ParaFi's 10 Crypto Predictions for 2030 | Ben Forman & Kevin Yedid-Botton

Transcript

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description of today's episode so you don't miss out on this really good deal all right everyone welcome back to another episode of Empire we are we are trying something new today um so we have Ben and Kevin from parfi I guess maybe I should start Kevin Ben welcome to the show thanks Jason yeah um Okay so yeah of course yeah good good to have you guys back um so I went to the parfi lp Summit the other day and um Kevin and Ben gave this uh beautiful presentation on predictions for 2030 and it was a you know I think sometimes as the industry the industry gets so focused on these little micro things or these little

things that are you know you know this mcoin moved 10% this day or you know what is this election doing to the stock market today and um I think sometimes s we don't really zoom out and um so I wanted to have Ben and Kevin on on the podcast to do something different which is share their presentation from the lp Summit and the presentation is actually not about what's going to happen this year it's not about what's going to happen next year it is actually big predictions for the year 2030 right predictions for five what is what is crypto going to look like and really what is the world going to look like about five years from now so uh Ben and Ben and Kevin are going to actually share their screen so if you guys are wa listening on you know apple or Spotify

or wherever you listen to your podcast I would recommend we're going to drop a link in the show notes I would recommend going to watch this on YouTube or or Twitter uh we can share a link on both of those because you'll get a lot more of the context you'll be able to actually see the slides if you're watching on those places so um Ben and Kevin I'm gonna hand it over to you guys um and we can jump in great than thanks again Jason it's it's a a pleasure to be here um before we jump into these predictions um I'm just going to quickly go over a couple couple compliance disclaimers so one is these are predictions they should be treated as such um All Views expressed are um subjective there op are opinions and belief they're not legal investment

or tax advice um parfi may be invested in some of the themes that we've discussed and the views that we express here are our personal views so just with that out of the way um uh we can now jump into it and excited to run through really like where we see the future of crypto and I I think it's you know to Jason to your point like people are very focused on the shortterm the micro in crypto so it's it's always great to just zoom out and level set on where we see the biggest themes the biggest verticals um you know moving five years from now so um let's jump into it we have 10 predictions Kevin and I are going to volley back and forth and uh

you know please interrupt us with any with any questions beautiful okay so let's jump into it so we wanted to start with a with a bitcoin price prediction uh and just really get it out of the way so our um our first prediction is that Bitcoin will reach parity with gold uh by the year 2030 so if Bitcoin converges to Gold parody that implies a price of roughly 815k uh for Bitcoin on a fully diluted basis um and if you kind of think about what that implies in terms of growth rate it's about you know 45 to 50% compounded annual growth in bitcoin price for uh the next uh five years um

and candidly you know it's Pro this is probably a conservative prediction because similar to the way that Uber didn't just get to The Tam of Taxi markets we think that Bitcoin will ultimately get uh you know many multiples of of Golds uh market cap so let's kind of like walk through our thought process on this prediction and we think the best way to really think about uh you know Bitcoin and gold is really from a first principles perspective so when you think about just the underlying traits of money right divisibility portability um ease of transact ability fungibility we believe that Bitcoin is just a better first principles

technology and skin for money uh than than gold is and look gold has had a great run it's um for 5,000 years uh gold has been a for a decentralized form of value storage it's compounded at 78% since Bret and woods in 1971 when we went off the gold standard but from first principles we think Bitcoin is better than gold on everything probably except for two things so one is volatility Bitcoin is still more volatile uh and as well as operating history bitcoin's been around for 15 years Gold's been around for 5,000 years um but most importantly I think the the

single property that I think is most powerful with Bitcoin is that uh is is it's uh scarcity so there's a hard CA supply of Bitcoin and there's not a hard CA supply of gold um when we then compare Bitcoin in this third column here to the dollar I think you know one could argue the dollar is better as a medium of exchange uh across almost every property than Bitcoin is today um but the reality is in our view is that you know Bitcoin is not really competing with the dollar um you know you already have uh venmo which has you know doesn't have 10-minute block times um you have we have stable coins as an industry that

are kind of wrapping dollars um but the re but it is a much better Bitcoin is a much better r view store value and this chart here is really kind of the Crux of that point which is supply side curves so if you look at Bitcoin you know currently 94% of all Bitcoin is in circulation um the remaining six% will be released over the next 115 years in the current having cycle the annualized inflation rate is roughly 0.9% um and you kind of compare that to the M2 money supply in the US and it's grown 4 and a half X since 2000 so one of these supply side curves is concave

that's Bitcoin and the other one is convex um in in terms of the US money supply and so what's what I find to be like the most powerful property of Bitcoin is just that it has a completely perfectly inelastic supply curve so it's one of the only Commodities in the world where regardless of where price goes you still get get the same um exact annual Supply increase and that doesn't hold for gold that doesn't hold for oil um that doesn't hold for any any commodity and that I think that mathematical reliability is is incredibly powerful um this kind of very much feeds into um the what's going on in uh with with the US

fiscal and monetary deficits so this slide here shows the US debt to GDP the ution of it over time and today we're at 120% debt to GDP um currently the US on its 36 trillion of federal debt pays 1.2 trillion a year in interest and you know we'll see if um we'll see how effective you know Elon and V are with with you know their cost cutting initiatives but I think the reality is is that it will be very difficult just with our debt servicing costs for the US to run a surplus um and Bitcoin is the escape valve for that and Bitcoin by and and by the way

you show this chart debt to GDP for the vast majority of governments and countries globally and it actually looks even uglier than this from a a supply side perspective this is a chart here that shows um Bitcoins onchain velocity or kind of what people refer to as hotal waves and the kind of key message here is that Bitcoin is is there's a diminishing supply of Bitcoin that sits on exchanges globally and that is in the free float um 34% of Bitcoin uh has moved within the past year but the other 66% has not and um an increasing percentage of Bitcoin

uh 31% of Bitcoin has not moved in the past five years so back in um okay how does this kind of tie into price so why are we reaching this price prediction well back in 2017 you know when I was at KKR I put together this kind of su of the parts valuation framework for Bitcoin and I said okay like let's look at store value markets let's look at medium of exchange let's look at kind of like financialization of assets and I ran I ran kind of like very back of the envelope math and I got to a price of 450k to a million dollars per Bitcoin um I think this anal was in many ways like the wrong framework or the framework has evolved uh but the actual kind of price

may may end up kind of coming to fruition so I wanted to like rerun this analysis today looking kind of strictly at Bitcoin as a store value um asset so this doesn't reflect you know Bitcoin layer 2os or Bitcoin shared security or um ordinals runes any kind of nft activity this is Bitcoin as a finished product product as it you know there there's no technology risk it's just Bitcoin and it doesn't have to change and if we say Okay Bitcoin gets to Gold parody that's 815k so that would reflect roughly 10x uh increase from today's prices if you got to uh gold parody plus M2 par you

know you're at roughly $1.8 million per Bitcoin that's 21x upside from today's level and then if you kind of want to dream the dream and look at kind of global M2 um and and believe that Bitcoin will start cannibalizing other you know non-dollar related currencies you're looking at um roughly $6.1 million per Bitcoin and um look I I think like I'll kind of end this prediction with this chart which is this we're undergoing the biggest demographic shift that we've seen Visa V wealth transfer inflation adjusted the Boomers in the US are passing 38 trillion of wealth to Millennials and

genz over the next 20 years and Millennials and gen Z two-thirds of millennial and gen Z prefer Bitcoin to gold and uh about 33% prefer Bitcoin and crypto to stocks um and so this will be a multi-decade kind of secular demand Tailwind that we that we think is going to you know inform and very much help like our our industry so okay that's prediction number one and you know Kevin I'll pass it to you for for the next one yeah so for the the second prediction let's talk about stable coins and our prediction is that stable coin Supply will reach 10%

of M2 uh money supply in the US so let's let's see kind where the numbers uh stand so today M2 stands around $21 trillion which we kind of show in the dark green uh chart and then stable coin Supply sits around $1 171 billion and they've actually gone up a little bit since we plotted this but U what you can see is that basically these two Supply charts have moved basically in tandem with one another uh for the past four to six years and um currently the uh stable coin Supply is only 80 basis points of the total M2 money supply so you basically need a 12x

increase in stable coin growth to reach our 10% um prediction so how are how are we going to get there and by the way one thing to note is that um when Pari started one of the first things that we kind of looked at was stable coins and stable coins have been this Relentless both secular and macro Trend in crypto where whether it's through ftic adoption or macro adoption they've continued to grow which is some some some people kind of like went went out and said uh when interest rates rise in the traditional economy people are going to dump stable coins they're not going to hold stable coins because it can earn yield uh in the traditional economy that has not happened in fact the contrary has

happened we've seen continued growth in and in in stable coin Supply so let's talk about the forces that are actually going to get us there let's start with the first one so this this this key kind of like uh first force is stable coins as new and as an evolution of the payment rails across the world whether it's for Global Finance whether it's for fintech or Commerce and to give you a few examples in fact there was one very recent one I want to call out uh which is tether uh financing 670,000 barrels of oil roughly $45 Million worth of uh of oil between a very sophisticated commodity company and

a very sophisticated Trader this is something that would typically be be settled either in dollars or some other currency um but this time it actually settled with a stable coin in a Trad in a completely kind of commodity traditional market and what that tells you is that market participants across Global Finance want to move money faster and settle it cheaper in in the traditional analog this would have actually taken cost more money and taking a long time and time is money so now that people are being accustomed to seeing that stable coins can move 247 365 they're asking themselves why can't I move the rest of my operations at that same speed and by the way we've actually asked a couple um OTC desk in crypto

what percentage of their OTC trades are settled in stable coins and depending on whether they're very Crypton native or more trafi um the answers have ranged anywhere between uh three qus of trade set on stable coins to about a third so that's actually quite quite amazing that the major trades when people are trading Bitcoin e Etc the majors are settling in stable coins the second thing is really fintech so for the first no stay on the slide so um with fintech um what you're really seeing is that for the first time ever you really have um Financial technology companies being able to build directly into a software native uh platform so you're not integrating with Legacy um uh payment providers that have

pay walls or uh are naturally talking about like different apis by running a full fintech stack Solution on top of the blockchain you have a composability across the whole financial stack and that is very powerful because not only does it create a better user experience for people to uh do micro payments and transact quicker but it actually creates a whole new business model for Fint companies where they're able to earn yield under underlying reserves that back those stable coins and that's something that you pre previously hadn't seen and of course you have like the normal things for like you want to pay coffe you want to pay for your coffee with stable coins and that slowly but surely I seeing more adoption from the major fintech providers whether it's

