Markets are UP, Token Talk, Stablecoins and Corporate Chains, and MORE

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Hey, what's everybody up everybody? Good morning. Welcome back to OX Research. today joined by my co-host Picacio and we've also got Mark Arjun from the research team and uh frequent member of the telegram chat uh frequent podcast listener and top holder of XPL apparently uh James Kristoff. How are we doing today guys? >> Wonderful after the hyperlquid uh per market was listed for XPL. It's great a wonderful day.

>> Yeah, I'm doing well as well. I am also happy about the hyperlquid purp listing of XPL. Maybe not as happy as James is, but in my own way. Um I think partially because of XPL, partially because it shows that Hyperlid is continuing to list as quickly as they're able to, which makes me happy. Um yeah, good day. Yeah, I think I'm maybe as happy as the both of them, but indifferent about the hyperlid listing.

>> How how big is that market, Bach? I actually didn't look at the uh >> um when I checked there was I checked like 45 minutes after I'll check again now, but I checked 45 minutes after they listed it was 16 mil volume, 13 mil OI, which is um not like anything to be like, wow, this is incredible. This is fantastic. But it is quite impressive I would say in the first 45 minutes. Um I will say I expect most of that to be um early speculators and then the next phase I imagine it'll mostly be people hedging out their allocation. It's

always like I was talking to James about this because we both got into the deposit program and I was thinking like can you hedge cuz like let's say I'm happy with the whatever it is that five bill you can hedge it. It's just like you have such imperfect information compared to the well compared to like you don't really know when the token's going to launch. I could just be eating funding forever. Um, so it's kind of tough. So I don't know if a lot of people are going to be doing that and like shorting the per to like hedge themselves or like take um take a price, but I don't know. Let's see.

>> We can uh I want to talk about that more. I know James as well, I think there's a lot to talk about on on like the stable coin narrative in general, whether it's like stable coin chains or just stable coin fragmentation. There's a lot of I think talk on some of these things. Before we get into any of that though, just quick shout out for our sponsor. Today's stream is Apdos. Thank you to you guys as well as uh D L London is coming up. Uh Blockworks Digital Asset Summit. It's coming up in London October 13th through the 15th. Crypto's premier institutional event. Uh probably the premier Blockworks conference. You know, I said that about permissionless.

I'm saying it about D now. I don't really care. I'll be a shill every single time. Um, so if you guys want to come out here from Leading Global Funds in, uh, financial institutions, C5 protocols, etc., um, you can get 100 pounds off your ticket at checkout using code 0x100, not 0x10, 0x 100, 100 pounds off. Um, >> you'll see Salve Picacio will be there. >> And hopefully some some actually Mark as well. Both of these guys will be there. um >> confirmed that >> confirmed 100% >> Mark will be traveling to London um as EU one of the few EU team members we're going to be actually going.

>> I should be there too. I don't know if that will discourage or encourage people to go though. >> Maybe maybe wait till after that. I don't know. Ticket sale. No, maybe it's fine. Maybe maybe people do want to go out and see James, but uh >> 100 pounds off tickets 0x 100. Uh go check out the D London website, get your tickets. We'll see you guys there. And then one last announcement on my end. Uh Block Works, we are hiring a research data analyst. So if you live in the data, the charts in SQL, um you love making sense of onchain data, diving in, building out dashboards, you know, picking out insights, uh go ahead and

check out check out the job listing and and feel free to apply. We'd love to hear from you. >> Very good. Um yeah, doubling down on the data side, we need to hire more data analysts. So, if you're a data analyst, um if you have DN experience and you're not an idiot, apply and you might get a really good job out of it. >> I'd be happy. >> Yeah. If you if let's hedge that. If you're not an idiot, please apply. >> Well, yeah. I mean, I don't want idiots applying for the job because then they're going to be like, "Oh, we got this research. He's an idiot." Can you imagine Westy getting upset at us? I couldn't deal with that. Um >> he's probably gonna AI filter all the candidates anyway. So, >> yeah, true.

Did you have anything else, Boach? Okay, we can jump into it. >> I'm gonna do the newsletter thing later. >> Okay, >> we have more viewers. >> That's fine. Baka is saving his big announcement for later on. Um, all right, James, Mark, then let let's jump back into what we were talking about. Um I guess we can let's talk about plasma maybe and maybe in like the broader context of uh I think there's a lot of stable coin talk some of it over the past few months but even recently like Wyoming announced creating their own stable coin. There are a couple of like you know crypto adjacent kind of companies that have announced like launching their own chains and then like you know operating pieces of their business or like transacting on those chains using USDC or stable coins um to

kind of like handle payment processing like stripe um circle being another uh I I guess to the to the plasma thesis or even just like the stable coin chain idea um or businesses transacting on chain via stable coins like I don't Do we have like big ideas, big thoughts here? Um, I I feel like it it goes the two sides of this coin right now are like this is just the hot narrative, so like jump in. And then the other side of that is maybe like, you know, there's a real business case here to actually make use of this technology to, you know, put out a better product for your customers.

Um, curious where you guys maybe stand on that or what you think. >> I think it's probably like a little bit of both, right? Like I I won't pretend that like any anything that I think here is like purely fundamentally driven. I think definitely like your your high level comment about like stable coins being the narrative is something. But like I was super interested by the Stripe announcement. Um and then also yesterday, the day before, I don't remember the Binance announcement for Plasma. I think like for any of these dedicated chains to really have a shot, they need to have that kind of like, you know, wrench to wrap around their customers and force them to use something. So like if you're thinking of how just how monstrous of a business Stripe is and how they're integrated

with basically every single electronic payment in the developed world, like that's so much more of a, you know, a towhold than whatever I think Circle is going to do. So I I I candidly don't know how Circle will compete on their chain for for payments and that type of thing. um when you just have Stripe that's already integrated and has already done all the work on the plumbing on the back end. Um like building a blockchain for for payments isn't difficult. It's the integrations with every single electronic merchant that's difficult. >> Yeah, I agree. the the stripe one was interesting especially as it was like its own L1 which kind of goes against this whole Ethereum is the home to stable coins and then these companies are going to make their L2s like B and

