Navigating the Markets with Matt and Roland

Transcript

so nuclear weapons have taught us about the negative feedback loop of mutually assured destruction if one attacks we all die basically and I think by Black Rock which is a us jugut or US it's very close to the US government and the way that us is run um I think that they're creating a positive feedback loop loop which is the opposite of a mutually assured destruction what they're trying to say is the fact that whoever has most Bitcoin wins and if this kind of compet ition starts in the next couple of uh of years then you're going to see every single nation state trying to accumulate as much Bitcoin as possible this episode is sponsored by scale scale has differentiated itself from other layer ones by offering users a network of

gas-free interoperable evml ones where the user experience comes first explore the gasf free ecosystem at scale. spacecyberpunk SL resarch hey everyone today's episode is sponsored by glyph glyph is file coin's foundational def primitive enabling filecoin holders to earn rewards on their fill tokens by lending them to a diverse pool of filecoin miners got Phill deposited with file coins first in most popular defi protocol by visiting glyph doio today chaos Labs the leading onchain risk management firm recently launched its new flagship oracal product Edge Edge

delivers integrated High Precision risk and price data for any application with the market follow and reach out to chaos Labs on X to learn more nothing said on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice bacho Ryan and our guests May hold positions in the company's funds or projects discussed what's up guys welcome back to zerx research um today I'm joined by Roland from mechanism capital and Matt from intuition um guys before we get started maybe you want to give a little introduction on yourselves and what you guys do at your respective

jobs why don't you go first Roland sure I can go first thank you for having us bacho it's um delightful to be here alongside a good friend actually two good friends uh one of them is a attendee one of them is the host so I appreciate you having us um as you have introduced me I work at mechanism capital and the investment team maybe just a brief couple words about mechanism it's what I call a crypto native fund created by the natives for the natives uh it was founded in 2020 by Andrew Kang and a number of other Crypton native founding Partners uh Mark Weinstein is the lead of the VC arm myself I help Mark and the rest of

the team um the VC arm throughout the whole investment process from sourcing diligence invest ments and advisory um mechanism Capital started with a focus in defi in early days in 2020 the first public investment thesis was on year finance and actually a bit of a fun fact the name mechanism comes from token mechanisms and go to market mechanisms and this is what we have been historically known to be um very helpful with and um yeah I've been working with them for the last six months and yeah maybe Matt can say a couple words about himself yeah I bought uh I

bought synthetics uh early in defi because of one of Andrew King's uh write up memos that that he was sending around so thank you thank you for that Andrew um yeah my name is Matt I uh head up Business Development and strategy over at intuition systems um I've been in this space uh fulltime since pretty much the end of 2016 uh ran a a cryp C to hedge fund for I think fiveish years uh before going full-time over at intuition which is was actually a portco uh before I made the jump to the building side and for those who haven't heard the intuition systems uh zerox research podcast I highly suggest it that was like one of the most fun conversations

I've had but uh zooming out intuition systems is building the semantic web um a a open permissionless Knowledge Graph and social graph uh that allows this folx onomy approach uh to how we sort of store organize access query uh knowledge and data um and in my opinion is one of the foundational building blocks of what will be the decentralized web or what is becoming the decentralized web and I kind of just recently rewatched Silicon Valley uh for like the third time and I was like oh man I feel like we might actually be reliving the show right now so go go listen to that podcast and learn more but yeah thanks for having us on pic fantastic Matt what's what's it

been like to go from the investment side to the like this is your first cycle building I assume um and the past few Cycles you were on the investment side what's that been like it's interesting because on the investment side you or at least for my experience you kind of spend your time doing your best to dub down right you're trying to figure out like where the dollars are going to flow and as the cycle heats up the capital allocators become less and sophisticated um so the act of allocating Capital becomes this like cyclical game of figuring out when fundamentals are most important when momentum's most important Etc the building side also has this like interesting dichotomy where you're

trying to build really really important foundational technology but you also need people to want to interact with it uh so I I would say like what I'm enjoying the most right now is trying to solve that puzzle between having like a core foundational piece of technology and then getting a market that's like obsessed with memes and AI to like want to come do things and to want to come like put in knowledge and interact with knowledge and like have a presence there and like that is that is the the current my brain is currently maxed out at like 100% thinking about that problem right now that makes sense and I guess something slightly related you guys have both been in the space for much much longer than I have um how do you think it's changed throughout the past few cycles and

because like you said memes and is we a big thing right now but was it was it always like that in your experience I just remember in um 2017 days once a protocol had a new website upgrade or when they were attending some conference and they got some sort of news the price would have jumped 50% or 100% uh that no longer is the case today unfortunately because I could push out many website updates if that was the case but um overall the long term trend is that the industry participants are getting more and more sophisticated um the fundamentals of Protocols are no longer website upgrades but they're rather Financial models and

they're getting a lot closer towards how tradify values things um and yes of course momentum and narrative is always important and um often times in the late stages of a bull market momentum is the most important uh aspect but overall the market participants are getting smarter uh on all different uh levels across the Spectrum so you have on one Spectrum on one end of the spectrum you have let's say institutional Capital which mainly is probably seen in Bitcoin ethereum and salana who has learned about the Cycles who has learned about uh the haing whether or not is it's still relevant that's that's another point they have learned about how Bitcoin works and whatnot uh and

they are taking a more educated stance to approach this industry and on the other side you have let's say Tik tokers or Zoomers who will no longer allow themselves to be rugged by nfts so like there are certain tokens that you won't even be able to pitch to someone on Tik Tok anymore because they know that it's just it's not it so I think that by having more and more people joining the space across the years a number of them every single birth cycle have remained um I remained in the 2018 birth cycle after joining the industry in 2016 um and you have let's say smart money actually all money is getting smarter not only smart

money yeah I think that's a good point I um Matt do you have anything you want to add yeah I do actually so I think like 2018 and 2019 I spent probably at least 50% of my time like reading and writing about us bond market treasury market like fiat currency based like scarcity this the history of money going back to coinage medium of exchange Etc and there was this really big academic approach to bitcoin um or maybe the better way to phrase it would be this intellectual approach to bitcoin and we got a lot of like the early onchain indicators um and that was sort of always destined to be adopted by like the Global Financial

