The Rollup TV: Hyperliquid USDH Special Day 2

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[Applause] [Music] We're live. >> Yo, dude. Hyperlid alltime high, baby. Let's [ __ ] go. We got CL207 cat on Twitter, dude. So, he puts out this tweet and this is what we were talking about yesterday, right guys? Welcome back to World TV. Yesterday, we did a whole Hyperlid stream. I'm Andy. It's Rob here. And we were talking about how this

community aspect, Rob, has just completely shifted from like these and I tweeted that it's these institutions lobbying to hype whales who are a bunch of terminally online DeFi gigachads. And here we have CL 207 saying, "Hi, Hyperscan has one or 1.3 billion dollars of the voting powder. Can you explain in simple cap terms so I know what you're trying to meow on a quote tweet of the CEO of Van who's like 60 years old and like it's probably like a decade millionaire and has like a 12 figure business and then Moon Overlord responds in the first comment and goes I don't like his attitude thumbs down just like what is the state of things Rob

>> can you explain the state of things like a cat in cat terms please >> I cannot unfortunately but that's I I am not a trillionaire. >> I mean I I think not look CL 207 is one of a kind. >> Yeah. >> Not not every uh double digit percent of supply hyperlquid validator is going to uh going to ask for an explanation in cat terms. Uh CL is is special. But >> yeah, >> I think like we were talking about yesterday, it's indicative of the cultural footprint of Hyperlid. And if they're rejecting Vanek, who obviously is one of the most experienced, not the most cryptonative,

but they have so much stature and legitimacy in the traditional financial world, at a certain point, they're going to choose one or the other. They're going to choose the traditional corporate experienced and reputable entity or they're going to choose a fly by night crypto native company that may not be registered in any jurisdiction but they certainly have a digital identity. And so you're dude Cat doesn't even have a freaking Cat doesn't even live in any place. He uses his friends credit cards to live in hotels. He has no He has zero footprint in the in the world and he just bought a tank and he's giving he give it to some girl.

>> Did they let him buy the tank? >> I don't know how, dude. It's crazy. Anyway, let's get the TLDDR, Rob. I mean, who's in the lead? We had Athena come out today as well as Sky uh yesterday, I believe. Today, we have Vance from Framework coming on immediately. Uh he will be the first guest. That's going to be awesome. Then we'll have uh Run, the CEO of Sky Ecosystem. Uh Rune is is is a a great smart fella. Um and then we'll have uh the USDTO uh lad Lorenzo. Um and he will be on to talk about his view as a validator. Um,

and yeah, I mean, we have a lot of we have we we have a lot of of interesting Hyperlid uh commentary coming to you for day two of this special rout. So, um, yeah, that's the latest. Athena came in and Sky came in and Paxos is updating their proposal as we speak. I'm not sure if it's been updated yet. There is a Poly market out that says Paxos, I believe, is at 90% right now. No, this is not Paxos is at uh 3%. It's at 97% against and this poly market actually looks way out of proportion >> really >> based on my eyes. Yeah, I mean look, I did say that I thought Agora was falling

behind yesterday. They're at less than 1%. There's not a ton of volume here, but there's enough to go off of something. I also think it's worthwhile pointing out that the person who has the most uh bet so far and has commented uh has a username of Jeff's scrotum. >> I have to imagine that is alluding to Jeff the founder of Hyperlid. Um and right now it has native markets in the lead at 57%, Athena at 39%. Sky, which is just listed in the last few hours, uh, or maybe actually last night, is only at 2%. And Paxos is at 3%, Fraction, and Agora less than 1%.

>> This seems way out of the whack. >> Well, is Native Markets winning? Is that the case? >> Yep. With 64% so far. >> But are you saying it's against or it's four? >> Four. >> So, Native Markets is the real winner. So, we're going to try to get Max on. Uh, he's been hard to coordinate with, but we had a a a tentative time. Well, look, we got Vance in the back. Why don't we uh go ahead and bring up Vance. Um, it'll be a great great conversation and uh just kind of lean into his idea for what he sees the future of the Hyperlquid Stablecoin ecosystem being um which is he's he's obviously on team Sky today as they've put out a new proposal.

Uh let's talk all things hyperl welcome to the show, man. >> Good morning, guys. What's going on, >> dude? >> Morning. Morning. >> Public going on. Yeah, >> all the stable coins. >> I mean, we had that layer zero wormhole thing a couple weeks ago, which kind of like was like, okay, Dow governance is coming back a bit, but now it's like, all right, we've got some of the largest DeFi protocols and institutions in the space bidding for bidding for a ticker in public. I mean, it gives you something to live for. >> I know. Gives you a reason to get up in the morning. It's uh I mean it's great to see everyone putting their proposals forward. I think um no matter what Hyperlid has already won and kind of whatever happens, Sky is going to be

building there and just the opportunity set has really been revealed to be massive. Like there's five or six billion dollars of USDC in the bridge and um I think for a lot of startups this is kind of a makeorb breakak moment. Like they either kind of get the five or six billion or they don't. But there's a variety of other players that you know I thought the um the native markets proposal was really good and like you know that's kind of an option if you really want to be native and I think you know the framework for thinking about these things is you probably want someone that's either really aligned and native like native markets or you want the best absolute deal which we think is is sky obviously um but there's all this detail and stuff that's getting lost in the middle in terms of you know even things like okay

Why should the stable coin be genius compliant? Are we sure we want to put all the the eggs of the hyperlquid basket, you know, right there at this moment? Um, and even for people who, you know, like like I'm I'm not going to disparrage the other contestants as I tweeted, but people that are just so small where it's like, look, if your stable coin has less uh volume than Mudang, like it can't really be a serious proposal. and and like if they're to win this, I think, you know, Hyperlid should get their tokens or whatever upside they're they're here to offer, but there's a lot to consider.

>> Yeah. So, so Vance, maybe just taking a quick step back as the uh current work that you guys have done in the Hyperlid ecosystem or just broadly your investment and interest. Obviously, this is like one of those no VC this is like the epitome of the anti-VC movement that we've seen, right? and not going to single you out here but uh that's kind of the whole community vibe of hype. Uh obviously you know you're then forced to buy on open market participate either in the EVM in investing in some of the early stage companies or just being a large hype holder generally like what is framework's involvement right now in the hyperlid ecosystem how do you think about the project and then yeah I mean I'm sure we'll get into some of the

nitty-gritty here. I think it's also important just to just to say like what what is the the relationship with Sky because that is that is another uh angle in which you you guys are approaching this. >> Yeah, maybe maybe do Hyperlid first. So um we have a lot of Hyperlid as framework. Um not going to really get into like specific dollar values but um I think at one point you know we checked and we're like top 20 so we have a lot. Um we've also incubated one of the top market makers on Hyperlid. So, you know, our our our interests are represented in multiple different ways across Hyperlid through owning the token, through being one of uh the people who've incubated one of the largest traders on Hyperlid.

Um, and so I would think that is kind of our involvement and and I would also say our cost basis for the Hyperlid is not $50 like a lot of people who've just been buying over the past couple weeks. Like we've been on this for a while. Um, we've also got prominent team members like Rajie who are contributors to the open source hyperlquid ecosystem and we're proud of that. Um, so I think that is kind of our current involvement and I think going forward with things like HIP 3, you know, we do have enough hype to create our own markets. uh and we have the ability to not just be a venture capitalist but also use our arms and legs of our relationships network the the market maker that we incubated to actually um really drive home a lot of

change and a lot of progress for the ecosystem. So I think that's like the first thing. Um and I I think a lot of the proposals that have come you know more recently in terms of like expressions of goodwill or intent um you know we've done we did the spaces today but like I don't think having uh like letters of reference written on Twitter for the first time in terms of like here's who we are and all that stuff like it kind of seems too late for that in some degree. >> So that that's all I'll say about that. And then in terms of Sky, um I think you know Rune and us are are kind of the largest holders of Sky. We're extremely active in the ecosystem and people forget but Sky does almost 300 million of profits per year. Uh it has about $8

billion balance sheet. We are the largest uh LP in a lot or most lending protocols within DeFi. And so we have a significant significant amount of weight that we can throw around. Um, and all of that can be brought to bear for Hyperlid and and like if the USDH ticker, you know, whatever happens there, I don't think it's make or break for Sky in terms of us being interested in this ecosystem. We're going to come regardless, but that $8 billion is something that we can wield that not many people can. >> Yeah. Yeah. And just one last kind of broad one because I I think we can make this really fun is what is your take on the growth of USDH and the like Hyperlid's general move into stable coins? I've seen, you know, I've seen

tweets floating around recently saying that there's only a couple good business models in crypto. There's trading, there's stable coins, there's well, exchanges, kind of like all three in one here. Um, you know, what's your what's your take on why these stable coin teams are really trying to win this and and um you know, just generally this direction for Hyperlid like what's the growth opportunity here? What's the 10x? >> Yeah. So maybe just to dig into why derivatives are such good uh kind of syncs for stable coins. Like there's very few places that people naturally hold stable coins. A centralized exchange is one of them, but a derivatives platform where you can margin with that coin is is generally the best. And there's no surprise that the largest centralized exchanges have

the largest pools of stable coins. This is the first time where we've ever seen that kind of be flipped on its head where a derivatives exchange that works on chain is a natural sync for stable coins, but it's also a place where you can use those stable coins to be composable, generate yield, and do different things that are creative to the business model. And you know, if done right, you're adding another 200 $300 million of buybacks or yields or whatever you want to call it to the assistance fund. And so it's it's it's not just an afterthought. This is kind of one of the two really proven out business models within crypto. Um, and so, you know, that's kind of I think the the current opportunity. And, you know, if it's five billion today and it can double its open interest, I would think that the stable coin growth would

roughly track that. So, you're probably looking at anywhere from 10 to 20 billion, uh, which at those levels is 500 million to a billion dollars of buybacks. And so, like, if you're thinking about Hyperlid as like a $500 coin, you kind of do need that other engine to be firing. And you know, if you really think about it, um I totally get the genius compliance stuff and like that's great and there's three years for everyone to comply and there's a variety of different jurisdictions throughout the world. Um as interest rates go to zero, which you know, sure as you are sitting there, they will go down. Uh that opportunity also disintegrates if you are, you know, an only genius compliant stable coin. And I think Kyper Liquid should want much more than that for the stable coin that they're working with. Um so that's kind of the

opportunity. Um and yeah, you know, I I think over the long long term, this the stable coin opportunity on Hyperl will be multifaceted. It will be multi-ticker. There will be a HIP 3 component. There will be a a variety of spot quota assets that people can use and they'll all have their own value prop. So like I get why this is so interesting and it is awesome to see the community representation here. Um but getting the ticker is like the first inning of the first, you know, it's so early. Um, it's great to see, but you know, there's going to be more to come from this.

>> At the very least, it's been an incredible marketing campaign, the best since John win put a trade on Hyperlid. >> Yeah. >> Um, >> one thing that I think is important is call out the unique value propositions of each of these proposals. This is what we've been trying to do the last stream. We had uh Nick from Agora, we had Sam from Fracks, um, and we also had Bo from Paxos. And so one thing that stuck out and it seems like you know the 100% or 95% plus of buybacks and revenue to the to the hyperlquid ecosystem is essentially table stakes at this point. I noticed in Skye's proposal there was 4.85% where most other companies are are offering 4% which is just basic T bills some advanced risk management that can get some additional yield and

potentially more. But what what really stuck out that looked unique was that Sky can provide 25 million in capital to create an independent hyperlquid star. I'm not entirely sure what a star is. Maybe you could help unpack what that is on Sky and how that could benefit the Hyperlid ecosystem beyond what some of these other proposals are offering. >> Yeah. So, um, look, the the math on Skye's proposal uh is about 112% revshare. And like the whole idea of like I'll give you 95%. You you are earning money from the stable coins that you are being given. I don't think that really should be kind of the goal here.

Nor should the goal be strictly sofur. Like if you want sofur, there's a bunch of protocols and go put these coins and tea bills for you and hold them at State Street. That's basically kind of what I see from the other proposals. And so like what Sky is proposing specifically is um something that as Sofur goes down will not just track it but beat it. And the reason that it's able to do that is a variety of things. Number one, it has a way of allocating capital through stars and and we'll get to what the hyperlquid star means where um Sky is generating yield from T bills. It's generating yield from the Athena basis trade. It's generating yield from uh Cedar USDC. It's generating yield from AAA Janice Henderson CLLO ETFs. um the diversification of risk collateral and

the ability to beat sofur should be table stakes not just 100% sofur. And then I think kind of the next point on the star is kind of um like you know if we weren't going to vote for sky we'd probably vote for for native markets for this reason which is um the stars of sky and you know I know for people who are just learning this terminology could be a little corny but bear with me. Um, there's a star called Spark and if you want to check it out, it's data.spark.fi. Spark manages about $3.6 billion of the $8 billion balance sheet of Sky and they make about $110 million a year of run rate profits. And that is directly cycled back into the ecosystem, which generates more yields and more risk capital. And so really like if if

Hyperlid is looking for a DeFi partner that can inject serious amounts of capital, risk capital and earn yield on that, that is what the Hyperlid Star would be. And so it that Hyperlquid Star would also have its own token which we would be farmed out to Hyperlquid users which would give it some of that nativity and community upside that the native markets proposal has. And um yeah, I mean you know the the hope is that we can cover all all bases here and if we don't win USDH again, we're still coming. Um, but this is what Sky has to offer in terms of not just, you know, Sofur Plus, but also real tokens that are uh in the community that are going to have tremendous upside.

>> Got it. Um, you mentioned earlier that you guys are about somewhere somewhere in the top 20 in terms of holders. Are you guys also staking and and running validators and therefore going to be voting on this proposal? And if so, how does your voting like earlier before you came on, we were talking about CL 207 who said publicly he controlled about 15% of the voting power and he's like he like >> hypers scan does yeah >> hyperscan exactly and and he would like you know uh Vanax proposal uh given to him as a cat but you guys you know >> a direct quote tweet of Jan Vanek the CEO of Vanek a d absolutely ratio too >> we're not we're not going to explain things to you as a cat but I'm curious like how much voting power do you guys control if if that's publicly available

and uh and yeah, I mean where where do you see the other validators? I'm sure you you have a general understanding of the landscape. How do you see these things shaking out? >> Um so I don't think we've disclosed how much hype we own. It's significant. Um and the validator list, I've seen it. uh I I can't you know mentally calculate what's been uh you know delegated to them but it seems like a lot of hype and we would be a minority of that uh you know in the scenario where we are delegating to that you know validator set um so I don't think you know we have enough hype to sway the proposal on our own and and that is not really our goal anyways um and and sorry the the question was you know how are we going

to vote >> well I think you've made it clear how you're going to vote I was curious how you guys um were positioned if you were running validators yourself and if you had a a hype position that was significant enough to to make us you know a material impact on the vote. >> Uh we we have enough hype to create a hip 3 market you know minimum which is you know some sort of guidance for you guys. Um and in terms of you know us whipping the vote our our process is look like we just want to explain our proposal and I think we have put the best economic terms on the table. are different than everyone else's, but it's a I think no matter what you think of it, it's an interesting proposal. Um, and so the hope is that, you know, it's not just kind of like we offer $25

million and someone offers 26 or like, you know, that type of thing. I think the best thing for the Hyperlid community would be to consider the proposals on different dimensions and decide what what they want. Do they want the most interesting, you know, max value in terms of like they think Hyperliquid's going to go to $500, but they need that stable coin engine to get them there? It's probably Sky. Do they think that Max V and native markets are really really bullish and interesting uh and can kind of provide that next huge community airdrop? Probably go with them. Um but you know, disparaging people, trying to fund people, that that's kind of not our strategy here. Um and again, whatever happens, like we're coming.

