Tokenization Supercycle Continues! Market Wants Higher! Eric Conner, Haseeb & Yoshi Join

Transcript

[music] 17 floor. >> [music] >> We'll see you around the timeline. Feels good to be back.

>> I think The Rollup is one of the most premier [music] media brands in crypto and Andy and Robbie are great experts at everything they talk about and it's my favorite podcast. >> Adding it to my library every week. >> Potentially multi-chain deployments. >> We are at [music] Dev Connect day one here. I'm guessing from base. [music] [music] [music] [music] >> [music]

[music] >> Ah, hey. [music] JP Morgan, Black Rockck, DTCC, Fidelity, the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. >> I'm bullish.

>> HE SAID IT. HE FINALLY said it. >> So bullish. Andy's bullish. I'm bullish. More push. [music] [music] Heat. Heat. [music] [music]

>> [music] >> Roll up is headed to the top. If we're not already at the top, we're going to the top. >> Roll up is my favorite. >> People from all walks of life, all over the world, all over this industry come together for the rollup. [music] >> [music] [music] [music] [music] >> Hey.

Zoom out. The institutions aren't coming. They're simply [music] here. It's the golden age of crypto, guys. Get right. Let's go. [music] >> Welcome to the next. See you on the show. [applause] >> Welcome back. The rollup. September 24th. Bull market. >> Bull market rally continues. >> Litecoin. Why am I looking? Why are we talking in 2026, >> Andy? You're talking about Litecoin. I found a I found a $250 million fully diluted runner. >> You got a gem. You got a gem.

>> I got a gem. >> You got a couple gems for the last >> I got a couple gems stashed away. We're going to talk about them. They're coming up. I got a couple gems. You're talking about Litecoin. I'll take it any coins. >> I was looking at a little bit and I was looking at Near. I was looking at Zcash and I was looking at how Near I think is battling Uniswap for like that number 24 spot in market cap. >> Yeah. >> And between like I think it was like 6 billion and like 10 billion. There is absolute dog I'm talking about >> solo here. >> I'm talking about just just pure junk. >> I'm talking about I'm talking about Let's see. I just want to make sure I get my facts right. So Near flipped unis swap live on the show. Near flipped unis swap. Near's in the number 22 spot. UniS

swap in the number 23 spot. Near just above the $6 billion market cap level, fully diluted between Near where they are now and chain link at like that 1516 spot. I'm talking at like ranked 17, 18, 19, 20, 21 pure dog I'm talking about between $6 billion market cap and like 10 billion pure nonsense. I'm talking like Bitcoin Cash. All right, good shout out CME Options. Stellar Lumens. They're not going to like me talking about them like that. Leo token. I think that's the exchange token from Bitfinex. Rain, not the Rain card that we're going to talk to about in a little bit. Cardono. That is what separates Near.

>> God, Near is going straight to the top 15. >> There is absolute dog between 6 [laughter] billion and10 billion market cap right now. >> This is this is your opportunity right now. >> Between and chain link, there is nonsense. >> If you turn this into an educational thing and not a you know, you don't we don't want to put down anybody. >> I'm not trying to slam anyone or hate on anything. I'm just saying that there is pure thin air between Near and Chain Link. >> You guys can see the ocean behind me. It's a beautiful day. I'm in a different part of Florida now. An undisclosed location. Pull it up. I'm in an undisclosed location part of Florida today. We got the beach behind. It's beautiful day. I'm definitely hitting an ocean swim later in the afternoon. Clear my mind off this bull market. That's what I'm trying to do here. That's why,

you know, I operate in phases, guys. I go to I go to New York and I get my soul sucked. I turn into this cold, direct, blunt New Yorker very fast. Meaning, I want to pay top dollar for exactly what I want when I want it. I don't want any and I want everything to be done at the New York level of convenience, speed, and and properness, right? Like, it's got to just be done right. Then I come to Florida and it's like, h my gosh, let's slow it down. Let's zoom it out. Let's get some nature in us. I wish there was better surfing in Florida. Let's go for a workout and let's zoom out. Take a breath and really focus on what matters and what's happening. And so if I was to put an educational spin on this from my Florida perspective, Rob, what I would say is

that this inefficiency in the market that has been built up for so many years is your opportunity. This inefficiency in the market that is these coins that do not deserve to be in the top 10, in the top 25. This is your opportunity as an investor to to to find out what that is. Every bull cycle, this is Robbie and I's fourth bull cycle. Now, if you count the last one as one, there is a reshuffleling of the top 25 and that is currently starting. You saw Ze rise from the ashes to get into the top seven or eight or 10 now. You saw Hype do the same. You're going to see Lighter do the same. You're going to see Near do the same. You're going to see a ton of these names come

up and rise the ranks and establish themselves as the next cycle that teams are going to aspire to flip. And we're finally in the era of this space, Rob, I think, where it's quality now. It's quality at the top, or at least we're getting to that point. >> Yeah, I uh I like it. It's uh something that we've been watching for a long time, right? Because I mean, you and I both found this space around 2017 and we were thinking to ourselves like we did some deep research and very quickly we realized that there significant portion of the market is just disillusioned with reality, right?

>> 100%. We looked at Ripple in the face and we were like, "No, why is this so high? Why are people so bullish on this?" Like, doesn't we're not >> chat are going to love that. We we do not let any ripple shills happen in our chat. >> And and we were like, you know, this just does not compute with the thesis. This thing will get rerated much lower and other things will take its place to your point. And there's still junk just clogging up the top 10. And so it just makes sense that we're going to end up seeing right obviously if something falls out of the top 10 or the top 20 something else is going to take its place and it is pretty exciting to see you know near rise through the ranks a lot of strong strong DeFi which is another thing that I noticed this morning Andy that I wanted to talk to

you about I'm seeing sky move previously maker every time >> every time sky >> every time sky moves that's the indicator that is outperforming uh Bitcoin the ETH bitcoin ratio is improving >> obviously we've got like a bunch stable coins that are up there as well, but that I think is to be expected. Otherwise, I mean, you just got deep solid infrastructure that is now cracking some of the top market cap, which is what feels like it's like nature healing. Um, and so this is something that we've been anticipating for a while. >> Like, Freedom Guy says, "I think it's it's worth a look, a deeper look." Yes. Investable token era, Gelato. 100% agree. 100%. Congrats on Zama, guys. Thank you. Not only was it a great sponsor, look, Robbie and I didn't play that perfectly. I can't lie, like we

should have allocated heavier, uh, you know, we do have some exposure just by them being a client, uh, and by our own portfolio management. But thanks, man. I think it goes a lot higher. I think a dollar for Zamas is going to catch a lot of people off guard. Um, and who else to talk about it than today with Hib. I mean, we've got on. He's obviously a huge near bull, huge hyperlid bull. I mean, great great conversation coming up here. >> Um, just a word. I mean, Gelato's the last comment in the chat, and I think it's a really good one. Titles look really small there. Not sure what happened there. Investable token era, I think, is an extremely healthy way to look at it. >> Um, >> because you're absolutely right. It's like the nature's healing. Um, you know, market is kind of like becoming more rational again. Um,

>> yeah, there we go with the headlines. So, yeah, I I think that's exactly the way to think about it. Market is becoming more rational again. investable tokens are real and nature's healing and I think it it is finally now as you get more liquidity into this market you know manipulation gets diluted some of like the you know potentially fugazi things that get you know super high market cap but the reason they're super high is because they have really low float right a lot of those shenanigan games get devalued or de derated because well they can't really hold up when there's a ton more liquidity in the system so all that to Let's not make wait any more any any longer. Let's bring him up into the back room, guys, and let's get him on the show.

>> Uh I think he's >> go straight into our guests. >> I think he's going to have a chuckle. Rob, tell us about our show today. >> Well, I mean, you know, you guys know Treasury 10 years rocketing. Market is doing uh pretty well, bouncing a little bit off that little pullback yesterday. >> Oh, yeah. Looks good. >> We're going to get into some of the headlines and tweets a little bit later, but we're going to go straight into our first guest. Then we got Eric Rockar. Yeah. Eric from Eric Conor and Yoshi. So like big, you know, not only, you know, obviously Yoshi and Alpaca are doing custody on like all a lot of the tokenized equity front, but then has got deep deep ties and, you know, payments and stable coins and prediction market.

>> I'm going to start this show off with a little bit of of a some funny banter here with Hib. So let's go ahead and get him in the back, guys. Send him in. Um, let's get them in and uh let's get this show on the road cuz this is going to be funny. Apparently, not everybody has been fullport near hype uh lighter and ze and uh the the euphoria isn't exactly reaching all corners of this market, but I think has been positioned quite well. Has the great thesis variational also just announced their TGE date. Hib's dragonfly is a big investor there. Let's please send in the back room now. Um, and let's get this show on the road, team. What a what a day. What a week, Rob.

>> Yeah. And so, you guys obviously know well. He runs Dragonfly. A little bit about Dragonfly. They closed their fourth fund of a $650 million mark in February. Uh, brought the firm to roughly $4 billion under management. Andy before we bring up hib why don't you just tell us you know if you raised another fund four at 650 you know it brought your total aumumumumumumumumumumumumumumumumumumumum up to4 billion how do you allocate >> how do you allocate4 billion in today's market >> you know what I think has been is and I'd like to ask him what they've done I think they did a lot of liquid stuff I think I' I remember asking him and Robin I think they were like look it's not all for venture >> you know we're we're doing a bit more liquid venture thought process now Um,

so yeah, I mean, let's um, >> but talk to me, talk to me, man. We're going to get him up, but tell me, you got $4 billion in your pocket, dry powder cash. What do you do right now? Near's at 450. Zcash is 1550, right? Yeah. >> What do you do? >> I mean, I look for other stuff that hasn't moved. I look for >> with 4 billion. You're going beta. You're playing [laughter] beta moves with four billion. I mean, look, I think you're thinking I [snorts] think you're thinking um uh I I mean, look, we're going to ask Hib, but I'm pretty sure you could just size into the majors at that point if you I think they raised what 650. And I remember talking to I think it was Rob Hib's partner about it. And he was like, "Look, it's not all for venture. We can

do some more liquid venture stuff." Uh which I hope that they have done. I assume that they were part of the pump, but no better person to ask than him himself. He's in the back. Let's bring him up. Let's get up and show that not everybody was full near hype lighter and that the euphoria as you can see is not reminiscent of or is not shared amongst the whole market. What's going on out there man? How are you feeling? And uh hope you bought those lows with that new fund. Great to have you back. >> Yeah well look I'll say we're feeling pretty good. I think we own pretty much everything that you mentioned. Uh you're looking pretty good. You look like you're in a lot of euphoria right now. What? Where are you? [laughter] What What is this look? Is this like the new >> I'm in Florida, man. I'm in Florida. I

needed to get out of New York City. And so I figured I would just embrace the like, >> you know, old guy sipping the margarita on the beach vibe for the week. You know what I mean? And took off took off the penguin and unveiled his true personality here. [laughter] >> Okay, nice. >> So see, give us uh give like we have a ton of topics. Hyperlid and lighter and variational. Obviously, we just got the TGE. We got Kaly and Poly Market both going through their own scrutiny. We got um what else Rob? We've got this tokenization super cycle and then obviously NER and this kind of privacy growth happening. So, why don't we start um with the per side variational just announced their TGE date. You guys are obviously early investors there and in lighter and al and also purchase

hyperlquid you know somewhat early with some size from the dragonfly side. Pers are exploding. There's still 1% of global derivatives markets. The CFDC is just apparently as of a headline yesterday on go mode, which feels like a like a rap song, but coming from a CFDC kind of like um comms uh official just kind of tells us where we're at. What's going on with the per side? How much do you think this trade has left in terms of its legs? Where are we at? >> So, for a long time, perch have been one of these missing markets. And by missing markets, what I mean is that it was it was it wasn't obvious in the very beginning that DeFi trading was going to be big because onchain is slower. It's just kind of got these UX crinkles that are going to make it more difficult for

people to be able to use this stuff the way they use stuff in in in traditional centralized exchanges. But once spot trading started to work on chain, we always asked ourselves the question of okay, where's derivatives? If spot is this big, derivatives should be even bigger because that's how it always looks in every traditional market is that spot is something like 20% of derivatives in any given market once it gets to maturity. So we were back I mean this must have been like you know 2018 2019 when we invested into DYDX and we invested into Derivex and we invested into a lot of these early attempts at building perplexes on chain and they just never worked. It the the UX wasn't there, the latency wasn't there, the performance wasn't there. It wasn't really until Hyperlid cracked the code that all of a sudden people realized,

