🚨LIVE: Risk ON?! HYPE, ZEC, NEAR Moving. Hayes Sold Too Early? Sam Boboev & Alex Cutler

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[music] [music] [music] [music] Thank you Lord. >> [music] [music] >> We'll see you around the timeline.

Feels 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 [music] at everything they talk about and it's my favorite podcast. >> Adding it to my library every day. >> Potentially multi-chain deployments. We are [music] at day one. Here I'm testing from B. [music] [music] [music] Heat.

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

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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. Yes sir. [screaming] Wrist on. We are wrist on. Ladies and gentlemen, welcome back to the roll up >> live from tokenization tower. The Empire State Boom. The financial capital of the world. Go Knicks. Basketball capital of the world. Soccer capital of the world.

Everything's happening. New York. Saw the UFC fights. Those were just south. Damn. >> Yeah, man. >> It's a place to be. I uh made some money on cash this weekend on the UFC, the Canes game, and the Knicks game. I was the only one who left the city for the Knicks game five knowing it was the most iconic Saturday night in New York City history. Honestly, my body is thanking me. I honestly think my body is thanking me. >> Pretty insane weekend. Iran war is coming to a close seemingly. We have a deal uh in principle that is uh looking like it's going to be signed this week.

>> Yeah. Yeah, I think so. I mean, it seems very likely >> leading to markets absolutely flying. >> Yeah. I mean, that that news was just very much >> kind of like expected but also unexpected in a way. And yeah, I mean what? Look at us. I mean, hype's at 68.4. Like, come on. Yeah. Yeah. Pretty pretty nuts. Why don't we uh bring up what we're looking at on the on the screen here >> because our first guest is going to join us in a little bit and we've got some things to go over here. So, uh Hyperlquid ecosystem is flying. We had Sheamus in the tokenization tower last week. He told us about the SpaceX IPO

and what we were looking for. Turns out Hyperlid traders were right on the money. this is actually a destination for price discovery. Um because it was highly highly relevant when SpaceX ultimately launched. Uh so that was great to see. I think that was sort of like checkpoint number one. And then obviously everything is risk on now that we have the Iran war uh seemingly winding down. The other thing people are watching and I think we're going to get some volatility is around Kevin Walsh first Fed meeting coming up on Wednesday. Catrini article came out over the weekend pretty much all about what to expect from Kevin Worsh and the macro uh cycle. So probably talk about that a little bit.

>> It they're basically bullish, right? They were like, "Look, the whole market is pricing in >> uh more rate cuts and we're bullish." >> Yeah. I mean, >> was that kind of the vibe? >> I got it up here. There's a couple of things we want to get into this now and I know our first guest is going to come up in a little bit, but for the sake of uh uh our macro update here. Um essentially they call this current environment the momentum trade versus the macro trade. And so the perception is that macro is uh not looking good. It's hawkish. You've got the war. You've got inflation pressures from the war.

But their perspective on inflation is that um you've you essentially have inflation peaked because now going forward we're going to end up with the war winding down. And so as the inflation makes its way through the economy, you end up winding down any knock-on effects which causes the perception of inflation to have peaked everything in CPI and whatnot uh has peaked and we are going to get some elevated prices but they're not going to get shown through. So the Fed has a reasonable justification to quote unquote look through the inflation which would not justify rate hikes uh as people expect. They also point at the labor market and say how uh this is not

there's no signs of an overheating labor market. Uh labor market is kind of just chugging along. It's not too cold, it's not too hot. It's pretty solid. Um, and it still has some slack, which means that it's still got some room to tighten uh before they need to do anything like raise rates or cut rates. And so, what will the what will Walsh do is essentially nothing. Uh, they say that the market has not topped. The recent sell-off was an overdue flush of extreme leverage in extended momentum names. Fundamentals support a continued melt up into late summer. we will see a higher incidence of 10 to 15% draw downs off highs over the next 3 to four months. So they think we're going to get more volatility to the downside, but we're

going to continue melting up higher. This is going to lead to more and more disbelief because every single time we get one of these 10 to 15% draw downs, people are going to say it's all over, but we're just going to recover, melt up higher, and then another draw down. >> That's what it feels like. I mean, that's what it feels like in cryptoland as well. like Zcash great example of 70% draw down followed by an absolute Dollaly Lama recovery. I mean hype as well what it's trading at. I mean look at this thing. It's breaking out right now. I mean it's breaking out right now to 6069 new local highs in this trend. I mean Bitcoin pulling back near looks great as well. Had a huge move off the lows.

>> Near incredible to see >> Zcash huge move off the lows. So, I I um I had bought some Venice last week. Um it's not looking great and I actually got out of that. And I think part of what's happening is that people are realizing near is the tech. And and so another thing that happened over the weekend here was that Mythos was um you know uh bricked right by the government and called it a national security risk and that it's not really it's too powerful to put in the hands of public citizens. new all-time highs, by the way, just now on the S&P.

>> There we go. So, I think part of what's happening is, you know, there was a big like rush over to open source. Uh people are looking at these models and they're saying, "Hey, we need access to the frontier models. It's pretty dystopian that the government is handicapping our ability to access these models." Big rush to open source over the weekend. Big debacle happening. But I think Venice missed out on that because people realize that because the government banned or effectively, you know, handicapped Mythos. Venice doesn't give you access to Mythos. It doesn't give you that open source. It just gives you the privacy. NA is the tech underpinning Venice. And I think people are starting to realize that Venice is kind of not moving at all despite the general risk

on appetite. And Near is getting a hell of a bid. And so I think a lot of value is moving from the Venice ecosystem over to the Near ecosystem. Yeah, I mean that's they put out this tweet about it, right? Like demand for userowned AI growing is growing. Near AI's private inference powers Venice's privacy preserving AI platform which has grown to over 3 million registered users. >> Yeah. Exactly. Exactly. So I think the market is realizing this and they're choosing to uh you know bid near instead of bidding Venice um in the light of the recent you know US government crackdown on mythos. Um >> I mean guys I got to say this looks insane. I mean I don't know where we're going ladies and gentlemen but this

looks like we're going somewhere. Looks like we're going somewhere. Guys we've got Sam Bobv. He is the founder of a very very cool fintech company, fintech startup, as well as a podcast. Uh he's our first guest. We're going to be talking to him about uh the Aentic payments flow and what that looks like, how that's happening, what's scaling in that space. He's very much an expert on the fintech side, on the agentic side. So, he should be our great AI supercycle guest this this week. And then we got Alex Cutler in the studio um uh at 2 p.m. So after him, Freedom Guy says we need to pump. Hopefully this war ending is the catalyst we need.

>> Certainly seems that way. And Catrini seems to agree. Seems like the AI uh um narrative just continues to have tons of momentum and we're not going to slow down anytime soon. >> All right, let's bring up Sam. Talk about the agentic economy and more. Uh, should be a good good conversation. Sam, welcome to the show. Good to have you, buddy. How are you? >> Hey, Andy Harup. Thank you for having me. I'm doing great. Thanks. >> Absolutely. It's great to see you here. Uh, Sam, it's been a hell of a a few weeks here. Uh, there's plenty for us to talk about Agentics economy, fintech, and, uh, the crackdown on the frontier models. um maybe you could just give us a quick background on yourself and you

know some of the things you're most excited about before we dig into some of the nuts and bolts here. >> Sure. Sure. Um thank you um for having me again Sam. So my but professional product manager you guys you know I've been building in fintech industry for the like I don't know past eight years had a chance to build wallets um card issuing um and at the same time I'm always analyzing what's happening in the market learning more and recent with the recent AI developments I'm diving deeper into agentic economy agentic payments agentic commerce and what's happening there currently working on my own project analytics and media platform fintup where I cover all these topics including AI payments, um, AI and stable coins and payments in general.

>> Yeah. Beautiful. Sam, um, I mean, I've been a big fan of your show and of your work. I've seen you all over on YouTube and LinkedIn and everywhere else. And, you know, it seems like you've you've got a really really strong background in understanding kind of like the nuts and bolts of fintech. We kind of come at this space from a different lens. We're kind of more like [snorts] we want to bring all of the nuts and bolts and bells and whistles of the onchain economy into the fintech landscape. Kind of this distribution play, this what they call like this DeFi mullet play.

We're kind of now also then entering this agentic world where um it's also going to be a big part of how fintech and blockchain interact. So maybe you could just like start high level here and we can have an understanding of what your broader thesis is for the intersection of these three technologies fintech blockchain and AI or a gentic kind of commerce and what you are seeing right now as the convergence between these three. Yeah guys as I as my background is in fintech let me start with the fintech first you know in the before this everything that around AI started we were talking about payments and the cross border and how to optimize

ledgers how to optimize transactions and everything around it once we start having frontier mod models basically literally everything changed you know now everyone AI is everywhere we want to be AI everywhere to use it everywhere however However, it doesn't seem to be as easy at seem as it seems because uh when we talk about fintech or finance in general, it's regulated environment. You cannot just simply come and start implementing AI or start integrating AI products into into into your products. If you are a bank or payment service provider or fintech, you have to ensure that you match the regulation requirements of the regulators in the market. But at the moment it seems to be nobody still understands how to

implement AI correctly into financial services you know yeah we can do customer support yeah we can answer your questions we can do analysis for you we can show insights how you are doing how you're spending but when it comes to um broader tag okay now I want to trade really can I do that or now let's allow AI to make to make purchase on your behalf Okay, can we do that? What if AI orders not one but 10 or thousand let's say shoes when you say go order that?

Who's responsible? And one of the open questions in my opinion at the moment is like who's liable if AI makes a mistake? And this is one of the important topics of agentic commerce I would say. Um everyone wants to go there, everyone wants to do it, but nobody still understands who owns liability. And if we converge blockchain and crypto in this into this world, we understand that stable coins are I mean native currency for AI or at least AI agents because one of the advantages of stable coins uh they are first of all programmable and again you can make microtransactions using stable coins. This is one of the biggest advantages stable coins have.

And what AI agents can do with stable coins is just basically go and let's say use stable coins for um subscription economy or go and do microtransactions to let's say buy u tokens on your behalf if you allow them. And you know when we talk about agent commerce, one of the first use cases is for developers especially uh go and buy tokens or some services using stable coins and you can automate those uh with um AI because again there are rules within the companies especially if you are talking about developers those are usually within the companies especially big corpse there are rules that um you can

set up and uh you can easily uh and safely use AI agents to make purchase on on your behalf. So these are my views so far. >> Yeah, Sam, I I've got maybe a more general question zooming out a little bit because you know you and I and all of us like here we are in the weeds, right? Like we're talking about this every day. where we're learning, we're researching, we're digging in, and we get into some of the very nuanced, you know, solutions for some of these, you know, back uh office maybe, you know, underneath the hood sort of uh solutions, >> right?

