Market Dynamics, Token Valuations, Eth vs Sol Scaling, and Crypto Politics | The Hivemind

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it's like inevitable that projects will want to first of all control their own block space and second of all be able to um customize like how their VM runs uh gas tokens like all sorts of stuff that that people will want to customize and so they'll want to move to l2's and at that point you end up with something pretty similar to like what ethereum has right now which is maybe this thing is bad for eth the token but it's good for developers and if it's good for developers it's good for users nothing said on the hive mind is a recommendation to buy or sell Securities or tokens this podcast is strictly for informational purposes only and any views expressed by anyone on the show are solely our own opinions not Financial [Music]

advice hi everyone my name is Jose masedu and welcome to the hive mind podcast our first episode on Empire pretty excited to be here we've actually been doing this for for over a year but excited to to make it to the big leagues so for those who don't know or haven't followed before the goal of the podcast is to basically provide an inside look into what we like to call the deli hive mind bringing together some of our brightest Minds from each of the divisions to share insights Alpha and [ __ ] posts so today with us we have cedus parabus who heads up our institutional research arm we have Yan liberman who is managing partner at Del event Ventures and we have uh Venture

partner Duncan also known as flood Capital self-proclaimed gem Hunter I split my time between Deli Ventures and Deli Labs our protocol R&D arm focused on incubating and accelerating new web 3 Primitives so to kick it off we normally like to to talk about markets just how's everyone feeling U maybe cedus can start since the others are uh are having a laughing fit yeah um I don't know I feel like the this chop for the last four months is just kind of driving everyone insane right uh and so if you're like a if you're like a trend Trader or something you're probably just like pulling your hair out at this point um but I don't know it's

hard to be like too bearish I think so like the dispersion uh has been pretty bad and that's also another reason this is something like we've talked about a ton and I had that thing on those like charts on Twitter the other day that kind of showed like your spaghetti chart table thing yeah I mean it just shows how bad it's been like I they chop in Bitcoin down in mostly everything else yeah it's like it's like you have your the three right like BTC esol all pretty good and then you have entire sectors like down 50% plus um and it's like modular and like Cosmos Eco are really just it's it feels like there was like a

big capitulation on Cosmos Eco like a week or two ago modular is just code name for low float High fdv launches like it's true it's true all of those well because it's like a new sector right it's a subset for sure of low float High fdv yeah that is like I guess like an interesting point to make is that it's like they're all in the same sector they all have the same kind of like low float High FTV stuffff just because they're they're all new most SE most new coins are kind of it's hard to get away from that unless you're doing a monstrous airdrop like just just structurally you're likely going to be high float or low float High FTV yeah I'm just saying

modular is like a new sector too they so it's like it's like what's actually driving that is is it like bearishness on modularity or is it just that fact that they're all new kind of yeah probably that fact that they're all crazily valued but uh I feel like it's it's actually like pretty healthy cuz we've kind of seen big coin bounc between like 70 to 60k like 60 back to 70 and it's done that a few times um so like bitcoin's you know only 10 15% off alltime Highs but you've had like a massive draw down and these other sectors like memes and these low float High fdv which is probably pretty healthy for the market because the market couldn't like keep on going up and support all those valuations it was literally like I forget when we counted

it during like March like January February March April there's probably like hundreds of billions worth of like ftvs that had launched with these low floats so you know bringing that forward into the future if Bitcoin had kept going up to like 100k that's like really heavy for for the market to absorb so this kind of chop that bitcoin's in is a good digestion period for the market to kind of you know price these things down to to where they should be and not have those really heavy unlocks like kind of dampen the Run later on because it's just not sustainable right like you can't have hundreds of billions of FTV on these info projects that make no money so I think it's it's healthy yeah I do think you'll probably see a period

though where those all probably Trend well as as soon as just because they are like low cir right and so you could see been talked about kind of to death right like I yeah you know did a threat on it too it's down probably 50% since then and it was already like talked about a lot then at what point is this sort of like priced in well yeah that's like the point I was trying to yeah and just markets generally as well because I I don't think you got to say your piece yeah I mean if you think I guess with on bitcoin if you think about what kind of puts in a local bottom is just a lot of uh Force selling right which is we kind of saw in that nuke um you had a