>> Yeah. So, I' I'd like to ask you about some of the uh stuff that's in the Athena proposal, just to get your uh perspective from the Hyperlquid community perspective, less so the I want to uh you know, kind of see sky win perspective, which is, you know, how how valuable do you think uh Athena committing anywhere between 75 to $150 million in incentives for HIPP3 frontends as well as uh you know, launching this USDH being backed by USDTB uh being like how how important are those two specific things to the hyperl uh community? Uh you know, should we value that more than other other parts

of their proposal? Um yeah. >> Um yeah, not to beat a dead horse here, but I don't um I I think the Athena proposal is is top, you know, four or five. Um, I would say the the best ones are kind of Sky, Athena, Native Markets. Um, I think Paxos, you know, has managed a large one. Like those are kind of like the ones that are are kind of table stakes. Um, Agora as well. Um, just because of the VANC backing. Um again I I don't fully I think so like maybe one way to think about USDH is uh it should be a wrapper that has compatibility with multiple jurisdictions in the same way that you know hyperlquid validators are based in a jurisdictionally distributed

way. You should probably think about that for the same you know context of the stable coins that are underlying um the uh exchange. And there's a couple of reasons for that. I mean, one of the ways that Hyperlid does not go to $500, it goes to zero is there's some sort of bridge hack. There's some sort of jurisdictional seizure, um, there's some sort of accounting issue of the stable coins on that bridge. And I think one of the most likely vectors that, you know, I've personally experienced is um, when USDC deped uh, because Silicon Valley Bank went down. And so, like, it's not just a theoretical experiment. And I I think this is maybe one area where um there's no hyperlquid mission statement, but I think there is some sort of

component of do you want this to be a maximally decentralized exchange in terms of not like the speeds and feeds of it in the functionality, but like of the jurisdictional basis. Um or do you want to bet at all on the US right now? Um given that you given that Tether, the largest stable coin in the world, has not even launched in the US yet. Um I don't know why today would be the time to make that decision. H very very good point. Yeah. Interesting. Well, that's that's been kind of the entire community vibe around Hyperloop has been this kind of um I mean, you could say it's about no KYC, but really it's just about this uh yeah, they've kind of not played by the same rules as everyone else, you could say, or they they've they've kind

of engaged in a very very uh you know, new way of launching a purposeex in terms of their their validator architecture as well as just the way that they've operated within uh kind of the broader KYC and uh per rules, but then at at at the same time, we've seen the US kind of become far more lenient in the coming or in the past few weeks. So, >> it it has, but I will say um like when you're running a stable coin, uh if you're short by even $10, it's a huge problem. You you kind of need to like wind up the whole thing and and turn it back over and figure out who's owed what and wind it down. um and jurisdictions seizing stable coins I is something that has happened before um both at the bank

level and at the stable coin level and so again you know like think about the stable coins the sky produces one is die it's the largest decentralized stable coin in the world it's only backed by ETH I think there's three billion in in existence but that's for a segment of people who just say like I want the fully decentralized like an Rand version of the the stable coin and then there's another one which is USDS which is you know a again a generated asset by Sky that is primarily used for lending. It does have a blacklist function so it can be more compatible and so like the idea of the hyperlquid stable coin should be probably designed to be somewhere in between those two and not like all the way of like let's just give state street

all our money. I don't think that's really where we are today. A strategic move to give all of our you know communal money to um just the US. I'm not sure that is the right path, but it's certainly one that can be explored with something like Sky where, you know, you're creating an asset that has, you know, varying functions, not just being genius compliant. >> Yeah. So, we ran the math on this and I think it's somewhere around $200 million of profit a year or so uh up for up for grabs should the should the $5.5 billion of USDC that is on Hyperlid today earn the current, you know, shortterm interest rate around like four and a halfish percent.

um when you're looking at the actual path to hyperlquid to something like $500 uh and and kind of trying to articulate a thesis around how this thing could grow really at 10x in price from here and 10x in market cap um you know price predictions and whatnot aside generally you you know you'd mentioned a couple times about how you feel this stable coin piece is important or at least the community could see it that way you know how how do you reasonably see the market uh accepting hyperl liquid in the 100 200 300 $400 range you know if if you know next year the following year five years whatever the timeline or prediction has been kind of leave that out but I'm just curious what

you think the necessary steps for the market to accept you know this this token as one of the top five or top three um you know you know is that possible how do you how do you see this actually tangibly playing out >> yep and Uh this is usually where I say not financial advice. >> I mean look like you know right now my personal calculations are you know it trades at you know2 to3 billion of earnings per year and like I see people using the circulating supply versus the fully diluted supply. I I personally use the fully diluted supply. I don't even think you need to use the circulating supply because it's growing so fast.

But, you know, I think it can probably get to 100 just based on the per volume that exists today. Um, and probably higher. But like if you want that rate change in terms of like why are people just now buying hyperlquid at $50, you probably do need another economic engine to turn on that can be something like unit listing stocks, bonds, uh, you know, commodities and allowing large leverage on it. That's certainly a path where it can get there. Um, another is hip 3 markets really kind of take off in a different direction. Uh, maybe options launch. Maybe that's interesting. I think those are probably other than unit lower probability paths. I think the higher probability path is the stable coins continue to grow in the bridge.

You get to $10 billion of stable coins that are earning, you know, 5% per year and that's all profit. That's $500 million of profit that you can then add onto your existing earnings. And so there is a path here I think for it to trade substantially higher than 100 $200 $300 but it does need to have some sort of other economic engine and you know just having laid out all the paths those are the ones that I can imagine. Um and again if interest rates go down and you're a genius compliant stable coin only I you know who does that serve and and like >> it's not what I'm trying to say is not you know if USDH goes to the wrong people it's just like this this like forever zero of of earnings in the wrong way. the stable coin war will be multifaceted, but you should kind of be

rooting for someone who has a different approach at least to take on some share of the stable coins that are in that bridge and do something different with them. And part of it should probably be a very native team like Native Markets and part of it should probably be a genius compliant one and part of it should probably be something like Sky. Um, and I think that is where we will get to. Um, but like the USDH uh beauty pageant is like kind of like everyone gets to present. Everyone gets to show what they're what they're doing. And I think that's a hugely constructive process. >> I'm curious where where you may see stable coins going in like the 3 to four year range. And I haven't really seen you tweet about this, but I have a feeling you might have a take where there was a video yesterday that came

out of this Russian finance minister, I think, talking about how the US is going to basically they have this $35 trillion pile of debt and they're going to try to use crypto to devalue it. And I'm curious if you think there's any validity to this claim and if so, how how do you see the administration progressing the stable coin agenda? Besson has said that there's going to be three trillion of stable coins, you know, by 2028 with rates going down. How do you how do you think this landscape shakes out as we're just continuing? It feels like on CT, everyone is calling, you know, there's going to be one more rally and then everything's going to die, but we're just continuing to hear this administration be champions of not just crypto, in particular, stable coins

like for the long haul. and and so I'm just curious what your macro view is over the next one, two, three years. >> Yeah. So, um I think uh the Russian minister's comments were uh taken literally and and probably like a literal basis to understand that is not the right one. But I do think he has a point on a on a larger scope where it is um you know Besson has laid out this framework of we're going to have uh 3% inflation. I think we'll we'll get there. We'll have 3% in growth. I think probably we'll get there and then we'll have 3% in deficits and that is not where we're tracking today. I think it's more like 337 or 338.

>> Um and that's assuming no recession. And so I think what the Russian foreign minister is trying to say is that um there is a debasement trade going on and there is going to be a new home for this money and it's probably not going to be bonds. And whether you read, you know, Michael Hartnett, who's the Bank of America CIO, or you read Zultan Posar, you know, it's pretty clear the governments are just going to be printing more money. The debasement trade is just starting. And that's kind of running into this idea of like cycle thinking. And the reason that I don't like cycle thinking is not because I don't believe in cycles. Um, I think the reason I don't the re the the reason I don't like cycle thinking is because it

kind of makes you like this imprecise person. >> It's like a it's like a it's like you know like people throw around words like okay like fascism. It's like what does that even mean? Like what does cycle thinking even mean? Like what point of the cycle what inning? It just like doesn't mean anything. What does mean something is that this debasement trade is starting and it's not going to stop for a very very long time. And what I've been tweeting recently is like the cycles that I can see them as of now are gold rallies, then stocks rally, then coins rally. And it kind of goes in a circle in terms of they search for their valuation ceilings, they search for kind of the riskadjusted return that they can get and then they pass the baton. And unless there's a war or 500 basis points of

interest rate hikes that are coming, you know, I don't think that's really going to play out. And so I don't think uh the Russian minister is lying. I think it's kind of uh a little bit of, you know, a imprecise term to think about it with, but you know, he's definitely right on some degree. The debasement trade is just starting and the cycle thinking is probably not as relevant in that context. >> You know what's funny though, guys, is I' I've found that each time that the crypto market heats up since 2017, the the fiat is dead or fiat is hopeless idea resurfaces, especially within the small community. Each time that it happens, it's more and more real. Like it becomes more and more compelling of a of a situation like like this this time

around compared to like in 21 it was what inflation and you know oh man like we had this inflation rise where oh oh god now it's like oh man like stuff's breaking you know things aren't things sell. Uh there's always a more kind of compelling reason as to as to why the debasement trade is going to happen. And while I do agree with you, Vance, I think there are probably people out there, you know, including in including Robbie and myself who have done pretty well this cycle and we'll do well by taking some chips off the table. Um, but we'll also, you know, ride for for the long term.

>> Yeah. I mean, maybe a different way to think about cycles and and you know, if you're building a capital base or if you're deploying a capital base is um number one, you measure your net worth from cycle low to cycle low, not top to top. So that's the first thing and the number and the second is just um for each cycle um you need to build a more uh stable capital base for the next cycle. And so um you know things like cash or things like real estate where you can lever that up over 30 years you know that serves as a very stable capital base kind of a a base of operations for you to go off and take risk. And so I think in that framing you know in running it up and running it

back cycles are real. Um but at the same time you know there is this whole idea of the power of staying put like if this podcast you know framework myself like I've been in crypto for 13 14 years at this point it's wild most of my adult life like >> pretty early on I realized that there were not that many uh people who are you know really bought in over the long term to this industry and community who are really intelligent and sharp and willing to work hard. And if you have all of those things, like there is no other place that is better for you to create wealth than crypto. Like people, you know, they joke about, you know, this is my last cycle. And my answer is like, where are you going to go?

>> Right? >> Like what's the trade after the trade? Something we talk about a lot here, too. >> Like, and sitting on the beach is pretty boring. Um, like the purpose, the struggle, all of that stuff is what makes life interesting. Like, and crypto is generally the most is the best place to express that in my view. I'm I'm curious how that translates into venture investing. You know, we've talked a lot about like a liquid bag, you know, being hype. They'd have no VCs, right? So, it's all liquid. But, you know, when when it comes to venture investing, how do you think decade time scales? Like, do you ever think like what is the likelihood that this thing really takes off? oft do you have to have that mindset with every single deal that you do or is there a play where you know maybe you get in contact with with a

founder they have a great idea but you know it is it's going to work on a two to threeyear time horizon that's where your vesting is up but on a 10-year time horizon maybe it doesn't make so much sense. How how do you how do you play with the time horizons given given, you know, the the long-term thinking and mindset that you just mentioned, but also with kind of the the moment in space and and the the you know, evolving meadows at play here where some something might make sense for a time and place, but but not so much on the on the multi- you know, cycle, if you will, time horizons.

>> Yeah. I mean, I think uh we have a long-term closedended fund, which I guess puts us in the category of VCs, but we play whatever game is on the field. And I think the worst thing that you can do across all investing is try to force it. And you can tell when you're forcing it. Um and I I think, you know, if you ever get that feeling, you probably just want to back off. >> Um you know, our bread and butter is working with founders. Um whether that be in the liquid markets or the private markets, it really makes no difference to me. Um when you know uh FTX and Luna collapsed, we were primarily a liquid fund because we thought those prices were advantageous. We were trying to do things like we tried to buy Celsius, you know, because we thought that could have

been an interesting investment. Um and so there's a lot of things that just come your way in crypto that you need to be kind of moving your feet for. I don't know what the best sports analogy is, but you know, like just be ready like ready yourself for. Um over time, we've gotten better at founder selection. Like I started the firm with Michael. I think I was 26, he was 27. Like, nobody gives you a handbook for this stuff. And so, you know, there's been capital that's been incinerated along the way. There's been bad decisions, there's been bad founders, there's been people who haven't even tried to start a startup that have just walked away with our money. All of the bad things that you can imagine have played out. And I think where we are today is the sum of all of those learnings. Um, and so we get

better over time. And forecasting the long long term is I mean like basically impossible. I think the best thing that you can do is get a pretty prescriptive vision of where you are today and because crypto moves so fast today can extrapolate really quickly. Um, hype opened at four and went to I think like 20 in the first 48 hours. Uh, and if you weren't buying on that first day, you know, you kind of had to wait for the Trump tariff tantrum to buy. And you know that's the other thing I think about venture investing in a liquid context is um you know when the Trump tariff tantrum uh happened that was when we bought a lot of our hype and I think about in terms of yeah it was great but like it's also like >> we were [ __ ] ourselves fans. We got

in at $2 first minute on launch just jamming it and just watched it all go down and I was just >> you know th those feelings are good because like you do need to touch the stove to realize that it is hot in a lot of investing contexts. Um at the same time like you have to have this idea of the hardest day to invest for is today. Like there's the also this thing where it's like okay after the hyperlquid unlocks happen like then I will buy. It's like well you're talking about investing at a date in the future. um think about today, not not really the future is kind of my my idea. And if you ever see someone building like real technology, like you have to nurture those people. Um and I think that, you know, Sky is a pretty good example of

this where they're building real technology. Maybe they're overlooked by the market, but like just like a dog on a bone, not going to let this go. We're going to build it. And like through all the building and all the time compounding, that will be what makes the difference. But um trying to big you know do big ideas about the future. Very rarely can that happen. I think you know maybe a couple of people like Peter Teal are capable of it but certainly not me. >> What kind of a kind of advice would you give to your 26-year-old self and Michael uh back when you were starting the fund given all the lessons?

>> Two uh two future fund owners here. We've been uh you know scratching our chins wondering how to do this media VC thing. We've we've done one fund already with just our own capo, but the whole raising process, you're looking at two young bucks here. >> Andy and I toss around a lot of ideas, right? So, and we're age when you you started the framework. >> Look, I mean, go for it. First of all, I think second of all, is uh you know, our first one was basically our own money. We tried to pitch people. It didn't work work. And the first fund, I think, was 15 um with one outside LP. Uh and I was living in Michael's parents' basement at the time. It's pretty pretty much as dire as one could possibly imagine was the setup for that first one. And um man, I mean, we launched in the first D5

bare market and kind of like just blitzed it immediately. So we we did get, you know, fortune, whatever, luck, skill, preparation, some combination. Um you got to look for things that move the needle, you know, like if you do have a hyperlsis, never let that go. wellre reason it, you know, but like just be there. Um, but you know, you do need some sort of divergent perspective from the crowd. Um, especially as you kind of get on to your second, third, fourth fund. >> Appreciate the age wisdom, Vance, and and and the time today. Looking forward to seeing the next, I guess, 24 hours or so of this hype liquid battle into tomorrow, which will be the decision

date, I believe. And uh I mean as you said, look, I think there's going to be obviously one winner for the ticker, but at the end of the day, the market's clearly signaling where it wants to go, which is more stable coins on Hyperlid. Really, it's competitive to Circle. Circle is going to have to really, you know, make a make a stance to get USDC native on Hyperlid as they've previously done for Ripple, Cardano, uh Hera, and others. And so, uh, looking forward to to kind of just watching this unfold. And um also looking forward to Plasma's launch. Uh we invested in that one. Talked to talked to Michael about that quite a bit a couple weeks ago.

That one's getting close. So, a lot of interesting times in the stable coin space. And I hope this podcast changed your uh podcast current crypto meta view tweet that you put out about uh only talking about treasury companies or other stupid [ __ ] So, thanks. >> Look, the bar to be bullish is extraordinarily low and you guys are succeeding. So, thank you. >> All righty, Vance. Speak soon, buddy. >> Take that as a compliment. Thanks, Vance. >> Yeah, cheers, man. All righty, Rob. Uh, well, who better to follow Vance than our boy Run, who we've had on the show before.

Hold on. I just want to take one quick second. Did we just have one of the largest investors in the space, give his bull thesis on Hyperlid, not financial advice, to multiple hundreds of dollars with just a couple $500. Then he closed out saying if you have hyperloop to a thousand thesis hold on to that. >> I mean financial advice to trillions because his bag is worth 80 million. You know >> I think um I think it would be interesting to figure out and people have done this calculation I'm sure you know just based on the current earnings.

I I think the price to earnings if you're if you're putting a pretty you know traditional and typical analysis on this it it's already under the multiple that a lot of like growth companies on the S&P and you know that that are public are trading at. Um I don't have the numbers off offhand but adding another half a billion dollars to their annual earnings would certainly cause that figure to jump. Well, we're at 53 right now. Market's bullish. We've got room in the backdrop. I know it's late for him. Uh I don't know how he's feeling about the current race of hyperlquids USD. We're gonna get him up.

Uh and we're gonna talk all things Sky proposal. Uh stoked on having Rune up again. It's been some time. Run. Good to have you. >> Glad to be here. >> Good to see you. >> Good evening to you. It's been a busy couple days, I assume, to get this proposal ready. >> Yeah. I mean, to be honest, I was just sitting and thinking about it and I think it's really been a lot of fun. like this is some of the most fun I've had in crypto for a long time. I mean, there's this I don't know, it's kind of like the Olympics or something. Everyone's like talking about it and there's all these like buzz and and excitement and and from our perspective with Sky, I mean, our approach to this was that we realized that this is like not just, you know, it's not just like a

race for a hyperlquid stable coin ticker. >> It's like a really interesting moment where there's going to be a lot of attention. There's going to be a lot of people who want to learn about stuff. And because Sky had all of these initiatives and products in the works anyway, meant to sort of be our entry onto Hyperlid, it was like the perfect time to sort of go all out and really be like, here's what we got. We we're doing a lot of cool stuff. Uh and uh we are we're we're trying to really um explain to people just how much value it can create.