"Aha, you must be this tall to ride in terms of UX, latency, performance, and everybody." It kind of set this uh this pacing that everybody could start to follow as they started sprinting. So, we're investors as as as you mentioned, uh we own Hyperlquid. We're early investors into lighter and variational that we invested into obviously variational pret using an RFQ model rather than using a orderbook model. But all three of them have unique angles of attack on how to to go at this purpose market. I think the answer is that largely, you know, it's it's it's hard to see exactly how the crypto per market is going to grow that much because there's only so much crypto trading in the world. It's more like taking market share away from the centralized venues. And you've seen that with Hyperlid. Hyperlid is now a

meaningful portion of Binance's total volumes. And they've been going up and up in terms of open interest and in terms of volume. But the really bigger story is that crypto trading on the whole is not the TAM for hyperlquid now already more than 50% of their volume is RWAS and the RWA TAM for for trading if you look at like the global CFD market to say nothing of the onshore you know regulated trading market is absolutely enormous so much bigger than the crypto market so the bigger story is that okay I'm not trying to be Coinbase I'm trying to be ICE I'm trying to be the New York Stock Exchange I'm trying to be the NASDAQ that you know we used to talk about this meme of like oh the NASDAQ on the blockchain but like the meme is actually happening now >> that is the much bigger market which tells you that this trade has a lot

farther to go even if you look at you know the volumes that are happening on hyperlquid and the liquidity available on hyperlquid on real world assets. So you know when you see people trading WTI see people trading you know SK highix or or gold um these are very very small relative to the overall market compared to Bitcoin and ETH which are now pretty significant relative to what's getting traded on Binance. So that delta is the room to grow for this trade. Now there's a lot more work that you have to do in terms of market development and in terms of getting the the liquidity and also getting the awareness. We've got headlines now of people talking about, oh, the price discovery happening on the weekends or happening on uh a bank holiday uh or a trading holiday. That stuff, okay, that's now happening when the market's closed on Hyperlid, that

that gets a lot of mainstream attention. But getting that dayto-day price awareness happening on um uh Hyperlid or on decentralized venues, that's the bigger unlock. So, in my mind, there's a lot more room to go. >> Yeah. And I know Rob's got a ton of questions. Just one followup there. How do you underwrite the trade from hype at 94, lighter at uh 5.5, you know, in terms of dollar values and you can, you know, people have different opinions on what the total market cap is for these assets just based on the buybacks and the burns and the treasuries, etc. But how like, you know, when you underwrote lighter and variational and hyperlquid from the liquid side, but also on the venture side, like if I'm underwriting that trade now, what what what's changed? like like like what do I need to factor

in from today's uh you know price and value to tomorrow's like what is that you know underwriting like like as investor how should I think about the risks you know of today versus 6 12 months ago and then also like where this could go and what needs to happen to make this thesis play out >> yeah so I I'd say if you look at variational and you look at lighter right so variational right now obviously they're prety valuation is like four to five billion uh variational depends on where you price it depending on the points market in a given day but you know call it somewhere between one and two billion for for variational um that right now is if you just look at the TAM right let's say the TAM is not even all the stuff that I just talked about let's say the TAM is just hyperlquid is how much can

these guys take a bite out of Hyperlid and then one level up how much can hyperlid take a bite out of Binance um you're assuming no TAM expansion you're assuming not that we're going to eat anything else just that freeze the market where it is today, how much further do these guys have to grow? Um, right now, you know, hyperlquid fully diluted is at like what is 80 billion, 90 billion. Um, if you look at where variational is today, that's another basically they're like 2% of the market, 1 to 2%. Um and if you look at lighter and like four to 5% of where hyperl is sitting today which tells you that from their side any any advantages that they have whether it's on the US go to market or whether it's on you know the product side that they're improving on or for for variational if it's on having a genuinely different model around RFQ and

being able to offer deeper liquidity with their swaps product uh relative to traditional approaches to doing RWAS with you know old-fashioned oracles and and kind of just regular old that underwriting that require like that's a venture type outcome and that's the kind of stuff that we do that's our bread and butter. Um, now hyperlquid, that's kind of the market, right? It's like asking what's the fair value of ETH. >> Any given day, people are going to, you know, they're going to give you 15 different models to decide what what is the way in which you're going to value ETH. Um, I'd say as investors, we're largely agnostic to that. There's a lot of different ways that you can skin the cat about how to value the TAM for Hyperlid. Um, and I also don't want to be in the position of making your market call, but the the the large answer is that look, just take Hyperlquid versus

Binance and look at that chart historically, which is that it it's basically been a one-way ratchet for Hyperlid relative to Binance. Now, the two move together almost certainly when crypto trading is down, when volatility is down, both of them decrease in volume. But the relative number has basically been kind of one way only. And that's the number that I would keep an eye on if you're thinking about sizing uh the the overall tamp for hyperlquid. >> Yeah. And so just to close that loop there, Rob, is that there's kind of layers to this. Right. Right. So you've got at the lowest layer, if you will, you've got uh what can variational get from lighter in terms of market cap?

Like what can that's how can they close that spread? And then how can lighter close or both of them close the spread on Hyperliquid? And then you've got all the per complex on chain closing the spread on Binance and OKX. And then you've got the entire crypto complex closing the spread on NASDAQ and CME and Interactive Brokers. And so it's just kind of like, you know, there's different risk parameters for each of these each of these different tokens and each of these different holds. Um I would assume that the lower market cap you go, the lower in the layering of the cake, the more risk. Um but you know, sometimes that doesn't always happen. And sometimes, you know, lighter flips goes on a crazy run and flips hype somehow, right? Or something crazy happens because hype gets hacked. you know, there's all these kind of like

extraneous things that could happen. But interesting view. Yeah. Back to you, Rob. >> I mean, I think you're absolutely right about TAM expansion because for so long, you know, we were talking about decentralized exchanges and per exchanges taking volume away from centralized venues. But no, no, no, no. Now we're taking volume away from brokerages, right, that are trading these massive asset classes. And I was looking for a tweet. I wasn't able to find it, but I think if I remember correctly, it was basically saying that AMC, you know, this movie theater got tokenized their stock and the CEO wasn't very happy about it. But the tweet that I remember was that 2% of the volume around AMC was happening onchain. And I think you mentioned that this is the metric to watch. What is the proportion of volume being traded for public companies that is happening onchain

versus off-chain whether that be centralized or brokerage that I think is the metric to watch and I think you're absolutely right that the relative market share around public company and broader asset class trading is moving onchain and you know this is essentially a a one one-way train a runaway train um and we're going to see a lot more TAM expansion and I think that is the thesis for hyperl and lighter and the rest of the per complex at large. And so PERPS is one of the the big four or the big five that we talk about on the show a lot. And before you joined, I asked Andy, I was kind of thinking out loud. I was like, "Look, you know, you just raised 650 million in fund four, right?

Takes you to about 4 billion um assets under management." I think we pulled that stat probably before this, you know, most recent bullish move up. So maybe we're higher. But so I'm I'm curious I'm curious categorically how you allocate four billion. Obviously you've got a significant portion of that in venture. A lot of that is in liquid as well. But if we put liquid in venture aside and we just look at the categories that you're allocating into the big four that we've talked about has been per prediction markets tokenization and stable coins. And then maybe you could extend that and include vaults if you make it a big five. Is that kind of the right categorical approach? the right way to kind of divide the pie or do you have another framing for how you allocate $4 billion? >> Yeah, I mean look those are directly

correct. I'd say prediction markets are also a big area of a lot of growth as well as the intersection of crypto and AI. Um you know we we recently led around into Venice AI which you know VVV has been on a tear over the last month or so. Um it's it's I mean the other thing that you also want to be mindful of is that you never want to index too much on what's happening literally right now if you're a VC >> because you're you're trying to not you know we're not traders right as a trader you're kind of thinking about what's going to move in the next week what's going to move in the next month um we're thinking what's going to move two years from now three years from now when a company that we're investing into at a seed stage or at a series A is going to

be coming to the four like you know when we were investing into lighter We invested in lighter before hyperlquid had its moment and before this thing was a a big category. We invested in a poly market before the 2024 election. Um like the the the time when you as a VC want to be shoveling money into startups is you want to try to see around corners and and think a little bit further ahead than just like what the high water mark is for the present market cycle. >> Yeah. Makes a ton of sense. And so can you give us any sort of breakdown as to like how you see these things playing out over the next few years? You know if you were looking right now and allocating today over the next say two to five year time horizon and you have your choice of you know vaults

tokenization infrastructure stable coins per prediction markets you know whether it's liquid or venture. How do you break those up? What are you most bullish? What are you least bullish on out of those five? >> Um interesting question. Um, least bullish I would say maybe vaults. Um, I think vaults are, you know, it's clear that vaults have a lot of product market fit. There's a lot of demand for them. However, they they don't it's not obvious to me that they're going to have a lot of defensibility. Um, ultimately like the biggest beneficiaries of vaults may be the issuers themselves and not the vaults platforms. Um again there's there's a lot of game left to be played on how people are going to package these up and distribute them. But right now my observation has been that uh I don't know that the vaults platforms

themselves are going to be big winners. Uh this might be a very commodified product at the end of the day even if there's a lot of demand for it you know so uh for a lot of these traditional financial products they're often loss leaders even though they have they gobble up a lot of AUM it's not where the money is made for a lot of these big financial institutions that offer a lot of these commodified products. So, >> and and so before you get into the the one that you're most bullish on, like this announcement from Ono and Black Rockck today around intelligent portfolios, it feels like it really resembles a vault, but you're like, "Hey, you know, there there's no moat. Like distribution is the moat. Black Rockck can go do this because they have like tons of customer distribution, but anyone can kind of spin this up. There's

really not much defensibility." >> Uh, I don't want to speak to that particular thing because I don't know the details of how it's being offered or what Hondo is adding to the table. Um I I do think actually tokenization is one of these things that is um doesn't have quite the feature of a vault, right? So if you think about it, let's say there's uh two vaults that are offering the same underlying yield, right? So they're doing some kind of uh carry trade, right? And this vault is using this carry trade in order to give me some yield. I don't really care if I'm if I'm going to vault A or vault B. So basically, there should be pure price competition, right? As long as I have some redemption rights, I kind of don't care if it's vault A or vault B.

provided that both of them are legit and I have some guarantees that, you know, it's going to be it's going to be a solid while I'm in this uh in this vault. On the other side, tokenization, I really do care about being in the most liquid tokenized version of this asset, right? Because tokenization, I'm trading this thing, I'm moving it around. I really am going to get hurt by fragmentation. So tokenization is kind of the opposite of vaults in that sense because of the fact that vault I'm holding it for a very long time. um doesn't really matter if I'm in the less liquid vault or in the more liquid vault provided that I have the same redemption terms and that you know again I'm not going to be worried about the the vault u you know if the underlying is the same shouldn't really matter. Yeah, you know I'm not going to put my money into a

vault run by some random bozo but I'm just a lot less sensitive to market fragmentation in vaults than I am in the alternative. So >> yeah, >> so that's why I think tokenization has more economies of scale and obviously that's where plays primarily. Um, the reality though is I think tokenization is probably going to be secondary to per. Um, that may not be true the farther out you go, but if you're talking about like one year from now, I would still bet on pers over tokenization. But five years from now, that might change, right? And why do I say that? I say that because when do you want to tokenize something as opposed to trade on a per? The answer is when you are saving for the long term and holding a position over a long period of time as opposed to making a short-term directional trade. If you're making a short-term directional trade,

that's when you want a per because a per allows you to get leverage. You don't need to worry about how much of the underlying is held in inventory. You don't you're not like, okay, there's not enough capacity in this market, right? like with a per it's all cash settled and so you can have doesn't matter how much AMC is out there if the AMC guy's like I don't I don't like this I don't want you tokenizing this you know nobody has to go out there and like hold actual AMC uh onchain in order for you to have AMC per trading around so uh AMC and of course the other thing about tokenization is that people are talking about doing real tokenization in which case they have to be KYC there has to be some some more regulatory surface area for doing this quote unquote real

tokenization as opposed to these debt instruments which are kind of these YOLO tokenizations where you get the economic exposure but you don't have the governance or you know the real stock quote unquote that you're that you have exposure to. >> So you want that when you want to save but if you're not saving if you're instead speculating or investing over short periods of time that is what most crypto natives are doing today. There's not a lot of people saving like people who are saving are saving using dollars, right? So they have stable coins, they're in some emerging market and they're not at the stage right now where they're like, "Yeah, I want to go invest in AMC." I don't know anyone's investing in AMC. Um but, you know, to the extent you're investing in the S&P or, you know, whatever in, you know, a Fortune50

company, um that's still a niche behavior on chain relative to the crypto natives who are mostly betting and short-term trading. So the CFD market coming on chain I think much more proxible much more similar to the existing crypto user base but in the long run I do believe that savers are going to come on chain where it's normal people distributed through fintech just like the stable coins are today where you have some fintech some emerging markets person is like hey I I have exposure to dollars through some fintech that's in my region allows me to offboard my local currency into stable coins but I can also invest into a diversified portfolio of stocks and bonds the same way that you or I might. Um, that behavior will come, but I think it's going to take longer to get here than the pers are going to take to grow.