system and like everyone had this Vision um and eventually that happened and I think all of those things that were being written about out uh I mean predating 2018 but that's sort of when I started paying attention ended up happening and the biggest change that I've seen in in the market between I'd say 2020 and now is that there's very little intellectual mind share uh by outside of a very small Niche for the implications of of decentralized computation um so like no one is really in a big way championing um outside of like B and like I think eth actually like listen I I I have been bearish eth on the eth BTC pair uh and I

think trading meme coins on Solana is a way better experience but like I'm not bearish like the ethereum ecosystem like still the smartest people in crypto are there building new innovative ideas but it it's really insular at the moment and there's not a lot of intellectual thinking around decentralized computation and its implications on the world um I think that's probably I I think we understand why that has become that way but that that's the biggest shift I'd love to see more of that quite frankly um but I also have a ton of fun in in the trenches like as an individual uh so like where attention goes money flows I think is a saying and like definitely um I have way more fun like browsing what I call Meme Twitter than I do like crypto Twitter I think that

makes sense do you see there being a chance that ethereum succeeds but the E token does not succeed probably not maybe just to add to Matt's point I think that crypto is a bunch of very courageous and forward thinking people uh that just so happened to be right and I think crypto as an industry has the ability to foreshadow future trends that may occur in the next decade or so one of which Matt just mentioned um back in 2018 if you would have told anyone that Bitcoin would have been adopted by Black Rock and institutions will be buying in and the ETF inflows would be 1 billion or let alone that we will have an ETF they

would have said you're crazy like you're absolutely crazy like you're lunatic and I think that the trends that are emerging now on the Utility side should definitely be taken uh a look at especially on the AI ex crypto side because what crypto brings to AI is verifiability which AI doesn't have intrinsically um and these Trends may not necessarily pan out over the next 6 to 12 months but they're definitely very strong Trends to look at over the next 5 to 10 years perfect I want to ask two things on that line first of all do you think that black rock adopting um Bitcoin bastardized the

Bitcoin Mission a little bit um to become sovereign money or do you think it's fine that we're letting the bankers take coins in do you want to be right or you want to make money that's fair good good good I mean the there black rock is not creating friction to buying and custodia your own Bitcoin right like that's not illegal so if the market says they're happy yeah right but if the market says that like yeah we're happy to pour billions of dollars in and you guys hold it then no they're not bastardizing Bitcoin maybe that value proposition of Bitcoin either hasn't hit its major inflection point or is not as valuable as we thought it would be because like we built up trusted institutions over like thousands of

years of like society and like you can kind of get into a deep Rabbit Hole there where like we're getting better at building larger and larger and more stable and stable Societies or you can get into a Rabbid hole where like on 100 150 year debt Cycles like things boom and bust boom and bust and like so long as there's so as long as there's Freedom of Choice then Bitcoin is not bastardized in my opinion I also want to add to that um so nuclear weapons have taught us about the negative feedback loop of mutually assur destruction if one of attacks we all die basically and I think by Black Rock which is a us I'm not sure I have to choose the right words let's see

jugut yeah us Juggernaut or us it's very close to the US government and the way that us is run um I think that they're creating a positive feedback loop loop which is the opposite of a mutually assured destruction what they're trying to say is the fact that whoever has most Bitcoin wins and if this kind of competition starts in the next couple of uh of years then you're going to see every single nation state trying to accumulate as much Bitcoin as possible and uh that would be exciting yeah I definitely think so I've been reading this um book about preor War I Banking and it's like people really like Sovereign Nations wanted to

hoard gold because that's what it was backed by and that's basically been the role in what you've been mentioning is if a world like comes for Bitcoin hey everyone we'd like to give a special shout out to the sponsors of today's episode scale scale is built different unlike other layer ones scale is offering users a network of gas-free interoperable evml ons where user experience comes first scale operates like the AWS infrastructure model where developers pay for space in the network in skl tokens to validators essentially scale has chain fees and not gas fees this allows for free transactions on scale and has saved 46 million users over 9 billion in gas fees explore the gas free ecosystem at scale.

Spacey and follow their Journey on X at scale Network visit the scale research Hub to learn more about the gasf free architecture and growth of the ecosystem that's scale. space research one more thing you mentioned is ax crypto which I think everybody really cares about but there's a million things under it so one is compute uh decentralized compute the other is data uh grph we have incentivizing structures like bit tensor as well what do you what are you specifically um looking forward to an AI ex crypto I this sounds like just a Shameless shill but I think the fact that I've decided to spend all my time there probably speaks more than the shill um the interaction later layer

between monetary value and information I think is like the most fascinating thing in the world right now like we we have a sense that AI will continue to advance and like that has implications everywhere but we AI needs its own payment rails um but like that's kind of a half-baked idea and anybody can come to that conclusion it's like a payment rails for what and it's like oh payment rails to to transact on a user's behalf it's like no that's not an AI native feature like that's that's a feature for the for a human end user what AI need natively is the ability to like read write and and monetarily transact with information uh as well as like how do

you start to think about IP rights with with AI like how do you start to begin to monetize information uh and then how do you kind of start to reward trustworthy information or information that aligns with like the the shared societal reality and what I mean by that is like Society can be delusional like we had the Blair Witch projects right like you you the society kind of as a whole decides like what is and isn't going to be considered true at a time and place so like you need to be able to not just like verify um information and not just transact using AIS but like kind of have some amount of audibility and some amount of ownership and equity in the information being read in the information being written and in

the transaction value on top of that because that's what AIS are doing that's the AI economy um so like that's why I get super excited with intuition but then the other side that I think is extremely exciting is the entertainment factor which we're seeing with AI meme coins right now like these things are online 247 generating video content photo content music content cheeky compliment uh it will roast you like it it's just there 24/7 better than any AI Entertainer could be and there's a certain novelty to that and there's a certain amount of of intrigue and knowing that it's like not a human on the other side um and like that that's really cool because there's two sides of that dumbbell right there's like the the core hardcore technological um fundamental of like