>> Yeah, Skyrun, sorry. So, I mean, we had uh Sam from Fracks, we had Bo from Paxos yesterday, and we had Nick from Agora. And so, we kind of had a somewhat of a of a similar conversation with with each. And I think it'd be helpful for the Hyperlid community to have a similar kind of vibe. And so I just want that, you know, that was uh uh we appreciate this kind of opening opening statement, opening remarks per se, but maybe you can just give us your your overview of Sky and Hyperlid. How do you see Sky coming into the Hyperlid ecosystem? What is the storyline here? Kind of your opening remarks to the Hyperlid

community. What kind of impact do you want to make? And then yeah, we have some specific questions about the uh about the proposal and uh some of the other kind of ideas you have about the the vision and more. So >> absolutely. >> Yeah, absolutely. I mean I you know uh I think um well so Sky is a very OG D5 protocol, the fourth biggest stable coin project in the world. uh I believe that it is uh the second most profitable D5 protocol second only to Hyperlquid and it's honestly like it's really that aspect uh of Sky and Hyperlid I think is very similar and very interesting. Uh

Sky is also like famously it's the first project ever to do buybacks. We were you know way back in the day people were like that doesn't work. we were weird because we wanted to do buybacks, but uh we were like the the people just really were really into buybacks. And so the fact that Hyperlquid was sort of another community that had like has this like obsession with buybacks, I find that to be quite uh amusing to be honest. And I've been I mean it's one of the things that drove me to look into Hyperlquid and realized that what's so interesting is I mean it looks it's one of these very uh high energy crypto communities but it's based on such a I mean honestly simple but very uh solid business model right and that's the kind of stuff that

we are just really really uh into in Sky because that's really been sort of the backbone of Sky uh all the way back to inceptionist maker all the way back in the day, right? Of figuring out how can we take blockchain technology and how can we use it to just deliver some real value in a way that that really makes sense. Um, and so obviously uh Sky is like a major super advanced uh stable coin protocol that would be very well suited to power the USDH stable coin. I mean, from a sort of technology and um sort of long-term growth perspective, it's just completely unrivaled. I mean, the the type of technology, the type of

infrastructure and the approach that Sky is taking to stable coins is uh just completely unique and just much more powerful than than what anybody else is doing. Um but the the reason why that's the case is actually because of all the other things Sky is also doing, right? uh and particularly uh this involves um the what's known as the sky stars which are basically these sort of independent autonomous economic units inside the sky ecosystem and they're kind of like projects building on top of Hyperlid but I guess the difference is they're a lot more connected to Sky they're sort of they're sort of like an

extension of Sky yet they have autonomy uh and they have the ability to innovate to move fast. And what they enable Sky to do is to really effectively um and very um just like um yeah I guess it with a lot of bandwidth effect basically effectively and with a lot of bandwidth a lot of size a lot of things happening in parallel allocate the assets of the Sky protocol uh develop new products uh front ends um you know adoption funnels all of these things uh and then also crucially partner with other ecosystems. And that's actually one of the things that that drove Sky to sort of transform into

what it is now into a module ecosystem was that we realize that if we're going to partner with you know all the different blockchains and L2 and all the new L1s and all the new uh like the different areas industries you have to specialize in. uh having these stars these like subunits that can end that can act independently and then be the sort of the bridge to these other ecosystems is going to be so essential. So actually that is like our initial um sort of um I mean the moment when Sky started basically being like okay we're going to now we are sort of beginning the work of of sort of scoping out how will we launch on hyperl how we work on hyperl then step one is all right we're going to do a star because that's kind

of like the forward operating base right that's the that's the thing that's going to be this the sort of the the nexus of all the ways that sky will deploy assets into hyperlquid uh grow stable coin adoption um you know support new innovation support new projects uh and basically anything where Sky and Hyperlquin synergize which is really a lot of places because Sky is just I mean there's nothing we love more than working with partners that can generate real value and then giving us some kind of uh business opportunity from that.

Yeah, Run. I mean, I think that uh you know, first of all, that was a very comprehensive answer and we appreciate that. And I think that uh you guys have done more for DeFi in the in the last couple years than 99% of teams. And we just had Vance on recently, you know, just the last half hour or so. And we're talking about uh some of the the specs of your uh proposal. And I think uh you know one thing that that we ask a lot of these these these teams and that I think is going to be particularly interesting for you is like what is the actual ticker mean to you? Like why is this USDH ticker important? Uh you know in in reality it's just the current ticker.

You'll be able to buy tickers in the future uh that have the same uh feature sets uh you know for per margin positions uh for um settlement of trades etc. There'll be a future future ability. Why does this specific ticker matter to Sky? >> Yeah. When it's a funny question because the ticker itself doesn't really matter to Sky. It's that it matters to everybody else that makes it matter to us. I think ultimately if >> that's funny >> uh if the hyperl community they um you know really understood the way that sky technology can how it can synergize with what hyperlquid got

uh then you know both ecosystems would just start growing at the completely exponential pace and so that's why I think like I mean there is this there is this strong belief in hyper liquid community that US is like sort of this is the moment to like have hyperl actually be the the um you know the the place where a really powerful stable coin comes out and actually really starts dominating the whole industry right and become this becomes another thing that that is sort of like a just like a successful hyperlquid product and I mean when I'm hearing that that type of vision uh this sort of the desire to like not just do another stable coin but like this is the thing this is going to

be the one thing that's going to be super awesome. Then naturally to me that means well then it has to use Sky technology because I mean this is what uh we try to build. We spent the last 10 years basically researching you know figuring out all the foundational stuff then developing it sort of um iteratively improving it over and over again and yeah adding this layer of modularity uh and autonomous agents uh which is just um I mean it's a lot more advanced than than how anybody can you know even sort of conceptualize uh currencies right but but it's it's a it's a vastly superior model for for managing a currency, especially if you

want to be able I mean if you're sort of your starting point is you're decentralized. You're not like you're not like rooted in some institution or some country or a team or person or something like that. You're like a a decentralized system that more than anything else it wishes to be immortal, right? it wishes to be um untethered uh and just able to operate and deliver the best it can possibly do without having to sort of swear feelalty to some particular counterparty or authority. Um that doesn't mean you can't like work with counterparties, authorities, regulators, institutions. Quite the contrary, that's like actually super super important, right? Otherwise, you're going to get nowhere. But it's just the approach that

Sky is taking to this of like in basically ensuring diversification checks and balances um maximizing governance above everything else. Uh I think it's just like the kind of the raw power that Hyperlid has like the raw energy that is that exists in this community is like an unusually good fit to basically try to merge with the technology uh and the capabilities that Sky has developed. Um and and yeah, I mean it's gonna happen because like I said, we were already we already in the process of basically eventually doing a hyper liquid star. But if you then had this kind of ground swell of support

which I mean to some extent has happened there's actually been a huge amount of support. I'm quite uh flawed by just like how much excitement and positive reaction there's been to our proposal right but if you had Sky actually being sort of chosen uh you know symbolically to be okay this is this is how we want to build our our USDA stable coin that was would of course just take this energy and like um 100x it to be honest. I mean it will actually be pretty spectacular to see how that would play out.

>> Yeah. Run. I mean I think uh we had a we had a really interesting uh kind of thought experiment with Vance that that I think you're you're hitting on here with Sky which is basically the stable coin for Hyperlid. There's a lot of alignment that you talked about which I think that we'd like to get into as well, but I'm curious specifically on this perspective for Sky kind of when you're looking at the landscape for the type of stable coins on Hyperlid and how relevant or important being genius compliant is. And this kind of idea that we should, you know, Vance kind of framed it as do we really want to give

up everything and just put all of our eggs into the US basket and be like we're genius compliant regulate like regulated stable coin or do we maybe want to be somewhere in between like essentially skies die which we all know in the crypto space as being very very decentralized truly kind of like the original of this algorithmic uh type stable coin obviously has become more and more in intertwined with circle and tether or something like USDS, you know, which is kind of in some capacity on a different end of the spectrum much more yield oriented uh in this regard and and kind of has a different level of of uh of kind of architecture. Let's just put it that way. Um when you're thinking

about USDH, you know, Vance kind of franchise maybe is somewhere in the middle of these two types of stable coins is the ideal. How do you think about this? I is there is there a a certain type or architecture of the USDH stable coin or just a stable coin in general for Hyperlid's uh future given its current path that you feel is most right or suited? Uh and obviously we're under the impression there's going to be multiple stable coins, but what is the architecture design that you feel is particularly correct for Hyperlid's community today?

I mean I mean a simple answer is I think that the correct approach to money and currency is the approach that this guy is taking with USDS specifically. Uh if you had to sort of pick one method uh I think that's the obvious one and and it is you know focusing on risk adjusted return right. Uh I think I mean crypto is still really complicated and like the world is like a complicated place and finance is complicated and it's also boring and is also like scary with big bad governments uh you know making rules but then also I don't know tariffing everything and stuff that also means it sort of I mean and just like I mean if you think about the thing that

led to the creation of crypto that was the financial crisis right which was this idea that yeah it's you know it's cool But like it the traditional system also doesn't really know what the hell it's doing, right? But what's interesting is now uh I mean first with blockchain we sort of we now have systems that are like they they know what they're doing in some sense, right? In the sense that like you have a blockchain is like you there's certain things about the blockchain that is just absolutely clear of like this is what it does. This is how it works, right? What's coming next now is the AI revolution, right? of like how now you're sort of like not only is it like all the humans can sit and look at the blockchain and agree on what's going on. It's like now you don't even

really need humans anymore to like figure out. You can sort of take the emotions out of the picture and just be like, "Okay, what is like the correct thing to do logically, right? Let's just think logically about it, right?" And that's where what you're going to end up with whenever you think about money from that perspective is risk adjusted return. Like that's the only thing that matters, right? You want something that is, you know, maximally stable. Uh, and then it should just be delivering the best possible yield while minimizing this risk. And it sounds that sounds super simple, but but you know, most people if you try to sort of pitch them that vision, uh, you ask them to pick something, they're still going to like fall into the pattern of like, I don't know, choosing an authority or something like they're going to choose some kind

of easier way to to make their decisions, right? And so um ultimately what Sky aims to do is to deliver the option for people to basically well people and systems to basically come up with the solutions that are just in you know that the that the market and the users basically want um uh and that both means something like are you catering to like human end users that need some kind of regulatory stamp of approval. Uh, in fact, maybe they don't care about any kind of return because they're just doing payments, right? I mean, that's an interesting thing we see with Tether that like nobody cares about yield on the Tether. They just want to not get like hyperinflated by the Argentine peso or something, right? Uh, and there could

also be like I mean different mathematical approaches to okay, we want the best possible risk just to return, but like we disagree on like the math and the data around it. Sky basically like offers the tools for all of this. Um and I mean yeah like I would say personally I would say USDH should like follow the USDS model go for best possible risk adjusted return but it would completely be possible to use Sky technology to also make the absolute best possible uh you know fully compliant uh very restricted collateral stable coin you could you could possibly imagine right because you you have a stable coin that would you could take all the you know beautiful super advanced decentralized technology of Sky and then you could like sort

put a bank in there somehow like I mean basically take a bank and be like yeah we give you control and and but everything else works as it is. It's just the parts necessary to like fully comply uh is is controlled by some kind of centralized regulated entity. Uh and it's still going to be better than just having a bank doing it and writing some reports or doing some like having some database, right? You always want as much as possible on the blockchain. >> Yeah, I think we can certainly agree there. And and so another piece to this genius compliant part is the riskadjusted return that that you're talking about. And so I'm curious to understand mechanically you guys are able to offer a higher risk adjusted return. I think it's about 4.85% um a after there's actually a a cut to

sky that someone could argue it makes it more incentive aligned because you guys are actually making money and have skin in the game. But it's still even after that fee a higher yield than what some of the other proposals are suggesting with 100% revenue share just by you know vanilla tea bills they're looking at generating maybe four to 4.25 and you guys are offering 4.85. So I'm curious where does that extra delta come from? How are you guys able to offer this higher yield to the hyperlquid community even after taking out a small fee for yourself and and you know offering the rest back to the hyperlquid community?

>> Yeah, I mean the answer is uh diversification of the collateral and then credit enhancement, right? So basically Sky is deploying the $13 billion USDS collateral portfolio into all sorts of assets, right? But if you like sort of very broadly uh generalize you can it's about half crypto exposure and it's how it's about half uh trafi exposure basically and these these are all totally different types of assets right um like uh yeah there's like regular sort of lending type of activity like a and the spark which is an basic like has one of its one of spark which is a sky star one of its products is basically an ava clone

that is a little bit lower risk level more simple than a itself and has its own institutional user base. There's also like exposure to Athena. There's exposure to like T bills but also more advanced uh trafi assets like CLOS's. And so each of these assets they all have a different risk but then what Sky does is it uses these stars right? So these agents that sort of go out and take do take action on behalf of Sky, they are used to perform something called credit enhancement. Y >> which means you basically like you sort of look at you look at some asset then you look at how risky it is like how risky is it very risky or not so risky and then depending how risky is you add kind of a buffer of security on top and on sort of like the risky it is the more

you need sort of a buffer to take losses right and actually uh what sky has done is basically the ecosystem of advisers contributors experts researchers all these people that have been working on since the beginning of maker right it's a 10-year project at this point so there's a lot of buildup up uh specialized knowledge and from that the ecosystem basically developed um an extension of the Basel 3 um like banking regulatory framework right that banks use to determine how to how much to credit enhance basically so and and actually when it when Sky deploys into Trafy assets it's just directly copying Basel 3 so it's just using the exact same uh risk like the capital ratio so

basically the amount of of uh credit enhancement uh that banks have to use when they deploy into Trafy assets. But then when Sky deploys into crypto assets uh basically it it uses like an extensions of the math of the formulas used to determine yeah Alex loss given default and prob basically a bunch of yeah a bunch of math you do and and you basically use that to um to you get a final number that is like this is the over collateralization and so you take all that all those different assets they're all sort of different some of them are more risky some of them less risky but they all have like an amount of credit enhancement that makes them sort uh equivalent in risk and now you have like total freedom into deploying into

any kind of asset. It can be super simple. It can be super complex and you can find all the places where the yield is mispriced. So that's really what Sky is extremely good at. It's like it's like a a swarm of like robots that are just seeking out where are the good opportunities, right? And that's where your money should be, right? not in some like, you know, boring cookie cutter gigantic institutional thing that is like, you know, it's just dumped in there with everyone else and then there's like middleman after middleman, right? It should you like like there's no reason why a normal person should not also have their money at the cutting edge where the the bankers with all the inside knowledge right now sitting and and and doing their deals, right? that

with the power of AI, blockchain, transparent data, we can open that up to everybody, right? And uh and yeah, and simplistically then that the way that sort of ends up being uh sort of experienced as the end user is just the yield is a bit higher. Uh and you know then you could then the question is is it actually like as low risk as something like a T-build back stable coin? that the answer to that question is going to be you'll have to check the math basically right it's like a debate on the math and right now that's kind of hard but as AI gets more and more advanced it's actually gets easier and easier for people to sort of verify for themselves and figure out you know do I want a government stamp of approval or do I want to basically check the math

and see this is this a better risk adjusted return. Yeah, absolutely. And this is a unique part of the Sky proposal for USDH because not only, you know, are are you able to generate that risk adjusted return, people can check the math, you know, you've also got somewhat of a not a government stamp of approval, but you've got this S&P credit rating, which is a unique proposition of of the Sky proposal. Um, the other one that it seemed to be a unique proposition was that I wanted to hone in on was uh the the native buybacks that you had mentioned, you you you suggested in the proposal that you would bring that all onto Hyperlid.