Confluence of of pain between the Y trade and and soft macro data and then the the jump fears and and you know all of that led to just a lot of selling a lot of liquidations and and you know we're in in the high 60s and all of a sudden we're we're touching 40s and so uh I feel like that was a good place to put in a local bottom on BTC doesn't mean you get a a v recovery bounce you know the same way we're talking about um a lot of Supply getting absorbed on the alts there's been a lot of Supply that to get absorbed on BTC from from gaws from Germans German selling from you know us moving coins and selling and so um I do think you like part of the

reason why despite all the inflows that BTC is in higher is because there's been a lot of this absorption I forgot that the total it's like a couple hundred thousand BTC between all of them yeah and grayscale like gray scale yeah so I mean it's it's good to process this at not all-time highs right because it's just eating into dry powder that that would otherwise move the Price Less at at higher prices and so um yeah I think you kind of expect some bullishness going into year end uh into an election year where you know the incumbents will try and do whatever is possible to to create a favorable environment to you

know convince voters that this is because they're in office and and so I do think there's going to be more pandering to to crypto and to broader markets um so I'm you know bullish going into into year end um it's funny like I think you know as it chops around and I'm guilty of this too you know you overanalyze price and you're you're comparing it to what stocks are doing it's like oh we're nuking but stocks are nuking set okay and then stocks bounce and Bitcoin doesn't bounce what's going on and so I think it's just the nature of chop and and uh it it definitely just eats away at a kind of mind share and and forces people to try and like overly focus on these like day-to-day

moves yeah people are going crazy out there um to answer my own question on whether it's priced in I think uh agree with all of you that there's dispersions coming basically there's definitely some like Majors I think are primed to do well um I think a bunch of vaults will will do well and I think a lot of people will will mid curve and like obsess over unlocks and I think a bunch of things will pump through their unlocks just like they did before right like the lios and stuff well when the Market's going up it's easy everyone just dime in hands every like Market's going up everyone dime in hands and then the market turns and it's just like everything nukes and like those are the ones that sell off the hardest but they can go up just as quick I I do think there's like still a

lot of pain in in the longtail EV vaults just because there's they're still up there's still like billions of dollars uh or like tens of billions of dollars of of unrealized gains that are going to unlock and they're unlocking on much and for a lot of these the circulating market caps are kind of like fugazi uh like if you actually go look at what the real circulating Supply is um it it's sometimes Like A fifth or or a quarter like definitely a fifth to half of of what's reported because they managed to get like treasury tokens reported or they get um yeah like there's a lot of different ways the teams game this and so the the real market cap is way lower than it seems and the unlock in some cases like that first cliff unlock is

like a few multiples of the current market cap which is just like an absurd unlock and and I I think you don't really need the narrative to shift for these things to go down just because you have like sellers that are up a ton that know that their thing know better than anyone that their thing has no traction right um and and we'll and we'll be ready to to sell in my view for for for for a lot of these for for some of them I I really think unlocks are going to be a a buying opportunity and and and a nothing burger and and people going to want to hold them through through them we're starting to we're about to start hitting the first wave of these unlocks and I I definitely agree you're going to get some bullish ones particularly ones that had a lot of secondary Market

turnover so I I think Tia is probably going to be a bullish unlock um I mean t that's a big five billion but I mean t is probably just GNA set the narrative for everything that's kind of like the the poster TR for like there was a lot of secondary volume on TIA above above the current price so people that are that bought locked coins above the current price well a lot is a lot is relative though I think it was right but but it's different the the the point being that it's it's changing hands from someone who's got an insane amount of unrealized gain to someone who's now flat so like that you know unrealized gain is is naturally a seller flat yeah potentially it's always bullish but it's just

there's a lot of unrealized gains and like secondary volumes are it's it's hard to make a huge dent in that but you've definitely it's nice also because you take from the people that have the highest propensity to sell right and give it to people that are like flat it definitely definitely dilutes a lot of it I think TI will will be a will set the tone for a lot of what comes after it really just depends on what's Happening that week too which is yeah like if it's a bullish week it's going to go up if it's a [ __ ] week there's no escaping gravity I guess I'm still just like not bullish on like da tokens in general and so that's like still what makes like the Tia thing I mean so the other thing I was going to say is like you're seeing some of these new

projects come to Market and they're not even that much higher off their last round like a veils last round was 800 mil and they went public at like 1 point4 or something they're like 1.4 1.5 now and that's before any unlocks even hit like that thing is definitely trading secondaries below the last round right and so I think you're going to start to see that I think you're going to start to see that like a lot I think the Market's kind of catching on I I hope I hope the Market's catching on because we've seen just so many of these disastrous launches but anyway we haven't though we we haven't that's the thing we haven't seen so many we've seen launches from a price perspective on launch for sure but