Robin Hood on Ethereum so it's kind of going against the grain in that sense I mean I I still think it's good for crypto as a whole for these experimentations um and then I remember back in the day Stripe was the most valuable company per line of code and if they get this right. Um, it's probably going to increase their time, too. I mean, look at Tether. Um, this is like maybe 10 years ago or something. I'm old. And this is like, uh, when they was, they're still private. But then, I don't know. It kind of seems like with, you know, with Converge, Athena's converge, um, stable coin chain, plasma, this one, like it kind of feels like we're going into the blockchain, not crypto, private

consortiums, blockchain, you know, like route again. But then but this time it seems like it actually has some legs and backing and maybe a little bit more fundamentals and like I'm just I'm not sure how I feel about that but yeah. >> Yeah, I completely agree with that. Um both of you guys I want to D you want to wait a bit but we can speak on do you have a separate section for plasma or can I speak my mind freely? Uh we can talk about plasma as well as part of this. Go ahead.

>> Yes. Um because um James and Mark both mentioned converge a bit. I think it's like the goal here is I guess like I don't think you can really compete with Stripe very well. So each of them are going to have to build out their own niches. Um like I imagine Stripe will mostly be used for the on the small business or business side in general. Um so like I view converge as mostly um DeFi just like expanding on the USD product in general. Um plasma is plasma is kind of the kind of the tough one over there. Um I imagine they're

going to mostly go for like emerging markets and payments in that side. like I've always like I've historically been a plasma bowl. Um despite not having enough allocation to be bullish. Um but like that's the one side that I was a bit I don't know the Binance thing I think is good because Tron has his Tron grew a lot because of the Binance integration. Um like in emerging markets people don't really use the wallets that we create. like you know when you see a wallet and like oh just an account. No, nobody uses like centralized exchanges that they mainly use um to to pay each other and save us dollars. So I think that's like key and I imagine they're going to do

more of that type of integration um to whatever like local exchanges there are in the countries that matter. Um so I I can see them each carving out their own niche that I'm excited about. I don't have like a great take on the L1 L2 thing that Mark mentioned. I I don't think it's bad for Ethereum that they're not building out an L2. Um it's not good, but like I think my base case is that these guys will all build out their own L1's. And if they build out an L2, I'm like, "Wow, that's great that they built out an L2." I imagine most of Ethereum's like um whatever their like value proposition is always going to be what it's always historically been, which is that it doesn't stop. It's a bit slow, but it's decent like maximally decentralized,

maximally trustless, and that's what it would be used for. I I don't imagine it getting a lot of um which is not a bad thing to have like if you're a base chain um to be trustless that's I mean maybe it's not great like rev wise but just off of like provenence and um you know what I mean like just off of that it's good enough I think and then maybe it can get like a Bitcoin meme multiple the way that Bitcoin gotten the meme multiple from being the inflation hedge.

Does that make sense? It sounds really stupid, but I think it makes >> I think it does. I think like the other thing, the way I've been thinking about this is like if if your circle right now, you're clearly not necessarily in panic mode, but you're like, "All right, my only business right now is clipping coupons on T bills and I need to expand or else like this business isn't going to exist." Versus Stripe is coming at it from like the completely other direction. Like Stripe is not entering this business so they can clip a a spread on T bills. are doing it for an actual like user demand um electronic payments perspectives and obviously they're they're wildly cash flow generative. So like they're just coming at it from one is I'm not going to say desperation from Circle but from like a

position of need that they need to expand outside of their core business versus Stripe already has a very established payments business and now they're just kind of adding something into their toolkit. Like if I if I were obviously to put money on one to win, I definitely think it would be Stripe. >> Yeah. I I also don't see how you can keep like taking that 4% or whatever it's going to become. Um if you're circle like to me I don't know though like I guess Apple offers the full T- bill yield right and they have a lot of users but I mean banks are still used clearly.

>> I mean isn't even getting full 4%. >> They give half of it to Coinbase. >> Yeah. No but you know what I mean. It's like, yeah, I imagine that gets compressed over time and >> as like more >> it's also it's also not a long-term strategy, right? Like you as a company, you can't say like we're long-term dependent on short-term interest rates. Like that's that's not a serious strategy that you can have for for long term. >> Yeah. >> Yeah. And I I think to your point as well, Boach, it's like Yeah. Apple or whoever else like Robin Hood and all of these like fintech like neo banks on like they're gonna offer you you know a margin a few points like below what the rate is today and basically give all of that to the customer. So yeah I mean

from a competition perspective they are already losing on that front if you're just someone who wants to hold you know and earn yield on cash essentially. >> Um it's just not competitive. So like they need to expand the product in in other ways. I think the question that it opens up is like if you look at like like if Stripe does this and you know if Robin Hood is doing this and XYZ other company is doing this like I know James we were talking about this beforehand but Austin Campbell did a recent uh interview with with Lorshin was just talking about how there's almost like this race almost for like financial financially based companies to to like roll out a product like this and basically like have it as an additional

service offering for their customer bases and you probably just see that like kind of go up the line of you know faster moving to slower moving companies. So obviously like the fintexs are jumping right on this and it'll be longer for like your big, you know, institutionalized banks to offer maybe the the exact same service, but it feels like eventually that's where it heads. And I don't know if you're Stripe, if you're Robin Hood, it's kind of like let's be fast and quick and like try to maybe onboard. Maybe we get a few more customers or maybe we make our current customers a little more loyal to us uh in the meantime and we don't risk losing them later when you know big bank JP Morgan offers the exact same service.

>> Yeah. I mean, if Circle was if I was circle, I would have like over the past two years, if your big bet is that stable coins are only going to grow, you don't capture that whatever 3 4%. You allow users to get it on chain and then you grow exponentially more, right? because the ability to have like hold stable coins without taking on smart contract risk um and like growing it or like earning interest on it is I I imagine a lot of people would switch away from USDT to USDC just because like you can get 4% on it or whatever the Coinbase deal minus the Coinbase deal is, but instead they decided to fully capture it. Um like I

don't know. I don't know if that make to me that makes a lot of sense like to be able to just give out instead of capturing it in the short term to grow. Any disagreements? >> Oh, I think I agree generally. I think like one of the biggest things too is like and maybe super crypton native people don't don't really want to hear this but like I think the name of the game for for Stripe and you know call like web two companies is all about using stable coins but completely abstracting away the fact that you're using a stable coin. So for your like small to mediumsiz business that's accepting electronic payments like they don't really care that what they see on their screen is called a stable coin.