this is what AI will become this is what it needs and like this is what it is today and let's have some fun and that kind of goes back to what I said I was focused on earlier which is like how does one think about like merging these worlds and like what does that Trend look like over time but that was a lot of talking what do you think Roland I think I agree but like from the investment side because I look at I think I've looked at like dozens if not hundreds of uh AI agent deals it seems like many Founders are hopping on the bandwagon and um doing AI um first of all I think Founders that hop on a bandwagon are not very investable you want Founders that have been on this on this trend for years to come and they

were like working their whole lives towards and now it's like their time to shine uh and second of all I just think Matt's points are are excellent and from the investment side I think that I have multiple views actually I think that on the AI mem coin side we're seeing a bit of a defi summer kind of um season and I think that the AI meme coins are not meme coins at all but rather they are analyzed in a very fundamental way because once you implement an AI then you can actually fundamentally compare its capabilities to other AIS what is the dev doing is the dev communicating it's not just like a CTO Community with a bunch of friends running a token up it's it's intrinsically very very

different um and I think that we will have uh AI meme token uh Mania it's already happening and I think it will continue but I also think that you also have lots of unknown unknowns with these tokens Because the actual Dev and the tech actually matters in this case it's not just a acute photo or just an NFD um that's on the AI mcoin side on the investment side and private markets for AI agents and whatnot I think that the big question is the demand question um we have shown that crypto is a wonderful incentivization mechanism that brings

people on board but you're essentially renting their time whether you're renting it for one day or one year or five years it depends on how you incentivize them but many of these tokens have not yet figured out their demand side in terms of what you do with the data who's the buyer of the data um in case you're for example like a deepen AI or whatnot or why would anyone be incentivized to buy the token the liquid markets because even if it's a cool concept you want to be interl with Crypton native to economics in such a way to create long-term sustainable I would say price action that's a good point and I kind of want to talk a little bit about that um start

of the year or maybe a few months ago we had a huge huge discussion like I feel like everybody just wouldn't stop talking about how that there was disparity between public and private markets and how that was leading to people not wanting to buy the token at um if you launch a four Bill no one's going to buy it uh is what most people were claiming we've kind of seen that that's not necessarily the case like a lot of high FTV um what I would say is like overvalued compared to maybe competitors um have been doing quite well so I guess the question is um and to both of you guys um what is like do you guys think there's been a meaningful shift from those launches and now we're like at better uh

I guess like valuations or do you see that changing over the next few months as well yeah I think the I think the fastest way to lose money in crypto is to think that um narratives lead to price and that price doesn't lead to narrative um I think a much better framing for crypto and and the way to think about crypto if you want to succeed is to just think about flows right are there more buyers or sellers um and that kind of sounds just like a smartass thing to say but um post FTX like crypto was that was the deadest I've ever seen it like the bodies hit the floor and everybody got swept out and it wasn't until really

this until the ETF approval and then the the Trump win until that really started to shift significantly so quite frankly I just don't think there were enough buyers to buy cool new Innovative technology and there were a lot of sellers there were VCS um unlocking with a a decent amount of uncertainty probably some uh nervous investors probably some overhang withdrawals and like there was just a a sell General sell pressure greater than the buy pressure and then what happens is the cycle takes off bitcoin's at new highs retails coming in there's all these Manas coming and guess what I'm going to do if I have 70% of my bag left and I'm a VC I'm going to stop selling and

everyone's G to stop selling and now all of a sudden that quote unquote High fdv down only oh no one's goingon to buy this token because VCS just dump on you guess what no one's dumping anymore and nobody owns the thing and the exact same dynamics that go down go up and it's Handover fist buying with no uh material sellers until until the Cycles hop um plus it's listed everywhere it's liquid it has good market makers you can get leverage on it and it's real technology um and the ftvs tend to be means generally speaking and we're still this like pre-product Market fa pre-adoption phase probably coming towards the ends of that where you can you can get away with high fdbs in this market because it's just like still a bit detached from reality and that's just the fact right um so so I think yeah it is changing um

I I think people who are interested in core technology and want to take that approach and who want to buy those coins like congratulations like congratulations on getting to the perfect entry for that I mean as a general rule of thumb I would say that inflation and unlocks tend to not matter when ball runs um I would say 10 because it doesn't apply to 100% of the tokens I don't want someone to tell me that oh my token had a 20% unlock and it dumped but typically um when you look at all the tokens that went up massively in 2021 and also now if you focus too much on unlocks I think you're losing out and you're missing the bigger picture um however in the bare Market that's completely different you will get destroyed by unlocks that's right that's

a good point um and it's something that I feel like people haven't been saying that much like now I feel like we're getting to the point where everybody's paring the oh high FTV like these are worthless tokens narrative and I agree with you Matt I'm not sure if it's um I think it was relevant a few months ago um I'm not sure if it's as relevant as um it was back then well like some of these Tok actually have great Tech to Matt's Point like SOI um SOI has has amazing Tech and um it it doesn't come close to some other blockchains out there and uh actually a member of our team has been really bullish on it for the last couple of months shout out to Ken um so you don't have to Discount a

token just because it's high FTV and you actually have to look a bit deeper and often times the saltiest people are the ones who don't have bags and see a to token ripping 100% in their face and they're a bit angry I mean I get angry too so if if you're high fdv at the beginning of a global liquidity crisis uh excuse me at the beginning of a global liquidity cycle like the time to point and be like oh the FDB is too high it's going to Nuke is is your timing is just off like you can be right for years and years and years but the time to like take that position financially is probably closer to the top of a global liquidity cycle so it's just like people kind of lose the plot they get too zoomed in they're literally on one hour