>> Yeah, I think I mean I think if you look at the mapping of tokenization expectations, you get this really exponential curve, but we're still in the early early part of that exponential curve, right? And so, you know, right now PERBs are kind of in their exponential era, you could argue, just because of the regulation that's probably coming and turning it from a headwind to a tailwind, as well as just the broader growth of the tokens and the attention. Um, so yeah, I think aligned on that take and just grateful for Vlad Tenn, you know, to be the new main character for this industry. Like, I mean, he is undoubtedly the main character of crypto right now. His chain is blowing up. I think it's gonna continue to explode. He's going on CNBC and just pitching tokenized assets and pitching per and stable coins. Like he's

the perfect We've had the worst main characters in the past. Like [laughter] the absolute time for season with some new characters, >> right? Like we need some and so he's answering hard questions and you know there's a Robin Hood summit next week. I'm going to go they're going to do these new trading tool unveiling and whatnot. So very bullish. On the contrary, uh the negative perception I would say the darkest spot right now is still prediction markets. Um so last week it was Kshi and was wash trading or you know even this week and then today it's poly market with with the New York uh you know GA or whomever uh suing them for illegal gambling practices. So I mean they're just under the freaking fire, you know. They're just getting just absolutely bamboozled by regulators, by the public eye. and I'm

in the car driving to get coffee today and the you know, guess what I hear on the radio as a ad for betting on Kali for the sports or for the NFL, you know, it's just kind of like they're all in your face everywhere you go at MSG at every sports arena and then they're always in your face in the negative press uh you know dynamic. So questions, one couch trading, does it really matter? Is it that big of a deal? You're obviously a big investor in poly market. Doesn't seem like that big of a deal. How big of a deal is it? two, what's going on with with Poly Market illegal gambling? Where are they at with their US uh kind of push? And just kind of to top it off, like what do these companies need to do to turn their image around? >> Yeah. So, uh I'll take those in order.

So, so Khi uh wash rating allegations. So, look, these are allegations. I I think the the answers to them have been somewhat satisfactory, somewhat less satisfactory. I think like the the the ratio between the open interest and the trading volume on KCHI is a little bit lopsided. >> It's embarrassing. It's embarrassingly bad. >> It's it's it's not great. That said, like obviously this is not the main story of KCHI. This is not how they're making their money. You know, this is like kind of a side market thing. Um so I I you know, look, I think every exchange does stuff to try to bootstrap. I think they they tried to own it. I don't know that they successfully owned it in the public eye, but um you know them them trying to walk things back the way that this whole drama unfurled was incredibly entertaining. I do have to thank them for that. Uh just because it

was a little bit of a quiet weekend and u a personal drama turned into something so spectacular. Uh was just it was kind of great television. So kudos to them for that keeping it interesting. Um, I'd say on the on the on the New York uh attorney general thing where where Leticia Leticia James, I think is her name, uh, she came out of Poly Market and called them an unlicensed gambling operation. So, look, um, you know, basically what she's saying is that you guys, not that, you know, you can't do this. It's that you need to get a state gaming license and pay taxes in New York. It's about taxes, right? And like for all these state attorneys general who are suing all the prediction markets, Khi, Crypto.com and Coinbase and Poly Market, they're suing all of them. And the reason why they're suing them is that they want taxes. It's not

that you can't do this, that you can do this, but you have to pay taxes to the states. Um, obviously the the prediction markets and the CFTC have taken the position that no, these are federally regulated markets and therefore they do not have to get state-by-state licenses. We have a precedence for this which is all the other markets that are licensed by the CFTC don't do this. They don't pay state-by-st state taxes. They don't get licensed in every single jurisdiction because for federally regulated stuff, there's a different licensing path than every single state has a D. So very clearly now there's a circuit split. Some of the circuits that this has been challenged in, it's gone up to an appellet court and the appellet court has has voted in or not voted but uh ruled in favor of the prediction markets. Some of them they've ruled in

favor of the states. That means now this is going to Supreme Court. It's very likely Supreme Court is going to take this case and probably sometime next year there's going to be a Supreme Court ruling. So this latest thing in New York is not like a oh my god I can't believe they did this. It's like oh every single state is fighting this fight because they all want money. Um so no surprise that this is what's happening. Uh >> sure >> when we go to the Supreme Court the big question is going to be how is the Supreme Court going to rule? Are they going to rule and say, "Look, this is an entirely federally regulated market. States back off." Is it going to be federal government, back off, give this all to the states, each of them is going to have to go state by state and get licenses and pay the taxes in each

state. Or are they going to split the baby and say, "Well, you know, some of these markets are appropriate for federal regulations. Some of them are going to be state specific." You know, if I had to guess, it's probably going to be some kind of splitting the baby. Um, that's I think often the way the Supreme Court likes to do these things is say, "Well, each of you have good points. We're going to meet you somewhere in the middle and like parts of these things are going to be able to exist globally, parts of them are are not." Um, I I think that's likely where we're going. Um, at the end of the day, like a lot of the reason why the public sentiment against these these companies has turned so negative, and I agree that it has, is because these companies are super young. They're very brash. They're very aggressive, and like they're just

more in your face than a lot ofational. >> Yeah. They're just everywhere and they just everywhere and they just want you to bet. They just want you to predict. It's like predict. It's just like >> fullfledged all like take the take the clothes off and just here's what we're doing. Like it's just in your face. >> Yeah, that's right. So, look, I I think the answer is going to be that people will get like both the companies are going to mature and you're going to see less of them in the headlines and I think like the market is also going to saturate. A lot of the reason why this advertising is working so well and why they're paying so much for all this advertising is that a lot of people genuinely don't know about these companies and they're growing super fast. But eventually they will saturate the market. Everyone will have heard

about them. It'll become more brand marketing rather than actual, you know, trying to acquire new customers because look, if you don't want to use one of these prediction markets, you're not going to use them. But today, a lot of people still genuinely don't know about them. They're in the early parts of their growth curves. That's a big part of the reason why the marketing is so aggressive these days. >> I see. Maybe this is a little too in the weeds on the ruling front, but is this primarily going to be a case between the Supreme Court or or the states and the companies or the states versus the regulators being like the CFTC that is taking jurisdiction over these things?

>> No. So, the the CFTC will likely be an amicus, meaning a friend of the court. It'll be somebody who's giving their own opinions and sharing their perspective in court. But the CFTC is not going to be the defendant. When when a Supreme Court hears a case, the case is an appeal from a case that was at a district court or it's an aggregation of multiple cases that happened at a district court. Those cases overwhelmingly are going to be the states versus some of the prediction markets or maybe just Khi given that Khi was the first in in the US context and they have most of these lawsuits against them. It will it will very likely be that Khi is the one up there that's defending uh uh prediction markets at the Supreme Court, but it's possible they aggregate cases from multiple uh prediction market cases.

>> And just a couple rapid fire, I know we're coming on time. Um, is it too far-fetched to think that what's happening with the wash trading stuff on Koshi is going to push some people in the CFDC's inner circle to consider accelerating the onchain per dynamics due to the transparency. And then two, maybe you could just give us your brazen blunt take on what's happening with Near and Zcash. >> Uh, will the CFTC accelerate on? I I I think that's probably pretty orthogonal to be honest. I think the CFTC I mean clearly there was there was a report the CFTC was investigating the reports of what's going on here with Khi and probably they'll issue some kind of fine or something. I don't think it's like a showstopper. Um you know there's you can

like the reality is that all this stuff was publicly accessible via API. You could get all this data yourself and verify that this was happening. So they weren't trying to hide this per se. It's part of the reason why I got called out publicly. This wasn't like a whistleblower. This was somebody looking at very obvious public data and saying, "Hey, this this doesn't look like organic trading activity." >> Um, on the near Zcash side, um, you know, look, we're we're investors in both NER and Zcash. Uh, I'm a personal investor in Zodel, the the Zcash wallet. I'll say very clearly, you know, this is kind of again one of these mega trends that they're both leaning into the the reawakening of privacy as Bitcoin and crypto is institutionalizing. There's always, you know, thesis antithesis happening at the same time. And I feel like that's a lot of the reason why you see this big Zcash resurgence. Um, near

I think is part of the same story, but also part of the uh account abstraction story that was something we were promised a long time ago that blockchains they're fragmenting. Uh, but they're also going to get easier to use because we're going to unify everything into one central experience. It kind of didn't [clears throat] really happen. You know, there's still a lot of complexity in managing wallets and moving assets here to there, blah blah blah. Um, FOMO really rose to success on having solved this in the form factor of an app and I and you know I made the argument on Twitter that Near is also solving this problem but from the other side is that you know Near is basically making the single account abstraction for every single chain every single trading venue every kind of financial activity you can do on chain whether

it's you know something like buying Zcash which you know you can't buy Zcash through through FOMO um or like do shielded activity through FOMO it's not about that it's about memecoin trading um so one part crypto ethos is I want to show everyone my P&L and scream it from the rooftops. >> The other part of the crypto ethos is that I want to disappear into the p into the you know spectre of privacy and not let anyone know I exist. >> That's what Near is more about. >> I only those aren't mutually exclusive either. They happen one after the other. First you make a bunch of money, you shout it from the rooftops and then you get off >> then you hide. >> You make enough money and then you want to hide. >> I only lose money on FOMO so I don't have that problem. So I'm safe guys. I'm safe on that. Um let's see. Always a

pleasure. Um 2026 crypto predictions. We have to go back uh in a couple months and do an episode in maybe uh December uh late December and you know prior to Christmas and just recap there. I think if you remember last time Robbie and I were sitting in a in one of our parents' homes at the fireplace and like all all done up. So we have to run that back. All right. >> Sounds good. Sounds good. >> All right, buddy. >> We're having fun again. Thanks. >> See you in token, man. Peace out, man. >> Bye. Having fun again indeed, Rob. And the fun is not about to stop. Give us your quick takes, reactions, takeaways, vibes. >> I mean, a goat, one of the smartest in the game. There's a reason he's still around. Four billion dollars aum,

probably a lot more. Uh, gave us pretty good insights on four of the big five. Only thing we left out was stable coins, which is okay because it's somewhat uninvestable, at least from a liquid token perspective. Um, but I like my biggest takeaway, you know, when you talk to a VC, I like to, you know, we always we like to establish like the unique edge that these people have when they come on the show. You know, if we're talking to a builder, we want to talk to him about what they're building, right? >> Sure. >> You know, Hib has because he's a VC, he's got a very general vantage point. And so I think he's one of the few that can talk categorically about multiple sectors because he's kind of sitting, you know, at 30,000 feet kind of looking at everything and figuring out how it

all fits together. So my biggest takeaway >> was the sequencing that he laid out for the four that we talked about vaults, tokenization, prediction markets. >> Yeah. you know, he said, look, the thing that he's least bullish on is vaults because, you know, he kind of thinks it's going to be a loss leader. You know, maybe it's got uh a little bit less defensible. It doesn't have as much of a moat. So, you kind of put vaults aside. >> Um, per and tokenization. He thinks per is going to be more lucrative in the near term. Tokenization might be more lucrative in the long term. And the reason for that is because right now the flavor of tokenization doesn't really matter. Um, per allows you to get, you know, kind of a quick nearterm exposure to something, whereas tokenization is

something that if you're holding it for a long time, that's more so what you're looking at. Also, I he didn't say this explicitly, but I think over time the different flavors of tokenization will become more important, you know, as we sort of get, you know, okay, this one has shareholder rights, this one has governance rights, this one doesn't. Right now, it's like, hey, just get exposure to these things. and pers is just frankly the better modality and you don't need to tokenize the thing to have a per on it. So I think that's relevant. And so the sequencing of the big four matters just as much as the four themselves. And I think you know to his point he's putting pers before tokenization in terms of category which I think is helpful for us to frame. And then I think it's prediction markets. Honestly he didn't say this. He was

mostly thinking like tokenization happens after per which again I think is helpful to think about the rotation as it could happen. But to me prediction market already happened. It's stable coins, per tokenization, then prediction markets. >> And stable coins aren't super investable right now unless you get them on the public markets. But I think that is true. So yeah, stable coins happen first. That's kind of behind us. Then it's per that's kind of happening now. Then it's tokenization. Then it's prediction markets. You know, maybe there's a Supreme Court ruling in 2027. Maybe prediction markets go and ultimately achieve what you know they claim is their higher purpose and graduate from gambling to becoming like you know a real time data news layer which would be really cool. I would love

to see that happen but there's some really significant you know market structure considerations to make and regulatory considerations to make before prediction markets get there. So, >> all right guys, let's take a quick market. >> Quick standby. Be right back with Eric Connor. Um, he is a legend and there's a lot to talk about. So, be right back guys. [music] >> This is the largest crypto conference in the world. [music] Heat. Heat. Heat.