PayPal venmo Etc um to have this everyday transaction so that's that's the first Force which is just an overall uh stable coin evolution of payment rails the second Force um is uh the store of value Force so this is not a store of value from H Fiat debasement that's what bitcoin's for like Ben just talked about but this is store of value against the inflationary pressures that have emerged across many Emerging Market currencies and as a way to really protect the purchasing power of the USD Like We complain As Americans that we have 1220 uh 120% Deb to GDP ratio but

in most of the world um you know inflation is much more rampant than in the US so the question is what are those countries those emerging countries actually doing to protect their savings if they don't want to go out and buy Bitcoin which could be volatile or so on so they're buying stable coins this is a map of the world and what you can see is a few hot spots on the first in on the left in the leftand chart you see obviously the us being a top Market but if you kind of just kind of work your way down the map you see Argentina and Brazil which have you know suffered from inflation ravage economies for the past several years um and one anecdote by the way is that when we were trading stable coins um we we we we notice that one of

the regions some of the exchanges that always had a premium to their stable coin so people know that stable coins are worth $ but they may not always trade at $1 what we saw is that there was a consistent premium in uh Brazil from people uh bidding uh willing to bid 5% plus above par to escape the inflation that they were experiencing their local currencies so and and and of course this is kind of you know I like to say that like inflation ravage economies are stable coin's best friend because they're driving a massive Global adoption of stable coins and I'm sure some of you that are on Twitter may have seen this uh right hand side chart which shows uh the activity of usdt to tether

on the Tron Network in mapped to Nigeria time zone and of course Nigeria intersects all time zones but what's particularly here is that um which actually when I kind of look this up I I kind of struggle to believe it but 60% of of tether's Supply actually sits on the Tron Network that's like an astonishing amount that and like you know we're talking about 60 plus billion dollars roughly of of Supply that sits on the Tron Network and the question is why and when you kind of really dig into it is because you have all these emerging uh economies that all they care about is super cheap uh uh transaction cost and by me like super cheap like almost basically free so it's no coincidence that you have a lot of emerging

countries adopting uh uh a payment rails through blockchains like Tron um for for for their thing so let's go to the next slide to to talk about kind of like what's really the data Behind These two forces since um well what I would say is this for our prediction to become true we basically need a fifth % kager over the next six years to reach 2.1 trillion okay that would be 10% of M2 and if you were to ask anyone in another industry whether 50% kager is high they would typically say it's you know astronomical number but in crypto that's not necessarily the case um and let me tell you why since 2020 the uh stable coin

Supply growth has actually grown at a kager of 115% year-over-year so stable coin growth has just grown 150% kager for the past four years stable coin holders have grown at a even higher kager of 180 so you only need about less than half of that growth rate to get us to a prediction for the next six years and what's really interesting though is that when you look at the number of people that hold crypto which is around 560 million so around 7% of the world population hold crypto uh stable coin holders um are only around 2% of the stable of the of the global population so 120 million versus 560 million when we looked at the

average balance of the stable coin holders it's around $10 that's the average value uh of stable coins in people's accounts so if everyone that holds crypto would hold uh uh if everyone that holds crypto which hold stable coins um you would actually have a much higher number of stable coin holders and then you would actually only need half the amount of you would only need around $5 to reacharge supply because you know $5 times 560 would put you above two 2.1 trillion so it's actually not not um not that out of kind of like it's not that Out Of Reach and then and for that reason we actually think that um stable coins are not just goingon to meet the

10% of M2 we actually think they're going to blow past it potentially settling around 20 to 25% of M2 so the third pred hey Ben before um before moving on to that Kevin I've got like one or two questions for you on this um so right now uh U uh tether I think there's roughly like 170 or1 180 billion dollar total supply of uh stable coins tether is roughly like let's I'm G to you know maybe botch these numbers a little bit but tether is roughly 130 billion of that usdc is roughly you know 35 to 40 billion of that and then there's a few small other ones so one question is on like what this makeup will look like usdc vers tether versus

maybe something else and then the other question is um you know eth makes up about 50% of you know of the stable coin settlement Tron is roughly the other you know 40 to 50% then like you know salana binance smart chain or like you know a couple percentages each what is your thoughts on like what are your thoughts on uh usdc vers tether and then eth vers Tron verse other uh stable uh yeah settlement networks yeah stable coins have gone through a very interesting Journey uh when when we started uh paying attention to stable coins back in 2018 we you know there was tether there was usdc which was very very small back back then and there was obviously d uh D

being this like crypto collateralized maker Dow stable coin and um we kind of started From like that small cohort of let's say like a handful of stable coins uh we went into the 2020 2021 defi summer you saw this massive explosion of the number of stable coins that kind of came to Market uh algorithmic stable coins crypto collateralized stable coins Fiat back stable coins some cases Euro stable coins and and then you know everything kind of came crashing down after the um the the teral Luna collapse and the FTX collapse so we saw a handful of stable coins grow to dozens of stable coins and we're back down to like a couple stable coins and um in my in my opinion and what the market tells you is two things one is that

um is is that first of all uh the market has clearly placed uh very strong emphasis on resilience of stable coins so people don't necessarily want to be holding uh a stable point that that has low low flow low Supply and maybe like it's B it's banked kind of like in some shady way because um you know it doesn't Inspire trust that you kind of need for the adoption and things and and tether suffered for for this for a long time where there was a lot of speculation whether they were insolvent or not solvent but over the years as you've seen those those rumors kind of be put to rest you saw you continue to see um tether stable Co supply growth so it's

very very difficult in my opinion nowadays for a a completely kind of like denovo stable coin to be able to out to to outpace uh this the stable coin Supply growth that you've seen in usdc and tether it doesn't mean that it can't happen but you need a it certainly can just be another dollar stable coin we we saw for example with the Gemini dollar they had a uh New York uh uh Financial Department of Services regulated um stable coin that has struggled to grow despite having you know uh every rail to succeed and the reason is because at the end of the day people have um not necessarily seen the need to to to adopt

stable coins that they can't have the same liquidity like in other rails like if I if I'm holding gusd and I call an OTC desk and say hey can you settle a Bitcoin trade on this they may say hey no I only care about settling in in U tether or usdc so it's it's is the is the is a classic saying of liquidity begets liquidity uh when it comes to stable coins and for that reason you know um I think we're going to be have we the odds that we have fewer stable coins versus a large number of stable coins I think is much higher that we have just a handful of them versus more yeah like just to add to I mean look like I think there's an incredible amount of path dependency in crypto if the world started from scratch today like I don't

think tether would be the largest stable coin um but that doesn't matter right um like the best designed product doesn't necessarily win so unlike one end of the spectrum like we have a stable coin Monopoly and on the other end of the spectrum we have like this heterog Genius Like fragmented stable coin world I think we end up much closer to the monopolistic world like today it's basically a duopolistic environment um and for that reason I'm I'm personally kind of Fairly bearish on you know pyus USD or some of the competitors and they have not gained meaningful traction um so you know I would Echo kind of what what Kevin said this is a network effects technology and

product so yeah the the big question and you know we've looked in stable coins a lot like what what do you what what do you gain by holding another stable coin and and and and the answer is like really not not much like they kind of function similarly they're integrated to similar platforms but even when you kind of do a a look through of where they're custody like the actual dollars backing those um there there there is fairly High concentration in like a handful of Banks and people kind of got wakeup call um when s uh um signature and silvergate kind of blew up where people were like oh all this you know stable coin concentration is actually uh in a couple

of Banks and um and even though you you would have expected that to spark more diversification uh for stable coins it didn't really it helped tether significantly by the way like in the day that that that um signature was blowing up the spread between tether and usdc was like 20% okay like people were just bidding tether this proverbial stable coin that was going to always blow up and the safest current uh uh uh stable coin usdc was trading at like a 10% discount so you know you kind of have seen this this this um this this risk appetite to just be concentrated in a

couple stable coins versus being Diversified because it doesn't doesn't offer much at the end of the day cool all right let's go to uh number three thanks guys okay so prediction number three um our third prediction is that tokenized real world assets will exceed the value of of All Digital assets um so this is another way of saying that um things other than stable coins so tokenized stocks bonds currencies Commodities will exceed um you know crypto market cap as we view it today when we add a Bitcoin eth and and and all coins okay so I like to kind of like ground this prediction in the like why are tokenized real world assets relevant and you really have to understand our financial system and how

it's evolved so this is this is one of my favorite charts um it shows Financial Services as a percentage of global GDP and post World War II Financial Services as an industry was one and a half perent of global GDP today Financial Services is 5% of GDP so what kind of this chart says is that in real terms in inflation adjusted terms the financial services industry has grown 3x it's it's um effectively uh its aggregate profits are 3x higher and I think this matters because like Finance as an industry is

