Story vs Valuation, Hyperliquid TAM, Pump’s Problem & Ethena’s Token Reset

Transcript

Nothing said on Empire is a recommendation to buy or sell any investments or products. All right, everyone. Welcome back to the roundup. We have Santi, we have Rob. I I tried to match you guys. I'm wearing a button-down shirt today and you guys want a t-shirt. >> You know, it's the last week of the summer. I'm not uh I'm letting myself be a little more casual. Okay. Jana's trying to close the quarter and, you know, put on his suit and tie and make sure he hits quota. But Rob and I don't have quota this quarter.

>> No, no, that's how you know Santi's got Santi's got no quota is because the quarter doesn't end in August. It ends in September. [laughter] >> That's right. That's right. That's right. That's right. A monthly quarter. Monthly quarter or quarterly quarter. >> There you go. Rob, what were you saying? Well, I was going to say you do have a little bit of um like I can imagine you in like Murray Hill at like 20 23 like selling like you know point of sale. >> I gota go change my outfit. Hold on. Hold on. That's the worst. [laughter] That's the worst. >> Turtle.

>> That's horrible. That's horrible. >> H I'm sorry. >> What are we talking about this week? Let's talk about markets. Santi, are you still bearish? >> Bearish crypto or bearish uh the rest of the economy? um bearish crypto. >> Obviously, I uh I got a lot of hate online saying, "Oh, that guy's a I'm a plumber that is sidelined." You know, for better or for worse, you can't be sidelined when you have all these bags that are vesting. So, even if I wanted to sell, ladies and gentlemen, I I can't just overnight just like even if I'm bearish, I'm like, I still have positions in I don't know. Go [ __ ] look it up. I'm I'm loving it because I'm a genius, not because other than I'm

investing so and locked. Uh but um I was writing about it. Um the short answer is I still don't think that you're getting paid enough to take this type of risk. Like there's still more risk and I don't think the riskreward is there there relative to other things like other opportunities. I appreciate if you're only investing in crypto. Feels like feels like a good moment. Last episode we talked about hyperlquid. We talked about I was very surprised that Bitcoin didn't go below 60 and I felt we had bottomed there. It was like okay sailor sold. We were all in agreement that it felt like we could go much lower and

they're like okay if you didn't go below 60 after all of this stuff it feels like a bottom. And you know, we're in a very different state of the world today, so we should celebrate that. That's not a bad thing. >> I mean, that was that was a tough time to record the pod because I think hours after we recorded, you know, >> we recorded on Wednesday. Thursday was like the White House >> Thursday. Yeah, exactly. >> No, no, the White House thing happened like two hours after we recorded. >> No, it was Wednesday. It was August. It was August 19th. We recorded on the 19th and then you know obviously they say we're going from two billion to four billion and uh you know pump a bunch of liquidity in and um you know when that h it's it was very it was very amaz so the

first thing that happened was you had this $2.7 billion short squeeze that h happened and then the the more important thing I think though that happened is financial media quickly started writing how the debasement trade is back on and so >> I don't think you know Duck and all these guys are looking at crypto Twitter, but I do know they read Reuters and the Financial Times and the Journal every morning. And so when they all start writing that the debasement trade is back on, look, there's a clear reason to start buying, you know, gold obviously, but there's a higher beta gold here, which is Bitcoin.

>> But but gold didn't trade well, has it? >> All went into Bitcoin, baby. >> It's digital gold now, Santi. There's no We're all in on digital. [clears throat] >> But you know what? You know what it is, though? There's some really good content that was coming out of this week that I'll I'll highlight later so you guys can hang out for an hour and hear me not be bearish. >> Was it David Senra or Patrick Oshani? >> No, Patrick Patrick Oshani was was very good. But no, what I'm trying to say is I've thought about a lot of this discussion around like which asset do you own? Like we know that the US government debt is untenable. 20% of their budget is going to service debt.

Like we all know that that's not good. The real question is like where where do you hide in that sort of train that eventually kind of eventually something there's a reckoning maybe there's not and I always I've had this like constant discussion with people about it and I always keep come back to is I think you want to be in inflation proof assets and the in a if you run the simulation of like what happens you want to be in technology because technology is what produces the most amount of growth And in many ways like having Bitcoin [clears throat] is like you you don't want Bitcoin to be at a million dollars per Bitcoin.

That's a terrible statement >> because it means things have gone terribly wrong. >> That means we're like bartering and the [ __ ] has really hit the fan that you have way other problems in your portfolio in life that it's like the insurance policy I don't want to buy because it makes me feel like Yeah. So, I'd rather revolution coming for you, Sante. We got a million dollar Bitcoin. Like, you're getting the guillotine. >> You're getting the guillotine right in in the middle of Monica. >> Yes. Thanks for, you know, doxing [laughter] me, but I'm not. In any case, I'd be really curious to get your guys' thoughts on it because that's what I meant earlier opening the episode. I feel like it feels we should

celebrate. It feels great that crypto's back in the menu, that it it's doing well. founders that have grinded through it, uh, that we ball backed. Look, obviously, um, I'm celebrating that. What I do struggle still is the riskreward here because I still think like I would like to make sense of like, okay, the the market's at an all-time high. It feels like it keeps climbing these walls of worry. We're going to talk about Nvidia earnings that are you know came out yesterday stuff in Jackson Hole but in if you run the simulation of like what happens here till the end of the year like rest of the year if the markets go down crypto is much more exposed like we're no longer having conversations that crypto is like

uncorrelated like that that like was very much proved incorrect for you know for >> well well crypto crypto has >> to have been uncorrelated the market has gone up and crypto has gone down. >> I I you're right. It has been uncorrelated but not in the way that you >> but even in the last week the S&P went down, AI stocks went down, crypto went up. >> No, the equity market hates what Bessen is doing. Like the equity and maybe hate is a strong word, but they have not liked uh what Besson is doing. They're worried about what it means for the global economy. Obviously, I mean, your guy drunk came out and wrote the uh the the piece kind of talking about why he um >> Are we Are we acting like Santi knows drunk now?

