🚨LIVE: Winter Is OVER. BTC, ETH, ZEC Ripping! Mert & zkDragon, TechDollar CEO & Will McEvoy Join

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[music] >> We're rolling. It's headed to the top. If we're not already at the top, we're going to the tugos. >> Roll up is my favorite. People >> from all [music] walks of life, all over the world, all over this industry come together for the roll up. [music] [music] >> [music] [music] >> Zoom out. The institutions aren't

coming. They're simply [music] here. It's the golden age of crypto, guys. Get right. Let's go. [music] >> What is the next? See you on the show. >> I'm running out of time. Ladies and gentlemen, welcome back to the road. It is Wednesday, August 19th. We are live from the tokenization tower at the nest broadcasting live from the financial capital of the world. It is a lovely Wednesday, August 19th. The bottom is in shorts have been blown out. $1.12 billion dollars of liquidations in the last 20 in the last hour. I'm Andy here with Rob, guys. We're streaming on the X

accounts. We're on the YouTubes. We're fired up. We got green lights everywhere. [applause] Give some love to the production team behind the scenes on Alex Megan [cheering] Co doing amazing work. Nero, Leo, Marcelo in the back cooking hard to make this show possible. Guys, what a day. Rob, how much are you up today? I mean, you got to be up six figures today just on this morning. I mean, come on. [laughter] >> Good morning to you, too, Andy. It's a it's a green morning across the board. I mean I mean what what are we been doing here? I mean this is [laughter] this is this what haven't we been talking about this? Haven't we been haven't we been saying that this has been the pre-bull?

Haven't we been saying that >> accumulate pump off the lows and everyone is going to be left sidelined. >> Accumulate accumulate accumulate. >> That's what we've been talking about here. I mean, what better way to solidify a bottom than the Treasury Secretary of the United States saying that they're going to make at least 4 billion in bond purchases. That is as QE as QE gets. That is literally taking bonds off the books, serving liquidity to the markets. Money printer is on. We are so back. >> That was some stealth QE. If we've I mean, that's the most QE thing we've seen in a long time, right? We've we've been in this interest rate hike environment. Now we're kind of in like this no rate environment. And that was

like a little glimpse into what's coming and what that means for your hard assets. Link Toad, great to see you. Great one-armed bandit. Uh good to see you. Woke up in a good mood. Quantum Rose, yeah, us too. Uh Omega Candle on Bitcoin. OG killer, great to see you, man. We've been hammering it. Glad you're here. Hyped to hundo. Take a look at Netnet on Robin Hood. gents link toad link link toads and marines congrats on w uh the state of Wyoming transitioning to you guys and then never mind today as well you guys are what over $15 billion um of transfers from what you guys call legacy infra providers um congrats $10 chain link today token congrats there um

yeah >> very cool yeah I mean there's just so much that we can go on here. Obviously, the big news, >> where do we start? >> I I think the most um the thing that like if we want to look at why Bitcoin is up almost 10% today, why is the market green across the board? Why are we pumping so hard off the lows? You know, you want to start with the macro. I think this is just pure money printer turned on, debasement trade is back on. The liquidity injection is back and it's happening at the Treasury level rather than the Federal Reserve level. I think that is the most clearest indication of why we're up and green today. I do think that the SEC has, you know, this reggg

crypto stuff. The White House is meeting with some leaders in finance and technology today at 2:30 p.m. We're going to hear more about that. There is a confluence of factors but I there is just absolutely no doubt that the yield of control and the liquidity I'll use the exact terminology uh the liquidity support is why the market is so green today and I think I mean that's just what we're going to focus on and then >> we know that this program >> that got announced is going to continue until November 4th. So this longdated bond >> longdated bond purchases of of at least 4 billion in every Treasury auction is

going to happen from now until November 4th. >> The the and the people are saying on November 4th it's set to expire because they're going to increase it even more on November 4th. It's not going away. It's going to be there's going to be additional liquidity support that's injected into the bond market from November 4th and beyond. So >> are you guys having fun yet? Guys, we have an amazing show for you today. We've got uh Mert and ZK Dragon. ZK Dragon is one of the lead devs of Zcash. Mert, obviously his ZK bags are probably worth more than three mansions in California. We're going to talk what's happening there. Things up 10% today. Uh today we had Ironwood get through successfully. A lot of the orchard pool has moved into Ironwood. Um that's bullish. We got him and Zika Dragon. And

then we got Terrence of Tech Dollar here in the tokenization tower talking about what's happening there. And then we got Will, the CIO of Cipher Punk Technologies who just announced the largest mining pool for Zcash, 16% of the hash rate. As always, guys, we're here at Tokenization Tower by our friends at Plume and their onchain asset management infrastructure products. Guys, check out plume.org to learn more. I was telling the CEO today that they're in a multi-month bottoming formation. Looking like a double bottom there at the lows for for the old guys at Plume.

So, looking great. [snorts] Um Edward says 80K by tomorrow, 90K by Sunday. SEC drop rules rotation out of AI and into Bitcoin and gold because we're printing. I think this is also like something that needs to be talked about which is that you know we are seeing this absolute explosion of capital into AI and tech right it's been like unprecedented money going up these big IPOs coming you could argue we are closer to the end of the beginning of the AI infra bottleneck trade than we are closer to the beginning of that >> I I agree with that >> that capital would have to come

somewhere, right? That capital has to go somewhere. Um, and I think we're seeing the early earliest innings of some sort of rotational capital. If you look at stocks S&P and, um, the NASDAQ today, they're not really reacting to this news as well as hard assets are. gold, silver, um you know, Bitcoin, crypto, these types of more like monetary uh hard assets are re are reacting a lot stronger to the uh easing news from the Fed and from the Treasury than um you know, tech stocks. And so I think there's there's something there to note.

So guys, we've got a great great show. We got merch, we got the whole gang. Let's get into it uh quickly into a couple of our segments and then we're going to get Mert and the guys up. Before we do, let me tell you about dinari building infrastructure for tokenized US equities and bringing real world stocks on chain to explore SpaceX on hyperlquid and more. Some of the best spot liquidity, visit dinari.com to learn more. Guys, it's a beautiful day in New York. It's 89, sunny. We're We are literally right there in the middle of that building in the Empire State. It's beautiful. It's warm in here. You got to love it. It's a hot day for a hot market. Let's keep it rolling. Um, you know, I'm sure it's warm down there in Florida. Let's get into the markets. I know we just, you

know, started this and then we'll get merch up. Um, before we do, let me tell you about FRA, our premier stablecoin partner, open stable and borderless. Visit frack.com to learn more about their FRANET product. They just launched. $1 in, $1 out. Some of the coolest yields uh on chain for dollars and more. So, markets. So Rob, this is obviously what we've been, you know, opining on. Uh S&P, Dow, and NASDAQ only up about a percent or about a half a percent, a third of a percent, half a percent. Treasury said it's going to more than double its long end of the yield curve buybacks. Oil is up a little bit. Bitcoin's flying. Bitcoin's at almost hit 70K. It may hit 70 on this show. 683. All of these things are up 5

to 10% today. And again, you know, it's a sign of the fact that hard assets are reacting much stronger to the bid and this kind of changing of the monetary policy than than kind of tech stocks or stocks in general. We'll see how long this lasts, of course, but I mean there's a lot of sleepers here. There's a lot of people that are not listed or are a lot of tokens that are not listed on this chart that are doing very well. >> Lighter is doing fantastic. Zcash is flying, NAR's flying, uh, EtherFi is flying. I mean, I can just go down the list. I mean, everything is green. Um, finally, that PUR position that you guys have been know that I've been riding on for so long. I'm so close to being above

water. Pump ripping. Frack, Plume, Venice Zama Chainlink Aerodrome ripping. >> Yeah, >> just a green market today. I mean the market is now going to shift from capital preservation to capital uh appreciation. Uh and I think that means our conversation is going to shift into one of outperformance. >> Um you know there's been some outperformers there there's things that you know had quite a little run in what we were calling the relative strength trade. uh we also called it like a secular bull market where there was sort of this AI crypto privacy crypto niche

that did extremely well in addition to the revenue meta which has done well in terms of capital preservation as well as uh you know kind of the secular bull market. >> I think part of the thesis going forward now is that the outperformers will continue to outperform. I do think there's you know a bigger question about outperformance. we obviously have, you know, taken an interest in sort of two classes of tokens in this market. Uh, one of those classes of tokens being those with monetary premium. Uh, and so there's really only two maybe three coins if you want to put them in there into that bucket. It's Bitcoin, it's Zcash, and maybe it's Ethereum just because people like to make that

argument, but we're not going to make that argument here. >> Yeah, they love to do that. Monetary premium is something that is going to catch a bid extremely well because of this debasement trade that is back on. So we're seeing Bitcoin, Zcash, and gold really do, you know, exorbitantly well as a result of this liquidity injection from the treasury. >> Yep. >> The other class of tokens uh is the that that we believe is going to continue to outperform are is the revenue meta. It's the class of tokens that aren't just generating revenue but are acrewing value. that revenue is acrewing back to its token. So that's what we're continuing to watch. Uh the monetary premium thesis I think especially now is the easiest to underwrite because

Bitcoin and Zcash are the I mean just ripping off the lows. Zcash is pushing like pushing highs almost 600 bucks. And so that class of tokens because it's so few the wealth effect is going to be extremely concentrated into that class. >> Cash looks ready for alltime highs. I mean we're going to hear from the guys. Um, >> and then there's obviously a lot of room and and to explore within the revenue class of tokens. And I anticipate we're going to continue having these conversations around buybacks, these value acrruel mechanisms, these revenue drivers that we're seeing in some of these onchain businesses. And we're going to talk about, you know, what some of the companies that are doing this the right way, what are they doing, who are they? and you know how more companies

can ultimately write their ship and get into, you know, this one-way train of the K-shaped token economy, this class of tokens that is going to continue to to outperform. >> Yeah, I agree. I mean, we're kind of thinking of it as like a barbell. You got, you know, the onchain businesses on one side, you know, we've spoken about them tirelessly. We'll keep speaking about them. And then you've got the store of value. you got this kind of middle bloat of all these older L1s, older L2s, older infra, older kind of applications that aren't really doing a whole lot that don't really need your attention in our opinion or your bid.

You know, that's just kind of like how we're thinking about it. It's like your attention and your bid is finite. It's a it's a valuable resource. Your time, your energy, your attention, and your capital. So, we're just all we're saying is we think there's two core areas to maximize your attention and your bid. And with the store value stuff, you don't really need to have that much attention. You just need to have the bid and the kind of coonus to hold, right? Longer term and just try not to sell. Try not to sell. Try not to sell on the business's side. This is where you need a bit more attention and bid because it's a bit more of a selective bid in our opinion, right? So, you know, for example, pump was just highly undervalued and doubted and so you had

to be seeing that trend start early about two weeks ago and be bidding on that, right? And now Etherfi is kind of, you know, you have to have your attention on the fact that it just had its earnings call and that they have all this amazing business growth and that, you know, the token starting to break out a bit. Same thing that ha, you know, same thing happened to Near Lighter's go, you know, go uh going through like the second stage now. Hyperl's on like the fifth stage of this. So the launching business part, you kind of need a bit more attention and your bid. And then on the store value, I think it's really just get the bid in there and try to just not look at it, >> right? Now we have momentum and now we have flows. And so I think now we're

going to see, you know, some things start to catch a bid. There's going to be rotational trades both inside and outside of this of this industry. Um, I'm already starting to think and actually Jim Kramer of all people put out a tweet which didn't make it into the doc. It was just before we started, but he said Besson is going to uh sell he's going to buy the long end at a discount, which is what he did today and now and then he's going to sell the short end at a premium. And I think this is going to have significant impacts on stable coin businesses, you know, the the entire stable coin sector. And so we're going to start to see these, you know uh >> craving, >> yeah, [laughter] the these sector shifts, right, where I do think that there's going to be a

rotation both of narrative and flows, and we're just going to continue to watch, you know, how these things are interrelated. >> Yeah. Love it, man. Love it. All right, guys. We've got uh first two guests of the show today, uh Mert and Dev. Uh Dev's first time on the show, ZK Dragon. Hell of a handle. Um, and Merch, of course. Uh, I mean, Zcash is up 10% today. People are waking up. I think, um, a lot of people are sidelined on Zcash right now, though, because, um, yeah, we like, Rob, explain what happened with the whole FUD thing real quick for some context and why we, you know, we think a lot of people are still sidelined here.