five minute 15 minute charts they're like on telegram 15 hours a day and they don't take they don't step back just to like use their brain for having an original thought and I think when everyone around you is saying the exact same thing in crypto just do the just literally do the opposite uh and and you'll win more times than you lose chaos Labs the leading onchain risk management firm recently launched its new flagship Oracle product Edge Edge delivers integrated High Precision risk and price data for any application with the market after 2 months of securing Jupiter Edge has already secured 30 billion in volume and more than 60% of all Salon of perose volume edges comprised of three components High Precision price data with an integrated risk engine automated delivery of real-time parameter adjustments on chain and secure delivery of custom data

points via zero knowledge proofs follow and reach out to chaos Labs on X to learn more thanks again to chaos labs for sponsoring today's episode quick shout out to the sponsors of today's episode glyph glyph is file coin's foundational defi primitive enabling filecoin holders to earn rewards on their fill tokens by lending them to a diverse pool of filecoin miners similar to lsts like Lio or GTO glyph solves a major capital inefficiency for filecoin glyph currently has over 19 million fil deposited and over 150 million Phil in total volume and is backed by the filecoin foundation multicoin capital and more got Phil deposited with file coins first and most popular defi protocol by visiting glyph doio today thanks again to glyph for sponsoring today's episode looking at Twitter and

looking at telegram all the time this is something I struggle with how do you guys um avoid noise in the markets and really just focus on your own that's a good question uh I think I adopted other people's views and lost enough money to realize that you can't borrow conviction you have to make your own conviction or you have to have absolute conviction in certain people um Roland is actually one of those people every so often Roland sends me a contract address and I have such conviction in Roland that I will always look deeply into it and I'd say like 20 30% of the time I'm like this guy's a

genius like he literally he has he's like the the you know they have those like those pigs or those dogs that like smell out those prizewinning truffles like that is that is rolling in the trenches um but um it's a feedback loop because the the more you stop listening to everybody and the more you start listening to yourself and doing the work and building conviction and finding a few other people who tend to be right often the more your luck turns around and the more you you find yourself being on the lucky end of of news and events and the more you find yourself winning and then it's like really easy because it's like oh man like all I have to do is keep thinking for myself and I make money and every time I don't think for myself I lose money and I'm just going

to keep I I want to keep winning you know that's the only way to do it and like mute every single chat and close telegram throughout the day like there's just no no need to have it always open unless like it's part of your work I think that's easy for people like Matt and I to say in hindsight because we have lost plenty of money on board conviction but in terms of actionable uh things that one should I think that the ability to grow and create grow conviction and create a thesis is by experience so I guess keep on clicking uh don't stop never die and uh in that way you will be able to gain experience and you will be able

to to to see what you did wrong and right and I think that maybe having like a journal something can can definitely help in terms of you writing down the things that you did that did that led you to the right path and the things that you did that led you to the wrong path um I've never really had a journal to be honest but I think that it's it's good for for many people I just um yeah I guess I I do these things in a more um informal way I just think about my trades once in a while and what I do right and that I should do more of uh for example my per trading wasn't was too stressful for me so I decided to cut that and I just focused on midterm and long-term stuff so I guess you have to

find what whatever fits for you and then based on that you're going to be able to get experience and then be able to have your own conviction that makes sense um Journal thing is something I hear a lot actually AI talks about it quite a bit on F index as well he's like you should keep a journal we talked a bit about flows and capital moving into specific sectors um where do you guys see the money going and just to add on to that is there anything specific that you guys are excited about uh sectors that maybe the market isn't going to move in the near term but uh you think it's the killer use case for crypto um and Matt I assume I already kind of know your answer but maybe you want to kick it up no no I want to hear I want to hear Roland is

way more qualified to answer this uh than I am so I want to hear his answer first killer app and crypto well I think I would want to divide this into let's say two different phases I'm not sure when phase one uh evolves into phase two but we're definitely in Phase One and phase one is speculation uh speculation is the driver of attention and the driver of usage in crypto and this is not me being salty this is me looking at the numbers look at the numbers of users on let's say pump fun uh moonshot look

at the rankings or the increase in rankings of f Fant and of other let's say trading related um protocols or apps and compare them to traditional ways of investing like Robin Hood and coinbase uh people want to have opportunity to win and crypto offers that especially in bull market and um I think that in time as we inv Bo more and more people crypto will kind of Interlink with many of the other apps many AI protocols or AI uh trafy related um startups and crypto in itself will become kind of the base layer

of future of of the way we interact with the world in the future just because of its verifiability it can be payments it can be via AI protocols it can be via deepen it can be a number of things but I think that in a similar way how Bitcoin has evolved and has shape shifted like a chameleon along the along the years I think that crypto killer use case also will will will change and I don't think speculation in itself is able to bring a billion users I think that the like the Glo don't quote me on this but I think the global market in terms of active gamblers is around like 1.5 1.6 billion um monthly um gamblers and it's very hard to unboard them because crypto

doesn't have the same distribution channels as as a cash cow gambling company does I don't think that's the Killer use case I just think it's a use case for now to onboard users and then it will evolve in the future I don't want to get like too zoomed in so I'm going to zoom way out um I just finished youal hari's latest book Nexus and if you've like listened to any of the intuition spaces I plugged it a bunch youv all if you're hearing this uh or if somebody knows youv all I keep plugging your book reach out let's discuss some tokenomics but um he has this really amazing idea where like there's two extreme forces and he's thinking about it specifically I think like in terms of like information but that also is kind of synonymous with

governance in a certain way where you have extreme totalitarianism and then you have like extreme decentralization democratization um and I think those forces will continue period uh and I think the natural reaction to any type of extreme totalitarianism is Extreme decentralization so like I think there's a force pushing towards decentralized computational systems uh and I think any democratized political system must verify its democratization therefore must adopt decentralized rails eventually so you have like both forces unknowingly pushing towards de decentralized democratization

democratized systems so I do think that blockchain technology is inevitable um and that's why I've dedicated you know this many years to it with that said um the AI blockchain intersection can't be understated and it's also a huge curveball in how we've been thinking about the killer use case so I think on one hand you have things like decentralized social media you have things like decentralized news you have things like decentralized databases uh decentralized indexing um decentralized vpms Etc and like those are just new ways to solve existing problems essentially um but then you have this entire AI layer on