>> I just think he's a big drunk guy, you know? >> He is a big drunk guy. Yeah, he's a big >> Yeah. >> Well, the AI wrote it, but he he kind of used the calculator to write it. Um but in any case, no, what I'm trying to say is like, no, no, no, you need all the zoom out. It's not it's not a hedge like in the way that we thought about it. like you know five years ago we're talking about like it's not a when you think about how you construct your portfolio putting crypto in that bucket and I appreciate Bitcoin might be different than all the other stuff is this is as high beta as it can possibly get so so that that's all I'm saying is when we go talk about the rest of the year macro what means for crypto is you

ultimately bring it back to what Rob spends night and day thinking about is allocators and are do they have the appetite to put on more risk in their portfolio IO, I don't know. I would love to know. >> Yeah. I mean, >> I do think people chase, right? And like FOMO is real. I mean, it's we've seen it. We haven't seen it in crypto uh recently, but we're seeing it in AI, right? Like the instinct stuff is like a complete obvious example of this that the we we the chasing that people are doing. >> Can we talk Can we talk instinct? Can we go down that rabbit hole for a second? >> For sure. Yeah.

>> Have you used instinct, Rob? >> I have. Have you actually used Instinct? >> I have actually used it. >> How could you say it's a mediocre product? >> I didn't say it was a mediocre product, but it's Town's better. It's >> Oh my. Are you an investor in town? >> No, I'm not. Uh, and by the way, >> there's no way town is a better product. >> And by the way, by the way, uh, you know what is even better? >> The Atlas concierge is better at all like the normal stuff that the concier stuff does. I will say Instinct is the best product experience I've had since Claude Code came out in what was that May or June of 2025 and since chat came out in what was that November December of 2022. It's the craziest product experience.

>> It was I do not understand. Now here I'll I'll give one caveat. >> Let's zoom out. People might be like what what what are these products? >> Okay, so there there are these chat bots. One one of the dreams of I think AI is that you could just outsource all of you know a personal assistant in your pocket and a lot of people have tried this. It has not worked up until I would say two things got released at the same time. One is Instinct and one is Grockbot. So Instinct is uh so Grockbot is you know SpaceX's company and it's um it's it's like 250 bucks a month.

>> What's that? >> Grockbot is also better than Instinct. >> I've heard Grockbot is amazing but it's 250 bucks a month. It's 250 bucks a month and it's an a separate app that you have to download called called Grockbot or just called bot. I forget what the name is, but it's 250 bucks a month. Instinct is a text is a text that you can just text and it you give it access to a bunch of things and it just does things for you. And I was delayed in Jackson Hole and it did my entire it like since it it booked five flights for me then went and got refunds for four of those flights and then order I landed at 5 a.m. So it had a it had a car waiting for me when I got to the airport. It I didn't touch a thing. I just texted this

thing. >> So listen I I'm my point was not that Instinct isn't doing all of those things super well. like the point that I was making on Twitter, which by the way, I think Instinct is a good product. You you and I might be a little bit different because I have not I am not going to give it access to all of my stuff uh because I just from an opex perspective and so my usage of instinct is maybe less robust than yours because I like I'm doing things that much more slowly in terms of how I give it access to a lot of my information. but for the things that uh it the the the things that I think a normal American would use it for. So the things like all of the you know it could be scheduling or it

could be making reservations, changing checking into flights, changing flights, like that type of stuff which I think a normal American would use it for I is undifferiated among the other people who are also doing a great job in the space. Now like my point wasn't that like oh this isn't a good product. It's that there's like probably like five of these products now that do a really good job and it's Instinct is actually a little bit more limited in some of them. Instinct can't make calls today, right? I had uh one of my agents on um on Atlas actually call the uh my haircut place and ask why there wasn't a time for me next week with the my preferred barber.

Uh and they told him that he was out on vacation. And then they had a back and forth with it about, okay, well, what times can we get me in as soon as possible because I felt I needed a haircut. Right. >> I'll I'll admit I don't know. I don't know Atlas. I'll admit I've never used Atlas. >> Yeah. Well, it's it's linked to a credit card. So, it's like a high net worth credit card thing. Right. >> Okay. But you're saying normal Americans won't use Instinct and a high credit card. >> But the people who are using Instinct today are people who could get an Atlas card. the people who are using instinct today are and and the um and like uh there's another one called Carta uh which also has a very good concierge uh which does does something similar and so I think my point was that like I I think

the world is going in this direction I think it's a these are incredibly useful products I think that instinct itself is somewhat undifferiated among the other people who are building these great useful products but doesn't mean they're not useful and great uh and so the fervor around it on Twitter about how everyone was like, "Oh, this is the best thing I've ever done." And also like now it's I got to put in money at two and a half billion and then a five billion. Like all of that is group think because like I bet you half of those people have not used any of these other products, right? And so it there is just a general dynamic in venture capital and in tech today that you bunch into things and you rush out the door, right? And there's

like a a little less like I think um just thoughtfulness around, you know, where we put our money these days. And and I I do this personally, too. So, I was just Rousante and I were just talking about this before we uh before we went live. And so, I like I like instinct. I just don't think it is, you know, so much better than the alternative today. >> Yeah. Yeah. And there's an idea of I think this market is rewarding people who buy high buy higher highs, right? >> Yeah. >> Yeah. So tying this all the way back to Sant's original point of I think you were making a point around group think and people chase and I think I I would make a >> yeah go ahead Santi >> willingness uh where are we in the state of the world's largest allocators investors um and their willingness to

continue to take on more risk at a time where markets are hitting an alltime high and we're in Jackson Hole and there's fears of debasement. Yeah, >> I think that that is the that is a trillion dollar question. >> Here's a here's a different way to maybe look at crypto, which is it's a really it's an asset class that has been beaten for dead and you have these valuations that are com getting completely crazy. So, let's say let's say Rob is right and Instinct, by the way, Instinct, for those who don't know, is at like a twoperson company. Uh 23-year-old launched it, spun out of a company called Sierra, which is Brett Taylor's company. Um it's like it's a brand new company. It's a brand new company. So, these valuations are getting totally insane. Then let's go look at Hyperlquid, right? Hyperlid did $154 million in revenue in Q1, $148 million