>> Yeah. I mean, we've bounced back to pre, uh, you know, ironwood orchard pool levels. Uh there wasn't and this is just some pre-context here before we get our guests up. I think they're getting ready in the back which is that you know we we had this uh this um movement inside of Zcash to investigate the protocol using some of the most advanced AI technology out there. And so you know there was not any sort of vulnerability. There was no exploit, no counterfeit Zcash created, but there was a movement to start to throw this AI technology at it to try and preemptively discover any potential exploits, any potential vulnerabilities. And so people

took that as, you know, well, what if they find something, right? And and there was a lot of fear in the market. There was a big sell-off and that just kind of cascaded as more information about this came out. But then that selloff recovered extremely quickly. I think you know we we went from the 500s down to the 200s now we're back 550 and more and so in response to that right there was this uh turnstyle accounting method that was implemented uh you know we and we've talked at length about this on the show and ultimately it was discovered that hey you know this new pool we're going to migrate from the orchard pool to this Ironwood pool it was a big buildout team moved extremely quickly had access to all the best you know AI coding technologies and then ultimately you know rolled this out as

far As I understand, it's been a flawless launch. Uh we'll hear from uh from a couple of the guys in just a moment. Um and now we're in this process of migrating from the old Orchard pool to the new Ironwood pool. Uh last time Mert was on the show, he shared a dashboard which allowed us to track the flows from the old pool to the new pool. And so so far everything has gone exactly according to plan. There has been no counterfeit Zcash found. And as more Zcash moves from the Orchard pool to the new Ironwood pool, it becomes less and less likely with every Zcash migrated that there is a counterfeit Zcash that has been created. So I think that is the context for what happened

for Zcash, the creation of the Ironwood pool in response to the Orchard pool. And now we're here um where Zcash is basically one of two uh assets out there that is uh digital asset and it is uh it it is one of the few monetary premium assets that has that that monetary premium narrative and I think we're going to continue to see that momentum you know shine through in the asset going forward. >> Got to love it. Let's go. >> We're going to bring up let's go ahead and bring up thank you for the context Rob. um very dialed. Uh also just some other context. I mean there's just been so many Bitcoin OGs you see in the timeline, Alex Krueger and a lot of the OG traders and uh Chris Berniski and

older kind of OGs just really really turning the tides from looking at this asset and being like I mean something's, you know, something's got to give here for the privacy side. >> Obviously, and we can go ahead and bring up our guest. We're going to get get into it because this is helping set the scene here. like you know obviously there was this uh new pool that was generated and it was a technological upgrade for the entire network and for the asset but there's also huge implications of privacy confidentiality shielding assets we have the rise of AI the collapse of privacy all over the place and Zcash comes in as the answer to a lot of the claims that we have been seeing with with issues in privacy as of late. So

>> Dev Mert, welcome guys to the show. Great to have you guys. Merc, good to see you. Dev, welcome on. >> Thanks for having us. >> Dev, it would [snorts] it would be a miss if we didn't give you a chance to introduce yourself uh to our audience. First time on the show. Would love to hear just about your background in engineering and currently what you're doing with Zcash. >> Cool. Um so founded this company called Valor Group which is basically just making Zcash scale solving uh a bunch of bottlenecks to try to hit the dream of uh make this thing credit card scale under pure proof of work. So two two or three years time you should be able to like pay uh do 50,000 plus transactions the same level of that Mastercard Visa hit and get this all like subsecond and

in parallel make this all postquantum and secure. Um, so this actually takes a bunch of uh work across the stack from the node software to wallets like uh the blocker for scale is actually the wallet side, not not even the nodes. My background in the um is that I've been in the ZK space for like over 10 years. The first uh paper on how you do postquantum recursion was uh from our our group called Fractal, which is now kind of the approach the entire industry is doing on ZK. Go uh go use binary fields uh which we were on and do starks. So turn nice turn of phrase 10 years later this is the consensus. Then

I was part of the founding team for tenerint and cosmos. So kind of did everything across the stack to help make cosmos uh as fast as it was. And then founded uh osmosis with a couple other folks last four or five uh four or five years and here we are now making Zcash scale. >> Love it. So what Dev, just to follow up on that, what was it that you know basically pilled you or converted you? Obviously a big believer in ZK for a long time, but you know had quite a tour and journey in the Cosmos ecosystem. What sold you on Zcash? Why why did you move over there?

>> Uh so honestly when people asked me kind of the entire time why crypto, it would actually always be this dream of private payments. And then you had this you had a couple big problems. Um one how do you get this how do you bootstrap the stuff to work like uh like you just have to make chain you have to get people on chain to do anything uh for uh you know privacy to work there's currently zero users then you have to get things fast and have good UX and you got to solve a go to market problem so first uh when we started Osmosis the the question was got three big problems left in crypto scaling uh privacy and me well uh we were like okay we kind know everything

we know about scaling 2021. Uh I put some asterisks but I actually think that's directionally true and scaling is like a lot of execution but not new ideas. Uh not insanely new ideas like like Salana was already well underway of like the scale path. Um then we had uh privacy and ME we thought the ME crisis was a bigger problem in 2021. Um so that's where osmosis uh started with and then the plan was to always go uh go into privacy. >> Yep. >> And then uh D5 market pressures take you different places and uh it didn't make sense to hit the privacy dream. And then we see that uh like Zcash is uh is working and like the question is if we

want privacy to work do we try to make a privacy layer on Salana or do you do make make Zcash win and I think that the better choice was make Zcash win because let's get as AI is accelerating we need like uncompromising privacy which means it has to be at the base layer. Hence uh made the choice of like let's go all in on making Zcash uh Zcash's privacy as good as it can be like in the hands of everyone. >> Love it. Love it. Well, you know, welcome to the show. It's great to have you with Merc. Kind of the inspiration of today was just really just to get a update on post Ironwood. Mr. We spoke maybe 6 weeks ago or so um preIronwood and we kind of spoke about all the

different um you know outcomes that were possible and what people needed to know. Obviously now we're you know post the upgrade and there's a you know whoppingly significant amount of Zcash having left the orchard pool I think to the tune of 85 plus percent if not closer to 90% now. Um, so would just love a kind of synthesized 6 weeks what happened, what went well, what what did you guys learn? Um, and just kind of catch us up to where we are today post Ironwood and then we'll get into more of the road map into the more of the engineering and just kind of uh, you know, what's on the horizon.

>> Sure. So yeah, I came on the show last time, but just to reiterate slash bring people up to speed with that context, there was obviously a vulnerability found. That vulnerability that was found was a result of ramping up red teaming internal to Zcash, right? So, uh, a year ago, maybe even longer than that, at this point, it was pretty clear that AI was particularly good at exposing security flaws. And it just can look at more places more deeply at all times, right? It's obvious. And so, Zcash got ahead of this by red teaming and doing audits internally and beefing up all sorts of efforts like that across

multiple core teams, not just one or two. Obviously, Deb leads Valor Group. There's also Shambo's team, Tachion, there's Shielded Labs, there's Zodel, uh there's now Zcash Labs, which got released uh since the last time I came on the show. So, there's quite a few core teams actually. That's quite underrated, I would say. I I haven't seen that on any chain this many core teams. So while doing that of course Taylor who is a very specific domain expert on Zcash and related tech found with at that time some of the latest AI tools a vulnerability that would have allowed for potentially counterfeiting

shielded notes in the orchard pool specifically. Right? Right. So there was a lot of misinformation about this because people would think people were not aware that there is a turn style mechanism which basically infers that only that pool would be affected and not the entire supply and obviously that pool is a subset of the supply and obviously given that Zcash has been basically the only coin that really went up double digits, triple digits or even single digits to be honest uh since the last year it obviously was getting a lot of attention, both good and bad, which is good because that's where the edge is. And obviously all sorts of rumors like, oh, they were just printing infinite money to give the Kos, which of

course would make no sense cuz then you would have to overcome infinite uh selling pressure as well as the shielded pool >> as and the shielded pool wouldn't go up in in terms of aggregate size and all sorts of different inconsistencies. Um but obviously uh the big trade-off in ZK uh or privacy in general is that there is this one trade-off for the auditability of the supply right um where if you have perfect privacy by definition there are some things that have to be private right such as uh who holds what and so that makes it particularly difficult to completely verify that supply and so Zcash has boundaries like turn styles around this and

that made it worse because then it's Twitter. And so the very definition of FUD, fear, uncertainty, and doubt was the perfect sort of uh environment for this because you could just do uncertainty, right? You can just say it could have happened, it could have not happened. And so all the Zcash guys uh Dev included or Dev and Sean majorly actually uh really helped lead everything made the effort to formally verify. I think there was two or three in parallel actually. um as well as um work with Zodel to release this new pool. Uh and this would make it such that once the funds migrate from Orchard to Ironwood, if the turn style doesn't trigger, you

can tell that it clearly wasn't uh the vulnerability was not actually taken advantage of. We're pretty certain now. I mean like 95% certain just statistically speaking but logically speaking I think I am 99.999% sure at this point so that risk is pretty much gone but then the more important thing of course is that how do you prevent this from happening again >> right is this possible right because as an investor that's what you look at you look at well could this happen again because there's there'll be more bugs uh and Dev can talk more about this part because he's obviously the ZK god or the zk dragon so to speak Uh but we uh the core teams have basically mathematically

proven the soundness of undetectable counterfeit bugs. Right? So the order of the the magnitude of the risk that you're taking is now an order of magnitude less. And this is going to become even better. [clears throat] Sorry. Uh this is going to become even better with the next fielded pool which will be Tachion which will be uh quantum proof. So ironwood is an upgrade in that it's not only formally verified and uh mathematically sound but it's also quantum recoverable. uh Papion however will be quantum proof which is a different thing and Dev can explain that in more detail but also it'll use I believe simpler circuit simpler arithmetic which will also

reduce the types of bugs there that are possible by an order of magnitude right less stuff less moving parts less things that can go wrong >> yeah Dev maybe you could just give us a little bit of an insight on on the engineering challenge it was to achieve the formal verification aspect as well was I guess you know explain like I'm five how or why MERT is so statistically confident that there is no counterfeit notes. >> Yeah. So on the formal verification um before what would you have to do to trust Zcash? You'd have to say like okay there's a bunch of smart engineers somewhere who uh okay let's start with Bitcoin. When you how do you know there's only 21 million Bitcoin? Okay,

you go run a full node and you say like, I'll just go count all the balances in Zcash. Okay, we can't go count the balances. So, what's the next idea? We have a couple shielded pools and we count, you know, the amount of money that went into the shielded pool and the money that went out. This is what the turn styling like like words mean. You can start analying like a good analogy in your head is like uh take a lending market. Let's say you have uh two different lending markets, one with 10 million USDC, one with 1 million USC. There's a bug in the 1 million one. Only 1 million's at risk. Similar idea, but now within the shielded pool, I've deposited in there. How do I know I uh my money is safe?