They'll just notice the benefits on the back end. Um, these would be like your transaction workflow that it's working better with stable coins. Um, I don't think it needs to be like in their face that hey, you're using USDC on XYZ chain. It's just the fact like Stripe has abstracted away this stuff in the background of the plumbing and made like your forward facing UX way better. >> Yeah, I I would completely agree with that. I might even I might have a hot take on the circle point though about like offering the yield now versus like keeping it in that like personally I feel like it almost doesn't even matter to to Circle in that respect because they're I mean they don't have a business model outside of that. So sure they could give away some of that

yield now. Um, and maybe that makes people use USDC immediately to, you know, to earn the whatever percent on it. But, um, like we're saying regardless, they can't they can't necessarily like do that forever. And if interest rates go down, you know, your your whole business model can't be based on short-term interest rates. So, like at some point, like that just isn't enough anyway. So, regardless, like they need to have a broader business offering no matter what. I I feel like to me it's kind of like >> a moot point of of whether they do or don't. I don't even think it fundamentally matters that much. More so, what else do they do with the business to grow it and and build their customer base? If they're just going to sit around and like let Coinbase basically drag them around, um then it

feels like the story's kind of already written for them. >> It's also kind of funny because Tether's Sorry, Mark. Can I one thing? Um, like we we say Tether is like the best business in crypto and then USDC is just and we're like Circle is not doing great and they're the it's the same business, right, like that they run. >> You actually you were queuing me up for my point there because it's like because Circle is actually Circle is using the yield to incentivize. They're just not giving it to us the users. They're giving it to Circle. They're giving it I mean to Coinbase. They're giving it to base. They're giving it to Binance even according to their filings. So they they're paying out this yield for distribution. Um it's just not us who can get it. And I'm sure they'd love to

give it to us, but but I think there's like securities laws blocking that. >> Yeah. And and I I think the other reality there is that like the onchain users like I people with the risk to like be onchain transacting like you know they're hopping on a and and Morpho and you know uh Camino and and earning rates on lending lending on chain and and earning higher than the risk-free rate because you know they have greater risk tendencies. Now maybe there is some like missed market share there of people who would otherwise have held it uh and been happy to like take the uh kind of the treasury yield uh trade basically but it it feels like at least the core like crypto audience member today that

probably like isn't really that attractive um because you can easily get that like basically anywhere you know uh any online bank any any fintech nowadays is offering that service. Um, I will say I do think to James point which I want to get back to around like all these the web all these web two and like finance companies like the whole point here is just to be able to extract abstract it away make it super simple for your customers like they shouldn't really have to care whether it's USDC, whether it's Tether, whether it's some other stable coin that they've created. Uh, I think that's a good point. It opens up a a question mark here with a bunch more like new stable coin announcements. Um, before we get into that though, I do want to just real quickly do a shout out

to Where's our There it is. Sponsor for today's stream is Appdos. Thank you to Apdos. With Bitcoin DeFi heating up on Apdos, nearly 400 million in BTC assets are on chain. Apttos users can now earn yield on their Bitcoin via Echo ABTC and OKXBTC without the typical bridge risks and high fees. Thanks again to Apptos for sponsoring today's stream. Um, >> jumping back into it though, uh, James, to that point, I just want to say there's been a bunch of announcements here around new stable coins. So, uh, I think I mentioned earlier like Wyoming announced they were doing a stable coin, the FR&T stable coin. Worldfy has a

stable coin. Uh MetaMask just announced a stable coin. Like all of these teams, cryptoreated non-crypto-reated like you know, states are announcing new stable coins. And so it opens up this this like question to that point around like, okay, are there just actually going to be, you know, there's going to be a stable coin for basically every single business that offers a product like this and then they're just going to have some engine in the background abstracted all away and it'll just be like, you know, having a money market fund on Fidelity or something. Yeah, I think this is like this is like your your infra versus app type argument where infra in this case is just like the massive prepoundonderance of all

these random stupid stable coins. And what is probably actually going to acrue value is whoever creates the rails to actually buy and sell products like outside of crypto, outside of just trading. Um like it's not it's not going to be valuable to just supply your coin because like obviously every stable coin is completely commoditized. It's whoever is going to be able to build build the best rails in the back end to actually get like flow of that stable coin outside of just the crypto economy for trading. I think >> can I ask a question about this? Why is um Zerox Zaki in our Telegram chat asked this actually, so I'm stealing his his question. Why the would Walmart and

like Wyoming, etc. launch a stable coin? Like what's the benefit? Like like you said, there's like short-term interest rate. they can capture that. But apart from that, is there anything else? I >> mean, they probably just have like dumb consultants inside of their like CFO organization that say like, "Hey, we should do a stable coin because we should." I'm serious. Like, if you think of like what is what is Walmart very good at? They're very good at like supply chain management and >> selling running a really really low margin business at like incredible incredible scale and being incredibly efficient about that. Like, do I think Walmart knows anything about like electronic payments? No, like they don't that's not their that's not their expertise. So yeah, I mean Alams Razer would say like they're just jumping in

to do it because they're doing it. >> That's kind of the >> I don't know like they they they weren't good at electronics. Amazon out competed them and then now Walmart did up their e-commerce online and then lets you pick up your groceries without even leaving your car when you drive into the car park. I mean they're years behind Amazon but they made it there eventually. And like to your point, James, you said they're very low margin business. And then when you're a very low margin business and you know, maybe you have these specialized deals with Visa and Mastercard, instead of 3%, they take 2.52. And if you could reduce that even further by introducing your own stable coin to BIPS, like you're you're adding a lot of free cash flow to to the to the bottom line.