in Q2. That's a $600 million annual run rate. If you had a fintech company that was three years old doing $600 million in revenue with how many employees do they have, 13 or 14 or 11 or 12? Like sub 20 employees? It'd be one of the hottest companies in the entire world on the front page of everything. There wouldn't be an Instinct article in the journal. there'd be a hyperl liquid article in the journal and even like even Salana right like you know maybe Salana's old news at this point but like you know there's I'm looking at Blockwork's data right now Dex volume 3.3 billion dollars of Salana Dex volume yesterday 4.2 2 million non-vote transactions on Salana, you know, 24 million trades uh yesterday alone, 2100

transactions per second. Like I think people there's the other side of this auntie is like Bitcoin rips and then people start to investigate the the industry again. There was a podcast with um I think it was Harry Stebings 20VC. I didn't I didn't listen to it but I watched a clip. It was Insight Ventures. I believe it was Insight Ventures, which is one of the, you know, most historic venture firms. And the founder of Inside Ventures said, Harry said, you know, like what's what's a place that, you know, you think could be hot today that no one else is looking at? And he said, look, blockchains have been have been beaten down. There's definitely a lot of value in these things. I think they could have a resurgence. I'm paraphrasing, >> but in fairness, uh, look, let's talk about like what happened. Okay, Bitcoin um rallies from 60 to 68, then up to 70

plus. you know that obviously is a big train to drive everything else but like the best performing stuff has been like Hyperlid is now at 80 plus bucks right um it's having like for all intents and purposes like Hyperliquid and Pump have been some of the best performing assets that have rebounded the hardest and that tells you everything that I think is not at odds with what I've been saying time and time again which is like if they're just printing cash and like hyperl is what Ethereum back in the day I I was transporting myself to October 2021 where Ethereum was first time hitting 4,000 bucks. It was printing $44 million a day. Sit with that for a second. It was like if you if

you were to run rate that, which you should never do, ladies and gentlemen, you should take a sort of an average or through cycle per um but it was like on a run rate to do like 15 16 billion in fees. And by the way, there was no L2s. It was going into the merge. There was talk about ETFs. Like of course transaction fees were like 7 to 15 bucks which was the tell. Hyperlid today like does not seem like a train that is going to slow down anytime soon because you're going to have some of the largest IPOs later this year. You're going to have constant volatility in the markets and need to do price discovery 24/7 365.

And so like the real question is like what is the upper bound of hyperlquid um fees and hype EVVM Rob I know you talked about I want to go to you because you said I feel like it's fairly valued last week I feel like it's sort of stalled in its revenue like an earnings potential do you still think that's the case or have we changed our mind? Oh yeah, I mean from a multiple basis like from any perspective if it was like an equity like it's it's fully valued. It clearly what's happening now and we talked about this last time when I I said it was fully valued uh in April and you know then it kind of got was rangebound for the last four or five months and you know I I got yelled at a little bit for that one. I think today

obviously what what people are underwriting is the Trump uh point which he you know Trump came on uh during his speech last week I think it was Wednesday uh and said hey you know there's we're trying to bring or or chair CLA of the CFTC is trying to bring hyperlquid into the US to be um to be you know fully compliant and so uh the the expectation and that's when obviously things went from like okay well it's trading you know sideways in this kind of rangebound area to uh you know now it's up you know to like 82 bucks so that was like whatever that was like you know 60 something uh and I think now there's you can dream again about okay well it's not that oh well

it'll keep doing what it's doing and it'll make this many fees and 600 million of annualized fees is okay we we totally get it that's that's great uh but like you know at an $80 billion uh FTV and I and I get the I'd have to go back and do the math and I I get the actual floating market cap is much less than that. But like it's still it's still pretty pretty fully valued. But now it's okay. Well, what if it comes in to the US and what if you know this I I think it was a Blockworks person uh Shondaanda who wrote this article about a way that could happen which I I I disagree with but um I is a point of view that people are talking about. Um and if that's true well now all of a sudden the TAM is not just you know

people who are overseas or who want to trade 247 or who are you know doing this from a regard perspective. the TAM is now like you know US large institutional capital markets and by the way like the hyperlquid infrastructure is you know as good uh exchange infrastructure as we've seen this is the way exchanges would be built today if they if they were built and uh and so like that NASDAQ has has pretty good exchange infrastructure but CME is like not great still and so I I think um now it's okay well let's price in the venture outcome and that's what the market's obviously done the last uh the last >> mistake I mean like I was looking at the blockberg's data if you want to pull it up about Hyperlid. I I should I should um go back on something I said earlier in terms of like there's no end in sight

in terms of the revenue growth. Like actually if you look at quarterly revenue for Hyperlid it's actually been slightly down like it peaked in Q325 you had like 300 million of quarterly revenue then and then it's sort of been in a downtrend. It feels like it stabilized like Q1261 million of quarterly revenue. Uh Q2 156. um you've had sort of the last couple days. Exactly. What is the you know where does it go from here?

>> Well well remember one thing I think that is worth noting about this >> is that the um uh so they have growth mode on in HIP 3. Uh and so growth mode means that essentially in for the hip 3 markets so all of the real world asset markets they uh take 10% of the fees they do on the crypto markets and so um be I think now uh hip 3 has been as high as 60 65% of the volume depending on the the time frame that you uh that you clip it on.

Uh so they're actually doing volume in these markets but they they're just much lower uh fee markets. But the reality is is like they will have to be much lower fee if they are going to do this competition against you know CME or open I think it's like four and a half pips right and so you have to you have to come down from there um and so I I think where it goes from here I think the question becomes like can it actually enter the US in a real way can it be there's still not really like large US institutions who are actually trading on hyperlink where there's people who buy per we've talked about it last week and there are people who want exposure to the token, but the current regulatory, you know, murkiness that it sits in today, especially among trade XYZ and

those hip 3 markets and the ones that have people really excited, uh, is put us into a situation where there's a lot of interest and there's a lot of retail and proumer and like smaller market makers and and takers, etc. Uh, but there we're not yet in a place where, you know, somebody like, you know, name your your person would feel comfortable actually going and trading on it. Uh but now people believe that that could be true in the future and that's the reason for you know the $20 change in in price not anything to do with the fundamentals. Yeah, I think Hyperliquid is being caught more to your point around like Coinbases of the world, which is a much asset light, a much much leaner and and look Coinbase is what a $65 billion business today, maybe a