>> Do do you think and and so, you know, for a consumer, I go, you know, down to the cafe, I want to buy a cup of coffee, I take out my phone, I tap my phone, I just put in my password or my thumbrint. It's all very very easy right now without AI, right? >> Yeah. >> And so for the normal person, fintech is easy. Like I just take out my phone, I tap my phone, I use the thing. It's so it you know, we've already innovated from the credit card and checks and right, we've come so far already. It's so much so much more convenient. Do you think with AI we're going to make the consumer experience any better? Like what is there to improve on the consumer experience? or do you think almost all

of the improvements are going to be made on businessto business workflows? >> Um, that's a great question. I think let's let's talk short term. Let's talk what's happening at the moment then I will go into the future. If we talk about right now what I can see that and I have a chat with chief operating officer of chime and what they are doing for example with AI they are implementing AI. So they are launching their own assistant within the Chime application and in the first place what it does that again as I mentioned it provides you customer support. Let's say you made a payment uh for some reason it didn't go through or you don't understand what's happening with your money it's gone you made a purchase you

didn't receive the delivery but the money is also not there so you go and ask and it provides you answers detailed it will try you direct and provide you more insights on what you can do. The second use case at the moment is I see in most of the use cases is insights well uh what am I spending on my money? Um am I within the budget that I set for example or you can go and ask your AI agent to create a budget for you and to help you to stay within that budget if you are overspending or you are not spending enough or whatever that your goal is. And very recently this is the third trend that I I am watching now.

You must have heard Robin Hood and then later on Coinbase that they said like we now allow you to integrate your own agents be it cloud for example maybe chipd as well and then you can tell them to trade on your behalf and Robin Hood also launched its own um card basically for AI agents particularly so it's card for AI agents where you can set up your limits uh you can tell what to spend on how much when and etc etc to protect you just in case from overspending again a health net you never know right so um they they launched these products maybe now we are going into wealth management a bit trading a bit where now customers can tell the AI agents to do trading for

them but the thing is I said Coinbase and Robin Hood allow you to integrate your own AI agents they don't say like we built one for you use this so you have to bring your own AI just take this into account so they are very cautious you know if they create their own AI within the application and they it makes a mistake that's very terrible but if you bring your own AI you know it's your AI you made a mistake we just we just g we just gave you tools so you had to take care of that so basically this is the this is the case but moving forward if I look into the future um I'm very optimistic that AI will come and help you to make purchases especially with subscriptions it will help you to manage

those but in your day-to-day operations in your day-to-day purchases let's say you go and buy a coffee um I don't know how it can help you I have no idea how well I mean or you do go groceries what AI can do okay yes it can tell you yeah you have this list of groceries you have to buy and then beyond that I'm not sure just yet how it can help you that's why I said now the main one of the main use cases for agentic commerce or agentic AI is that just to go and buy tokens and this type of stuff in B2B economy more if you're a developer within the company it's way easier because you have policies you have rules limits that you can do and you cannot do but in

day-to-day commerce you will still mainly rely on AI in my opinion at least short term just to do the search to understand to compare then you go and make the purchase the final purchase yourself >> yeah uh new type in the chat says can't imagine the crazy new AI laws when it comes with coordinating with Apple Pay and convincing Apple Inc. that I can't that I can use my custom agent within their IP, right? It's going to be a lot of these interesting dynamics of people wanting to use their own local AI for data sharing reasons or uh a better model from a certain provider who's uh potentially competitive with a fintech provider who has a deal with a different provider, etc., etc. Um, you know, Sam, one of the things that I think our

audience is going to be most interested in is from this kind of fintech investing angle. We had this, you know, kind of like decentralized AI bull thesis episode last week talking about, you know, the likes of Bit Tensor and Near and Venice and a lot of these kind of like crypto assets that are building like decentralized training, decentralized inference doing a lot of these different things uh in a more open-source distributed manner rather than like in a closed source frontier model lab. But in a similar sense, when it comes to the fintech adoption of AI and using agentic payments, building the agentic economy, who who is set to win the most here, right? Let's say we get, you know,

hundreds of thousands, millions of agents operating onchain or offchain in the kind of more fintech economy. Who wins here? Is is there a type of company? Is there a provider? Is there an issuer, a service provider? like what is the broader thesis of who's going to capture a lot of the value from this whether public company, private company, etc. >> Well, it's very hard to say to be to be completely honest. It's very hard to say but in my opinion uh the companies that have huge customer base are definitely uh winning the race. Uh because you know one of the things that those companies have is data. So they have a lot of data and on the other hand they have a lot of

resources. Um one great example is I will speak in terms of for example UK where I am based now and Revolute for example in my opinion in comparison to smaller or new fintex that coming to the market revolute has huge advantage because it has huge customer base 75 million uh users who are using Revolute and then they consequently has a lot of data that customers are are are producing on on their platform. So they can use that data um to um create AI agents spec specifically for their customers and then maybe in the future outsource that AI agents to other companies because we see that Revolute is doing this sometime they first

launching some products for themselves and then later on for example the HR uh platform they first created it for themselves then they outsourced it to to the market and now they're selling it. So what they can do now that they they can create AI agents first for themselves. They can train use it uh basically create the best version of it and then start selling it to third party providers. So in my opinion user um companies that has a huge customer base are going to win relatively to smaller ones. Again I could be wrong here because again um there could be a fintech or even a company at the intersection of AI and fintech. So they could start as an AI first and then go into the fintech. Uh we one example is

chat GPT or openAI. They recently integrated with plot. So now you can basically bring your uh transactional banking information into chart GPT and I believe it can do analysis for you and then provide you detailed information etc etc. And once we have proper regulation in place, what OpenAI potentially can do is that they can now start launching their own financial solutions. Who knows? Who knows they can potentially do that. I mean if they have resources and right regulation in place, they can easily do that because we can see they are buying a lot of financial companies and they say we want to be super application and if you want to be super application, you must have some sort of a financial solution otherwise

it will be quite challenging. So again, um bigger companies with large customer base going to lead, but uh let's see how that goes. Yeah, you know, one of the things that caught my attention last week was that uh Mastercard and and you know, Visa is is partnering with them as well and the credit card companies are pushing these initiatives to partner with the AI companies so that they are the primary primary mode for agents to spend uh you know in agentic marketplaces and so they this thing called agent pay uh you know which is this service designed uh for businesses to offer services that agents can use to buy and sell. And so that kind of got me thinking and I know you know we kind of

primarily look at this from the digital assets perspective. This didn't necessarily seem like it was leveraging blockchain technology or stable coins although you know Mastercard and Visa have their stable coin strategies as well. Yeah, >> given that you are sort of on the you're sort of in the middle of a lot of these intersecting areas >> from your perspective, do you see these fintech companies really adopting blockchain and digital assets or does it is it kind of still like cringe like you know they don't really need it stable coins and blockchains you know the credit card companies work fine agents work fine like you know when I hear you talking about how these things are going to need to be you know interacting ing

with one another. It seems like blockchain is a perfect solution, but I'm curious from your perspective, how important do you think blockchain is to the overall fintech complex? >> Uh, bro, I would say blockchain is very important and these two companies, these two giants are in blockchain game. You know, Mastercard recently acquired BVNK, a blockchain infrastructure provider for $1.8 billion. you know uh it means they want to be in this game and they understand that it's very critical for them to be in this game you know their strategy is usually like this there's a new technology in finance there is a new technology in AI we have to be there we don't want to be left out so with um basically mastercard agent pay solution

what they are doing is they are saying we're creating machine payments where we don't need humans so basically they are um stitching this into their DNA which means So Mastercard will start offering solutions where you can set the limits. You can create cards particularly for AI agents and you can if you read the news they say now you can spend stable coins and we have basically infrastructure for that. You can use our infrastructure to allow your AI agents to spend stable coins and the same applies for Visa.

they partnered up with um OpenAI. Uh last week they announced that and again they want to also be in this game and they they have their own agent that went in terms of stable coins and they also are processing up to if if I remember correctly they say seven plus billion dollars in stable coins which is quite good number and the numbers are increasing. So these two giants are always there. They always want to be in this game. And uh let's say if you say blockchain going to disrupt this, trust me, they will be there. They won't be left out. They will be part of it. And if we talk about AI economy, so what Visa and Mastercard are trying to be,

they want to be in addition to be a network, they still want to be a network using stable coins or any other types of blockchain solution. also they want to be a trust layer. So what they say um okay guys cool um there are AI agents and we want to ensure they spend money correctly. We want to ensure that they are reliable uh and they do the right thing. So we will go and uh verify all of this through our solutions. They have different solutions. Each of them have different solutions for that. And we will still be the trust layer between all of you because again we are well connected. We are available almost in all the countries around the world. We have resources. We have connections to

banks as well as consumers. So use us. So this is the strategy they are using at the moment. >> Yeah. And then on that note, specifically Sam, when when it comes to the payment side, do you think that these card companies, have they have they accepted that stable coins will be a a payment mechanism for agents or what is the discourse in your circles around what [snorts] changes are going to be required from the fintech kind of, you know, Goliaths or the payment networks as it pertains means to agents like what is the broad discourse around the changes to these financial services

companies that are going to be required due to the influx of AI? First thing they understand is that they AI agents will be spending not like human you know um as I said uh most of the transactions are done by agents are microtransactions. So what uh these two giants or any other payment processor are doing that they want to integrate into blockchain uh rails and again as you said one of the best ways of doing that is through stable coins that's why as I said for example Mastercard acquired BVNK and we should expect more consolidation in stable coin uh market in my opinion there will be more acquisitions because at one point Coinbase they also showed

some interest um to acquire BVNK Initially, Mastercard said that we will acquire zero hash at one point, but that the deal didn't go through. So, these guys uh truly understand what's happening with in the AI economy and how AI AI agents will work and they want to be as I said early on in this game and they want to stay relevant as a rail. They don't they don't want to go and develop much of the things themselves. they will be rather um providers for let's say banks, AI companies on one hand and fintex if they want and need tools that that will help them um to grow in AI economy and win the competition. So they say like come we

have tools use our tool use our rails and please go grow because you if you grow we will grow because you will use our rail to make transactions and we will make money out of that. Yeah. And and this is the same sort of growth model that we've seen from blockchain companies, growth companies in general have have used this to bootstrap and generate network effects to lead to scale. And and so on on this note, as we're thinking through the adoption curve of these agentic commerce payment methods, the machine-to-achine economy, stable coins, and blockchains as part of this, again, the consumer doesn't really seem like they will have very much proactive ex like differences or changes to their experience. And because there

is this trust gap, it seems as if it's going to be an uphill battle to try to get consumers to adopt stable coins or some of these new methods. But what I'm realizing is that, you know, maybe they don't have to, right? Maybe the machine to machine economies, these agents, we'll just tell our agent like, hey, you know, I have this card, right? Say it's a debit card or credit card via Mastercard or Visa. Then it seems like Mastercard or Visa could they could decide, hey, the machine wanted to pay for this thing. I Mastercard or Visa needs to settle with the merchant bank account.