>> That's a good point. Yeah, I think maybe to Mark's point, like there is if you're Walmart in this scenario, like your your customers who are, you know, product sellers, distributors, like buyers and sellers of of goods, like I mean they're dependent on you. I I think if anyone knows anything remotely about Walmart, like they kind of often get to set prices uh of products that get listed in the store because they they have that brand power. Um so to get listed there like and have a product being sold in Walmart is like a meaningful thing, right? because they have thousands of stores, like you get a retail item out in front of millions of shoppers, that's meaningful. Um, so I don't know if if you're thinking with like a 30,000 foot view and you think that like maybe some amount of commerce and like spending goes onto onchain

rails and so offering having some means to do that via stablecoin platform and then like if you're Walmart and you have all these basically like locked in customers and you could force them to use your stable coin rails and your stablecoin to like do some of their payments um and do some of those transactions then uh I think I agree with Mark that like there's may there's like a future case where like it could make sense where you you know, you save some bips, you save a percent on, you know, your your settlement activity of of business transactions with your customers by kind of putting them in that system versus having to use, you know, if it's Visa cards or other other fulfillment methods.

>> No, I I'm I'm happy with them switching over to stable coins, but isn't it much simpler for them to just use uh I don't know, Circle or like Tether or like any other chain like that instead of building out their own infrastructure? Oh, unironically, one project that is kind of relevant to this is M0. I don't know if you guys have looked into it. Um, I find them quite interest. So, I think like I don't know if they have a token out yet. I think they have a governance token, but it's not like a speculation token. I think it's just like a like a governance like actually just a governance token. Um, but they allow anybody to launch stable coins using their infrastructure. Um,

and the collateral on the back end is the same for everybody. So, they use the exact same. So, there's no like, you know, when you swap from USDC to USDT, you take like a kind bit of slippage. Um, with these, you technically shouldn't because the collateral is the same. I don't know how it's going to work if it's crosschain, etc. I don't think the Walmart guys care that much about that side, but um, it is quite interesting and probably something to look into. I I should probably look into this. I I do think maybe just to lay it out like the counterargument to not using Tether using USDC is that they're they're taking the yield today. So like if if you're Walmart, it's like okay if you stable coin and have the collateral and you know have the customers like you

don't you don't necessarily need Circle in that scenario. If the >> I don't know I would assume if they were to do one like this is it's probably still it's like very early stages like there's nothing really happening here yet but >> I mean on the Yeah, they'll do the math on the back end. See if like >> you know the yield versus like setting up your own infrastructure. I can't imagine it'll be cheaper to set up your own infrastructure to run. I >> I don't think so either, but not because of the infrastructure and I'm going to push back against myself and for two points. one is that you know this the same um genius act the amount of regulations that you have to go through to issue a stable coin like the fintex and banks already do most of it and

paxos is already doing most of it um and so I think you have to get you have to get your entire business under much deeper regulation and I don't think Walmart wants to do that necessarily so that cost alone might not be worth it especially if you're just trying to save on the transaction fees then versus Visa then might as well use somebody else's stable coin. And then and then secondly to my point that you know Walmart is low efficiency business they they've tried to push the blockchain supply chain stuff years ago and it you know to to increase efficiency and they tried to force it on their suppliers and the suppliers didn't care. It didn't work out. So as as as powerful as Walmart is not every they don't have like absolute

power to push these things through. So, those are some counter points to, you know, to this to this bullish scenario. >> That's good. I um I think I've only seen one example of those supply chain things working and it's with fashion stuff. I don't know if you guys have seen it's like a specific blockchain and it like confirms that a product is what it says it is. Um but yeah, I I get what you mean. the legal costs, infrastructure costs. I don't know. I'm sure they have, like James said before he left, they have some ex Mckenzie consultant figuring it out for them.

>> Yeah. I mean, the reality is it's a narrative and they probably have a guy in a department somewhere who's going, "Wow, this is hot." And like, man, if we did, look at the math and if we saved 50 bips on all of our transaction volume, holy that would be crazy. Uh, it's probably a combination of those things. Um, and again, I think it I do think it is one of those things where you could squint and be like, "Yeah, maybe that's a thing." But the real Yeah, I mean, the reality is these a big company like that isn't going to make a switch like that overnight. So, if anything, if that ever does come to fruition, it's it's probably years out.

>> Uh, sad James left because I want I've been I wanted to ask him this. Um the the real question comes after the followup. The first question is is Stripes L1 going to have a token? >> What do you all think? >> Probably not. >> I don't think so. >> I think the whole thing is moving everything onchain, right? So I imagine they'll move some or they'll create some form of synthetic asset on chain or probably they won't even have to like you can just buy it on some form of a platform. Does that make sense?

>> Why would they want second equity? >> I I don't see why they would have a token. I don't which is kind of like my point because they don't need it for what they want to do just the financial res. Um, so then does any L1 stable coin chain need a token? >> Well, they can lo they can do D. I honestly like token, no token. As long as I can get exposure to it, I don't really care. Like if they had non like if they had a public equity, that's fine by me. Um, I think if you are cryptonative, you want to have a token. I think if you

are non-cryptonative but incorporating crypto rails, you probably shouldn't have a token. Um, like that's how I would think about it. I think it's probably fine if I get your point. They're trying to get me because I have plasma allocation trying to run my >> No, I I think we can recognize that like the market dynamic is still largely the same where um I mean one like Stripe Stripe doesn't need to capitalize on launching a token to like capture this dual structure like market inefficiency opportunity.