last [music] last [music] [music] [music] [music] >> [music] >> We get deep. We get deep. [music]

Welcome back to AI Supercycle, our premier AI show airing every single week presented by Near. We cover the ins and outs of decentralized AI, privacy, and the future of this massive technology. Near is the blockchain for AI and the execution of AI native apps. You can check out Near's latest AI product at near.ai. Now sit back, relax, and enjoy the show. Alrighty, guys. We're here at AI Supercycle episode number 50. Uh powered by our friends at Near. Enough said. In the past, we have to said say what they are, but if you don't know about Near now, B, we can't help you. We got Eric Connor here, the co-author of EIP559, OG Ethereum developer and investor, just general investor in the space. Been very, very dialed in uh in the market.

So Eric, great to have you. >> Hey guys, thanks for having me. Yeah, I'm excited for this. >> Yeah, first time. First time. And uh what a run from some of these AI names. I mean, you look across the market and you look at Near and Venice kind of leading. Then you look across at this Pearl token that I'm not sure you looked into proof of verifiable work as this kind of next Bitcoin for AI almost taking out Bit Tensor and the uh their kind of role. Interesting dynamic there. uh you know you've got the the likes of um you know RCM doing well, you've got Zama doing well in the privacy side with AI as well. So a lot happening here. Um and Eric, I know you've been quite early to a couple of these names. Maybe just talk talk through your AI investing AI

crypto crossover investing strategy here. >> Yeah, for sure. I mean, I kind of have a funny one I guess I'll go into, but yeah, I mean crypto is always going to follow like the mainstream narratives, right? And I think the best thing for crypto is when it can um improve a mainstream narrative like AI. And I think some of these projects can prove like you can break out of the traditional AI space and blockchain and crypto can add some value. Um I think Venice VBV is kind of the obviously one there. I I actually funny enough this was back like when it launched it's at least a year and a half maybe two years ago. I know I lose track of time fast in this space but I literally saw VBB launch and bought it sub a dollar. I believe like Eric tweeted the contract or something, but even then I was

watching like new launches on chain because not a lot was really happening. Um, I bought it and then like Coinbase listed that same day. Um, the bad news of this story though is I fumbled it like day two and then watched it run up like 900% since then. But yeah, I literally I was one of like the first like besides Sniper Bots, I had to be one of the first buyers of VBV ever [laughter] and then I fumbled. Well, what's funny is I sold it like they had a Coinbase pump and it was just up a lot in a day. I'm like I I didn't know much about it. There wasn't much info and then it literally did nothing for like a year and then just took off again. So, um yeah, that's that's a classic fumble.

Like I kind of like those fumble things that FOMO does, but uh you know, I don't I don't have one for just my base wallet, but I probably don't want to look at that one. [laughter] >> We have one too, man. We had Eric on the show on this show in person at Near Con back in February. I mean, I think VVV was like seven or eight bucks. >> No, two dollar 80 in Denver. Eat [snorts] Denver.$180. >> Yeah. >> It's part of the game, right? I try not to buy like you don't. Exactly. Like you like, all right, you messed up. It's higher. You just buy in with more size. If you want to, you know, revenge trade, if you're still really bullish, if the thesis hasn't changed. Yeah. >> Um, but you know, fortunately for the rest of your portfolio from what we've seen both publicly on FOMO with Boner

and some of these others and then also just, you know, through your tweets, you know, you're kind of the the owner of this own both and chill thesis around the per assets. How did you come to that? Why was this such an obvious play for you where it's like, hey, everyone's going to be upset at lighter or hyperlquid. There's going to be this kind of Salana versus ETH camp forming. Just own both and relax. like you don't need to take a side, take a polarizing view of this market. We're still early. What's your thesis? How did you come to this? Um, and how did you nail that? >> Yeah, I think this is because of a lesson I learned last cycle. So, I'm sure a lot of people listening, you know, originally I I've been in ETH Maxi for years, kind of recovering ETH Maxi

over the last year now. Um, but you know, I was in Ethereum early and I held it for years and for a while I just thought that was the only token I ever wanted to own. And because of that, I kind of missed the whole Salana cycle when, you know, ETH didn't do much when Salana was pumping. I, you know, I saw Salana very early. I could have easily rotated. I could have played the meme game a little bit. And I was just like a little stubborn there. Um, I kind of had a aha moment to myself year and a half, two years ago. Finally sold some of my ETH bag, bought some hype. Um, just saw the per thing coming. I mean, 247 stock trading, all this is so pitchable to normies as well and Wall Street. It's just it's just obvious to me. Um, and in doing that, you know, I thought I'm

never going to tie myself to just one coin again. So, even though I was like buying up hype and, you know, still had a little bit of ETH at the time, but, um, if I saw something, I didn't want to just become a maxi of that coin anymore because there like there's so much opportunity out there and it's kind of silly to do. Um, so yeah, then I ran across lighter, who I also think, you know, is already is, but going to be a huge player in the per space as well. um and just kind of sizing the both and like then you don't have to worry like I was always stressing out about Salana pumping and ETH not just because I had ETH like I don't want to relive that story again so why not own both I think there's plenty of there's plenty of pie to be had right in the per space um

there's going to be multiple winners um you know lighter kind of has this like in in the US and you know hype obviously is a much larger cap more open interest and they're kind of got like you know the more worldwide presence right now but you know with regulations happening the CFTC coming out with these roundts and advisory committees. Like there's there's going to be different winners, right? Um and why just tie yourself to one coin? And especially like back in the day with ETH and Bitcoin, I kind of got like the maxi narratives because they each kind of had their like but when it comes to like burp coins, I don't see why you would tie yourself to one.

>> Yeah. Because they're not trying to be like money like you know, they're not trying to be, you know, this is this is the standard. But man, you're speaking to two recovering ETH maxis too. I mean I mean I don't know the extent obviously we weren't you know in the ICO with with you you know whales but we were hanging out in the ETH forms and we were buying ETH in 2017 in the first bull and then you know we saw bank list and the rise of DeFi in the early late 2019 cycle in early 20 and ETH kind of made our investing career like it made our it made our first like big big win from you know call it you know 50 to 200 bucks all the way up to 5k and happened relatively quickly and it took me a while. Like, it took me a while to be like, Rob, like ETH is not one of my

core holdings anymore. I still own it, but I look at my hype position. I look at some Zcash. I look at some other positions that I have, and I find it in the top 10 of what I'm holding, but certainly not in the top three. And and and I just every time it pumps, I just kick myself because I'm like, ah, this is so obvious. It's going to 10K. But I'm like, I just got to go back, look at the Zcash ETH chart, look at the hype ETH chart. And then lighter kind of formed this like saving grace for me and I think you agree with this which is like if anything is the perfect representation of what ETH is trying to allow for in the creation of this world. It is lighter. It is a ZKFI high performance trading venue with a cracked Olympiad team that is only possible on

Ethereum. It has better security properties than Hyperlquid. It's the best. It's the most secured per stacks in the market. just B if you know ZK, if you know Ethereum settlement, if you understand kind of the nuts and bolts and so that kind of saved me, Eric, where it's like, "All right, fine. I'll put my ETH chips into the lighter basket and I'll still be bullish." But yeah, stuff has changed, man. Like the whole market has just changed. >> Yeah. No, I mean, I completely agree with you and that's kind of how I felt about my lighter investment as well. I mean, like at heart my like I hope long-term blockchain wise like Ethereum's core values win. And I think you know this is in my opinion I mean I don't know what he thinks but to me this is like what I saw as Vital's vision of layer 2 and like ZK specific apps right

so like lighter you wouldn't really know you're on Ethereum like it trades extremely fast the user experience is great but you get Ethereum security guarantees underneath right um and like the viable the team is pretty Ethereum aligned and you know I that makes it more comfy to me as an investment coming as a you know a decade long recovering ETH Maxi. But yeah, I mean also like I'll say like people have to just look at their portfolios differently too, right? Obviously at a larger market cap things like Bitcoin and ETH, it's just harder for them to move. But also on down swings are probably going to hold up long term like a little bit better, right? Um and like a lot of people I mean taxes are a big thing too, right? I mean if you get a big bag of something and you sell it if you live in the US, I mean depending on what state you're

living in, you could be selling having to pay 30 to 50% of that in taxes like especially if you're on short-term gains and stuff. So, like there's a lot of decisions to be made um in portfolio management, right? And like for me, pulling that tax bandaid off was the biggest one probably because you're thinking, all right, I'm going to lose X amount of this, reinvest it. If I reinvest it, doesn't it's got to outperform by, you know, whatever an extra 40% just to make it back. So, um, but yeah, there's just so much opportunity out there. And if you're like plugged in 24/7 on on Twitter and now these social trading apps and all podcasts and streaming, um, you should have a lot of alpha, I think, to to pick up, you know, cheaper coins as well. So, yeah, still always kind of anchor your your portfolio, I guess, with, you know,

stronger coins and larger cap coins. But, um, yeah, I don't think I think the perp train is just getting started, to be honest. I mean, I think >> now that clarity failed, we, you know, the the um SEC and CFTC in the US are coming out >> just saying they're going to make their own rules, which they were very clear about, you know, at the round table a month ago as well. But I mean, we haven't even seen um a license given out yet and these things are doing well. So, when a license comes out and volume really picks up and if US, you know, um customers able to start using them legally and stuff, then the open interest is just going to explode on all these platforms. Yeah, I mean that's what Hib was saying just before you had came on and I think we're we're aligned and also positioned.