>> Exactly. >> If it doesn't matter to the consumer, then Mastercard and Visa can choose to settle via stable coins. With the merchant bank account, do they have the latitude to make the decision to say, "Hey, if I if it's okay with the merchant, I'm going to send the merchant stable coins." The consumer doesn't care, right? So will do you think we'll see a lot of this stable coin adoption happen behind the behind the merchant like behind the point of sale so that you know the agent they go out they do something and then it's between Visa and Mastercard and the and the merchant to ultimately decide and maybe it's not even the merchant right if I'm just buying from a mom and pop they're selling me a you know a shirt or

something right they might not care stable coins or fiat right but it's between the merchants bank and Visa and Mastercard And if it's more efficient for them to settle via stable coins for agentic transactions, then it will be up to them to do so. They don't need the consumer or the merchant to opt in. Is that is that right? >> This is this is exactly the case. And the first use case in payments or I would say one of the biggest use cases of stable coin in payments is like for settlements. Exactly. And as you said in your day-to-day payments, you really don't care. I mean you what you care is like you make you want to make a payment and then get the good or service that's it in the background you don't care what what's happening what rails what

settlement you don't even know most of the people 90% of people they don't understand what settlement is they understand they are making a payment with the card payment went through they got their coffee that's it and at the moment most of the um transactions in stable coin is in the background so basically everyone's saying is stable coins are rails just like everything else a and others. So those are rails those are mostly for settlement. One use case you might care is in crossber of course because again it's cheaper. So let's say you are doing remittance, you are sending money abroad. At that point you might care. Yes, because again stable coins are relatively I would say relatively cheaper and relatively faster. And as a merchant one thing that

you would care when it comes to stable coin and again it's about settlement. How fast how fast that uh your transaction or your money settles and you get access to it. If you use stable coin, it's quite fast rather than like waiting for batch transaction T t T T T T T T T T T T T T T T T T T T T plus one, T plus2, etc. You don't have to wait for those t types of stuff and because again stable coins and blockchain 24/7 available. So you might get access faster to your um to to your own money. But other than that that I mean it's like you don't you really don't care. You just make a payment that's it.

>> Yeah. Yeah. Yeah, I mean I think that that's kind of like like the bold thesis for this like DeFi mullet idea of of of kind of stable coins or blockchains underneath but these really you know strongly developed fintech applications on top as you said with a lot of customer base or a large customer base like Revolute some of these others you know Sam I'm curious from the investing perspective how are you how are you expressing your bullishness on the fintech adoption of stable coins and of AI systems as well as the, you know, growing trend of of the fintech world kind of colliding with the blockchain world. From an investing perspective, no, you know, not financial advice, but

how are you expressing your belief in these trends whether in the public markets, private markets, through your work? How do you how do you express this bullishness? >> Uh, as you said, no not financial advice, right? [laughter] >> Yeah. Yeah. >> Yeah. Um, no guys, I'm I'm really bullish on this. Why uh because AI is huge um first it was just gen AI using in day-to-day work now we have agentic AI which now you allow your AI agents to do everything on your behalf right moving forward it will be purchases as well and if we say agentic AI is the future then I highly believe that stable coins will be the future as well and I wouldn't say the fintech world is

clashing with blockchain world they are I I mean the fintech world is pro blockchain. They want to adopt it because they also understand that the future is the blockchain. The future is um stable coin especially as I said they understand that the AI is the future. So more and more companies and more and more governments I would say for example the UK is also working in that direction uh go and adopt their own stable coin. They will develop uh stable coins in local currencies. Now 99% of stable coins are USD. So hopefully there will be GBP and Euro stable coins soon. Um I'm pro bullish. Uh and I'm looking at

different companies and different solutions. Uh hopefully we will get to the point where we will fully trust AI agents to make transactions even though we are early stage but this will happen at some point in my opinion. And uh Sam I'm curious like you know there because there's so many disruptive technologies happening here we could see how machine to machine you know agentic payments could you know as we think further out and and tend to imagine these things right like robots and humanoids tend to get involved and all of a sudden this thing gets very weird and very you know very very creative and so I'm curious what is what are some of your bold predictions? Do you have any hot takes as you kind of think out into the

future? Like how do you think the agentic commerce is going to be disruptive and just generally any any bold predictions for uh fintech over the next few years as it converges with AI? >> Well, you know, I always try to avoid making any predictions. Um yeah, but um I will try to be general. uh I don't have any one particular opinion about uh the next stage of disruption but definitely we going to see more and more companies to converge with AI and to launch some sort of AI product. Uh I'm talking mostly about fintech vertical, banking vertical, launch some sort of um AI solution where now you can for

example just like Coinbase or uh Robin Hood, you can bring your AI own AI agents and give them the cards to use on your behalf or let's say they will launch their own agents to help you basically to do the stuff. But the the overall idea the overall vision that I have at one point maybe every company will be AI company. Who knows? >> Yeah, it certainly seems that way. And and so predictions are difficult. I I totally understand. We we you know face that as well. Is there a particular use case like something that you would use yourself like that doesn't exist in the market right now, but you would be really really excited if a company built this?

Well, let let me say this. It does not. I wouldn't say this doesn't exist, but um that would be great to have um AI agents that would go and I think it already exists, but I would it would be great if it's more personalized to help me with my um subscriptions because sometimes I make subscription and literally forget it. >> So because sometimes, you know, I make subscript subscription just to test but I forget to cancel it. So it would be great like to get AI agency inside every maybe application, payment application or financial application that I use that would help me to manage this correctly uh and then give me the insights. But these services already exist but I'm

looking forward to what else AI agents can do. The only thing that I am still waiting I wouldn't say this is product but rather regulation you know how this is going to work out. This is I'm really curious about this because at the moment the market is going forward. We are developing I mean a lot of products especially in financial verticals as well but trust me at one point regulation will catch up and then we will start uh so many of them die out. I mean products they will die out because again they do not meet the requirements of the regulators and then only the strongest ones will survive. So I am more curious about the regulation at the moment.

>> Yeah. And we're already seeing that uh that happen with the US uh you know sort of nerfing >> moment. Yeah. Yeah. That happened actually. That was really interesting use case. Let's see how that will evolve. >> Yeah. Yeah. Sam, I'm curious. Um who were some of the you know where can our audience find you and who you know what are some of the best interviews you've ever done on on on your show? >> Yeah guys uh the best place to find me is first of all LinkedIn. just go and type Sam Bobov. My surname is hard to say but yeah guys try and on I am live on LinkedIn and X as well. Um just go type wrapup uh on YouTube uh sorry on

YouTube to find my podcast and on X just type [ __ ] wife and you will see all of my podcast and conversations with top leaders from fintech vertical. Yeah. >> Beautiful. Well Sam thanks for spending some time with us. Uh it's been an amazing episode. a big fan of your content and of your work and looking forward to this to this convergence, man. This AI and aentic side, the fintech side, and then mixing in the blockchain kind of underneath side. It seems like it's it's happening and it's happening quite fast. I think by the end of the decade, we'll look back and I think a lot of the financial services world will look a lot different than what we're currently seeing. So, it's it's exciting and equally equally moving very fast.

>> Yeah. Thanks guys for having me. >> Absolutely. We'll see you next time. Thanks Sam. >> Cheers, Sam. All right, guys. We're going to take a quick standby and we will be back. Next up, we're going to do some screen share. We're going to do some uh additional additional uh setup here. Rob, takeaways, thoughts there on uh uh Sam's a legend. Guy has had several conversations with uh with legends of the game as well. So, he's a legend himself. You uh you heard him say he's in a group with Chime. Uh, Chime is obviously like a major major player in the fintech space. So, I think yeah, um, a lot of these companies that aren't really in, you know, they're they're obviously not L1's, L2s, DeFi apps, that

kind of thing, but they're on the periphery. And just like every company is becoming an AI company, they all need an AI strategy. All these companies are going to need stable coin strategies. And because they need stable coin strategies, they're going to need a blockchain strategy as well. So, I think we may end up seeing more of these fintexs like build out their own networks. Um, I'd be, you know, maybe curious to see or hear if some of them are, you know, using like JP Morgan's conexus uh like blockchain. I think that's just for internal use, but I think they're going to expand that. How many of them are going to go with like public uh open, you know, credibly neutral networks like Ethereum?

>> Uh, how many of them are going to build permission networks, right? So they have more control. But I do think that the tangible adoption of this is going to happen really fast as Mastercard and Visa are going to be like the catalyst and then banks uh like if we get the Clarity Act, I think we're going to get regulatory clarity in the way that banks are going to leverage stable coins and therefore you're going to like I kind of just put two and two together here where like the consumer doesn't need to opt in, the merchant doesn't need to opt in. It's going to be it's like it's going to be fiat in, conversion to stable, stable transfer, and then conversion back to fiat when it gets paid out to the merchant. So,

you're going to get fiat in, fiat out, but in the middle, when it comes to these interbank settlements and transfers, that's all going to be stable coins. And I think that itself can drive tons of value regardless of um consumers or merchants ever wanting stable coins. They're probably not. they're not going to care. But when they when they go to their bank, it's just going to show them a number. The bank's the bank's not going to tell them it's stable coins or it's fiat dollars. Just like it it doesn't tell them whether it's US Treasury deposits, 2-year treasuries, 10-year treasuries. The bank offuscates all of that and it just shows merchants and customers a number. And I think it's going to be similar between stable coins and fiat. Once these things are just classified as money, it's going to give

banks the ability to say, "Hey, if they don't care, we don't care. We're just going to show them a number and then we're going to do the most efficient thing for our business and all of that is going to happen behind the scenes. >> Yep, man. So, I've got a video here of uh Brian Armstrong. >> I thought this was pretty timely right on the drop here from right on the news like right before the news from Iran and Trump. >> I think Bitcoin is the new digital gold. I think it's going to be a key part of our economy going forward into the future. So, I'm as bullish as ever. I think sometimes people look at these four-year cycles that Bitcoin goes. We kind of see the percentage of people who are who have

made money versus not. And I, you know, my instinct is we've probably have bottomed at this point, maybe at the 60K number, but nobody can say for sure. Of course. >> What do you think? >> Calling bottom. >> This is like when the Cabal owner, this is like when Trump tells you to buy like the S&P. Like when the Coinbase CEO is saying this the bottom like I mean >> um I'm optimistic as always. I think by 2030 we're going to have a much higher higher price and I'm long Bitcoin just like always. >> I mean come on. >> Wow. Um >> I mean he tweeted this too.

>> The four-year cycles the fouryear cycle is very much alive. >> He tweeted this. >> Oh my goodness man. >> Bullish on Bitcoin is still long as always. It's never as good or bad as it seems. New type says, "I am so bearish on coin." [laughter] >> Wow. >> Yeah, man. I mean, >> Hyperlid is just taking taking this thing's lunch, isn't it? >> I had these lines. Oh my gosh. Look at this old chart, dude. Oh my gosh.

>> It almost It almost got up there, didn't it? >> I was buying down here on this run, and I had a really good run. I ended up selling a lot of my coin to buy PER, but it never got to the moon. [laughter] It >> was a pretty good trade still. Um, yeah, man. I mean, I I don't know how you can look at, you know, how how can you underwrite uh Coinbase thesis when it's valued similar to Hyperlid and it's got what, like a thousand times the amount of employees? Yeah, it's uh it's Yeah, I mean market cap's 45 billion on Coinbase and Hyperliquids is not that. It's around that 18 to20 billion mark,

[snorts] which this actually brings an interesting point here on the stream, how we count hype tokens. >> Okay, just based on the title, and I saw this, but I didn't get a chance to really look into it, but it sounds like it's going to be similar to what John Charb has said. uh what others have said about the way that they allocate ecosystem grants and how these are calculated as part of the circulating supply, but in reality they're never going to get put into the circulating supply. So basically they're saying that there's a 1 billion genesis supply at the top and a narrow circulating supply at the bottom like kind of circulating or you know that's what coin coin gecko CMC that's what they'll show you. Each answer a different question. We think neither is

the right basis for evaluation analysis. This table below sets up the measure we use outstanding token supply. This note explains how we derive it and why. >> Okay. So you've got the 1 billion, >> right, Rob? You see that? >> See that? Yep. >> So that's the 658 billion mark. >> Right. >> Right. You take out the future emissions and community rewards. >> Yeah. So if you're looking at fully >> take out the hyper foundation >> just real quick fully diluted is going to be that 65 mark.