that that's just like dynamics of of of launching like for for the investors in in those rounds uh we haven't seen that's why I don't think it's it's over yet is it's because you can still make money doing these like pre-launch rounds and then it launches above your your your valuation um and obviously it's going to be tough to get liquidity on it yeah that's a paper gain though I don't think it's that like that's really a winning formula to make money um because you're I mean yeah if if you bought it at 800 it's trading at 1.4 you're going to be selling it at a 50 60% discount so you're down if you're trying to sell OTC on a on a price that's you know a little less than 2x what you but that's like taking the

worst example right like taking one of the or one of the worst examples where investors are kind of up the least I think for for a lot of these you still have like a big Delta like there's still somehow people on binance and bit like buying these things on launch and and holding them and pricing them above previous round yeah I think their rationale though is there's no unlock coming anytime soon right so this is just like a a game I get to play until there's a new Supply hitting the market that that's the other thing for me it's like if you want to express bullish view on crypto last s CLE there's only a few coins you can buy now there's like constantly new coins launching which have reset unlock schedule so you can just like dump the old one and that that's unlocking and get the new one or

get a meme that doesn't even have any of these Dynamics so I just think there's so much more competition for Capital plus like these billions of dollars of unlocks that's going to make make it painful for some of these things to find oh there are definitely some like King maker pair trades too yeah 100% yeah but I think this is help I think we can all agree that this perod even though bitcoin's only 15% off the high everyone's like feeling like this is a bare Market because all the alts have gone down like 70% but it is a healthy period of digestion in the market because that couldn't keep going how like what we saw in March is just like not sustainable going forward and we've had a lot of digestion so I think overall it's healthy for the market of course like Jose I mean Jose made this

point though in the last pod how it was like in traditional Venture most things that go to zero never become liquid right and this everything goes public here and so there's going to be some like massive like things are going to go from multi-billions to zero over the next few years well I think that's why you get there's the appetite to invest at these vs because like that contributes to the to why the Val like never in in traditional Venture would something with this level of of you know revenue and and profitability uh rais at this Val right like series A's with no business model raising at Mid n figs uh because

you know you have a path to liquidity so I can take a lot more risk on on the valuation side because it's it's not a a binary outcome there's like a a spectrum of of kind of exits I can get where I can at least recoup exactly yeah that's a big I think people still don't realize how good a vent how good a asset class sort of crypto Venture gets a lot of hate I still think people don't realize how good an asset class it is and yeah what you said true it's like in in Venture you probably have like a fraction of a percent of companies that go public I actually tried to find exact stats but it's but it's hard and then in crypto it's probably like a few orders of magnitude higher everyone everyone will everyone will launch not everyone some some

things never some things like founder has regulatory concerns or like there's a lot of things don't launch a token TR trust trust us yeah the so there's there's things that don't launch a token but most things do and and like a lot of the things launch a token before they launch a product and sometimes they have derivatives for the token before they launch a product too so there's just like these Dynamics where people are going to be making a bunch of money on both sides of these trades for things that are like super early stage and sometimes don't even like launch a product or or the launching a product is bullish is bearish right because now you have something to judge whereas before it's just just pure narrative um kind of like Ian Lair doing the like if they do slashing or whatever like you know you

know it just makes the the calculus for Supply Siders way worse MH I think like we haven't really seen because if you're actually to vest your entire like Venture position in some of these it's usually like a year cliff and then twoe for your vest so I think it's kind of TBD on if you don't sell OTC if you'll actually be up on on some of these projects but it's definitely like attractive versus regular Venture testing I also think it creates a lot of opportunities in like the liquid markets where you know these projects have launched either like a previous cycle and have drawn down a lot or they didn't take VC capital or they just like launched at a reasonable valuation to like get in at at an early stage but

yeah you kind of have to remember if you're going outside of like BTC Ethan Soul like you're playing with basically like Venture Investments and you have to be really cognizant of the supply Dynamics and also just like if the product's actually going to get traction and be around in a few years from now if you're not just just trading if you actually want to like invest in in this asset gcoin Hunter a man of the people looking out for the common man well it seems like a lot of people are trying to run with like the OG defi narrative over the last few weeks I was going to say I think that a big part of that just has to do with the fact that they are fully unlocked and like even if they also have a business like yeah but it's like I don't I still think

they're overvalued like personally but I can still see them doing well because people want something people are sick of the low float stuff they're sick of like the mem coin stuff they want something real to bid and so I could maybe see a bit of that but yeah it's hard for me to get too excited personally I mean you say that like what's sana's what's sana's like actual earnings like if if you take out inflation like what's their total economic value minus it's a lot it's like close to ethereum now but that's like that that doesn't that doesn't take a discount inflation right that's just there inflation I mean inflation has nothing to do with that

but it's a platform so you can price in a lot more growth versus these these like things that are clearly not platforms is not aost R and more growth inflation is a cost to the amount okay if you want to say inflation is a cost you have to there's like you need to basically figure out what percent of the inflation is like a high propensity to be spent and so you know you can kind of come up with like some average tax rate for the network and so maybe you guess it's like 20% right and so you can say if inflation is like 6% on something then maybe like the real selling pressure you'll get is like