not a productive industry um it's just meant to provide to be a lubricant to other Industries to move money to have open Capital markets and so on and so so this chart implies that the financial services sector is extracting um you know meaningfully more rent and you know not withstanding this chart like I don't think anyone feels that Finance has gotten 3x better right we still don't have you know an Amazon like experience for finance um we you know despite all the Innovation on the internet you know I can order Uber Eats it shows up at my door food shows up at my door you know 15 minutes later you know it's still very difficult to send receive money um

get a mortgage pay your taxes send money back home um the financial services system does not work very well and the other thing we've observed here is just entropy so think about the past like five years in finance you've had two of the three largest bank failures in US history you've had platform blowups like what you saw with nickel trading getting halted on the lme or Robin Hood restricting trading in GameStop um you've had you know single like dark poool uh trades like with Aros kind of like send ripples through the financial system you know the bank the the

financial markets today are chaotic uh and opaque uh and I think we can agree They Don't Really function or work very well um and certainly uh uh they only serve a very small percentage of the global population uh there has been a lot of innovation in fintech and we're big investors in in fintech but the reality is is most fintech companies are not zero to one Innovation they're they're creating a glossy kind of digital front end on top of the same opaque slow uh you know uh backend that we've been using for the past 50 years in Swift um so the question is and really the answer to

this in our view is is this idea of kind of tokenizing real world assets and moving them off Swift off dtcc to a whole new set of rails and we've seen over the past year this concept which we've seen with stable coins uh as a starting point uh move and spill over into the broader asset stack so just in the past year we've seen tokenized real world assets um you know this chart's a bit stale at this point they've almost doubled year-to date we're uh almost at 15 billion of of tokenized real world assets um so our mental model and framework for why an asset should be tokenized comes down to several points um it's you know the transferability one

you know when you have an tokenized asset you have Atomic settlement so you don't have t plus2 or in the case of some assets t plus 30 um you have sovereignty so you can hold assets directly instead of through intermediaries or or broker dealers or custodians um you have efficiency and auditability so um all the fund Administration functions um can get streamlined um and actually pafy uh you know we're kind of eating our own dog food in this in the sense that we've tokenized a sleeve of our latest Venture fund to um really appreciate and use the value of of this of this technology um but you also have like kind of the micro payments that

that are enabled here um that you just don't have um in in kind of the traditional system um you have composability so all these Assets Now on being on a on a kind of uniform shared Ledger can all speak to one another and it's not just Financial assets but it's your you know the title to your vehicle it's um you know your your you know the mortgage on your home it's can be you know Airline points it can be your University diploma like things that we don't traditionally think about as assets um can get tokenized so there them being on the same Ledger is incredibly powerful and then there's kind of the programmability of these assets so we think about you know we call kind of PDFs dumb contracts and

then what you have on ethereum are smart contracts so you know many of the world's assets are just encoded in PDFs and the beauty of tokenization is that um when you have assets on a blockchain you can program logic into the actual asset itself itself um this reduces the need for lawyers for administrators for trustees and it also opens up a whole host of other you know AI agent use cases where micro payments can be enabled so you know we could talk about this slide for you know an hour but I think the the Crux of it is this just makes more sense and now the data

is starting to follow and uh you know here you know you can see like it's Black Rock Franklin temp the California DMV Hamilton Lane KKR um everyone is starting to really Embrace and use this technology and you know we look at um you know Larry Fink at Black Rock as kind of like a great example of kind of waking up to this so here are a couple I mean f back in 2017 he said that um you know IND Bitcoin was an index of moneya laundering and he didn't really get past Bitcoin in his analysis of of the digital asset space he kind of started in sto there um but today um he kind of calls himself a proud skeptic and now he

comes away saying that this is the most important technology for Capital markets since we moved from analog to electronic um in the 1970s and 80s so now you know Black Rock has the largest Bitcoin spot ETF the largest etherium spot ETF the largest tokenized treasury ETF their investors in securitize this has all happened in the past year um and so now you're just seeing this ground swell of activity in in the financial services space um you've also seen it kind of in the longtail of assets so you know tokenized Pokemon cards tokenized luxury watches tokenized YouTube royalty streams for creators you're seeing kind

of the longer tale of assets that don't have traditional Capital markets coverage start to move on chain and there's quite a bit traction here um where I I actually think similar to the way that China kind of um went straight to mobile payments um and Leap Frog kind of the Legacy payment infrastructure you're going to see a lot of these longtail assets just move on chain they're never going to be supported by the Banks and traditional Capital markets they'll move right on chain and what we're looking for because this is a network effects technology is which of these subcategories are going to get to that critical penet ation rate where if you want to participate in the asset

class you need to be on Chain by default like you're you know if you want to participate well you you have to own these assets uh in a tokenized format so you know our view here is like and this is this is a chart we often reference which is you know when will this when will this play out right because people have been talking about tokenization since the you know 2017 Ico era where people were tokenizing you know dorms in Charleston South Carolina and there was Al all those projects kind of ultimately failed there wasn't liquidity so the big question is when and this is a chart that shows different technology adoption Curves in society

over the past kind of century and um there kind of two big takeaways here so the first is that today Technologies are being adopted more quickly than ever before so the slope of the curve is much steeper um and the second takeaway is that technologies that didn't require Hardware rollouts um that just are kind of software based can get adopted much more quickly by Society so if you look at you know electricity or the automobile those took a while because they're constrained by the laws of physics and uh and you know physical materials whereas if you look at social media um you know that was adopted much more much more rapidly

so we kind of think we're at the point of of of kind of takeoff um in in in the real world asset tokenization world and we're going to see a lot of meaningful growth over the rest of of this decade nice thanks Ben oh should we jump into number four yeah I've been waiting for this one prediction markets okay this one is exciting um so this prediction markets you know we believe are going to disrupt traditional media and become the main the first mainstream consumer application on blockchains in some ways as predictions already played out um with what we've seen over the past month but I think prediction markets are going to grow meaningfully every year for the rest of the decade it's not just a once

every fouryear phenomenon okay so let's just kind of level set I think most people know what prediction markets are but um or have heard of them this year but you poly Market was the number one app in the iOS store and news ahead of CNN ahead of New York Times um it was one of the top apps in the world I think it hit number one in the entire IOS app store on Election Day um it had um over 30 million uh visitors to its front end uh polym market.com in the month of October which is about 80% of coinbase.com website traffic it's been discussed and referenced in the Wall Street Journal in the New York Times tweeted about by Elon retweeted by Trump

um it's kind of hit this mainstream hysteria and one of the fascinating things like when I talked to my friends outside of crypto is many reference poly market and just have no idea that it's a crypto product because actually for many PE for some people think about poly Market uh as like a a trading application edding application but the vast majority of people think about poly Market as actually just a news source so that's very very exciting I think when we think about um these prediction markets in just very high level these are markets that resolve to zero or one based on whether an event occurs um they can be very very valuable sources of

information um you know back before people were focused on poly market and prediction markets you know we were looking at the this Market that we're showing here the odds of Biden dropping out of the presidential election and this was pre the debate with Trump that didn't go well this was back in late 2023 early 2024 the market on poly Market was pricing Biden at a 20 to 30% probability um to drop out of of the race and this was at a time when he was the presumptive candidate the Democrats weren't running kind of an open open market primary um and so this just kind of shows that um you know the market was kind of more accurately discounting the

probability of of him dropping out then what happened is during the debate this Market started to move in real time and what was fascinating here is this was a direct referendum during the debate on who was winning the debate um and so instead of listening to kind of the talking heads on CNN pontificate about who won who lost or on Fox pontificate about who won who lost you you can just reference markets and there are higher Fidelity in my opinion uh source of Truth relative to um you know what any single expert says because there's actual money on the line uh another great uh use case for these prediction markets is the latency of

information so we go back to kind of the July 13th Trump assassination attempt this is a chart um where we show a Time series of Trump's odds to win the Republican nomination and it was trading at 99 a. half so it was you know because he was you know he had effectively won he was the presumptive candidate shots were fired at the Trump rally at 6:11 p.m. eastern time on July 13th before any um me meaningful account on X tweeted about what was going on poly Market moved uh before any mainstream media Outlet you know tweeted

about it was covering it poly Market immediately moved you can see here the Market corrected down to roughly 97 cents on the dollar um over the next call it hour the media Outlets started to report on it people were talking about it on Twitter but poly Market adjusted before all of those sources the other really interesting thing here is before when during a period of time where people did not know would Trump be okay what was his well well kind of would he still be the candidate was he dead no one really knew and poly Market provided very valuable information that in fact you know he appeared to be okay it never dipped below 97% um and then the last the last chart here we show Trump's um versus kamla's

odds to win the election during election day itself and what you can see here is like throughout the actual election day when the polls were open the odds didn't really move but then as the poll started to close as um major news networks started to cover the results of the election um poly Market odds adjusted well before you know the M the mainstream media Outlets um I think that's a function of the mainstream media Outlets want to drive ratings may want to make the race team closer than it actually is so you know Trump was already tra trading at 96 97 cents um you know uh By You Know by midnight um when the race still wasn't

called so um again very valuable High Fidelity information and look volume has exploded this year and um you know we've seen $3 billion dollar of volume on poly Market over the last uh month we've seen um roughly 300,000 active Wallets on the platform and notably these numbers are not materially off uh in the postelection period they're off slightly but not not materially this technology of prediction Market markets isn't just about politics it extends to sports it extends to science it extends to you know culture markets um you know there are markets on whether different Venture back companies

will still be in business at over a certain period of time so you can think about this as like almost like an in Insurance Marketplace and one of the fascinating things here just to close out this prediction is that we actually think that AI agents are going to be the largest participants on poly Market over the next couple of years because you know if you have as an example a weather Market how much will the Earth's temperature warm in 2025 no one can really compete with an AI agent that's reading you know meteorology Publications taking in alternative data from weather apis globally and using its natural language processing ability to make markets in