top so to ask what the killer use case is is to know exactly what the world looks like 10 years from now and quite frankly I don't know if we have like AI overlords and if we do I open you with welcome arms and if we don't then um the impact AI is having on the killer use case is probably way way less than we thought and who knows maybe there's like a humankind Revolution where like all the global governments all decide at once to like hold AI back or something who knows like anything's really truly possible um but but as as Roland said like we're starting to see early adoption and I think this is the the last pre-product Market fit cycle I think what we see um three five plus

years from now it's going to look much more like the early 2000s where like applications come roaring forward because they are having meteor meteoric Rises with users um so I think like the fact that no one's really paying attention to Applications right now and the fact that no one's really paying attention to like the core Tech protocols right now tells me that they're probably in their like last like forgotten cycle or something right like things swing the pendulum swings um so the fact that nobody's really talking about that stuff tells me that that's going to become a really big deal over what I would consider to be a medium to long-term Horizon uh I don't really

remember exactly the question asked but I think that kind of answered it that was perfect it went somewhere um much more interesting because now I get to ask about we both me you guys both mentioned that the market is now maturing um Roland you brought up that now we're doing Financial stuff Matt you said that this is the last like pre-adoption cycle um will you guys well you guys will be able to keep up but will I be able to keep up versus the new trafi um incompass how do you think the market shifts I guess like after this cycle do you think we go full because like you guys mentioned pump fun I think made let me pull this up they're making money like Protocols are now making money they have 300 million in Soul sitting or they just sold it I forget

yeah it's like they make money so um I mean we said price leads narrative narrative leads price will narratives even matter coming up um this like later this cycle next cycle what do we think yeah narrative matters always right um Tesla not just a car company right narrative always matters um we won't keep up I mean 2020 and Beyond already could like you used to be able to be a generalist in crypto like 2016 through early 2020 you could be on top of the pulse of everything people were like pseudo intellectuals and like 12 different topics and then 2020 came and it actually became impossible and every VC uh that I knew started bringing on

more analyst people started specializing gaming got its own specializ specialization layer one got its own specialization um layer twos got their own specialization the application layer got its own specialization uh and that was the very so I don't I I already can't keep up and being on the building side of things like people in crypto Twitter and people uh speculating on tokens don't even know about twoth thirds to three qus of the things in crypto like the types of tech that we adopt that isn't even tokenized that's decentralized that like we're using and like all sorts like people just completely underestimate um how big the space is from a technological standpoint and they get so zoomed in on like what you can speculate on today or what the flavor of the month is or like I mean

listen people are so zoomed in that they're like oh AI memes are out now we're on Tik Tok memes and like the whole complex collapses they're like oh it's all over it's like oh you have no idea that three quarters of the technology that's being used on these things that you're even logging into daily like doesn't even have a token right um so no we won't be able to keep up uh yes narratives will still matter um and I think like crypto succeeds when it doesn't feel like it's crypto anymore more right when you just swipe up log in and go about your day anything you want to add Roland I think that Matt said that price creates narrative or Pro price leads narrative and I think that is true to some extent but I think narrative has to be uh very carefully

created and very carefully manufactured especially if you are trying to lead a narrative or create a new narrative it doesn't just come up so I think to some point they work hand inand and that mechanism this is something that we focus on on using our experience and of course our reach to help protocols create their narrative and um if you don't carefully shape your narrative and aren't able to communicate it well and distribute it in a way that appeals to people um then your narrative is inexistent and you cannot have even price leads narrative because there is no narrative there is no narrative to be created so you have to very carefully

think about creating your narrative either as a protocol or as an investor you want to be able to sniff out and figure out narratives before they happen or in their first inning because otherwise you're too late that makes sense um Matt maybe a question more more directed at you we already talked about how um you moved on from the investment side to the building side and that you enjoy it is there anything that you don't enjoy um being on the building side and is there my view is that and this might just be because on CT you see a lot of people complaining but sometimes protocol Founders complain they're like oh like meme coins are getting all this attention um we're not getting that attention is that something

that you felt um and if it's not something that you felt why do you think that is what have you guys done the correct way that's a really good question um I think if you're not getting attention um trying to point to the thing that is getting attention and chopping down at it is like literally the worst thing you can do and is like a bearish signal because I see that and I go interesting problem for us to overcome let's think creatively where is the intersection of our product and the and attention and if there is no intersection um of the product and attention then what core

fundamental problem um are we solving and how do we find those people who have that problem and if you can't come up to an answer to either of those things you're just you're just building a hobby um straight up right like if you're not solving a problem or and if you're not able to Garner any attention um then you're probably just building something too Niche for Mass Appeal and and your expectations are misaligned with reality um the building side of things there's nothing I really dislike about it quite frankly like every day you get to wake up and deal with people and um the biggest challenge is existing within the boom bus cycle of

crypto I would say right because every 12 months uh you're you're trying to build highly scalable cryptoeconomic feedback looped well architected decentralized systems um in our case around information knowledge and and and social connection both of humans and non-humans right AI agents can be part of this easily um that how dude no nobody knows how to solve that problem like right like you're pioneering like everything we touch we're at the breaking point of it so like we're adopting a technology they they spin out an update four weeks later it's a breaking change we have to fix it

four weeks later it's a breaking change we have to fix it we like we can't just go to like um like Google and ask like why things aren't working like there's nobody who's solving these problems like that's that's so exhilarating that's so pioneering that like is a great reason to get out of bed every day um but that's a really huge Challenge and then you have to figure out how to do that through bare Market Cycles early bull cycles Peak euphoric bull cycles so like the line isn't here it's not it's not like the line isn't straight uphill Everest like you are literally zigzagging up Mount Everest right like oh it's a be cycle like let's get down and like really communicate all of our fundamentals and like go find the other really high signal Builders and like ask

them what their problems are and like use them for market research and it's like oh it's an early bull cycle it's only crypto natives who survived like the point farming meta is big like let's go get to them and it's like oh man it's like mid bu Euphoria Ai and memes are the thing like how can we demonstrate our Market to this this current market participation and then eventually the market tops right it's like uh oh everyone's running away like like what core functionality that nobody's going to care about because it's like foundational and no one's going to touch because it's so abstracted away like do we need like where's our Tech debt like what do we need to do so like the fact that you have to keep zigging and zagging and zigging and zagging instead of just like trying to hit that North