1.2% right and then the other one is is the thing that we talk about all the all the time is like these lock tokens that people are allowed to stay those are basically all sold a lot of the time like in a vacuum inflation I think people over analyze inflation it doesn't matter it's just it's like demage for non stakers basically on the way up it it it it does I guess on the way up you know there's there's propensity to hold right because you figure the the the validators or whoever are are high conviction that they need to sell a certain amount to fund costs and then the rest they kind of want to hold and and play for the upside but eventually you know it's going to come due it's basically like stock based comp right exactly I see the stock based comp

no I agree set it's like if you're holding salana and you stake it yeah you're losing it's like 7% staking rate right now you get charged to 10% fee so like the dilution is just that 70 bips or whatever because if every if you stake it then you're not getting diluted yeah like sure the price might go down by like the market go you own the same percentage it like doesn't matter I mean if you're staking yeah you're just you're just staying the same staying staying put but no like I mean Salon no but like Salon validators make a lot of like real Revenue now um that it's like worth it for them even without the the inflation now I will say like Solana the validator centralization has been like getting a bit worse over the

past year um how do we get under that I don't know we talking about inflation yeah we don't we don't have to go down this we have to go down this road we don't have to go down this Ro I mean I did want to tou touch Bas is something y said maybe maybe may we can maybe we don't have to go back here but just on crypto Venture because it is the reason a lot of a lot more stuff gets funded in crypto Venture and people fud it a lot but it's just the fact that it's such an attractive asset class because you have the liquidity and the liquidity enables you to both like take risk off the table much sooner right you don't have to wait for this binary outcome like you can sort of reassess at every incremental like time period you don't have to just

wait for it to go public or something like this and you know face like a a Theos or something or even like FTX is a really good example right Equity holders got torched but like uh token holders like multicoin did did I think they they said they sold most of it at at 20 bucks or something in their annual report so like if you have the token you you can get out it's just such a difference right and then the second thing is you can back things that don't that can't IPO or get acquired but are still really good businesses right and there's like a huge range of things like that in crypto which would never be able to IPO again acquired but are still good businesses and with a token you're able to like if like in in crypto Venture there's like or like a normal Venture there's this

probability distribution let's say like an expected value distribution all the different ways that you can generate like a high expected value like some of them is like 1% of the time you do really [ __ ] well and 99% of the time you get torched and then there's businesses that are way safer right where 60% of the time they do good but not like insanely startup um like Google like outcome but they're way less risky and they succeed way more often you can actually invest in the entire distribution as crypto Venture whereas as a as a normal Venture investor you just can't so I think that's the reason that it's still like one of the most attractive places to be in my mind but uh for sure and not only just for like VCS even if you're just like a retail

investor if you put in a lot of work you can find projects that don't have any VCS and like organically launched like two that come to mind was like GMX last cycle didn't take any VC money it did really well banana this cycle didn't take any VC money it did really well they both launched at like very reasonable valuations um on chain and you can find those they they definitely exist so it's not just for if you're like a VC like you can find these as retail investors you just have to be you know really yeah or following my Twitter all right we want to move on we want to go into the salana eth thing or like there was this eth panel that I thought was worth discussing uh that was

posted in reads it's like Justin Drake vitalic uh Sebastian X flash Bots now doing the thing whose Name Escapes me and a few other people one Bal and it was just who was it no no no wait you Stefan or yeah Stefan from X flash Bots and there was some there was the guy there was Chris from monoma there there there was a bun it was a star studded like uh sort of like nerd snipe panel for sure and within it like vitalic basically says sort of verbatim in an Ideal World there would be no defi like I think it was referring to the L1 um like in Ideal World there would be no defi on the L1 um and then later on like Justin Drake says something like yeah I

thought the use cases would just be like sending tokens and stuff but then I spoke to Paradigm and they're like no we need we need token swaps you know and to me it was just like shocking the disconnect between the eth int and I'm by the way I'm I'm bullish eth I I I actually hold more e than than so right now I I don't quite know why but but I do um and yeah that but it was shocking to me to see the disconnect where these guys just don't use the chain and they're sort of dismissive of all the I mean to be fair it's just like buying meme coins and Defi and stuff but they're very dismissive and I Tower and there's been a trend of this throughout the year right like uh vitalik's post about not being single-issue voters like basically a anti-trump post his thing