[clears throat] little bit more, right? It's hover between 40 and 60. Hyperlid is like 40 on a fully dated basis. Like, you know, obviously it's less than that, like call it 18 today on a on a current market cap. Like, you see, to me, that's the trade that people are doing. I think um the interesting thing is just going back to pump. Pump is basically cranking out very similar revenue like a little bit under hyperlquid but it's a fraction of the valuation with I think like pretty interesting uh traction on some of the new products like if if you pull up that dashboard yo I was like obviously look full disclosure I'm an investor in pump >> which dashboard you want the pump dashboard. the pump one. Yeah. But I do want to bring it home to like a relative

valuation. Um pump really has rebounded. Uh and ju just take a look at that like >> you want to look at revenue by product. >> Well, and then total do quarterly so we can just compare what we were talking about with Hyperlquid because Hyperlid remember folks was cranking out like 160 of of revenue. So um on a quarterly basis kind of call it a 150. pump is cranking out call it 100 90 to 100 and it's it's it's a 140th of the valuation. you know it was like a 1 billion current market cap well 1/8 of the valuation sorry on a current uh market cap basis

>> and obviously folks like Anom and others have been super bullish on the have gone like Martin Skrey was was on uh basically like live trading um and >> made a lot of money >> there's a lot of incentive for for the for the you know all of the people on Twitter and all of the uh >> uh content creators to be on >> that's The common denominator is both of these are the killer applications of crypto have been it's super social and it's trading and I think um from that standpoint I mean help me I would really try to maybe someone here can help me make sense of like why is there such a divergence in evaluation between the

>> what's the go we can talk about the buyback I think they they've slowed down the buybacks and that's something that maybe uh >> here here so I I'll answer your question. So here it's because of what is the vision for this company? What is the future for this company? So why is pump moving up? People are talking about buybacks and people are saying memes are getting reignited. That's not a that's not a future that excites me. The the Pump founders I I think very highly of them, you know, Noah and and and everyone else. I I would if I was giving them feedback, it's that they've done a horrendous job of telling the market what they're trying to build. Now, you flip that and I'll I'll show you Hyperlquid. These are the numbers that

matter to me on Hyperlid, which is that the that 29% of um no, excuse me, that 38% of Q3 notional volume on Hyperlid, 38% is not cryptoreated. So that when I look at this chart, I'm like, okay, my vision for crypto has been that every stock, bond, currency, and commodity would eventually come onto public blockchains and we could trade all those things on public blockchains and is if if hyperlquid is the venue where you can do that stuff, man, that's a cool future. That's like a thousand times bigger than we are today. I don't know what that is for Pump. And so I I hope like, you know, someone should give Pump founders that they should go talk about that.

>> They're not. And by the way, the my portrayal is not there. One is like it's not a zero sum game here is what I'm trying to portray. It's like hyperlquid can be extremely hyperlquid is more like stealing the thunder of what Salana try the narrative of Salana which is NASDAQ on the blockchain and again like Salana is uh I still think a much relatively larger in market cap. Pump on the other hand is is not necessarily competing against and it I don't think it's ever tried to go after this narrative. It's just like a ne Toro of sorts which is you know younger generations love it's at this intersection of hyper social and and trading and similar to Robin Hood actually I I I I comped hyperlquid at Coinbase maybe the um the good comp

there is I don't know CME or some other thing and pump is really e Torocoinbaseocial media um allin-one I think Anom had a really good tweet tweet that uh talked about like Hey, why why does it why can't I like directly trade on X like this would be a killer product >> and um I think that's right you know I think younger gener it's entertainment value like people come on chain and start trading memes because it provides a you know it's exciting you know >> I think we're in a story and narrative driven market all you know I I I thought that crypto would eventually look more like finance and we would value these things on DCFS and financial models turns out I was completely wrong and

finance ends up looking a lot more like crypto where what matters more than than the the revenue is uh you know the Palunteer CEO getting on a chair and sitting cross-legged and you know seeming like he's you know done a bunch of drugs and like saying crazy things and the stock goes up because the market likes that and maybe that's just a sign of an inflated bubbly market and maybe we'll be having a very different conversation in six months and say that oh the DCF did matter but right now I think all markets in the world are driven by stories and my only message to the pump founders is that I love their business.

Seems like they built a killer business. It's one of the biggest success stories. They're telling a terrible story to the market. The hyperlquid founders are telling or Jeff I mean Jeff has his own way of telling stories which is maybe not to tell the story but the pro the metrics are showing are telling the story for him which is why he doesn't have to do it. Um and so yeah it's a story driven market right now. That's my that's my take. Yeah, I I think it's I think that is a big part of it and this was the point I made earlier that you know the 20 bucks was entirely around the what Trump came out and said it there was no change in fundamentals in that in that in the last week. It was the was that Trump said a thing that was a new piece of information that made

people believe that the TAM had gotten bigger and that the story was bigger than they had you believed before. Uh I also think there is just a general perspective now because it keeps happening and we talked about it in venture with instinct and I think it's happening with the traders that you buy the winners and you just keep buying the winners. You keep buying the highs and you don't try to there is no such thing as value investing anymore. Like value investing is a way to lose money and a way to underperform, right? And I think this is people are starting to buy that story not just in crypto markets but in like you know general markets as well right they're trying people there's a general perspective now that flows and storytelling and venture type outcomes matter more than anything and at the

same time it it's sort of all blending together right because like the instinct thing there was a a tweet um that someone else put out I forget who it was like oh like the venture investors are now pricing these things like options right which I think is actually kind of true is that we've It's always been an option, but it's always been about finding alpha and like if supporting founders and now it's just like oh well like you know can I put enough money into this thing to king make it and and so my option value is high enough right and that's kind of what's happening there and at the same time the you know public market investors are uh mostly just like you know bunching into things that they think can maybe get a you know venture style outcome in the public markets and so the way people are

pricing all capital markets today just feels very different generally than has ever been true in the past and there does feel like public public private I mean there's still this like multiple differential but it does feel very much like the way in which people are putting frameworks around things are all converging and it is bunch into the winners can make the winners you know uh think a lot about what the future can be price growth not value who cares about cash flows >> welcome to token 2049 >> token 2049 is back October 7th and 8th bringing together 25,000 attendees 300 00 speakers and 500 exhibitors for the world's largest crypto event. Token 2049 is happening alongside and in