Stars is the biggest challenge but like I think that's super exciting like I can't imagine getting out of bed every day and like not solving a problem I care deeply about like that's just man like that that just gets my blood going that's fair it's a good point and I honestly feel for you guys because even AI agent stuff um thinking about it like four or five months back it was a completely different place than it is right now like these the growth of new tech is exponential and I think um we both like underestimate and overestimate how quickly it's going to come that it's it must be like full of surprises constantly um you mentioned that well you mentioned bull cycles um and like being mid and early and this is actually not for the podcast but for my own knowledge where do you guys think we are

right now um what I want to say what inning but I'm not American so I don't know what that even means but um what stage are we at and do we even have stages or is it the super cycle real this time rolling where are we at um I think that in the past you had um Bitcoin and altcoins participating in the same cycle and them having Bull and bare markets at the same amount of time at the same periods of time um I don't think that will be necessarily the case anymore I think that Bitcoin has separated away from from altcoins um and although it will lead the way I do not think that Bitcoin will have another 80% draw down I generally don't think it will uh but I do think at some point we will be able

to capture all the speculative money in the space uh at which point everyone has bought meme coins Ripple cardano and whatever the retail people like buying and that point there's only one place to go and that place is down and uh alt coins will go down 80 90 95% 98% and um in regards to where we are in the cycle I have a pretty firm belief that and we'll see how this plays out it'll be interesting to see maybe two years from now I'm pretty firm belief that most of the previous Cycles have been identical in terms of timing that

every single time someone tells me this may is different this summer is different this December is different I have they have only been wrong um crypto Cycles tend to have a two-wave up kind of momentum in which they tend to either top in April or November December so I would be cautious going forward uh March April um and then also um cost is towards the end of next year so I think that we have yeah it depends how you look at it uh we may have a double top next year uh April and November it's just me basically guessing based based on my

belief but I just think that at least until March we're good and I'll be cautious in the summer and I would I wouldn't hold I wouldn't I wouldn't believe in any super cycle for any altcoin for any agent coin for any other meme coin that has been promoted that it's a long-term hold that nothing is a long-term hold in in in in uh in short-term meme coins so I would say longterm is six months that's very long term but every single cycle you have new assets that become like long-term holds Bitcoin e now I think salana is becoming one as well and this are assets that you can hold for for a very long period of time I keep

accidentally cutting you off so I'm I'm making sure that you're good muted for sure um what's kind of scary is that like I'm thinking about it in a very different way but I think it kind of triangulates with with what Roland's saying um if if we look at the traditional cycle it's like Q3 Q4 next year we top like going back to like the FTX bottom I was like next cycle we top around 200k plus or minus 15% um just like don't overthink it draw some lines on the chart it's going to go there like I you you'll probably trip up and talk yourself out of it along the way and like hearing everybody be like oh 100 120 like we're not going higher I'm like what the like

in what in what world that I live in like is Bitcoin not going higher with like everything happening um like literally get a grip um now with that said I think that the Trump Catalyst was a very real Catalyst and come mid January a lot of uncertainty returns around the Trump Administration like we have there's just so many questions to be answered um about how this Administration is going to execute if Congress is going to play along with them and markets don't like uncertainty uh in addition to that I think like in Q2 Q3 next year there's really real us recession risk like anyone who tells you otherwise like either has just very high

conviction in in certain Dynamics but even then I think will kind of agree that like come Q2 k Q3 some of those liquidity Dynamics could be kind of backing off like the draw down of the TGA the the hiking of the the US debt ceiling like we kind of have to go through that period again right that's always a rocky period for crypto um every single time and I think that we could see Q2 Q3 recession risk and one of the potential outcomes of of of recession um is that well first all risk assets go one to one and nuke uh I don't think Bitcoin nukes 80% but like let's say we're at 150 like could we come back to you know 120 100 90k for sure why not

right and that Wick could be gone in a week right we could be back at 100K like it moves so fast um but then we might stay there for three months four months five months whatever but if we go back to a regime where they start decreasing rates and increasing liquidity um and Donald Trump is not one to let the the pain get squeezed out of the US economy he's one to to kind of pick it up get it going and sort of like let the machine carry on um I could see the potential narrative for a super cycle and and above and and a blowing past 200k run because then what happens is we already have a lot of stressed metrics across like the

economic Global Sovereign playing field and we're cutting rates down again and we're adding more liquidity again on top of all the the stuff that we did from 2020 to 2024 on top of all the stuff that happened post 08 and like then you kind of have to ask yourself like like oh my gosh like is the US bond market default risk priced correctly right because US Treasury Market default risk priced correctly like what's going to happen to us commercial real estate like this isn't good um and then you kind of have to look at like all the other Global players uh and be like oh man like they're even worse off and then if you kind of already have some Sovereign starting to buy crypto or like maybe they just start allocating during a period like this when they're like Fiat reserves and their B Holdings like

are kind of a bit shaky and people are losing confidence in those balance sheets then like yeah I kind of always thought we could have some type of really like the joke has always been like the top is when we sell to the sovereigns so like what is the path to sell to the sovereigns it's not like month one of the Trump Administration we're like Bitcoin Reserve we're putting two trillion dollars into Bitcoin like no that's not going to happen that way but it can happen out of like a shock or a recession so all that is to say um I I think a lot of smart people and you'll probably start to hear this Echo more and more and more closer to the inauguration and I bet you we're going to be like Peak bullishness going into the inauguration and people are going be