>> Yeah. Theoretically. Yeah. >> Is you just take the price of hype more or less >> and times it or >> that many whatever the price of is Yeah. Yeah. Yeah. Um, but they're saying basically like you subtract all of these tokens in this category. And so this 27 billion is basically like this is basically like the team emissions and and community rewards. And I think their thesis is that those tokens are just never going to be used or touched. Hyper Foundation which I think is an additional team allocation assistance fund which obviously just the buybacks and then they hold it in a in a

in a multi-IG community grants hyper cord hyper EVM fees and so well future hold on the future emissions which is obviously the largest part of this the idea is that these aren't circulating yet right but to say that they're never going to be circulating I think is a bit of a stretch Like future emissions means right now if you stake your hype you're getting something nominal maybe 2% 3%. Right? That is going to incentivize people to stake. There could be a different incentive mechanism maybe so that you don't have to just inflate the token supply. Um community rewards and maybe team rewards.

>> Yeah. >> Like the team, it's not like the team is never going to sell. I mean like they did a great job. They built a great product. They deserve to be rich. They earned it. Like the team is going to get some tokens and they probably will sell some of those tokens. >> So, I don't think I don't think we're going to zero out that second line item, >> but maybe they describe better how to think about that almost yeah 41 and a half% of tokens. Uh, Coinbase has tens of millions more users than Hyperlid.

Um, what are some of your favorite places to grab some slices for lunch? That's the alpha we need. Love me some New York pizza. I don't know. A ton will know that one. Back again, boys. Let's go. Hyperlid's a one pony shop that is about to get way more competition the second the clarity bill passes. I don't know about that. Uh, cheap Italian cuisine. XRP is also showing strong gains today. However, Zcash zero, XLM near doing pretty good. Gentlemen, hello. Hello, Shine. Coinbase offering a subscription. Keep your funds safe and trade 5500 with no fees. Subscriptions, lol.

Okay, not much there for the boys. All right, so coming back to this article, guys. Um, here's why 1 billion is the wrong anchor. So, it includes large allocations that may that may enter circulation in the future. valuing the token off the full 1 billion is equivalent to valuing a company off its authorized share count which no analyst would do. And I think that is the key point. >> Yeah. >> Is that yes there might be okay. So this is an interesting take here. We therefore start from the genesis apply and remove everything that does not represent an existing or contractually

committed claim on that token's value as of today. So, it's basically giving them the fullest benefit of the doubt >> is more or less like what's happening here. >> Um, I'm going to send you Andy John Charb's uh analysis that he did. Um, I want to say what was this was a a while ago, but it has a very very similar conclusion. Um, and I think he actually structured this as a proposal. >> Yeah, I saw that. I remember that.

>> Right. So, this was a while ago and he says, we can bring it up on the screen, but he essentially says in summary, uh, we propose the following changes to Hyperlquid's economic model. Remove the max supply. Ongoing token issuance would now increase the total supply. Um, >> right? So, you take away the billion dollar cap and you just incrementally add the tokens to the supply as you need the tokens. And this is exactly what the typical corporate security finance model would do. When you want to issue more shares, you would issue more shares. You don't value the company at the total amount of authorized shares. Um he says burn all the hype currently held in the

assistance fund. Burn all the hype acquired by the assistant fund on an ongoing basis. I think the market is pretty much pricing it this way. Like we saw there was about $4 billion of hype in the assistance fund. um they're not going to do anything with it. Um I don't think you are really going to need that hype. And so I think the market is essentially treating that as burnt. Um >> yeah, >> the last thing is here is that >> and Rob just real quick that is what this is. >> This like this is the largest bucket here. The future emissions community rewards 27 billion. It's effectively like what you're saying and this is basically like tokens that could be used for LPing, staking rewards, ecosystem development, but because their issuance

is expected to coincide with future value creation, counting them today would overstate present potential dilution. >> Okay. So, right, and that was the third piece of John Charb's proposal is that we should revoke authorization for all unminted hype currently allocated to the future emissions and community rewards, which would basically say >> you don't need this category. You would reduce you would end up reducing the hyperlid supply by 45% in the in just like that.

>> Yep. And so, >> yeah, >> by doing this, >> I mean, what do you lose? You lose this preminted hype that's just sitting there not being used. But if you combine that with the ability to mint more hype, then you effectively give yourself, you know, the ability to mint whatever you need when you need it, right? So, >> burn everything that's not being used right now, but give yourself the ability to mint more if and when you need it. I'm a big fan of having a max supply capped, max supply check. Yeah. I mean, I think the the answer is probably somewhere in between these two proposals. I mean, so, you know, you want to basically what's what's what

Hype Strategy is trying to do here is present a much smaller market cap to potential investors by way of reasoning than the 65 billion number that they see on Coin Gecko. You know what I mean? like that's what they see and they're like okay this is a huge this is as big as some of the largest companies in the world in terms of trading you know how much room does this thing have left and so if you go through all this what you get is this outstanding token supply and they're calling it similar to fully diluted shares outstanding figure issued shares plus granted equity that vests on a set schedule excluding both authorized but unissued shares and retired treasury stock And basically this is kind of like

what John Sharp is trying to get rid of and this is what Hyperloop strategies are basically calling as not part of the supply. And so you've got the core contributors and the circulating token supply which is again this is how I think about it. I think about it as you've got all the circulating supply and then all the remaining unlocks for the team. That's like how my brain thinks about the hyperl supply currently. >> Yeah. But if you think about that as 45% of the token supply is currently like locked and gonna go to the team. Typically what we've seen is that those get unlocked and then the team dumps it and then you know everything is over.

But what is happening here is that these things don't need to be minted right now. They don't need to be on an unlocked schedule. 45% of the supply is also not going to the team, right? It's going to emissions and it's going to community rewards. Not all of that is going to the team. So you can look at the core contributor allocation. You can set up a vesting schedule so that that is very clear onchain programmatic but you can also reduce the authorized shares or the uh outstanding shares of a lot of the other portions of the supply.

I also think um if we're we're looking at this >> like what I'm thinking like what is the reason to keep it the like the current way and I think what comes to mind is you know if I'm think if I put on my hat my Jeff hat right and if I'm Jeff >> I have such an obsession of with Bitcoin that like I want to try to recreate the Bitcoin economic model and Bitcoin as we know has a hard cap app 21 million like there's never going to be more than that. It has a set inflation schedule and then it runs out and that's it. And I think Jeff initially set this up set hyperlid up so that it would follow a similar model. But now we realize that

that might not be the most efficient model. You >> don't need to be this, you know, purist with respect to token supply. >> Yeah, >> people like I I understand people like the idea of a supply cap. It makes sense. Bitcoin has it. >> It, you know, if you have that, then you don't really need to run into any any worries or concerns about exceeding that and infinite inflation. Sure. But you also have the ability to set up the mechanism for a more methodical token minting mechanism and token inflation mechanism. And I think like it's not like anyone expects them to mint all 45% of the token supply, 45, you know, 450

million tokens right off the bat. I think it I think from a like if you're going to value this less like Bitcoin and more like a very very successful technology fintech company I think what John charb and and what hypers liquid strategies are proposing makes more sense than the mechanism of full hard max supply cap like Bitcoin. >> Yeah. I mean, I think they're trying to get the idea out there that the number is a lot smaller than what investors are looking at on Coin Gecko.

>> That's what Hyperlquid Strategies is doing. >> Yeah. >> Yeah. But why isn't Hyperlid like Jeff reciprocating that? >> I think it's because he wants to be like a Bitcoin purist. >> He doesn't want to like have a say in it. >> He doesn't want people to look at him and and hyperlquid and he wants to be as similar to Bitcoin as possible. And I think he has the hard supply cap in his mind as this is what Satoshi would do. I think he he goes through life thinking what would Satoshi do and Satoshi would put a hard supply cap on his coin.

>> Well, here's Catrini saying, "What will Wars do? Nothing even though there's two rate cuts being or two rate hikes being priced in." Has the market topped? No. I mean, I I don't really have much here to add, guys, other than I mean, come on. >> I mean, that was that was ex that what you just had up was a pretty good summary of the Catrini article. >> I mean, talking about >> paid to hold risk, ladies and gentlemen. >> Summer meltup, um, downside, uh, risks to inflation. Let's see, I have it here. Uh the labor market has slack momentum uh in the face of macro. Um and you have downsides to inflationary

risks. >> Yep. >> Iran resolution core inflation is going to stay calm because the war is coming to an end and so they can look through inflation. labor market has slack um actually getting better uh which you know and we saw the high like payroll numbers uh which kind of people thought like oh the labor market's good so they actually have room where they can hike but >> y >> they also make the point here just on the Kevin Worsh thing that um they don't really like right now people are comparing Kevin Worsh to the 1970s because you have this politically aligned appointed Fed chairman you have high inflation And so apparently in the early 1970s

there was a new Fed chairman that came in. He didn't raise rates enough and then inflation went out of control and the guy actually was forced to resign after 17 months. And then they got Paul Vulkar in there who was a super hawk like the most hawkish person Fed chairman ever >> and that Vulkar was came in and raised Fed funds rate to 20%. And caused a recession and that is ultimately how we defeated inflation. But >> wow. >> So treaty saying like that's an unfair comparison. Worsh is going to come in.

He's not going to try to be the next Paul Vulkar. We can look through inflation and we essentially that Kevin Worsh is going to be a lot more doubbish than people think right now. >> And that's where the market's not pricing it in at all. And that's why, you know, I think that's why Catrini and I saw Felix Shavein from Blockworks talking about this as well. Like the base case is two rate hikes. All right, last thing before we get our first guest up here in the studio. >> Break that [ __ ] [music] >> Do we think Matti did that on purpose?

>> Wait, wait, wait, wait, wait, wait, wait wait. >> Do we think that he put school buses in Time Square as a tactical honeypot for colonialism? He must have done that on purpose. >> I just My biggest takeaway from this video is the word hooliganism. >> I think that's great and might start using that. >> She must have done it. >> I mean, >> they must have >> school buses in Time Square. What? >> Like why else would they be there? >> I heard that they were transporting people to and from World Cup games.

Oh. [laughter] All right, guys. It's been a great show. Uh, >> I got Alex Cutler here from Aer Drrome in the studio. The tokenization tower. We're going to get him set up. Get him dialed in. They've got a big launch coming up. USB beat Paraguay. I called it wrong. Yes, you did shine. I think you owe me 200 bucks. Elaso, cool stuff. I highly appreciate the way in which you're sharing the information. Take a day to break it down. Yes, sir. That this next show is going to be great with Alex. No one's talking about stagflation. It is so clear.

Perhaps it is. I'm going to I'm going to trust Satrini on this one. The guy's been absolutely dialed all year and uh another thing as you know we wrap up, we had an AI segment today. Um talks a lot about open source models running locally on machines. I think decentralized compute, decentralized inference is going to be really really important to that entire entire hooliganism coin just created. [laughter] The buses are normally used for group trips. >> Yeah. >> All right, guys. I'll be right back with uh Alex here in the studio.