real time on poly Market so I think AI will compete with AI um to make very accurate markets on poly market and that will be a very valuable source of information for for Humanity um that we can use so um this is very exciting for us and and just full disclosure pery is um we're the largest investor in poly Market but we you know we've been invested since 2020 but we're we're huge Believers in this in this category Ben how do you think about um maybe two part question here uh you know Robin Hood recently launched poly Market uh prediction markets uh there's Ki uh I've probably seen more pitches this year for like new prediction markets than like

any other application in crypto um so I'm curious how you think about that I'm also curious how you think about the relationship between media and prediction markets like right now they seem very antagonistic towards each other you know Shane is tweeting like we are the New Media um I've always seen it you know and I've talked to Shane about this like less like you know one verse the other it's more like I I think they can be very symbiotic towards each other um but I you know I'm super biased as a media operator here so I'm curious how you think about uh th those two questions yeah so on the first question I think that uh decentralized prediction markets have um a very tangible advantage over centralized prediction

markets like Ki because they're Global they're 247 um all the betting activity on them is transparent so you can see you know exactly what wallet Behavior looks like and actually one of the observations we have is there were there were actually more people more wallets that owned comma shares but they were smaller size large uh fewer but larger wallets that had been on Trump you can see the cost basis of every participant again they're 247 they're Global ki's you can only deposit money on Ki during the 35 hours a week that banks are open right so they're kind of constrained by banking rails in a sense right so I just don't think there's any competition at the end

of the day when all is said and done um I think that uh you know these will be decentralized prediction markets will end up being much much bigger um I think the disadvantage is obviously kind of there's blockchains are still difficult to use you have to bridge assets to polygon the ux is not super intuitive so there is a bit of a tradeoff um but look like markets volume was 20x Kies um over the past month so we we'll see how that evolves but I'm I'm kind of you know I'm I believe this is like a use case that just makes a ton of sense onchain versus offchain and then on your second question um look I think that like media will start you know referencing and

embracing kind of the data from poly market and incorporating it into their stories and Analysis um you know Bloomberg is now you can access poly Market data on a Bloomberg terminal um you know I think poly Market will get the poly Market data and probability will get discussed and debated more um on air uh but U I think there is a bit of like an innovators dilemma here so uh you know whereas like previously the media was the thought of as the source of Truth um this is a direct threat to you know that kind of position and credibility and so so um you know I think it's going to be interesting to see how that how that

evolves o over time um maybe that whole nature fundamental nature of what media and news is May May evolve and change yeah I'll add a couple things which is um throughout throughout this whole election cycle um people you know prediction markets like poly Market are actually fairly novel people say oh I used to use prediction markets uh for the last election and 2016 election but those are just incorrect statements because they failed to understand that when they were using those like trading sites those odds were set by bookies by centralized bookies like small number of participants that were deciding the likelihood or probability of something prediction markets are are are

competitive they're Global and information is is priced much much better and balic actually published this uh article not too long ago uh earlier this month that he's kind of creating this category um as like a derivative of prediction markets called info finance and this idea that you're going to see all this um novel um markets but not about what prices do like a a typical Financial Market but about the likelihood of certain events whether it's government politics science um um you know um your name is like you know weather etc etc and um and that was going to become like a whole new asset

class 4 uh what's called info finance that are proxies uh financial instruments that are proxies to uh conveying information for from from a news from a news standpoint the second thing that I would argue that I would say is throughout this whole cycle I mean you saw uh there was just constant uh uh demonizing from like traditional media against like prediction markets oh prediction markets are manipulated uh they are skewing the ODS in Trump's favor they're sking the odds in ca's favor and there was this whole misunderstanding about what a prediction Market is and ultimately a prediction Market is just um a a a a a a market if you believe that prediction markets are

efficient and that they are globally accessible that people have the ability to express and price information in real time then um logically you have to kind of have the view that these markets are efficient at pricing that information um if if if poly Market was segregated on only access accessible to like a very small number of participants in a in a specific region in the world maybe you could say hey that they're actually not very efficient because they they have biases or they're not competitive or like the excuse are are off but but uh one what was really interesting is that when you saw Ki launch and uh uh ibkr forecast Trader launch and Robin Hood

launch and all of a sudden all these markets that had uh uh different populations and different customer segments were all pricing very similar odds you kind of kind of got rid of that that excuse of like poly Market cannot be possibly manipulated if every other Market is being is being showing very similar odds and people were like oh well there's like a 2% spread and sometimes there was like a technical Nuance on like how easy it was to get money in or the exact description of the contract whether one was expiring uh on on November 5th or inauguration um so I I I I you know I second Ben Ben's views I think these markets are going to be absolutely massive the biggest barrier in my opinion and we've

looked into this a lot because I think there's a lot of actually amazing opportunities from an alpha generation stpoint is um is how easy is it to move money into this Market I think poly Market despite being the most liquid and and and have the the best liquidity and most volume it's still for the average user incredibly difficult to use so I'm excited to kind of see how uh those uxs become even more invisible uh to use because one very interesting thing is poly Market was the number one news app but Ki was like top 10 finance app and the question is like why was one unus and why was why was the other not uh what was was the other finan is because

you couldn't actually trade through poly markets app okay and put aside the fact that there's us people that are restricted from Trading just a normal user with an iPhone couldn't actually trade through the poly market app because the the ux was not quite integrated so I'm actually very excited to get to the point where you are able to trade and fund poly Market um um just in the same way that you would fund Ki or Robin Hood or interactive brokers scale is the blockchain that is Simply Built different let's face it other L1 networks have costly transaction fees that increase as the network gets busier scale has solved this problem with a gas-free scalable infrastructure where users never pay gas

fees scale was awarded the most active gaming chain in 2023 by coin Gecko and host five of the top 25 games on dap radar you should definitely check out scale I was using it the other day it really is incredible to use that's scale spelled with a K hit the link in the show notes or head on over to scale dospace SL ecosystem to get started today hey everyone Jason here I wanted to take a second to break down why magic Eden getting into token trading their team is extremely concerned that crypto is still Consolidated in the hands of a few centralized exchanges who act as Gatekeepers ultimately recreating the trafi space they believe that crypto is still missing an onchain binance and their aim is to move trading completely

on chain fully decentralized they've done $6 billion dollar in nft volume in the last 3 years and have had more than 1.4 million users visit their platform in the past year making them the number one nft platform in the market today they are the ones that can do it stay up to date with magic Eden's journey by giving them a follow on X at Magic Eden Unis swap wallet is designed to easily manage store and swap your crypto all in one place access thousands of tokens across ethereum and 10 plus chains including Bas arbitrum optimism and more Unis swaps wallet has built in me protection and zero gas fees with swaps that go through Unis swap X you can also

swap with the peace of mind that the code is completely open- source and independently audited download it today it's available on Chrome IOS and Android hey everyone Jason here wanted to uh just take a quick break and highlight everything that's been going on in the mantle ecosystem in just one year mantle has seen its tvl surge by over 1,100% now reaching $1.69 billion that's just such a crazy amount to think about more than 225 protocols have made mantle their home while the platform's Eco fund has invested $38.5 million in 51 pioneering projects through strategic Partnerships

with bybit including MNT as collateral supporting Athena to scale and the first ethereum L2 to integrate Ono Finance they just continue to be on the bleeding edge of l2s be sure to stay up to date with what's going on by giving them a follow on X at ZX manle special thanks to the incredible mantle team for sponsoring today's episode earlier in today's episode I mentioned Ledger's latest products the stacks and flex and I wanted to take a few seconds to tell you more about them for Black Friday only Ledger is offering $70 in Bitcoin if you upgrade to The Ledger Flex you can also save up to 40% on selected Ledger Nano wallets and accessories

these wallets are virtually impenetrable to online attacks because they store your private key in a secure offline chip you can manage more than 5,500 tokens and install up to 100 apps offer is only valid until December 5th or while supplies last so be sure to hit the link in the description of today's episode so you don't miss out on this really good deal okay let's wrap on prediction markets um Ben and Kevin take us into prediction number five prediction number five is all about Ai and it's um our our prediction is that AI will comprise 90% of onchain activity uh by dollar value uh by 2030 so uh let's kind of

like frame that for a second uh cha GTP launched its you know kind of like novel uh model uh llm in late 2022 since then we've really kind of been witnessing one of like the greatest technological and economic transformations of our time through Ai and as of this month for example if you're like a iPhone user you now have um you know Apple intelligence in your pocket and by the way that's going to integrate with uh chtp so it's really kind of like expanding um the reach of this type of llm tools and chat Bots to most people and like I think the average person doesn't really know what even a chatbot is they've heard about it but very few people are power users of it so let's talk about really how how um

crypto is playing a role in the AR Revolution the first thing is uh infrastructure and I'll talk and I'll talk this in a second like the first thing is infrastructure which is uh Bitcoin miners are really kind of beginning to repurpose their energy and power um data centers for um um uh you know ai ai capacity and training you're seeing that a number across a number of big publicly traded Bitcoin miners but the thing that I really want to talk about uh in this section is AI on chain and I'm talking about AI systems like large language model that are integrating directly with blockchains and just to clarify something I'm not talking about training uh AI on chain you know I think we saw that in like 20

