't view it as negative sum.

>> And I I think it's only going to add value to the CME and URX. >> Guys, last thing for you. I know you guys have had a long day already and you guys do the show every day. So appreciate you rocking with us. Um I think the Wall Street Journal put out a a article today that said I think the headline was this crypto trading platform has become Wall Street's convenience store. And this is kind of going on what you're saying here. Um, capital flows with kind of how they could be like intertwined and mutually integrated in a beneficial way. Like is that the narrative right now? You guys think is with the largest trading desk, the largest allocators is that Hyperlid is is kind of like this like toy almost.

It's like this 247, you know, always open bodega. You pop in there, it's a Pakistani guy. He knows your name, you know his name, he knows your order, you know, he's always open. He he you always get the same good bagel, triple egg, cheese on rye. Like how do you guys think about this like convenience store narrative? Close us out here. >> We're in different parts of town, brother. Um [laughter] um you know, here here's here's what I will say. I think that hyperlquid is still misunderstood.

And I think that the the the entire institutional trading space is aware of it, but they can't talk about it. But I think that a lot of people want to be able to get leverage and pay the funding rate and be able to have more efficiency in one getting leverage and two being able to execute and hedge their risk on a different platform especially as it relates to over the weekend. And what what what I believe is that the funding rate dynamic on hyperlquid is the thing that and especially with with perpetuals differentiates it pretty significantly

because once you have you know funding rates are all over the place right now in hyperlquid right and that's actually tells you that it's not as efficient market as it should be right because if those were you know efficient they would probably be closer to the margin rates that you pay either in, you know, in your brokerage account or in future roles with with futures. Um, and and the and the yield the the um futures role basically yield extraction that you can have and the premium in that. Um the the entire thing that I think about for hyperlquid is the fact that you have this place to use leverage and it is based on the supply and demand in the

market and the you know once you have these large shops come in and start arbing the funding rate in the same way that you have um you know different carry trades or you know the entire um you know uh basis trade in you know treasury markets and things like that. Once you have that come in, people are going to come in, extract the yield. There's gonna be way more liquidity. And then you're going to have all of these large players now say like, okay, where are we going to, you know, clear through or how are we going to manage our risk?

And I I'll just say this too, we haven't, this is kind of more of a technical thing that people aren't really talking about, but if you're a trader, you really care about it, is we haven't even seen significant spoofing or, you know, people trying to float narratives using Hyperlid yet. You know, I I would say that every single informed market participant knows that you know that everyone can see what you do on Hyperlquid. And if you think that, you know, people, you know, anyone is dumb enough to say like, oh yeah, like let me just go in here and, you know, be able to, you know, put up this trade or this risk and now everyone's going to lean against that and it's not arbed somewhere else or whatever that might be. you're going to start having a lot more of those kind of like little

changes, especially in markets that you can move around a little bit on the weekend that people, you know, once you once you see these other guys and market makers and things like that in there, especially since we don't have, you know, spoofing laws on chain, you know, it's going to be an indication about the development and then you're going to have efficiency around that and you'll have some changes and stuff like that. So, I think we are still the fact that we have an absence of those funding rates are still pretty high. We're not seeing, you know, you know, that type of sophistication on there yet. All of those things indicate that we're incredibly early, but there's a ton of capital and a wall of capital that's coming for Hyperlid.

>> James, >> yeah, I'll add to that. I I think we've talked uh personally about how we just believe PERS is like an amazing product. I mean, if you guys have used them, it's it's so smooth. And one thing I've thought about personally, like as I go into my content game and stuff, is like um nobody's monetized on pers yet. Like you've had all these people over the years, they get brought to brokerages, they get brought to futures prop firms, they get all all this stuff that they've been monetized to, but there's still, you know, 100 million people who have never even traded PES before. And once they do get introduced to this, maybe the regulation changes, maybe it just grows organically. Where are they going to go? Well, they're going to go to like

where the leaders are, where the liquidity is, where the best fees are, right? And Hyperlquid is kind of set up for that, right? So, it's like I it's it's hard for me to not think that there's so much growth left in the ecosystem that it's not time to start figuring out like like who's the eventual winner. Like, we haven't had the moment yet where this whole industry boom sticks and hockey sticks to the, you know, we like Hyperlid should be a $200 billion thing. Um, CME should have a a deeply liquid PERS platform. Interactive Brokers, Cali, Coinbase, all these things. It's going to be a competitive fee market where they're like, and then everybody's got a PERPS account like then, okay, I get it. You could start picking winners, but dude,

like we're just we're just getting started in this and that like that's why I'm like, well, we found the leader. Do you not want to bet on the leader in a growing space? That's like I'm just trying to simplify everything here and like, you know, let's see. Let's go. >> Yep. Capital Flows James guys. Awesome. Um guys, you can find them at Global Flows James Rosenthal. They are live uh every day about two hours before us. So you go straight from them. Get the markets alpha. Come here for the bodega vibes. I mean it's pretty good morning if you ask me. Um Capital Flows James guys, thank you for joining us.

Absolutely absolutely epic session. Thank you for being so spot on here. Uh, and uh, I owe you guys a beer and a dinner if you ever come to New York. >> Thanks, brother. I really appreciate it. >> Look at you try to walk back the bodega thing. No, you went to you you you went there, bud. I I'm excited. I'm from uh I'm from upstate New York. I'm from Syracuse. So, I I I'll get there sometime. Come visit. >> There we go. We'll see you guys there. >> Thanks for coming on, guys. >> See you guys. >> Cheers, boys. >> Wow, that was so bullish. And of course, while while this is happening, PERS ripping, Zcash is at 622. Hype's back above 72. PERS almost back at 11. Chad

is firing, guys. We've got Mando coming up. Mando is also deep in the markets. I'm pretty sure he's on the near trade with us. Pretty sure he's on the hype trade with us. Don't go anywhere. We're gonna get Mando up. This guy knows what he's talking about. He I think he made about $20 million in 2021 on NFTTS and and and DeFi. So, he's definitely not swinging small amounts of cash. Um Rob, that was so bullish. Yeah, I mean I uh I really like the dynamic between both Capital Flows and James. Uh you know, it it obviously Capital Flows takes a much more fundamental, much more macro uh holistic view. James coming at it, you know, more on the micro structure, looking at uh,

you know, lots of things and and watching, uh, watching, you know, some of the some of the technical analysis as well. So, I think they balance each other out extremely well. Um, and and it builds a complete thesis and that's one of the things that, you know, I think you and I share as well. When when you have kind of two philosophies, two perspectives on a particular market, if those two harmonize [snorts] together, you get something that could be really, really lucrative. And this is this I mean this is true of you know things in general right all the way down the scientific method if you're able to replicate results it's more likely that that result is true and it confirms your hypothesis and so if you look at the fundamental and you look at the technical you see these two matching up uh that typically creates a very very

interesting picture. I'm curious to hear from Mando because >> he's got the technicals he's got the fundamentals and this guy's got size and he's bullish and I think he's in the right positions right now. Let's bring Mando up. Let's get him started here back on the roll up. James has me ready to run through walls for per Yes, me too. Mando, welcome back, man. Thank you for uh for sticking with us. It was a per bull session that you just missed there. So, >> yeah, the gamma looking good. I know OSF. >> Apparently the gamma squeeze is looking >> gamma squeeze is coming.

>> I don't know what that meant. >> I So, are you um are you long near? I mean, the thing looks great. Zcash, what is it? 624 right now. Kind of sailor's sailor's demise seems to be Zcash's like chance. I don't know. Um, how are you reading things out there? >> Yeah, I am long, but I the majors do not look that good right now. >> I know. >> This is the elephant in the room. >> Yeah. So I um hype I mean we made each other in Miami and I said like hype's been was my bag for that period and it still is my biggest bag. Um what I have bought is is near [clears throat] quite a lot of near

actually in the last in the last month or so since since Miami actually I was on I was on a stage with >> Michael Vander something do you you know this guy the trader? Yes, Michael Vamp. >> And he he's like more of a technical trader, but he was telling me about it and then I looked into it and I was like, "Wow, this is this thing is the truth." Um, kind of this move from them being just a performant L1 to having this having this uh control over some of the biggest like DAPs on the chain and those starting to really pick up in terms of revenue. And then honestly, then I started using Near Intent and I was like, "This is an incredible product." like this is not just this is one of the best products I've seen in crypto since hyper the idea that I can

swap any coin to pretty much any chain privately. >> Um really fast low fees it was like this is this is really good and honestly after that like I actually I didn't get bearish on Zcash but I was like I don't really feel like I need it. Uh I feel like they built something here which is which is really good and is is probably built for agents as well. So it's built for like the the next stage of let's say blockchains and I got very bullish on that stage. I did I did message Ilia on the the 9th of May saying Ilia I just bought a big bag of N. Didn't reply. He didn't reply to me. [laughter] >> We'll get you connected to Ilia man.

We'll make sure that he knows that you're uh >> you're part of the inner circle. >> Near's a big partner of the show. They they power our weekly AI segment, AI super cycle. So we are we are friends with the team. We're big fans of the team. Been tracking them for quite a while. And it it you know something that occurs to me just now is that you mentioned Zcash and and Near sort of you know your growing interest in Near has kind of led to a lesser interest in Zcash. I I I'm sort of seeing them almost as like this privacy AI like next generation Bitcoin Ethereum, right?

Because Bitcoin is fundamentally it's just kind of that's it. It's the asset. It's the money. That's it. Ethereum is a smart contract platform. Near is like the smart contract AI platform. Zcash being like the confidential privacy money, right? I I think that's sort of the the balance between the two, but I'm curious if that if that resonates with you. >> Yeah, it's actually it's a similar parallel, but to be honest, like I kind of just want money when it comes to privacy. Um, and like I still think DKS is a bit clunky with the wallet and just the architecture around it. Like >> I don't know. Just go use near.com and tell me that this isn't like the best product you've used for for privacy. I feel like why would I need anything else?