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join us in New York City for Avalanche Summit. >> You [snorts] have the founder, right? Oh, Santi, you're muted, which means I get to talk over here, which is you have the founder of Pump right now tweeting. He said, "Pump made five times Poly Market's revenue yesterday. Please make it make sense." >> It's not true, by the way. That is like >> This is a jump. >> Yeah. Like I've been I've been >> It's just not true. But like he he can he can it he's looking at like a DeFi llama dashboard that is very wrong. But I understand >> a classic tail's oldest time. I will say definitely agree with a lot of that like um you know I'll bring it back to something

like you've had now two companies SpaceX and Enthropic basically say that their TAMs are 28 and 30 trillion like Enthropic and people are that's to your point Yano that gets and and you're Rob I think we're all agreeing here that gets investors extremely excited like you want to see an infinite expanding TAM you know uh as big as it gets and maybe in a different decade you would have been laughed out of the room and lost all credibility but there are outcomes that are just so big now that for you cannot put multiples and try to make sense of them like Nvidia buying hugging face it offered to invest at 5 billion it rejected it then it came back and bought it at 12.6

you it's made impressive like I think it was like on a 100 150 million ARR like the pace growth is incredible but you can't make sense of it on a multiple basis like it just fundamentally just does not make sense and I think that's Janna to your point I think probably that is the most articulate way I've heard someone describe why hype will will probably continue to trade at a much higher multiple than pump because the TAM for all assets is much much larger than memecoins As much as memecoins are a phenomenon that is here to stay and will, you know, it's a killer, it's found product market fit since the earliest of days in crypto and go look at pump revenue through cycle like, you know, it was it was as durable

as as hyperlquids, but its TAM is not like Hyperlquid's TAM is multiples maybe orders of magnitude bigger than pumps will ever be in the current framing. And yeah, yeah, that probably explains a big discrepancy. Le let's flip a little bit. Let's uh I like this a good old a good old token conversation. Um this is what happens in the bull baby. So I think we should talk about Athena. Athena announced today that um actually really I mean just one fell they did it all in one fell swoop, right? So I'm going to read this post from the Athena Foundation. We are excited to announce four updates regarding the Athena ecosystem.

Uh one buyout of early investors. This was really interesting. So, the Athena Foundation executed a buyout of all lock tokens from certain major seed investors that sold any ENA within the last nine months. Rob, they buy your tokens. I was going to say >> not buy our tokens. >> We had you haven't been selling any ENA. So, >> two alignment of token and equity. The Athena Foundation and Athena Labs have reached agreement on a master framework agreement whereby IP and ownership of value acrewed by the protocol is assigned to the foundation exclusively and governed by token holders with no residual cash flow due to equity investors in the labs entity. Awesome.

Love that. Three, revenue buybacks. There's a governance proposal now live for the implementation of the fee switch whereby net revenue acrewed across all business lines under the Athena brand will be used to programmatically buy back the Athena token. So we've got you know fee switch and buybacks. And fourth um is removal of monthly VC unlocks. The Athena Foundation and lead investors have agreed to eliminate future overhang associated with monthly VC investor unlocks by releasing the unvested tokens. This is interesting. All team >> that's a that's a Kyle Samani thing you know just >> all team tokens remain locked per the original vesting schedules this is um this is what exactly what you should do

this is I'll just say this is exactly what you should do I also am biased in the tweet thread they came out and filed they said building further on improving transparency for the Athena ecosystem stakeholders Athena is pleased to announce its participation in the block works token transparency framework. So they disclosed uh everything here um for the f many of this for the first time ever publicly entity structure supply in investing schedules insider allocations foundation agreements protocol value retention uh so really yeah just um you know I messaged guy I didn't know this was coming but I said just amazing amazing job here you I think this is exactly what teams should be doing I hope that this is a a model I hope I hope by I think many teams have started

to look at this but I hope by you know a team as good as Athena and as important to the whole industry as Athena doing this. I hope other teams can uh yeah take note. And I thought Felipe from Thea said it best. He said token capital markets are now in a much better place than they were a year ago. Many large tokens have solved the token equity issues and work through lowflat high FTV overhang. There's much less leverage in the system and valuations are much more reasonable. This is a good setup. So I think that's great. Shut up and show me the chart. Athena's up 25%.

Market's liking it. Um um and it's uh it's it's the right thing to do. I wonder um Rob a little bit more insight on how they actually uh removed all the like did they just buy out investors that have been selling and and just unlocked everything. >> Yeah. Um I'll have to be careful about what I what I can say and what I can't. But >> you can say everything, Rob. It's okay. [clears throat] Um >> Rob, do you have that tab open that you're we're seeing here that [laughter] >> uh and and and in case anyone who's listening to the pod doesn't doesn't know, but um Dragonfly uh led the seed and then uh of Athena and then we were

also large investors in the A and then a kind of a further public ground that they did and so we've been uh we're we've been the largest investors for Athena for a long time. Um but so uh I mean it is essentially exactly what he said right which is the uh you know for anybody who had been you know selling the token on Lunlock or had been selling tokens in Athena for for the last nine months or so um you know they offered to buy them out and and I think basically everybody took it uh and that included obviously the the unvested tokens. Um they uh they also decided that you know Santi alluded to Kyle Samani earlier but but didn't um uh didn't elaborate but Kyle Sani has this this point that he

says a lot which is that uh it would be better if tokens actually all were just completely unlocked all the time and you because that allows for like real price discovery. You don't have these like monthly overhangs and so so for all of the you know remaining investors and and advisers they're um you know now their their tokens are completely unlocked. So there is no vesting schedule. there is you don't have to worry about oh this day every month somebody might be selling you know etc and so there should be more price discovery but that also means there is actually more liquid tokens today than there was uh you know before today um but importantly he kept the team uh vesting going uh which means that the team is still aligned with the the the protocol over the long run and so you know a guy when he came uh to us