2019 2020 of like the decentralized AI or things like that like this is not our thesis um our thesis is simply that we're going to see an increasing amount of this intelligent agents active on uh this across blockchains and uh consuming a majority of the block space and so why do we think so so the first thing that I want to clarify is this distinction between Bots and AI agents um obviously we know there's bots in crypto we've known them you know from the from for many many many years ago like It's Not Unusual to see a liquidator bot or a trading bot or some other bot doing things on chain but the

main difference between a bot and an a agent as we're framing this prediction is a bot is just a piece of software logic of business logic it has classic uh if then conditional logic is a terministic and it kind of does things like a traditional program um an AI agent obviously has some business logic because he needs to know what what it's doing but at its core its nucleus we have an llm and this llm is able to understand and interpret the language of smart contracts and one breakthrough that it's particularly interesting of of um of llms is that there were actually made to interpret uh written language um they're not like they're tokenizing uh

words and um Loosely typed languages like python um uh are actually great uh methods for them to write code so you've actually seen uh uh chat chat Bots um have amazing abilities for code writing because they're tokenizing the language so the the the key breakthrough here is that you now have this this compute substrate where AI can integrate directly with this substrate that's blockchain for computing and it can and it can do many things so you're not dealing with uh per uh you're not dealing with down websites or authentication Pages like you typically

would would run into in the traditional web dual world like if you're building a a chat bot in web2 world and you try to do an action you're GNA run into pay walls you're going to run into authentication processes you're going to run into like servers that maybe don't uh integrate with your software drivers in the way that you want to and so on and so forth in crypto that's not really the case it's a permissionless and Global compute substrate so these agents are really kind of like meant to run wild and if you've been following Twitter I'm sure some of you have you have seen like this truth terminal uh type of like you know sophisticated bot agent and again query whether that's actually a person or or or or an I but you've seen this kind of

experiments that you have these AI agents kind of just running wild doing Financial experiments that are you know beyond people's imagination so let's talk about kind of concretely what what's what's happening on AI uh coming on chain there are three kind of things the first is that you know you've seen uh examples of AI paying other AIS with crypto um you're you're you're having for example Vex say that crypto AI Revenue by 2030 is actually going to exceed uh $10 billion in annual revenue from onchain and one of my favorite ones is actually Bernstein uh saying that digital asset micro payments like traditional digital asset micro payment

uh are going to unlock AI adoption and then like when I first read this I was like what's the connection between digital asset micr payments and AI but then it comes back to the topic of you actually cannot have high frequency micro payments uh um unless you have systematic ways of doing that through Ai and you can't do necessarily do that in the traditional Finance world if you're having the the limitations that I that that I uh described but in in in crypto world you actually are able to unleash the AIS and able to P process um a very high throughput of micro Financial transactions um without getting payall and um and I ultimately think

that you know you have having uh the AI agents are are going to drive the next wave of crypto adoption and they're really the perfect medium because it goes back to the question that I that that I was mentioning like the average person finds crypto very the the ux of crypto very difficult to use and AIS have the perfect opportunity to simplify that because um it no longer is about you or a friend trying to navigate Smart contracts and sign transactions you're now interacting with a friendly chatbot that can assist you with those transactions so uh the next slide really kind of talks about um this this this

this this this developments this software development kits that we're seeing launched by the coin bases of the World by poly markets and by the way this is just a couple of examples there is many dozens of this that you're seeing in the space where you're having sdks particularly uh tailored for llm adoption um because uh you know there this companies are realizing the big opportunity so imagine that I could just prompt my we were chatting about prediction markets right so imagine that I could just prompt my chat boy and say I want to bet 10,000 usdc uh on poly Market that the Federal Reserve will cut rates by uh a quarter point by year end

and rather than me figuring out how to take money from my coin account into a smart contract and Bridge it to poly to to polygon and to poly Market the llm because it it can interpret the the smart the smart contracts which is compile list of operations uh presented to me in a in a human readable format and I would say yeah proceed this looks good and then it would go ahead and do all the operations behind the scenes and then bet bet on poly market so these are intent based actions versus um having to actually deal with the smart contracts ourselves and I actually believe that this ux um uh AIS will actually radically change the ux of crypto um and

it will actually on has a potential to onboard um you know the next 10 20 million uh users into crypto because of that nice great oh let's keep things let's keep things moving uh so prediction number six um we believe that the most lucrative investments in the upcoming cycle will be at the application layer rather than at the infrastructure layer and just as kind of a sub prediction we expect to see 20 over 20 different applications that generate 250 million plus of ARR and 100 million plus of free cash flow so let me just kind of

contextualize this for a second most people come into the space in crypto most institutions almost all of them enter in through either Bitcoin or maybe stable coins and rwas at this point um and when you kind of look and try to Value Bitcoin in particular it's um it's a bit of an esoteric exercise you kind of price it relative to Gold um you kind of lose many fundamental investors I think what a lot of people Miss is that the application layer in crypto is not difficult to Value most of these applications um you know either collect fees or have the potential to collect fees and you can run kind of discounted

cash flow analysis or look at PE ratios um on these projects and actually value them um and you know look there has been like a surplus of investment into infrastructure over the last call it 3 to four years the vast majority of venture capital has gone into infrastructure Bridges me like you know wallet as a service all these you know um you know shared security all you all these kind of uh things that are beneath the surface that the real is like don't really connect to the average consumer or person um and um we think that like it's very much time for the application layer

uh to see more investment and to see more growth I mean it's already happening um I think it's just going to only accelerate for the rest of of this decade um I think the application layer in particular is poised to capture a lot of value because these are like software Plus+ plus business models so you know they're very very high incremental margins um uh sometimes 100% kind of flow through to ibida or free cash flow um these businesses can be launched in a very Capital efficient format um the most one of the most commonly cited examples of this is unis swap which uh effectively grew to trillion dollar plus

of onchain volume with only 11 million of venture capital and the product was launched with a team of you know less than 20 people um so these are very very Capital efficient from a both Financial capital and human capital standpoint to launch um and you have kind of global accessibility from day one so if you like the business model of software which I think most people do um you're going to like love the business model of crypto applications um I I think they're some of the most powerful in the world in terms of the speed that they can scale and the return on invested Capital um what we've done on this slide is attempt to kind of apply like a PEG

ratio to some of the um most well-known projects on the application layer a PEG ratio being kind of a PE ratio um over over kind of growth rate um and what you can see here is um you know there are uh there are a number of very cash flow generative and high Revenue producing applications in the space which is impressive but these are also all growing at a very fast rate and if we were to you know superimpose kind of other large public SAS companies and uh onto this slide um you know crypto would would look like materially material really better um a great example of a top earning application in

the space is uh maker da which is now sky and you know what we've shown here is you can look at something that looks and feels like a gap financial statement an income statement or free cash flow statement um and in real time so you can look at it on a periodic basis either weekly monthly annually quarterly um or you can look at it in real time and you can apply that same kind of underlying Bottoms Up fundamental analysis that you would if you're looking at any public company but apply that same kind of framework to looking at tokens on the application layer and look like we all know that um you know the market can stay irrational and you know people may want to buy meme coins but I I'm a

believer that um over time over the Arc of time markets converge towards fundamentals it may take time but you know if there are too projects and one is definitively more earnings on chain than the other it should be valued at a higher at a higher uh valuation um as time as time goes on um so this to me is is very powerful and um the last thing I'll say here is uh I I think that one of the things like just from a regulatory standpoint we may see in this coming cycle and you kind of saw saw last week is a number of projects that have made the decision to not collect fees and turn on fee switches we may see

fee switches now come on in this cycle with greater regulatory Clarity I think a lot of those fees may go to buyback and burn programs which I think will be a direct Catalyst for many many of these tokens so I think like that has been a very material change in the last week if we're talking six months or a year ago maybe the thesis around the application layer wouldn't be what it is today Ben do you think these are um does the value end up occurring to the defi applications or more like consumer I'd call poly Market more of a consumer application or I know you guys are I think you said the biggest investor or uh I don't know like you know concert tickets on the blockchain or you know that that kind of stuff like where do

you actually what what kind of applications I mean it's tough to say like I think I think that like there'll be value that accurs to like a number of different onchain categories I mean Finance I think has the most product Market fit and is the most intuitive in terms of how you can extract value if it's a lending and borrowing Marketplace you can take a cut of the interest paid by borrowers to lenders um if it's a trading Marketplace you take a you take a cut of volume whereas in the consumer side maybe it's a little bit less intuitive how you extract value although I think there there are typically kind of clear ways to do it um but I look I think it will be diverse in terms of that value acrel okay let's go on to prediction number number seven oh I love

I love this one I'm excited about this one yeah right so our seventh prediction is that um wallets are going to become some of the most valuable business models in crypto and really will evolve to kind of become thought of as Bank what kind of the same way we think of banks today kind of as Diversified Financial Services hubs or platforms um so there are a lot of you know we think there are a lot of good business models in crypto but I think few can kind of compete with wallets um so it centers around kind of uh one growth in the space so if you look here at um the average uh monthly unique active addresses on chain um we're at

roughly 40 million um onchain addresses in a given month today across all blockchains this has grown every year for the past six years and it's grown at about a 55% keger um whether you're um interact if you're interacting with any onchain application um you need a wallet and and that wallet could be known to you it could be something like metamask or it could be a wallet as a service platform and it could be abstracted away but either way you need kind of that private public key pair that we kind of call a wallet today um so kind of why do we think that wallets are are such valuable businesses well it kind of comes back to um we kind

of call like aggregation Theory so there's a great blog Ben Thompson stratechery where he talks about you know why businesses like Facebook and Google have become so valuable and become so dominant and kind of the Crux of that thesis is that they own the user relationship so they sit at this very critical point in the supply chain between consumers and businesses and they kind of control where attention goes and I think the same could be said about wallets um so there this wedge between kind of the the user and this ocean of different applications and and candidly like we

know this firsthand large investors in consensus which um operates metamask uh it's um it's it's a very strategic asset in the space every team wants to get in front of metamask to form some sort of relationship so I think many people think about these wallets as like you know custodians that's all a wallet is it's just a crypto kind of custody account but really like if you think about what a wallet is it's kind of your onchain passport your identity uh your access key your credentials you know your money your identity all kind of rolled up into one and um I think you know our view is what we've seen in the wallet space I