like they're a very valuable private company and so I don't even know like launching a token today for them is probably not probably doesn't even make sense from like the I don't know maybe brand risk side of things I would say since it's not really like uh positively accepted thing in the in the trady world today is maybe what what I would think but yeah I mean I agree if you're like a crypto native company like sure we know all these projects have you know they probably have equity associated But it's great when they launch the token because the token is half the product. Um speculating on it is uh what half of the people lined up on CT are here to do. So uh if you don't launch a token then why

you know nobody's going to talk about you um unless you have a really great product. And um oftentimes you know there there tends to be something of a correlation there of like if you have a great product then you know the token can exist or not exist. it doesn't even matter as much anymore because you have a great product. Anyway, >> I've been thinking about that and the issue is that in crypto like it's quite easy to get a bloated valuation. We know this like whatever um capital formation is very easy in crypto. We know this. But another issue is that if you do not know how to do crypto, you can also become undervalued. Like I

would say like pump is kind of a good example of like pump versus I guess heaven's a much smaller asset so it's like difficult to compare them but like pump should kind of probably be worth more. I know they have some metrics that are going down, but compared to some of the other products that we've sent to 15, 20 bill, whatever, it should kind of be worth more, but for some reason, they're not able to get that like they're not able to position themselves very well. Um so versus like heaven you saw I mean peace is doing a fantastic like he's very clearly forming this narrative and

positioning themselves very very well. Um so I think like historically we say like crypto is great because you get blown valuations but you can also get that in trady. I mean look at all these IPOs. So I don't know if crypto is the same as it was if you don't know how to play the game. I also imagine that stratifi is very difficult as well. So probably just >> Yeah, I was going to agree. I mean, but I think it's kind of broadly the same game being played. Like in Tradfi, you see, you know, startups and private codes like get to blow valuations, but it's from riding the narratives, right?

like you see, you know, massive valuation bumps on like, you know, this that and the other AI startup and maybe 99% of those will literally be dead next year. Um, but it it doesn't matter because it's that's what's hot right now. Um, I mean the same same thing happens in crypto, but like to a smaller and finer degree and like more more like constantly is kind of what I guess I would say is there's there's like sort of always like a kind of new hot narrative every three months and we can send, you know, L2s to a couple billion and then we give up on that and then we can send, you know, stable coin chains to a couple billion and then we give up on that and then we can send the next thing. Um, I mean, we did AI here as

well. We did the AI agent coins, um, AI launchpads, like um, just the rotations and like the narrative switches are just faster here than in Treadfi. But the same I think the same like broader game happens where you've got people with capital that they want to allocate and they're they're ready to jump on the hot the hot narrative. >> Yeah. Um, I mean, look at Palunteer. I think Shardfire is getting more and more like like >> um like crypto just because there's more retails entering the space courtesy Robin Hood etc.

>> But and I'm going to stop there because you all know I'm a token and it's the last thing I'm going to say on this right. Um >> so Stripe L1 no token cuz so then you don't need to incentivize anybody because it's just going to be Stripe running it. So, it's just trust me, bro. And, you know, they need to have chargebacks and, you know, fraud detection and all of these things that you're not going to get easily in a traditional blockchain because censorship resistance is most important and you have to add those layers on after. And so then we have a private siloed blockchain database with no token.

What is the point of it being an L1? What's the point of it being on a blockchain? >> Can I make an argument here? I think most tradi or like traditional businesses coming onchain are actually trying to do the same thing that a lot of people in crypto building and it's just regulatory arbitrage. I think crypto is always going to be a little handsoff and probably Stripe will manage to get away with more leeway than it would have in if it was building like a centralized database like you said. Like I does that make sense?

I I think they're going to get Can I I have a thought here? Uh and I'd love to drop a take, but Mark, I think the point is to quite literally position something in between the existing onchain platforms and their current off-chain product. So if they need to have also their own like blockchain oriented, call it a chain, call it a database. I mean, you can call it whatever you want. Like in reality, base is just a server.

Maybe in AWS, I don't know where they run it, but it's just a server that's running the the the freaking box for the sequencer, but uh in Stripe's case, it's going to be the same thing, right? It's it's just a computer that runs that runs like this ledger. I I I have a feeling that the really the purpose is just to act as like the intermediary between those like two halves of things and they already offer like some crypto payments and services like you can you can pay and transact via crypto. I think it has today like basically the same rates as as like using card as far as I'm aware.

Um, so I don't know if the point here is, you know, you launch some chain that acts as like an intermediary ledger and then it can accept like, you know, bridge and transfer requests from other existing chains and like stable coins that actually exist out on chain today like on ETH or Solar elsewhere. um and act as like their Yeah, I mean to your point, act as like their centralized ledger that they can true up, you know, if customers are going to have a combination of, you know, bank payments, card payments, crypto payments, maybe they can reconcile that and and maybe it just makes sense to like call it a chain and and and format it in this way just because of the interaction with crypto.

That's like my current view. I don't I don't know if that's entirely correct. would love to hear more explicitly like from Stripe and others what exactly or why or how uh the pieces and parts get put together here, but it seems to me that like you would almost you have to have some kind of interconnection piece to the onchain component if you're offering like crypto services generally. Yeah, the the more silo bases, the more TR for integration stuff, it just seems like more reason for the chain link army to get a little bit more bullish.

>> I'm just saying they have the ends. >> One of our data guys just posted a thread on chain link. Um yeah, and it was only moderately bullish, so I imagine he's going to get a lot of hate for it. But um yeah, I mean I guess like link is kind of a clear one. um kind of sucks for like like Mark you mentioned Ethereum and how it's not being built on L2s which sucks for Ethereum I guess but the the counterpoint to that is like Cosmos Avalanche these guys position themselves exclusively for these L1s right like they wanted to become the infrastructure

partner for traditional institutions I mean I guess Cosmos less so that to me always kind of felt like a Linux um not very commercially focused. No, but it's true. Um like Avalanche, they have Evergreen, which was meant to be exactly what this is. I haven't seen anything about it about like any Evergreen or like Avalanche L1 integrations from any of these traditional financial institutions. I'm sure there's some and some people are going to get upset at me and be like, "Hey man, we launched something like this three weeks ago. Are you stupid?"