>> Yeah. And not only just that, Rob, the 8 billion balance sheet that you guys have, I think the the exact wordage in this TLDDR was it will be able to deploy. >> So, so maybe you could unpack that. What does that mean? and and you know mechanically once that is deployed on hyperlquid if if you know that that's the route that's taken what does that mean for whether it's volume revenue the hyperlquid ecosystem at large so well let me just quickly talk about the buyback engine right so right now sky uh does its buybacks via unis swap and that's like it's okay but it's like not super efficient and then being a ecosystem that is just obsessed with

efficiency and finding ways to generate more value, we basically realized it will probably be more efficient to do the buybacks on Hyperlquid. So basically then we were like, okay, what's that technically actually going to take? And then of course right now Sky is not listed. Like Sky is in the middle of a transition from the old MKR token to the new Sky token. >> Uh so Sky is not even listed on on Hyperlid yet, but then that would also just be naturally a good way to then bootstrap the liquidity for that asset once it gets listed. But yeah, I mean what's actually interesting and what has I mean the the thing that's always been the driver of um like Sky interest in Hyperlid is the fact that Hyperlquid has a lot of interesting

capital allocation opportunities potentially with you know mispriced uh riskadjusted return uh which is the kind of stuff that we're all about in Sky right uh but what has actually held Sky back quite a bit is basically the USDC bridge uh which was sort of this the problem with that is it's like very hard to quantify the risk of of a of a bridge of that nature that's sort of unique to a single uh a single system. Right? So now that everything is getting opened up with the new stable coins and all these different bridges, suddenly there's a lot more um you know there's there's a lot more room to scale and then obviously if Sky ends up actually winning the USDH ticker and

that becomes like a major component of the the economy on Hyperlquid then that would mean Sky would have like very tight control and ability to verify the security of the bridge which would then really open up the floodgates for like how much capital Sky would be able to deploy into Hyperlquid. But you know actually what's so one thing is right >> there are these riskadjusted return opportunities in hyperlquid out there that sky can use to generate a better a better return uh for USS right but the thing that's kind of even more fun and interesting and cool about all all this is that like well you still have to go find them right you still have to go and do it and this kind of goes back to the very first point I talked about which is

like the thing that really is cool about sky that makes us so unique is that this is done through the stars, right? And so the way you sort of get get this off the ground is you deploy a star. You get a star going. And the way you get it going is you set up a farm and you have people farm the token. So you start getting a community that can hold the token and that can actually control it and that can make the decisions around actually deploying into these good opportunities out there because then I mean you'd want the hyperlquid community itself to be sort of the guide basically, right?

being like this is where the this is the good yield. This is where you go. This is where you go. Right. >> So, you're not trying to sort of remote control like as a bunch of Ethereum nerds that don't really know that much about Hyperlid compared to like the natives on Hyperlid, right? >> Yes. >> And the really cool thing is, you know, nobody works for free, right? In this kind of setup, like the star gets to also generate uh essentially like a what we call an outperformance, right? Like it can actually generate an even better return than the uh 4.85%. 85%. Uh you know sometimes 10%, 15% right and then it has to credit enhance but often the cost of that credit enhancement is uh going to be less uh than what it will earn. So there's just sort of like opportunity

and value going around everyone. And the reason why all this value exists is because like you're having people with different skill sets, different knowledge and different resources coming together and combining them in ways that just creates you know value where the what do you call it the you know the whole is greater than the sum of its parts. >> Yeah. And run, I gotta ask specifically about your level of interest and desire to actually bring significant amount of the TVL that you guys have onto the hyperlquid chain. And the reason I ask is because a lot of that exists on Ethereum, which is very I mean, look,

Rob and I have been doing onchain D5 for six years, right? we were you know very early in compound year etc. I know when I have money on ETH L1 versus I have money on L2s versus I have money on Salana versus I have a money on L1 versus etc. In my own mind, I I understand technically what I'm getting into as far as the levels of decentralization and I also understand how I feel about that the different capital in different places with with regards to hyperl specifically. Um there is no escape hatch and so an escape hatch as as you know Rune is effectively where you can basically brute force your funds out of a chain should the operator go down or should the operator become compromised. And in this case it is

somewhat problematic for some of the hypo liquid holders like as a hype holder uh which makes up a significant amount of the portfolio on the liquid crypto side. It it is it is still worrying that that that now obviously the validators and Jeff and everybody has set the precedent that they will roll things back should anything happen like an oracle exploit like with jelly jelly right so so I think there's some level of like backs stop here but but but from the from the ethos that the generation that you were born in you know into the space and where Rob and I came in you know we're we're much more on that kind of level of like decentralization maxis kind of like very trust but don't or you know uh verify don't trust her you I'm messing that up, but that's the that that that's the

point. Um, what is your actual risk tolerance for bringing that $8 billion I believe is what it is, onto hyperl like how realistic is half of that coming on or a quarter or or more and what would be like a time? >> Uh, so yeah. So what's interesting is this is sort of one this is one of the ways that I really like just matured and completely like changed my view uh into something just very different from what I how I thought of this when I got started in crypto. Uh, and I mean the fundamental answer is like well the answer is that I don't have the answer for that because I'm just like a hairless ape, you know, like I'm not

really built to do super advanced data analysis and math to figure it out, right? like um obviously there's like you have to have a lot of intuition around um I mean you have to make sort of decisions around things that are just like this is off or like this is you know they're like sometimes you may not be able to quantify the risk and this is actually something where like the the thing of like having the single bridge onto hyperlquid that's the type of stuff where that's the kind of risk where it's just like there's a every you know all the chips are in like one place and there's no reasonable way to like go and be like hey let can we take a look at the the bridge right because actually

obscurity is a part of the defense right is a part of the security of that that system right so once you have multiple different bridges uh then uh let that's the kind of stuff where I think okay now there's like from my sort of intuitive perspective now there's like surely uh there is an opportunity for something at real scale here and then from there I mean the task is simple you simply go end to end and gather all possible data like literally all knowledge and data everything you can possibly find about every single opportunity and every single risk. Uh and then you try to put that into the existing risk models. Uh and I could yeah I was just about to like rabbit hole into like sky governance but I I managed to stop

myself from doing it but basically um there's like well there's very advanced ways we can sort of do this systematically and then you put it in into the risk models you get you get a result and then at this early stage I mean you also have to have a lot of like looking at like the final outcome and be like all right so we got this result but should we actually go ahead with it or maybe like is it too conservative and like you know is it actually maybe you know clearly uh more you know we could deploy more right um and then like you sort of adopt you you you improve your models again and again over time right the more you use the system uh the more it sort of learns about it environment and then it just

increasingly gets a little bit smarter and that's like governance done the right way right maybe that's even something to kind of like take away for the hyper liquid community of this process now right that is very important that every time you do sort of a governance cycle, you like write down what you learned from that and you kind of are like, "Okay, next time we're going to do this. Let's make sure we don't start from scratch, but that we sort of start from like the high point of like all the knowledge we gathered around this process, right?" Like Sky is basically that except 10 years of that of just over and over and over like building up the sort of decentralized brain of the of the protocol. >> You say the agentic brain of the protocol now with the stars. Are you sure there's not a half humanoid inside

of you there, Run? You're still human. Can we get a double check? A little knock on the head here. >> Oh, yeah. No, I'm uh I'm very much human. >> Well, RV, I think we're I think we're at a good stopping point. Do you want to just do some closing thoughts here? >> Yeah, Run, please go ahead. I mean, you know, you put together a very comprehensive proposal and we appreciate you taking the time to explain it uh to us here as well as our audience and would love just Yeah. some closing thoughts on on how um h how to wrap this up and and generally going forward your your plan with Hyperlid.

>> Yeah, you know, if you win, if you lose, you know, kind of where where's your head at? >> I Well, I mean I the thing I mean obviously it's going to be super exciting uh if we win uh and and just uh really really epic. But um at the same time I mean like I said in the beginning this has been like a really fun uh amazing process for us. It's like there's been so much awareness like so many people wanting to learn about Sky and sort of I mean there's Sky has this sort of impenetrable thing right where it's just so much that people are like they're they're scared to to dig into it. But now that it was presented in this sort of tangible way of like wow here's some real stuff some real benefits. There's actually been a lot of

people that have been trying to sort of get into it and learn from it. And I just think like the the level of like you know I don't know the energy the positive nature of the hyperlquid community I really think has like amazing potential. I see it as like raw material, some kind of like raw uh you know what do you call it? Diamond in the rough kind of that if you if it was able to embrace the type of governance mechanisms and technology that sky has you would really be able to just like direct that energy in incredibly powerful ways. And I mean we're going to do that with a hyper liquid star. That's going to be kind of like the Trojan horse that's going to begin to introduce the highly structured uh governance mechanisms of Sky to Hyperlquid.

>> Yeah. >> And that's whether or not we win. >> Last question. >> How will you celebrate if you win? >> I will uh go back to work. >> I'll celebrate by working. >> There's a there's a robot in there somewhere. I'm telling you. Watch out guys. Run Christensen, Sky Vision for USDH. Appreciate your time, man. It's been a pleasure. Look forward to the next 24-ish hours. It's going to be a fun time. >> Absolutely. Thanks a lot, guys. >> Thanks for your work in DeFi. Run. Appreciate you, man. All righty. All righty, Rob. Uh, man, I looked at the sky chart. It's at seven cents.

I'm pull up a bit more longer time frame here. Um, so had a sky chart. I'm looking at the hype chart. We are not the >> It had a It had a gnarly a gnarly pullback um from I mean it's really just gone sideways, dude. This thing could be a sleeping giant. >> I mean, Maker Dow has always been a sleeping giant. You got If you're looking for >> Yeah. I mean, if you're looking at um >> See, >> Mark's 1.7 bill, so it's definitely not >> Oh, but it's full it's it's fully vested. It's fully unlocked. This thing looks good, dude. If Sky wins, this thing sense.

>> Oh, Andy, I think I lost. >> Gonna go crazy if they win. >> Oh, you're back. I mean, so I It's kind of funny. I'm looking at the hype, too. >> Get the new Mac up as well. I think so too. Coin Gecko's eating up all your data. Um, yeah, guys behind the scenes. Let's make sure Let's make sure Andy's connections doing all right. Um, but otherwise, I think you're right. I think Maker and Maker's obviously been around for a very long time, doing quite quite well. We've got uh we've got our next stable coin evangelist

behind the scenes. He's going to come up in just a moment. We're going to get him on uh after we confirm Andy's connection as well. It's been it's been just one after another firing USDH proposals right after uh right to you guys. And so we're gonna we're going to switch it up a little bit. We're going to stay on the stable coin train. Andy, my trusted co-host, is back. And so we're gonna bring up Lorenzo here. Just a moment. Welcome back, Andy. >> Just in time to speak with Lorenzo. >> Yeah, man. Let's get him up. Um, this is crazy. They just said that they're not going to uh fulfill do a proposal. So, >> yeah, let's hear why.

>> They're the only ones. They They didn't think they could win. They could match the battle firepower of Athena and such. So, guys, let's get him up. Let's get Lorenzo in the shot. Lorenzo, give us one quick sec and uh and we'll get started. Um yeah, pretty big news today for USDT Zero. Lorenzo, good to have you first on the show. >> Um would love to know just a bit about yourself, man. Before we jump in, who's Lorenzo? What's USDT Zero? What's your background? Uh good to meet you for the first time.

>> Yeah, likewise. Pleasure to meet you both, Robbie and Andy. It's it's pretty cool to be here and it's the first time I do a live stream, at least related to crypto. So super super cool and thank you for having me. Uh yeah, so my name is Rorenzo. I'm one of the three co-founders of USDT Zero. Uh I don't know how much you guys know about what we're doing, but we're basically uh one of the leading solution to move USDT tokens between networks. Uh we launched USD Zero back in January. Um the way you can think about it is basically a new standard towards which tether tokens can expand to the to other ecosystems. Uh since then we've moved more than 12 and a half billion USDT between networks.

We're currently sitting on around between 50 to 150 million USDT moved between our supported networks every day. Um it's been quite astonishing. Uh we were not expecting such a rapid growth but we had a lot of help from all of our partner ecosystem partners and etc etc. So uh pretty cool. I'm a D5 guy myself. I've been working in Defi since 2020. So pretty OG in in that sense. And for the last three years, I've been focusing together with my co-founders on TED related products. Uh we helped out on a bunch of native deployments. We are uh we ship the product together with Tedra called Aloi which is um basically a stable coin backed only by gold uh in a as decentralized manner as possible uh compared to to a product. And then for

the last 15 months or so we focus fully on launching and executing USD zero which has been really really fun and really really exciting. Uh we are the chronical USDT on a bunch of big networks uh polygon and arbitum hyperlquid uh uni chain and so on and so forth. We also going to be the chronical USDT on plasma and yeah that's quick two cents I guess doing our best line the attention people want to communicate they want to learn about it obviously everyone's really stoked on Tether that's a no-brainer based on the growth plasma and now Hyperlid so we'd

be remiss to not cover what's just happened right now. So, USDT zero account at uh 3:18 p.m. Eastern time tweeted, "Since our launch, USDTO has been deeply aligned with Hyperliquid. We're the largest stable coin on Hyper EVM. We run a validator. We've consistently supported the growth. Our commitment to Hyperlquid and its ecosystem is not tied to the USDH vote. We are not submitting our own USDH proposal, but we will support USDH and continue to give the ecosystem it has come to expect from us. We will continue to remain committed and good stewards of the ecosystem. Guys, uh this comes after Athena, Sky, Paxos, Agora,

and everyone else. So, there's kind of two elements to this conversation. It's one, who the hell are you guys voting for and why, if we can talk about it, and two, why aren't you guys being a part of this? So why don't we start with the second part? Why choose to not be a part of the USDH proposal race? What's going on in your mind? Um and kind of what is the state of uh your view as to why that you guys chose to opt out? >> Yeah, I mean our our stance is pretty straightforward, right? Like we as as we said we we are the largest stable coin provider on HyperVm itself. We have more than 200 million USDT zero issued uh on the network. We have been deeply pushing the hyperlquid technology layer as much as we could. Meaning that I don't know

if you've seen but the hype USDT pair on spot side of things was one of the very first time that somebody could pair uh a volatile asset from from hyper on liquid against something that is not USDC. Uh and we have had very deep discussion with liquid team since the moment we we got into the picture. Hyper liquid is one of our core uh pillar of the ecosystem and we think it's going to it's just going to go parabolic like the whole ecosystem is ringing behind it and it's just been very very exciting and we want to keep doing that. Um when it comes to why we decided not not to play this uh this this big game is because well first of all we think that we already have a very good stable coin for the liquid ecosystem. It's called USDT.

It's the most used stable coin in the world. It's the largest stable coin in the world as well as the one that is preferred by basically every single trader on planet earth. Uh and we thought that the whole picture was just getting too crowded and we had nothing to to add towards it and it was just very exciting for us to see all of these other uh behemoths in the space space. We had room before me pos we had very deep discussion with Athena about the proposal they posted which it's also very interesting and we want to see how it goes right like we want want to see how the ecosystem is is taking this on. We want to see how we can u help them out to to develop this thing and we are very confident on the fact that developing a stable coin is hard. uh

adopting reaching economies of scale, reaching distribution, etc., etc. is not an easy business and we're watching this very very carefully and we are as as we said we we're hyper liquid first when whatever is going to benefit the liquid ecosystem will will be right behind it and whoever the the community chooses to uh to to actually support in this proposal, we are super happy to to work with them to to make it a better place for users basically. And I I gotta I gotta follow up on the second part of of Andy's question. You guys run a validator. You said this as part of the tweet where you said that you're not submitting your own proposal, but you do run a validator.

>> Yeah. >> Which means that you have a vote. >> We do. Uh so we we have we we run a validator together with Lugenods, which are some of our closest partners when it comes to the validation side of things. They are they're amazing. We love them. >> And uh we're still evaluating the options to be very very honest with you. Uh I think I don't want to sound salty or anything but I think this is a very very um like we have a very little time frame where we can actually make decision especially is so important for for an ecosystem like a liquid. So we're taking all the time we need we are evaluating options. Ethenina just came up two hours ago with with a with a very interesting proposal. I was speaking with guy about it. I think it's it's pretty interesting. Uh Paxus proposal is

also very nice. The the native markets one is is exciting. So we're going to take all the time we need and then we're gonna we're going to do what what we think is best. But again, we we want to be a part of this ecosystem. We are chosen to be a part of this ecosystem and we'll do everything we can to make sure that we securely play a role in it. But without rushing it, we I don't like rushing to especially to being some something as large as we are. We want to take our time. So >> So you didn't mention Agora or Frack, but you did mention Athena, Paxos, and I don't believe you mentioned Sky. So one could >> native markets.

>> One could Yeah. And native markets. one could uh one could then deduce that your current top three is Athena native markets and >> don't deduce I just I just I just said that the first SP that pop into my mind and the one that I had the time to review it so and in the in the >> you have no public rankings that you're wanting to think about or you have no idea. So rather than disclose like who you who who you're considering, I I'm curious because something that we've seen across all of these proposals and I think we've had maybe four out of the five or five out of the six. The only one that we haven't really spoken to is is is Guy from Athena that that one just came out a couple hours ago and then and then Native Markets. Y

>> and so >> given that you guys are an interested party, you have a vote, you're affiliated with Hyperlid and aligned with the community, but you are objectively looking at all of these proposals because you haven't submitted your own. We've also been taking a look across the the swath of proposals. A lot of the there's a common denominator across most of these almost all of these except for Jeremy Aair and Circle's nonp proposal has said that there is a revenue share and it's effectively essent essentially all of the revenue goes back to the hyperlquid ecosystem.