about um how celebrity coins should should give money to charity or whatever rather than doing like there's better things to do with the money like there's just been a trend of a bit of a disconnect um and I'm torn because I love vitalic like he's one of the ogs like been in been in the industry for so long has always has been uncorruptible in terms of like in an industry where it's so easy to get corrupted the dude's been totally like like uncorruptible um very balanced Etc but also it kind of sucks that these people are so disconnected from from what's actually happening on chain and the dgen culture I guess and curious to get your your those and I think I'll probably have to do the E bull case because I think oh I

think you guys are yeah but but we can do that later I mean I think uh it was Fubar had this good post yesterday and like the entirety of the scaling road map for ethereum is BAS on this idea that like setting tokens is the use case and when it's like the the use case most people care about are swaps right and that's like a fundamentally different problem that you're solving and it is why like the liquidity fragmentation that people talk to death now was never seen as like a massive issue because if you're just sending tokens that actually doesn't matter that much but when the entire use case revolves around like having liquidity in trading um then this is why you see

integrated monolithic type architectures do well it's why you're seeing a lot of excitement on these you know these paralyzed dvms the l2s that are coming out right these high performance l2s that are completely centralized um like one single beefy node uh but they can do a ton of transactions right and you're even seeing it with like 4844 when ethereum reduced its da cost a lot you've seen like a big you've seen like the power laws get get more extreme where like base and arbitrum have continued to like grow and everything else is either like flat or down right

it's like you need some sort of chain or something to connect all of these together well no it's it's almost the opposite it's like people showing that they really don't want to use multiple things they want to use one thing right one unified chain yeah I saw I saw a Chow from Alliance yesterday he was like it's base versus salana and that's like I don't know man like I'm not well let's talk about the stuff that ethereum has going for because I feel like right now it's pretty consensus that soul is just the place where marginal buyers are going marginal users are going it's giving you these cheap swaps all the meme coins are there um so yeah we could talk a bit about eth I don't know Jose

you I think it's like fixable I think a lot of their stuff is fixable um I think like Max Resnik from consensus and SMG has really been pushing this like multiple concurrent proposers thing on the L1 right and trying to get more okay what does that do in English please it helps reduce me because most meev is like you have a but that's not the issue with the L1 right yeah but no but you can the isue yeah yeah but you're also he's also like he's very against the whole Raspberry Pi philosophy right getting rid of that he wants to scale a lot of people want to scale the L1 yeah because people want to use the

L1 I mean I think the benefit of the l2s is that you now have so the question is like what you lose in fees you you need to make up in moneyness right like the the the appetite to hold e and use it uh increases more than the fundamental value of e decreases because all the transactions are are now on the L2 uh so which I think is like a decent argument to make I think it it in the grand scheme of things the uh you know Supply burning thing was more meme than anything right because like the degree to which the supply was burning is negligible so it's more more mimetic than than actual you know def like

Supply constraint uh Supply constraining so I think you know the argument on the l2s is you now have different communities incentivized with their token when not not saying those tokens are good Investments but they're going to be used to try and get people to come build and and use their platform and and in all those scenarios you're using eth as gas and so like you're gaining moneyness on that side no but here's the thing the so the burn first of all yes it's like mimic but it's strong mimic and I listen to these trii podcasts and and when they bring them up they're like oh yeah I like that it's like a stock buyback I like that I'm on board with that and the thing is before eth had this if you if you look at eth like pre- 1559 proof of work it was purely a

recycled asset right because miners would get all the fees and then they just sell it and that's why eth never did well and then as soon as 1559 went into play it pumped from like whatever 100 bucks to like 4K and in the L2 road map you kind of go back to the same architecture right it's like yes the l2s are using eth as gas but the l2s barely have to pay any money back to the L1 and so they're just like recycling it and you go back to the same thing that it was in the past that like nobody right but you have way more holders now right that's the trade off is it inrees the money so like what better for users I don't know why is it better for users yeah well my like you know the meme of the guy standing up on his on his own or

whatever like is like the the L2 road map is actually good like I think I think it actually makes sense and I don't know we published this report recently on on the on the portal salana the salana the the modular um which is a play on the salana the mon monolith report from a year ago which I I'll give you your your shout out cedus you you put out a bull report pretty close to the bottom it was a good one um and then salana the modular it's sort of like there's an interesting analysis there it's very back of the envelope but it's this just shows how salana even even a million TPS which is sort of what fire dancer hopes to to provide can sustain maybe 20 million uh users right especially in this like agent world that