think over even the past year has been pretty pretty incredible things like account abstraction um gas lless transactions uh you know using pass keys for um login authentication all these things are making the ux materially materially better and you know it's also possible that we kind of do away with the word wallet altogether maybe it's called something entirely different um so a few examples of this in our portfolio and I'll run through these quickly so one is nosis safe so nosis safe um custodies today about you know two and a half to three% of all crypto and you can see here six million safes have been created cumulatively

since Inception um this is kind of the go-to uh wallet for most Dows or foundations um because these are these are multisig and you know if one key is compromised transactions can still be executed by the remainder of a quorum and what's F what's great about nosis pay is they make things like token vesting simple payroll uh automated um and they also you can also program in conditional transfers to these underlying tokens so it's just a very useful product and it's it's becoming more useful um a second kind of example is fire blocks um so fire blocks is like what what uh what what no what

safe is um but for um Enterprise so you have you you know compliance uh dedicated account managers and fireblocks is dedicated is is kind of integrated into all the major exchanges and payment gateways and one of the super impressive things about fireblocks and we've blurred out the numbers here to protect the confidentiality but you know this is a business that just like grew through the cycle like you almost can't see FTX on this chart like they just are they're printing you know they're they're growing their their user base they're onboarding large Banks and institutions they have very strong Network effects and I think fireblocks will end up being you know one of the most valuable uh

companies in in the space and you what we believe to be kind of a best-in-class enterprise software company um and then the the third and last example is is metamask so I think many of these wallets uh uh you know initially just monetized through kind of like transaction activity or swaps they took a cut of that volume um but one of the fascinating things with wallets is there's so many different ways to monetize you can monetize the Fiat on-ramps or off-ramps you can monetize and take a cut of staking rewards um you can create kind of social recovery features um you can put in place ways to mitigate kind of me

so the wallet is almost like the beach head and once you own that customer relationship there are ways to there there are lots of ways to add value to your customers over time but also you know take some you know take some cut of activity um from your user base by the way just something to note here um I think you know there's this clear distinction between a wallet that users are consuming directly like a metam mask a phantom Etc versus kind of like what fireblocks has done which is a wallet that's a service business this is very powerful because I still think there's a general question mark on whether 10 years down the road people are still going to be using like the

same wallet ux uh to interact with crypto I think tough tough tough to tough to say but what's indisputable is that you will always need the underlying cryptography to operate on the blockchain and um you have this really solid uh uh cryptography infrastructures like fireblocks that extend that cryptography via walet as a service for a number of integration so I think that you know when you're kind of really looking at the segment the long-term kind of like Compass the nordstar is how do you use what's a very complicated cryptographic technology and make it as seamless and as invisible as possible and you're seeing that with Robin Hood

you're seeing that with Bridge you're seeing with many fintechs that by the way are like the largest customers of fireblocks because they're going to fire blocks and they're saying I don't want my customers to even know what you know a transaction is but I'm ultimately dealing in crypto and I want you to provide that wallet as a service cryptography service and extend it to support my operations so I'm actually very excited to continue to see the ux evolution of wallets away from what we kind of know as wallets today into even more seamless things to the point where you'll be able to use something that's crypto without even knowing that it's crypto because the cryptograph the cry the cryptography operations are fully abstracted from you H how do you think

about uh if I had to maybe counter this it's that you know there's only a couple main wallets in the industry today it's probably uh Phantom which kind of dominated salana obviously backpack's doing well there too and then metamask and then there's you know a bunch of a couple other players but is really dominated by them but now you're seeing people kind of trying to verticalized the stack so you know coinbase launched their own wallet Unis swap launched their own wallet if you are a big project or application you want to own the wallet layer too so there's going to be Mass competition in this area how do you think about that from the Investor's lens Kevin you wanna um yeah like my sense is that there is very purpose-built apps that provide you know specific features but like if you are

like I I actually inevitably think that that's going to be more the case where like you have a a particular provider that wants to deliver a particular user experience that's supported by their own application I think the generalized wallets May kind of have to kind of fade away because um it it will become more people would want to go to um a ux that has a very specific application of what they're delivering and and and and and I go back to to fire blocks being a great example of that where Robin Hood for example uses fire blocks on the back end uh to deliver the user experience and you know you would ask yourself the question like is that a Robin Hood wallet and in many ways it is it is a

Robin Hood wallet that wants to deliver a particular experience same thing in the way that coinbase even though they run their own cryptography uh they're delivering a very particular experience to their uses based on that so I'm actually not surprised at all that this is the case and I expect it to continue to um um to kind of like you know that Trend to continue nice nice cool back to you guys yeah so let's talk about um you know one of the most uh interesting questions in the space where like we think Solana will reach parody with ethereum so we think yes we believe that for a prediction that Solana will reach parody with ethereum as measured by obviously activity oh my God Kevin

you're killing me with this one I'm I'm uh I'm get the slack message I'm getting blown up right now because people are saying blockworks is running a targeted Cutthroat campaign against ethereum funded by salana so you're not gonna help me out with this right now yeah well um look look I think I think some facts are maybe you know indisputable U you know let the market Market judh by themselves but you know sorry go ahead go go go ahead with your we believe that salana will reach parody with with ethereum uh measured by activity and market cap so and I'll tell you kind of why I think that so let's kind of first start with like let's kind of level set for a second uh on Christmas of 2022 after the FDX collapse uh and this is

what what I'm showing the leand side chart Solana's market cap bottom that 3.6 billion uh on that same day uh ethereum had 146 billion Market cups so that was around a 40x difference between uh the Solana's market cap and ethereum's market cap since then and by the way this was cut before this latest Rally post uh election um the that spread has gone from 40x to only 6X so massive outperformance uh from Solana as have been really a massive comeback market cap is a very easy thing to compare if we actually look at the other metric uh whether it's tvl yeah ethereum is still the the king of tvl it

has roughly 10 times the amount of tvl that Solana has and primarily because of like ethereum defy and staple coins which are predominantly still in ethereum but if you kind of go down the list you see that 30-day volume is roughly you know two-thirds uh compared to Solana and then you kind of go down you actually start to see the numbers the story change rapidly and you start to see Solana put this massive numbers so what to me kind of like what what what I what I what I kind of look at this at this data is I see two things one is that ethereum and Solana from like a pure kpi metrics perspective they're they're not Apples to Apples comparisons they're hard to compare because they are they're they're fundamentally different architectures uh so so like comparing you know daily act

aesis or number of transactions is not Apples to Apples but what you can tell is the the growth rate of the kpis so let's go to the next slide and um you know I I like to kind of say that like maybe like Solana is a blockchain with very high velocity of money you know fast transaction uh and high throughput whereas ethereum has really succeeded as like this lower throughput uh more uh liveliness type of blockchain that you know serves great for certain cases but what's become clear is that there's been an increasing preference for um for Less statefulness in some cases and higher throughput and higher velocity uh for for many uh financial and blockchain

applications so let's look at this so the the uh you know I mentioned in the prior slide I mentioned that the uh 30-day trailing Dex volume was about 2/3 but for the first time ever uh earlier this summer the uh Solana so Solana managed to actually eclipse the volume the Dex volume of ethereum for the first time ever so uh um you know the other things that you're seeing is Solana e trading volum this is actually one of my favorite my favorite charts I'm talking about the amount of volume that the native token so or eth trades um relatively eth has an ETF already um and despite having an ETF and by the way

just to contextualize like the ETF creates underlying trading activity and the under the native token e salana doesn't have an ETF and what I find amazing is that on a year-to day basis Soul has is only uh one quarter behind uh e volume so it's done a quarter of the volume with E that that e has done on on crypto exchanges without having an ETF so in many ways like what this is really signifying is the amount of of of demand both from retail and institution that there is behind uh Solana trading and so appetite and you know like if you kind of look across the rest of these charts whether it's monthly transactions

or stable Point volume e still has higher absolute numbers but the rate of growth of Solana across the kis is increasing it's a higher derivative than uh than than than ethereum so um and and and the kind if you ask yourself your question like why is that the case why have we seen a major shift from eth as the main chain to Solana as a main chain and if you look at the next slide really I think is you have to zoom out and ask yourself Solana has really emerged at this more pragmatic uh Builder Centric blockchain versus ethereum has been more you can

argue like more focus on infrastructure and academic research but it's really about this Trends which is Solana is positioning itself to write this major secular and macro Trends whether it's AI whether it's Moville uh arvr Financial Services like for example like they launch you know some people think it's like you know a market employ some people think that there's actually LS to this but I actually think it's really interesting that Solana has been one of the few blockchains that's had a mobile mobile strategy like they've launched the uh Solana Saga phone uh which sold out less than a year uh it launched Seeker earlier this year which has 150 plus 150,000 plus reservations and you

when you think about how the barriers to enter to interact with crypto directly having uh mobile Centric uh uh uh interfaces that allow allow you to interact with these blockchains is a major breakthrough so in my my in my in my in my in my view is Solana is deferring it defer Shing itself as a uh community that can ship products that can address real use cases across big secular Trends and I obviously don't have time to go into every single uh reason but there is very few uh inherent foundational and Architectural differences why Solana cannot deliver the same type of services and applications that ethereum uh delivers

and the fact that there is this four four to 5x spread in market cap just doesn't seem doesn't seem right um so we expect that that uh spread to continue to to to converge to one another whether it's you know salana going up at a faster rate than ethereum or ethereum kind of coming down to meet salana somewhere along the way Jason hopefully we're not getting you in in trouble now that it's uh you know you know maybe it's Pari is running a targeted campaign funded by salana to no this is great guys this is great I know uh you know obviously Santi you guys were used to work with Santi and I I know uh if you were on here he would be uh falling out of his seat for this so no this is great okay so let's go to