Yeah. >> But each of these proposals seems to have a uniqueness to it, right? Sky has uh a hyperlid star that could get enabled. they could bring a significant portion of their balance sheet. Athena obviously has network effects and they have their own novel mechanism. There's FRA has Genius compliant. Agora has Rain cards and and State Street. There's all all of these have some unique properties to them and I'm curious what sticks out from your perspective about some of these proposals. Is there any anything that does stick out about highlights that you've seen across the different proposals that have piqued your interest and said, "Oh, this is this is not just some stable takes uh uh table stakes revenue share agreement. This is

actually a unique value proposition that this proposal offers that the other proposals don't. What What are some of the things that stick out?" >> Very good question. So, I had only enough time to review the the largest ones. And again, we have had so much stuff to do, especially with the OKX announcement that we we we we want to take as much time as possible, but for me, the most interesting for thing for me is not really the unique of each one of these proposals, is the fact that a whole entire industry mobilized themselves in five days with Behemoth to the sides of Athena, USDS, and so on so forth to basically try to get what effectively is just a ticker, right?

Like that for me is what I think is the most interesting thing and just it's a testament to the to the power and to the success that the whole liquid community put into this industry and how how just how amazingly they are they're handling these these situations. So I'm personally I I think native stable coins for specific chains are something very very hard to get right. >> In in the history of crypto very few uh ecosystems managed to get one right. Uh, one of them was B USD before it was it was unwinded which was very impressive.

Unwinding a $25 billion stable coin is something very very cool. Um, and at the same time again I we are heavily looking at every single one of them and we want to be somewhat agnostic right now because again we are here for Hyperlid. think Tether should be and USD0 should be one of the pillars on which HyperVM and maybe in the future itself is built and we just want to work with whoever the community picks and decides to to work with. >> Um from a from a general alignment perspective I we're obviously very very close to to to Athena. They are aligned to to the USDT and so forth but all proposals as you said have have merit and their unique twists around it. So on that point then why from your perspective has tether not submitted a

proposal on USDH? Well, that's something we should ask Paulo all together, I guess. But on our side, >> if you want, so we should ask him. But to to me, like that's usually not how USDT zero deployments operate, right? Like we we want to be a part of the ecosystem, but we we also want to let ecosystem pick their own fate. And if anybody wanted to include a heavy USDT zero back in their proposal, they could have. And if they haven't done it, there's probably good reasons for it. And we have been bouncing ideas off with basically everyone who who posted one of one of these proposals in the last five days. I had a very fun weekend if you want.

>> Yeah. >> Did anyone reach out to you to to have you join their alliance? >> Of course. >> Yeah. But but none of Yeah, quite a lot of people did. Uh but for us like the the value prop wasn't wasn't really there. Like for us it's what can we do to benefit the liquid community and benefit our ecosystem in a streamlined way. And when when everything ended up and and all cards were were played or at least most cards were played because we don't know if anyone else is pushing proposal outs, we we realized that our best bet and the way we could have served the liquid community better was just to be agnostic and be like, "Hey, we're going to be the backbone. We want to be the backbone of this this ecosystem and ster is the backbone of crypto in so many other other ecosystems

again. Uh and we don't want to pick a side. We want to let you guys get get your own decision, figure it out, and then whoever you pick, we're here. We want to work with you. Uh we want to push forward basically the the technologies that we're developing specifically for for Hyperlid. >> And I think uh you know, Rob and myself as Hyperlid holders as well as the broader community watching appreciates your your kind of uh angle on this. It's less about all right let's make USCT something for you know to be in the proposal mix but more so let's let's just take a stand for the community a and you know have that community oriented feel and so um one thing that happened was that I'm curious about that we just kind of spoke about as Rob

mentioned there's table stakes for a lot of these things one of them is that um the revenue back to the hyperlquid community is 100% or back to the hyperlquid uh AF the assistance so Paxos. I have a clip of me asking him why they chose to do 95% and I assume this applies to Athena as well. And he responded in saying that that there needs to be some sort of incentive structure for the the uh entity that's running this stable coin and managing it uh to be able to want to keep growing it and scaling it and keeping it on in their business line. Do you agree with this take? Do you think he's being greedy? Uh do you think that that that that there should be a little bit given back to the to the entity that's running this? How do you reason about this 95%

or 100% uh mark when it comes to the revenue generated from the stable co stable coin being given back to the community? >> Another very good question. Um well, I don't think he's being greedy. I think making a stable coin successful is is extremely hard and I am not a big fan of of of bringing the yield back to its users just because I am used to an ecosystem which is USDT ecosystem that has a very different use bases from all of the people that are generally using what we call the D5 stable coins or something like USDC right like tethers and USDT holders main reason of using USDT is not to get that additional 5% more a

It's to save themselves from 100 200% inflation a year, right? So our user base and Ted's user base is very very different from any other stable provider. And that's also why I think uh Paulo and the rest of the Ted team did such an amazing job in the distribution layer that they accepted because they have something that no other stable coin in the world can actually have right now, which is people holding their token without anyone paying them but just because of pure utility. Um this I I do think though as a personal view that this if you are building something that is native to the USDH to the liquid community something like USDH is meant to be judging from the announcement that they made it does make sense to bring back some of the some of the revenues to to its community. I also think that it's

extremely hard to make revenues out of a stable coin if you don't have the distribution networks and any new stable coin will have a big problem to to reach that. Um, a wise man once told me that making a stable coin that is up to$4 billion dollars in market cap, it's something quite easy. Like you you can do it from four to 10, it's very very hard. Above 10, it's absolute madness. And only few entities in the world have managed to to actually do it properly, right? But because of the way the stable coin business works, if you're just relying on tibial yield to get reasonable revenues, you have to get to those very big big sites. And then if you're bringing back all that firepower back into the industry, yes, it's good for the industry, but at the same time, you're also you have a trade-off here,

right? Like you have a trade-off between how do I enshrine something in the ecosystem without forcing my users to use it. And that's also part of our reasoning, right? Like our our stance is that if you're running an exchange, you need to have USDT usage. Every single exchange in the world has USDT usage. And if you force your users to use something else, you are you're leaning on this trade-off towards the okay, I'm I'm I'm having more issues on on a stable coin, but at the same time, maybe I have some kind of a trade-off when it comes to the usage of the of the actual exchange. And which is why our take is it's going to be a hard thing to do. Uh if there is a a community and an ecosystem in crypto right now that can get it right, it's likely I predict

liquid because I mean they've been rewriting the rules for the last year and a half basically. uh and uh we're just watching it very very closely and whoever decides to do it is going to have a friend in USD zero most likely because again we are here to make everyone uses everyone hyperlquid community life better that's what we kind of do as our as our mantra >> Lauren before we before we wrap I I want to get your your uh take on something that we've seen this is again stable coins it's on the idea of stable chains but a bit adjacent to hyperlid USDH and You know, we've seen several stable chains come out. Tempo, obviously, most recently backed by Paradigm and Stripe, but then also Plasma, um, uh, Stable,

USDL, like all of these are chains that are pushing stable coins and you know, you guys are right in the thick of it. And so I'm curious, what do you think is going to separate these chains from one another, especially ones that are primarily focused on pushing Tether, right, USDT? Um, and so there's not much differentiation on the asset or the stable coin itself, but it's all about the payment chain. How do you think, you know, we're going to find differentiation? And when you see some of these other ones launch and you're looking at competitive advantages, how do you see this competitive landscape shaking out?

>> Yeah. So, think about it like this. Um, we are the canonical USDT for both plasma and stable, right? Um both teams are extremely competent and they chose very different design choices when when developing the chain right like for example on on stable there is USD zero is actually a gas fee token while on plasma it's more of a zero zero fee transfer for for USD assets both things the thing that both have in common is that they're trying to remove as much f friction as possible between the end user that is using tether and anything else in in in the system. Um to answer your question, I think the thing that will set them apart is execution. Now I I'm going to be very honest with you.

Few times I've seen chains executing as good as the Plasma team has been executing. Uh Plasma will launch with two billion USDT zero supply from day zero. So the moment the chain goes live, there's immediately going to be two billion USD live there. And the whole this is something amazing and something that you would not be able to do with basically any other technology. And it's extremely cool to see it happen built on our tech because when we designed USD zero we designed it for chains like plasma like our pitch is always the same. We think friction we think barriers between networks are ultimately hurting users and we want to remove them as much as possible which is why you can move uh one USDT zero or 100 million USD Z 1 billion USD zero and you're still

going to pay the same amount which is absolutely zero other than the gas fee. Um I don't know who will win. I think it's pretty clear that this cycle narrative is stable coin and stable coin align chains. Everyone is is building one. Um I have few hopes on anyone that is building something not based on USDT just because if you're building a stable coin payment chain, you want to use the stable coin that is used in payments every day all over the world. Uh and one more thing that I will say is that some of these chains I think they're missing the point to go back to what we were discussing before. I live in Switzerland, right? St I use stable coins in my day-to-day life, but stable coins are not meant for me. Like I can

get a bank account in 10 minutes if I want to most likely and I still find ways to use my stable coins and so on and so forth, but they're not my tool. They are the tools for people in Africa, Latin America, uh India, Asia that are left out by the traditional financial system and traditional banking infrastructure and that's why they rely on USDT. So in my opinion, the chain that will win is the chain that will focus on on the areas of the world that are really in need of of stable coins which are furled countries and countries where the banking infrastructure just doesn't serve certain people because it doesn't benefit them.

>> I mean did somebody did somebody say trillions? Did I hear trillions? >> Yeah, you said trillions as soon as possible. We are at 0.002 trillions now. So, we're we're working on getting the number up, but we are we're I think we're doing a pretty good job, and it's going to be exciting. I mean, Plasma is coming. We all know it's it's sometime soon. I hope. Uh I may know something, but if I say something, Paul and Nathan will kill me. So, I don't know when, but it might come up pretty soon. And we're going to be very excited to see how how that how that plays out. >> Yeah, man. Last thing for you um that I think is is relevant is we're we're right now in a very uh elevated rate environment in terms of the US federal funds rate.

>> Um right we're we're expecting rate cuts to come in about 10 days or so maybe a little around two weeks or so. Um and that has an impact on yields in DeFi in different ways as well as on different mechanisms. So what I would expect is that rates come down. It increases speculative behavior. The demand to borrow stable coins in lending markets like a morpho etc. increases thus increasing the lending rate on stables. while also to the contrary uh stable coins that are like more mechanically based like Athena's USD they are a beneficiary of the speculative behavior for their basis trades with higher

funding rates uh in a lower rate environment which kind of separates them from the others you know I'm curious from your perspective of the tether perspective and even you know holding from the circle perspective and USDC how do you guys how do you envision this this playing out where right now there's definitely people that are trying to launch stable coins that want to give yield back to the owners and you know kind of cut Tether's margins or kind of try to try to undercut Tether and Circle and whatnot because they don't pay back yield. Um, how do you think about this dynamic as it relates to the changes of the macro environment where stable coin yields will theoretically come down just from a pure US Treasury's perspective,

but also potentially increase in DeFi such that the actual yields in DeFi due to speculative demand for at least a certain period of time will likely be higher than the federal funds rate and thus making it more attractive. How do you kind of reason about this? >> I I think it's it's a pretty it's a pretty good assessment. Um my my main thing is that it's very tricky for me to to understand really all these giving yield back because we work on a day-to-day with a completely different user base as I told you before. Um which is also something pretty cool if if you have very low cost and you don't give the the revenue share back. It's likely something that like your users use you because they want to use it not because some other macroeconomic scenario. So if

yields go down, who knows what other solutions are going to how the effects on that happens, right? um for me and again I don't want to speak for tether directly but in my opinion every single time that the market pumps tether market cap goes up the reason is pretty simple people want to buy bitcoin when when the market goes up and the easiest and most efficient way to buy bitcoin is through us uh which is quite different from the behavior of other of other stable coins right like other stable coins usually grow when markets go down because people sell the a bitcoin and try to save in USDC or whatever right the USD system is very different um yeah I wrote I don't know how to assess the the whole scenario. Usually rates going down to me means that as you said defi should kind

of bloom again. I I remember when in 2020 we had like 30% yield on stable coin. Everybody was like ah that's that's pretty low. Let let me just loop my USD anchor yield 50x just so I can get 120% of my stable coins, right? Like that's that's a pretty fun fun period. But for me, stable coins have always been something different and they've been a financial tool that gives hope to people that doesn't have it. And that's what we're trying to build very very much on on the Tether and USD zero side of things. Uh at the same time, again, we are a little bit more defi native than than other Tether Tether departments, if you will. Uh so we we always want to make sure that our technology is best suited for that. By the way, the moment USD launched, it opened up a whole bunch of different

farming strategies for a lot of large funds or certain uh DeFi funds, if you will, that are looking for yield against their their their their USDT because now you can move them between networks without having to pay 50 bips, which it's up in your margin quite a lot. Um, yeah, so that's kind of kind of how I'm seeing it. Um, I'm I'm going to be very very interested to see what what happens when rate goes down because it's all easy to run a stable coin when rates are up and everybody's making money. But the only people that were running stable coins when rates were not this high was was the ter guys and they found it to be funny >> because it's like everyone's so bold up on stable coins and so excited about them because rates are high because they see these because there's so much to

earn. But that pendulum is going to shift right back to volatile speculative assets as soon as rates, you know, if rates get cut in half. The stable coin business model gets cut in half. I I think what what it could what could happen here is that the the stable coins that too big to fail stable coins, if you will, are going to end up almost having the ladder pulled out from under them. Because you're right, I mean, I think both you guys are right, like the the yield delta here for them to capture is going to come is going to be compressed. is going to come down, but if we're still going to inject trillions into the supply, doesn't matter if the yield is if the delta is that small if we increase the capital base.

>> And so I think what's going to this is what's going to end up happening, but most of that's going to flow into the biggest of big stable coins and those are the ones that are going to end up winning from some of these inflows. I >> I agree. I also though think that we're we're missing up something that is quite cool that is currently happening and something that the whole teller team is pushing very hard which is um other denomination of stable coins right like I don't know if you guys have checked checked it out but one of the coolest thing in my opinion that is currently happening is that we're seeing a reignited demand for tether gold >> uh I don't know how familiar you guys are with tether gold but it's basically a stable coin that rather than being denominated in US dollars is denominated

in ounces of gold and it's basically it shows a direct relationship with the bar of gold that technically you effectively own that are held in Switzerland in a vault in a very safe country. And for me that is the perfect stable coin for DeFi, right? Like I I never really liked having US dollar exposure as a European myself before I understood how economics work. But I as as something as someone trying to build a centralized system, I always I never like this reliability on a single point of failure which is the US market. And Terold is kind of a fail safe to that, right? Like on top of bringing gold on chain which is very important it's also opening up a full other arrays of of of possibilities if you know what I mean right like what if

we start denominating all of the major pair against gold rather than US dollar because like we think of gold as a volatile assets but the dollar is also volatile asset just volatile in the other way around if you think about it and I just very very excited about that particular thing and in my opinion we're going to see a ton of demand for gold back stable coins in in in the future. And I'm very happy to to be able to contribute to the Ter Gold ecosystem with XAT Z which is the same thing for USD0 but for TA gold uh on on all the chains that we're launching on because I think it's going to be the next big thing.

>> So wait, can you just further could you just put the the stable coin backed by gold thesis into like 30 seconds? Could you just explain what is the Tether? What is a stable coin backed by gold thesis? >> I mean it works in the same way as as USDT, right? You give them one US dollar, they give you one one USDT. In this system, the way it works is that for each X in the world, there is one ounce of gold backing it in a vault held in Switzerland, which is pretty safe historically in terms of geopolitical stuff and so on so forth. And and then it just allows you to move the historical success that gold always had in the history of humankind on blockchain technology. And it's pretty

difficult to go around even these days and try to pay with a bar of gold. But if I can start moving all payments in a gold denominated tokens on chain, that makes it way way easier. And on top of it, I can saving it. And on top of it, I can take that token and put it into DeFi. I can collateralize I can borrow against it. I can collateralize a stable coin with that. I can do all kind of stuff that is in my opinion extremely exciting and something that really is important for the way I at least I am seeing this industry. Like I think the second best thing after Bitcoin to save in letting go the old speculative part of it etc etc is actually gold because during the Roman Empire with an ounce of gold I could buy myself a pair of

sandals a tunic and a [ __ ] sword and now I can do the exact same thing. I can buy myself a gun, a pair of Nike trainers, a couple of trousers, a shirt and I can still have my my my purchasing power basically intact if not even more. Like it's going up all gold all time high yesterday. So that's what I think is going to be extremely powerful and we know this is not something that's going to happen in the next two months. We're building those railways up for the next five to 10 years and that's why we're also expanding XT0 so heavily. We launched it on Polygon. We launched it on ton. We're soon going to launch it on on on all the other major we launched on liquid by the way. You can buy gold spot on liquid right now on the XT USDT pair

if you want to. Um hopefully you're soon going to be able to use BPS on it and uh and T team is pushing very hard on all the centralized exchanges to to create those deep liquid markets. >> Beautiful. Lorenzo, I man, we appreciate your time and thanks for that explanation with regards to Tether Gold. It's been a fun conversation and uh dude, stoked to see how Plasma goes. Stoked to see how this ends up >> and uh looks like you have some proposal reading and internal conversations to be had. >> Yeah, unfortunately yes. So, I wanted to have a nice weekend and I got stuck into reading Google Docs for the whole for the whole Saturday and Sunday. So, it wasn't fun and I guess it's going to end up like this for the rest of the week.