Um, and best of luck to them. But that's the like other side of the coin, right? It's Ethereum L2 is not getting used. Okay, that's fine. But Ethereum can still kind of pull it off. Whereas like what what is like Avalanche's game plan now? You know, like if you can't get anybody else, how are you going to >> Carlos, thank you for joining. Boach, I was gonna ask to that point like how did how how is Avalanche so I guess you could say right about this thesis of like let's offer a service to >> have blockchains for all these companies but but also so wrong like it just didn't it it doesn't appear to be to be playing out right like

>> these stable coin chains like most of the most of the announcements like it's not really happening for them and to something you've written previously like >> I don't even know if it ever like maths out for them either. >> So I um they would always have to get the like Ethereum L2 thing, right? Like the L2s don't pay enough to Ethereum, but Ethereum can kind of just get away with it and say, "Look at all these L2s we have." Um they would have to do the same exact thing on the Avalanche side. I I remember doing the math. It's like the revenue that they would make would be negligible off of each L1. I think they would have to have like a significant amount of L1's um under them for them to be able to make a lot of revenue from it. Um and why they were

right and why it didn't work out. I think it's probably a bit early to say it didn't work out. Like they could get free incredible deals next month. You never know. Um and I imagine like a lot of traditional businesses are quite slow moving so it could just be like a three year thing as well. Um but yeah, they were right. I mean, they were wrong on the gaming bit so far cuz I think they essentially position themselves as like we're going to do L1's. What needs L1's? Traditional businesses want control of their over their stack. Makes sense. And gaming makes sense. Like these both of these need like individual um environments. Uh not individual, you know, like isolated environments to operate in. Um malleable isolated

environments just hasn't worked out. I'm sure they will. It's not like a horrible story with Avalanche. I think they probably have a lot of money and they probably have enough pull to get a few deals going. Um, I just wrote something on optimism. Um, well, I'm looking into writing something on optimism and it's kind of like the same story where it's like you need to get L2s under you. Um, because that's what the L2 like L that's what the L2 game plan shifted to, right? like you're an L2, you want to build out your own stack and then get a bunch of like paying minions or like L2s and L3s under you. Um it's very competitive. We've the game plan was always like the tech,

our tech is better, why don't you come? Our tech is better, why don't you come? It's not that. It's going to be a lot of like handshakes and giving money and giving incentives and being in the right rooms at the right time to actually make your product earn money and be relevant. Um because there are a like off the top of my head there's Ethereum which can have its own L2s. There's Optimism Arbitum ZKYNC which can have its own L2s and L3s. Avalanche obviously Cosmos obviously Salana you can have network extensions.

Um I'm sure the other chains will also start making some form of bid. Uh I think the only one that I haven't seen make a bit is Appto Hyperlid which are just like just bring everything on here in here. Um working out for some of them not working out for some of them. So we'll see. It's very competitive. It's more competitive than it's ever been I think. Um, and the margins are I think smaller now. >> I kind of want to the the Carlos the network extensions on on Solana like is that their version of Alus?

>> Yeah. I mean it's just like a different branding but at the end of the day I I I think it's just a marketing gimmick. I I don't think it's any different like from an regular L2. But I I do think the difference is like in the philosophy or like in the like goal. I think Sena has like a clear goal of like keeping keeping the developers and the users on the L1 itself. And just like regarding the modular architecture, I think that's just the characteristic of it not just for L2s but for other sectors. Like if you look at modular money markets for instance like it's the same thing that Bach was mentioning that it's not just

about the tech anymore that's the least important thing like it's more about BB and how to on board like distribution partners like look at Morpho for instance like Morpho has a very similar architecture to Oiler or Camino or other like modular money markets but like they were able to like partner with Coinbase for the CBTC deal and That was huge for them. >> Yeah. >> And that's probably looks like on their end as like giving up some revenue to the big bad wolf to get into the right rooms. Um but yeah, there's like two sides to that though. Like one is boots on the ground um negotiations, handshaking. The other one is like

competing on the product level and not on the tech level. I'm going to tie it into hyperlquid, but this is how it's going to go. It's like we historically hear a lot about like you can put cloves on blobs and bullet and you know like asset is you want to be close to asset issuance with drift. But like realistically all that matters is you're a trading product. People want to trade on you. What do people want to trade? New markets. You list new markets as fast as possible. And I imagine like I still think Solana network extensions probably have a higher chance of doing well than other chains because there's a lot of interest in Solana for example like because it's at least

relatively close. I don't know versus like L2 like arbitum I think probably does better than optimism because arbitrum as a chain is not completely irrelevant versus like OP mainet has been um kind of pushed to the back end for some time. So it's like that kind of stuff also matters. You want to be at least somewhat relevant while still working the >> Yeah. >> Yeah. I think a key difference here is just like optimism like they explicitly want to attract like new L2s or like new like chains built on top of them. Like Sena doesn't I don't think the Sena Foundation really wants like more network extensions. They want like more people to build on the L1. Like I think

that's like a key difference there. >> Yeah. I' I'd like your take on this, Carlos, but because my read of network extensions popping up was more like a hedge from builders on Salana being worried that they wouldn't be able to execute improvements to the chain fast enough to be able to like basically service a product that they wanted to offer. Um, but it feels like, you know, Gito Bam and like, you know, recent kind of like competition between like the Anza team and Fire Dancer team, like it feels like we're seeing that. Yeah.

Ideally, they the like core Salana people don't they they wouldn't really want network extensions to succeed. They want to just ship a little faster and and make them build it on on the chain. >> Yeah, I I agree with that. I think like the reason network extensions like were a thing is just because there was a time uh where it was very hard if not impossible to build certain applications on Solena and have them succeed such as uh onchain order books uh or clubs. Um the reason for that was because like we we talked about this before but because market makers on Sena have like a structural disadvantage over takers. you have like network jitter and other

things you you need to deal with and and you can see that on like for instance if you look at the text landscape on Solena like prop AMMs today like have a higher market share than like on in aggregate than traditional AMMs and order books like for the sole USD pair or for stable and stable pairs and that's just a byproduct of like the network like micro structure on Sena um I think that as as you mentioned like as these improvements come in like Jetto's BAM, like Alpenlow, um Fire Dancer, whatnot, like you could see more of these applications built on the O1 and have them like be competitive in terms of like performance and like uh

structure to to other chains. One thing I want to add to that and kind of related to the Avalanche thing is um Danny part of the reason I think Avalanche was a little bit too early and optimism also I think they were a bit too early and like there's a there's a light at the end of the tunnel. It's massive. It's like traditional businesses coming on chain. Um but if you lose relevancy before then you're cooked, right? like there's not you don't have much pull. Um and with Salana it's kind of the opposite. I think they want everything to come on one chain. Same with Hyperlid which is fair. Um but there I think