we're that we're moving towards and I think it's clear like what what kind of the eth people realized very early on is that no amount of scaling on the L1 would make it good would make it able to have everyone on it and so you would always need to to fragment and the l2s I think provide uh really good X benefits and it's not just like scalability in terms of being able to to scale horizontally it's also customization like we're already seeing that on salana right with these these five salana l2s it's like Zeta and and and code and grass they're all building l2s that are customized in their own ways suit their own their own purposes and because they're realizing that they can't get everything they want from uh from from

salana right like because when you use an L1 you inherit every design or or a lot of design decisions you have some obviously design space with Smart Country but a lot of stuff you inherit from the L1 and to me it's like inevitable that projects will want to first of all control their own block space and second of all be able to um customize like how their VM runs uh gas tokens like all sorts of stuff that that people will want to customize until they'll want to move to al2s and at that point you end up with something pretty similar to like what ethereum has right now which is maybe this thing is bad for uh eth the token but it's good for developers and if it's good for Developers it's good for users and I I I don't think and the the base versus Soul

thing I think it's very like right now clearly it's base versus soul but this is sort of assuming that the only thing people will ever do on these chains is is trade tokens and trade meme coins and like these are these are the these are the two things that have the most traction right now uh and you're assuming these are the only things that will ever have traction I think if you want to if if we assume that more [ __ ] will be done on chain I do think the L2 road map and like app specific l2s make a lot of sense and then just last thing I don't actually think this is bad for eth because I don't think any well I agree with what you say that eth lost out on fee revenue and and stuff like this but I don't think people buy these

assets for their cash flow uh you know I don't think people are buying salana for its for its cash flow they yeah they are 100% and look look how much eth like every L2 the the biggest asset that's bridged to these l2s is eth like eth is eth is money bankless are right eth is is is money on these l2s here's the thing your whole to the best the best L1 to have for ecosystem of rollups is a performing L1 that has like short block times and a lot of Da capacity and so this is also why you're seeing on salana salana doesn't have these generalized rollups they actually do have app specific rollups whereas on ethereum they're all these generalized

ones because you still can't launch on the L1 um so I think like the mental decision if you're building an svm is also a lot cleaner because if you want shared State you can just launch on the L1 and then if you want to have your own block space then you just make this app chain thing um as an L2 so I do think that salana is going to like back into having a lot of app rollups which is actually kind of like Cosmos thesis and I think if you go back I think the biggest problem with the cosmos go to market and what they missed is I still think they're I actually agree like a lot of these things will be app chains at the end of the day I think that the

transition period to get there though is what caused most messed up on and you need like some Central liquidity Hub to get like a lot of developers to get a lot of money where everybody just is and then you make like the app chains after and Cosmos went like straight app chains from day one and then you could never build you could never build liquidity you could never get like enough developers and that's why I think salana now is like ironically going to start crushing the app chain game because they have this good place that they're like starting at so you think just salana is better at hosting l2s than ethereum will be or like app specific chains it depends what you want like I do think

there's going to be yeah way high way higher ratio of app chain to generalized like even all the generalized so that the argument you're making though is is still one in favor of l2s on eth it's just you're just right like you're saying the the the path to getting there on salana is is more favorable but in the end right the the the consensus is that these are necessary yeah but like I know like everyone's going to end up in approximately the same spot but how you get there matters this is where I'm like uh shill one of our portfolio companies we on bullish inisha and these projects they're actually building for the rollup world because I think both salana and eth are optim I mean eth is is obviously like a you know very old Tech in crypto

space there's a bunch of things they've inherited that don't make sense you know like Lio and lsts kind of destroyed the whole solo staking thing and made it made it and there was so much engineering effort that went into that and I'm I don't understand this salana stack as deeply but I'm sure there's things like that there too and so if you accept that it's a rollup world then you kind of want things that are that are built like what do you actually want from a from an L1 I think that's a really interesting question because all these exactly I think it's like liquidity iCal assets with with liquidity right you want like all the usdc and and wbtc everything to be issued natively on the L1 and then to have an easy Bridge tier roll up you want that you want users you want like a

decent wallet um make it very easy to deploy like it's it's these basic things and like none of that captures much value right you can't like capture much value for all that there's definitely Network effects to it because yeah liquidity has Network effects but it's it's it's just like it's it's yeah it's an interesting like the L2 world is interesting because it it does keep like everything ends up like eth right now right like Soul ends up like eth right now too the only things that will be on on Main net so are the things that need like shared stay which you know it doesn't seem like there's that many of them the thing is I was talking to Dono from L2 beat just on like Twitter the other day and he made the point I talked about with like 444 how Bas and arbitrum