like oh no we're way too bullish to like pull back around the inauguration and we will um because there'll be a period of uncertainty uh and then I'm pretty much watching economic data really closely between like Jan 20th and through Q2 Q3 and just kind of like having some cash having some cash having some cash having some cash um yeah I feel like I just talked a lot in kind of in a bit of a circle but that's how I'm thinking about the cycle at the moment what do you think think Rolan I saw you in mute yeah ran what are you gonna say yeah I mean I think macro data is extremely valuable at inflection points um and I think Matt has done extremely well to identify what those inflection points may be but focusing on monthly data on The Daily or weekly level will

just waste your time um on most cases if you're a PhD in economics maybe that's useful for you but I think that even then you risk losing money um um I just think that it's more important to focus on what we have and um spend as much time possible extracting as much juice from the bull market and then be able to either identify for yourself inflection points macro data or find yourself a mat I found myself a Matt so I have the easy way out I can just message him I I my favorite thing to say is uh macro isn't even astrology for men because at least astrology is grounded in thousands of

years of pass down wisdom like it's you will lose money betting on macro all all you have to do with macro is react after the Catalyst that's it like when a macro Trend changes it changes for months so like even if you're two to four weeks late to like the shift just trade with the shift um and as Roland said like all I'm talking about is I'm open-minded to a recession in Q2 Q3 I'm not shorting crypto no way but like when if I see that in Q2 Q3 after being ready for it six months prior like I'll be really quick to react

yeah and also like during Panic moments even riskof aets react violently to the downside um there is no risk off during a moment where everyone is seeking collateral for whatever positions they just sell everything everything that's liquid and that includes Bitcoin and as well it's a good point I um yeah I I I guess I got to shift my mental models a little bit I was firmly in the camp that of what Roland said relax until March and then consider some stuff but I guess going into Jan I need to start I I like you said Roland I hate and like you said as well Matt first of all I'm not smart enough to understand macro stuff um so I just generally avoid

it and if Matt writes something in chat and says hey guys maybe be a little bit careful then I'll pay attention or like Bing goo is perpetually bearish but like if he says something I'll pay attention but um apart from that I tend to ignore it but this is a maybe Matt we can have you on um Roland you can come as well to L um if you're correct um in January and see if we're gonna go down or not it won't be a big one it'll just have a lot of uncertainty like we're not going to nuke in in Jan 20th but like I guess is 10% is 10% a nuke I think I think Matt is talking of having like a 10% draw down like a twoe draw down in J I don't think he's talking about an end of the world kind of scenario where your

altcoins go down 90% And your goat is essentially worthless yeah that's fair um guys thanks for coming on before um before I let you go do you w to shill anything um the last three minutes is just you saying um go to this website do this do that um read about us X here um anything you guys want to share with my dear listeners I like how we both stayed muted that's so that's so dangerous um man I have to think okay I'll tell you I'll tell you one thing that caught my eye I'll tell you two things that caught my eye um on on the thousand X podcast uh Obi shouted out coin called Geo which

is the first cap meme on the internet uh I think it's the best risk reward in cryp memes like it's just it's it's the easiest play with the it has the most ravenous Community I've seen since MOG it has the most Diamond handed a um meme holders I've seen um since MOG pretty much uh the rest of the market pulls down back it just goes sideways uh and I just think it's a matter of time until that thing just absolutely rips and then when it's ripping uh and everyone's piling in a momentum and then they're all just being like it's the first cat meme on the internet it immediately puts it in the category of like a doge or a Pepe so I'm just like that that thing is

my like cycle bag bought some talked to some smart friends and like I'm just I have very high very very high conviction on the second one came about recently um I have a buddy uh I I won't I would love to shout him out but he would be super mad if I did and um he's like super deep in the AI trenches and I was on a call with and he was showing me everything he was like oh yeah like Alisa ai6 fcoin this this this this this this this this this this I was like well I just got a crash course in an hour uh and I started scrolling through a bunch of these coins and I was like these are really cool but it's just spewing content at me like I kind of got bored like I kind of get

bored of the of the timelines of just content content content content content um and like it doesn't interact with me and I kind of think that like want to be long community and you want to be like long that community's Vibe and culture um and it doesn't feel real in a certain sense uh and then I was in a group chat and somebody started talking about AI swarms and and they they sh they shared three four projects one was like slz or something uh project 89 whb wob and Sid and I checked out each of those um and and the the this was like November 18th or November 19th and the WIBW project

had just released this AI generated video of the past 27 days of its life in in in art form and I was like whoa this is super cool like this like what is it building and I spent like 30 minutes at most just scrolling its feed and like reading all of this Asic art so first of all I think Asic art or I'm pronouncing that incorrectly because they they uh AI whatever a s CI um is like back in Vogue so like that was super cool to see and then I started like reading and paying closer attention to it and I was like oh holy like this thing's like doing something and then I found the the the founders page and it's these two AI agents building a a video game and I was like well this is cool like this is cool

like this this has you have my attention um so that's something I've been looking closer and closer into and like those are the two things in the trenches that I interested in uh and I'm feel like I've been gaining some mind share but like I'm that's really contrarian from everything else that I'm hearing shill uh by everyone all the time and like I said earlier like I want to do the opposite of of what everyone's doing if things become saturated and I want to build my own conviction on like my own thesis um and I think that's really important in crypto but Roland what are you what are your picks and I'm going to write these down whatever he says yeah I I've actually seen geigle mat and the fact that I I don't know I think binance futures posted about it a couple times

that was quite interesting um often times my bags align with Matt's bags so there's no way to show mine bags because Matt already has um but I would say from a longer term Point are you in what are you in I know you're in Geo are you in uh I guess you don't have to Doc it's okay yeah I don't want to dox my wallets um but I think like the way that I exp I think that okay to put it bluntly memes go higher as a niche um currently we have the biggest overlap between Market participants and memes so we have institutional money or

funds that maybe one year ago would have said no I'm not touching these things that now are opening up to touch memes every single allocator liquid investor U liquid fund investor Institutional Investor is interested in memes and is actively allocating from from 1% to whatever percent they're comfortable with you have Smart money that has always been active in memes and you have retail that is only active in memes so I'm not surprised when the volume of like Pepe or whiff is larger than many other large caps because this is what the people want and if this is what people want we should give them what they want and what we want and I want is the number go up and I think it will go