>> As Hyperlid community members, we have faith in you to make us proud. >> Yeah, we'll we'll do we'll do our best. We'll do our best. >> Penguin, stay winning, brother. Oh, >> as always, man. As always. All right. Have a good one, guys. Thank you so much. >> Thank you, sir. Peace, brother. All righty, Rob. Man, >> what a day. We're not done >> stream so far. >> We are not done. >> 10 minutes. We've got >> Hyperlid King. >> We're gonna hear the Hyperlid thesis. >> Watkins.

>> In the meantime, we're going to play our theme song. >> Do we have embedded music? >> Can can Can you hear that? I can hear it. >> It's embedded, Daisy. All right. How should we How should we pass the time? Got about 10 12 minutes some. Um, >> let's check the market. >> Market looks pretty hot. Hyperlid is obviously doing well. IP saw a funny funny tweet today, >> dude. IP $11 storage.

It said um >> it said I just sold all of my hype and bought IP. The reason being that Hyperlid's revenue is down from 250 million to 200 million today and IP's revenue is up from $43 to 147. >> Um okay, but there's been some crazy pumps. Did you see my X >> crime?

>> Yeah, >> I I saw it. I don't know much about it, but I heard it's crime. >> I mean, dude. So, yeah. Hype alltime high. Obviously, this is like the biggest marketing moment. >> IP goes to alltime highs. >> $11. >> Pump looks pretty good. >> IP is going to be the top of the town at KBW. I mean, no one's I mean, that is just >> everyone is going to be riding IP. Pump looks silly. Pump is ready to explode. That thing is just Yeah, that thing's going straight to a cent, two cents.

Um I mean, dude, the market looks good. And's bearish, though. It's just crazy. Maybe he's going to be right. Maybe maybe this rate cut stuff scares the market. But >> you see Worldcoin. So Tom Lee bought Worldcoin through in Bit Miners >> like in Bit Mine he bought $20 million worth of the DAT that World Coin is running. That thing's at 87 cents on Thursday last week. >> A$180 today.

>> Wow. It's a two and a halfx. >> Yeah. Not bad, huh? >> In a week. Our boy Jordy is doing big. >> Big thing. >> So did the Coin fun guys. I had the Coin Fund guys back when I was in New York and they called that too. >> Um, one uh one fix from what we said earlier in the stream, the the rate cut is uh supposed to happen next week, not >> Yeah. the 18th or the 19th. >> 17th.

Next Wednesday. Um >> so we'll see how that goes. The rate cut environment I think is gonna look what I think hap is happening now that obviously the market is pricing in 25 basis point cut front running that and the rest of them are probably looking at this and they're seeing like look okay we're front running this 25 basis point cut. If we end up cutting 25 basis points where does the market go from here? Well it's already priced it in. doesn't go anywhere. And I could see how that could be somewhat bearish in the midterm or at least on on like a month timeline.

What I think people are under indexing on is a 50 basis point cut. Um prediction markets I think right now have it at like 18% chance, maybe 20% chance. >> Yeah. >> And if we get a 50 basis point cut, I think we floor it. I think we pump hard. So again, that's a 20% chance. I think no one is really pricing that in and everyone's pricing in this 25 basis point cut. That's a basically a certainty at this point because the labor market has softened. Uh but I think there is a significant chance we get a 50 basis point cut. And I think if that happens, all bets are off.

>> All bets are off. What does that mean, Rob? >> I think we go higher. >> Okay, cool. Good to know. Good to good to know, sir. Man, what a wild two days. I mean, we got TYI Media following on the on personal. We got big names coming in on the rollup account. >> We got Vance calling for $500 for a hype. >> I wanted out there. >> I wanted to get your take on something Vance said about the cycle about cycle thinking. >> Okay.

So this was in reference to, you know, hype to $500, maybe a thousand, but also in reference to uh this idea that um first gold like the cycle is not necessarily there. Everyone's got different different cycles in their mind right? >> Yeah. >> And so the facade that Vance chooses to believe in is the cycle of first gold, then stocks, then coins. >> Yeah. He tweeted it yesterday. He's pretty bullish. I mean, look at stocks. Green all-time highs. >> But also look at gold.

>> Where's gold at today? >> It's also at an all-time high. >> I mean, it looks insane. Gold looks insane. Yeah. Bit Bitcoin's lagging, huh? >> Coins were decoupled for a time in the market. That was maybe like a month or two ago. Arthur called it. He called the decoupling and he was right. But now gold and stocks have caught back up and now everything's correlated again. So I think the question is where do we go from here? And I think if if we're looking at gold and we're saying like look like this is where this is where the inflows are coming in.

I think it means that we haven't quite seen it's almost like majors and then and then large caps and then altcoins from there right on a on a on a broader basis that's gold stocks and bitcoin and if gold's if gold is still pushing all-time highs it means we haven't yet seen the the type of rotation that we would expect from stocks and then and then once again the rotation that we would expect into Bitcoin and then from there the rotation into large caps their large the large cap rotation into alts and so I think it's not necessarily the case that like cycle thinking is invalidated it's just how we choose to measure these cycles

>> and I think there is a case in which you could see the entire you could see like a phase shift right like a sine wave that's shifted to the right where the cycle isn't necessarily just you a year after the having which classically was the cycle that I believed in because it was the cycle that was right from 2013 to 17 to 2021 but even just a sample size of three is still very small. >> So I think I think there's so like he so when I was like hey um but you know taking chips off the table makes sense to to a lot of people you know he was like okay well that's one way to think

about it. So, how do you how do you reason about, you know, managing your own personal portfolio while also ma maintaining this long-term bullish view, but also not wanting to take a 70% draw down? >> I mean, I think you and I tend to agree on this on the way to play the game right now, and it's this this idea of Nash equilibrium. I'm not going to go on some long-winded thing so we can get off solo shot, but I think >> Yeah, you are. Go for it, buddy. No, no. I think I I think you know there is again like this riskadjusted return that Run was talking about but on a personal net portfolio basis where if you if you sort of take like a kernel of truth in

each of these guys thesis then you know you see this gold stock Bitcoin rotation happening and it would mean that we are yet to see this this big increase in in Bitcoin. And so I think once again, you just don't want to mid-curve it. And you could look at, you know, some of the large caps like hype, pump, IP. Some of these are doing quite well, but they're still new coins. And so I think there's these different sectors where there's there's a a thesis at play. And it's no longer I think mostly the takeaway here is that it's no longer the case that everything is pumping at once. It might look that way like from a from a 30,000 foot view, but

I think the way to look at this is like, you know, you wanna you want to kind of be in capital preservation mode. And to me, that means Bitcoin or gold. And then with the other the capital growth mode which is kind of the other part of the portfolio you go into full Nash like you know you have you kind of have your stack of chips and then if you're playing with some house money then you go all in with your house money and you basically develop a thesis and and you shove when it when you believe and have conviction in a thesis and right now that looks like hype.

I mean, >> yeah. I mean, it it it is hype. I mean, we full shoved that thing pretty hard, and when Vance was buying down at $10, we were uh we were holding on to our butts. Um so, you know, it's funny. I saw this guy Jez on Thread Guys stream. >> Yeah. >> Um and he was like, "The best way to make it is just a full port." And dude, I mean, he's just he's like like dude, >> I I want you I I hope it's clear that's not what I'm saying.

>> I know we can't go back in time and full port hype, but if we first of all, my biggest regret of the cycle is not Dude, I can pull up our group chat on Telegram right now with Hyperlid and I can scroll back to freaking >> Yeah, I know. >> August 11th, 2023. Robbie, my freaking business partner, makes a group chat because he meets them at a conference. Great. Okay. I started my network, bro. >> One trade on that damn day. And just one trade a day. You send them analytics. We take a call with them. I'm in I'm on my way to Andor in a bus with the worst possible signal and I'm with this girl

Zoe and I'm with going to see my buddy Lawrence and I'm like I can't even remember I can't even hear this guy but Julian's like telling us that we should do the affiliate program >> and we're like we need revenue. We don't need affiliate program. We need revenue now. >> And then here we go. And then so we fade that and then he sends us more in October. We fade that points points program will begin November 1st. He sends us the tweet saying the points program is going to begin and we fade it and then he says he releases something new in Istanbul. Hope you had a great time. I'm I'm supposed to have a meeting with him in Istanbul and I I was probably too hung over and I

missed it, dude. And then the token launches and we don't even size up enough. Just like generational generational >> I mean we we sized up about as much as we could. >> Generational generational fumble on hyper liquid points. I mean it couldn't have gotten any easier for us. I probably tried to airdrop farm 30 other damn protocols this year and like how did I how did we or last year?

How did we not do this? I forget where I met him. Dude, it was in August of 2023, which was not ECC. August. >> Yeah, August 2023 is the group chat. >> I don't know. Doesn't matter. We sized up in hyperl though. >> It is great up. >> I mean, we are uh we are definitely sized up. So, like Vince, we did not buy in at 50.

>> I think our our first buy was like $210. >> Yeah. How did we fall back into uh into this? Um, we're not we're not sitting here talking about hyperlquid regrets. That's for sure. Talking about >> No, we got Ryan. We got We got Ryan Watkins coming on stage in a few. >> Yeah, give him a minute or two. >> He is the co-founder of Syncrasy. Uh, he is one of the active liquid investors in the space. They are doing a lot. He's basically gigabullish, hyperlid Athena. Want to get his two thesises on that. want to understand what syncrey is, what his fund is all about. Um, kind of how he sees it playing out, what his what his

thesis is is in the fund. Um, and yeah, that is the that is the majority of the uh conversation there amongst other things. Rob, >> let's talk more about the market. Um, I think we've had a bunch of fascinating takes so far and we've talked about USDH playing, but I am curious to wrap it up with uh with Ryan >> tomorrow. >> That's what I was saying like uh it was uh that's why I wanted to give the hyperlquid points story because I feel like a lot of people a lot of people struggled.

>> Oh yeah. with that like a lot of people missed that and it was a generational fumble. So, >> in hindsight, I think it's just take more opportunities, you know, like don't be so dismissive >> because we we did put our best foot forward. It's not like, you know, we we just straight up said no. It's just that at the time it's same thing that's going on now. There's so many opportunities at play. >> Yeah. >> At any given moment. >> Well, I put out this tweet. It was like, dude, there's you you know it's a bull market when there's like what was it tweet? I was like, you know, it's a bull market when there's a dozen different things happening in each sector of the market and you can't really keep up.

Like that's right now. >> It's always like that. It's not just bull markets though. 2023 was the same thing >> kind of. >> But why else did we not do a hyperlquid points program? Like I think it's just at a certain point it's a little bit of ego just to think like, oh, we don't need this, you know? We just didn't know what it was. It didn't have any hype. It wasn't it wasn't exciting. >> I mean it was but like it wasn't it was like >> like bro we had been through the experiences of GMX, DYDX >> and all the other perexes and to us it was just another perex.

>> Yeah. And this is like this has obviously changed dramatically since you know the six months prior to launch into launch and further but like man like that like perexes were not cool in the bare market because they didn't generate any revenue. There was no this buyback kind of thing going on other than rollit and nobody really cared. Yeah Robbit. >> Robbit obviously a very different mechanism for generating revenue, but they did they did help spur the whole buyback meta.

>> Pretty funny to think about because that was OG. Not even OG. I mean that was 2023 maybe. Yeah, probably late 2023. >> Yeah. >> And it did quite well because they were generating revenue. But then again, I mean, it gets back to the point of the perpetuals exchanges were not generating revenue in the bare market because there was low volatility, there was low volume. >> All righty, guys. I think we're just getting Ryan set up in the back and then he will be our final guest of today's stream.

um looking forward to chatting with him and about his uh his uh his his thesis and more. And yeah, should be should be a fun one. I I'm not exactly sure what the tech stuff is going on in the back, but it classic streaming guys. We're streaming daily at this point. We got a team in the back producing the show as well as producing the actual guests as well as the post-production the clipping. Uh it's been it's it's a big big uh undertaking here. So appreciate you guys rocking with us through the uh through the stream.

>> Oh yeah, you guys rock. We might get creative with some of these mechanisms. I think there's a lot of very cool creative things that are on the docket as far as two-way interactions are concerned. >> Yeah, dude. The thread I was editing the thread little taste if you guys are are listening big stuff on Friday. Big big announcements, little tuneup. I have a a banger thread explaining from our perspective the stream lore and how it all kind of played out written by our creative strategist Zachary who I'm gonna who I'm gonna take a biz trip to out to Hawaii with Rob. Just a heads up.

I think I think he's gonna come out on Wednesday. Be a little like a little a little MX build for the boys. Just put two tweakers in the room together and see what we can come up with. >> Oh my god. Goodness. >> Come on. That That would be fun. >> That would be great. I FOMO just >> I know you're just going to be hanging at hanging at home streaming. >> I'll be streaming. >> I mean, I'll be streaming, too. >> Um, man, I would uh I wouldn't want to be a brain cell in that room.

>> No, it's it's going to be firing. I'll tell you that. >> That's for sure. >> It's going to be firing. >> Zen. I wouldn't want to be a Zen. I don't know. There's something There's something I'm trying to get to. I just not sure what it is. >> You wouldn't want to be a STEMI in that room. >> No, there you go. That might be it. >> I'm not even on any just caffeine. >> Each other sty. >> Yeah. >> Um Okay. >> Zach just texted in the chat said, "Two tweakers in a dream." >> Yes, sir. Yes, sir. >> That's right. >> Yeah, man. So, I also just got really good news from Token today. Uh hopefully that we're gonna be able to do something there. Locked in as in as a speaker for KBW >> and got some good >> and then Token should be good. Have some

we got Arthur Hayes booked. We got Impalo booked. We got a couple other sick sick speakers booked in person and virtual. Um so I'm stoking on both of those. And yeah, still trying to lock down that Dev Connect event setup, but that's going to be exciting. And then if you guys are going to if if anyone's watching this and going to SmartCon in New York City, um Chainlink is hosting an epic institutional event and uh it should be super super great. And so we we'll be doing live streaming from from that. And then I think I think we're locked in. I don't know what's the status of the DevCon stream. Is that happening or what's the

>> follow? >> Yeah. Okay. >> We've got EF Alignment happening which is very cool to see. We had Tamas on the stream last week. >> Yeah. >> Um I think we're going to have some more Ethereum Foundation members on the stream coming up. Have to follow up, get those guys booked, which is going to be very exciting. Obviously Ethereum doing big, big things. No surprise, no doubt. Do you >> think ETH is going to 10K by the end of the year or no? I think this gets back to like where we are where we how we're thinking about cycles.

>> Okay. So, I think it's possible. Um, but that would be an insane run in four months. >> Oh, 10K by the end of the year. >> Yeah. >> But what's the rush, right? Like there is just no rush. Like I I was I was uh I was surfing with Nick yesterday, right? And we were just talking about kind of the cycle and stuff and we're like, man, the dream would just be a slow steady climb. You know, it would just be the dream, just a steady super cycle climb.

>> If you were president of the United States, isn't that what you would want to do with the economy? >> Wouldn't you >> slowly supercycle it? You would basically want to just you would want to start at point A and if you need to tank it right off the bat with tariffs and market manipulation, you might do that, right? So you have a you have a a strong foundation of basis. >> Yeah. >> But then after you do that, wouldn't the best possible thing for sentiment and your citizens or community just steady climb? Just this reminds me of an episode.

>> Yeah. But yeah, go ahead. Reminds me of an episode of How I Met Your Mother. It was a It was a guy talking about how to build the right party playlist and it was basically crescendo and don't ever stop the entire night. Just continue to build and build and build and build and you just never you never have a comedown. >> Yeah. Now, wouldn't you want to do that with the economy? As soon as you get these types of like back stops in markets and such, people just want to take more and more risk and it just becomes the people that take more and more risk and then get rewarded for it incentivize other people to to take more and more risk. And that's why you see alt season. That's why you see tokens go crazy at the end of the risk curve. That's why you get

the Bitcoin, ETH, altcoin kind of flows that go all the way back to secrets of crypto in 2017. I mean, it's just it's uh it's been a it's been a uh uh it's been a a journey to to kind of understand how that flow happens and and it just that's why we we we don't get the super cycle. We get like these like uh slow slow slow and then we get this freaking parabolic finish because everyone gets gets, you know, fired up. [Music] I I I'd imagine there's a there's a a way or a system to control the leverage

such that you you basically you do grow the leverage but we're also printing money. So you can kind of think about like those two scales and if you balance those two scales then like the S&P stocks just go up pretty much over time. They just go up because they're generating value. They're providing services. there's money in the system and we're continuously printing money and so as long as these things even if you just think that they maintain their value just like just like gold, right? The denominator is going to zero. >> Well, yeah, dude. Let me let me throw something your way if you're going to kind of get into that frame of mind. Um, how about this tweet from John Charb, which is, "I'm trying to buy a house.