>> Let's do it. Stand by. We'll be right back. Cheers, guys. to

go in. 70. All righty, guys. We are back here in the tokenization tower. I've got the Aerod Drrome founder, contributor, CEO of Drumo Labs, Alexander Cutler. Alex, welcome to the tower, buddy. Good to have you, >> dude. It's great to be here. Beautiful day in New York. >> Nice view for you, right? Fives are immaculate. Uh Nixon 5, >> amazing weather. Tokens are pumping. I mean, a hell of a time to be here.

>> Tokens are pumping. What What a weekend for news from the kind of broader macro climate, the Knicks won, the Carolina Hurricanes won, the World Cup started. >> Yeah. >> Yeah. >> Yeah. It's a great time to be here and uh you know, it's been a bit of a winter in the the token world. Yep. Um, but it's a great time to be up in the, you know, the tower here talking about tokenization because >> as of today seems like people like tokens a lot more than they did yesterday, right? [laughter] >> Well, Alex, man, you guys have been putting in a lot of work on quite a few facets of Aerome. Maybe just uh it's been since D. maybe just catch us up uh on the latest of what you guys have been locked in on and then we're going to get

into kind of thinking about token value flows, predictive allocation, and just more of this kind of broader conversation. >> Yeah. Um it's an exciting time because uh Arrow and Metadex03, what we announced in New York last November, right? And that we've been talking about on a few different occasions between now and then, it is officially an audit right now. Um that is like uh nearly two years of work right that we've been putting into what we think will be the leading onchain exchange for spot markets. It's in audit. Uh we're ramping up to our launch. Um and this launch for us will be the moment uh four years in the making. It's actually four years now since we launched Veladrome where we're

going to expand to Ethereum mainet. Um, we're going to grow onto Circle's Arc and really uh our objective is to be the definitive uh onchain exchange uh for spot, you know, just in the way that hype is for derivatives markets. You know, we want to be the New York Stock Exchange of the onchain economy, just like, you know, uh I think you've seen Hyperlid, you know, they are the uh Chicago Merkantile Exchange, right, of of the onchain economy. And here we are right on the precipice of it. So >> yeah and that statistic I think from I I think I saw on base on Aerome this the number one spot volume liquidity and volume for Bitcoin ETH and a couple

other key assets on >> yeah I mean think about what are the top traded onchain assets and and some of the most important assets in the world right now. Uh certainly you would say bitcoin and yes uh most days uh we are the the number one exchange for trading bitcoin anywhere on chain and that is incredible to think about. Uh most days we are also that for ethereum which will be on most days the second most traded asset and we are doing volumes right higher than some even centralized exchanges and this is the sort of shift we're seeing like with hyperlquid where it is beginning to outpace many of these centralized exchanges as well. But then the third one is super critical because this is going to be a major growth area for the onchain economy I think in the

next two years which is we are doing more FX volume uh EURC USDC than every other exchange onchain combined and think about that arrow airdrop today services a single network in base and we are doing as much as exchanges that service uh all the other exchanges that service 24 different chains and all this sort of stuff And that is why we think we have this right to win as we expand outside of base and the optimism super chain into mainet Ethereum to ARC and really across all of EVM. You know, we want to unite all of that. We want to be the venue that people are trading not just all the amazing uh assets and

tokens we have on chain right now, but a growing FX network, um tokenized real world assets, equities. Um we want to be the exchange layer. And by the way, we want to be that because if you look at the last year um and you look at where value like acrews in the onchain economy other than stable coins, no vertical the onchain economy produces more value than spot exchanges. I think last year uh about $4.5 billion in fees on spot exchanges. I think derivatives exchanges like 2.53 something like that. So less.

Um chains right I think did about like two billion. You think about chains, chains are worth collectively what $300 billion, something like that. Very little value being created there. And then there's lending and some of these other verticals. So when we say we want to go out and win it, it's not just that um exchanges are the second most important piece of infrastructure on chain. We think it's the single most valuable piece of infrastructure on chain and we want to unite that right across all of EVM. >> Yeah, man. I mean I I think we had the uh I think Logan he's a VC from Frictionless. He's a very big Salana Bowl and he was he was been pushing on like trading and execution is like what matters. It's what makes money and it

seems like this space is really coalescing around yeah just building elite DeFi primitives for trading. Um, obviously you've got the perp side and the spot side kind of separately and it it's like we're getting that right right now, right? We're finally getting price discovery onchain deep liquidity and then like the like the ratio from DEX to sex uh OI liquidity depth volume is really starting to like really creep up. >> Yeah. Yeah. It's an incredible moment because these are the the bets that we assumed, right? like how can you beat a real um real time 24 hours uh globally accessible network effect when it comes

to creating marketplaces that allow you to trade anything, right? anything from these amazing new digital assets we have to any global currency to increasingly tokenized real world assets to and then you know for those of us been a while the crazy stuff the meme coins right how can you beat a global onchain marketplace like that um and that's before you even start to think about the composability of DeFi you know the way in which you can then take these assets borrow lend against them create entirely new primitives but I think we've seen this evolution um over the course of the last year where even the centralized exchanges right are starting to not try to protect their core businesses right they're not trying to compete with

onchain exchanges they are actually trying to be the distribution layer for them so um within the last year uh Coinbase for instance integrated uh Dex is on base um and aer drone being the largest of them directly into their front end so if you come and you issue a token right now on base, right? You get instant distribution to hundreds of millions of Coinbase customers and they were an early mover here, but actually now it's if you launch a coin on Aerodram on Bay, you don't just get Coinbase distribution, you get OKX distribution as well.

>> And I think that will be the shift, right? um it'll be more of this activity is happening onchain and then you will see players like Coinbase in some ways disrupting themselves but aligning themselves very closely with onchain infrastructure and becoming the distribution rail because of course most end users aren't going to care where their trade settles. Um all they're going to care about is do I get the best execution? Does this exchange or this interface offer me access to the tokens that I want? But like, you know, people will be using our FX infrastructure.

Yeah. When they're just on a trip to Europe and they're making a a dollar to euro conversion and rather than Wells Fargo taking like 2 3% off of that, um they're going to get this instant low rate settling entirely on chain, they don't even need to know what a blockchain is, what Aerome is, or what Coinbase is. They'll just know it works and it works better. Yeah, that is one thing that I've started to kind of wrap my head around, which is that this this idea of so a platform like Aerodrome, a platform like Hyperlquid, Hypoquid has these uh builder codes. You can kind of launch per on any kind of front end.

Aerrum getting these integrations with these kind of suite of assets available via the the Metadex product, but these are like going to start to end up being backends. Yeah. >> Right. It's like and then then the thesis for these things gets to be a lot crazier than just like oh it's a UX and UI where you can go trade. It's like no no it's like the underpinning liquidity layer for global finance. Yeah. So it becomes not just like oh you know you know hype's a cool like competitor to Binance or like oh maybe you know a drone will compete with like all the brokerages and it's like no no no like the brokerages like the Schwabs we'll start with the Coinbases and the OKX but then we'll get to these swabs and the etc etc these will just you know become

the front end for these underpinning liquidity layers and the value of that is like immense in terms of the value being created by that activity. Yeah, I mean think about this. There was um leaks that came out of the SEC, right, you know, a few weeks back um uh maybe a month ago now. Time is is flying by, right? >> And the idea was that we are very very close to the SEC saying >> we are going to say legitimately you can bring US equities and trade them um onchain. You can tokenize these assets. And the minute that sort of thing happens, yeah, this onchain infrastructure, um, things like hype, things like arrow, um, we are now actually directly competing with any onchain or any off-chain venue that

offers the ability to trade um, these types of assets. And you think about what we can offer. We don't need uh, thousands thousands of employees, right? Uh, we don't need uh, HR departments. We don't need all this sort of stuff. We can cut all the intermediaries out. We can make it faster. We can make it cheaper. We can make it more efficient. And by the way, because you've cut all that middle layer, that intermediary layer out, you can share more of the value. And this is actually like the core thing about I think who we are, right? We came to build on chain because we truly believe that we should be creating shared systems that create shared value for all of the participants in them. and uh that by participating in these systems you now have like a

greater stake in this new economy that we are creating than you could ever have in the traditional economy. I mean >> this is the innovation of the AMM right like anybody in the world anywhere can participate in the act of market making without asking anyone's permission right >> and so yeah we are right on the the line here and I think it's going to shift very very quickly where these onchain venues are now increasingly becoming the places that people trade everything you don't need to go to Schwab anymore if you want to pick up some Apple stock for instance >> yep yep yep yeah and I think that like breaking of the mental model of we're just doing crypto asset trading on chain to all assets is a big one in terms of like the valuation heruristics of these

assets as well as that like the the the way that investors should think about aerodyome hyperlquid lighter etc etc etc it's not just like we're trading crypto here this these are going to be the underpinnings of global finance >> it's just better technology man right >> and tech wins over time >> it always wins right and and there's of course always a lot of doubt there's always a lot of crime time. There's always a lot of drama, but inevitably if it is better technology, it wins. Like, you can never put these genies back in the bottle. And uh we're on the verge of doing that. And that's like, you know, when Brian Armstrong said on an earnings call late last year, he said uh their bet is that 10% of global GDP comes on chain in the next 5 years, people need

to think about what an order of magnitude increase that is over the size and scale of the industry today. And of course that will translate into the layers of that economy that are uh critical and that create the most value. And that is why exchanges matter so much. >> And that is a good transition. You put um this tweet out that's pretty spicy. You're known to do that. It said and this is kind of getting into like the acrewing value into these assets and you know we've had multiple conversations about how the space has shifted. I mean we call it return of fundamentals. We called revenue meta. all these like silly like fun things, but they are they've come to fruition. And investors in this asset class are no longer just hopping on narratives or ideas. They're

looking for product market fit. They're looking for revenue growth. They're looking for an asset that is investable. You've notably said that a lot of the assets in the space are not investable. But this tweet specifically, you put out a chart showing what you guys are calling net token value flows. and you said um it's time to stop uh basically saying that emissions are not inflation or something along that effect. >> Why don't we just start with like understanding the way that Alex and Aerodrome thinks about tokens and the design of a token from like a balance sheet perspective and then we'll get into some of like like the bells and whistles here.