Historically, you'd say that there's this like spec somewhere that a bunch of smart people uh wrote, reviewed, and really audited. And we just like know because of all these audits and people are smart that there's no bugs. Now uh what form verification did or has done is we have a mathematical proof that hey look our implementation perfectly matches the spec. >> So Zcash has never had a problem where [snorts] uh we've we've designed a wrong spec. We had uh we had this pro uh the problem we had here was that um the implementation had a slight bug in orchard that you know took years or AI to detect. So now the defense we uh we now have is that

okay we've mathematically proven that the circuit you use is and we're checking on every single transaction implies exactly what you want. But a spec is like an ambiguous term. It's actually kind of simple. What you're proving boils down to a simple claim. If there's a payment and the proof passes that means that uh someone owned some notes and then the total input u of the transaction is equal to all the outputs. So if you spent 5sec there cannot be more than 5sec out. And that's kind of all we have to prove here.

But this uh and so this kind of solves the big scary risk of could there be a second bug? No, because that would mean that this like mathematical proof engine is false. Mathematical prevention sounds also like this ambiguous scary term, but it's kind of just composite logic of um let's say that you say uh let's say you uh had a rule that all uh all brown dogs are nice. Uh Sally is uh Sally is a brown dog. Okay, that implies Sally is nice. Like for verification is just doing that at a large scale. like it's not some like big scary thing. It's just a lot of tedious

work once you have like millions of conditions. Uh so we have that proving that like look our uh this or this iron word pool is sound. There's no counterfeiting as long as you know your basic your cryptography assumptions hold. >> Yeah. And so you've effectively cleaned up a lot of the a lot of the you know potential inconsistencies. uh in the codebase. Um and now that is kind of behind us. You know, we've talked at length about, you know, this potential vulnerability, this turnstyle method, and now the migration from the Orchard pool to the new Ironwood pool, and it seems like it's going extremely well. I think everyone sort of now has their eyes set on Tachion. Yeah,

>> obviously quantum is a unresolved problem in the Bitcoin ecosystem and there's this sort of overarching theme at least philosophically, socially that there's this migration from Bitcoin to Zcash. >> I'm kind of curious if you know you think that there is still this ongoing migration from Bitcoin to Zcash, you know, philosophically and then also maybe, you know, from what you're seeing there on the ground. And then I'd love to just dig in a little bit more into Tachion. Is it primarily this quantum focused uh you know proofing? Is there other components to tackon that you think are you know worthy of note you know expanding the ecosystem and um is this the primary piece of work that all

of these uh labs companies and contributors that you mentioned earlier are they all focused on Tachon and what are they focused on in particular? >> Sure. So the first question about migration. So the good thing about Zcash and what a lot of people don't necessarily understand if they're not let's say if they're on CT is that Zcash is still relatively speaking a tiny asset uh even in crypto. I mean uh I believe Dogecoin is above it. Uh obviously like it's barely in the top 10. Uh last year was barely in the top 100 uh or a year and a half ago at this point. And so there doesn't even need to be a migration uh from Bitcoin to Zcash.

It can just be 5% of people putting some amount of money for Bitcoin and that'll already be noticeable. And so if you just do that for all the ecosystems above it, which by the way is happening. I mean, one of the things I used to say when this run started was that privacy is the last PVE in that it doesn't necessarily interfere with really anybody else's goals except for potentially Bitcoin, right? Which is to say, I still run my company on Salana, but on a personal capacity, I hold Zcash. I try to help wherever I can. I'm talking about right now. And that's because what Solana aims to do is completely different than Zcash. Same with um really all the major chains uh

except for Bitcoin. And Bitcoin, I think there's multiple schools of thought, but one is that why would there just be one store of value asset? Why would there be one money in a digital sort of atmosphere where you it's it doesn't cost anything necessarily? I mean there's the proof of work cost of course but there is no reason to get zero sum especially at this point in time right and so certainly there have been some individual migrations of people who have gotten disillusioned with crypto and and and Bitcoin. I would say for example I migrate to an extent. I mean uh I used to hold much more Bitcoin than I do uh

today. I still hold some, of course, but the the point of what I'm trying to say is that it's a tiny asset and it's a PVE. Everybody needs privacy. Uh, it probably is the closest thing to the cyberpunk ideal of crypto from the early days still out there today. It has real utility and use and it's the one market where competition is really not that fierce in my view. I mean, everybody's trying to be like a trading app or a launchpad and all those different things, but who's trying to be private money? Exactly.

Right. And it's it's a it's a network effect as well, right? Because it's very hard to compete with the anonymity set as it keeps growing, right? Like how are you going to siphon liquidity? It's going to be very difficult. Anyway, so that is all to say certainly there's people as more people, for example, my real estate agent and and he already bought some. It was a very easy sell. I didn't even have to sell him. I just told him what it does and he's like, "Oh, that's interesting." Okay. And then now he's already up 10%. Of course, it can also go down, but I never told him like this will moon or something. I just said, "This is private money. It's useful for such and such."

He's okay, that seems useful, right? So, I think it's it's very dentist proof so to speak. And uh a very simple idea >> can can always spread much more than people think on the internet. Um, >> in terms of takon, I'll let Dev talk to the more technical aspects. It's it's obviously there'll need to be some coordination across all teams here, but fundamentally um the Tacon team itself is um or the Zakura team, I believe. Dev can correct me if I'm wrong. Um there's two teams that are obviously taking more of a lead on it, but it's Shawn Bo's project fundamentally. And uh it'll have quantum proofing but it'll also help reduce the

state growth problem so to speak or the nullifier problem more specifically uh which is to say it'll pave the way for scaling Zcash more. >> Y >> and Dev can talk about the specifics on the performance end there. >> Yeah. So we're kind of doing four things in the quantum uh in tack upgrade. Um on the quantum side we're making all quantum private. So today like what we did in Ironwood is your funds are safe if you hold it in Ironwood and uh like I don't know you uh go into a coma come back 20 years later your money will still be there like you can now move it out of Ironwood into the new quantum pool in 20 years post quantum computers.

There's a second problem which is that Zcash did a bunch of work to like limit the privacy uh leakage of quantum computers where like things are only concerning once they know if someone with a quantum computer knows your address and even if they know your address they don't learn everything they learn like they just learn about payments you receive but nothing about payments you make. Um but this is kind of complicated in Tachon. We're just going fully to full postquantum privacy. there's no conditionals. Uh everything you do cannot be learned by a quantum computer at all. Well, uh which improves a lot of things and causes a lot of technical problems on both the wall on the wallet side and chain scaling. So, first goal uh quantum privacy. Second goal is uh

scale. So, we introduce recurs uh recursive zero knowledge proofs into uh into Zcash. What's kind of funny is like 2017 era when we're doing this fractal postc colon recursion you have this explosion of recursion recursion techniques and Sean Bowen co-founder of Zcash made uh made one that's actually now kind of the the standard in most places is it's commonly known as accumulation which got rebranded to folding whatever um that's now going to be live in Zcash which acts as a massive scale improvement transactions go down by by over 5x in But uh even more interestingly uh node processing time goes away as a dimension

as like a thing you have to worry about or as does um like state size. So the only bottleneck to scaling Zcash is then just going to be consensus and wallets. Uh sorry the bandwidth of consensus but like compute fully eliminated state size fully eliminated. >> So that's the second uh big goal. I'll go. >> No, no, no. I have I have a separate question. Please continue. >> Okay. The third one is a privacy upgrade to a bunch of um metadata leakage where there's some like nuances where privacy is really hard. If you can't get you should have zero leakage. And this works for basically all users. There's except

for like weird edge cases like you do a multi-IG or like you you start signing a transaction but your internet cuts out for an hour and you don't uh you don't re resign it like uh you can imagine a bunch of weird edge cases like that and those edge cases all they do is they leak hey you had an edge case well Tachon kind of solves that no we're not even going to leak that anymore um yeah oh I I combined the two tachon scaling >> uh so yeah That's the big improvements there.

>> Okay. So, Tachion is inclusive of several privacy upgrades across the board as well as the quantum proofing that that we've talked about. >> Yeah. >> And the performance side, right? >> Yeah. The other big one's wallets. I don't know if you ever use a Zcash wallet. You have to go through like stupid syncing thing. >> Yep. Uh and like it works. >> Your balances don't show up and you're like you start kind of freaking out for a second. >> Yeah. What I was doing right before this uh right before the call is uh got this like 6x faster, but uh it's still like this still shouldn't be a problem at all. So um when Tachon we switch to a new way of wallets working that uh it's kind of a bit of a long segue but this is fundamentally gone. Today if we had a

million transactions you'd have to scan a million things. In the tachon world it's 0 of one. No no no scanning at all. >> Got it. So Cameron Winklevoss put out a tweet claiming that Zcash is I think the one and only quantum resistant network and then he got a lot of push back from people in the privacy space who were like no it's not quantum resistant yet right and so um this Tachon upgrade by and large from both of your standards is the defining moment where that claim from Mr. Winklevoss can be said to as a completely blanket blanket statement and be verifiably true. That is that that is like the mega kind of uh big upgrade

here. So uh I think it's a little bit more nuanced of um one of the biggest things about quantum is a commitment to a plan in Zcash. This has been clearly there from a long time ago. Okay, let me let me rank the problems of quantum uh uh for quantum number one is commitment to a plan. So look, everyone knows there's a plan and there'll be upgrades in time. In Bitcoin, it's still kind of unclear. Are we adding a new signature? What are we going to do? Um, so then we have second thing is can you just hold funds for now and be safe like for like 20 years? Like can you hold funds and go into a coma for 20 years?

That is solved in Zcash. So uh one and two are both solved. um in Bitcoin that's not you'd have to do like you'd have to do these weird winternit you have to change a signature scheme to get any hope and you have like a slight asterisk of if you use an HD path and Bitcoin one day decides to freeze all uh freeze all non postquantum funds you could do a ZKP but provably Satoshi's coins don't follow that so Satoshi's coins would be stolen uh so that doesn't really help help you much in Zcash. Um, yeah, this whole quantum recoverability thing that's shipped in Ironwood fixes that problem. Go to Ironwood, you're safe. The third layer of quantum

protection is privacy. Well, for Zcash is privacy of uh we did a bunch in Orchard. So, you have a lot of things are are safe, but there's still this like asterisk of uh there's a slight leakage if your address is leaked uh for some payments you receive. >> In uh in Tacon, that's fully gone. In Bitcoin, the standard is everything's public. So, they don't really care about that. >> Then the fourth step is that uh is there any more quantum upgrades that have to exist? So, Zcash will have one more quantum upgrade after Tachon, but this one almost doesn't matter in that you shouldn't care if that came the day before quantum computers came out because we just freeze the old pools and

everyone all users can safely move over to the quantum one. Uh, so I I I rank these as like that's the priority order and how quickly I need to ship and we're already through two out of the four, the two most important. The third most important one comes out uh in a couple months. >> M, anything to add there regards to the kind of uh quantum secure kind of marketing or narrative here? What do you mean by um like >> just kind of like thinking about these things in phases as as dev says with regards to kind of labeling Zcash as being postquantum secure.