and he proposed this I think we were we we were all We like I initially really liked the idea but you know we're trying to figure out how we thought the market would react because you you know you have these two things two sides which is that you kind of get rid of all of this um uh you know overhang from people who were you know indicating that they were sellers at these levels but there are you know kind of a pot of tokens that are now uh potentially you know out there and are liquid that they they weren't before. But I think my perspective and and now it looks to be be being vindicated was that like this is the the what you want. You want real price discovery. You want people to be able to um feel comfortable that they know what is happening and that they uh

that there is an asymmetric information with like other holers of the tokens. and you uh want there to be a situation where you don't feel like you know this has a I don't I can't like the I can't um underwrite the long term of how this might uh of how this might uh go and and perform even if the revenue goes up right like that's a lot of the concern right and and so now we'll get real price discovery people seem to be excited about it I think obviously doing the um the >> was good price discovery >> what's that There was good price discovery, right? I mean, they they had like 8 million. I mean, it was like on a on a circulating versus fully diluted, there was like over 60% of 70% of the tokens were already in circulation. So,

like I mean there's just it's been a brutal market. Uh so, it was down like 75%. As is everything else. You know, this definitely helps because you're at a point where probably the cliff the residual is small enough that you can buy it and just there's just some people that have been like dumping constantly. And you know the beauty and the the good and the bad thing about crypto is that you can see that and it's very well telegraphed and it doesn't inspire much confidence. A lot of the ENO is now locked though in DATs, right? I mean uh like that's the other component here, right? And and and um >> yeah, a big big portion I think it's like over 20% is locked in USD the the DAT uh which that that's been that's been like the best performing asset over the last week has been USD. Uh I I will

say >> not not a genius or nod sideline ladies and gentlemen. I I'm have exposure to hea because I invested in this dad. [laughter] >> So there you go. Although although you could have sold you could have sold at a dollar now it's you know eight or so. So >> no no I agree with you. There's been good price discovery but but I think the if you're um you know you run a public company you run a a token project. Like what do you want? You you want to to uh take your equity or your token and put it in the hands of people who you know are want to be sellers to the people who want to be buyers and want to hold for the long run. And you know that that allows you to do this now at a time when the market seems to be be waking up. And

so uh and it happened at a time when he also came out and he announced that they're trying to put the fee switch on and that they're you know aligning all of the uh value acral back to to the to the token. And those are what's that's what the market wants to see. and and because the market wants to see that and now you have this uh the situation like I think you it I expect I'm very bullish on guy's ability to continue to execute and so I expect they'll do really well and that there's um you know he's got a lot of other good things coming down the pipe to you know uh continue to make Athena bigger bigger business >> on that point can we spend a minute because we talked about a lot about like okay stable coins are a big theme how do

you go long stable coins is a question that I constantly get asked by people that are coming especially new to crypto they're like hey these things stable coins are really working other than circle are and maybe tether if they raise around or not I I don't know. Um we've talked about Athena. What is the latest because we also have talked a lot about like just yields coming down quite a bit on chain that it just doesn't make sense. And I think this touches on like macro the first question we started the podcast because you kind of need to have a view on macro and and onchain rates um to form a thesis on Athena going forward. And I know they've done a lot of historically the Athena model is like it's a basically a tokenized um hedge fund of

sorts where it's like you're you're your yield comes from the funding rate which is well understood and it works really well in the bull market maybe not so well in a bare market um but typically that positive that that that is how like the yield on Athena historically it been really interesting it come down it came down quite a bit and I think that's is what is reflected big part of what you know is reflected of the token price. What is the what are the prospects of the of of the project um diversifying away from that?

Like what is your thinking around like yields coming back and what does that look like going back to like what drives the marginal buyer for ENA? I think you need to have a like what what rates are. >> I mean they've been pretty clear. So, uh, I forget exactly when it was announced, but they announced it earlier this year that they weren't just going to be, you know, basis on, uh, crypto, on ETH and, uh, and Bitcoin. And so there is a, you know, they they've they've diversified into, okay, basis and uh, in equity markets as well also um, you know, very uh, like secured lending. I I think they announced that

they did this uh a billion dollar deal with with Falcon X to do secured lending. They also uh are working with Janice Henderson. They're working with Black Rockck on uh a number of you know call it slightly higher yielding uh collateral uh but like you know Janice I think is their CLLO product. So their collateralized loan obligation product that's a little higher yielding. And so they'll continue to diversify their collateral the way in which they make uh you which they create yield. So I don't actually think it requires a uh a big you know a view on the forward curve of onchain yield. What I think it requires is a view on onchain finance getting

better. there needing to be a yield asset that sits underneath a lot of pieces of onchain finance and their ability as a team to find the best gris adjusted yield to power that onchain finance. I think that's what it requires and I think guy is as good as anybody at being able to do that. >> You forgot Robin Hood there. I think it's announced quite recently. So they're playing >> Yeah, they're they're powering the Robin Hood uh they're on Robin Hood chain for um the the vault product there. They're also on Coinbase for the vault product there. Um they've got, you know, and they've they've, as you can imagine, they're they're having those discussions with all the fintexs.

>> I guess implicit in that is you're assuming, okay, if if crypto continues to catch a bid, there's more demand for these assets, the the basis trade um obviously works really well in a bull market, not so well in a bare market. So, um, you combine that with if onchain rates somewhat follow off-chain like traditional rates and rates go up that rates onchain should go up as well as that benefits Athena, right? Well, I also think it they're going to do a better job of or continue to do a good job of making sure that they find the best adjusted to yield whether onchain or offchain and whether and it doesn't just need to be you know a lot of other

people are just sitting in treasuries or just sitting in in one product. They've made it very clear like they're not going to do that. And so then it's how do they become distribution as a piece of collateral or a piece of a token that underlies all of the rest of this onchain finance that's happening, right? And so like I we we don't really have a like in crypto today we have stable coins and stable coins are kind of the quote asset and they're the collateral asset for the vast majority of things that happen on chain. Um but you there is certainly a world in which uh Athena which is a slightly higher yielding asset you know call it a money market fund plus and then some basis and then some CA um some CLLOs's and and things