there is a limit to that and I don't know if that's necessarily a bad thing. Like not everybody needs to have all like you don't need to technically have businesses under you if your chain is still making money and growing. Um, it's just like a different path, but I think network extensions are kind of a hedge on that, right? Like you technically you can get the best of both worlds on Salana. You can launch an L2 or you can just come on the chain and build it. Um, they're improving the chain as well. Um, but yeah, hopefully that works out for them and they're not late, which >> yeah, I think that makes sense. like to kind of to your point like what you said is that basically like for Salana and

for for people that want to come and build on Salana there are profitable avenues to like build a meaningful business there today and that's why there's a million of these prop AMMs now because they see that like oh they can take some market share capture some pips on the trading volume and like that's meaningful same with like you know trading bots for memecoins there's a bunch of money to be had there but you know if there's nobody you know transacting on Avalanch's L1 or there 50 sovereign L1's then it's like you know there's not an incentive for like a new builder to go over there but you know there there's an incentive for Avalanche to try to sell that to a company to to do their on onchain venture there >> but I just wanted to ask for Salana with this with these network extensions right

um you know whatever L2 semantics right a little bit fragmentation there these proper MM who are linking directly into aggregate like Jupiter, right? So there's you can't you don't know what the code is. You can't build on top of it. No more defi Lego blocks with with with GTO bam. Um the application specific sequencing like you know that seems like it's really geared more towards um perp like per dexes. It'll help them out more so than you know like lending. And if each app has its own like sequencing then again composability becomes a little bit more difficult. And then all of the apps, most of the apps I should say, especially the major ones in Solana are competing on multiple fronts

like in different like DeFi suites, lending, trading, etc. So it just seems like the there's such a focus on the apps and like such self-interest that Solana might risk running into just greater fragmentation in the L1 chain itself. And I don't know if any if if if anybody's talking about that as a risk, but it just seems like it continues to head there. >> But just having too many apps on the chain. >> Yeah, but then having not too many apps, apps competing with each other on multiple fronts, the application specific sequencing and um prop AMMs making things less composable. You know, it just seems like everybody's in their own silo but on one chain.

>> Why would why would make things less composable though? >> Why would what? Sorry. Wh why do you think prop ammms are making things less composable? >> Because how how do you compose on it? Like they have to integrate with Jupiter directly, right? Like can you for instance could you could you do like what pump did and route to one of these propm without knowing what their code is like you did with radium. >> I mean you you can like like but I don't understand how that like >> isn't that the same thingability though.

So can you how do they come how do they make their deals with Jupiter? Like Jupiter normally just had to use the aggregator. Don't they have to go? >> They're they're closed source in the sense that you like there's a like a make like a market maker like doing their thing right but they're open source in the sense like they're a DEX in the sense that you can look at their contracts and hit it directly. So like Jupiter can integrate with them like Titan can integrate with them. Camino swap can integrate with them. So you do have like that composability. You can route through them but they they don't quote everything right like they they quote only highly liquid pairs because they're are actively market making that

and they need an oracle to update the price. So you you wouldn't see like a prop amm quoting like the newest memecoin because it's not like first there's probably not an oracle price feed for that and second like it's too risky for the market maker. So you you only see them like quote things that are highly liquid where they can like probably take advantage of the sex decks arbitrage and like really like make a lot of money like uh with Yeah. market making it.

Yeah, just highlighting Carl's point, like you see that here with the soul stable coin volume. They've just they've completely taken over the market share of this on Salana. Um, and to your point, Mark, there are like a million of these now, right? Like I remember we started tracking these a couple months ago and it was like >> Oric and Sulfi and Zeroi popped up and now >> I mean there's there's Goonfi, there's Humidify, there's Tessa, there's there's a bunch of these that and more and more like keep popping up. Um maybe just because they they've all noticed like how attractive it is to just go out there and um and get into this game. Um but I would agree with Carlos on the push back there. Like I don't think it it breaks anything in terms of composability. It's it's the same concept of I mean if you know the

contract is out there in the same way that like if you know an API endpoint is out there to hit then you can hit it and you know you can trade against it. >> Okay. Okay. Yeah, that's a that's a fair point. But okay, so what about the what about the application specific sequencing? >> I think that's often I think that's a good point. I think that not I don't think every application is going to use BAM for application specific sequencing or custom ordering of transactions. Like I don't think it makes a lot of sense for like for for instance for a money market to do it or for a pump to do it.

I don't know. like it makes more sense for specific like niche use cases like burps like drift is probably like a very good candidate and is using like exploring use cases with BAM. I know that uh Pith is also exploring use cases with BAM. I think what that will do like is take away some of the me that was previously flowing through jet tips to jet and instead that will go to uh the application itself. So in a sense like jet is kind of foregoing some incremental revenue. Uh I don't know if that's kind of like your point uh there.

>> No that makes a lot of sense. Thanks Carlos. Guys, um I need to head, but before I head, I need to do a shill. Is that okay? >> Um so everybody knows that Oh, I wanted me on there. Well, never mind. We're good. Everybody knows that Xerox Research has its own newsletter. Um and we are Historically, the newsletter has been written by the editorial side um who have done a fantastic job, but we wanted to make it a bit more um analysty I

guess. Um so me, Mark, Danny, Carlos, Ryan, Luke, everybody from the Blockworks Research side um we are back to writing the Zerox Research newsletter. Oh, if you are a listener of Block Works um podcast, Xerx Research, um please check out the newsletter. We've been writing it. We've restarted writing it over the past week. Um we are going to make a more formal announcement going forward, but um just wanted to bring it up. Um I know not a lot of our listeners and subscribers uh are subscribed to the newsletter as well. I think you might find it interesting. And we try to keep it as investment focused as possible and less