>> So I got very bullish on it. And the fact that they they've kind of >> this is what I think L1's kind of need to do here. I've been very bearish on the L1 trade, but they need to basically get their core devs, building these these core apps essentially, and then directing the protocol revenue uh that protocol revenue to buybacks or at least allowing um your L1 holders to benefit in some way. N's done a really good job of that. Um, and I think Salana tried to do it recently with this, you know, the the move from totally to build a per deck. And I don't know where that ends, but I think a few a few of the major um or few L1s are now realizing they're after hyperlquid and um that that's the kind of move and I think N was kind of

ahead of the game with when it comes to some of these AI integrations and then privacy. The three strongest narratives I think in crypto right now are are privacy, prediction markets and and peri kind of feeds into all three of them. But um and I think Nia's got this privacy one actually. I think that's the strongest story. So my view and if you look at the you look at actually per met uh volume metrics like those are kind of edging lower. If you look even hyperlquid revenue >> y being honest here it's going lower. It has been going lower for a while though obviously if they open up in the US >> you're talking about a parabolic increase from retail institutional flow.

So um and of and like I think it deserves like a very high multiple even even at that level. But if you look at the this move into privacy all of the near intense metrics are kind of heading up. So I think it's one of the strongest stories right now. It's a chart which looks like it got beaten up for a long long time and now they've done this pivot and they're doing buybacks with the revenue and I just think this this thing could could really uh fly. So hype and hype and near are my two biggest bags. I I do have a small bag of of lighter cuz I like Kane.

>> Um and >> got a little like uh massistic party you there, you know, don't we all? I mean, come on. But that one's more I think they're just a decent team. Like if you look at a US-based team that is building per there aren't that many. >> Um obviously to to was building building one for Salana, but it feels as though the lighter team are based in Miami, friends with the like Robin Hood/Citadel crowd. like >> y >> there is a there is a path there that if you get the clarity act and you get a push for like decentralized per need to jump through a few hoops I think those guys are the way that they've set it up

with the with the L2 and the >> slightly more decentralized than hype or quite a lot more decentralized than hype in many ways and using ether as the security layer like I think it's got a shot so that's like my outside bet and the metrics the metrics themselves look decent as well because they're doing buybacks But that's a much smaller BL. I still think Hyperl is the play. I still think that's that's like, >> but >> and we just had the guys on from uh Capital Flows and they're just so ungodly bullish on PUR as like the main expression for this trade.

>> Yeah. >> Um which is interesting. But Near looks amazing. I mean, Near just retraced that full entire dump from Bitcoin. And it I mean, I think you said looks ready for new alltime highs. Um, I literally was on the show yesterday, took a bathroom break, bought bought more 255. I mean, this thing this thing gets to five to seven, I think, in any sort of world where Bitcoin isn't going straight to 50K like this month, >> right? >> Yeah, that is the question is how how do we react like at what what levels are we watching on Bitcoin? What things could happen here that kind of signal to us?

Because it seems one it's going to go one of two ways, right? If Bitcoin goes, Bitcoin seems like it's going lower and that's either going to take the rest of these things with it or people are going to jump out of that Bitcoin bandwagon and they're going to jump into Hyperlquid NE and the rest of them. >> Yeah. Yeah. So, it's probably a shrinking pie, but like you have winners where people like are jumping. You have relative winners in that in that pie. I think it's difficult with majors right now because I I've been pretty vocal about Sailor and that I thought it was just not good for Bitcoin. what was going on with the 11% buys and that >> this cash was going to be an issue >> and then it's it's going to come to a head like um I said it a few months ago

but he's either got to sell Bitcoin, he's got to sell more stock or he's got to turn off the the divvy for for that for that pre and I he's got about six months of cash left. So I think he's got about three months to make a decision basically. >> Yeah. And I I don't know which one it's going to be, but I think it's going to be messy. Most the most likely thing is messy for micro strategy holders. I think Bitcoin probably is okay in in in all scenarios, but it just feels like a messy scenario. I don't know how you can underwrite massive size. This is what I was saying to I was speaking to a trader yesterday being like, I just I don't know if I had like tens of millions of dollars in Bitcoin right now. Like, I just don't know how I could underwrite

that with what's what's about to happen for a trade. That is Salana. >> Yeah. Salana feels like it hasn't made that pivot to to the although it's you know has a lot going for it. It hasn't made that pivot to the L1 kind of benefiting from the buybacks. It still has high >> inflation and then you're now actually approaching the levels where all the FTX sales happen for for those right like um the unlocks have happened but I think the the lowest sale happened there around 63 and they're they're four year locks. So you're talking about like just a lot of sell pressure on any in any bounce. That's why I think Salana has been like almost just going sideways because all these VCs that bought it

last year and and the year before are now they kind of just have to keep selling >> if they haven't already. And then ETH ETH is just kind of it's got a very high valuation. I think it it's difficult to justify like it doubling or anything like that. So I think people are looking for these smaller stories where they're tied to a like a parabolic narrative and there's a few of them. There's the the per narrative of which I said hype and and and lit. There's the the privacy narrative which I like Zcash but I just think N's going to destroy it. And then not destroy it, but I think it's as in I think N's going to be the trade of of that of that privacy narrative. And then >> and then prediction markets I think it's you're just kind of farming right now.

So >> yeah. So it is just interesting that um you know Zcash's whole MO right is like this private payments private store value asset. It's really the private store value asset but you know what people actually want from privacy is the ability for me to send you a stable coin Mando in a private fashion and you not and I don't want to be sending you payments um in Zcash or an Ether and Bitcoin. No, no, you want to do a stable coin payment private and that's what Near Intense does. I think we have it on the screen. Leo, let's pull up the um level privacy that's one thing I would say there are levels of privacy like it's ZK Zcash so like you actually don't >> like NI is private in a way that and

they even say this like if they have to give up the data to the US government or government investigates they can that's not the same with ZK ZK is like fully um Zcash is like you'll never know where where that went um like you know where when you move money to near intense like you can see that transaction cash. It's not not the same with Zcash. So, there are levels to this privacy. So, you could say that like Zcash exists for that next level of privacy where you don't want anyone even knowing that you've even sent the the funds, right? >> Um but uh but I think near intense for all intents and purposes like for what most people want for privacy, which is like people don't want all their wallets docked like >> Yeah. Um, I think it's going to it's going to be a very very strong and I

have to say like it's because I started using it and our businesses now use it like we use this for >> for for years for some of the other businesses we do. So it's like >> once I started using something like that that I was like well this this is just what we've been looking for. >> Um and I think that that was kind of the light switch for me that this is like a product which is um is really going to be a game changer. And you know, we've we've talked about this quite a bit on the show, but you know, obviously Near built out this, you know, this L1. It powers a lot of, you know, blockchain transactions here, but all of that was kind of a side quest. Like I like to think of Near as a AI first company and it built out the blockchain because it

needed a place in which agents could start to interact with one another. Uh, and they've built out some tremendous products on the on the way to ultimately a flourishing uh AI agent ecosystem. And so Manda, we have uh if you click on our tile here, you can see this Dune dashboard that I I find really really good for uh near intense. And you see that there was actually the largest volume day of the entire month happened uh just on the at the last day of the month on on the 31st. Um and it blew it away. 100 mill 100 plus million dollars.

Um >> I was looking at the TVL one. the TV ones, the the real life. >> Oh my goodness. >> So that's right here. And so what is happening in this chart is that they're continuing to grow the amount of assets that are embedded into this protocol and they're all confidential. So it's growing the privacy narrative. It's growing the entire base of private assets that are able to proliferate to the rest of these chains. >> Yeah. So this is my my point. I there is no other chart in crypto that I've seen that looks like that right now. >> Like particularly cryptonative like Yeah. if you're talking about tokenization, but like something that is purely just about crypto assets and you see something like that, you go like wow, okay, and they haven't done the whole RWA thing like imagine swapping swapping those uh on something like

this. So, you kind of start to think that wow, they've built something here which is really got a product market fit and you if you bring up you could move Bitcoin to USD on Salana and it's it's done the private transaction for you. Yeah, you can see which assets are generating the most interest here. Near uh stable coins, Zcash, stable coins, and Bitcoin like those are crossf functional ecosystem. And you mentioned, you know, the RWA thing, which is pretty much what spurred Hyperlid into the next generation of growth. Like the stratosphere of Hyperlid that we see today is fueled by HIP 3. Yeah. I think what you're pointing to is that Near could have a hit three moment where they turn on support for, you know, gold and and some of the tokenized assets that

are currently moving through, right? You know, the the token they have Hyperlid as one of their chains you can you can move to and from like they have built an incredible product here. This is what I'm I'm basically getting at. I didn't get this excited about a product since Hyperlid because I was like, "Okay, this is what I was looking for." And I haven't seen anyone build a privacy deck like this before. crosschain. It's really easy to use. Um, >> look at the fees. My >> and I know they sponsor you guys, so I [laughter] don't even I didn't mean to [ __ ] at this so hard, but like really [ __ ] good here. So, >> disclosures is all you need, you know?