Um I'd like to talk about Robin Hood. It's so funny where like ETH is not the core holding. >> Yeah. Right. >> Other stuff's going to outperform, but it's also like the best environment Ethereum has ever been in in terms of products and like output. And so I know it's going to rip still. I still want to be on that train. Um but it it it's just funny that juxosition there. Uh Rob, were you gonna add there on purp? >> Yeah, I think Eth is, you know, there there's a few different things. One of them is on timing. The other one is on, you know, the way that these things break down. And we've been talking about this barbell thesis for a long time, which has been hard money on one side, predominantly Zcash and Bitcoin. And then on the other side, it's been this revenue meta, this like, you know,

Hyperlid, Lighter, Pump Fund was in there, and there's a, you know, a few others that are generating some revenue and passing it back to their token now. But it feels like we're getting a little bit like that is becoming a little crowded and I think that was kind of the vibe over the summer right where you know market was generally pretty apathetic but then these things started to kind of show some light and then we ended up you know kind of evolving into this current market regime where you know for some reason Litecoin today is catching a ton of attention. So it it feels like we're getting a little bit deeper. Now if you think back, you know, Andy and I were talking about this as like this transition from bare to like pre-bull, like this apathetic market condition into this like very sectordriven bull market. Some of these

things are starting to pop off and show some momentum. Now it feels like we're transitioning from pre-bull to actual bull, in which case, you know, again, I try to think like this time isn't different. And so typically the way these things go is like, you know, the major market caps, you know, the bitcoins and the ETHs and those things kind of do most of the heavy lifting early on and create this wealth effect that ends up spilling over into altcoins. And so I'm curious if you kind of see that, you know, we had these po these things that popped off, hyperlquid and Zcash and Near, they were kind of the winners of the pre-bull, but now that we enter like the real bull market, we're going to kind of transition back to majors and then run the same sort of playbook where th that major wealth effect spills over into the rest of the

market. >> What do you I mean just general take >> to add a tiny bit more color there. you know, Secrets of Crypto, Eric, you remember him from the OG uh uh you know, he had that like genie, that blue genie profile pick, and he was always like Bitcoin first, then ETH, then alts, then like shitcoins. And Kobe's infamous like pyramid of portfolio construction was like Bitcoin and ETH, 70%, 20%, you know, midcaps, 10% or 5% low caps, 5% garbage, right? And so, but that's changed a bit in that, you know, Bitcoin didn't lead this whole cycle and ETH hasn't led, but Robbie, you kind of laid out the winners. Just curious. Yeah. >> Yeah. Um, I definitely agree that we're transitioning from a pre-bull to the start of a full-on bull. I actually have

like a thesis that we never even had a bull market two, three years ago. Like, Bitcoin went to 120. Salana did pretty well, but I think that was just money slloshing around. I mean, ETH ETH ran quickly up to like 4,900 and dumped again. Like, to me, that was never really a bull market. I I think this is the start of it. But yeah, what's been really interesting is the per coins and things like Zcash and others have been leading. Usually it was the majors leading first. We saw the majors try to catch up the other day and then everything else just cools off. I'm always kind of scared when like ETH tries to take the lead these days cuz [laughter] it'll go like on a crazy run and then, you know, dump 10% and the rest of the market nukes, you know, a little bit more. But so far, we're holding up pretty well here. I I think

the most interesting thing about this is I do think this theory has changed. I we've seen a lot of decoupling to Bitcoin. So like back in the day, everything was tied directly to Bitcoin. I mean, you would see like one coin maybe kind of run. Um but these per coins are not tied to Bitcoin at all. Cash man and Zcash. Yep. And a few others. And this is the first time. I mean, I've been around since 2012, so this is what 14 years now I've been watching these graphs, and I've never seen this before. Um it's almost like they don't even care about Bitcoin. Now granted, if Bitcoin nuked to like 50K tomorrow, of course, the market's going to come down with it. But I'm not even convinced that perpoins wouldn't just recover and, you know, do well. And I think this is happening because of the regulatory landscape. So finally, we

have some like bullish regulations coming out in the US. Um, previously everything was just kind of tied to the Bitcoin news cycle and now we're like, oh, we could actually have some like major used crypto apps that um, you know, have laws and regulations written around them. The founders aren't scared to have US customers. Um, and I think that's why we're seeing that. But yeah, I think we're going to I think the the smaller caps are going to pump, cool off, majors are going to pump, cool off, and it's just this constant kind of cycling of of money. But, um, I think we're seeing finally an inflow of new capital, which I don't think we saw in in that cycle a couple years ago.

>> Yeah, man. I was, uh, drastically I was extremely impressed. This is going to sound kind of weird. Extremely impressed by my ability to not take a deep bare market draw down which has allowed us to size in win size into the winners which we got lucky but also you know we're skilled and had some risk >> but I was extremely disappointed in my performance last bull. Extremely disappointed and extremely let down and I barely made a portfolio all-time high against 2021 and I quickly was under it and I was like are you effing kidding me? I was promised my third cycle I was going to make it and here we are and then we didn't make it. And so I I do align with that and and I feel like uh you know you know not to get too bowled up but this does feel a bit more

secular. And on the note of just you know tearing down ETH in its most performance-based best era it's ever been. Kevin Olirri we're at this avalanche conference. He comes in and he's like I thought I was going to the ETH that was going to win everything on the smart contract side. you know, obviously he's been paid to be there at this avalanche event, and he's like, "It's not ETH. It's going to be somebody else. Whoever," and this is going to be Eric, you're going to love this. He was like, "Whoever wins the trading and the exchanges is going to win so big. Those tokens are going to moon so hard." And I was at an Avalanche conference, so I couldn't say it wasn't going to be Avalanche because it might be Avalanche. But I'm sitting there thinking to myself and I'm like this this mother effer is shilling hyperlquid and lighter right to

the biggest hype and lighter bulls that he even knows. And also near intense he's also shilling near and near intense. He's also shilling some, you know, partially Salana and their spot, you know, trading growth. And what he's really also shilling is Robin Hood chain. And it's just like how is this guy so tapped in but doesn't even know what he's shilling but like we know. It was just hilarious moment. What do you think of that take? >> Yeah, I know. It's interesting. Like I wonder how many people like him and others even realize like Robin Hood is an Ethereum layer too, right? And like the reason I think Ethereum will still look ETH the assets always kind of had its battles and you know I I was one of the first that kind of started ETH's money and was you know battling that with Bitcoin maxis back in the day. So

ETH the assets always had its issues. I think ETH's going to be fine. I mean I I was just on Bank list recently. Everyone gives me crap because like four years ago I jinxed ETH and said it was going to top out that cycle like $2,500 and it's constantly at $2,500. So I up my target to 20K for ETH. So I don't want too many ETH maxis in my replies after this saying I'm dogging on ETH because I'm not. I think Ethereum the technology for sure and likely then ETH the asset will still win the technology battle. I mean Robin Hood's building on Ethereum layer 2 and like why? It's because of composability and like Robin Hood gets this right. They they come on they announced they're doing a Robin Hood chain. They instantly can integrate with their partners like lighter, unis swap, others. I mean, unis swap is just so easy for them to plug into. They're

using, you know, lighter for pers and, you know, some of these meme stocks as well. It's just so easy to plug and play on the Ethereum chain. And I I think people don't realize how hard it is to get liquidity, too. So, like one of the most interesting things about meme stocks is it's like instantly bootstrap liquidity for onchain stocks for Robin Hood. Um, and I don't know if this was like they expected this to happen. I don't know how much they're kind of like playing wizard behind the scenes with this stuff, but um all of a sudden there's millions and millions of dollars in liquidity on Robin Hood chain for their tokenized stocks because they route through these meme stock pools. Um that's hard to do. Like other chains are not going to be able to just spin up and say, "Yeah, we're doing tokenized stocks. We have no composability with

Ethereum and we're just going to create hundreds of millions of dollars in liquidity for our tokenized stocks." It's that's just it's almost impossible at this point. I you know, Vlad and Robin Hood get this. It's first mover. I think they're not too scared to move first and break things. Um there's some weirdness going around with like inkind redemption of stocks they claims coming like how these are held in trust. There needs to be a little bit more clarity around here though that area which I they seem to get. Um but yeah at the end of the day Robin Hood decided to build on Ethereum. Now we could argue for days how does that return value back to ETH and all this stuff but my theory has always been if Ethereum is popular ETH's going to do fine, right? people just hear it and just buy it. So >> it's also just went through a bit of a

revival period there where it was the decision making process was of the older era. Like if you think about Dows, you think about this whole decentralized decision making that era has came and went. I do think it will come back in the same way that Zcash is kind of the antithesis to the institutionalization of Bitcoin. That's what Hib just said. this kind of like decentralization will come back as the antithesis to the centralization. In a way, lighter kind of serves that for Hyperlid honestly. Yeah. Um and so um you know I think that will come back but ETH went through that period of revival which I think was so crucial for its perception with the cryptonatives uh that and I I would say it's been a wildly successful revival. But without getting too deep into ETH, I

want to get into Robin Hood chain. >> Wait, hold on. I got I got I got to ask and before we get like fully deep into Robin Hood and meme stocks and board sits and FOMO and all that kind of stuff >> and Eric's $3 million unrealized P&L of course. >> Yeah. So I I just want to follow up on the ETH thing because like I it feels like it doesn't fit into this barbell thesis. It's not hard. I mean maybe you know you invented this hard money thesis for ETH and maybe you have a word to say about that but it's definitely not part of the revenue camp, the revenue meta, right? especially as Robin Hood, you know, exponentially grows its revenues. It doesn't get, you know, a revenue share of that. It's get, you know, flat fees for its block space. And so it

feels like it doesn't really fit. It doesn't really have like a thesis. Yet, it also feels like the I just constantly hear people hate on it. And it makes me so bullish almost only for the fact that Tom Lee has taken so much of the supply off of the open market that once it gets going it's gonna have so much momentum and be so reflexive that it's going to I think rip face and blow like surprise a lot of people and so like does is ETH money does it need to have a thesis at all for it to go up? >> Yeah. Like can it just exist in between this hard money barbell of like Bitcoin and we put Zcash in there whether it's earned that or not but then you put gold in there and maybe even silver right actual physical metals and then you've got hyperlquid lighter pump pond stump

on the revenue side you know all these other revenue producing businesses that are just cooking and pumping ETH kind of finds itself in the middle CMS you know came on the show last week or the week before and he was like hey everyone's in this barbell trade it feels likeensis Ethereum could go up just because it doesn't fit into this and so it's under >> Yeah, I agree. So to answer your question, I don't think it needs a thesis. I actually think price leads narrative. I don't think narrative leads price. I think people things like Zcash go up and people are like, "Oh yeah, it had a great narrative." No, I think the narrative sounds great now because it's pumping. And I I think people will see that with ETH. Like I I don't know really. I don't have a real feel on where ETH's going. Like I'm very

underexposed to ETH right now. You know, people have been saying, "Oh, Eric's underexposed, so that's, you know, it's bullish. It's going to pump." Well, I've been underexposed for two years now and hasn't done anything. So, I I mean, I don't know. I could easily see ETH hate rallying to 20K. Like, why not, right? We've seen crazier things in crypto. Um, and at that point, you know, narrative all of a sudden will be like, "Oh, E money again, right? It just [laughter] it's what happens." But I think most people for now to me, if I was like buying more ETH again, it would just be on the technology play side. Like my theory is if like Robin Hood chain wins, if lighter, you know, wins a huge part of the per space, people just see Ethereum and just naturally buy ETH.