prediction number nine so our prediction number nine is I'll just read it and we can talk about it so 98% of digital 98% plus of digital assets uh will underperform Bitcoin uh less than 2% will outperform but the ones that do will outperform Bitcoin very meaningfully and so you may kind of like look at this prediction or hear this prediction uh and think that you know we're bearish or we're Bitcoin maximalists um you know we're not um basically you know our view is that there's massive return dispersion in crypto and we think that you know this is an alpar Rich asset class so if you

can dig through the data and find the 2% of winners there is uh you know meaningful Alpha that can get created and this is just a function of the power laws in crypto being more extreme than traditional Venture so you have fewer winners but those winners are much much larger in terms of order of magnitude and this is a fun of the fact that it's trivially easy to launch a network or launch a token um you know at some I think most days there are like thousands of meme coins that that are created um and most of them are spammy and go to zero but it's actually not too dissimilar in you know with utility tokens at the application layer infrastructure layer um so we think that

you know that's it's a function of that and then the second thing is the majority of alt coins are just very poorly designed from an incentive standpoint um and most human capital in the space is just not set up to sit and work on one project for a decade plus um once like a four-year vesting schedule is over or by the time it's towards the end you know they're launching their next project because it's more EV to just keep on launching things rather than stick with one thing for a prolonged period of time um if you look at all of capitalism in web 2 the biggest companies in the world Apple meta Amazon these are companies that were built over decades and where

you had investors and Founders that partnered in private markets with a long-term view where there was no liquidity in sight until you know you went public and so for us um you know it it it very much like is a matter of incentives as being like one of the most critical problems in the altcoin space and here we have a quote from you know office space um where um you know Peter Gibbons was like asked to come into the office over the weekend to do his TPS reports if anyone hasn't seen office space please please watch it it's you know probably top top 10 movie of all time in in my opinion um but it's this is really like a classic kind of show me

the incentives and I'll show you the outcome problem because in this space you know there are no like W2s or performance reviews or this isn't block works like a like a very well high functioning run Media company with employees and promotions and uh this is like the wild west from a human capital standpoint and so you know on top of that you don't have Boards of directors and you have companies that go public you know kind of quote unquote go public much earlier than they actually have users or fine product Market fit um so imagine if you know the restaurant on your corner the mom and popop restaurant like had a stock that traded 247 well that's that's what most of of the tokens

that that are listed are like today um so we did a little bit of data crunching at parfi to tease out this kind of concept or hypothesis and we looked at um we went back to coin gecko um on January 1 of each of the last four years and we looked at that top 100 token cohort on January 1st of of that year and we stripped out things like stable coins or staked eth like we focused on actual tokens that that move um and what we found was that um each of these in each of the last four years Bitcoin has outperformed the median uh top 100 altcoin uh in each of the last four

years ethereum or sorry in um three of the last four years um excuse me ethereum has outperformed the median top 100 altcoin in all four of the last four years but there's a important butt here the top 10 median altcoin so like kind of the fifth best performing altcoin outperform Bitcoin and ethereum every single year so this is just another way of saying there is Alpha in this market but Bitcoin and ethereum will still outperform or have historically outperformed the the vast majority of tokens and again past performance in you know these these historical performances of tokens is not reflective doesn't

imply future performance or guarantee it but this is what we've observed empirically kind of looking backwards and you know here's another um illustration of that same data set but um actually kind of stretching the data out further and examining these cohorts over very over much kind of longer periods of time um the other kind of uh problem and I think bell curve and Empire and blockworks has done a great job kind of digging into this is this the idea of low float High fdv tokens um and it's been a problem one could argue it's a problem or maybe it's not a problem but there what's undeniable is

most tokens launch most Venture back tokens launch which are very small percentage of their tokens in the float and once investor Cliffs happen and and team Cliffs the the market gets flooded with Supply and so as we like kind of look at this data what we've spread here is um these five projects have raised um and we've kind of picked these you know out of a cohort there's nothing special about them in particular but they raised a billion dollars of venture capital they've anywhere between four and 26% of their token Supply in the float so very low percentage just these five projects alone have 7 billion dollars of unlocks

coming in the next year um and I would argue that most of these projects don't have what would be described as kind of strong product Market fit maybe there's an exception on the page or two um and not withstanding that you know the founders and of all these projects are kind of like billionaires on paper so I think there's like this weird incentive in in this industry to kind of have a high token price and it doesn't it's unclear if that's the way we kind of really grow grow as an industry um this unlock problem kind of goes out as far as the IE can see um here we charted out um you know roughly 70 tokens their

unlock schedule in the coming month in the coming quarters and what you can see here is you know there's roughly between two and a half and five billion dollars of unlocks um of these of of VCB tokens every quarter um the the other issue here is whenever altcoin markets rally the teams that have not yet had a tge moved to tge because they look at their comps in the public market and say oh we can you know we should capitalize on this this is no different than what happens in late stage Venture and public Equity markets so whenever there is an altcoin rally there's like a new a new launch or new launches and that further adds to this maturity wall of of tokens

and so this is you know this is supply and demand and also this is why C ly you know the big question is who is BU who will buy these unlocks in a world where most institutions are entering the space through like one of these spot ETFs or or through uh um a crypto fund as an LP um retail has kind of been somewhat absent this cycle um and so really it comes out to who is going to absorb these tokens and that's why I think you know protocols and applications themselves will become like the natural and arguably most important buyer of their own token very similar to what we've seen with you know um like maker

is as an example um with their token BuyBacks so this is a problem uh may may not be a problem depending on how you look at it but it's just also kind of like cold hard facts and and data um should we go on to number 10 yeah let's go to the last one okay so if you're still with us thank you um we're on number 10 we'll kind of close it out um this has been a marathon so um you know we think about uh blockchains at parfi kind of very similar to countries um there are these kind of like self-contained kind of sovereign

entities with value flowing between different constituencies and you have different businesses that are built within the on these blockchains and so we've kind of thought thought about this idea of like kind of spent a lot of time thinking about and and and trying to calculate this idea of blockchain GDP um to understand kind of the economic output of different blockchains and you know our prediction here for prediction number 10 is that blockchain GDP will grow to one trillion which is approximately uh 1% of global uh GDP and so kind of let me just take a step back back and and describe kind of how we get there and I'll be referencing kind of

the slides that we have we've sharing shared here so if you think about GDP uh in the traditional kind of macroeconomy in real life it's a function of a few things it's consumer spending investment government spending and then net exports like what you what you export as a country net of what you import and that is generally how GDP is defined um so how should GDP kind of be defined in the context um of a blockchain well the way we think about it is there are two buckets there's onchain GDP and then there's offchain GDP so what is onchain GDP it's this idea of um there are kind of two fun sources of onchain GDP there's what

takes place at the protocol layer so things like gas costs meev transaction fees and tips and then there's what happened at the application layer so these are smart contracts or applications that are acing value um then there's offchain GDP and that's value that doesn't flow onchain but is indirectly generated through an onchain product so you can think about something like tether uh which is generating profits offchain due to some onchain activity so that's our framework but I want to kind of we wanted to attempt to quantify what that looks like today um for ethereum in particular so here's a here's a um I'll kind of skip over this slide but here's

kind of where we see um ethereum protocol GDP so we looked at kind of gas costs so eth burned over the last 30 days um transaction fees and tips so these are like block rewards paid to validators on the network um uh uh block Builder payments made to validators as well as consensus rewards and kind of get to 3.3 billion of kind of protocol GDP then at the application layer we looked at some of the largest um earning applications whether it's you know Lio or a or um Unis Swap and we aggregated the uh the revenue of

those protocol of those applications and then looked at things like imports and exports so the idea of like an import is certain blockchains have to import labor and services from the offchain world like if you think about a subd on maker Dow that's a great example of that um and then there are things like exports which is like Layer Two sequenc or revenue or or other things that would fit that category so as we kind of blend those together we think the we think that ethereum's onchain GDP and again these are rough numbers that we've estimated and we would welcome feedback on our framework uh we estimate ethereum GDP on a kind of a run rate basis on chain is roughly 5 billion about 65% or 2third of that is

on one CH is um is at the protocol layer and about uh the the remaining onethird is at the application layer um if we think about offchain GDP it's very difficult to quantify um I mentioned you know tether Circle as examples of of offchain GDP um you could also consider kind of coinbase trading fees um or revenue generated by fire blocks is also kind of fitting this category um it's very again very difficult to quantify I think arguably maybe even larger than onchain GDP today so that's our framework for GDP and I think that you know in some ways like kind of just

stepping back for a second um you know I think as an industry kind of coalescing around a metric like this as like a North star is pretty interesting and and and maybe something worthwhile because I think what this metric measures is um the usefulness of blockchains like if people are building like useful pragmatic applications on chain where people are paying to use block space this number will be higher and if we can kind of like measure the growth over time and see that you know the GDP of different blockchains is growing I think that's a signal that like we're doing something right as as an industry um so

and I know blockworks has like like a a very similar metric to this I think total economic value or Jason what yeah exactly yeah TV yeah TV TVV so like I I think that you know and and yeah so I think like and maybe what it's like very similarly kind of constructed we're think about it very yeah similarly yeah so um so yeah like that I I think and I uh so yeah I mean that's like kind of the prediction that we have is like look if ethereum's at 5 billion today and maybe we add up all the other blockchains maybe generously we're at 10 billion to get to trillion that would be 100x growth um so I think that's a you know that's a good goal for the industry hopefully we're like you know well well in excess of that yeah one interesting