>> So, I'm uh I'm bullish on that. And I think those those are kind of my narratives for the for for for the for the bit. I I really just stick to like the coins that like are the breakout ones. And I think it's kind of easy to spot those coins like we said like they're kind of different to the major narrative. They're more DAP narrative with buybacks in a strong um in a strong sub sector and there's only a few of those. So I'm sticking to those majors. I don't know. I think Sailor's the Sailor situation is not nice. >> Yeah. Uh Rugrat says Zama is the unicorn when compared to all other privacy players. I know Zama's uh doing something pretty cool upcoming with a very similar product to near.com. Uh but specifically for like stable coin

payments um you can just send confidential stable coins across different EVM uh wallets and that's coming out soon. Uh >> one thing I would say there are some people who will do this but like >> hyperlquid didn't just win on being the first per deck. It wasn't >> hyperl was like the 10th like we had loads before that. It was because it was a really good product. The UIUX is really good. The fact you can move to to many changes is really good. That's what I think they've done here. They've got a really good product and I think if they continue to build out that like that they'll win on that.

>> Amanda, one more thing just to add into this this near thesis. So, we we had Ilia and we had Arthur Hayes on the show at the same time. Uh kind of, you know, we were reaching the end of the uh of the um uh podcast and we opened it up so Arthur could ask Ilia a question because he's kind of building this near thesis too. Arthur asked Ilio when he plans on making near deflationary such that you know there's no more proof of stake or economic inflation and we end up with you know uh quite a bit of burns and buybacks here. He said by 2027 and so like less than 18 months to kind of get the near intense flywheel spinning to such an extent where they're generating

enough volume generating enough fees and using that to buy back burn and take inflation off the table for near and you end up with this engine that is fueled by real growth like the real activity of the platform is ultimately spilling that value back into the token and they're reducing inflation at the same time. that felt like it put a a target out there in the future to when we can expect a uh we can kind of expect a path in in in working towards this. So this adds to what we see because obviously there's you know the supply demand dynamics. We're not only generating this volume, generating these fees, but we're also taking inflation off the table. So

this value flow between the token feels like it's really starting to even out. And it it seems as if this is one of the few tokens that's doing this. Obviously, Hyperlquid is out there. They're generating a ton of revenue, putting it back into the token. They're un there are unlocks on Hyperlid, but they don't really seem to do much with those unlocks. Not many other tokens out there that are filling into this this category. You can look at Veneer chart like it hasn't been a pretty scenario for a while. like you have to give credit to that team to essentially going like right we we've seen how what the model that works and we're going to switch to that. Um and they obviously IA is clearly a very very smart person like he was one of the he seems like to

be one of the smartest L1 founders out there and obviously has a background deep background in AI. So but to catch up on like privacy being the narrative um and and build helping build this out I think was very very key. Obviously, they're doing other stuff. I I have to say I haven't ventured or that isn't as crucial to my bit of a story, but for other people, it's like that's the story. Like the whole ironclaw um performative for for AI agents, it's like it's it's being built with that in mind. So you kind of think like if they've got a buyback model and they have that AI um kind of let's say more equity style story for for for the chain like about building out future apps which which could be very performative and they now get that this is how you

build like this is how the L1's got to be from now on. all the unlocks have happened, right? So, you're really just looking at now inflation and they've dropped the inflation and and if you're telling me that it's going to be deflationary by by next year, like, yeah, I think this is there are just not many stories like this. Like, I'm trying to think of the other L1s that you've heard about for the last like few years, like I don't know, uh, Avalanche, Algarand, like you can name you can name a lot of a lot of different L1s. I haven't seen any of them do this, but this is the smartest thing I've seen from a L1 which has kind of reached the end of its token vesting and they said, "We're going to keep going. We actually going to pick up the mantle and build

something incredible here." >> There's um obviously a lot of this was spurred off by like Venice, right? Was kind of an early riser in this market as well. And Near and Venice actually work pretty well together. And there's someone in the chat here, Rugrat, is saying, you know, how does Near plan to handle private a AI to AAI transactions without exposing sensitive data? you know, could FHE solutions like Zama become a core privacy layer? I think this is indicative of where we're going, which is that these privacy functions end up fitting together. These are layers that end up stacking nicely with one another, just like how Near Intense helped open up the Zcash ecosystem. Near itself is helping route Venice uh models through a TE so that they stay confidential. And I think that is going

to be true of AI to AAI transactions as well. And you kind of mentioned, you know, there's levels to this privacy thing. You know, that only gets you so far. There are additional steps that you can take to to in in essentially lock down and secure your data to the extent where you couldn't even, you know, give it up if you got subpoenaed by the US government. And I think as we layer more and more of these things together, those, you know, extra privacy functions become enabled. >> Yeah. And you see that from the institutional side in the US that they're all kind of getting on board with the near thing because they realize that this has been built for kind of a more not regulatory friendly but this is something that is passible you know it's it feels like it's it's got the privacy

that you need but you know um will still fit the rules somewhat. So, look, >> I spent a lot of time talking about NI because I think you probably everyone spoke about liquor before this, but I think >> I think it's I think it's the best play. Uh uh >> things ready, Mando. >> Alongside uh alongside uh hype and >> and yeah, I have my my small lip back. >> Good man. Well, Mando, thanks for spending some time with us. Um we are we find ourselves in an interesting market, right? And I think it's funny that for the last while a lot of us in, you know, like the typical shows like the Thread Guys and the Ansoms and um us and you and a couple of these other like kind of more like guys that stuck through it through the bear and like we're trying

to find opportunities. We're now kind of like all on the same thing it seems like at least. So we're kind of like three threeing right now. Nike and a couple others. It feels like we're three threeing. >> There's not that many stories out there. So if you and if you stuck around, I think someone said this the other day, which is like you think that you're in a consensus trade, but that's that's just because there's nobody here. But like if a story starts to pick up and you draw in interest like Hyperlid just has you suddenly realize and then CT thinks it's it's a crowded trade and actually suddenly CT feels underexposed and it moves from 45 to 72. Like it's if you start to see any sort of external capital move into crypto for any of these sort of stories, >> it's

they can really go >> born ape level. Buckle up, buddy. >> Exactly. That's what we're looking for. [laughter] >> All right, man. Have a good rest of your day, man. Have a great evening. All right. >> Bye. >> Thanks, buddy. Cheers, man. >> Oh, yeah. Oh, yeah. I mean, two bull tards in a row. Let's give him some love for that. >> [laughter] >> guys on the on the thought of hype Zcashneer per I mean the one thing Rob that a lot of these have that is you got to be excited about in the current market is that there's fundamentals at the forefront >> and you know you guys in the chat are asking about revenue about privacy about fundamentals about gamma squeezes like

we're talking about real things here and who's next is K is the founder of a company called RE and RE is extremely underknown in this space, has an upcoming token launch, and is a business that is absolutely printing high levels of revenue, and I think it's something that you guys need to know about. It is not something that's been talked about at all really in the space. Um, they are still very, very early, but their business that is not necessarily like onchain entirely, but it's a combination of offchain, onchain, is is making a ton of money. And so we're gonna find out what that is, how he plans to, you know, get the community involved, what that even means, and yeah, just kind of like how what it's like running a business that makes, you know, eight nine figures

on an ARR basis and how he's bringing this into the uh, you know, kind of crypto digital asset space. Something that I think again on this show we're going to keep pushing like fundamentals, business, how are you making money, how are you giving it to token holders, etc., etc., etc. So Khan's going to be a good one. Let's bring them up and let's get started. It's been a really really bullish show so far. Kin, welcome to the show. Good to have you. >> Yeah, thanks. Thanks for having me guys. Appreciate it. >> Absolutely. Thanks for coming on. >> It's like a busy traffic day out there behind you.

>> San Francisco. >> Oh, yeah. >> Well, Carl, we've uh we've been, you know, quite a bit focused on sort of the the you know, for a while Andy and I were very deep into the technical side of this world. you know, we dig into, you know, blockchain architecture, these sorts of things. More recently, we've been focused on the financial elements here and that has been, you know, talking about more hyperl today, uh, and and and sort of the near intense model today. But there's a very strong fundamental thesis around the financial elements of something like the reinsurance market as well. We were also in Bermuda for the Salt Conference.

There was very strong uh, insurance markets there. So, I'm very excited to uh to hear a little bit more about, you know, REI and uh how you guys are making an impact on this market. Uh before we dig into, you know, REI and reinsurance, maybe just a little bit about your your founder background and how you ultimately ended up founding REI. >> Yeah, for sure. I mean, I've been building businesses since my mid20s. Uh ended up at Shopify pretty early on. Joined Y Cominator about a decade ago to start an insurance company called Cover. bought reinsur bought reinsurance as kind of part of that process and then decided to start a reinsurance company.

So if you guys aren't familiar with what that is, I run an insurance company for other insurance companies quite literally uh are kind of like a capital lake or the ocean uh that uh insurance companies which are the boats sit on top and kind use us as a source of capital. >> Yeah. Beautiful. And I mean one of the things that the market is reacting well to Kin is making money and you guys have a very very solid business. Can you maybe just explain how the business side of reinsurance works specifically with what you guys are doing at RE Protocol.