like that where there can be it's like you're now you're using a you know call it a slightly higher yielding asset as collateral. So whether that's uh you know we see some of this in the traditional world where uh people have used money market funds before as collateral instead of just uh US dollars. And so I think that's the what you have to have a view on which is that they will continue to win distribution uh across the rest of the ecosystem. They will have people want to use it as infrastructure for uh trading uh trading terminals and for um exchanges and for um uh a lot of the rest of like the lending ecosystem in in crypto. uh and then uh at the same time there'll be a trusted party who can get you a very

very good lowrisk or riskadjusted yield. >> Just to tie up this discussion because we talked about hype, we talked about pump, we also shared revenue. I'm looking at obviously the the ENA Athena fees um and it's been pretty interesting like even as back to my earlier point even as like u the funding rates come down like they they've still managed to produce you know pretty durable kind of revenue through that um you know they they peaked at like 162 million in revenue in Q3 of 25 that's come down now to call it 56 um so it's been a steady decline but you know I think Um it's uh pretty interesting where that goes from here. Um but again, you know, a protocol

that is I think it's at a very similar valuation to pump and pump is producing basically 2x the the revenues. Uh again this is this goes back to the TAM and the interest of like new capital coming into the space probably likes Hyperlid probably likes Athena much much more for the simple reasons that it's just a much bigger TAM like it really stable cocoins just capture the imagination and >> unless unless Pump is able to do what FOMO did which is onboard a bunch of normie users and I know you know Rob made the good point they're not the same thing but I'm just saying the the customer acquisition that FOMO's been able to that could I think I think pump needs a little bit of that. So >> what what is uh I know you record a

podcast. Can you just do what is the oneliner on because foam has been growing quite it might be the breakout app of this this if we want to call it a new cycle. Uh but what have they done exceptionally well? Build a really beautiful product experience that feels really really easy to use and not cryptonative at all. It just feels beautiful to use. And combine that with very datadriven customer acquisition through off crypto Twitter platforms.

That's how I would describe it. >> Do you think they um you think that was an opportunity that Phantom gave up or lost? >> I think there's been it's an opportunity that everyone in crypto has not done very well. Like they're the f like they're one of the first to really capitalize on Tik Tok and Instagram in an amazing way. And I like did Phantom not do it right. Yeah. But like you know I mean you know who did you know who did FOMO? The first the first time I ever saw FOMO I saw I thought of uh the Tensor guys when they built >> so do you remember Tensor went and built Vector?

>> Yes. Well it got acquired by Coinbase. Ve V ve V vector is what FOMO could have been what FOMO is today. V ve V vector was the closest thing. I don't know if you ever used it. It was a great app. It was so fun to use. It was what FOMO could have been. So that's that that is what actually I think >> what Vector could have been. >> What vector could have been. Yes. >> Yeah. >> Yeah. Yeah, I mean it's the thesis that finance and social and trading and social are coming together uh has been one that I think people a number of people have shared for a long time and it's even part of the the reason that we we underwrote uh uh poly market in that way but that's been very clear that like that like the time is now and FOMO built this great product

had this great marketing machine at a time when that has really blown up right and so like the the social aspect to it. And I and I think it's just it's unlocked this virality and this sort of um oh I don't want to say addictive but sort of addictive nature of these products where people are just like they love to come on. They like to engage with people on them. They like to um uh both trade but also engage with the content creators but also those content creators like to engage with their fans. And so it's just it's it's become a very a very very very social experience in the way that you know I think honestly trading crypto has been for a lot of people through the timeline for for a while but now you can do it directly on platform.

>> Guys, anything else we didn't talk about that we should? >> I was just going to say of course Nvidia earnings everyone should be talking about Nvidia earnings is as important as uh you know the Fed but uh for anyone that didn't >> have you have you uh taken any chips off the table with anything that you hold in AI or equities? >> Have made a trade in a long time. I mean, I've I've not uh not underlying tokens. I've had other like structured products and stuff like that, but no, no, I have not. >> Sante, are you worried about uh this insider trading investigation into into LEO?

>> No, for the simple reason that it doesn't affect markets because Citadel took over his book and they already offloaded 80% of it. So, or 100% of it. They had a really good quarter or uh I think uh or month. I think they're up like five, six%. Citadel [snorts] did, but I mean there were there were um the gist of it is what he is married he just got married to the anthropic chief of staff and they're all roommates like I think the semi analysis guy Doresh and it's it's all >> do you know who else was roommates? Oh boy.

>> Who? >> SPF. >> FGX. [laughter] >> I Well, I think the gist of it is more that like also uh and I the reason I asked I know you and and Leo have a parasocial relationship, but I [laughter] >> What are you talking about, Rob? I'm on the other side of the world, brother. Incredible. No, but I I also um like it feels very plausible to me that that this is true because obviously like everything Anthropic is doing uh investing in anthropic itself is obviously fine. Private markets have different standards but you know a lot of what Anthropic is doing is you know cutting deals and uh they know a lot of information about what's happening at the public companies and of course you know then he's you know trading a lot of

these public companies. it I think it also I I saw a tweet where uh the tweet stuff wasn't great but it sort of like was talking about the difference in how um like venture capital and like tech works versus like how public markets investors work and how you know people generally in like private markets they like their whole job is to essentially trade on inside information but in the way that when what I mean by that is not in public markets but like you want to have asymmetric information about what private market companies are doing well so then you and then go and and try to fund them. And so there's this uh people just take it a lot less serious than in in the tech world and in Silicon Valley than they do in like you know call it

New York hedge funds where people are like deathly afraid of you know slipping up because they the public markets have this different standard and so it wouldn't surprise me that a you know 23-year-old who has spent his entire time career in you know high you know growth like you know p private markets would uh make that mistake. Well, we'll see because you bring up a interesting point for a later conversation, which is there's a whole lot more liquidity in private markets today that it just the the lines between public and private are largely irrelevant in my mind other than your rule making that just was at a time where private markets were like way way smaller relative to public markets like so that's um yeah interesting. I mean

obviously every major fund from Quoteu to Altimter to Gavin Baker's fund like they're all crossover and Tiger of course has done this for a really really long time because they as they should realized there's a lot of value to capture. Um, interesting question like like yeah I mean I remember when I was at Sage View it was it was a hybrid fund and we were looking at and then we transitioned to fully private like just doing growth but I've always felt that like a hybrid approach is really interesting because you might be looking at a private company and you look at their churn and you look at their data and then you say well it's better to invest in Salesforce because I'm looking at a Salesforce competitor. I'd much rather put it in the public markets.