>> Yeah. I mean I would even take a step back before like we even think about financializing tokens, right? um in our mind and this is the first principle that we baked into the building of the metadatex, right? Tokens are the single biggest revolution to coordination since the very invention of the firm, right? And that goes back to what I was just describing, right? And that we can build something that is a competitor to the New York Stock Exchange and we can do it without any intermediaries. We can do it in these decentralized ways. How can we do that? You do it with a token. The token becomes the central coordination tool of the overall platform. Um you know in our system for instance token operators those who take and lock their token participate they control the allocation of capital across our system

in immutable ways. The degree to which we can control like our own token rewards that we distribute is totally proportional to the amount of the token that we lock and use each week. And then likewise, we take 100% of the current and future productive value the decks, all the revenue, all the value it produces, and we give that to token operators each and every week totally immutably um uh totally permissionlessly. And that's the same thing for us. We don't have the ability to uh enrich ourselves by taking the token that produces no value going out selling that on the market and um you know buying ourselves a beachside mansion

>> and uh before we've ever found any product market fit or before um you know we've ever redistributed any value within the system. We are users of our own product, right? >> Just like anybody else. And so we think about every token should sort of sort of be built on and evaluated against these principles. And I think just because it's more clear now than ever. It wasn't that many years ago that Hyperlid did not own its category. >> Yeah. >> Right. So how did we go from a situation where there was a number of different derivatives exchanges out there competing fiercely for market share and right you know at different times different leaders emerging. How did Hyperlid go from that position to now

being like the absolute dominant player? Um, and what I think is probably the second most important part of the onchain stack right after these spot exchanges. >> They did it by not raising a bunch of money, selling a bunch of tokens on the market, things like that. um they did it by distributing 100% um or close to 100% 97% right of the revenue that uh that they produce back to the token. So now you see a situation where like uh hyperlquid I think in undisputed way seen as a proxy on the growth of onchain derivative exchanges because their token represents 100% 97% close enough we'll round up 100% claim on it

>> right >> and that is also the same basic first principle on which um aerome and drrome which started as like five guys you know in a discord anonymous without raising any money without selling any tokens um slowly starting to take over L2 Ethereum with Veladrome then taking over the single most consequential chain of the last uh 2 three years which is base and now being in a position where you know we outperformed the market leader uh uh 3 to one in these ecosystems and that's how hype one that's how we've won to date and we think that that is the only moat that um any onchain firm will have in this new onchain economy because if

you are not maximally capturing and redistributing 100% of the value. That is a bounty for a competitor to come >> exactly >> offer that and beat you. And by the way, there's no amount of VC backing or pedigree or connections. Doesn't matter how good the rave you threw at uh token 2049 was like none of that. >> I totally agree. It's like it it's like it's you know it's you it's you guys coming out and saying here's what we're going to do. you know, you can you can try to beat us at at our game, but if you're not going to play the same game that we're willing to hold ourselves to, then you're not going to compete in in the in the operation that we're operating in. And that's exactly what Hyperlid and Hype have done. And now you see this kind of like follow on effect

of a lot of the other kind of purpose platforms doing something very similar. >> But there is usually like a leader and there's like a lot of followers. But even that part of it aside, it's setting that standard that is like here's exactly how we're going to do it. And if teams aren't willing to like also play at that same equal level, then then there won't be real competition on that front. >> Yeah. And I think about it because this is one of those amazing things that I think happens uh pretty rarely in in industry and business. And this is where the um the virtue virtuous thing the the um principled thing aligns with strategic necessity. So obviously if you are here on chain it's because you do

believe there's something about this technology that can build better systems. And if you're aligned to the idea of decentralization right these open networks that redistribute all the value like you're probably bought in on the principle. >> Sure. >> But the principle doesn't matter if we can't win, right? And so, um, we do this not just because we're convicted, but because we believe it's an ultimate strategic necessity. And just to emphasize this, I mean, we get asked the question all the time of, well, what if someone comes and they do this for and they try to, you know, compete with you guys? And we say, >> what are they going to offer that is more than all of it?

>> How do you disrupt somebody who's already redistributing through all of the value can possibly create? you would have to find other sort of uh ways in but it's very very hard and you can see how hard it is >> in the sense of the share that we have gained against like extraordinarily wellunded um incumbents uh who should have had every right right to sort of box us out of the markets in which we're not now dominant but it's because of the 100% value redistribution yeah >> that uh we've gained our share it's because of that I think it's an outside share of that of why hyperlid is now the thing right in in uh onchain derivatives exchanges and that is the disruption we want to bring to global onchain spot

markets >> and and so on that front on the token front specifically how how important do you think the programmatic um enforcements on chain are versus um a more like uh let's say flexible schedule of tokconomics right for example Sky kind of does their buybacks bas based on the risk in the market, based on what they're seeing, based on their yield parameters, based on the interest rate, sometimes they turn it on, sometimes they turn it off. Um, pump, you know, does these really, you know, almost erranous buyback schedule and then they burned a lot a bunch of their tokens and then sometimes they'll buy them back and sometimes they'll So, there's kind of a also bifurcation here.

We already talked about you know setting the standard at 100% of value re or you know let's call it value sharing but then what about the programmatic you know pre-commitment like type of buyback or type of of token economics how valuable how important how crucial is that programmatic nature do you think for a project like aeradrome >> yeah um I guess what I would say is first the bar is low here right because um about 90% of the top 100 tokens re don't redistribute ute any value and I think that is why the top 100 is going to be actively remade right because you're going to have more of these disruptive tokens in that carry real onchain utility value redistribution and things like that so I will say anybody

experimenting in the space of redistributing value you're already ahead of the curve right and depending on the the product the the model um I think there will be uh a lot of right answers on these types of things uh but to bring it back to the net flow question. I would actually say um probably the more important question on uh you know how you know rules-based you would say maybe the system needs to be versus very discretionary. I do think there's probably a degree of discounting there because you know people could get very cute with how they're doing it, stuff like that. But um it's really about well is whatever you are buying back offsetting team unlocks,

>> investor unlocks, incentive spends and things like that because if it is not if you are saying you know we're going to have a h 100red million in token unlocks this year right and that's going to go to our original investors insiders it's going to go to team insiders and things like that and we're just going to be buying back 25 million along the way. what they're really doing is transferring that 25 million to their own exits, right? And so that's where net flows really comes um uh as this sort of central evaluation mechanism here because I think you as a token holder deserve a single view u where you can see how much value is directly flowing to you a direct claim um that

you have >> versus you are actively subsidizing right and if that ratio is out of whack and again most tokens that ratio is >> infinite. Yeah, infinitely skewed to the negative side basically. >> And some of the top ones are still, you know, 20, 30, 50x on on uh the number tokens are going to be sold on top of your head as uh as a token holder versus any value being given to you. But this is where again hype um like I know that they've they've taken their unlocks and they're uh discretionary, right? So they can kind of stream them out at the right thing and they can keep their kind of overall >> positive positioning relative to revenue. I think that's very smart, right? But there's probably only like within the last 6 months um a handful of

tokens that you could find where that ratio >> would be positive, right? And Arrow is one of them. Hype is one of them. >> So, and it's just basically like it's basically like the business economics of the asset are net positive. >> Yeah. >> That's like the that's the it's it's like any business, right? You've got your revenue and you got your expenses, but it's it's putting that into the token model. And you're saying that in that outlook of the world, there's only a handful of assets that that you could if that's your model for investability that are investable in the space.

>> Yeah. And I think like you can still have a token. This would be like, you know, early days of Amazon, right? It took forever for Amazon to make any money. Did that mean Amazon was not investable? Absolutely not, right? But you could actually look at the numbers and just say how unprofitable Amazon is at this time. And you could see you could bake into your own head and saying I see a growth trajectory. I see them investing towards that growth. I can see that ratio of unprofitability beginning to shrink over time to the point at which Amazon becomes of course a wildly profitable um business. But I think we just haven't been very honest about a lot of these things because I think even when you look at something like the net

token flows dashboard today. If you see a token whereby it is uh emitting fundamentally like 50x or 20x um what it is bringing in, you then have to look at that and say well >> do I believe that there is a trajectory a course for them you know to close that gap and given some of the inflated valuations of L1 tokens and things like that um given how little money some of these verticals make like the chains themselves or in lending I think it's actually a hard case to make that uh that will ever balance out in a way that justifies things but that just balances out you know where to allocate in what size at what time at what phase of

growth and things like that >> and I think it's just a leveling playing field because I do think people got away with for a very long time saying um sure there's no revenue but there's no cost in this system even as hundreds of millions were sold and that was a cost you were you were incentivizing a team to build something right um And I think token holders just deserve a more honest conversation about the net value flows. >> Yeah. and and uh Alex, you know, got somebody here in the in the chat asking about some of the institutions that you guys are like talking to or partner with, but I guess kind of to frame that in the way that I think would be interesting is, you know, we heard from the Bitwise guys when they launched

their hype ETFs that, you know, explaining this thing to allocators was actually quite simple compared to other assets because they got, you know, they get the Bitcoin story, Ethereum, they kind of get it. They still need to, you know, put some cash flow analysis on it. all these other kind of L1s, same kind of cash flow analysis, but when when presented with hype, it was like very clear like here's the business model, here's the revenue, here's where it goes, here's the programmatic buybacks, here's what's happening here. Like it's very clear story. H have you had a chance to tell the Aerodrome story to larger allocators and have you found this similar experience or like like what is that institutional light bulb moment for a drum and kind of how's that part of the story coming along?

>> Yeah. Um it's a great question. Um I think the most interesting thing probably exactly to that point is I think it is harder to explain to onchain native allocators who have all this baggage right of all these different systems and models and things like that than it is to explain to um off-chain allocators traditional allocators. And the example I'll give you here is uh I won't name his fund because I I don't know how much he wants me talking about this but um uh there there's one gentleman who's who's raised uh a hedge fund um and is focused exclusively on uh uh procuring uh staked arrow or vierero

position. Right. Sure. >> And he doesn't raise from anybody onchain native. He is going entirely to traditional money traditional funds and things like that. And when he is making the pitch for um Arrow, he is just talking about us in terms of hey here is the product they are this amazing new tech company in this growing onchain space and he says they control about this percentage of the market share right now and they are growing and their token is yielding you know 20 to 40% per year. and he said to us multiple times, he has never closed rounds faster than when making this pitch, right? Um, you

don't need to know all the other details. This actually sounds like a very interesting asset if you didn't know anything about the onchain world. And that has been the problem to date. How do you sell people on a uh a governance token? Yeah. Right. With hundreds of millions of unlocks coming to uh a traditional allocator who just goes, "What is this garbage? This looks like the worst asset I've ever seen in my life." Or in many cases, if this was an equity, this would be illegal, you know like. >> And um I do think that this will be the new class of onchain capital coming in and they will not buy the ship coins.

They are going to be looking for real onchain products, tokens that represent real onchain utility and value acrruel and assets that look like more interesting assets than of course what they've got easy access to every day um in the traditional uh economy >> and are they asking about like what is the you know what's the 2025 revenue what's the Q1 2026 revenue what's the multiple like maybe you could just give us a bit of sense if if you have a rough estimation in your mind of kind of like what those public numbers are for us.