Like I don't think that many people just buying crypto in their Coinbase apps besides all of us dieards are like looking too hard into these narratives and thesis. I think they're just like, "Oh, this one's up 10% in the last month. I want to buy it or my neighbor talked about it." I you know so >> but Eric on that note when when those folks used to come into the space in 2017 that was Robbie and I's first big runup and big like you know you know you you learn a lot in the first cycle I mean you lose it all right and second cycle we saw and what what were they buying they were buying Bitcoin and ETH and Litecoin and Ripple um those were kind of like the big four if you will last cycle you saw them come in and buy some Salana some Avalanche some Phantom

some Terral Luna And then Dinocoins, XLM, uh, Hideera, blah blah blah. And then previous cycle, whether you call it sick or not, it was memes. It was everyone's buying memes because that's the thing. Do you like do you think they're actually going to come in and buy this barbell? Like, is this what they're going to buy because they're smarter now? Are they going to buy dino coins again? Are they going to buy memes again? Are they going to buy your meme stocks from you and make you a trillionaire? Like, [laughter] what are they going to do? Like, what are they going to buy? >> I mean, my thesis is meme stocks right now, right? Yeah. I mean I think I by the way I think a lot of the reason people were buying ETH early on is a lot was happening on chain like we had DeFi summer we had NFTTS like punks were

going crazy like people just see that and naturally associate the underlying asset then but uh yeah I mean I think the to me where a lot of people are going to come in soon is on Robin Hood chain and things like meme stocks things that haven't been tried before. Um you know we're obviously seeing a general pump in Robin Hood assets a lot due to like FOMO and social trading as well. Um, but yeah, I think meme stocks are a new meta. I think I think people are sleeping on this to be honest. Yeah, sure. Bonercoin's at like 50 million market cap and AI is at like 250, but I mean there's CEOs constantly following and liking tweets here. And I think what people don't realize like Bonercoin I think has like 20,000 followers. Um, they're doing at one point they did 10% of the onchain volume of the HIM stock on the stock exchange that day. Um, if

you're if you're like the CEO or like I've been on himself podcast which is like or him house podcast which is like the investor community. They're very open to the boner community. You have like 20,000 Rob uh rabid fans all of a sudden who are only interested in the stock going up. Like no one's shorting boner coin right now. You literally can't um you know and if he goes up in the pool like that pushes boner price up and vice versa, right? If boner goes up it swallows up more hemshares. There there's I think I mean my theory is that every major stock is going to have one meme stock winner and one meme stock community and they're going to be used as kind of like the the the gen marketing arm for that stock and we're going to see different companies embrace it in different ways obviously. Um, but like to me my theory was Boner's like

the perfect not only is it the perfect meme name beyond even being backed by him. It's just the perfect fit. >> You know this feels like it started from the treas from the DAT complex. This is like you know digital asset treasuries was like the corporate way of like getting this off the ground and then you know they came in and they kind of like made it retail friendly with this meme stock pairing. >> Yeah. >> Um couple things here. I mean just across the docket I just want to give a little update. US Treasury bought four billion dollars of its own debt. CFTC just came in and issued updated guidance. So like what you're saying, Eric, on all of the regulatory innovation that's happening. I'm running it through our clankers right now to get a summary because two comment letters are like 19 pages long. And then the other thing that I I wanted to ask you

about because actually you you mentioned it when we kind of broke into this like uh you know Robin Hood tokenized stock conversation is in kind redemptions. They say that it's coming right after you. We have Yoshi Yokawa from Alpaca and Alpaca Securities does the custody for Robin Hood stock tokens. And so I plan on I'll I'll ask him about the Inkind redemptions and anything else that you want to know as far as how these things are custodied. >> Yeah. No, that's awesome that he's coming on. Um yeah, I've been digging into it a little bit. Um from what I understand, I think they're the custodian for both Coinbase and Robin Hood. The Coinbase ones I believe give the onchain holder a little bit more rights. I don't know too much about this. I think the Robin Hood ones are some type of debt instrument and Vlad

has said that voting rights and in kind redemption are coming. The only really bearish take I've seen from people who I've like even non-crypto people like more stock traders and I've kind of talked to them about this is like they they instantly go to like oh are these synthetic shares? Are they even like if I wanted to redeem it could I? And I'm like well not really yet. So I'd be curious like what that road map looks like for Robin Hood. >> Yeah. >> I think to your point it doesn't even matter because right now people just want exposure to the underlying asset price. >> Rob remember what was saying right where it's like the beautiful thing about pers right now is that you know you've got this asset class of people and demographic people they just want to get in and out of these things. They're not looking to hold hymns for the next 10

years. They're looking to make a make some money on boner. Sounds ridiculous to say, but again, our lovely guest is up millions on Bonercoin. Um, or they want to, you know, they want to trade in and out of these things. And so these kind of debt issued SEC or is like issued debt notes are kind of perfect, right? It's kind of exactly what Vlad wants to do. It's exactly what he wants to make happen. And so, you know, you've just got this perfect storm of let's get this done now. Like, let's get started and we'll figure it out as as we go. And Eric, I'm going to the Robin Hood event next week in Houston. It should be epic.

I'm long Robin Hood on variational going into it, farming some points, getting long on Hood stock. And so my question is, is this is this enough that Wall Street is still behind the ball on Robin Hood and they don't understand Robin Hood chain? Is this enough to pump Hood stock? Like is this the epitome of the thesis that Robin Hood stock starts a rally that leads to other equities that are active on there which kind of you know culminates in this meme stock you know bonanza like is that kind of what you're thinking about how big this could truly get? >> I think so. I mean I think the first mover here you know has a big advantage. They're obviously there. My my theory is everything's going to be eventually tokenized like the entire traditional

finance world. How long does that take? I don't know. But we're seeing like a huge ramp up in, you know, things like Kimshares, Nvidia shares being tokenized on chain. Um, they're making a ton of revenue from the fees on their chain. I I I believe I saw something. I I could be totally misquing this. I thought I saw like 300 to 500 million annualized and that's just, you know, just today before things have really taken off. Um, I think the first >> the revenue from the chain. Sorry, I believe again no one quote me on that, please. But >> no, [laughter] no, you're right. And that puts if it's if it's above the 500 mark, what that does is that puts it in the one of five business lines above 500 mil annualized, which is again I think Wall Street may not realize this yet. >> Yeah, I agree. Yeah. And like as more

volumes happening, as they're making more fees, more things get tokenized. I mean, I think Yeah. [snorts] I mean, for Robin Hood, this has to be a huge tailwind, right? It's got to be. Um, and if they we're not even talking yet about traditional finance players coming onchain and offering product like traditional type products onchain, right? Like we're going to see that as well. Um, but yeah, it's just the beginning. You just got to be patient with the stuff as always. Like I like being on the ground floor of things and I I've got some kind of I don't know if you want to call it a mental illness or right, but I'm willing to diamond hand things for for years. [laughter] Go go go through many zeros and I mean I had I had ETH at the beginning. It ran up to 25 and the Dow hack happened. dumped to like three or eight bucks and

ran up to 1,200. It dumped to 80. Like, you got to be willing to do that. I think one of the weird things meme trading is teaching people is to not know how to hold. I mean, people are literally like making fun of on uh unrealized P&L people and FOMO are up like $12 million because they haven't sold. I'm like, well, first of all, maybe they don't want to pay short-term gain taxes, and maybe they think it's going to go higher, right? Everything's taught us to like go in and out of stuff in a day, and I think that's just a bad habit for a lot of people. And I think what you're saying is there's a bigger macro event here for this cycle because last cycle was so treacherous. It was so just I mean you wanted to get in and out of those things as quick as you can. Now

it's no longer a trader market. I think it's a holders market, Eric. And that is a shift that you only learn by participating in actual crypto bull runs. You have to learn the hard way with the bear. you know, when when Todd shift, you got to know, you got to be able to take stuff off the table. But until you've gone through like a real cycle and you've realized that your targets are not high enough, and I know this is a very very bull posting podcast and I love it, but you know, you do learn the hard way by selling too early in mega trends and you get screwed over. It's like that Newton's Newton buys a little bit, Newton's friends buy some more, Newton all allins, last leg up, he doesn't sell, and then he gets nuked on. It's like the same concept here of

>> of kind of sticking in. And so I haven't sold any of my Ze. I haven't really sold much hype. Haven't sold it much lighter if any. >> I haven't sold much near, you know, just trying to ride a lot of these things. Uh even, you know, my ETH just like memes on FOMO. I get keep getting destroyed. I I just not my game. And I just know that that's not my game and I just can't and so and the public nature of it screws me over. I just I don't love it. So, it's hard for me on FOMO, but you know, it just takes one is what it seems like on that app. >> Eric, you know, there's been like kind of mixed feelings and mixed takes with regards to the whole stock token thing.

Like, like you said, you know, him seems particularly receptive to a lot of the things that are happening in the boner community. Um, and then you know you've got AMC and the CEO of AMC is like talking about how you know he didn't he didn't approve of this and you know this is unregistered and it's going to hurt people and you know calling the SEC for consumer protection and then you know Vlad is like what's the concern here? So, like maybe you could just help reconcile this. Like, you know, why are CEOs of these public companies that have these tokenized stocks reacting so differently? Like some of them see the purpose, others don't, you know, maybe you can just pick and like kind of untangle like why there's mixed feelings here.

>> Yeah, I've actually been digging into this a lot because I'm like, why would the AMC co be anti- this when in theory anything being bought on Robin Hood chain is bullish for their stock price? And I I think I've deduced to AMC had some weird things with synthetic shares and like naked shorts and all this stuff. There might just be a misunderstanding. Like perhaps he doesn't think that each share is actually in custody and he thinks there's going to be synthetic shares on chain. Use those to short AMC somehow. I don't know. Either that or he's short AMC behind the scenes. I really don't know why he wouldn't, you know, be bullish here. Um I also think we're going to see like I don't really know him but I've just seen his tweets. I think he's an older guy. I believe like the HIMCO is a bit younger. I think

there's going to be a generational gap here. Um, you know, as younger CEOs understand the tokenization of stocks, they're going to be more receptive to it as well, I think. >> Yeah, >> you make a really good point around synthetic shares because I was of the mind back when Bitcoin ETFs and Bitcoin treasury companies kind of at the peak sailor, you know, uh, dysphoria was like, there's more than 21 million Bitcoin. Like part of the reason why we're not really see like if there was actually all these flows from institutional investors going into Bitcoin Bitcoin like we would be so much higher than we were because we didn't have all of this what felt like dilutive excess you know public shares and other companies and derivatives products diluting the Bitcoin market kind of like

the synthetic Bitcoin. And so I I'm I'm curious. Do you think that is true in the Bitcoin market? And do you think that's what's happening? And I'll ask Yoshi in a little bit, but do you think that's what's happening in the in the Robin Hood tokenized stock market either? >> Yeah, I mean it's a good question to ask him because what I understand is truly every share on chain is backed by this custodian. So I'd be curious his answer to it. Um I do think I am always mystified especially with e ETF flows back in the day like you would see these giant flows and the price barely moved, right? So I I do think that plays a factor there. But I I think yeah, I think it comes down to just a misunderstanding. Like Robin Hood's been pretty transparent about this and Vlad's slowly more over the last week. But it's

probably just a general misunderstanding from most of the CEOs that have come out and been negative about it. Um because I mean I'll be the first to admit there's not a ton of information out there. I mean I did like a claw deep dive on it and it came up with a lot of information but like what are the shareholder rights of to these debt instruments and things like that and like why is Coinbase giving their tokenized stocks? I think they only have like three tokenized stocks if I correctly. Three or four. Yeah. So, they're obviously kind of going like a slower route than Robin Hood's kind of more moving fast and hopefully not breaking things. But, um, >> but yeah, things are going to get weird.

Like, here's an example I give. Like AMC, I believe, is a $2.5 billion market cap. There was a there was a meme stock tear that AMC like two weeks ago, I believe, ran up to like 120 million. We've seen like SHIB, for example, a memecoin run up to 40 billion, which would be 20 times higher than AMC's market cap. What happens if one of these meme stocks outpace the market cap of the actual stock? Like what what starts happening on chain? Like when Boner started pumping, there weren't even enough HIMS shares on chain. It was like a Saturday, so the HIMS share price on Robin Hood ran up to like 10 times the actual stock and market makers had to wake up and start arbiting it down, minting more shares. I think this is where it's going to get really fun and I'm not sure many people know what's going to actually happen if that occurs.

>> Also, I think the result of that is just you end up with like larger volumes happening on chain. So, you mentioned I was going to say I saw a tweet. >> Yeah. Yeah. There was a tweet there was Qualcomm's a $200 billion company or or I believe that that's what the stat was. There was a there was an asset on chain that was like two $20 million market cap and it had more volume in a given trading day on that $20 million market cap than like a $200 billion company in the equities market. >> Wild. >> So Rob, that's that's what you're saying, right? Is that the volume on chain is just going to accelerate. >> I Yeah, I mean I remember saying I think it was, you know, in during this episode that like 10% of HIMS was traded on chain one day. You know, we were just talking before. I think there was 2% of

AMC traded onchain one day. And so, as memecoins go up, they pull more inventory onchain. And as long as these aren't synthetic shares, then the inventory is finite. It either has to exist offchain or onchain. And if more of it gets pulled onchain, then there's less off-chain for uh to be traded. And I think therefore you then see like this rerating of the protocols in which these tokenized assets flow into per being the primary modality that you're going to end up trading these things. And you know we know that there was you know this kind of battle right decentralized perpetuals exchanges was going after centralized exchanges right we had like the dextox ratio now we end up with like the perpetuals uh venue ratio to brokerages. Right now we're talking

about 2% or 10% during market hours. Next we're going to be, you know, that is a runaway train. I think that >> decentralized venues and public brokerages is going to get flipped. >> UniS swap is crushing too, man. I mean, they're their tokens ripping and their volumes are through the roof. >> So listen, one more thing though on on the point of like pulling more inventory on chain and rerating the protocols that those tokenized assets flow into. This CFTC guidance I mentioned it came out like literally as we were talking and I just ran it through chatbt. The main take there's quite a bit in here but the main takeaway is the CFTC PA staff is providing a clear path for tokenized assets and qualifying crypto to function as collateral in regulated derivatives

markets. That is huge in my opinion. That means that, you know, you're going to be a not only you going to pair these things with meme coins in an unregulated world, you're going to be able to take your tokenized HIM stock, your AMC stock, borrow against it, get margin against it, and then go use it for different purposes. You can go get, you know, all these yield generating use cases that we've been seeing pop up. You can then go and do those. You can use them as collateral, use them as margin. And we end up getting so many more non-skeumorphic use cases as a result of, you know, making these things programmable and productive on chain that we never could have imagined. And then the TAM of all of this is so much greater. >> I love it.