Um and then kind of tie in like why being onchain or why having kind of like a DeFi aspect to your business contributes to kind of like the grander vision here. >> Yeah, for for sure. Look, I I think um if if you unpack when you buy an insurance policy, what are you buying? you're buying a promise, right? Something happens, you get paid out. The the counterpart to that is there has to be the capital there for the for the claim to be made or for people to trust that you're going to fulfill your promise. That's the basic premise behind any insurance business. And it is most elegantly represented on chain, right? So anyone in the world can see exactly what capital we have, what our solveny position is, that we're good for all the promises that we make. And that is particularly effective when you're

talking to insurance company customers who rely on you for that capital and to regulators who are looking at you to be sure that uh you know you're meeting your solveny requirement u that policy holders are not going to be left in the lurch and that you can kind of continue to scale in that regard. Um, so we thought of it as the most elegant way to build a reinsure completely transparently and then building this new plumbing into DeFi that takes in stable coins, funnels those stable coins to insurance companies that are regulated and those insurance companies go out into the broader world, sell insurance policies to every conceivable business person uh and entity that's trying to conduct commerce or engage in the real economy. Right? And so uh that's that's quickly my journey. Today, you know, we are at about 410 million in in total

book. Uh we've touched 700,000 policy holders across the United States. So, we're we're in the background. We're the plumbing. Um we're we're probably of the most size and scale of that at least with real world impact that most RWAs or D5 protocols have not yet touched. Uh but it is it is really meaningful. People can get to work because of us. Uh people can buy homes because of us. People can start businesses because of us. And Carton, could you describe why it's helpful to have the reinsurance market onchain? >> Well, it's the transparency, right?

>> Yeah, it's actually also a coordinate an act of coordinating capital and capital flows, right? So, if you think about the risks that are being taken in the real world, those need to be matched up to capital one in a transparent way, but that plumbing um you know, there's really nothing special about the capital like capital can form in a unique way like it does on chain. But this is a repeatable process that should be readily observable by any anyone in the world. Like if you have a computer, you should be able to say, "Hey, there's this massive lake of capital that supports all re real economic activity, right?" Um and so so that you know primarily the most elegant thing, but if you you pair back even further, this is a space that um has not been the most adoptive of technology. Super

conservative, very regulated. A lot of the business gets conducted over email, phone calls, brown liquor, spreadsheets. Uh, and so if you're thinking about how how do you get to a point where you just build this machine that is able to accurately price risk and enable risk-taking, you need to be able to get all of all of insurance and reinsurance on chain. So that's like you sell a policy, you capture information, that information percolates all the way down to the capital provider and kind of the most elegant technology forward way possible. get better pricing, get better underwriting, get better results, you completely refactor this business and it's trillions, right? It's not it's non-trivial.

>> Yeah. And so you guys have about you said about $410 million on the book right now. Um, you know, kind of looking to continue to grow that. >> What does that what does that mean from the business uh perspective? Like what is the value capture of a $410 million book? And then what happens as you guys scale you know into the billions for for this reinsurance uh you know company what is that what is that how does h how does re protocol the company capture value and this will lead us into you know token and thoughts on you know creating a sustainable business on chain.

>> Yeah for for sure. So the pro the protocol itself um the right mental model is Lloyds of London. Many of you may not be familiar with that, but it is a massive insurance marketplace that exists in London. It's 350 years old. It is a pot of capital. It's an institution that has licenses and infrastructure. Uh enables certain counterparties to trade in that market and has 72 different insurance companies and underwriters that kind of transact there. The right mental model for RE is that like while we own a reinssurer, the protocol itself is intended to be hey you pull this capital and now you can point this capital at any insurance company in the world. That is a massive idea. That's trillions in premium that could be flowing and economics that are generated to underlying depositors, right? Um and

you can do it most elegantly now and quickly now because we live at this unique inflection point where the technology exists for this to happen. So then it becomes a really really interesting and unique kind of business development effort, right? Uh and so now we're kind of starting to win this war on for onchain capital that's coming in and we're sourcing. We're also starting to win this war on human capital. So like the top underwriters, the folks who are most forward thinking in the insurance and reinsurance market know that onchain and digital capital is the future, especially in a market where you need to prove solveny. You need to prove that you have the capital and and others need to be able to trust you because the product is is trust. Um and so we're starting to win that and those folks are bringing business in, right? And so so

now you're seeing multiund million dollar accounts come our way. You're seeing all sorts of new insurance companies at the cadence of like one or two every one or two weeks join the network uh which and start to get buy reinsurance from us today. We're whitel listed now with practically every major reinsurance broker in the world. So guy Carpenter, AON Gallagher, all of these guys who transact incredible amounts of of of this business now point some of this business towards us. Um, and so it's not, you know, out out of the question, you know, we've got 410 million on the books for new business this year. We're already at about 230 million, right? Uh, we had set out the a year-long target of 400, which is which is a stretch. We're going to handily hit

that. We're likely to exceed it, right? And so now it's just a question of can you kind of continue to pummel on capital formation. Can you get the smartest people in this market both on the technology side defi uh as well as the folks who have been doing this uh this and running multi-billion dollar books of reinsurance business kind of involved and I think we're doing a really good job of both and you know as as you continue to scale this business one of the conversations that we've had significantly on this show feels like every day is you know where where that value acrews like the decision between you know sticking in the equity game or kind launching a token and distributing more of that value out into, you know, your your your network. Um, what goes through your mind

as a founder? Obviously, we're not asking you when token, if token, none of those things, but when you consider what the implications are for going with a token or or, you know, sticking and being a private company versus, you know, what what we're seeing kind of in the public markets. How do you disseminate the best thing for your business? How do you distinguish when it's the right time to start to you know kind of share value with your network via an equity or a token or you know reinvest that those proceeds back into the business to fuel more growth?

>> Yeah. Yeah. For sure. I mean this is a classic question perhaps like um you know we are best one of the best suits to answer this right like we we're actually kind of like a public utility in some sense. the product if you abstract everything away as a commodity you have like uh if you take the entire insurance market you get a beta of the insurance market and it's kind of steady state predictable um so so here here's how I would posit it right like the the beauty of REI is that it emulates what exists and what has found a market solution after 350 years right so Lloyds of London has a governance council right it dictates who can transact on that market it dictates the the common capital layer that supports the entire market. It sets the fees. Uh it it sets the lines of

business. It set it sets expansion goals. There is a direct real world analog to what we are attempting to do on chain that has taken hundreds of years to get to where it is. Right? Uh and so the beauty of it is we're not starting from zero. We're literally taking that as hey here's the fee setting mechanism. Here's how value is acrewing to the common capital pool. here's how we align economic incentives because if you're originating any sort of risk, whether you're a lending business, whether you're an insurance business, what you want to be sure of is people aren't cramming crap in the in the front door, right? And you want to be sure the people who are originating that risk are also aligned economically with the folks who are ultimately taking that risk. And so si similarly, what capital do they need to post, right? So

that there is this common enterprise kind of um idea that's happening here, right? And so the it's a good time generally speaking in the reinsurance market still, right? our return on equity for a like a general reinsur sitting in the high teens low 20s which is which is quite good. Um you know we're we're not seeing we haven't seen significant capital destruction over the course of the last couple of years especially in a catastrophic realm. Our business is very very low volatility. So if you think about what we do and why why we've approached the market the way we have we know DeFi gets spooked. We know that people don't want their capital destroyed. We know that people want safety. Um and so we're more of a law of large numbers business. All of the hundreds of thousands of policy holders are in low limit uh low you know

low volatility lines of business very little catastro to to negligible catastrophic risk. It is purely these small policies where uh as time passes no individual claim is going to move the needle for us too much. And so we sit on the lower margin end of kind of this this market. But the trade-off is we trade off upside for downside protection. And currently like that's the right configuration for DeFi. Eventually it will change by governance but that's where we're at. >> And then K if you did decide to kind of take this common pool of capital right there's a very you know as you said well doumented historical business of reinsurance and how the allocation of the capital happens.

Introducing this onchain adds that transparency, adds that, you know, credibility for 247 reserve management, uh, 247 transparency reports. If you were to think about how you would want to extend this business even further on, chain, you know, then you start to get into this token conversation into kind of like how you think about further expanding more value for your customers, for your clients, for your business. Um, you know, Rob's kind of asking how you're thinking about allocating the capital. People are very excited about like token buybacks right now from the hyperlquid perspective. They're excited about um making these assets kind of like more on the deflationary realm in terms of like the amount of emissions versus the amount of revenue kind of

flowing in. People are just wanting to have a well-rounded business behind the asset they're investing in and then know what they're investing in. So you guys got the well-rounded business thing dialed. Um what is the potential asset that we can invest in for RE Protocol? You guys are at 400, you know, about 400 million now. Say, you know, you guys get to four billion 10 years, five years. People want a part of the upside. You want to have this kind of growing distribution, this growing community. How do you do that, right? What's going through your mind? >> Yeah. Yeah. So, so I'm I'm firmly of the camp generally speaking that if you are high growth, right, and if you're growing like 3x, 5x, 6x year over year, and you're a venture venture scale business, it doesn't behoove you to do

things like throw the capital back out the door, right? like what you're doing is you're trading off like a very high uh you know outcome potential opportunity for the the vested stakeholders for something that's just cash in hand. And um you know that that would imply lower general overall multiples for the type of stuff that um you know should exist or is happening on on chain today. And so as as long as you think and this is not not a re specific thing, but if you think of this as a founder, right? If if you think that you can continue to add value and grow to clip and generate an ROE that is well in excess of what the market can deliver, then you should continue to pile in. Not only should you just do do that, you should tell the story and and back up

the story with the numbers, right? Like if you're growing five or six year over year and you're spinning off hundreds of millions in free cash flow, it's a good story, right? Uh and you can take re as a stylized example of that uh you know doing hundreds of millions in topline and then you can take a look at reinsurers that are spinning off billions in free cash flow a quarter right that would if you think about like if we were to decide like okay there's a switch here government has to decide there's a switch here there's buybacks there's an a huge amount of capital that's available to be able to do that kind of that kind of stuff right well whether it's prudent is at that point in time is ultimately a a decision you need to make that says, hey, what's the growth track of the business? Um, you