slop as opposed to the podcast which is a lot more slop and less investment focused. Um Danny, was that is that okay? Do you have anything you want to say? Danny doesn't do the newsletter actually. >> Well, that was crazy. >> Calling everything we do here slop. Um no, that was great. I think uh check out the newsletter, the newsletter reboot. Um exciting stuff in there. And then one more shout out as well that I will make for the show. Shout out again to our sponsor for today's stream, Apptos. With nearly 400 million in BTC assets on chain, supported by a secure, fast, and affordable MVM environment, Apptos has become the BTC growth chain. Apttos users can now earn yield on their Bitcoin via Ekko's ABTC and OKX's XBTC

without the typical bridge risks and high fees. with support from Ekko, OKX, and STAX's SBTC, Aptos is the place to go for best-in-class yield on Bitcoin. Appreciate the support, Aptos. Um, and let's let's close it out here, guys. Um, yeah, I guess shout out for D London. Mark and Bach will be there for sure. So, get your tickets if you want. 100 pounds off the Zerox 100. >> That's $135. Just >> that's $135 USD. Amazing. Um, check out the newsletter. Uh, newly revamped. Uh, hear from these guys writing. What is it? Tuesday through Thursdays. Boach Tuesday.

>> Every day, bro. We write it every single day. >> Oh, it's every day again now. Okay. >> Every day we write it. Every day we talk about our market thoughts, what we are looking at, what we're interested in. I posted the links in the comments on both YouTube and Twitter. If you are lazy, it is the last comment on both of those. So, just click it, put in your email. I will pick two winners and give them 50 bucks. I don't know if that >> I don't think he's going to do that. Um, >> no, I will do it. If you subscribe today, I will do I will just send you Send me a wallet. I'll send you 50 bucks if you're the winner. If you're the I'll do a roulette thing.

>> Did you see Jack tried to do that with his uh his prove airdrop? >> Yeah, but Jack did it because of in uh editorial integrity. I don't have editorial integrity. I want people to subscribe to the newsletter. It's my job. You have to subscribe. >> Same thing though. He did it for subgrowth. So, >> same outcome. Do the ends justify the means? I don't know. >> Um >> maybe maybe let's just go around the room. Let's get some thoughts. Like the market yesterday was was a pretty red day. Um today, this morning was a very positive like I mean everything is up.

It seems like there I mean ton of volatility around like this Jackson Hole event. Uh I don't know. I'm just curious. What do you guys do you guys have any have any strong thoughts here? Do we change thesis? Like any any coins tokens they were super bullish on like ETH ETH and ETH DATs like had a big run and they've cooled off a little bit. Is it time for Soul Dats? Is it time for Pump to be back in the light after kind of waning for a bit? How we feeling? >> I have to go. So, I'm going to give my opinion very, very quickly. I think I've been long the entire time and I think we bottomed because I saw the most idiotic bear takes I've ever seen in my life.

Like, just raw dog So, I'm long. That's it. I don't care about Jackson's hole. I didn't check. Um, just generally excited about the markets. I mean, everything is looking good, you know. Who cares? Let's buy some coins. No, but more seriously though, I have I do think that sentiment has bottomed because I've been seeing a lot of really horrible takes about how the future of the world is horrible and debts are financial crime. They might be, but for the time being, I think things are good. >> I mean, how how can you top that? I think that's a good way to end.

>> Thank you, Boach. >> Carlos, Mark, any thoughts on the markets? just long long and strong excited for months to come. >> Still holding long and strong. I think I'm not I mean I think it's that story is you know is not done. You know if you trace it back with Bitcoin that's how much of a years ago 5 years ago it's not done. It's we we're 3% of the supply acquired in such a short amount of time but we have you know these these dots haven't even started deploy their liquidity onchain restaking. They're not done raising money. They're not done with at the money market offerings.

There's going to be international popups as well. Like I need I need to see an ETH alltime high before Yeah. And before I start to say anything before I start to say we're done. >> Yeah. This is something I wrote for the newsletter like Tuesday edition. But do you guys know how long it took Michael Sailor like Micro Strategy to acquire 1% of Bitcoin supply? It was like 3.6 years. But and guess how how long it took uh Tom Lee to acquire 1% of feed supply.

>> Like a week >> like 40 days. >> Yeah. >> It's like 40 days against 3.6 years in >> the >> Yeah. The pace of accumulation has just been insane. To that point though, is that not like I mean is that not indicative of like maybe it's like a bit overheated of a narrative? Like sure we we could we could do more. We can do more on that. >> Well, no. I I didn't mean this as a as a super bullish thing. I mean I meant like uh >> it's it's definitely like quite like Yeah. quite heated quite Yeah. quite frothy.

>> Yeah. I I mean I think I think I do agree with you, Mark. like I I don't think they're necessarily just done. I would say, you know, I don't know that I'm like bullish on like Bit Miner stock, for example. Um because we understand how the game works here. But I also would not be surprised to see, you know, hey, five more deaths next week, you know, big big announcements of raises, you know, we're shoving more into the coins again. um it just feels like that's where the market is at especially if sentiment goes green again which you know it looks like today things things look very positive so if that holds into next week and you know the following month um then we can ex we could see an extension of that and I think the one topic that we've discussed

is like if uh like sole ETFs in larger format come online and then we see maybe like a rerun of some fresh new soul DAT codes as well like that could be an interesting narrative and Maybe maybe you get a stupid silly rally on soul as well. Maybe you see it for a different asset. I don't know. We haven't really seen uh like XRP DACO in size do anything crazy yet. Some of the other like it's another one of the really big crypto assets out there. Um BNB as well. Personally, I wouldn't be surprised to see it happen. I I just I do feel like the data point that Carlos shared would not have me like um necessarily so so positive with such a positive outlook, I guess.

All right, no other thoughts. I think uh we head into the weekend pretty happy that all the charts and candles are green. Um unless you're holding something really obscure and niche that uh got hit today, but as far as I'm looking across the board, things look quite nicely. So, I think everyone can uh happily enjoy touching some grass. Um you know, have some drinks, have some food, whatever. go out, get maybe get away from the screens this weekend. Um, after catching a, you know, a nice day today. Uh, and we'll see you guys all next time.

>> Thank you guys. >> Thanks for coming on, guys. >> Cheers. [Music] Hey hey [Music] hey.