>> I think the thing with quantum is I think there's pretty wide consensus that it's going to take a long time to actually arrive. Perhaps AI speeds this up to an extent, but there's always the physical layer which you just cannot necessarily speed up. And that's generally where most of the bottlenecks are in in terms of error correction and and all sorts of different things. But I think the most important part with quantum in regards to a store of value asset is the lack of surprises. Right? So the entire point of a store of value is that it is a low entropy asset in a high entropy channel. So one way of thinking about this is that if a

country's currency is extremely volatile, right? Then all the commercial activity in that country for that economy is unstable and you can't price things correctly and you can't uh you can't save, you can't invest. It's it becomes extremely chaotic. Or maybe a non-monetary example is even on this call right now there are low entropy carriers like antennas and and fiber cables transmitting the high entropy message which is literally uh my my voice and the that's encoded in that and you can only get signal from the difference of those things. And so if you have a very highly volatile asset

that is or a high entropy asset then it fundamentally cannot be uh a store of value because store of value requires no surprises right it it requires that if I put my money here it'll still be around in 5 years sure I don't control the price but there won't be tail risk right and so with that is all to say the important part about quantum is that you must have a plan and a concrete timeline line such that you can reduce that risk in the investor's mind, >> right? And so the worst thing you can possibly do in my view is completely brush it aside because then you're b like it's it's a very um it's a horrible trade because

best case scenario is that quantum is delayed, but you're at least ready for it. Worst case is that everything is hacked, right? And so one path leads to ruin, one path leads to meth, right? So if you're opting into the ruin, that is a bad trade in my view. Uh especially because Bitcoin is a trillion dollar asset. There's so many different minds on it that it seems to be very unwise to me to not prioritize it, at least within some groups. And so I think >> Yeah, go ahead.

And this is a fundamental issue with decentralization um and the lack of coordination amongst decentralized contributors. And so maybe this you were kind of starting to lead into my next question here which was that like how is Zcash organized? Why has Zcash contributors been able to reach consensus and ultimately implement these things into the protocol whereas Bitcoin hasn't? Well, one thing is I think one of the main fallacies in crypto is conflating decentralization with being uncoordinated. Uh like decentralization people assume given past experiences must mean disorganization.

But with with any project fundamentally there needs to be a unifying cohesive vision, right? And decentralization actually just means coordination without the middleman, right? And so you still need to be able to coordinate, but the coordination has to be around the fundamental ideals and values of that project. And I think one is obviously Zcash is smaller as a project and so the message can spread and be more unified. Uh but two is that the again this goes back to the simplicity argument.

It it just has to follow that a store of value has to be ready for surprises such as these. Yeah. Yeah, >> but also there's no um there's also the you know the the expected value argument here which is that Bitcoin people have this risk aversion now because which actually in itself is a risk for them which is to say well we got to a trillion dollars or $2 trillion so now we just have to keep doing what we were doing before and then it's a misinterpretation of history that they think will lead to something different uh or or that will lead to the same consistent repeated results.

But of course that is sort of like the innovator's dilemma in some sense. It doesn't necessarily that gives people like Z or projects like Zcash the chance to actually improve on that. Um I do think Bitcoin will be ready for what it's worth by the time Quantum comes. I think it would be pretty unless there's like a major major exponential breakthrough or like maybe a few of them it would be hard. But again, that is all to say my main point going back is the most important thing in and in and the ironwood migration and the tachion and and quantum proofing and recoverability all tell the same story which is that it's fundamentally designed around hardening it as money right as a store of value low entropy asset that people

can trust in. One thing Zcash uniquely offers is that you can hold this right now and you don't have to do an update to be safe perform quantum computers. >> Uh I think that's like one of the interesting things like that's the result of having a plan on coordination. I think like the Zcash community has been rallied around you have to take like unifying principles. privacy matters. There's um security is critical. Well, and then uh we want this thing to be usable for Ze payments. Like I think these are like pretty consensus and it goes back to the very first Zcash announcement post that we need a culture of updating in order to get there where Zcash launched pioneering zero knowledge

proofs. It was obvious to everybody that like hey this first thing we're doing is not the end state and uh we're keep we're constantly going down that uh that path of everyone understands that like we're going to have to keep updating the cryptography because we pioneered ZK now we have to go like deploy postquantum ZK um this new thing called private information retrieval whatever so the culture of stagnation isn't there it's um but the people are mindful of don't update things that should never be updated like uh you the happening schedule or whatever.

>> Yeah. One of the things that just recently came out that's all aligned with this kind of decentralized uh kind of network coordination uh conversation also in accordance with this idea of basically reaching this you know multi- multiund,000 or multi-million TPS eventually through the future upgrades is um the primary Zcash digital asset treasure company Cippher Punk Technologies announced and we're going to have them on the show here in an hour. uh they announced that they've you know set up a massive mining organization up to 16% I believe is what they claimed of the Zcash mining hash rate and of course you know over the last 6 to 12 months we've seen a lot of mining from crypto just typically uh you

know bare market thing but also in in this case with AI shifting towards providing their GPU power and compute for inference right and so you know cyberpunk technologies comes out and said look we're going to put this much capital and effort uh and machines towards mining Zcash. Does that change anything for you guys? Does that um make the network stronger, more centralized due to a strong amount of the or a large amount of the hash rate in one or organization? Does it help the potential scaling as you were saying with the kind of consensus and the uh hardware part potentially being removed from the question in the future upgrades? what just like general takes and uh how does

this kind of new power to the Zcash hash rate and the 16 or so percent how does this contribute to the decentralization of the network and the future upgrades? >> Uh it's pretty big for decentralization. I think a misconception uh people have across all of crypto is uh what is decentralization at the consensus layer? So um you know Ethereum markets we have hundreds of thousands of validators. know, hey, if you take the top five, you're already at 60 plus percent. Um, in proof of work, it's a little bit more honest of uh you have these public trackers of the number of mining pools, but you still don't see like the breakdown of uh where miners are uh like

you know, which company owns them, Foundry, now Cyberpunk, uh Chinese miners world, etc. But it's actually pretty whenever you do dive in, it's smaller than you'd expect and all the security arguments uh need rest on it being like tens. But there's huge um what do you call it? Uh central uh there's huge advantages of scale which is why mining it's way more cost efficient to operate like a warehouse of miners with cooling solved versus some in your in your house. So, Cipher Pump being in here like adds an extra uh one extra minor and they're also an active

participant in governance. Uh like they hold a ton of coins so they're you know uh it's very easy to see their opinion on stuff which because they go post it every single vote. Um so it's actually really easy for big improvement for vision of Zcash of like okay you have a public uh you have a company who has public stances on all all this voting stuff and we have another big minor like the question is like how many big minor do we have before was it like companies four companies well we know for sure no matter what it's now one higher than what it was before >> love it >> guys I think we're getting a little bit tight on time but obviously this has been like, you know, we're we're big

believers in Zcash and and the private money thesis here. I'm just curious for anyone who's, you know, just kind of starting to get into the ecosystem, a little bit unfamiliar with Zcash itself, can you give a quick crash course in kind of the tokconomics here? Like there's 21 million fixed supply, it's proof of work, you know, like is there a having schedule? What is the inflation look like? What does the token distribution look like at a high level? Is there a you know community fund that is funding all of these disperate contributors? Maybe could you guys could just walk us through some of the some of the basics here.

>> Maybe I can do high level and then Dev can do specifics. >> Sure. >> High level. Yeah. Uh mimics Bitcoin. Obviously it came after Bitcoin. So the the point in time uh compared to Bitcoin is slightly earlier in the schedule. Um, in terms of distribution, this is one of the my favorite things about Zcash, which is it was launched in a time where token like it was launched in the proof of work uh type of days which >> 2016.

>> Yeah. which is to say it didn't have these extremely um high FTB lowflat types of games and the coin has been basically down only since launch which is actually really good because it means the only people remaining are the people who actually believe in the project and pick it up on the open market right it's also not necessarily available on too many exchanges obviously people will sometimes say oh you know my privacy coin got delisted on this exchange, but Zcash didn't. But first of all, uh, shielded Zcash is available almost nowhere. Um, but second, Zcash is also I work on an exchange, I use exchanges

and, uh, in certain jurisdictions specifically, you can't get it. And so that is to say the distribution is very there's no one with like a giant colossal bag of like you know some fast L1 coin that's going to come out and get unlocks right it's quite transparent at this point uh in terms of like uh um uh like the what it stands for but also uh like the activity on exchange changes and and uh like you would have and like the liquidity parameters across different trading venues and all these different things. There is no secret VC

with coins unlocking in four years, right? Um it's also again it's proof of work. So it's just distributed quite differently. Um which I I I I believe would be very interesting for crypto to go back to. >> Um there's actually a project on Salana that was doing this that did relatively well for Salana. Um, and so the distribution is I think about as good as it can get. Obviously there's still room there uh as more people learn about it. Um and then the other questions were around oh there there's um there's a few different um dev grant type things where um certain protocol um revenue so to speak goes into a lock box that's

controlled by token holders and the token holders vote for example um my guess is they would vote on giving some money to Shawn and and potentially Dev for being like, hey, you guys did this ironwood upgrade, you're doing tapion, you're adding value, and then the token holders fundamentally vote, right? Um, but I think Dev can give a much more detailed answer. He knows all the proposals around this. >> Yeah, I mean Dev, you certainly earned it. Uh, maybe you could just tell us a little bit more like what is this protocol revenue and then what how does the process work to contribute and you know, reap the rewards of that.

>> I say funding uh high level. I think that's for you know Zcray Zcash Foundation got a bunch of donations early on. I'm a little bit ambiguous on like the the details I think earth. Um then there one of the big dramas of Zcash early on was that uh hey look there's a zero we need zero knowledge proofs we have to do a bunch of updates doesn't uh you know funding researchers doesn't pay for itself especially when zero of them uh have coins it's you know fair launched u so we're going to put some of the uh block emissions towards like uh devs that that historically was the founding company that ended uh a couple years ago so So

that was 20% of block rewards which I'm pretty sure it's all sold to fund uh development that now goes into this like lock box this like multi uh effectively a multisig and that multisig has some legal directive to only disperse how token holders vote on it. So Zcash is kind of cool in that we have private token holder voting where um you can kind of you can have a vote for a couple weeks uh everyone participates in the vote. you don't see anyone's balance or their amount. You just see the aggregate totals at the end.

>> So then uh you can make a proposal saying hey I did X please give me like uh uh some money for having done it. So there's a token holder voting side but this is only retroactive and then there's an upfront side that's managed by some DAO of people uh that's called like community grants. So these are the kind of two open funding sources. >> Got it. So there's no more no more protocol revenue or block rewards going into this lock box. This is just the old 20% of the block reward that was instantiated at the beginning of the protocol that has since ended.