know, what are the potential opportunities? Uh, and if it makes sense and it's prudent to return capital, you absolutely should as an operator, right? But that is like on a case- by case basis and depends on kind of what your growth track is and whether you believe you can continue to generate value. That's it. >> Yeah. >> Yeah. Make it makes sense. And and you know what I think uh I I think honestly Andy's pro projection is a little f is is FUD. you know four billion in five to ten years. It feels like the the multiples here are such that you know we will see a liquidity effect where liquidity begets liquidity and there's a coordination of capital that ends up coming on chain and it ends up bolstering the reinsurance protocol and and you know when it comes to everyone

who's listening and they want exposure to this uptrend and you know maybe they're not in a position to you know participate in venture capital you guys aren't raising another round and so this ship has already left the the station but you mentioned how the reinsure businesses are spinning off so much free cash flow. We had um one of one of our friends of the show, Santiago Santos, who's kind of doing an in, you know, inversion capital looking to buy companies and implement um blockchain technology uh in a more private equity fashion to kind of bolster those businesses. That's effectively what's happening here with reinsurance. And we don't necessarily need to get direct exposure to the asset itself. What we can do is we can look at the reinsurance

business as a whole. We can look at some of those companies that are maybe public or out there in the liquid market and we can anticipate that they will start to adopt this technology that will improve their bottom line because it'll cut their expenses. They'll be able to make their businesses so much more efficient and and those will be the liquid assets that that our audience can take exposure in. And so I guess my question here is if I'm a reinsurance business, the Lords of London, right? I've been operating the same way for 150 years. All of a sudden there's this new fangle blockchain technology and you know car knocks on my door. He says he's got 400 million in business. What is my incentive? What can I expect as a reinsurance business as the improvement

to buy bottom line? Like what is the elevator pitch to these businesses that have been operating the same way for for a century? Is it you get in there and you say hey we can you know improve your margins by 10 15%. generally what what is the pitch to these reinsurance companies to bring them onchain? >> Co complete transparency and cash collateral which is not something not every reinsurer can offer. A lot of it is we we signed a piece of paper and we said we're good for it. Let's see you in five or 10 years, right? Um instead what you have is a direct visibility into exactly the capital that's backing the promises that have been made. Um but but I wanted to step back a little bit like the analogy I want to draw here is like if you think about it as a product,

right? Tesla went out and they found a way to like print cars at like the the highest gross margin like like kind of marginal cost profile possible. I what I'm kind of viewing this as is like I have a product of reinsurance and there's like really two components to that product. It's like what's the operating the opex and expense load that's necessary to generate this product and it's the lowest it possibly could be uh by a technology enabled company like ours which has dozens of employees as opposed to tens of thousands of employees. um and a a unique uh you know capital source or cost of capital that provides it with an edge u over time. Right? If you think about these slivers of insurance risk

that are going to find their way out into the broader DeFi market into vaults into all sorts of different strategies, people are doing all sort unique things. um as they become a much more predictable source of yield and people are starting to rely on them, you would you ultimately see uh you know a a decline in cost of capital through convergent convergence integration and something that like that's something that no reinsur in the world can compete with. Like what we're arcing towards is producing the product of reinsurance at the lowest possible cost. If it's the lowest possible cost, it either benefits the policy holder or benefits our counterparty, the insurance company that's going out into into the world and selling insurance. And let me tell you, they care about money, right? Like they absolutely do. And so and so if you

you're coming to market, you're faster, you're quicker, you're clearer, uh and you're cheaper, it's a a really difficult thing to to compete with. >> Yeah. Ken, last thing from us. Um what is the next six months, nine months for you guys? We're almost halfway through the year. It's freaking crazy. It's already June. It's flew by. Like, wow. Um what's what's you know, what can we expect? Right. people people that are watching the show are in the community. They want to be a part of, you know, high growth high growth projects, companies, they want to track you guys. What What can we expect uh kind of throughout the rest of the year into next year? What are your big goals and targets?

>> Yeah, for sure. I mean, look, uh we've kind of said this publicly in the past, but our our Gen 1 2027 goal is to hit a billion run rate, right? A billion in premium. Uh that that's meaningful. that takes us out of startup territory out of you know probably at the upper end of the scale up territory and from there on in just come comes down to like hey u integration into DeFi uh general you know we've kind of conformed to all the liquidity needs of of folks who are are operating in DeFi this product now kind of exists there's a track record we see capital form we write billions and billions in premium right there's a real shot here that this thing just eats a meaningful part of the reinsurance and

insurance market, right? Like uh if you just take if you just take Lloyds as a style example, that's one market. It's meaningfully sized, but if and there's couple equity analyst reports out, but if you just price Lloyds, that's a hundred billion dollar market, right? Uh >> and that's one of of many. Uh so so the size and scale of this opportunity is massive. It's like 12% of global GDP. this guy, man. Everybody today has just been so bullish. Bitcoin's at 68K and everyone's so bullish today. K, thank you for spending some time with us, man.

Uh, really looking forward to working closer to to tracking you guys. Uh, been big fans and I think that the market is going to be caught off sides and offguard with the scale of what you guys are doing and um, kind of like the like the rigor and the and the kind of uh, what is happening behind the scenes here. And so >> yeah, for the sake of our industry, thank you for quantifying the TAM in percentiles of GDP. I think this is a practice we should make more common. Uh yeah, and Kin, thank you so much for coming on, man. Uh hope hope you come back again soon.

>> For sure. For sure. Thanks, guys. Appreciate the time. >> Thanks, K. Cheers, man. >> Guys, what what did you think of that? Um I we don't know. So, we're trying to get to like the like the business model of what's happening on chain, how it's actually happening. Um, clearly these guys are doing large numbers comparatively to other kind of uh DeFi protocols and like I said, they're relatively unknown and so I think uh I think they're one to follow. You can find him at um I think at k_soya retocol. Those guys are doing well. So, >> yeah. And you know, I think in years past when we've talked about the business model of some of these things,

it was very much like we have this L1, we're going to follow the same playbook that L1's follow or we have this exchange, we're going to follow the same playbook that exchanges follow. >> Yeah. >> Now, we have businesses that are starting in this off-chain business world. Like, we're an insurance company. We're going to follow the playbook that insurance companies follow. But we're going to have an edge in the insurance market because we can do things faster, better cheaper >> on chain. >> Onchain. Exactly. And it just feels like a much more legitimate and and a much more sturdy thesis and foundation to build on top of uh Zama up next. Least uh c last but certainly not least, our guest today. Um and we've got some things.

>> The founder of Zama. Zama, as we said guys, uh in the beginning of the show, Rob, um they they had this breakout above that three and a half cent mark, guys. So, if you guys been tracking this, the private, you know, privacy narrative has been very hot. Uh had this breakout retesting that level. Now, if this thing holds up here, you know, it's going to be kind of at blue sky highs. They did just go through this weird USD uh USDC freezing thing here. So, let me guys let me give you guys some context as we get ran up. So, Circle blacklisted Zama's CUSDC confidential USDC Ethereum contract on May 30th. Uh, this was following a US federal court temporary restraining order tied to a civil lawsuit against overnight finance. Uh, there was an alleged rug or hack.

Basically, what happened was this froze about $13 million worth of USC in the poolled rapper contract. 99% of that came from one disputed deposit. you know, theoretically from the hacker, from the exploer. [snorts] Zama had minimal other kind of like deposits in that in that contract. So, Zama froze c USDC free CUSDT C wrapped ETH investigated cooperated and then the court lifted the freeze on June 1st. Systems fully back to normal and Zama has a has a larger kind of launch later. That's the context. We got Rand in the back. We're going to bring him up and get his take on it because this is a very very controversial conversation about USDC, their ability

to freeze contracts, who you know who they're allowed to freeze, what they're allowed to freeze. We saw the drift protocol exploit. Then we see this, this is much smaller circle did act. Ran's up here. Ran, welcome to the show. We got a lot to unpack here. >> Hey guys, glad to be here again. >> Absolutely. Thank you for coming and and you know Andy alluded to you know kind of the situation that unfolded here as well as some of the past previous incidents where circle has been in a bit of a funky spot freezing things without um really communicating why they're free freezing these things. Um Rand I'd love to hear you know kind of this story from your perspective. Maybe you can just lay out what happened chronologically and

and we can start to make sense of you know maybe some best practices for the way these things should be handled in the future. >> Right? So maybe just a quick primer. So in the Zama Zama is not a new chain. You know, we're a protocol enabling people to take existing ERC20 tokens on Ethereum and other chains and turn them into shielded tokens where balances and transfer amounts are encrypted. So, we have multiple assets that we already launched. For example, we have confidential USDT where, you know, we've had close to $200 million flowing into it already. Confidential USDC was a new asset that we were planning and we are

planning to launch a big offering around. So it was there but it wasn't really used like there was no utility for it yet. So like it was pretty empty. There was like you know a few hundred,000 of uh of deposits over time. Back in May 11th, we had a single person deposit 12 and a half 12 and a half million USDC and shield it into confidential USDC. So, you know, we see that it triggers all kinds of internal warnings when someone does a deposit like that. As you can imagine, we looked up the address. We screened it against sanctions, looked at KYT, it was clean, nothing flagged. I was like, great.