It's crazy that gold is now a serious hold for even short to midterm wealth storage, not just long-term money I'm setting aside for a large purchase at some point within the next year. A house is split between T bills, gold, and BTC. Can't just sit in cash when DXY is negative 10% year to date. >> Yeah. 10% year to date. >> Yeah. So why w with that understanding and that basis that denominator why couldn't we just have a slow steady melt up and there's going to be boom and bust in there like people are going to take leverage people are going to blow up but

even if you just think about something that's not like even like Bitcoin and gold though I mean I I guess you you can still have like micro strategy you know sell a bunch of ATMs and get blown Right. And then obviously have to unwind all that positions. It's gonna have a >> but um but like >> Okay. So we were talking about that with Vance, right? Is like >> do you sell your crypto because you think it's going to go down in the future to hold dollars, but the the denominator is worthless. I just feel like people accelerate the actual time that it's takes for the denominator to become worthless. Like it's not just like a like it's going to be a a process. You know what I'm saying?

Like Trump is purposely pulling DXY down to uh facilitate better US exports, I believe, is essentially the Gro. >> I mean, it's kind of it's kind of the idea. It's the way that all these foreign exchange currencies are linked to one another, right? They all you want to devalue your own currency so that like you can essentially control the money printer and no one else really can do anything about it. >> Yeah. >> And >> Yeah. So, so that's real. That's why, you know, asset owners are are doing what they're doing. It's also um, you know, printing the money is also devaluing I I I think that there's something really interesting about this Russian finance minister, you know, claiming

that we're devaluing our own debt because think about think about hypothetically. >> Yeah, that is a crazy crazy trip. Hypothetically, let's say that Trump has secretly accumulated, you know, a lot of Bitcoin, a lot of Bitcoin, right? >> Which they are, and they >> which maybe they have, maybe they are. They're obviously very invested in the crypto economy, >> but let's say no one knows he's doing it, right? So, he doesn't really shock, you know, the market >> and and have people front run.

>> And so, he does he he first you want to fill your own bag, right, before you pump it. And then you devalue the dollar. You print a ton of cash, right? Denominator goes to zero. Bitcoin price flies up and he's got he's sitting on a massive amount of Bitcoin. >> Then he can turn around and he can say, "Look, this 35 trillion. Okay, sure. We want to pay it off in Bitcoin." And Bitcoin is now 10, 15, 25, 30x higher in dollar terms. >> Yeah. >> I mean, can you just wipe it away? Like can you just >> No, but like uh if if 35 trillion is X today and the value

the the purchasing power of 35 trillion tomorrow is Y and and Y is is some number that is like some arbitrary number that is like X minus Z. So there's some there's some decay happening then like you know then then that math's math man. But you get what I'm saying, right? Like the purchasing power today is is 10 and purchasing power tomorrow is nine. >> Then you can kind of slowly, you know, wither away the actual like >> the 35 trillion. That's >> the nominal value of purchasing power of a given item, >> right? But that doesn't all that's going to do is send assets to the super cycle.

Like it's going to just be an absolute just just absolute madness really. >> Okay. Okay. I think I think I see what what we're getting at which is that yes that is happening but your point is that it's happening slower than everyone else thinks like slower than people make it come out to be make it seem >> which I can understand like we are printing and and maybe it's a very intentional print that that we have going on like people like we are printing not only to finance you know government subsidies and and and these sorts of things and and you know consumer spending and and you know finance these these projects but it's also intentionally printing to devalue

the debt >> which is so bullish for Bitcoin. >> Yeah. >> And Bitcoin is a reserve asset of the economy. >> The investment thesis since we got crypto pill in 2017 has just been like okay denominator is going is going to inflate. Anything scarce is valuable >> like gold, real estate, land. You know, that's why digital art is still kind of like funnally a late stage bull thing, but it like it works too. >> Yeah. >> You ask Ralph Paul, he's always talking about his digital art collection and the value in it.

>> And so I think there is a possibility that this could slow me up. And I I I could buy into the thesis that we get some speculative bursts over the the coming six months because this leverage cycle builds up based on low rates. People pump a ton of money in. It's easier to do DATs. We have a ton of buying and then we have these big bust cycles and we have these deleveraging. But that is underpinned by the denominator going to zero and this slow inflationary cycle taking place on a much longer timeline.

>> Yeah. So, >> so >> maybe the thesis that you can come to is like, okay, yes, if crypto goes crazy from here, selling to dollars is a worthwhile thing to because if Bitcoin goes to 200K, 150, 170, and then let's say it pulls back down to 80 in the future. Look, I'm not trying to be a trader here, but I'm trying to avoid 70% draw down on the portfolio, which if BTC gets up to a really high amount and then just pulls back down close to 100, you're looking at altcoins getting demolished and and that's okay. But it's like is the time value of the of the dollars that you're that or like the dry powder that you're

holding, you know, as long as that time value is and you're you know, you put that into some earning account like some 4% yield and you understand that you're at least trying to offset the devaluing while then looking to reallocate at a better time to assets. The problem is just like how are you going to time that? Like if you know that this is going to continue to happen, why not just jump on a train and just keep allocating towards assets just to be on that train? >> Well, the answer is train is has to end at some point >> theoretically.

>> That that again gets gets into like where you want to place your chips. And so I think if you know you make a poker analogy here and Vance I think talked a little bit about this which is that you want to have you know there's some capital preservation here. And also I think what's really real and he mentioned this too is trade after the trade. It's like what are you what are you gonna do? Like there's the time asset and then there's the monetary asset. And the monetary asset, you know, maybe you want to shuffle things around depending on market conditions. Time asset, you know, is a different conversation. But as far as the monetary asset goes, you're invested. You see the denominator. You see what's happening.

Where else are you going to put like you want to have a capital preservation mindset, right? So that's where your capital base is. But as far as where when it comes to growth, if you're playing with house money, where else are you going to go? Unless everything is going up and down at one point, which is >> that's what that's what Vance was saying. He's like never leaving here. >> Like what what are you gonna do? Sell the cycle. It's your last cycle and then what? It's not like >> where are you gonna go? >> There's nowhere to go. There's nowhere to hide. I mean, you could hide in other assets if you really wanted, but I mean, we all we all know where this is going.

So, all right, guys. We got Ryan in the back. Um, he's coming up, the co-founder of Syn of Syncrasy. Uh, stoked to have him on. Lot to talk about today, uh, from the Hyperlid side, the Athena side, and more. Um, so, let's get Ryan up and, uh, and let's, let's jump on. >> Welcome, Ryan. Good to have you. >> Yeah, likewise. Thanks for having me on. >> Yeah. Apologies for some of the setup stuff. It's a it's a full technical operation here, man. >> All good. >> Yeah. Good, man. Good. Good.

>> It's exciting times. USDH, we've had feels like every single proposer uh to be the issuer of USDH. I think besides two, we haven't had Guy from Athena. We haven't had native markets, but we've heard from Agora, heard from FRA, we've heard from essentially all the rest. You're very involved in the hyperlid ecosystem as well. So, just to just to open up, you're not putting forward a proposal yourself, at least not that I'm aware of, but how how do you how do you view this landscape and what what are your your initial impressions and thoughts here? >> I mean, if people want to give me all the interest revenue for a stable coin, I'm happy to do that.

>> They they're gonna they're going to want it. 100% revenue shares, table stakes, Ryan. >> Right. Yeah. No, it's uh I think it's incredible. I mean, it came out of nowhere. Um, so for a long time, one thing that I thought Hyperliquid could do is uh create their own stable coin. It's kind of like low hanging fruit. There's all this USC on the platform. And even like at the end of December, I think it was one of the first time tweeted this out. They already had like a couple billion dollars there and it's just sitting there doing nothing yield. And it's actually quite easy, I think, to just like replace it. But there was just no reason to do it. Like it wasn't really that big of a it wouldn't have been that big of a revenue boost at the time. I think at the time would have maybe been

an incremental like $50 million. Uh and Hyperlow was already making you know well over like $200 $300 million just from the the perks exchange and that was like the most important thing to do. But now that we're getting to uh a stage in I think the the growth of Hyperlid where uh you know can start to think about this more and also where there's just way more stable goals in the platform. I think now is the time to start considering what to do with this product and it's a very synergistic product to an exchange. So even if you just look at Circle's USC as an example, uh one of the biggest criticisms that I think many of like the natives had of Circle going into IPO is that they're giving up so much of the interest income to to Coinbase. Now it's like a big criticism

like oh the margins are compressing and this is going to be such a dud when it goes public and obviously it just behaved the opposite. But I don't think that substantively that that take was was wrong. And really what I'm getting at here is that exchanges are the biggest distributors of stable coins. And I think Hyperlid is no different. And I think now we're kind of seeing Hyperlid really start to uh just kind of put it like strongest foot forward and demonstrate the power that it's now having in the ecosystem and >> and and just going going after this opportunity. So yeah, I think it's it's very exciting and uh I mean at this point like literally every single stable coin issue with the exception of Tether and USC have come to the table to uh to

to win this and it's been a absolute show, >> man. And I I put a a a screenshot of CL 207's quote tweet of John Vanek saying, "Hey man, I I own 1.5 billion in our validator, whatever it is. could you uh please speak to me in a language I understand like meow or something like that and then you got moon overlord in the comments saying oh I don't like his attitude thumbs down and it's just like it's just a complete flipping of of power truly I mean it's you've got some of the largest institutional players in the space basically coming in to lobby to essentially what is like hyper onchain defy giga whales now as a result

of the airdrop and as a result of the success of hyperID liquid. Um, just taking a quick step back, Brian, with your in involvement in Hyperlid. Curious kind of like what your personal and and synchronies capital involvement is in the Hyperlid ecosystem and kind of just generally your Hyperlid thesis as I know that you've been involved uh quite a bit early on and then we can get into some of the nitty-gritty of some of these proposals and uh and that stuff. >> Yeah. So we've been uh it's like longtime supporter of Hyperlid. Uh Sunny or our D5 monk who's on our team uh had covered Hyperlquid for you know well before it even launched the hype token.

Uh we at a fund level bought Hype on the first day and have been holders since and we haven't made any additional investments in the ecosystem. I think we're uh generally very patient and methodical about how we build exposure and I just don't think that there's been opportunities to do that so far. But yeah, it's one of our largest holdings and uh and yeah, so that's that's like how we just think about Hyperlid uh and our exposure as as a whole. For me, this this proposal, we haven't officially endorsed any uh any other proposals. And part of it is just me waiting to see what all those would be. You know, Guy just came out today with his proposal

for Athena. And I think that one kind of shook up the uh the landscape of proposals. So, we're taking our time. And I think over uh the course of the past couple days since we started to get trickle these in uh what I really started to laser in on is what is the most important thing that the community consider when evaluating these proposals and you know for us it's really about alignment because there's so many teams that have come to the table they're all proposing the same thing. we're going to be a genius compliant stable coin. We're going to pass back all the revenue to token holders, right? That just doesn't make a difference at this point. And I think the number one thing is we want to make sure that whoever is building the

stable coin, this is going to be their number one priority and that they're going to be here in the next few years as we look to scale this ecosystem. So, yeah, I'll pause there, but that's that's kind of like the most important thing that we've identified so far. >> Yeah. And I think you've you've outlined this, right? you sort of articulated this like who is going to be the best steward for USDH and and so you know I think we've seen a couple of proposals sort of allude to how they could build USDH into a legitimate stable coin beyond Hyperlquid's ecosystem. The most compelling or one of the most compelling that I saw was uh the the Agora proposal and how they could leverage RAIN and the

debit card issuer to sort of implement USDH into Visa and there could be some network effects there to to massage it into the rest of the ecosystem. Aside from that, how else do you think any of these proposals, what would stick out to you as okay, yeah, that is a legitimate way of building some USDH adoption outside of Hyperlid? >> Yeah. Yeah. So, I I actually don't think building adoption outside Hyperlid is the biggest priority. I think the the sequencing of how or I think it is like an end goal, but the sequencing of you get there matters. So I think phase one for lack of better words is uh just getting this new stable coin adopted

within the hyperlquid ecosystem. So then a day like what we're bidding for is just a ticker and once you get the ticker you have to go and get the stable coin adopted. There's no promise from the Hyperlid Lab team that they're instantly going to add USDH pairs for the spot markets or it's going to be USDHs collateral on Hyper Core or any of that. Right? you need to actually go and uh get this stable coin to scale and then get it to a point where hyper the hyperlquid lab team would even consider wanting to put this in hyper core. So I think like the what I would do is I would be most focused on who is going to be supporting uh hit3 markets who's working with like the builder codes ecosystem who is tapped in with all the leading projects in hypervm to get

stable coins onto that platform lending rates are still bar rates are still way too high there uh and all these things I think would be like the number one priority as far as just and what would be the most immediately creative to the ecosystem right so building financial products around the stable coins and actually working with all the people all the builders in the ecosystem to to get this adopted. >> Yeah. Yeah, man. I mean, I think this is a big part of >> this is the this is a big part of the future of uh Hyperlid's growth trajectory, right? Is the stable coin part. I think I mean somebody put out a tweet saying that basically, you know, the best businesses in crypto are exchanges slashtrading and stable coins currently and and maybe one other and it

seems like Hyperlow's kind of coming together to put these all into one. We had Vance Spencer a framework on uh to start the stream off today and he spoke about uh Hyperlid's potential path to you know $100, $200, even $500 and and kind of wrote that or you know kind of stated that this stable coin could be a big part of that path in addition to growing purpose volumes. When you're thinking about the the future of hype the asset as well as the protocol, how how important do you think this stable coin is going to be to driving more flows into it? you know, do you agree with with Vance that this is a very strong part of its next leg of growth uh into a higher uh multiple? How do you kind of think about this stable coin uh

part of the platform leading to its rise in, you know, 100, 200, 300, $400, etc. >> Yeah. So, I agree with Vance and his bullishness. Uh I agree with I think it was someone from Dragonfly who originally put out that tweet about how the biggest businesses in crypto are exchanges, stable coins and and smart contract platforms and totally agree with that framing as well. Historically we've not seen these three businesses bundled. uh and I think that is what is like a big opportunity because uh if you can bundle all these businesses and you can align all these businesses economically with one single asset then you will could potentially if

you get this to scale and it's competitive in all three of those categories and I think these categories are very synergistic as I said uh exchanges distributed stable coins uh blockchains are the settlement rails for stable coins and trading If you can get these to scale, then you can have probably the largest buybacks of any protocol or platform in the ecosystem. Already today, you see that Hyperlid is doing more buybacks or generating more protocol revenue than any other smart contract platform in the world inclusive of Ethereum, Salana, and that is more or less just with the perpetual swaps volumes that it's getting and the growing spot markets and nothing to do with stable coins yet.

This is also prehi3 which I think will be expansionary because you're not only going to have just existing, you know, Bitcoin, Ethereum, soul markets that are driving a lot of volume with different collateral types, but you'll also have potentially US equities, preipo startups, all these new asset classes that currently just don't have, I mean, even just outside the crypto economy, this perpetual swap instrument to trade them. And I think that is like, you know, very exciting green field opportunity. It also helps hyperrow get to a stage of its growth where it's also not as tied to the crypto economy anymore because >> you know crypto can go down 50% to in the next month and then all of a sudden

maybe we're cooked for six months and then all of a sudden volumes fall off a cliff and now revenues are down but I can be pretty confident that equity volumes will be more stable than crypto volumes right so I think it is important just to kind of diversify a revenue mix as well and that's why I think the HIPP3 stuff is is important. So when I think about the way that the stablecoin fits into this picture, it's like once again once uh is another revenue stream for Hyperlid. Uh and then two uh it's like a it's like a huge driver of the the buybacks that like I said just already are at a scale that is outpacing everyone else. And I think this just supercharges it. And

maybe the one last thing I'll say too and this is something I've been thinking a lot about recently uh because this wasn't in the original Hyperlquid thesis we wrote is that uh Hyperlid is taking has a very unique point of view on how to build an ecosystem. So if you think about historically there's like two different ways to build an ecosystem and this is a little bit reductive but there's like the uh you know fully integrated uh there's like I don't know there's maybe a vision where you just have the smart contract platform and then a bunch of thirdparty teams go out and build everything right and then there's this fully vertically integrated version of like an app chain I think of I mean although it wasn't successful like something like Kanto or think of maybe like a bar chain where like the

core team actually builds these core primitives of stable coins and trading uh all under one roof. And hyperquit is kind of this interesting in between where it is intentional in the same way that a baritin or Kto would be and that it's saying we only want to have one hyperquit stable coin and one hyperlquid exchange. These are enshrined into the protocol but it's not the core team that is building out those features. These are thirdparty teams and initially for a unit that was not an open process decide who's going to build the spot market but now for the stablecoin it is an open process. So you get to tap into the community and see what everyone can

bring to the table and you do get competition but you get the uh also you get the benefits of this efficiency and this like intentionality of just having like a single product for the entire ecosystem to coordinate around and that is a I think a really interesting way of methodically building an ecosystem from scratch because these are as we know like extremely important primitives. These are extremely cash generative primitives and if you can intentionally build roll these out uh then I think you can build not just like an amazing ecosystem but you get a ton of buybacks for the token and I think that's like what hacker liquid is doing. So in your original

>> so >> I I think you know what what you're talking about from the purpose-built app chain perspective and now they've been able to expand that especially as they've gotten network effects with the amount of liquidity and volume and adoption that they have. They've been able to now incentivize other teams to come in and build out other core primitives and functionality. And you know, now they're starting to go beyond perpetuals exchanges and start to build into more product lines that they're going to bring, you know, under the under this umbrella and it's all going to kind of flywheel through Hyperlid.