>> Uh so it's still the 20% of the existing block reward still continue uh continues to add in but it's only uh this has a end date. I believe the end date is 2028. Um, okay. >> And then after 2028, uh, people can go revote on how to how to update it if it should >> still still get more or end it, keep it all to miners. >> Got it. Okay. Well, guys, thank you so much. Uh, I think we've got our next guest. Andy's getting them ready in the uh in the tokenization tower there in New York. So, uh, appreciate you guys coming on as always with the updates. uh were big believers in the uh shielded money thesis and uh appreciate everything that you guys are doing for uh pushing forward quantum proof money

uh as a whole. So big shout out to you guys. Thanks for coming on and I'd love to see you guys again soon. >> Thanks so much. >> Thanks for having us. >> See you next time, gents. All right, guys. I mean, if you're if you don't know, now you know. We are big believers in Zcash. Uh we have people in the comments saying this was a paid segment, not a paid segment. We're just big believers in Zcash because we see what's happening with Bitcoin. Andy and I have both been around in this space for a long, long time. And a lot of what Zcash is doing now is part of the reason why Andy and I got into this space to begin with. And so we got into the space to to begin with because we see the politicians and you know this monetary

regime uh basically desecrating our fiat system. Uh, Bitcoin was an answer to this early on and uh, you know, Zcash has since picked up and continued the cipher punk ethos and philosophy and is now programming that directly into the protocol uh, and the asset. So, we're big believers in Zcash. We're going to actually have uh, the digital asset treasury company Cipher Punk in the uh, in the show in just a little while. Um, so guys, stick around. Uh we're going to go to New York. We're going to go live to New York with Andy and Terrence uh from Tech Dollar and we're going to be

getting into our next segment. Guys, don't go anywhere. Stay tuned. Got a great segment coming up. >> [bell] >> Going 70. All righty, guys. Here we are back at

the tokenization tower with Terrence, the founder of Tech Dollar. Terrence, good to have you. Beautiful day in New York. >> Beautiful. >> Not a bad look, you know, not a bad view from the boys. >> Definitely be. >> Yep. Um, man, what a day today in the markets for crypto. I mean, big bounce. Um, you're a finance guy. uh our our Treasury Secretary uh Scott Bessant decides to go out and buy a ton of long of long of longdated bonds to effectively, you know, slow this steepening yield curve at the end here. We were seeing some weird dynamics play out where the the shorter end of the curve was kind of responding a lot better to inflation, but the longer end was kind of screaming a problem. People are calling it stealth QE, Fed

intervention, Treasury intervention. Uh, obviously the coins are responding well. >> The coins are responding great. Um, personally calling it inverse 1010. >> In inverse 1010. >> That's what I liked. >> Yeah. Do I mean I don't know if you're a QE expert, but it does seem like the early stages of uh of kind of a flipping from a tightening environment to an easing environment here. >> Yeah, definitely no expert on the QE, but um I do think the tables have turned, tides have turned a bit. Um, seems like a lot of my friends myself are allocated, so looking forward to the next couple months. Nice, man. Well, Tech Dollar is the platform that you've built a private credit platform that lets employees, founders, and early investors borrow against preIPO equity without selling their shares. So, I know

that we'll get into that. Did you see the Uni Tree IPO launch? >> I did. I saw it on Hyperlid way before that. It was going up only. Yeah. >> Right. And so, it was what 5,000x overs subscribed or something crazy >> and climbing. >> And climbing and absolutely exploded off of the launch. >> It did. Yeah. Robotics are a big one for us. So, we keep a close eye on all that stuff. >> Yeah. Yeah. I was with these I was with these um guys over the weekend and um they're basically selling blocks of these preIPO companies to large investors out here in New York. So, they live in SF. They meet a lot of the GPS of these large VCs and they come in and they um try to find, you know, willing buyers here preipo. And I showed them hyperlquid and they were like, "Oh [ __ ]

man. I might be out of a job soon." >> Yeah. Many such cases, I think. Uh yeah, we've been seeing a lot of those robotics block move for a while. Um it's actually how tech dollar got started really. >> Um had a lot of friends and myself invested in some of these later stage robotics deals. Um and obviously >> which ones? >> Appronic, Figure 1X, um Standard Bots out on the island. Those are great guys. Um yeah, a lot of people are allocating marked up heavily. Um someone's always looking to get out, someone's always looking to get in. So I'm sure there's a lot more upside there. >> Yeah. Yeah. So you guys are doing some deals, you know, a little syndicate or angel collective or funds, you know, structure. You realize there's an opportunity here for this kind of pre-IPO. There's clearly this, you know,

there's clearly a strong demand for the AI companies, for the robotics companies. So you get to thinking and this leads you to where you are today. what you know from where we are today to you know aping 20k clips into robotics companies where you know what happened in in between there that kind of led you to want to start this company? I mean, we started out looking at, like I said, a lot of these later stage robotics deals. Um, a lot of them had marked up quite considerably, but we were basically myself and a lot of other uh guys both on our cap table and not were looking at how do we actually get some liquidity out of this? Um, always the question, right? I always joke about living a very illquid life. Um, and you know, in the past couple years, the answer to that question was running

continuation vehicle, playing these LP gymnastics. Um, it doesn't need to be like that. So that's kind of like why we started Tech Dollar. Initially was a product to cater to GP's liquidity solution allowing them to keep the upside. Then over the course of the last year and a half we really found that there's a much bigger market in employees who are owning a lot of these equities. Um you know 20% of all these employees all these companies sorry >> um are giving away their equity their employees. Um it's the largest line item in total comp. So when you look at that market, um you look at it compared to, you know, these GPS that are just looking to avoid continuation vehicles, it's a much larger larger considerable uh piece of the pie. So that's what we're focused on now. Um lending to guys who, you know, don't want to treat their

upside, their equity like a lottery ticket. Um want to treat it more like a hard asset. So >> right. So the idea of almost like you know I'm one of the first 50 engineers at OpenAI or you know and a different frontier lab and I'm like I've got this equity package based on the hyperlquid price or the lighter price or the last round. [laughter] >> Right. Exactly. Um that's worth $6 million. And I'm like, well, I don't really want to sell this now and be like, I sold the bottom of my own company 20, you know, three years into the multi-deade long AI revolution, but I want some liquidity. So, I come to Terrence and I'm like, hey guys, Tech

Dollar, you guys have this platform. Here's what I think my equity is worth. You guys maybe give me a price bas, you know, based on what you think the market would give it, you know, illiquidity, discounts, premiums, other kind of risks, etc. And then you're able to provide these employees, founders, etc. some sort of effectively a loan on their on their equity that is liquid without them having to sell that equity. >> Yeah, that's exactly it. You know, awesome. You have a lot of them and early engineers, product guys, marketing people that are staring at, you know, transformative wealth on paper and uh it's just that paper. You can't do anything with it. Can't buy a house, can't put down that down payment when you need to. You have to wait for a tender window. Um, so yeah, what we do

is you running these equity value programs. I like that a lot more than a loan. >> Yeah. Yeah. Sure. So we're doing that. We're basically coming saying, "Hey, >> um, you know, we see the last funding round. We're trying to mark to mark tom market rather than, you know, last round because it could be a bit stale." >> Um, obviously where the data allows that, but um, yeah, across the board, it basically allows us to accurately track things as they mark up. as companies run tenders, you know, company goes from 40 billion to 70 billion, we can add more credit to the borrower. Um, so it's very intuitive um and it works very um well in parallel with these tenders which help us price things.

>> Yeah. And so Okay. So then who is um like where is the capital coming from to provide the liquidity to these employees founders and then what is the what is like the the approximate set of ranges of like interest rates or what I can like like if if I'm the founder what am I expecting to kind of pay to get this service? >> Yeah. So it really varies based on the collateral. Um the liquidity will start there comes from a couple different avenues. Um right now we're pre live on the liquidity side. So, we've been filling a lot of loans just with forward flow. Um, coming to a great agreements with private credit groups, private credit funds, high net worth individuals that want exposure to these assets or already have exposure. Um, you know, everyone kind of has been dipping their

toes in robotics, chip adjacent infrastructure um compute quantum compute like we was just talking about. >> Um, so they already have a lot of these equities on their balance sheet and that gets these >> lenders very comfortable with providing liquidity to match these facilities. Um, now when it comes to rates, we built the product to be very competitive. Um, in a landscape where there's not much competition to be honest. Um, you know, unless you're a founder, and even if you're a founder, you call up a bank. If they even pick up the phone, they'll decline to price it out right or they'll give you a 20% coupon, 20% of the value of your equity. Um, I personally thought that was quite bad. I would never take that deal. So, yeah, we look to price things anywhere from around 80 basis points to one and a half% a month. Um,

it's cheaper than most AMX's. Um, so it's pretty good. And consider all things considered um considering you get to keep your upside and you know continue to build onto that value you've already created. >> Yeah. And so if I'm a a liquidity provider, a high net worth individual, a private credit fund, uh uh investment bank or firm, what I get by coming in and being like I want to provide $10 million into tech dollar is I get to select which I mean I call them loans, you call them equity >> value programs, >> equity value programs. So I get to choose which equity I effectively want to purchase.

>> Yeah. So we don't allow um like individual let's just call them LPs to come in and you know steer capital between actual specific facilities. Okay. What we do do is we allow them to you know pick and choose verticals. Um in some cases with forward flow agreements some range of underlying. So maybe you're one that loves robotics. Right. Right. Um I get 10 loans from a robotics company or I have a companywide equity value program being ran. Yes. Um I will pass all of that opportunity on to you and our LPs get to earn low to mid- teens uh pass through which is quite good considering the yield on chain right now.

>> And do the LPS own the equity after the deal is done? >> No. So in the event of disposition default um we handle all the settlement. So Tech basically acts as an origination platform, an underwriting platform, a monitoring platform through Capite partnership on the data side and uh so servicing covers everything from you know getting the loan started to getting it closed to you know Andy doesn't pay back his credit facility and now I'm going to go sell the thing through our network of broker dealers and >> um yeah settle that same day so that there's as little risk or you know opportunity cost loss on our LPS.

>> Yeah, exactly. And then, you know, we're on the precipice of the anthropic IPO, the OpenAI IPO. Um, obviously SpaceX came and went. And then, uh, whole behemoth of other kind of, let's call them, innovative technologies IPOs. Um, probably not as big as those two, but still going to be quite sizable, I think. When that IPO happens, what changes in that? I'm the LP providing you know my 10 mil in the AI sector and obviously that includes open AI anthropic couple employees from each let's say as an example what is that what happens at IPO day >> yeah so we try and price all of our facilities such that they are aligned with that event that liquidity event um

we don't lend against anything that public um so in the event say Anthropic goes public tomorrow and you're lending against you know a bunch of basket of anthropic employees or tech dollars running an equity value program there. Um, the loans get wrapped up. So, we basically settle everything in advance. We'd know obviously when the IPO data is the same way everyone else would. We don't hear anything in advance. But when we do the underwriting process and we go about actually looking at, you know, providing someone a facility, what we really try to look towards is what is that merger, that acquisition, that liquidity event, that IPO date, um, such that there's no, you know, lack in like alignment on the timing side.

>> Got it. Got it. Okay. So, just to be clear, when I put capital up, I'm not getting any of the equity from any of these deals. I'm just getting I'm I'm getting a nice interest rate. >> Yeah. As friendly as like the new SEC guidance is, and we've been working very closely with them, it would be a nightmare for everyone involved. >> For everyone involved, um it's quite easy, you know, just to settle things. If someone if I had a borrower and hey, big surprise, it goes uni trees public tomorrow. Um we would just close the facility up or we could bundle it up and sell the whole package to another, you know, licensed party. >> Yeah.

>> Yeah. Very cool. Very cool. Um, how's the how's the growth been? How you know has has it been a it's I mean this is relatively new, right? >> Yeah, we just so we just uh started in March a little earlier actually. Myself, my co-founder David were building this I want to say last year, last August, September was when we got the ball rolling. Um, and then we, you know, brought in some external capital in April, May, June. Um, and since then we're just scaling up the origination side. So tech dollar is live. You can come and apply for a loan. Um soon the liquidity side will go live. Um we've been spending a lot of time building out our legal mode, working with regulators.