Like if you can traffic across private and publics, if you still want to make that distinction um than than you should, but yeah, it's uh we'll see. I I think it might be I I have not followed this at all, but it will probably be a pretty interesting case to follow. >> Content of the week, the 55minute episode for August 27th. It's pretty good. >> No doubt. I mean, we >> No, no doubt. >> No doubt. Content. Yes. Yeah, we can keep going if you'd like. Uh maybe we should live stream. Uh content of the content of the week. I have I have two.

I'm going to cheat. I know it's uh one is uh Invest Like the Best. And this guy is uh >> Dude, we're banned. We're banned. We're putting a 30-day ban on Invest Like the Best and David Senra. We have no range. >> We have an embarrassing lack of range on this podcast. No man, this is this is a very good episode. This guy Neil Moa, he used to work at uh uh Nvidia and Apple before that. He if you really want to understand uh just um he has a very good way of describing you know the state of affairs the world like uh you know uh I really enjoyed that podcast. Um worth your time. Um the other one is uh semi

analysis this discussion between Darcesh and and uh Dylan Patel. Um very good. The the reason why I like listening to these AI um podcasts is I think it really just uh you have to be paying attention to this stuff and and no matter what business you're in and no matter what industry you're in, like it's super relevant to understand like the state of models, open source versus closed, you know, it really informs a lot of you know uh so those two I found really interesting. They're they're all came out this week. I would highly encourage you guys to listen. >> Rob, what do you got?

I recently reread uh the the creative act Rick Rubin's book. Um I assume you guys have both both read it. Uh and I don't know, I just felt I had read it, you know, um a few years ago. And it felt uh like more apt to me today than it did even a few years ago just in almost like in the age of AI uh like creativity like matters more. And like the the way in which you produce things and you bring things to life um I think is more is is almost more creative or more of an art than uh it ever has been. Uh and so I I don't know. I I I I

had a different lens on it this time and I liked it more the second time. So, um you know, I will uh recommend a reread to anybody. >> Can I ask you a question, Rob, real quick, on that? >> Uh what do you think about like standiller? Of course, it seems like he used AI to write this >> do you have an issue with >> No. Uh I don't have an issue with people using AI to write. Now, I think with with that article specifically, I thought he did not like it was sort of AI sloppy. Uh, which not like the content itself, but like the writing like at this point, I think most of us can pretty much almost always spot like when something has been written by AI

and when it hasn't. And I I think I have a perspective that, you know, this is a tool to help you write in the same way, you know, there are many many other tools, but to try to distill it into something that, you know, maybe feels a little bit more human and that, you know, is a little bit uh more a little takes a little bit more thought. And so it almost felt to me like he just like he had a point he wanted to get across really quickly, get the op-ed out, and he like had Claude go and write it for him. uh versus like spending a little bit more time with it. So I think people would have given him a lot less slack had he you know just taken the ideas you know had Claude write you know most of it and then sort of edited it a little

bit more uh thoroughly like that people would have given him a little bit um more slack there. That said, I I mean there was a good uh point that somebody made which was like well you know what people in you know a year ago or three years ago he probably would have just had that thing ghost written all right and we wouldn't have given him anything uh any crap for that and so I it it is just generally true that people use tools to write and you know the point is what matters more uh so I I don't have any concern with it but I I do think we people are going to for a while react negatively to things that seem like they're obviously made by AI and that You didn't spend real time on it.

>> Handwritten cursive only. [laughter] >> Did you write cursive? Did you learn cursive when you were a kid? >> Uh, dude, I only write cursive. I have beautiful handwriting. I've been told. >> Yeah, you do. Actually, you do have beautiful handwriting. >> How? Rob, why do you know his handwriting? >> Rob and I write love letters to each other. >> Penals. >> Or pen pals. [laughter] >> Sorry, I meant to say pen pal. >> He had a handwritten note for me last time I I visited him. So, you know, it was very nice. [laughter] >> Janna, what's your content of the week, man?

>> Content of the week is >> before we before we really, >> you know, I was So, you know, that Jackson Hole trip I had, I um ended up having a 26-hour travel day. So, I got to the airport at 8 a.m. >> I jinxed it, right? Didn't I? >> What did you say? >> I I said it's really hard to fly into that airport if it's like >> You did. You did. >> If you can't fly at night, I'm sorry, man. I'm really sorry. I had I had 12 hours at the Jackson Hole airport, which is a tiny airport. There's not 12 hours worth of stuff to do. End up connecting to Denver. Denver flight gets pushed like five more hours. Fly into New York, land at 5:00 a.m. in Newark, and then have to drive three hours to the North Fork. So, like 26 hour travel.

>> Can I ask you a question there? There. Why did you not just go back to Jackson Hole a half an hour away from the airport? >> What do you mean? >> You said you were in the airport for 12 hours. Oh, because they kept saying 1 hour later, one it was the worst type of plane delay where they go, you know, you know, flights at 10:00, flights at 10:30, flights at noon, flights at 1:30. It's the worst type of delay. Anyways, that's what happened. So, I watched all of the show um Shane Gillis's show, Tyrus.

>> There's So, that's my fiction. I'm trying to bring some fiction to this, you know. >> It's good. I mean, it's not as good as my fiction, but Okay. You guys don't know. You You don't know Shane Gillis. Come on. Come on. >> No, no. I know Shane Gillis. I I just haven't seen >> Little Little Culture here, Santi. Little Culture. >> No, no. I I'm now I know this guy. I just don't know the name. I'm terrible with names. >> He's a funny He's a funny fella. Anyways, he's got a He's got a show on Netflix called Tires. I was desperate for things to do. I made all my calls, got through all my emails, got through everything. I >> Well, clearly didn't do anything because you had this app do everything for you. Incredibly lazy and unproductive, man. You got to get back to work.

>> Back to work. All right. Thanks for listening, folks. Happy end of August. We will see you in September. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Block Works team may hold positions in the companies, funds, or projects [music] discussed.