up and um like what is dodged now maybe like 70 billion maybe it touched 80 billion that is a crazy valuation and um in the last bull market we had Dodge touch 60 billion Sheba touched 40 billion so if you think your meme coin will only touch one to billion you have to dream bigger especially if it's listed on all of these tier one exchanges which not many are but the conclusion is that you have to dream bigger the biggest mistake uh in a bare Market is to buy too early the biggest mistake in a bull market is to sell too early and that's it on memes I think that like the recent listings of Pepe and whiff on

coinbase and Robin Hood are huge because there is a certain amount of institutional capital in the US that is unable to access other platforms like binance or okx or any other non- us uh exchanges so I think that is a paradigm shift although price action has been disappointing in the last couple of days and hour late November I'm not sure when this will be published uh hopefully my bags will be higher than now and another thing that I want to point out that another thing that I want to point out is um actually a portal of ours which is nectar AI which is very interesting thing that not many

funds um let's say were able to touch back then but now they're all interested in which is uh AI companionship the World Health Organization actually declared loneliness as being one of the largest epidemics globally um there is a trend for people to spend more time inside in computers like us right now and then they get lonely and I think that AI companionship um is able to bring something on chain that we haven't had on chain on chain we've only had users that are driven by financialization which comes by swapping by yield by speculation but once you bring emotion

on chain then you're actually potentially able to break what I call the uh like adoption dilemma um and I think that AI can definitely help with this and um having an AI companion on chain all the time is just the beginning of a future that we may not necessarily be prepared for but it's coming either way and uh we just have to think ahead and and prepare for it I think that yeah you guys definitely check out nectar AI oh sorry I know we have to end but before we end I have a suggestion but I don't want to cut you off let me Al go on go okay hear uh so okay Roland you

can shut this down but like I think it'd be really cool for us to kind of go back and forth like I I didn't realize that you were kind of looking at these AI swarm tokens too and like I I don't know if everybody kind of like knows or thinks about like how other people think about assessing these early narratives and this early narrative creation so like I'm actually super genuinely curious what you've looked at and what you're thinking about them and then we can kind of compare notes we can time box it to like three minutes kashio so so you don't get in trouble and we can like kind of pull the veil back a bit but that's only if everyone's on board yeah I think that generally speaking so like for example right now I quite like blob for examp example and I just want to like

share more about my um my thought process so I think I I mean I analyze these tokens like defi tokens even more than defi tokens I think they're to defi tokens with a cult leader the cult leader is the dev and defi tokens of Dev may not be known or may be anonymous so couple things that I look at I try to get in these tokens sub 20 M just because I want them to have a big enough upside that is asymmetric for me enough to get in and to be able to have like a 10 20x in them um I'm not interested if a token is like 500 mil I'm just it's just not it for me because many onchain tokens tend to top at 1 billion market cap um and are unable to go higher without a significant tier one sex

listing uh with that being said the way that I look at these tokens and create a mental model is that I look at the dev what's his tone how capable is he to push this forward how motivated is he to push this forward I don't care if he's an on or not you can read you can kind of be able to visualize their tone and how consecutive they are with with their developments um I think that as important as the AI itself is the dev is in terms of his post on Twitter then you have to compare the tech and The Vibes I think that people discount Vibes but Vibes are very important The Vibes have to be Immaculate for the AI token and

also for the community and um you have to make sure that the content is engaging because what this at this point in time these AI meme coin agents are a engagement Farm protocol or attention Farm protocol so you have to make sure it appeals to the audience and it's competitive because it's an extremely mercenary field and if it's not competitive something else will be competitive the next day and you're going to lose U so it has to be um Innovative if you're able to scan the code which I'm not but I have a couple friends are able to you should be able to to assess whether it's more advanced than other AIS and assess the capabilities of the dep um then you have to look at things that you look at other

meme coins as well such as holder distribution is it a cabal is it a CTO um what is the percentage held by the top 10 top five top 100 whatnot um you have to look at the volume and I like for example like when I got into blob uh I had $110 million volume with a $6 million market cap and just by looking at that I was like what's going on here is this like is this fake is this poofed but actually it was not just lots of people trading it which lots of people trading it means lots of attention which lots of attention does not equal $6 million market cap lots of attention equals uh I don't know goat going to a billion

that's lot of attention so there was a mismatch so I tried looking at mismatches between different fundamental things that I look at and valuations yeah I think that mismatch Point Nails it um I was hoping you're going to give me Alpha on which AI swarm um to build positions in but I I appreciate that framework wob WIBW web wob is the one I like most but I haven't really looked into all of them into so much detail and we we do have a big risk of listening to this one year from now and sounding like complete I won say it um like both Mania but there's also a chance that you'll listen to this one year from now and say wow I was early um to the

narrative maybe not webw if they go up 1,000x I'm not listening to this no more I'll be chilling thank you very much for that um yeah no I'm just joking but I think that I think that like all the tokens discussed by myself and Mark are very experimental and um everyone should look into them no way shap performance investment advice but we're just have the disclaimer at the start man you don't need I promise I'll I'll we have three disclaimers before this I'll even no no this was not meant for the audience it was meant for you bacho yeah that's who we worried about otherwise you're gonna end the podcast and gonna buy all our tokens which I mean I'm looking at the Shir right now and it's green it has to be you no one

else is listening I think it's DCA in I set up a um yeah let's reiterate that that was for what it's worth I think AI agent stuff is like the meme coins I I heard a lot of smart people in you guys are just adding confidence to it just saying that this isn't just regular meme coins it's um actually something like a slight shift in um attention and like sectors so I find it really interesting I am I'm not in web wob uh and for my listeners please make sure to do your own research um nothing is financial advice um but this stuff is really interesting guys thank you for coming on um yeah that's it thank you guys for

coming on this was a fantastic episode I had a lot of fun thanks for having us this was awesome thanks again to scale for sponsoring today's episode if you weren't already planning to make sure to go check out scales ecosystem explore the gas-free ecosystem at scale.png Bas SL research [Music]