>> Yeah. Yeah. I mean I think that they they are they are absolutely applying traditional fund fundamental analysis to to the underlying token. So they want to understand uh costs, they want to understand uh revenue and of course as we know in investing uh generally speaking they want to know about growth, right? Um because growth is the entire story when it comes to what am I allocating, right? Because uh you're going to be betting on the potential for growth. And in our industry, you've got two ways of course uh to make a bet on growth. you've got uh I believe uh this uh token or protocol represents an index on global growth. So right now, right,

you don't have to bet on a particular protocol to bet on derivatives growth. You just go by hype because you know that they own that market, right? Or you can bet on somebody who you believe >> will take enough market even if the market isn't growing, there will be a growth story there, right? And so those are the types of questions I think we get asked. Um I think actually this is a big disconnect between like crypto, Twitter and institutions and banks, right? >> Um they have no doubt the onchain economy is going to grow by an order of magnitude. Um and so all they are trying to look at is to find the uh assets that may have some degree of like lindian growth potential that will acrue value

from that growth and place their bets accordingly. And like I think you see that in the large raise right that you just saw Morpho execute. Like there is no doubt lending is going to be an essential layer and that Morpho has more than proven it will be at least a portion of that essential uh layer. So they were able to of course go out and get an unbelievable amount of capital um allocated towards them. Um, so it's I think it's super exciting, but but you know, the onchain world, I think, is still got the baggage of years of all these terrible coins and uh just being narrative games or early games or insider games and um that was a way to certainly make a lot of money, but there

was nothing back it up so you could lose that money just as fast as you made it because there was nothing underpinning the the thing. >> Yeah. Yeah. Last thing on the institutional side before we get into more of the predictive allocation, the arrow launch. You know, it was amazing to see um the ETF for Hyperlid go live. It was like really kind of like a big moment for the community on on Aerrum side. What is that process look like? Like how how much effort and initiative is it internally to get a product out there that traditional allocators can invest in? Right? I know that it's not easy for people to come on and you know these these these funds these asset managers they can't just like go on

Coinbase and buy Aerodrome or they can't just go on the chain and you know put 100 million bucks and buy Aeradrome and their their their clients and customers surely aren't going to do that. What's that process look like to get the breadth of investment availability for the Aerodrome asset more available? Is that a this year thing? Is it a next year thing? How far along are you guys on that process without kind of, you know, revealing things that you can't? Yeah, I mean I think we have a philosophy of if you build it, they will come, right? Um and so for us like our focus has been since day one, just build a better product. Yeah.

>> Uh build a better exchange. Um expand that exchange's share. Build it around a token that is maximally useful that captures and redistributes all the value. Yeah. And if you do this correctly, right, um the rest of these pieces will come. So, of course, we play like a very active and consultative role, right? I'm talking about my friend, you know, uh uh who's all in on us raising a hedge fund. We talked to every major uh token issuer and institution. Um but like the greatest example of this to me is uh when we launched Air Drrome on base, people assume um given sort of the closeness of of our team to the Coinbase team over

the years that uh maybe we were ex Coinbase employees or something or or maybe we had cut some sort of deal. We didn't. We deployed um at the time it was our new Dex OS metadex02 was powering a drone. We deployed in the first day we deployed we doubled the TVL of the chain. So obviously at that point you know the Coinbase team is getting real close right to understand who these guys are how they did it. >> Yeah. >> And um when it came to their own investment of course they came and approached us and said hey guys what you guys are doing is awesome. We would love like a greater stake and a greater share. Yeah. Like will you sell us any tokens? Things like that. and we had to

say the same thing we say literally every single week. No, we do not have any tokens to sell. >> Um, but you have access to them the same way everybody does. >> Go buy them. >> Go buy them. And so Coinbase Ventures went on chain and I believe it's one of the first or second time that they went on chain to buy a token um just through T-Ws. Yeah. And over time it ended up being uh at least at that point the single largest liquid investment that Coinbase ventures had ever made in their history. And I think that still holds up.

>> Yeah. >> Um and they took all those tokens and they locked them and they participate each week in the system. Y >> and so I would expect right because this is such a unique uh uh product and such a unique token because it shares so many characteristics even with hype which we know now people understand the value proposition of if we stay focused on the best product all the partners if we um take over EVM and um uh over the last few weeks or have been days we're just within 50% of the market leader on on total volume so we are we are closing in that gap even before the launch. If we do all those things, of course, there's going to be >> a number of different uh institutions,

partners who are going to want to come in and participate. >> Um and again, their option set is pretty pretty small. We we're going to outperform anyways, but uh >> No, no, but I mean, hey, I mean, >> you know, we can get the Bitwise guys on the phone. We can get the uh the 21 shares guys. They'll get these ETFs going. >> Darn right. >> They definitely will. So, let's talk about this Arrow launch in July. I think this is like the you know you know the token is doing great today. Everyone in the chat is excited. They're calling you the cult leader here. Um and uh you know token's looking good. People are excited. July launch arrow coming to Ethereum with this new kind of mechanism you guys are dubbing predictive allocation. talk to us about, you know, we I think we understand, you know,

we're bringing this this uh platform that you guys have built onto the largest DeFi platform of Ethereum and you're going for the number one spot on Ethereum. It's clear unis swap has been the primary market leader. You're going straight for unis swap. You're trying to eat that their launch and grow the market share as a whole. You know, it's it's >> it's it's pure versus pure, but it's positive some. We're building the onchain environment >> errors going onto Ethereum in July. What does that mean? And why is predictive allocation this interesting new kind of spin-off almost on prediction markets and on this gamified auction design uh to bring more value and to create more value onchain? What is this launch mean to Aerodrome? Yeah. So I mean I think

it's pretty clear by this point that Metadex O2 the operating system that powers Veladrome and Aeradrome today is is the single most advanced um operating system powering a decentralized spot exchange today right you can just see it in the relative market share anywhere it competes um but we're never satisfied right um so we're not just taking Metadexo2 and uh extending that on domain Ethereum uh we are doing the single biggest upgrade um both on the techn technology side and on the economic side in this expansion coming together as arrow and moving on to mainet Ethereum. So we're trying to leaprog even farther ahead on on the lead that we have here today. And one of

the principal aspects of this is something that we decided to keep pretty quiet until um we were out in can right and we got to >> meet up and talk out there. Uh but what we announced was predictive allocation and um this is something that is in our minds an entirely new onchain primitive. Yeah. >> Um it's not something that has been done before and it is a primitive that is only possible in onchain systems. So I give this preface just because >> it's complicated. >> Chat says explain it to us like we're five.

>> I know. And it's it's a hard it's a hard thing to do because you know when you're talking about new primitives I mean why do we still roll out and we say read the Bitcoin white paper? It's like because to really understand it, you got to go into it. Or you know when Vet Vitalic dropped his first uh blog post being like we should build this thing. It's it's maybe called like an automated market maker, right? And then you'd have to spend hours reading it before you really understood it. So >> it's complicated. That's just a way of I guess lowering the bar on my explanation, but like let's let's give it a shot here. The way to think about it is that um AMMs came into existence and they solved for one problem which is like what is the price of this asset y

>> in any particular time and uh they were very good at that right you could remove all these intermediaries you could just know I'm here I want this the price is this boom we're off to the races but this is revolutionary stuff but what they weren't necessarily good at was where does capital need to go Where do markets need to exist where they do not yet exist? And so the evolution of these um exchanges built around AMMs was first self-organizing marketplaces. So um this is the classic two-sided marketplace of unis swap. You're a trader. Um you want liquidity. I'm a liquidity provider.

I've got that. You're going to give me fees and in exchange I'm going to give you um uh the tokens to swap against and hopefully the best execution about that. It was simple but is kind of a fragile thing. Um uh the big innovation in metadexo2 was thinking about these things as coordinated marketplaces. So you add a third participant in the token operator and the token operator is allocating capital into markets um which allows it to bootstrap things ahead of a clear market demand. Right? Um so uh two great examples of this is where we are leading right um there was not significant bitcoin trading on base >> um uh but anyone could have come on base

and spun up a pool uh in a self-organizing way but that's not how it happened right it happened because uh folks like us and like Coinbase used their capital allocation power to direct um capital to establish the world's best Bitcoin market and then that market ended up producing extraordinary value, right? It was like within a week or two more Bitcoin was being traded on Arrow and Base than on Uniswap and mainet Ethereum, which it had been basically since the genesis of DeFi and the FX markets of Eoc USDC would be another great example.

>> Um, but as of right now, when you're allocating capital in that way, you don't actually get the upside on being right about where a market does not yet exist, right? Because you get rewarded with the fees generated before. So you'd have to basically outlay your capital, take on the risk of bootstrapping that new market, but you don't get an asymmetric reward. So this is how we get into um predictive allocation and markets that are not just self-organizing or coordinated, but now anticipatory and predictive. So in predictive allocation, it is no longer that you are allocating capital each week incentivized by the rewards that represent what happened last week. You

are allocating capital to where you think markets need to exist next. >> And if you are right, this is where the prediction market thing comes in. Prediction markets are about, >> you know, making a bet on what you think is true. But it's not they don't play a role in actually creating the outcome, right? >> Um, but you do get an asymmetric upside in a prediction market, right? If you are right on uh figuring out uh a truth claim, right? when uh an outcome is uncertain. So what if you could do that while bootstrapping new markets? So the example I always like to use here is uh Wintermute um is uh they they bought tokens off the market to they lock them.

So they they hold arrow >> they allocate rewards each week. Wintermute has a lot of intelligence, right, about where they think um liquidity needs to exist. Y >> because they are going to be one of the single biggest traders into that liquidity. Yeah. >> Um and so Wintermute for instance, if they had a point of view that there is going to be an unbelievable amount of volatility, you know, in the blue chips next week, maybe they allocate 100% of the the capital from their voting power to those markets. that incentivizes those markets to grow in advance of the demand. And then because they were right about that, they get to collect an asymmetric reward by virtue of being

right about that is where the activity was going to concentrate or generate. >> But it could be something even way more in the trenches where you have a point of view about um >> you know a more exotic pair, right? you think um so and so is going to go on stage and they're going to announce something pretty amazing, you know, about this coin. So, you shift from a pretty guaranteed outcome. You could go from like voting for rapc. You don't know if it's going to outperform, but you know, it's going to generate a lot of value >> to allocating everything there and now uh it's printing, you know, a,000% APR LPS file in. Then if that volatility, if that activity, if those fees hit,

>> you get all the sort of gains from being right about that is where that thing needed to exist. Right. >> Wow. So you're able to so you've created a system to just kind of summarize you've created a system that you are incentivizing liquidity providers and capital allocators to go to where to make a bet on where they think the most amount of trading activity is going to happen and thus providing the most amount of liquidity if they are right um to these pairs which will give the users who want to trade that pair the best possible possible execution, the best liquidity, the most depth. And then if they're right in doing that early and embedding

on that, they get an outsized return of the fees generated or the value that was generated from that activity. And that resets on, you know, a weekly basis or some sort of cadence. So you're basically creating a system where you're incentivizing people to allocate capital in a more efficient manner rather than kind of having it broadspread like say about like you know let's just do five pools you know we're going to you know allocate it based on what what we think is going to happen >> and then that gives it the users the best case >> for their liquidity and for their needs. So my question is what if a lot of the large cap allocators make a make an al a predictive allocation for the week ahead or the day ahead or whatever the cadence may be in. Um, what if a lot of them are

are wrong? Yeah. And a lot of the activity happens on a different pair where a lot of your LPs aren't in and the experience isn't as good and the depth isn't as good. What happens then? >> Yeah. I mean, I think this just get comes down to >> do you believe in the efficiency of markets and if you know, show me the incentive and I'll show you the outcome. >> Right? So we believe of course that if you create a marketdriven um incentive that is oriented around um you get the most reward the more right you are and every participant from Coinbase to Wintermute to the onchain DGEN right um they know that each week

they need to optimize things to be as right as possible um there will be weeks in which they are wrong certainly Um but the collect intelligence because the incentives are so good because there is so much latent edge and information right in these systems that can be used um it will optimize right over time. And you think about >> we built this fully believing that a vast majority of onchain activity is going to be increasingly agenic, right, and algorithmic. Sure. And so you can imagine a scenario where it's not even individuals in many cases making these bets.