Okay. So, you know, we're gonna have to figure out who that person is because obviously, you know, this doesn't just happen in in an early stage protocol. Um, but it was, you know, it it was it was vanilla. It was fine. Um, f Saturday morning European time, so Friday evening, uh, California, uh, I basically see that the confidential USDC contracts is frozen and like, oh my god, what just happened? like you know did this circle put a blanket ban on Zama privacy like it was very scary because you know like you have to understand that it doesn't happen that typical issuers freeze contracts for protocols it just does not

happen. This just not something that we have in crypto because if you do that you're breaking composability. The whole point of stable coins is you can build on top of them. And so if people start breaking protocols without warning, you know, you can imagine if that was like a a USDC AMM pool on unis swap, how bad this would be. So it just doesn't happen usually. That's not like a normal thing. Nonetheless, you know, so I see this happening. It's Saturday. I freak out. I try to to to figure what's going on. Thankfully, you know, Zach XBT on Twitter effectively helped me figure out the the problem, which was effectively that a US court in California

uh decided to put a restraining order on the Zama confidential USDC contract because the person that had deposited $12.5 million was the defendant in a lawsuit. boots >> that was about to happen. Nothing to do with Zama at all. You know, this was completely unrelated. It was token holders of a protocol, you know, uh going after one of the protocol founders and we just got caught in the middle of it. Uh so, long story short, Circle extremely helpful over the weekend, very responsive, you know, like honestly very responsive. We talked to all the parties

involved. We worked, you know, a bunch of solutions and, you know, we had come to what think what I think would be like a good middle ground. And on Monday when we had the other hearing with the judge and we explained the situation, the judge reversed the order altogether uh and basically freed the confidential USC contract and circle immediately unfrozen. Uh so effectively what happened here is that I think you know the the judge had misinterpreted what phrasing the confidential contract would imply. Uh there were

over 100 people that had shielded USC. Granted the amount was small in comparison to this 12.5 million deposit but it was nonetheless you know 100 innocent people that had nothing to do with the case. uh that had you know their fronts held up. So that was the first thing that wasn't necessarily very obvious in the beginning. The second thing is there was a misunderstanding that Zama as a privacy protocol you know is not a mixer. Zama is not a mixer. >> Trying to hide your trail by shielding assets in Zama is not a good idea because we specifically do not hide the send and recipients. We hide the balances and amounts. It's when all of that became clear to the court, they immediately lifted the restraining order

and then you know the defendant and the plaintiffs had their own kind of like thing going on after that. So from all purposes Zama is out of the of the thing now and you know we can just move on and resume things. So I want to be very clear this is not something that should have h that should have happened in the first place and circle didn't decide to do anything you know they just complied with a court order which was unwarranted and was reversed as soon as the court had opened again.

Yeah, man. I mean, circle, man. They've just time and time again proven that they're just going to listen to what the regulators and the government bodies say with regards to freezing. And if there's not a government body or regulator that's going to push them to do so, then they will not. That that's kind of been their position. You know, Ren, you know, one of the things that I think is important to understand is how like how can we build these systems in such a way that a court order cannot brick our contracts? like is it possible in the future to have Zama's confidential technology is it solely based on the issuer that is like that is the reliance here or maybe could you just talk through a bit about

like what's gone in your mind about okay this happened perhaps perhaps I was expecting it at some point or perhaps I wasn't perhaps I was you know as prepared as I'd want to be or not as prepared regardless of kind of what happened in the past going forward how do you think about the resiliency of Zama's privacy and confidential network, you know, on the on the back half of this happening. >> Well, to be honest, if anything, I think this is a big win because we were able to get uh restraining order reversed in record time. You have to understand like these things usually take weeks or months, right? Like this happened effectively instantly. Had this been on a weekday, we probably would have gotten

it reversed the same day or the next day, right? It's just this was the weekend so we had to to wait until Monday. So first of all this is a big win because it shows that given the right u context judges you know have they do the right thing you know the judge did the right thing here and said look you know we should not freeze the money of innocent people this should not just not happen. Uh so first of all, you know, I want to say that like I was very impressed by how quickly that turned around and I would like to again stress that it turned around quickly because everybody involved circle people in the lawsuit were also collaborative in making sure that you know this was the case. So how do I avoid this in the future? Well, I

don't think anybody can avoid that if you're building on top of a token that has freezing functions, right? And all stable coins have freezing functions and they have to, you know, this is just how this is just how stable coins actually work in, you know, in the US. Um, but it's not really dissimilar to how you would what you would have if you're building on top of like the API of any web two provider. They can cut you off for compliance reasons. And so it's not really different in this case here. So I'm not trying to argue that people should use freezable assets. There there are many tokens most of them sure are not freezable and if we implement uh like a confidential token for an unfreezable asset this cannot happen. uh

but you know we want to build on USDC, we want to build on USDT, we want to build on stable coins because stable coins are driving a huge part of the onchain flow going forward and for us as a protocol servicing financial service providers, we just cannot ignore stable coins, you know, we just have to make it work. how Bitcoin, Ethereum, you know, there are some unfreezable assets out there. And so there is not a subpoena that can or a court restraining order that is able to, you know, you know, halt [snorts] the production of Bitcoin. Um, but stable coins are such there's even decentralized stable coins out there that that could uh, you know, fit into that category. Um, ultimately, you know, these are fundamental things and we have

kind of this asset first view of the world and things are built on on these assets. Uh switching gears a little bit and looking at you know the the the situation that unfolded was primarily an education issue. Uh you kind of mentioned how the court the judge didn't fully understand the way that Zama's protocol works. Um you know circle is kind of listening to the judge they're they're affecting the changes that need to be done legally in order to stay compliant. And you mentioned that you know after there was a dialogue open they were very responsive. Um, if we're looking at what best practices can be put into place, you know, Circle, I imagine, could have let you know that

this was coming so that you could maybe prepare, but it was maybe not legally in their right to do so. They might have had to, you know, act first, then communicate. But when it comes to the judge and this restraining order, how best should they communicate this? You know, in this case, there was there was this this lawsuit that was pending. Was that public information or could they could was there any way to find this out? Because, you know, the judge would have had to communicate with Circle. Why did they communicate with Circle and not and not Zama? >> Well, that's a very good one. So, first of all, I think they went to Circle for a couple of reasons. Um first of all uh the plaintiffs were not

in touch with Zama and you know for some reason did not want to reach out to us directly. The second reason is Zama is not a US company. So technically a court could not have ordered us to do anything. It just so happened that you know we want to be lenient towards uh the US because we do business a lot with US companies and so we decided that we were okay having a role in this suit so that we can unblock the situation. So I think it's just that like there wasn't really an easy way for people to figure this out. However, they could still have contacted us. And I think the way that you do that, especially with protocols which are operating on a global

international basis where there isn't age jurisdiction that applies to them is you reach out, okay, and you say, look, you know, we've got this thing pending. Is there something you can do at your level in your protocol to fix the situation? And then, you know, either there is or there isn't, but at least like there is a a conversation about it. And I think it's just that you have to understand it just does not happen that a court orders someone to freeze a protocol contract. It just does not happen. I do not think anybody had in their kind of like checklist of things to do. Is this a protocol or is this a like a wallet?

>> Uh it's just it just it's not something that happens. Uh we were just very unfortunate. It's a very circumstantial case. it does not represent the reality of the risk of being frozen as a protocol uh in in USDC or any other stable coin, >> you know, and then Rand I I know you have quite a bit of like the cipher punk roots, right? And so these centralized issues issued stable coins, they are, as you said, you know, absolutely crucial to the current environment. They are one of the largest use cases for this industry. Um do you think then that like like does this this lack of communication this event this education

gap with with the courts right all this is kind of stemming from the centralization issue? How how does this affect your view on store of value or medium of exchange assets in the future given that this is like you know the beginning almost like a mistake but there's going to be situations where there's not a mistake whereas actual pure restrictive kind of to totalitarian behavior from governments and from uh prosecutors. How does this affect your vision for Zama?

How does this affect your view for what the proper medium of exchange asset for the future world is going to end up be? So I think you know we've always been very clear that we are building a protocol and we're building products for financial institutions other D5 protocols effectively for finance to move on chain and if you talk to companies building and operating in finance you know they'll be very clear they need compliance checks they need anti-moneyaundering checks that's just how things work in finance. So our priority as a protocol is to service the users that we are targeting with the

protocol and those users are institutions and they require compliance. So we are building multiple compliance features into the Zama protocol to make sure that whoever uses it can comply with whatever you know regulation they want to comply with. So we Zam at the comp like the protocol in the company we we don't decide what compliance means you know we give the tools for people to decide how they want to be compliant in their own thing for instance one thing we did in in the CUSDC confidential USDC token is we we use something that we call um transitive compliance meaning that if circle freezes an address in the USDC token

this will automatically ally propagate to the confidential USDC token and freeze the confidential USDC of that address as well. So, you know, if Circle has to do something in the future, we just mirror whatever they do because they know better than us what compliance means for USDC or like we don't have an opinion on that. And if another stable coin provider has a different view on it, we'll just, you know, mirror whatever they do in their own stable coin at the level of the confidential stable coin. And that's, you know, I think something that we can scale quite well. you know this idea of like if it happens on the base asset we can propagate it up the stack into the confidential assets um and I want to be clear about

something you know I don't think that you can be everything to everyone especially not when it comes to privacy and when it comes to >> to crypto and you know there there is a space for unstoppable store of value Zcash just like there is a space for you know Bitcoin Z is not trying to be Zcash We're trying to be a protocol for financial institutions to use blockchain with the same level of compliance and confidentiality as they have offchain. It's a very specific segment of users or servicing and it's a very specific mandate we're trying to do here.