Um you know, really establishing a strong foothold there. So that way once, you know, guidance does come, we can be in a really good position. But yeah, we've got over 300 companies I think we announced today that are capable of, you know, unlocking credit for borrowers. Um I actually think that number is going to be closer to 900 like on the car ride over here. I'm pretty sure we just added a lot more on the back end and you know we're actively adding them day by day. Um soon we'll have some self-service opportunities so if your company's not on there you'll be able to add it. >> Yeah. >> Very cool. And when you think about kind of the persona or the you know when I was spending time with these guys I felt like I was in an episode of the big short. I was like yeah we got this block

and we're closing this deal and like we're making this commission and felt like that one scene where it was like wait I don't get it. Why are they bragging? It's like, no, they're not bragging. You know, I don't know what the punch line is, but it's something like, no, that they're not bragging. Um, when you think about like just like the scale and the speed as to how big this AI and robotics kind of buildout has become and the persona that you guys are dealing with on the provider of the equity of of these companies, founders, employees, etc. And then you've got this kind of uh you know high net worth investment banks who whomever kind of on that side to kind of make this market.

What is your 10x here? Like what is your you know you have 300 markets 900 soon you know couple million dollars tens of millions of dollars of deals being flown. How do you get this thing to like billions of dollars to be able to be like a almost like a broker for any, you know, large company looking to go public? uh people that have equity in in these things wanting to get that credit. How do you kind of think about scaling that? >> Yeah. So, this is something we spent a lot of time on. Um so far, a lot of our borrowers have been very white gloved by myself, my co-founder, and our sales team.

>> That's what I'd imagine. >> It's very co very cost intensive, very labor intensive. Yeah, exactly. Very relationship based. And that's okay when you're starting out, right? Um it has to be very hightouch. Have to spend a lot of time talking to customers. Um but now what we're actually getting at and why I'm uh showing this equity value program today especially you is uh you know our scaling path is how can we reduce that time spent on you know white gloving all these borrowers and the answer is becoming embedded alongside your 401k your dental your vision um your healthcare um as an equity benefit as an employee benefit um tech dollar has the potential to be one of the only employee benefits that's just as beneficial to founders board members as it is to employees and investors alike right the problem with these guys that are walking

around bragging, shifting blocks on your head [laughter] is basically that, you know, they're [ __ ] up the cap table. They're really >> Well, right. They're restructuring the hell out of >> Exactly. They're putting it everyone in everyone's going for a loop there. Um you have names that you don't know. You have founders that don't know who owns what. You know, you saw this anthropic news ages ago, which was, hey, everyone's rolling everything into an SPV. That was happening because you have these employees staring at, you know, seven, eight figures of wealth, and they've got a bunch of guys like your friends that want to move blocks, right? >> Um there's always a willing buyer. there's going to be a willing seller whether these founders these boards like it or not and eventually you know they clamp down on this SPV angle. So for us

um moving forward and getting to you know a point of real like velocity here is uh us not even having to sell the thing uh we'll never be a broker never be a dealer right um and not just saying that like I really do uh think the best way for our business to scale is to stay capital light right have other people sell this thing because it's good for them that's how the best products win. So what we're doing now is going directly to companies, companies that run tons of tenders, companies that haven't ran any tenders, companies that have raised enorm like at an enormous speed comparative to everything else. And we're basically saying, hey, um next time you go to run a tender, maybe you should think twice about it because if you go out and you spend 100 million bucks buying back shares from your

employees, you know, 30 40% of that's going to go to taxes. Yeah. So it' be way more capital efficient if you were to take that 100 million and allow your employees to access a revolving line of credit collateralized by the equity that you're already agreeing to provide and to buy back. Y >> um so that's how we're going about it now. We're working with Salata companies to you know wave these >> transfer restrictions in advance. They're actually waving it back to themselves essentially. uh they're you know creating an excluded list of company excluded list of funds rather sorry where they you know in the event of disposition in the event of default uh they know that us as a uh you know as a group sitting in the middle of our borrower and our lender is not going to go out and sell it to a wrong party not

going to go rap it into SPVS >> the way to get companies comfortable is to make sure that it makes as much sense for them as it does you know for their workforce and that means being able to you know have your employees not have to sell the thing because they want to make a difference in their lives. >> Yeah. Exactly. I mean, it's the best of both worlds for them. Yeah. Or so it seems at least. I mean, I'm trying to figure out what the kicker here is. >> Yeah. >> Win-win product. We spent a lot of time, you know, uh trying to make sure that was the case. I've seen too many products um not just in crypto, but like in broader fintech go the wrong way. Um just don't think there's a reason for it. Like this can be a very win-win

scenario. Um people are always going to sell whether you like it or not. So, might as well support the better outcome for everyone, which is, hey, this guy can access the cash. And if he doesn't pay it back, company gets to clean up the cap table at a much discounted price, right? Because if you're lending at 40 60% LTV, your employee doesn't pay it back, that means you're getting your shares back at a 40 60% discount. >> Correct. Yeah. >> And so, when presenting that concept to these companies, you know, that's something that they understand that, you know, that they that they kind of buy into. >> Yeah. Very receptive. I mean it doesn't cost anything from them unless they're running the program themselves. Um obviously that's our end goal. It's what is best for everyone having these companies provide that capital run the program themselves rather than having

even an external lender come in >> but obviously the demand is there on both sides. So, >> so I was talking to um the head of the private credit sector kind of or like the head of a kind of subsidiary of Franklin Templeton yesterday about tokenizing a lot of the private credit work that they're doing. that kind of are facing both a liquidity problem currently, but also a kind of just a a delay in settlement times, a a delay in being able to get deals and loans even like even just getting a loan to the market for them takes 15 days. Yeah.

Right. It's just like what the hell are we doing, right? >> It can be much longer. When we were first getting things started, myself, my co-founder, were calling up tons of banks on the East Coast, the West Coast, basically pretending to own eight, seven, eight figures in equity, even owning pretending to own less. Yeah. >> Um, and we would get quoted, you know, if we got quoted at all, four to five weeks for a pre-quote. Um, that's >> what I mean. It's crazy. >> It's like just to get a quote, not even to do the deal. >> No, it makes no sense. You're going to take three months to get the actual money in your bank account. You might as well wait for the tender because your house isn't going to be waiting, right? You're going to have the guy next door buying it from you. So,

>> yeah, it's uh it's super interesting. We're trying to move faster. Um, right now we can do this in about 24 48 hours. Um, at least kickstarting the underwriting process. Um, what we've doing so far is working with RSM, top 10 CPA firm. They look at the shares. They make sure, hey, this is enforceable. >> Um, and then we spend the remainder over remainder of our time going direct to companies, getting approvals, uh, and mapping out the best path forward. >> Yeah. And I mean the kind of kicker to what this guy was, you know, thinking about was, okay, how can we tokenize some of these private credit vehicles themselves to be able to offer other investors easier access to get in if they want or add a better liquidity profile to this instrument as well as um

you know just kind of like broadly make the the underwriting and the quoting process much faster. Um so it's kind of like a bit of fractionalizing in a sense and then also just uh you know removing this very very inundated process. And so you know when I started talking to him I was like well we have a guys take a quick break. Okay. Um and so through through this process we um you know came to kind of come to a a conclusion that there is a illquidity premium that is attached to private credit that they're marked to market once a quarter. It's kind of like a nice thing because well you know when

[ __ ] hits the fan it's still one you know 100 points 100 points 100 points. It's like there's kind of this advantage, if you will, to having an illquid asset, which kind of sounds ass backwards because for most investors, you think liquidity is the advantage, but it's typically actually the other way with private credit because for a variety of reasons, it's easier to kind of mark these things only, you know, once a quarter redemption cycles, etc., etc. when it comes to this kind of product mechanism. If you make these open AI shares more liquid, if you make these employee shares of Snapchat preipo more liquid, if you make these robotics company shares more liquid, do you feel that there's going to be well I think undoubtedly [clears throat] there'll be

a better market price for what these are actually worth based on the demand and supply of them? But I guess what I'm trying to say is like there's been kind of like this big bubble of like oh this this fund raise then this fund raise then this fund raise. But what you're saying is like these employees are looking at this fund raise this fund raise and looking at their check go like this and being like all right guys like I know what's going on inside this company like you know I don't know if we're worth three times what we were you know six months ago. So, I guess what I'm trying to get out here is by adding more liquidity, do you feel that there's like a I guess a more fair market force, but b kind of could put a a pop into all

of what's happened with this kind of like illquid markups based on kind of adding more VCs to the cap table. Do you kind of see >> Yeah, I hear what you're saying. The question is always, you know, you're injecting more liquidity in the system. Are you leveraging up the thing? Um, >> or are you like leveraging it down and showing like >> Exactly. Are we letting in hedge their downside? Um, I think the question is actually rather what is the difference in them hedging their downside borrowing versus them hedging their downside and selling the thing through your friends flipping OTC blocks. Now, if I'm going out and I'm selling the thing, um, I would argue that, you know, I've got a new counterparty on the cap table, I've got a new buyer at that price, it's probably going to heat things up a bit more than someone borrowing um, at a 50%

LTV, right? It's not like we're offering some crazy amount of leverage. No 99% LTV for your preipo equity yet. Um, but at the very least, what we're doing is providing a good data point, right? Um, like you said, a lot of these private credit marks are quite stale. That's a kind of like a double-edged sword. It's a good thing, it's a bad thing, right? >> Um, it's great in a bad market. You can turn around and say, "Oh, we don't have a mark till next quarter." Um, it's pretty bad in a bull market. Um, you can't, you know, watch your company run a tender and then suddenly you want more credit, but you can't have it. Um, so yeah, so it's good and bad. What we're trying to do is kind of sit in the middle and, you know, narrow that spread a little bit. um tracking things like I

said to live secondary pricing. I love it. Um and keeping up >> Terrence man I know it took us a couple times. I had quite the stomach bug from an Argentina better. [laughter] I had a great steak and a lot of skiing and it kind of got the best of me some wine as well. >> But uh thanks for coming out. Um congrats on the success. This is awesome. Right place, right time, innovative idea. So um wish you the best and uh yeah, thanks for coming out. >> Appreciate it. Thanks. >> Yeah. Cheers, guys. All right, guys. We're going to be back with our next guest, Will Mavoy, on Zcash, privacy mining, and more. Uh, and we also have tons of markets, charts, news. We got a massive news hearing at 2:30 starting with Trump, with the Winklvites twins,

with Sergey from Chainlink, and a bunch of other leaders in the CFTC in the digital assets and tech industry. We're going to stream that live right after Will. Then we're going to go through what happened today, markets, charts, news, and more. Don't go anywhere. We'll be right back. Robbie is gonna hop on and we'll get Will up. [music] [music] [music] Heat. [music] [music]

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

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We get deep know we get deep know [music] we get deep we get deep know we get deep [music] >> yo yo yo what's going on guys? This is itan with the rollup. We're going to be patrolling the streets of New York City getting answers to the questions that you guys have most. What are people trading? What are people investing in? How much do people actually budget? We're going to have people. >> All right. So, for everyone that just got a lesson in the bond markets, uh this is what we're watching. Besson is buying the long end at a discount. He is selling the short end at a premium. And uh we're getting a lesson in yield curve

control in real time. The money printer is on. And we have uh Will McVoy uh who is the CIO at Cippher Punk. That is a da Zcash digital asset treasury company who's going to be joining us on the show in just a few minutes. Uh today is all about Zcash. Just had a fantastic segment in the tokenization tower with Andy and Terrence. Believe Andy is getting ready again as well. And yes, we believe in the Zcash thesis. We've talked about this. Uh it's also flying today. I mean, it's at $550.