>> It is hundreds of um agents looking at an unbelievable amount of market signals and then allocating in those ways, measuring, testing results, refining to like capture more and more edge, right? You know, I'd love to see like AIXBT, you know, lock some uh S arrow because he's always out there talking about what he thinks is going to happen. now he can have some capital on the line and if he is actually right about those outcomes >> um he can be rewarded in disproportionate ways. So the thesis is basically like look people may be wrong but the collective group the intelligence of the of the of the pack is going to suffice such that there will always be enough liquidity to be very competitive with other onchain spot

markets and in in the in the event that the pack uh you know is right what you get is extremely optimized liquidity for the exact right pair at the right time plus the LPS he's, you know, benefiting in an outsized fashion which kind of creates a whole another layer of community and trust and desire to be involved. >> So like worst case is like you're you're going to be competitive and relying on market sophistication to kind of even out. Best case is like you're consistent like the system works in such a way as you're consistently right and you just have the a lot of fees being generated because all aggregators or any sort of flow kind of like machine will see that

you guys have the best liquidity route trades there or people will just trade direct and uh they'll get a better experience and and and then again the LPs will have a outsized win. >> Yeah. And I'll give you just a a reason to bet on why this will be far more right far more often than it will be wrong. Right. >> We've seen this already in prediction markets. >> Okay. >> Um >> political uh commentators, um election reporting, uh pundits, right? >> Yeah.

>> Um everyone had opinions. You had unbelievably expensive polling firms who go out and market and run all these sorts of things. What is the best way to actually know right now the likely result on any particular question especially those of larger market sizes like an election result a primary it is going to things like poly market >> 100%. So if the incentives there work such that that is the best vehicle for truth discovery in any single moment in time y >> that exact same mechanism applied to capital allocation and then the reward uh for that onchain I think uh it's very easy to take the the bullc case um on this and if you think about the markets

that these allocators are trying to bootstrap their competition is still these lagging uh self-organizing marketplaces. So they are trying to build liquidity that moves in an anticipatory way ahead of things. Um and that's just going to further increase um the degree to which the self-organizing markets struggle to compete which brings in the compounding effects of u more liquidity moving into >> um rails that look and operate you know far more like ours. >> Yep. Yep. Yep. Yeah man. I mean so mid July launch just kind of closing out here what is left from you guys to prepare are you guys ready to go? Yeah.

>> Uh what's you know what's what's left? >> Yeah. So I mean we are fully in the hands of the auditors now right we're working with uh chain security. We're working with Sherlock. We're doing of course multiple rounds of audits. We're doing um >> bug bounties and all that sort of stuff. But of course it is a moment in time where um if it wasn't your top priority prior and we've always taken security unbelievably seriously but I think clearly we've seen over the last 6 months some teams didn't have the the same disposition.

>> Um but uh we are going to be sure right that those auditors we are completely in their hands. They take as much time as they need. So I think we should have a good read. Uh we're about to close another round here shortly. So, we'll start to I think have a clear idea on the exact date. But, I mean, the tech we've been working on for years, the economics we've been working on for years. Um, you know, if you're a DGEN onchain, one of the most fun parts is when it feels like a game, and it will be a game when we show up to to mainet because last time we had any fun there was the Sushi Swap vampire tech. So, you know, we've got spreadsheets. we kind of we kind of know, you know, where we want to go and play and and like I said

before, you know, >> given how dominant Aerodrome already is today, we are already the number one exchange in terms of revenue. Um, we're leading the the market leader there. Um, we are very close on volume um and then TVL and fees, right? uh a bit farther behind, but it only takes us taking about 20 to 30% of mainet Ethereum and we are now the number one largest global spot exchange on chain. And my hope for that, right, is not just that that we're successful, right, and that um this hyperefficient system um that shares all the value, right, and all the other participants are rewarded for the bets that they placed, right? Uh but my hope

is that it catalyzes a remaking of the top 100 tokens because now you have two examples. Yep. In the two most critical verticals of the onchain economy that say anybody from anywhere can beat anybody if they maximally redistribute 100% of value. and all those top 100 tokens that that aren't doing that they fade and they start losing against anybody who builds according to these like arrow and hype principles and then by the way that's not just for like the disruptive power of our industry but that is how we go beat the trady incumbents too because they can't beat this they they've got to extract value out that's baked into the whole system we don't have to do it so this is also

the thing we get to go out and beat them with >> man that just gave me some chills let's give them some some Love, man. Alexander Cutler live from Tokization Tower. Alex, great episode. Thanks for joining us, guys. I'll be right back to close out the show. We're going to go over markets, charts, scroll the timeline a bit, and just get caught up on everything that we missed earlier on. We'll be right back from Nization live from the financial capital of the world. You're watching the roll up in Alexander Cutler. Thanks, Alex. >> [music]

[music] [music] [music] [music] [music] >> We get deep. We get deep. You know we get deep.

You [music] know we get deep. We get deep. You know we get deep. You know we get deep. [music] We get deep know we get deep know we get [music] deep. We get deep. You know, we get deep. We get we get deep money power. [music] [music] >> [music] >> We get

deep, you know. We get deep. [music] We get deep. We get deep, you know. We get deep. [music] We get deep. We get deep. You know, we get deep. [music] >> [music] [music] [music]

>> Yo yo yo yo yo yo. Robbie's done for the day. The boys are just hanging out in the tower. What do I buy? Uh, excellent interview. Thank you. Yes, sir. Shine. Time to buy some Arrow from Sin Solidarity. Yes, I agree. Alex was getting me even more bullish for Arrow than I already was. Me too. LFG. Yeah, I mean this thing looks good. I mean, daily candles obviously flying. Um, so maybe you missed it for today, but I mean, when you zoom out, we're looking at something that is we're looking at something that is at alltime lows pretty much right now chart-wise.

Like, I mean, it's up 40% from the all-time lows. It is 20 or 30% away from becoming the number one spot exchange in all of crypto. They are about to go to Ethereum and go straight for unis swap and they are fully redirecting 100% of the value back to the token holders and it is trading at a $400 million valuation which is about 135th 136th of Hyperlid's valuation and They are making a ton of cash.

And so if you guys recall what I was talking about with the net token value flows with Alex, um, let me pull up the the this the chart for you guys. Um, here we go. Here we go. Here we go. Where is his tweet? I'm finding his tweet here. Here we go. The biggest lie our industry ever told was that ret unlocks shouldn't count as emissions. And so guys, so this is the the work that Aerum has done here on net token value flows and it's actually showing you token revenue which is a

token direct claim on protocol value, fees, buybacks and burns and then token emissions which is the full cost token holders subsidize. Right? So, when you hold the token, you're subsidizing this cost because other people are selling it. Um, and you're like, you know, you're holding it. Inflation unlocks and rewards entering circulation. And so like the point that Alex was making is that some of these L1s and like other assets, they have this almost infinite um like infinite spend compared to their

revenue. Like like look at Salon. So they make $12 million in revenue and their emissions are 1.1 billion even something like like ETH and Venice. And so it's kind of ironic that the number one here is Pancake Swap. Like what >> that treasure ad slaps harder than expected. Thanks, bro. hype pump arrow radium.

There's four assets that if you judge by their way of thinking about the market, there's four assets that are investable from this net token value flows perspective. It's kind of nuts. It's kind of nuts. And so you come into the hype pump the tokens here and you look at what is you know what is happening and it it really kind of presents a different a different picture of like what is investable in this space versus what's not.

And so, you know, I think with Arrow, like I think their their whole thing is like, look, we are going to be the the leading spot venue. Just like Hype is like the number one purpose venue, we're going to be the leading spot venue. And I think they have a really really really really strong chance of taking uh volume and market share from Uniswap. And yeah, I think I think I I feel FOMO right now.

I feel FOMO on a drum right now. [laughter] I feel FOMO. It just looks good. It just looks good. And we know we have a catalyst coming up. You know what I mean? We we we know we have this July launch. So, it's interesting for sure. Thing's ripping. Hype's ripping, though, too. I mean, hype looks insane. How about Arthur Hayes being sidelined on this on the trifecta? He sold Zcash down here for sure. Definitely sold near somewhere around here. And I'm pretty

sure he sold hype somewhere around here. We got about two more green days away from some from from CT just absolutely dumping on dunking and dumping on Arthur Hayes. That is going to be funny. That is going to be funny. What is SpaceX doing? Has anybody traded SpaceX? Has anybody made any money on SpaceX? Has Has anybody touched that? Wow. Ripping today. Wow.

On a tear. Wow. On a tear. On a tear. It's heading back towards like those like when the IPO first. I'm going to add to my arrows today. I can't resist. Get a little pullback, man. Try to I don't know. Not financial advice, but that 40 cent level. If they give you a nice little pullback there, it'll be money. Damn. SpaceX ripping.

Apple bouncing. Everything's green. Everything's green. Everything's green. So, yeah, guys. I mean, it was it was looking a little bit slow for a little bit, but uh it's um it's looking much better. And you know what's next, guys, is this is uh Open AI. And I don't know if there's much volume happening on this right now. I think they actually might have Venuals is actually shutting down. So, we'll kind of see what happens to those pre-IPO markets, but these two are

coming guys. Like, these two are coming. Anthropic and OpenAI are coming this year. They're going to be huge. They're going to be huge for Hyperlid. Be huge for just like the decentralized trading. What was the uh So, here was Dinaris that launched. We had them on the show on Friday. Not a ton of volume obviously, but they I I checked over the weekend and they have some decent volume. So SpaceX, is anybody in SpaceX?

40 cents is nothing if Arrow does what we think it will. Yeah, I hear you. I agree. I agree, man. What a day. What a solid Monday. What a solid Monday. What a solid Monday. I mean, people are people are saying that that that could have been the macro bottom for Bitcoin. We'll see. We'll see, guys. We will see. Guys, we had an amazing show today. Everybody watching YouTube, give us a a thumbs up there. Throw the notifications on. Throw a subscribe on.

We appreciate you guys. Uh, it's been an amazing Monday here in the tower. Um, beautiful day outside, back in action, back in the back in the markets, back online. Hell of a weekend with the Knicks, the Canes, the World Cup. Um, I definitely want to do some World Cup stuff though. So, let's see who's playing. Let's see who's playing. And we can do a little team ride real quick. Belgium is playing. Egypt right now. Spain, Urguay later, New Zealand, Iran.

Interesting. Waiting for the US. Waiting for the US to play again, guys. So, that's where we're at. Yeah, that's where we're at. We're just going to hold off on any more uh World Cup predictions until we got a better game. Spain's definitely going to win. Producer in producer in the back knows that Spain's going to win. Maybe you take the underdog there and you do a little uh you do a little bet on the tie.

Be careful out there on Thursdays, Bros. World Cup. Yeah, Thursday is the um is the parade. It's going to be wild. So, ladies and gentlemen, you are watching the rollup live from the tokenization tower. Great show. Appreciate you guys rocking with us. Get a W in the chat to end the day. We'll see you guys back here as usual, per usual. same place, same time tomorrow, 12:30 p.m. Eastern from the Financial Capital World. We've got a great set of interviews tomorrow. We got markets, charts, news. We got Koshi's, John Wang, we got Corey Clipstein, huge Bitcoin whale. We got a lot to talk about. It's going to be a fun show, fun week. Thanks for rocking with us in the chat, guys. You make this so much fun. Much love. Love every one

of you guys. Thanks for riding with us. Roll up, fam. We're out. We'll see you guys tomorrow. >> [music]