>> Yeah, that's the great unlock of composability, right? They they allowed things like this and all of a sudden you could go, you know, borrow against it, use them on a use whatever, you know? It's just it's so easy once it's in your wallet tokenized like sky's is the limit. >> Yeah. And Eric, I mean, we ask right like you know who are the winners and we don't need to get into I know we're you know on time here but it's just like it's very clear you see unis swap pumping. You see the the the per platforms ripping. You'll see a and morpho start to go on a run. You'll see a drone go on a run. You'll see Kamino from Salana side and Jupiter and Radium go on these runs. Like it's just very clear that uh DJ Spartan's 36month DeFi bare market was probably more like a 52-month D5 bare market, but that's

over. Why? And you said it at the top of, you know, it's this regulatory headwind going from a headwind to a tailwind. And so just thank you for your time, for your insights, for your posting. You've helped me just stay grounded and just be be bullish, be be more bullish, honestly. So, uh, appreciate your time and just your efforts with EIP5 1559 Ethereum. We wouldn't be here without guys like you, man. So, yeah. And thank you for your time. >> Yeah. Thanks, guys. It was awesome. >> I'll see you again soon. Thanks, Eric. >> Yeah, for sure. >> Cheers. >> Give him a follow on FOMO. [applause] >> What a episode that was. I I try not to swear on the show, but my goodness, this guy's a legend. >> I think that calls for the hat.

>> I'm signing off, guys. What a show so far. I'm gonna get out of here, take a breather. I got a clearly an ocean to swim in. So, uh, bigger and better things here. Uh, Rob's gonna Rob's gonna finish the show. The Andy was right shirts are coming. The rumor mill is slapping. We Rob, you got to talk about the tokenization news that just came out today. We We nailed the exemptions. We nailed the news. Even though >> Andy Solo, come on. This guy nailed it. You know, >> we nailed the news. It it hard work to get into the group chats and have your ear to the rumor mill. Come on. Andy Solo rant on tokenized funds here.

>> We we we we nailed the tokenization exemption news that and and and Sinclair did not pass. It did not pass. We nailed the CFTC ps news coming imminently pretty much immediately after. That worked. That worked. We nailed yesterday's rumor mill of what's coming out with the uh tokenization institutional deepening of ties with issuers with Kathy Woods Arc Invest as well as Secure or sorry with Secure Ties and Ono and Black Rockck. We nailed that. Uh the rumor mill has been hot. It's been accurate and we have been on it. Really appreciate you guys supplying the ammo. All of our sources and all of our community, you guys make it possible. This has been Andy. I'm

signing off. Much love. See you in Valhalla. >> Be more bullish. All right, guys. Next guest. Uh Yoshi Yokawa. He's been on the show before. We're going to be talking about custodying the market. Um very relevant to the entire discussion today because Yoshi's company Alpaca is the custody provider for Robin Hood stock tokens. And so you heard Eric Connor talking about what it is to allow inind redemptions for these stocks, right? There's been speculation from AMC that says, "Hey, are these synthetic shares?"

Presumably, that's why he's against uh you know, this tokenized stock trading on Robin Hood. And so in response to that, it's important to basically show these CEOs of these public companies like, "Hey, you know, these are actual shares. These are real stocks. They're in real custody. They're not synthetic. And you know, there's a lot more to do with them. We can treat these things as real. Um, and we can do things like Inkind Redemption. So, we're going to bring up Yoshi, uh, the co-founder and CEO of Alpaca. Alpaca is the brokerage infrastructure layer behind more than 300 financial institutions and fintexs across 40 plus countries, serving around 10 million accounts, and it has quietly become the single most important company in

tokenized equities. So big big company, maybe the num the most important tokenization company that you haven't heard of and they also do the custody for Robin Hood. So very very important, systemically important to the tokenization buildout. Alpaca Securities custodies roughly 94% of all tokenized US equity backing over $1.5 billion in real shares. That's the important qualifier. real shares sitting behind token tokens issued by backed and others. The sector crossed $2.4 billion in market cap this month, up 32 million from a year ago with weekly volume uh peaking near $3 billion in August. So again, one of the most systemically important companies to tokenization,

maybe the most important tokenization company that you haven't heard of. company raised $150 million in January at a $ 1.15 billion valuation uh with Citadel Securities BNP Parabos participating then another 135 million in this past July to build what it calls an agent first brokerage we're going to talk more on that uh and integrate Broadrigid's governance stack in July so that tokenized uh tokenized shareholders retain proxy voting and disclosures so again more reinforcement that the shares issued by Robin Hood, issued by Coinbase, custodied by Alpaca are real shares and not synthetic shares that dilute the supply of these public companies. Uh the framing is that

tokenization is not replacing traditional finance. It is being built on top of it and that the real prize is the $350 trillion custody market where four incumbents hold 180 trillion. Guys, we're gonna get into it with our next guest, Yoshi Yokawa of Alpaca. Yoshi, it's a pleasure to have you back, man. I uh I I I welcome you to the show and I'm excited because we are in the midst of the tokenization super cycle. >> Yeah, definitely. It's always great to uh be here and uh love chatting with you. It's always fun. >> Absolutely, man. Let's have some fun. It feels like I mean, look at the market.

We're having fun again. So, uh we'll get into it. I mean, look, we we started off uh your intro by saying Alpaca is the brokerage infrastructure behind more than 300 financial institutions, 40 plus countries, 10 million accounts. One of those is Robin Hood. Another I believe is Coinbase. So maybe you can just talk to us about the journey with these partners because Coinbase and Robin Hood leading on the tokenized issuance front with regards to these stock tokens, tokenized equities. we're seeing the regulatory bodies comply and make more accommodative regulatory guidance and so what has it been like to build with some of these integration partners and ultimately roll this out for the entire market >> I think like what's important is that to be very aware of uh you know what can be done what cannot be done and then

extremely flexible about the local regulations uh when I mean local is countries local and also like you know when it's you know cryptonative like you know there's uh requirement and common sense in the cryptonative structure. So building that compliance stack and then uh uh back office mid office operations and then API to be extremely uh uh you know flexible to be able to uh get into that that has been always challenging. So so I think like you know we have uh experience working with so many different countries and regulatory requirements. So that really pushed us to be uh extremely flexible by owning and internalizing so many licenses and approvals and then uh uh technology itself. >> Yeah, absolutely. And so you know just

before you came on we had Eric Connor who has been prolific on Robin Hood. uh he is towards the top of the leaderboard on FOMO when it comes to trading some of these tokens. And so he's kind of playing both, right? You know, HIMS and Bonercoin, right? The as these things are paired up. It's I mean, it's incredible times that we're that we're living in. And so, you know, one of the things that we talked about was that, you know, there's kind of like mixed feelings amongst the public company CEOs, you know, when they're reacting to some of these stock tokens. We've got, you know, the HIMYM CEO that is super receptive to it. Very much in favor. On the other hand, we've got the AMC CEO that is like, look, this is unregistered. This doesn't make sense.

People are going to get hurt. We need to have consumer protections, right? And then Vlad comes in. He's like, what's the concern? So, like, why is there mixed feelings about this? I take it, you know, maybe the AMC CEO, the only, you know, uh, theory that we could come up with is that he thinks it's synthetic shares and he doesn't want like to dilute his shares, right, and get get caught with, you know, people shorting synthetic shares. Can you just help illustrate, you know, what what is the reality here and kind of clarify any of these misconceptions? Are these synthetic shares or are they actually real AMC shares? I think like you know what we have to uh be very careful and intentional and I appreciate um specifically pointing out that word

synthetic. Uh synthetic definitely mislead a lot of things uh that's not factual into the factual thing. So you know I come from a securitization background. Uh I started my career at Leman Brothers. So like I kind of think about a lot of this uh word synthetic CDOS's that was uh one of the reasons why uh you know the whole bubble happened during the 2008 financial crisis and when we talking about regular CDO and synthetic CDOS's the difference is that synthetic CDOS's did not have actual uh instruments behind the scene but we use the indexes that reflect the price movements of that uh things and then package that into the securitization to be CDO so that's synthetic CDO here what we're talking about as the SPV

wrapped tokens stock tokens are not synthetic it's actually uh uh uh backed by real share one to1 so I would say we used to call like co to be cash co and the synthetic co I would say this is like cash stock token so that's actually factual that's how it works right now so far uh you know obviously like we have to remember four years ago there's a Luna protocol that went completely bust that's purely synthetic but like you know I think we are still four years out from that I think we're still smart enough to remember what happened so I don't think anyone tried to do the synthetic so that's the factual thing and in terms of like you know how the uh each of the CEOs react to uh what's happening um I cannot talk to um you know specific person person how he's

thinking about however um I think each of the CEO of the company have different uh uh strategy uh to think about uh uh you know investor relations how to position the companies in certain way. Uh so it may come from that for example uh maybe intentionally uh maybe like know it was not intentional who knows but the reality is that what's factual is that this is not synthetic this is cash uh stock tokens >> it feels like an education gap it feels like you know the AMC guy he might remember the meme stock craze back you know in in GameStop 2020 2021 and he doesn't want to repeat that right because movie theaters a lot of people didn't go to the movies and so he sees is happening and he just doesn't

understand what's happening here but ultimately this is more distribution and more demand for his company's shares which you know it's tough not to be bullish and so um what I'm curious about because you helped you know clarify this misconception these are actual real shares in custody right and they are uh representative real shares onetoone with these SPV uh you know issued tokens so given that these are real shares then it should be possible to do inind redemptions, right? Where if I have the tokenized stock and I want to redeem it for, you know, the the you know the non-tokenized traditional share, I should be able to do that, right? What is what is holding us up from inind

redemptions? >> Uh it is uh definitely uh possible and doable. However, there's a lot of nuances um because like you know having holding the uh stock tokens and then holding the Traty shares that's under uh writing that stock tokens uh live in the different regulatory requirements. So for example um you know that owning the trfy shares would require having the trfy brokerage account >> and that may not be the case for the certain stock tokens. So in order to have the technicality of being able to achieve that user experience in a very seamless way, uh there has to be some kind of delta of the timing because like you know the the companies have to

develop that uh uh usability and the user experience to be uh uh you know good and then technicality in terms of underlying uh you know the mid office uh back office operations is definitely doable and then we have the product called uh instant tokenization network that's literally we built that uh just for this purpose like in kind redemption in kind minting. So like we're working uh you know discussing with a lot of partners of ours to make sure that uh that capabilities actually show up uh in a right user experience. >> Amazing. And you know one of your partners is the DTCC right? you're a um you know kind of one of the companies that is helping to establish some best practices for the DTCC's uh tokenization service uh of which their pilot program

is launching in October. Uh they did kind of a test run of this back in July and it seemed to have gone well. And so given that you know you've developed this service that is able to kind of you know uh go back and forth between inkind redemptions the tokenized version and the traditional version of these shares. How are you working with the DTCC to ultimately stand up more infrastructure to facilitate these flows, right? What is kind of the before and after picture where we are now and then what will be possible once the DTC launches their pilot program in October? I think like you know the once that happens we still have to see how the uh liquidity will look like and I don't think we have seen

that yet and and and the reality is that um each of the tokenization definition that we have right now there's like three categories right like you know is sponsored token IST and then custo token like DTCC token like we're talking about and then there's SPV rep token and each of each three of them have a different uh pros and cons and then different purposes why they are used. So I think like you know we have to firstly kind of embrace that there's a differences of those three categories and I think like you know DTCC one it's you know it's amazing product in a way that cuz like they actually hold the uh trfy shares uh in their account and then creating uh much more um basically like onchain native uh uh uh like better usability programmable version of it. However,

like you know, okay, who's going to actually use that is a very different question like you know how it's going to be settled, how it's going to be cleared, how it's going to be executed, uh how the price is going to be uh you know what is the price that you know is going to be NBB or not. Uh there are so many nuances uh that comes with it uh with the uh secondary trading and liquidity and I think like you know we have to see that as we develop this product as we uh you know together launch it uh in in October. And are those things like, you know, national best bid and offer, secondary liquidity, are those things that you've already solved and you're helping teach the DTCC or do you anticipate they're going to have to kind of figure it out on their own? >> So, so I think like it's more of the uh

market participants uh who's going to buy and sell and who's going to facilitate that? Those are the people like you know who have to figure out really like you know these are uh ban uh banned to the uh uh uh NBBO or not. Mhm. >> And then if that is the case like you know how we ensure that we keep that bid and offer uh on the pricing and I think that's a very different uh discussion away also from the DTCC that us included uh market participants uh have to figure out together. >> Okay. And you know, another component to this is the regulators. And just today, a couple hours ago, the CFTC released new guidance kind of clarifying some previous guidance that said, look, um, the CFTC staff is providing a clearer path for tokenized assets and qualifying

crypto to function as collateral in regulated derivatives markets. And so as there are more use cases that flow downstream of these tokenized assets, right, you know, it was one thing to tokenize these equities, it was another thing to start pairing them with meme coins, right? It's a third thing to then put them in a lending market or perpetuals market and use them as collateral and get margin against them. And so as there are more use cases for these stock tokens, how does it change your business at Alpaca? um what I think about is that um I focus on what doesn't change.