Starting from the perpetuals piece because we were talking about this before, we're actually going back and through our through our our chat >> the Hyperlid team back in 2023. you know, we we sort of faded the points program because we were like, look, like >> perpetuals exchanges have been done before, you know, Apex and like some of these other ones like >> why why do you think Hyperlid had a why was it a zero to one? Because at at at at the beginning it was just a perpetual exchange, but they were able to build such a such a robust ecosystem around it. What do you think they did differently that other perpetuals exchanges didn't? and and what made them so successful early on that it spurred

this monumental growth. >> Yeah. So I think it's a I guess a handful of things. So for one, many of the early per exchange were constrained not only by technology like it was just hard to build a chain with that level of performance even if you were to have just a small number of validators but they're also constrained philosophically because I think many of the early builders in the space had this hard line on decentralization right there's a certain way you're supposed to build a product if you look at all of the core printers we built in the past whether it be per exchanges or uh spot markets or stable coins like what was it? It was like decentralized stable

coins. It was AMMs. It was like you know an L2 with some you know really complicated proving mechanism that is the per exchange and that's great if you want to adhere to a certain set of principles but it's not great if you want to build the best product. And I think what it took is a shift in the culture of this industry that took place over the course of many years for someone to come along and even have the confidence that to build this and that people would actually want to use it. So that was one.

It's just shifting culture uh and then also like the technology getting to a point where you actually could build one of these one of these products. Um the second thing is just like the actual uh timing of it. It's no surprise that uh you know I think the Hyper Code Labs launched the Hype asset after Trump won the election. I don't think that this is I mean I think it would have been like a riskier proposition for this like offshore derivative exchange to launch a token with buybacks before that happened. So it's like hard to separate that from this Uh and at the same time like I think having a more accommodative regulatory environment in America gives

it more cover to go out and grow and and kind of move with confidence, right? Because these businesses uh operated in a gray area for a very long time and not every founder operates in the gray area the same, right? Some people are more careful, some people are more bold. And I do think that that is like it's it's hard to separate the timing from from all this. And then the last thing is just, you know, they just nail the user experience flat out. And you know, that one's just like a little bit hard to communicate. It's just something you got to experience for yourself, right? It's just really smooth. Uh it was like one of the few per exchanges out there where you just deposit once and then you have to pay any more fees to transact. Whereas every single other blockchain, you have to pay

every single time you do a transaction. You have to prove something every single time you do a transaction. Uh I think it's just cheaper. even just look at like the fee tiers versus Binance or any other exchanges is a lot cheaper. Uh and then yeah like when you actually in like I said he had the performance the performance that was actually comparable to one of these centralized exchanges but you can still access it anywhere in the world so long as you have the VPN right so those are things that I think really stood out to to me and then maybe one of the last things that I think just the team is just aggressive so like the first list assets they're really creative they like they'll list like a pump futures market before it goes live >> they'll be the first one to do it like

the Trump futures like way before any other exchange did and sometimes being first is the most important thing with these really hot assets where people want to trade. >> Yeah, man. I think you you you raised an incredible point about the US regulatory regime Trump as well and and we had we had Vance kind of speak about his view on the on the stable coin side of things which obviously is skewed towards the sky ecosystem but but I'll kind of ask you the same which is he he framed it as that the and you know last thing here on the on the US and I'd love to get into into some of your Athena stuff as well is he framed it as uh USDH doesn't really necessarily need to be a genius compliant giant uh US regulated stable coin. Like that's probably not exactly

what the hyper community really needs. But on the other side, it probably doesn't need to be something like uh you know, you take it all the way out to like a die or a algorithmic stable coin or a very decentralized kind of like uh yield bearing, you know, very kind of uh let's just call it like exotic type of of stable coin. you know he he he thought somewhere in the middle and obviously this lands on USDS for his perspective like what is what is your take on the type of architecture for uh USDH stable coin given a lot of the uh features that you've mentioned of hyperlquid's success some of them being you know regulatory arbitrage some of them being the team's aggressiveness and willingness to kind of ship uh let's call them exotic products when it comes

to the actual design of of USDH and perhaps this this is, you know, going into Athena's proposal, but how do you think about the correct type of stable coin and, you know, I imagine that there's going to be multiple actually. Um yeah. >> Yeah. Uh, so I I I I actually do think it needs to be genius compliant and I think it just needs to be no frills, uh, built in the safest way with the most institutional partners. And mind you, that doesn't mean that like the team that's stewarding it needs to be this large institution. You know, for example, the native markets team, they're working with bridge acquired by Stripe and Bridge will be the issuer of the stable coin.

So, you get the best of both worlds where you do have like the compliance and fiat rails of a bridge and stripe, but you do have this native team that's stewarding the the protocol, right? So point being is I don't think you I I do think you need to have like a someone who's just not going to [ __ ] this up, right? And why is that important? It's not just important just from reducing the risk that there's a [ __ ] It's also important for increasing the confidence so that more people would want to deposit this asset and use it on the platform because you know Hyperlid it's getting big, right? I mean this is like one of the largest exchanges for trading crypto in the world at this point and it's competitive with like the

Binances of the world and it's also not a guarantee that you can even win over the existing USC that's on the platform, right? It's not like day one, you know, Jeff is going to snap his fingers and then everyone just converts all their USDC into USD. It'll be a I think it'll be a process and I think that whoever team wins needs to have like a like an actual coherent plan for how to get those get those over and I think like you know the Athena proposal was a great example. There's going to be a combination of like incentives and you know all this stuff to kind of get all that stuff over to uh US USDH. Um so yeah all to say I I really do think that you know this is opportunity to uh

to build something that is institutional grade that has a lot of trust so that you can actually get more people comfortable with using this platform which you know while we all may like I just think about meeting one of my friends works at investment bank they hear about this decentralized exchange and you know all the servers are somewhere offshore in Tokyo and there's like wait hold up this what what is going on here. I think you want something that's just going to be uh like a positive for the brand uh as well.

>> Understood. Understood. All right, guys. Shifting gears um into some of your Athena thesis and and the the thing that that I want really want to kind of pick on here is that we're going to get a rate cut next week or in about seven to 10 days Jerome Pal's gonna come out. We're gonna get a rate cut. Um this is very bullish for uh speculative behavior in crypto. Um you know kind of what I expect is to see stable coin yields uh increase as the as the uh desire to borrow stable coins increases. uh the lending rates on a and morpho should go up for USDC, USDT, but no none other than USD is the larger you know beneficiary here of this of this design

with their kind of uh funding rate basis trade mechanism. How do you think about Athena's growth into a rate cutting environment and kind of walk us through the the evolution of the thesis up until now? >> Yeah. Yeah. Uh, you know, I think one of the f first times I I met guy in I want to say early 2024. Uh, and this was right before Athena launch. Uh, and he told me like exactly what he was going to do, how he's going to get to 5 billion, 10 billion. And he specifically talked about this rate dynamic. He's like, listen, at a certain point, Fed is going to cut rates, right?

Crypto will rip, funding will blow out, and the spread between what you get from this USD stablecoin and what you'd get on T bills is going to be huge. And this is going to be a huge showin for us. And I was like, that makes a ton of sense, right? That makes a ton of sense. And now we're kind of at that stage where there's a line of sight to that happening. So I think he's totally right about it. Uh and that's really all there is to say about that. Uh the second thing on like the evolution of Athena thesis, I mean I may have had one idea last week and then in the past week he announces that I mean uh another 500 plus million dollar pipe

into the uh Athena DAT announces a integration with Binance which is I think probably the most important integration in its history that could uh add another you know couple maybe few billion maybe even tens of billions of dollars mark of a supply to the US stable coin. Uh he also announced his integration with Megath right where they're going to be the powering the native stable coin of Mega so that Megith can offer you subsidized user transactions and then they put out this proposal for hyperl this is all within the past week right so I mean these people are just shipping and it's relentless I mean I can only think of maybe just like a a couple of founders inclusive of Jeff from Hyperlid that are

actually shipping at this pace and this is just something that I think that people in the the crypto economy you're not used to, but that you would be more used to if you were uh in like the normal startup world or like normal world of uh finance and technology where there's just like a a higher level of professionalism and and more competition in some of these areas. Uh so yeah, I mean much much to unpack there without maybe any of those uh you know four proposals, but yeah uh it's a it's a monster in the making. Do you think part of the reason that crypto is starting to embody more startup culture is because there's more at stake? There's like this competition is more fierce. You know, we're talking about bigger numbers now

and that's why it's drawing in more talent and more competition. >> Yeah, I think that's right. I think yeah, definitely more at stake uh bigger bigger economic opportunity, which is one of the reasons why we're seeing this influx of talent. I think that there's regulatory clarity now which gives builders more confidence to go and take bold risk and then uh another key factor here as well is that I actually think many use cases are starting to ascend the S-curve and >> now that these these products are real and we're not just competing in the the narrative wars all day for you know why is my shitcoin better than your shitcoin

like how do you actually differentiate you got to go out and do Right. And at the same time, you know, what is doing something in the context of these these core use cases we talk about, whether it be stable coins or tokenization or trading. Uh yes, it is speaking to, you know, all of the cryptonatives, but it's also interfacing with large institutions and both within and outside the crypto economy. And that just takes a certain uh type of a founder to go and execute that well because listen all the use cases that is listed this is finance.

>> Yeah. >> Right. This is not this is not like you know social this is not you know some some weird this is this is finance. You have to go and talk to investment banks. You have to go and talk to asset managers, brokerage platforms like all these different people and and convince them to to use their products, right? And I think that's what's also changing like the types of talent that are succeeding in this asset class. And also it's like a it's a it's kind of lighting a fire on everyone too. Like there's this huge land grab that's happening out in in crypto. And if you don't have an answer for how you'll be able to compete with some of the large incumbents that are now coming after these core products as well because once again it's not just like Athena is competing with uh or

Hyper is competing with like other decentral exchanges other decentralized stable cocoon issuers they're competing with Robin Hood they're competing with all these big institutions that are coming in and like these people don't care the code is open source y >> right as far as they're concerned stable coins are 1% of US M1 money as far as they're concerned like >> these these exchanges and no one's using them on a grand scale. We're just trading coins back and forth like and then there's like what like maybe 20 to30 billion dollars of tokenized assets on blockchains. I mean this is actually like real like zeroth inning of this stuff going up the scurve. So this is nothing to do with prices, right? This

is everything to do with just like where we are in the the growth of this asset class. And I think that's the reason why like like I said, there's a fire under people because yeah, this you can't just win by winning the narrative wars anymore. >> Uh and not only can you not win, but you probably just won't make any money doing that either because there was a point in time where like it didn't even matter if you're winning, you could still pump a token up to a billion dollars and cash out and go buy your house in. And that's just not what people can do anymore. >> Nope. Yeah, man. I mean I think you put extremely well. I call it crypto entering its practical era which is extremely positive for a handful of projects and will contri it'll keep contributing to this market bifurcation

in terms of performance and you know in light of regulatory clarity institutional appeal we're moving deeper into this revenue or value territory real value creation territory and moving away from Dows and governance for the sake of it fugazi decentralization overemphasis on you know idealism and tribalism and into the real and perhaps albeit unsexy categories of just moving all of finance onchain. And it's just an extremely bullish development for the space as a whole and equally so for the projects that are contributing it. And so how do I how do how do I take that eloquent uh response and turn it den?

Well, I pull up Arthur Hayes's tweet and he says uh with Binance USD listing ENA fee switch is going to get turned on. That unlocks 500 million of buybacks. Let's [ __ ] go. Ryan Watkins, give us the Athena bull and bear case. How do we get this thing to 50 bill? What is the max bull case? And what is the bare case for Athena? Close us out here, man. >> Yeah. Uh I I think that we're we're in the beginning stages of creating the next Mag 7 of the crypto economy right now. And you know, for all we talk about market topping, market bottoming, all season, it's all noise, right? I think what's happening now is it's this assass is going to look like I think a lot like it

has for the past three years to be honest where there's a select assets that are doing well and most assets are rationalizing down to zero which is where they belong and so this is not just about Athena uh or or hyperlquid there's there's a handful of projects that I think like we said all the things we talked about where the founders executing they're building real products they're growing really fast uh like that is the opportunity I think from here on out so when I think about st Um, Athena, you know, what is the thesis for me is that stable coins is this, it's one of the few, I think, TAMs that is provably hundreds of billions of dollars today and will be trillions tomorrow. They're the third largest issue right now.

They're the fastest growing by far. They've added about five to six billion dollars in supply over the past couple of months. And that was really just from the AB integration uh yields just increasing from all the price action on Ethereum. And you're starting to see I mean if they can put out all this stuff in this past week where they're talking about you know launching an exchange on Hyperlid and building these products around Hyperlid and being the native stablecoin and running the stable coin as a service platform for me and uh getting integration with Binance. So you can already see the line of sight for them seal and that supply from 12 billion is today to another you know 10 2030 billion tomorrow

right um once again this is just what like the current opportunity set within a crypto economy this is not talking about when you get uh you know more fintexs that are starting to enable you to click a button and start saving in stable coins and I think that Athena is like really well positioned to be almost like a savings protocol for many almost neo banks uh as as well. So yeah, and then maybe one of the last things too is and this may be a hot take, but I'm I'm really excited for many of the uh DATs that correspond to many of these large products as well. I think people are really underestimating uh like I said there there's this there's a speculative incubation period that is they're all going through right now where they trade

at a big premium, they sell equity, they buy more. All right, that's fun. that's not going to last forever, right? By this point, you have a material percentage of the supply for many of these large assets and networks that is sitting in these publicly traded companies. What is going to happen from here? I think that they're going to be key players in governance moving forward. So, you think about Salana's SIMD 228 proposal, the inflation proposal. Uh if there was a public company that held temper supply, they probably had a lot of influence in whether or not that proposal goes through, right? I think about the long-term economic implications of if you have like some of these big entities that hold a large chunk of supply on the balance sheets, what can they do with

that? Where are they going to deploy that capital? Are they going to deploy it into lending markets? They can deploy it into purse markets. Are they going to deploy it into liquid staking providers? And then what can they do with access to US capital markets, banks and uh and funds like they can borrow money to go and put it on chain and that could be like a huge driver of growth. And I I really think that uh you know the the there are a handful of teams that I think really understand the opportunity here to get institutional capital into the asset class and yeah I think that uh and also full disclosure we are investors in Athena. Uh but I

think the the one is is one of them. >> Ryan we wish you uh a lot of success in the next couple months. I think we're going to have a lot of fun in the crypto market. Um, and I think over the over the next couple years, uh, we'll be reminded that it's early. We get too caught up in the cycles and the thoughts and the this and the that, but when you zoom out, it's it's extremely bullish. And I I kind of am closing out this two-day hyperlid special, thinking to myself that we just did all of this, but I think there's a strong chance native markets is just going to take the cake because that's what the community wants.

Um, so we we will see, guys. Yeah, Ryan, thanks so much for coming on, man. Would uh would really appreciate you having back on and we can revisit some of the uh the thesis that you laid out here on Hyperlquin and Athena. >> Yeah, 100%. Appreciate the time, guys. >> All right, buddy. Cheers, man. We'll see you next time. >> All righty, Rob. That does us, man. That does us in real good. That Tuesday, September 9th, the rollup live stream. Looks like it's hot over there in Florida. It's cloudy. You got mosquitoes flying around. I need to take go to the bathroom, get some lunch.

>> I'll uh challenge your native markets proposal even though the poly market has it at 80%. I'm going to go with Athena. >> You really think Athena is going to win? I just cannot see the community wanting to accept anything else other than native markets. >> You might be right. I think the odds are in your favor, but >> I think the validators are already starting to like signal that way as well. >> Really? >> Yeah. We'll see tomorrow. We'll cover it in in the morning, guys. Thanks for coming out. Awesome stream today. Um, good job team. Good job Rob. Hyperlid alltime high. IP all-time high. A lot of stuff going on out there. Pump good. Soul looks good.

>> Athena looks good. >> Athena looks great. Chain link looks good. >> Dogecoin ETF tomorrow. >> Dogecoin. >> Maybe not tomorrow, but soon. >> People are still sleeping on TIA down under two. A looks good. Even Murad's SPX coin looks good. So guys, thanks for coming on. See you guys soon. Signing off.