Uh you guys have not seen what this thing can do, especially if you recall back in 2016 when Zcash first launched. It has not been in price discovery since. The last time Zcash was in price discovery was when it first launched on Paloniex in 2016 and it was trading at about seven Bitcoin for one Zcash. That's right. When Zcash first launched, this is a little Zcash lore for you guys just because we've been here for a while. We've seen a thing or two because we've been around a little while. Uh when Zcash was last in price discovery, people were pricing it at 7 Bitcoin to one Zcash, literally calling for it to flip Bitcoin. Obviously, it had an extremely overhyped launch, you know,

came back to reality. But it was actually priced at over $1,000. Oh, the OG days over I I mean, dude, Zcash was at $1,000 back in 2018 when Bitcoin was 20K at most. So, this thing has gone on insane runs before. It has been uh it has been in price discovery before, but it's been almost a decade that this thing has been in accumulation. almost a decade of this asset changing hands from >> paper hands to diamond hands >> and down only too, right?

>> Like that's where it just >> especially relative to Bitcoin. Yeah, cuz I mean this thing started out seven Bitcoin to one Zcash. People when this thing first came out, people legitimately thought that it had a chance of flipping Bitcoin, which is why now you have people saying like buying Zcash at $500 is like buying Zcash or like buying Bitcoin at $500. People think that's a meme, but a decade ago, people thought that was a reality. And so this is the wrong on the on the profile on the on the design today. >> No, you're just tweaking.

>> Okay. I I think it looks just like him. >> I think so, too. Uh we're going to bring Will on. >> He said we got He said we made it with AI. [laughter] >> He said the pick was from four years ago. >> You if you guys can't tell, Andy's a little euphoric today. >> Oh my god. Let's guys, what's the market doing? Little little miss gun, great to have you as always. Um, we're going higher. New type, great to have you. Freedom guy, new type. Shine. Yeah, you you guys are the OGs. You guys are part of the show every damn day. We love y'all. You guys are the best, man. Um, Rob, that meeting just started 2:30. So, we're going to chat with Will, uh, CIO at Cippher Punk. Today's like the Zcash day. Oh, yeah. Um to things ripping chain link above 10 BTC 6825

hype 62.4 four pump at 3084. I don't know what that is. Per 7.9 Zcash 5 550. >> I mean, we can talk a little bit about where we might go from here. I do think we're going to get a pull back. Um I mean, people are calling this the bottom. I could see it. Honestly, I could certainly see it. I mean, with the amount of liquidity, >> so good if it was the bottom. >> I mean, with the amount of liquidity supply that, you know, we're getting injected into the market. I mean there's you said they're running those bonds till >> $4 billion. They doubled the amount that they had previously done at least doubled and they're doing that until November, early November.

>> Every day they're just te-wopping bonds. >> I think it's every week they have treasury auctions. Um but they're Yes, they're absolutely tepping. And the theory is that when this program expires in early November, it will actually open up an opportunity to announce an even more aggressive yield curve control liquidity supply program. Yeah. >> Uh right now we went from 2 to 4 billion. And who knows, we could go from four to 10. Who knows? >> Hype looks insane, guys. Looks ready to go on another run. At the very least, we know that now this is like volatility has returned. You know, open interest was massive. Ton of shorts got liquidated. Even if the price isn't going to just move up only now, we're

going to see volatility now re-enter the market, which I think >> and the regime >> at least in the short term. >> Exactly. And I think if you're bullish just on volumes like volatility tends to lead to volume tend to >> which is bullish for our revenue meta tokens pump hype lighter near intense. >> Exactly. Anything that generates chain >> link >> anything that generates fees on on volume and activity is now going to do well because there's more volatility. more volume, more activity means more revenue, more fees and more value ac uh protocols and ideas. I like that Zama is basically bringing what Zcash is

bringing just just on its chain to any EVM any >> but that's a conversation for after will because I think that is going to be a good one because the question is do you yeah >> I I mean I would call it how it is if just by analogy that Zcash is to Bitcoin like Zama is to Ethereum like these things feel very similar in the sense that Zcash >> well they're complimentary really ex >> they certainly are I mean Zcash doesn't have a you know, it doesn't have a smart contract layer and what Zama does is bring confidential smart contracts and applies that to >> programmable money basically.

>> Exactly. >> Applications. >> I mean, look, we've been here for previous cycle. We've been here a long time. We've seen Bitcoin and ETH do extremely well in their own right. Zcash and Sama can both do extremely well in their own right. And if you're bullish on privacy, why wouldn't you want to own both? >> Send them all. Let's get Will up here, CIO at Cippher Punk. This guy's fired up. Will, good to see you, man. How you doing man? >> Good. It's good to be back. I We had a lot of fun last time, so I'm happy to be back and uh to to cover everything. Cypher Punk and Zcash. >> Yeah, man. Congrats on the on the announcement of the Bitcoin or the uh uh the mining um rigs that you guys have absolutely just you guys looked at those AI, you know, all the data centers.

You're like, nah, you know, whatever you can do, we can do better. We're going to mine Zcash still early looking to get that 5% mark. Um will maybe just kind of give us a bit of a a rewind here like how did this you know choice come about? Why was this the best choice for Cypher Punk? Why does this make sense? Why do you guys have so much conviction in this being uh the path to accumulate more Ze um give us the kind of leadership inside the room of the boardroom here as to how you guys came to this uh plan.

>> Totally. Yeah. So, um, yesterday we announced Cippy Punk mining. We are by by our sort of analysis, um, of the network the largest Zcash miner. We have about 4.2 gigas of hash rate. Um, there's just over 20 gigas um, right now. So, that's how we get to sort of this 18% of the network uh, figure. And um and from our perspective, the way that we framed and and got a lot of conviction around Zcash mining is really through two framings. The first one was that if you compare Zcash mining from a revenue perspective, really a revenue

per u megawatt hour perspective, it's obviously more profitable than Bitcoin mining. And you've had all of these Bitcoin miners convert their sites to become AI collocation sites, right? So you take all the the Bitcoin machines out, you retrofit your facility to then allow a a hyperscaler or some sort of other AI company come in and plug their GPUs in. And we did the math and again we found that per megawatt hour Zcash mining brings in more than both Bitcoin mining and even that sort of uh AI collocation play. So that gave us a ton

of of confidence in it and Zcash mining. And then we also just compared Zcash mining to other regimes of Bitcoin mining. Right? So >> if you go back to Bitcoin mining in 2016, Bitcoin from a market cap perspective was very similar to Zcash. Today it's, you know, sub 10 billion. Um, and the mining economics are similar. At the time, Bitcoin mining was was bringing in about $300 per megawatt. Um, and today we estimate that the Zcash mining is bringing in about $450 per megawatt. So, so those two framings gave us a lot of confidence. Um, we spent a lot of time thinking deeply about um Zcash mining

and in investigating the the supply chain of of mining AS6 and so on. Um, and then yeah, it's been it's been super exciting to to announce it announce and announce the the transaction with Winklas Capital. >> Yeah. >> That brought the fleet uh into Cyberpunk. >> The fleet. The absolute fleet. So tell us a little bit more about this deal. Um we actually just had Mert and Dev, you know, two guys that are just extremely deep in the Zcash ecosystem, talking about the progress with Ironwood, talking about what's coming up with Tachion and just kind of giving, you know, our audience a little bit more of a crash course and a technical deep dive. We talked a little bit about, you know, this uh this minor coming online, but maybe you could tell us a little bit

more backstory about how this deal ultimately came together. Yeah. So, so the the deal is a all stock deal, specifically warrants between Cippher Punk and Lucas Capital. Cippher Punk um contributed 33.33 million worth of warrants in exchange for 4.2 gigas, which comes out to um just under 5,000 of the latest and greatest uh Bitain Z15 Pro Zcash miners. Um and and so so those are those are sort of the contours of the deal. Um we spent a lot of time digging into the

the supply chain for for Zcash AS6 and what we found was this is another reason why we really like the opportunity. What we found is that it's just an extremely slow and bottlenecked um supply chain. Right? So today you can go out and you can you can place an order for 5,000 machines and I think you'd be really lucky to get them plugged in within seven uh seven months. Um and I think I think for most operators it will take longer than that.

Um typically you know manufacturing cycles can take longer than anticipated. um getting the machines uh into the United States from a transportation and logistics perspective also takes time. Uh and then you also have to find a really high quality site to plug them in at. Um, so I spent um the last several months um deep on the ground visiting sort of what we view as best-in-class hosting sites around the country >> with that that we could have confidence that would have extraordinarily high uptime um close to 100% uptime and also super competitive hosting rates. Um, so those are the types of sites that we

looked for that we plugged our machines into and those hosting contracts and relationships came over to Cippy Punk uh in addition to the the fleet itself. >> Love it. And I'm curious like your bet here like what is your by selling warrants of the cipher punk equity at future prices, right? I'm sure there's like specific you can read in the 13F or whatever it is. What is the bet that you're taking com that you previously weren't taking?

>> So, one that there's just a massive opportunity to secure the Zcash network, right? is extremely profitable from a a return on capital perspective and a and if you were to sort of analyze the fleet from a payback perspective, it's extremely competitive or compelling in its own right. Um the way I also view it is as if if we can increase the security of Zcash, the network, then our underlying treasury automatically becomes more valuable, right? a more secure, a more decentralized, I would even argue argue a more US-based um Zcash mining um uh network uh just drives value to Zcash um and Ze

specifically, which we which we hold over three 300,000 tokens. Um so, so I think it's a strong synergy. I think there's also just a a another way that I think about it is that we uh historically there hasn't been a lot of great communication between the miners and the rest of the ecosystem. >> Sure. >> Um the miners are a critical part of the ecosystem. They need to have uh a seat at the table in conversations around uh network upgrades and what's happening um you know amongst the wallets and nodes and so on. Um so so I think we're going to bring that sort of level of communication and commitment to the

network that that miners historically haven't. Um so in many ways I view I view this bet on mining as uh synergistic with with um our under our our exact treasury. >> Yeah. Yeah. Yeah. I mean what a move today. I mean, jeez. I mean, nice nice little Wednesday pop for the old Zcash holders. When you're thinking about kind of the like the institutional access points to Zcash, I mean, I think Grayscale has like a trust right now. Zcash trust. I don't know it really has much of, you know, trading volume. And right now the only way to get access to Zcash in like a

brokerage account if I'm not mistaken is basically to buy Cipher Punk, right? So when you think about maybe I'm mistaken. >> That's my understanding. >> Yeah. So when think about like your role as the CIO, like am I wrong to think that a lot of your job is going out with, you know, the help of the Winklev and others and and just trying to talk to the biggest and largest investors in the world and Zcash pill them? Like is that not the highest leverage thing you can be doing with your time right now?

>> I I think so. I I think you make a good point there and because it's something we we've thought about a lot like we can make, you know, we're going to make some really great bets in the privacy ecosystem, right? We're we we can buy all the Zcash um that we want, but at the end of the day, our role is very much educational, right? We need to be out there and we are talking to you know some of the largest investors in the world educating them not just on Zcash but like like look like privacy is very important right we we've and we talked about this last time I was on we're we're at the I think the tail end or the tail end of

this downtrend in privacy right so individuals investors institutions over the past 20 or so years they've really I think forgotten about the importance of privacy um not just in terms of technology but at like a deep societal level. Um so it's that it it's educating investors on the importance of privacy on why Zcash um is a very compelling option in terms of getting privacy exposure in your portfolio. Um, and then just sort of getting the ball rolling um on sort of what else could be valuable in a world where privacy goes from being um sort of

overlooked and undervalued to a world where privacy is actually like very core to everything um and you need exposure to it. >> Yeah. Yeah. And will, do you think that there's any potential bottlenecks, you know, on the technical side or, you know, kind of the narrative violations that you think Zcash might run into as you're talking about this more with both institutional investors, people coming over from other ecosystems? You know, it feels like there's a lot of potential flow and capital out there that has yet to come into the space, but you know, is it just a matter of time? this thing is slowly slowly slowly then all at once or do you think that there is still a reason that so many ecosystem investors

are still sidelined? I certainly I I think it is sort of a a building of momentum, right? And I think it's it's just going to become more obvious in your day-to-day life how important privacy is. So when we launched when we launched Cippher Punk last year, we had a Twitter spaces and one of the things I mentioned was that I felt strongly that over the next 12 to 18 months, everyone would be walking around with cameras attached to them or they're wearing cameras in some capacity >> or like the little AI thing. They put the AI thing under their shirt that is like recording every conversation.