uh you know scenario that that we've seen in the past this this year actually was with Unis Swap and uni chain so Unis swap was uh the top the top the top number one or the top number two uh gas consumer uh in in ethereum L1 for the past several years now Now with uh unit chain that's moving to an ethereum L2 so then and then and by the way like all that me all those gas fees we're going to validators like Pari Technologies for example and and other ethereum validators that were capturing that that um that that Revenue now the question is when you move something from L1 that is high you know Revenue generating to an L2 to like what we kind of Demas like

this gray area of like offchain sequencers potentially um or other offchain world it's like does does does is the GDP kind actually being um eliminated is it being destroyed or is it just simply being transferred into another form of GDP and this is actually a really interesting question that exists that's very unique to crypto because very very nuanced business decisions and Architectural decisions can make the difference between even if the the even if the function is exactly the same the usare experience is the same a minor decision of whether you're running on an L1 or l to of your whether you have an offchain sequence or not could actually drive orders of magnitude of GDP difference uh to to our metrics

because of how it's being Quantified so um I think we're in the very early Innings of of of of this of this uh you know GDP definition and how it actually is gonna continue to evolve but um you know I ask myself that question is like where all the fees that were generated by uh Unis Swap and L1 now that they're in now in a in a unit unit unit chain L2 who's really going to be the Ben iici of that how how is that value consumer surplus being transferred from an L1 to an L2 amongst the cohort of of um us of participants from Traders validators liquidity providers and Unis swap you know holders as well yeah yeah it's like I I wonder if like L

like eth L1 and l2s could be thought of as like you know like NAFTA like is it like the US Canada Mexico or is like is it like the Federal government and the states or is it you know us and like Puerto Rico like a protectorate like is it you know it it is a it is an interesting I mean it is an interesting question that that Kevin has posed yeah um guys one of the longest Empire apps we've we' we've ever recorded there's still one question I have that was not covered in these 10 predictions be very curious to get your takes on uh you've got honorable will you actually rip through these honorable mentions just one line for each just quickly we we've

gone through 10 predictions but we actually have you know many more and we we wanted to kind of quickly go through some honorable mentions we have 10 others so Kevin and I will just read them we're not going to like talk about them uh but we'll just kind of like read them For Your Entertainment um okay so prediction number 11 ZK Tech will transform privacy and scalability across the blockchain space but most of the existing Venture funded teams won't cross the chasm prediction 12 the Bitcoin mining to AI high performance Computing data center conversion story is really just in the first inning prediction number 13 20% of governments globally will own Bitcoin by

the end of this decade um prediction uh number 14 10% of countries will have adopted cbdcs at scale prediction number 15 permission defi permissioned defi activity will exceed permissionless defi activity by 10x H prediction number 16 crypto collateralized lending will come back to 10x the size of the 2021 cycle prediction number 17 onchain messaging will begin to disrupt email Telegram and what'sapp prediction 18 is one of my favorite

uh Bitcoin mining will drive the next major wave of renewable energy adoption I like that one prediction number 19 the ethereum 0x00 address will be exploited within our lifetime what does that mean Ben so this is like the burn address on ethereum that people like send oh my God that would be insane yeah like there's tens of millions of dollars billions of dollars of more than that yeah yeah tokens in that in a single address just sitting in there and you only have two to the 256 probability of getting that just in the same way that you get any other address so I think it's a very bad um architectural decision that many tokens aded never thought about that that's

interesting and then the last one wait why is that a bad that's almost like a it's a it's because they should really be implementing a token burn so like the actual token is fully removed I know but isn't this kind of like a fun Lottery system it's like uh the token supplies of all these Burns would all of a sudden get like massive it like a massive basement event it would increase the genie coefficient of the space because one person would get like a massive amount of money I know but that would be so fun and so entertaining guys that's what you're not you're not thinking about the entertainment value Kevin you have the media you have like I think there like I haven't looked in a little bit but like maker Dow used to like burn its maker tokens to that

address versus like fully removing it yeah no I know it would yeah it would just like it would be highly entertaining for if you don't have skin in the game but like highly chaotic and uh you know disastrous for those that like actually have to figure out what to do with these things okay so what's the what's the last one here and then the last one uh is that at least one major war will be fought over Bitcoin strategic National reserves can you tell me more about okay so 20 at least one major war will be fought over Bitcoin strategic National reserves and then uh 20% of governments globally will own BTC I think the most you know we're recording this November

15th and it won't go out for another like probably 10 days I think so you know we'll see what happens in the next 10 days with a the Strategic Bitcoin Reserve but you know I think one thing that is I think the most important poly Market actually right now is the 32% chance that we create a strategic Bitcoin Reserve like that is the single most I think this actually jumped since since you last looked at it I think it's close to 50 now but yeah uh I think it came it jumped to 50 and then came back down fny enough um but yeah I'm just I mean I'd love to hear your guys's maybe just expand on that because that that's kind of one combined prediction there I would argue like maybe just expand on that well I'll like just talk about yeah I mean Kevin could talk about the the

major war part or or the other part we just we can skip the war but maybe just like tell me your thesis around governments owning Bitcoin for me it's like look there are there are 195 countries globally So 20% of that is like for 40 uh is so you know today I would say they're probably you know you have um El Salvador uh you have Bhutan you have uh you know like German I mean Germany and the US government and some governments own Bitcoin but not by having bought it I think this prediction if we're kind of like refining it a bit more is like we think governments will like proactively own it or want to own it slh hold it um and I think in my mind

there's a lot of game theory at hand here uh if the US adopts a Bitcoin n a strategic National reserve the game theory is that other countries will by definition like kind of almost like need to follow and you know there is a big advantage to being a first mover in that process versus like being like the last country globally to adopt and so this is why like the I think the world can change very quickly in a very short period time with that kind of like a paradigm shifting decision where you know uh where basically people have to be fast followers with the us but let's say the let's say the US doesn't buy

right if we start getting smaller countries defecting from the dollar choosing to hold even uh you know a low single digit or mid single digit percentage of their reserves in Bitcoin um that starts to compound and create like this waterfall effect um so yeah I I think that it's inevitable and and actually sorry last thing I'll say is I don't think we end up at 20% it's almost like either it's like 5% or 100% it's not going to be in like the middle it's either gonna I I think it's more of like an All or Nothing kind of concept but by the way and there's Game Theory as as you're buying but also the the flip side of that game theory is that if

you're a country and you and you want to build a strategic Reserve you should actually tell no one that you're doing that uh you want to be quiet and hush behind the scenes because as soon as it becomes known that a major country is building a strategic trip in many ways I think it it kind of puts us back to like the Space Race there an arms race to other countries building that and you're ultimately fighting and and being outcompeted in price so you actually want to keep keep keep kind of like a relatively low profile in that sense but to to the point of like like Kevin you want to hear on that point I so I went on Fox yesterday to get they asked me to come on Fox Business to talk about the Strategic Bitcoin reserve and uh the producer was talking to me behind the

scenes before going on he's like what's the what's the most interesting thing in the markets right now I said there is nation state game theory playing out this is Game Theory it's a highest levels of asset allocation the US is being front run on a Bitcoin strategy because we've essentially telegraphed to the world that we intend to buy this asset that's in scarce Supply but right now we don't have the concrete ability to do so so the dynamic in the market is that if you're a known if you're a large holder you're seeing bids from these even larger holders or even larger non-holders who are anticipating what's coming and they're basically trying to grab the exposure before you do it's a super interesting like situation happening in the markets absolutely and and by the way just on on on prediction number 20 on like we we believe that at

least one major war will be fought over bitcoin's naal strategic reserves if you if you kind of just look at history and you ask yourself what are the things that nation states and countries fight about it's uh well in in the modern day now it's uh chips right like there's this big political tension between China Taiwan and the US and like where our chip production comes from and the chips act that was enacted by the Biden Administration to bring us manufacturing of chips into the US and well well that chips and compute are a massive a key component of Bitcoin um the second thing energy uh energy is something that has been you know oil in the past has been globally fought over many many many many

wars and what what is what is crypto particularly uh uh good at or depend on energy energy infrastructure energy sources and then the last thing is what what is bitcoin Bitcoin is money it's a financial asset it's a reserve asset so you combine these three massive geopolitical forces uh compute chip production uh energy uh infrastructure and uh a financial uh asset that's nons Sovereign and you have like the the the the the the perfect combination the fusion of every single kind of uh uh scenario to create uh what what what I actually think is it's it's a

potentially uh a war like uh geopolitical incentive to control those assets because if you control those assets you're in many ways by definition a prosperous Nation so I think we're in the very very uh early stages of nation states waking up and realizing that that they have to own they have to be energy self-sufficient they have to be energy independent they have to have chip manufacturing completely in Independence from China and Taiwan and that you ultimately want to be um uh somewhat decoupled from uh kind of like Global currencies that dominate uh trade and global trade and you're seeing that with bricks already with like you know Asia China Russia Iran launching their the

kind of decoupling from from from uh from the dollar and and I think the other asset that's going to play a role there is going to be the dollar some brick currency and you're going to see uh Bitcoin uh uh uh up there so I love I love I could not agree more with you guys I I love this I mean it's just a commodity that the world is going to want and like it's actually tied in with your um with the power grid one and uh like Bitcoin like our power grid is so screwed right now um and I think so anyways we're at two hours I'm gonna cut it off um uh this is great Kevin Ben thank you guys I know you're doing a similar type of conversation at the digital asset Summit Ben and Kevin will both be there it's March 18th to 20th so

you guys should get your tickets that's my marketing plug to make the the marketing team happy so uh Ben Kevin thank you guys so much I appreciate the time thank you Jason thanks Jason hey everyone thanks for watching today's episode just wanted to quickly thank today's title sponsor scale scale really is one of the best chain experiences out there today and I've used so many different chains there's a reason they are gaining so much adoption in both gaming and AI use cases hit the link in the show notes to explore the scale ecosystem [Music]