Rand, um, I know you guys are planning to launch this C USD USDC product and just kind of building on what you're saying with types of clientele with the focus here as well as your, you know, kind of broader vision for the space, what what does it mean to be able to enable privacy on a day-to-day use case, not just for institutions, but for everyday onchain users? How close are we on the Zama side to enabling me to do confidential payments with stable coins with ETH using just my Rabby wallet or just my MetaMask wallet or just whatever it is? How close are we to getting that done on Zama today for not institutions but for the everyday user? Is that

coming? Is that a priority for Zama? Just trying to get a bit more understanding about what's uh what's coming up in this launch. Well, I cannot tell you what's coming up in this launch yet [laughter] or if I my marketing team is gonna hate me, so I'm gonna try not to >> to okay to spoil it. Um, but I can tell you that. So, confidential payments, you know, they've been there in the Zama protocol from the beginning. uh for example when people participated in you know Zama's token sale they made a confidential USDT payment when they're bidding right so >> this is already working it's been working from day one it's like the you know the the base feature of a

blockchain protocol is to pay right so like that's already there >> uh what we haven't yet done that we're working on is integrations with wallets with custodians with exchanges with all the people that are offering the front ends that we are using day today to use blockchains. Uh and so, you know, that takes more or less time. We've got a bunch lined up. You know, we just recently announced, for example, an integration with defense, uh which is a uh MPC wallet infrastructure provider that now supports confidential tokens in their APIs for their customers. Uh we've been working very closely with fintex in particular you know uh stablecoin neo banks who are offering crypto cards so that when you pay something with your

card nobody sees it on chain because well let's be honest man like there are things that you pay for that you might not want people to know right. Um so all of that works today. Uh and what's coming next is the level above that. It's great that you can pay but you need to earn you need to swap. You need to do all the other things that an app like Revolute offers you today. And for that to happen, you have to think about privacy not just as an isolated singlepurpose thing like payments, but as an infrastructure piece in a bigger let's use stable coins for everything we do onchain financially going forward.

Um, so you know, if we do our job right, we're nothing more than HTTPS for blockchain transactions. Uh, and I and I mean that in the sense that Zama is, you know, the small lock in the corner of your browser that says that this thing is encrypted, that you don't have to worry about people snooping in. >> Yeah. And you know, Rand, one of the things that I think people are getting very very excited about is is tokenization in general, but specifically applied to assets that are tried and true and they have, you know, a very wellestablished asset class. Uh this is sort of the the hip three moment of hyperlquid right when it moved beyond just crypto assets and started to apply its technology to a broad swath of

assets. Um you know you're talking about privacy which is something that's applicable to the broad swath of assets and you have this partnership with T-Rex which I I believe enables something on the order of billions of dollars of RWAS and assets. Can you just talk us through how Oh, lost rub. >> I think he was saying talk. >> Yeah. Talk you through, you know, T-Rex and >> Yeah. Yeah. How how rwas onchain are kind of >> um so rwas I think people don't understand yet how huge that is, right?

RWAS is trillions by the most conservative estimates. But if you look more generally at assets under management of companies globally, so things that you can exchange for value in some kind of capacity, it's a $120 trillion market, right? Uh payments globally is 80 trillion. So like asset management as a category is far bigger than payments for example. And tokenizing those assets is supercharging the creation of new financial products because the composability that you get with blockchains, if you combine that with

RWAS, then you can create all kinds of new financial products that people can be using for all kinds of different purposes. So I think actually that we're going to enter a whole new era of innovative financial products that we could not even dream of in Trafy just because the complexity of you know putting together different assets. Um and so T-Rex which is a protocol launched in part by Apex Group a3 trillion dollar you know company in asset management. Um they're launching a protocol to orchestrate RWAS on Ethereum in public chains. Uh so think of them as the layer that will connect all those RWAs, allow you to trade them, allow you to issue them, to swap them, to do

whatever you want. And confidentiality is a very important part of what they do. And Zama is the partner that they work with to bring confidentiality. T-Rex, so they have a hundred billion dollar already committed to their protocol. >> Wow. So just to give you a sense if just 5% of that 5% of their existing commitments gets shielded with Zama it would make Zama the largest privacy protocol by total value shielded TDS bigger than Zcash bigger than anything else. Privacy is tiny still today compared to the enormousness of finance

moving on chain like we're going to talk about trillions like we talk about billions in DeFi today that's going to be normal. >> Um Rand just got to ask you then you know people are excited about Zama. They are very excited about Zcash right now. This idea of this shielded nature of of of shielding your Zcash. In Zama, you can shield uh your assets, use them, you know, as you said, for the initial token auction, for payments, for payroll, for anything, right? It's kind of like let's not just pigeon hole privacy into, you know, a single use case. But where does the Zama Zama the asset come into here?

Uh we were just talking about it, you know, was it was kind of breaking out bit, you know, on a small pullback here. Price action aside, where does Zama the asset come in? How does Zama become a beneficiary of all the privacy work of all the billions of dollars that are going to be coming on chain using it from the likes of T-Rex from financial institutions from large allocators? Where does Zama the asset fit in here? >> You know, I I like to not reinvent the wheel when it comes to to these things. So, we just pretty much copied what Hyperlid is doing, right? So, the protocol collects fees at different levels. We collect fees on the FHE computation. So think of it as like gas fees on confidential computation. Uh but we're also going to start collecting

fees at a financial layer. So you know if you're swapping confidential assets and things like that, we're going to take a fee on that as well. All of that is going to go towards buying back Zama tokens and burning them. Uh and then on the other side, we're minting Zama tokens to distribute to stakers of Zama tokens. So it's a it's a buyback and burn and mint mechanism. Very simple. Everybody understands it, you Hyperlquid does it like a bunch of people do that. I think that's probably one of the cleanest way to build value for uh stakers uh based on protocol usage. And so again, not reinventing the wheel, just doing something simple. The bottom line is we just need to get people to do

to use it, right? And so the fundamentals is what drives the value of Zama. This is not like a shortterm quick thing, you know? This is something we're building over the long term that we want 95% of financial transactions to be using on chain in the future. That is a goal. I can hear you.

>> Yeah. >> Institutional confidential uh you know privacy functions out there like Canton network is the one that gets a lot of attention. Um, and so, uh, when you're thinking about Canton network and the institutional privacy that they offer and then you're looking at the combination of Ethereum plus Zama privacy that you offer for institutions, how how do you separate what is the opportunity and the design choices that Zama has chosen versus something like Canton? And why do you believe that FHE and and Zama is the correct choice for institutional finance to the scale of hundreds of billions like T-Rex?

You know we Ethereum, Solana, they're trying to bring finance to their public networks. And there is a reason why a public network is beneficial because you know you get one global ledger everybody is using to transact. You get automicity, you know, you get instant settlement. You get all the advantages of sharing one global infrastructure. And the internet did that as well. You know, the internet allowed people to have one global public network on which they could exchange information and eventually do commerce and eventually, you know, AI and eventually this stream that we're doing here and blockchain, all of that stem from the internet as a public global network. But the thing

that really made the internet go from like hey I'm publishing like some blog post uh publicly to I'm using it for global global commerce and finance and AI was the ability to add encryption. HTTPS HTTPS was invented to protect credit card information when you were paying something on an e-commerce website. >> The reason why the internet has encryption is because people wanted to pay things privately on the internet. Right? And from that we start using HTTPS for communicating private information for all these other things.

Blockchain today without Zama is like the internet without HTTPS. You can use it but nobody's going to actually use it for real financial transactions. Nobody's going to use it for trans transmitting personal information for their health record for your AI prompts unless you add this layer of encryption this HTTPS for blockchain. And that's precisely the market that Zama is building. Zama is this HTTP HTTPS layer for public blockchains. And so, look, Kanton has clearly done great. Honestly, kudos to them. It's amazing how they're good at BD. For sure. We're not trying to compete on the private blockchain angle. What we're saying is if an

institution wants to use a public chain for financial financial transactions, they're going to need Zama to make it confidential. >> That's and I mean when you look at the skies of or the size of the internet versus the intranet, you can see the different sides of the opportunity that you're talking about here, Rand. It becomes when you look at historical examples for public open networks versus these private ones, it becomes clear. Rand, I'm very glad that you had this resolution quite quickly. I know it was a weekend and and I know that you wanted it quicker. Thanks for coming on, explaining to us and to the community what happened, how you guys are pushing forward and just generally like how you're thinking about it. It has become

privacy in itself has become the limelight of what's happening in the current industry for the institutional side, but also for a lot of the core ethos of why people are here um from the kind of like the cryptonative side. And so for that we we are you know for one and for two and for three excited about that. Um thanks for spending some time with us Ren. >> Thank you guys. >> Thank you Ren. See you next time. >> See you buddy. >> What' you guys think? Bullish. Zama again guys looks pretty pretty good. Um I mean let's look back at it again.

Where is it at? Still at that just around that three and a half cents mark. We you really want that to hold. Um, I think it, you know, it looks pretty good and I think it's still early and I think he's he's got a point about the difference between Zcash and kind of Canton and what Zama's trying to do. So, uh, pretty solid. Um, guys, we're going to pull up our lovely favorite site for a bit. We're we're going to go through our daily equity and a bit more. I'm going to pull up my screen, have another look at our lovely HL eco site as we tend to do here.

So, just gonna pull up my screen, Leo, and [snorts] uh rock through some of that. Rob, bullish on Zama or >> Oh, yeah. I mean, pull it part of this uh part of this privacy trade. Um I think institutional uh RWAS upwards of hundreds of billions on T-Rex. They've said that they've uh they're on a path to allocate this onchain, tokenize it. They need privacy. We don't know how much privacy they need. uh you hear Rand talking about you know 5% of that allocation. So I think there's tremendous market size there. I think they may end up splitting that up. But I do think that Ethereum plus this I mean Ethereum is where there's more tokenized

assets than ever before. Like you know you you see the success of Canton, but then you look at RWAXYZ and it's one protocol that's on test net. It's kind of fuzzy to think about where Canton is right now despite the attention they've gotten. whereas we know that there's real tokenized assets in production on Ethereum. Uh but we know that they need privacy too. So I think uh Zama is a a programmable privacy layer that can support the likes of all these assets. >> Agreed. And if you know if people want to do it on the public blockchain, then that's where they're going to do it and that's and that's a tool that they're going to use and that thing should be rerated to do that. Zama's okay. Still don't really understand the investment thesis. Feels like something that Solana will just acquire. Rugrat says he's

going to help you. Yeah, please help new type out. Let's pull the screen up, please. Um, all right. So, back at it. Per at 10.8. Uh, MNAV still at that 1.28 mark. Nothing's really changed since yesterday other than just kind of broader pullbacks. I think what's exciting though is huge fee day here for Hyperlid. Massive. Uh, this is like one of the largest um, you know, in a while, right? This is one of the largest since I mean largest feed day on Hyperlid since March 4th.