have just seen massive increases at the expense of everyone else and this is kind of the way interoperability will go too and he was kind of saying how like all the liquidity might just go to base over the next couple years and then that kind of like kills the super chain thesis and now Bas just like owns all the liquidity and so I think like and in that's in in this instance Bas is like this L2 to ethereum but now it owns all the liquidity sure it's paying the da to e it's basic basically in L1 at that point and now it's just like run by coinbase I think that's like a and like this it kind of kills a lot of these other chains I think that is like when people think about the L2 future they're

thinking about all these like thousands of rollups that are like marginally equal in activity and all this but you could still just come with the same power laws I don't know I I think there's a bunch of applications where it makes sense for you to have your own L2 I think one one example um is is like ethena announced their chain right still unclear whether that's going to be a chain or an L2 or whatever but to me that makes a lot of sense like you have your own stable coin um having a chain that's built around that product where all the all the apps are built around that product you have a uniform user experience you can use USD as the gas token makes a lot of sense um and there's loads of examples like this Ronin right is another it's it's app

specific L2 um like what immutable is done with polygon I think there's there's just like endless examples where app specific stuff makes makes sense and I agree Bas maybe wins the the generalized rollup or or like is is very well positioned to win the generalized rollup but there still I think there's still going to be app specific stuff that kind of makes sense no yeah I think there'll be a lot of I don't want to like misspeak I think there'll be a lot of that oh yeah I feel like we talked about this a lot yeah agreed so maybe move on but last last thing but just to sum everything up because I feel like we were getting into some technical stuff and in case people aren't following like I feel like why you would launch an L2 is for eth's liquidity right and you

know developer base but realistically over time something like base if they get enough users on there and have the distribution through coinbase you know why does that necessarily need to be tied to eth um so that's like something to think about or Soul yeah or Soul right yeah um all right what do you want to hit next do you want to do crypto for Harris politics stuff or do you want to do the I lay drama that just dropped with their team members getting a lot of I mean so a lot of people are talking about how like as cela's odds have increased prices like done worse I feel like it's it's probably just random um I don't know how like people

feel about that well I think like the current administr I think if anyone hasn't listened to it a16z has a really good podcast out I think it's titled like a16z little Tech Trump something like that but basically um yeah Ben Horowitz and Mark andrees who are like lifelong Democrats go through how now like they're voting for Trump in this upcoming election because they feel like he his policies are much better for Innovation and I think they touch upon uh crypto AI some some capital gains tax stuff but maybe there one more topic but it it's really good to to go listen to I guess why like Cala

they're talking about this reset but you know she's in office right now and and the Democrats have been pretty negative towards crypto so I think Bitcoin and eth are gonna be fine because they have the ETFs but probably the smaller stuff and like the the defi regulation and that sort of thing uh you know is probably yeah it's also the people that she's mentioned she's bringing in are have historically been incredibly anti- crypto so it's it's you know follow what they're doing not what they're saying and and the appointees she's bringing in have not been friendly towards it so I think it' be pretty naive to assume that what's happening now is anything other than kind of flimsy pandering after realizing that there's a decent amount

of votes and donations from this voter base that that they're missing out on um yeah it seemed like that that uh crypto for Harris which yeah calling it crypto for Harris and not Harris for crypto seems like a pretty simple mistake to avoid but um I I didn't really listen to it but uh just kind of tuning into a bunch of those who or fall like you know getting feedback from a bunch of those who did who are pretty objective not really leaning one way or the other it seemed uh like a loose effort um and a weak one at that right it was some live some pre-recorded but all of

it was basically just kind of reading pre pre-made statements um that were generic and and and not really saying much and then at the end asking for donations of course yeah and on the other hand Trump uh by the way obviously I'm not American um and I don't don't have like great political takes I don't think but like listening to Trump's speech in the uh at the at the Bitcoin conference that was like an insane you know like everything you could have hoped for I mean maybe RFK is was even better but but Trump's just like everything you could have hoped for from from a president right in terms of what he said like right self-

custody Bitcoin of the Strategic Reserve it's like insanely bullish crypto like understands it firing gendler um and on the other hand Harris it's hard to figure out her policies on on anything but definitely on crypto it's it's been there's just been nothing uh yeah and I I do think it's very bearish if because it just makes it hard to build crypto projects in the in the US and the US has most of the talent and most of the capital in the in the world like realistically most of the dev Talent most of the capital is there and so it if gendler keeps keeps going and and it's just going to be so bad for the I think it's very bad for Innovation and for the for the industry I mean all this