>> The little AI pendant or the flock cameras that I'm sure you guys have heard about. >> Yeah, 100%. I mean, I think that's a really good the flock controversy as it were is a good example, I think, of people waking up to surveillance and the importance of privacy. But just on the sort of wearable tech, like I think that was a weird concept a year ago, but now like you have Apple Apple leaks point to the fact that the next generation of AirPods are going to have cameras in them. So, I don't know. Walk down the street and count how many people are wearing AirPods.

Fast forward a year and I think all of those people are probably wearing, you know, AirPods with cameras in them. So, I think as just across societ society, as we start to realize that um we're sort of all being surveiled, all being watched, you you're going to want some sort of reprieve from that. and Zcash is the monetary asset that you can buy to get that um to get that reprieve. Um and then again, I suspect, you know, not I suspect, I know that there are a lot of other technologies and companies um that you're going to want exposure to also um once that, you know, sort of, you know, light bulb goes

off, which again, I think the flock, uh the flock protests are sort of a an example of that. >> What else do you put in this asset class? You mentioned that there's like other assets that you're going to want to own if you believe in privacy technology and you believe in this asset class. What else do you kind of bundle up with uh you know the p privacy investment thesis? >> Yeah. So without getting like too specific I I do think that you're going to there's some there's a privacy technology or a privacy focused business offering services in every sort of avenue of your life. Right.

>> So Zcash addresses financial privacy. Financial privacy may be like the most important part because like if you are you know if you buy something sure that's like you know one transaction but from an information perspective it tells a whole lot about you right it tells you know what you're interested in you know what you like what you don't like where you go the time you go right and these are all the reasons why Bitcoin being transparent as a store of value or or a means uh payment are are are sort of difficult to wrap your head around. Um but yeah, I think there there's probably there's there's a lot to do in in sort of the private internet browsing space and the

VPN space. I think I think there's a lot of interesting developments happening amongst uh mixnetss and maybe in alternatives to VPNs. Um um I think there's a lot of space to sort of work on um more private enterprise applications or even things like a more private and secure version of like Google Docs and Sheets and so on and and and you know um and then of course um super secure um uh messaging and communication apps um which I think Signal does a pretty good job of today.

Um but I think you know there there's a lot to be done from like a distribution perspective uh in addition to in addition to the product. >> Do you um like do you think that message will resonate with people that have a lot of money? >> Um do you think the Zcash message will resonate with people that have a lot of money? >> I I think so. I mean, I think um like if just take Bitcoin Wales for example, if you hold a lot of your capital in Bitcoin, um people can just sort of monitor what you're doing with that

capital. Yeah. >> Right. They can monitor that. Maybe you just went and you know, you just did this big transaction and then maybe they can sort of like simultaneously combine it with like using AI, they can combine it with other data on you, right? things you're posting on X and Instagram and so on. Um, and they can like, yeah, probably much more easily figure out that, you know, you bought a house in in this neighborhood and and now you're sort of doxed. Um, yeah, I I certainly think like um I I I I see both. I mean, I I think there's sort of a bottoms up way that that privacy gets adopted. I also see um a pretty compelling like top

down um and uh and yeah, but but at the end of the day, privacy is important for everyone. I mean, as as Americans, like privacy is a precondition to all of the the rights that we value in the Bill of Rights. Like, you can't have freedom of speech if you don't have privacy of thought, right? if if if the government can just sort of know or anyone can sort of just know what you're about to say before you say it, they can pretty easily cut you off from from exercising your freedom of speech. Um so I think yeah, it's important. It's important for everyone.

>> Yeah. And with a lot of the technology that you talk about today, a lot of it is predictive and will almost prevent you from or protect you depending on, you know, what what uh perspective you're looking at it from. But before you even act out, which is kind of what you're saying, you know, they're preemptively putting a stop to some of those rights, before you even commit, you know, some sort of uh violation of those uh just by, you know, some sort of predictive analysis that is being run by these cameras plus algorithms plus other wearable technology that you're talking about. Uh and it just feels like as prediction algorithms and you know AI is effectively part of that as well as uh surveillance technology becomes just

more ubiquitous, more abundant and continues to accelerate. It only poses more and more of a threat. Um >> yeah, >> and yeah, I think you know a lot of people see that a lot of people realize that and they're going to be looking for a way out. Um and so you guys provide a vehicle for people to access you know this asset. Um a lot of people on chain are able to sort of you know use various uh protocols to access this ecosystem near intense you know swap in swap out uh but when it comes to more regulated venues you guys are sort of the go-to right now. And so I'm curious about [snorts] kind of the corporate structure of Cipher Punk in particular. We actually have uh our intern in the chat

sent us a little screenshot from uh Tiki Media, friend of the show, says that uh he's unsure how you guys calculate MNAV. Uh from his calculations should be around 1.2, which means that you guys might be considering ATMing new shares to buy more Zcash and get closer [clears throat] to uh 5% of the network goal. Is that sort of on your radar? Is that a fair calculation of MNAV of Cippher Punk at the moment around that 1.2 to mark. What do you guys do when you're above MNAV? Like other treasury companies, we've seen them hammer the ATM, raise some cash, go use that in the market to buy more Zcash in this case.

Is that something you're you guys are considering doing at Cippher Punk? >> Um, so so I think MNAV, um, I mean there's a lot of issues with MNAV just if you're like a treasury company. um you you're sort of alluding to like it's like can be very complicated like what shares do you include and what like assets do you include if you you know cash and so on. I think now you know we've transitioned into not just being a digital asset treasury company. So I would I I you know sort of mentally sort of am not really paying attention to MNAV. MNAV makes sense if you just have like a single asset and you're you know you're accumulating more of it. Um, we have a lot of Zcash. That's true. But

now we have a core operating business that is highly profitable. We also have a venture portfolio starting with Zod. Um, so yeah, I don't I don't view MNAV as being super helpful in terms of um valuing us today. From like a just a general fund raise perspective. I think, you know, we've now transitioned into this point where we think about fundraising like any other company with operating cash flows. Um, and um, so, uh, when it is opportunistic to raise capital to put it into to make investments that drive shareholder value, we'll we'll certainly do that.

But it's it's it's definitely not as simple as, you know, are we trading above our, you know, the value of our ZEC treasury anymore. I mean, I've been uh holding hyperloop strategies and the MNAV swings are really just uh they're hard to they're hard to they're hard to deal with when you see the asset going down and it's like a leverage bet. It goes up, it's like a leverage bet. Um, but I guess you didn't really answer the question. Will, if I'm being honest, are we buying more Zcash soon or is that not allowed to be talked about? What's your kind of end of the year road map look like?

Well, for mining, we are going to be accumulating a ton of Zcash um just from the mining business, which I'm excited about. Yeah. >> Uh we're accumulating Zcash at our at our hosting cost. Um which is great. >> Is a sign is a significant um significantly more accreative actually than right >> going out and buying it at 550. Um we're still very interested in buying Zcash at spot though. Um, I think now that we have this additional operating business and it's going to be one of what I expect to be many. Um, we're going to be extremely opportunistic in terms of, you know, when we're accumulating more Ze with cash. Um, so, uh, yeah, to answer your question, we're still very much

interested in buying more Zcash and, uh, we have this great mining engine that will be driving more Zack into our treasury, too. Well, I think your previous answer also just provided a lot more insight into the way that you're operating this business and and it separates and makes it distinct from other digital asset treasury businesses that have to to use your words like a one asset business. You know, they buy ETH or they buy Bitcoin or they buy something else and that's all they do. And in very few cases are they contributing to the network in some way, shape or form. um whether at the most minimal case it's staking that asset that they bought. Um and in more you know extreme cases you are doing what

you're doing in which case you're mining you're doing these other things you're invested in the in the sector the category as a whole and ultimately bringing about you know kind of this you know well-rounded thesis that you've talked about here today. Um, I'm curious because it sounds like the mining business is pretty fundamental to Cippher Punk. Maybe you could just walk us through the mechanics a little bit more like what is the revenue story? You mentioned it's essentially at cost like what is sort of the flows that you're seeing. Uh, you know, obviously Zcash is proof of work. You're mining by contributing this hashing power. I I saw the Z next Zcash having isn't for a while uh in 2028. So the block reward should be pretty juicy. Can you just

describe like what it's like to be a Zcash miner today? >> Yeah. Yeah, 100%. I mean, a lot of it is um a lot of it is in in the details in terms of like future future uh hash rate growth, future price price growth. Um you know, you have to spend a lot of time thinking about how you model these things into the future. Um uh but today um just sort of if you back into it um using sort of the figures that we've been public about um we're mining hundreds of Zack per day. Um if you were just to look at sort of industrywide hosting rates it's something like uh six to 9%

um per kilowatt hour. Um and I think you can what you'd back into again without because we haven't announced these numbers um is you you get very compelling uh gross margins. Right? Again if you if you were to sort of think about it from the perspective of um if this is from a revenue perspective twice as uh twice as generative as AI collocation. You can sort of you can sort of imagine how profitable it is today. um in the future um you know hash rate's going to grow. We feel like we have a good sense of where hash rate is going to grow too based on um uh based on sort of the the supply chain for

Zcash miners. Um again, we're going to be looking to increase the size of our fleet too. Um so overall, it's it's it's a very compelling opportunity that we're excited that shareholders now have access to through Scythe. Um and um and and it has the ability to be even more compelling if um if Zcash continues to to run from here. Um which it looks like, you know, it's have a good having a good day today. But um we'll see what the next several months look like from a hash rate and price perspective. Um but it's a super compelling opportunity and yeah, we we're just super excited to bring it to to Cyber Punk.

>> Love it. Will, congrats, man. Thanks for your time as always. Um big big uh bulls here and love this announcement. Love that we're getting uh just a bit more homegrown mining for Ze. Um and you guys are thinking about things in a very unique way unique way as far as Ze per share. So um first that we've heard of this from a uh acquisition company and uh curious if this sets a kind of a new standard from some of the proof of work networks but my intuition tells me that proof of stake doesn't really give you anything close to the level of accretive nature that mining does and proof of work and well the only other proofof work network really worth mining these

days other than Bitcoin seems to be Zcash and maybe a couple others but not many of those have digital asset treasury. So unique position, unique time. Um, wish you the best and thanks for your time. >> Cool. Thanks, guys. See you soon. >> Thanks. Well, we'll see you next time, man. >> Cheers, buddy. >> All righty, guys. Bullish. Um, what a day for the markets. What a day for privacy. What a day for crypto believers, for hard asset believers, for fiat as a zero believer. Just a lot of believers out there winning today. Guys, we're going to take a really quick break. We'll be back in a minute or two.

Take a quick breather. We got a bunch of news tweets. We got the White House live. President Trump is going to deliver remarks with technology leaders live. Um, some of those will be crypto leaders. I'm sure there's going to be some sound bites here. We're going to react to that. We're going to cover some news. We'll be right back just a second. [music] >> [music] >> Heat. Heat. [music] Heat.

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

We get [music] we get we get [music] we get we get we get [music] [music] you know we get >> [music]