>> That's got to be a result of all the uh the liquidations, right? >> Yeah. 223 million last 24 hours. T-W looks amazing right now as well. >> Um >> TWP's a little a little >> misleading, right? >> Yeah. I mean it's a little like fleety like you you know it it's a good number right now and it's different. Someone cancels an order and then all of a sudden it you know it could change. Yeah, I agree. It is a little bit like misleading. Uh, Ruggress says, "Imagine being able to compute on encrypted data without decryting. That's what they provide."

Great show, guys. Thank you. Thanks, Rocky. Um, yeah, I mean, it is a little bit misleading, Rob. ETF flows kind of trending down. I think people are really excited about Grayscale ET ETF. I I don't know, Rob. I kind of think that the ETF buyers are have bought, you know, on Hyperlid. >> Yeah. Like I mean, I'm sure there's going to be more demand in the future. I mean, but look, I mean, they still did they've still done almost 40 million today, which is pretty impressive. >> Yeah. I mean, I I think they're going to continue. They're going to use, you know, all of these vehicles to get exposure to Hyperlid. We know this trend is not slowing down. It's accelerating.

and they're going to end up going into um different ways to express exposure on hyperlquid. think like capital flows called it like there's going to be options that are bought on this um that is going to create that gamma squeeze and I think you could end up with um and obviously you know there could be that gamma squeeze on per which would help that asset in particular but you could end up with options on ETFs and DATs right and you could end up with options on hyperlquid onchain right derive is uh you know selling options on Hyperlid as well. All of this is going to impact right the ETFs or the DAT differently,

but it all flows back to Hyperlid and that creates a virtuous cycle where ultimately spot going up is going to be the most beneficial for this on a on a holistic basis. Uh Rocky Rocky says, "Let's go Knicks." Let's go Knicks. Yes, sir. >> Game one tomorrow. >> Tomorrow. Tomorrow in I think it's in San Antonio. No. Is it is that a home? I don't know. I mean, look at this, man. You just keep winning, you know? You just you just keep winning here on this chart. Um market's getting a little bit pullback, though. Zcash back under 600 per person at that 10.8 hype under 71 again. Uh kind of looks like it's rolling over. Bitcoin just won't give anybody a break. I mean, it just looks

bad. Just looks bad. So, it looks it does not look good. Not what you really want to see, is it? Yeah, we um I mean you got to watch that closely to determine, you know, will these things continue to rally uh in spite of Bitcoin just >> like look at this thing. >> Yeah, just flopping. Um pretty bad. >> Yeah, not great. All right, guys. Back to um here on the Hyper Protocol fees. I think we're going to do our daily equity segment, guys. Um there was some really interesting tokenized equities and BBO uh conversation from Olivia Rob that I think you had pointed out for for us. So

we're going to flip to that. Daily Equity is our new daily segment powered by our friends at dinari. And basically what we're going to be doing is talking about what's happening in the equity verse, how it's happening and what's kind of coming. Right. So, uh, today it's this kind of tokenized version of this MBBO idea that I think that we wanted to, uh, give you guys a little bit of an illusion to. Um, and so we're getting a lot of these conversations from, uh, Commissioner Pur and these others. So, guys, sit back, relax. Welcome to Daily Equity. We're going to get into it right now.

[music] Yeah. Well, I mean, if you look at this and you're thinking, what is NBBO? Uh, it's national best bid and offer. Uh and so obviously uh this is what makes up uh the efficient frontier of our equities market. It's the regulatory uh necessity that when you're making a bid on a particular financial asset in a

regulated market like the equities market, you are uh it is enforced legally that you need to get the best bid available. Um, and so the national best bid and offer is the composite of the highest bid and lowest offer across all 16 US equity exchanges. Um, and you know there's oracles that are currently serving this composite on chain and it's effectively the way that they enforce composability in the equities market. Uh, they combine together all of the uh, regulated exchanges, the US equity exchanges, and they build together this composite order book across all of those exchanges. And you need to offer the highest bid and lowest offers. So the tightest spreads. They do this by effectively composing all of these order

books together across these exchanges. It's the tightest spread the market is showing and the benchmark regulators use to judge whether a customer got a fair fill. When you buy Apple, for example, through a US broker, you transact at NBBO or better because regulatory uh it legally obligates the broker to get you there. That obligation is why retail and trust investors can trust the price on their screen is the real price. Right now, [snorts] we don't have that in tokenized equities. A token that claims to represent that same share could clear the same bar. Anything less is a different instrument sporting the same ticker. And so Olivia in this post is arguing that if tokenized equities that are representing themselves whether

wrapped or otherwise as this particular share um they ought to clear at that same price. That just makes sense. I mean this sounds like the most in in like elementary school level inefficiency that we have to have on chain or else like what's the point? Like the whole point of having things on chain is to have 247 price discovery in markets. But like how do you regulatory, you know, impose that the market price on one venue on chain is the best market price? I don't know if you can.

>> Well, I I think you can do that by either uh king making an oracle uh or you do this legally and you just say everyone is going to be up to doing this in independently of themselves, but legally you're going to have to find some way to do it. So right now, obviously it sounds obvious because this gives you the best the best uh bid, the best offer, but this works for retail investors. If I'm a predatory exchange and I want to charge high fees on on um on very wide spreads, I'm not going to offer the best bid and offer because I can go clear that somewhere else and capture the arbitrage in the middle, right? But this is forcing that exchanges are uh offering the best prices. investors ultimately get uh the

win here. Uh and it seems like it's just plain obvious, but right now it's not how it works in practice. And you can see today many tokenized equities don't trade at the national best bid and offer because they they never touch the market itself. And so some of these guys may match the trades against an onchain automated market maker pool where the prices whatever the pool's thin liquidity says it is. And because these tokenized equities have, you know, they're very early and therefore they have very thin liquidity, they're oftent times much further away than NBBO. And so, you know, you may run an RFQ system or an AMM system or a PROP AMM system that we're hearing more about. Uh you may pay a transaction fee plus a spread.

And that spread may widen or uh widen depending on how the liquidity profile of the ticker reacts. Uh the venue quotes whatever it decides to quote. both produce execution that varies trade to trade against no benchmark or rule. This is what Olivia is arguing against. And I'm curious whether we're going to see this enforced at the chain level or the broker level. >> I think if we're able to and and look, there may be regulate regulations that are enforced at the chain level in which case decentralized teams may have trouble enforcing this. um more centralized teams like a Solana could implement something because they have a relatively small validator set. Hyperlid may be able to to implement something on

their HIP 3 markets for equities. They might find it easier to implement this versus something like an Ethereum where validators may not agree. And so what we have here is ultimately we're going to have a regulatory regime where we're going to have this implemented. I think that's a no-brainer. But where it's implemented is the question mark. Um the result if we don't implement this is price disconnected from the market. The holder has no way to know whether they are filled fairly because there's nothing to check the fill against. They hold exposure to a number rather than a claim on a share trading at the market price. Um and as we get more and more um tokenized equities and we get this regulatory approval of these tickers

where the SEC is effectively saying hey this wrapped version of this of this asset is the same as the as the share itself. they need to follow the same guidelines and and this is something that Olivia is arguing for >> and she says this is achievable today via players uh such as dinari global a tokenized equity issued on a registered broker dealer rails uh not the offshore SPV model bottle not the rapper the rapper model there is a standard worth holding to ladies and gentlemen that is our daily equity show powered by our friends at dinari views are own tokeniz equities are missing nbbo OS. Thank you guys for tuning in to the tokenized equity daily equity part of the show

today. That wraps that part up. Rob, man. Wow, what a what a show. We got uh Extinct Prism F y'all in here talking about these going to cut off the internet before we get the bag we want. Tokenized equity is not happening. Bro, just get out of here, dude. Just leave. Just leave. We're over here extracting alpha out of the market, cooking all day. Great show. Get out of here, brother. get out of here. Um, >> I mean, token tokenized equities are happening. Like, then you have the Kobasi letter saying that it's grown 154% year-over-year. You've got billions of dollars in tokenized equities. If you want your hyperlquid to keep going up, you want hit three markets. You want prediction markets, all these things ought to be tokenized so that become

composable extent prism says no. So, that is what we have in front of us. um we are going to tokenize the world. So, we're going to continue doing so and we're going to uh get not only digital uh and tokenized equities but also commodities. Um all of these things are coming on chain. This is when we start to rerate all of uh the protocols where these assets will start to flow into lending markets, decentralized exchanges, per platforms, prediction markets. Once we get tokenized assets at this scale, they flow into all of these platforms and then the fees, the activity, all of this ends up looking

like uh it's operating on the scale of the entire financial system, not just for crypto assets. Not sure where Andy went, but we are here wrapping up the show. There you go. It is a secular bull run amidst the greater bare market, guys. Stay tuned to make sure that you're picking up all the alpha here and you're not missing out on some of these rallies. Always not financial advice. Great show, guys, as always. We're going to see you again tomorrow. Peace. >> [music]