stuff is pretty obvious like I think you can make the argument that that Harris is like bullish Bitcoins bullish memes right because they're just going to keep spending which should kind of continue the existing uh Tailwinds for for crypto um which is you know currency debasement uh etc etc and so that that's bullish Bitcoin and then she's obviously going to be very stringent on the regulatory side which is kind of bearish any l1s and a lot of the protocols but bullish memes that are very clearly not Securities and and there just other ways for people to cycle BTC gains or or put in fresh powder whereas I think Trump is is kind of ends up being a bit more bullish

everything I mean may maybe just quick comments on the igen layer thing and then we can end it what do you think this this igen layer and by the way we're uh small investors in in Ian Lair ventur so uh yeah yeah I don't know so the thing is uh they gave team wallets to a bunch of projects that were building on top of I layers so they could give them air drops yeah I don't I mean I don't think it's a good thing I mean I know that it happens a lot I don't know how much there is to say about it like I don't know bad yeah bad unethical yeah like I don't think it's good I mean

but like you know Celestia airdrop to contributors to the cosmos SDK and like to GitHub handle there's a lot of there was a lot of manual stuff like air drops always have a bunch of manual stuff and like realistically these projects would not exist were it not for igen layer I can I can see why it would be like a gesture to try to aird drop to the igen layer team right like you built the infrastructure on which my LRT exists like I want to reward you for that in the same way that that people do with with air drops try and reward people who contributed to the space overall if there was any and they mentioned there was like some teams felt pressured to do do it that's obviously not cool but the thing itself I think is like uh kind of like an offshoot of what already happens

with with I think you just have to disclose it to be honest the fact that it comes out through an article is not great but if you're if you're kind of upfront about it then it it's easy to rationalize and it doesn't feel like you're doing something sneaky because I mean you know same arguments directionally can be made about the whole why is this nft community getting this airdrop it's like all insiders doing Insider things and then I mean reaking as a whole yeah yeah maybe we don't have time to get into that uh I mean we have I don't know um I think we've yet to see anything truly interesting with reaking yeah I think Igan da mainnet just went live and so thing is I think they're they're starting off with like 10 eth of rewards

per month and that shared across like everyone right so it's just like immaterial like it's no money so yeah I mean my my thing is I think reaking as a concept makes a lot of sense like you want economic value securing people doing things on chain that can't be secured trustless Le uh so you can slash and stuff like this I just think no one cares about it right now in crypto and there's like ample evidence that Economic Security is just a meme right everything from chains like with very low market caps not being attacked to chains being attacked and the price not reacting at all to the you know all these articles that all of defi relies

on that are that are sort of multisig or admin Keys there's like I think a lot of evidence that it doesn't matter right now hopefully if the industry matures at some point it it will matter but even if it does matter I don't think it warrants the amount of investment and attention and mind share that has gone into the various clones and offshoots of like reaking for X you know I just think think a lot of that has been a huge waste of capital and and uh and like sort of time I would also say the biggest shift in reaking over the past few months is that like reaking when it was pitched was like oh this is bullish for eth right it was pitched as like a

solution for eth the asset right it wasn't pitched as like people want avss it was this will be good for eth and now you can just use any asset you want like you can use stable you can use like it's pretty generalizable um you can use most things now because reaking is a primitive like yeah you can use whatever you can use a board ape right like it doesn't matter um and so you're seeing that aspect open up a lot and you're even seeing now like ABS is will be able to stake their own tokens so you've kind of come like for a full circle in a little sense where it's like now you are reintroducing the native token of the protocol us is staking and like sure you can have other

assets backing it too so it's not just based on the protocols token but like I think that's the biggest change we've seen in just the overall reaking narrative um yeah yeah kind of overhyped like you're never going to get enough economic value it seems like they have so much tvl now that are they really going to be able to generate enough like natural yield not through inflation to to make it worth it taking on the extra risk or just like supporting these valuations probably not but I guess we'll see yeah the mountain side is always a tough thing especially when for a lot of these projects you're competing with their native token right which they can use for for securing stuff entirely it's all subsidized right

yeah yeah yeah all right guys yeah good first episode uh we suck at ending these things maybe we can all say bye this time make it a bit less awkward uh thanks very much for tuning in to our first episode of the high of mind on Empire I hope you enjoyed um please subscribe is that a thing yeah pleas tweet at us with what get a new laptop yeah Duncan please get a new laptop so we don't have storage issues anymore um and yeah thanks very much for tuning in tweet at us with anything you want us to talk about next time we love you there is no all right goodbye you [Music]