>> So um this included like you know this AI and agents narrative as well. Uh you know technology continue to evolve and then this like tokenization this is a humongous paradigm shift like you know whole financial services operation stack is getting updated uh like it's going to 10 or 50 years like it's going to take long time. However, what doesn't change is the human behavior. One is like you know the uh uh fear and greed which means that there are certain things that people do and people don't do regardless of it's get automated or not because you're ultimately responsible and the other thing is that like what has to be protected there's an investor protection that we have to make sure that happens in the right way and then we have to also protect the health of the capital markets. So like those two things don't change. So regardless of like we put

that into the D5 protocol for the lending or like you know we create more structures around layers of the layers those two things don't change. So like our job is to make sure that those things are clarified and then there's a right structure and then uh you know the make sure that all things are disclosed and explained and educated and you know this whole process of like uh you know allowing me to be here uh uh you know on this pod is a part of that right just clarifying our job is that to make sure that uh to protect like what doesn't change regardless of how the systems or the technology changes >> yeah and I I think you know it's extremely important that you are here you know a big through line of everything that we do at the show has been education and a lot of times you know it's been like the primarily you

know the people that are in the industry educating them on technical specs on how to develop you know blockchain infrastructure and these kinds of things but increasingly we've kind of oscillated from the technology over to the finance world right and started to educate people on the way that finance works you know whether that be tradfi educating them onchain or vice versa a lot of onchain people are now getting educated on finance and so what do you think is still some of the biggest gaps like still some of the things where you come to these shows and you run you know these podcast circuits and you think like okay I have to get this message out because this is still very you know under the radar and it's not being talked about enough. What do you think is more important for these market participants to understand?

I think that um we have to really uh be stay curious about what the uh existing uh systems were meant to be. What I mean that exactly is that uh at least in the United States securities law uh there's a lot of rules uh uh you know that from the uh 19 uh uh 33 you know securities act and there's a bunch of the compliance rules we need to take them as the really historical history book and then have to respect it and understand why they were created every single like you know the rule there was an underlying incident that happened and that's not uh anything unique because like you know the the things repeat itself and it rhymes because like human behaviors don't change and I think like

know we kind of forget that because there's a new technology or like a new way of building things but ultimately certain things don't change which means that like know certain behaviors don't change so things will happen over and over and over again I think we can't underestimate like how important to understand why those rules were built and then actually study and and I think like those are the things I continue to push out Even though I'm I'm I'm on the business side, I'm the uh you know CEO of the company, I really care about the history and then I think compliance and the legal is the like, you know, book of the history in my opinion. >> Yeah. And there's a reason that those laws and those rules are in place and and so to your point, you know, this is why you say that, you know, we're not replacing traditional finance, we're

building on top of it, right? This is sort of like the next evolution as we upgrade, right, the entire financial stack. this is sort of the next step in that process and so we're not you know erasing financial history we are the next step in financial history and I think that is the right framing you know one of the one of the things Yoshi that you know was sort of the way that this market was constructed early on in financial history right if we look at the current custody market right now in the traditional world there's about four market participants and I think you know the DTCC C is one of the primary, you know, custody providers to the traditional market. But right now

there's $350 trillion custody market and four incumbents hold about 180 trillion of that market. Right? So just about half is held by four incumbents. But then I have another stat here that says right now Alpaca is doing the custody for 94% of the backing for tokenized US equities. And so when we think about the healthy market structure for the custody of these tokenized equities, how should we think about this? What is the power law? What is the power dynamic? Is it true that, you know, Alpaca's got 94% and you guys are, you know, you're going to get more? You're going to be 99% of the custody market or do you expect more market participants to come in and take some market share? >> Uh, it has to be more market

participants to take more market share. Um uh I think the reason why we say that is right now uh it's only few billion [music] dollars uh or like a little bit more than few billion dollars assets under custody for the tokenized stocks but like you know the uh securities market is $300 trillion right and then even like you know US stock market is uh you know much less than that like less than 100 trillion so so like so like it's just even tiny so that's how we have to understand this is just a even even a first step yet. That's how early this is. So I think like anchoring like you know how much of the market share of the percentage uh at least to me it's it's not really relevant. What we have to really make sure to focus on is like how quickly we bring this $350 trillion

of the securities market custody on chain uh as much as possible. So because that's going to benefit us as a company as well. But like you know that we need to bring more participants to be uh able to do this. So like you know we are uh in the camp of how can we share the resources and how we can uh uh you know provide like you know what what we have uh as an IP so that more competitors actually come in because that's better for the market uh more people will be involved uh ultimately I think is going to benefit us. >> I love it. I absolutely love it. Uh couple things on the product stack Yoshi. Uh, one of the things is that you added Broadidge, uh, so that, you know, the the tokenized shareholders have some of the same governance rights that they

would have if they held these shares in a traditional brokerage account. um you know when you're looking at the demand for these kind of products we see a lot of retail demand and you know a lot of that is just to get exposure to the prices but when you bring someone like a broadidge in to give voting rights and and governance rights that upgrades these things just from you know a stock token to a true tokenized equity why is it so important that you brought in Broadridge and you give shareholders these governance rights >> so you're completely right like right now uh like how it's being used primarily is more of the uh price discoveries and then like you know making um uh you know money and getting exposed in trading. However, uh to make this uh again hold $350 trillion of securities market it needs institutional

participants and the institutions uh based on their requirement of the licenses they are required to provide those things as a part of the rule and law. So like you know making sure that these things are doable uh through our uh system uh is is needed. So I think you know that is the reason why we're doing this and then broader is of course the uh uh de facto standard uh to be able to do that. So I think like you know that has to happen for uh to push this tokenized markets to be even more active. >> Yeah. Um just a few minutes left here but a couple more questions. Another big push on the product side from Alpaca has been this agentic first brokerage concept. Maybe you can just unpack like what is what is that like what is an

agent first brokerage? How is it different from a traditional brokerage and why is it so important for the modernization of this next generation of finance? >> Yes, I think what's happening in the financial services there um it's just in general becoming more programmable if we use the very uh old classic word. it's it's becoming more programmable. The reason why is like you know two things. One is that of course like because of the AI and agents uh you know a agents has to be able to function and read the information in a very programmable way and which means that like you know the when human used to click in login or sign up even that has to be uh programmable. Uh so that like you know the agent first means that you have to even two step further in to you know make the abstraction layer. So that it's

a uh basically programmable layer. And the second one is tokenization. Tokenization same as like stable coin it's a called you know programmable dollar. We're making every single securities and real world assets programmable. So like you know in order to do that uh we have to make sure that uh all those interface are uh uh ready for that. So that's why like we've always saying it's API first. We're saying like always developer first. But now like more than developers there's agents and that's going to be more than 8.5 billion of the people because it's uh you know ideally infinite numbers of the agents that's going to participate and trying to attack and not attack but like you know in use interfaces. So it has to be scalable that way too. So that's the reason why like you know we think now not only Alpaka but every

single financial services have to be agent first because like participants who's going to interact with the financial services is going to be much more in the agents than humans who exist on this earth planet which is 8.5 billion people. >> Yeah absolutely I think that's where we're going. I think everyone in you know this industry and finance sees it. Everyone in AI sees it. Um and so it's just a matter of getting there. Very similarly, I think you're also targeting, you know, this $350 trillion custody market right now. We're still playing in the billions, right? So, we are we are like 1% billion is a big number, but billion is still like 1% of the 1% of the entire custody market. And so how do we ultimately accelerate this and go from billions to trillions to hundreds of trillions of onchain

tokenized equities in custody at alpaca. >> Dude, that's exactly what we're doing right here, right? Like it's education. It's like, you know, we need to bring in more players to come in so that like, you know, all those people have another different creative ideas to push this. I think like the more people we get in we involve I think that's going to move faster and then it creates more credibility trustworthiness and then really education clarification this is how it works and this is not again synthetic this is cash right I think those things in my opinion do matter and we cannot be emotional about it because like we cannot be competing right now because it's so freaking small which means that we need to be really partnering to make sure that like we think for the whole uh bigger pie instead of like, you know, fighting each

other because it's so small. Um, and I think that is the only way. >> Yeah, we're in this together. Yoshi, thank you so much, man. Always appreciate your time coming on. A true leader in the tokenization space. You guys have done incredible work, pioneering and stewarding the tokenization industry forward, working with some of the biggest names in finance in general, and uh we really appreciate you taking the time to help help educate us as well as our audience at large. So, thanks again. We'll appreciate it real soon. >> Yeah, always fun. Thank you very much for this. >> Absolutely. We'll see you soon. Thanks, >> Yoshi. >> Thank you.

>> Incredible, guys. There you have it. Uh that was Yoshi from Alpaca um with another great word on tokenization and I really liked how the show flowed today. That was our last guest. Uh and so we're going to wrap it up here in a little bit, but I mean obviously look how general, right? We start with Hib. We talk about the categories that this bull market is built on, right? We talk about prediction markets, stable coins, vaults, tokenization, and per, right? And then we come up with Eric and we talk about right the sequence of how these things are going to get played out. What we're seeing in the markets right now, what kind of

timing we're seeing out there, why is Litecoin getting a ton of attention, how is this market evolving, how is it reacting to certain things, how is and then and then we finish it up with the institutional framing, right? And we understand at the most fundamental le level, right? How Yoshi is listening to some of these institutions, right? how he's listening to some of these public company CEOs, right? What their reaction is to seeing their stock tokenized. The fact that no, we can clarify these misconceptions. These are actually real shares that are held in Alpaca Securities accounts on behalf of these onchain brokers. That's what I think I think we just invented a new term, onchain brokers. Okay? And you know, according to the SEC, they don't need to register as broker dealers because they can fall into some of these tokenization

exemptions, right? But they can still do things like, you know, margin. They can still use these things as collateral. And a lot of that guidance is coming out of the CFTC. And so these things are real shares, right? They're backed one to one, right? They are issued by this SPV vehicle, but they have governance rights. and Alpaca partnered with Broadidge to bring governance rights to these tokenized equities. And so they are real tokenized equities, right? And so therefore, right, you also get, right, this unpacking, this unveiling and this increase in market structure, right? So that you can do inind redemptions, right? And a lot of the same functionality that you would expect is there. It's just underneath the hood. The regulatory environment is becoming clarified and we are starting to see these things play out in real time right

before our eyes. Guys, it is not the time to be sidelined. I see Zcash uh has achieved 1550 which feels like a key level again. Feels like we're ready for the next move up. I am thinking about buying more. I think everyone should be more bullish. I am more bullish after today's episode. I hope you are also more bullish. Gas me up, one supply, gas me up. Every chain, no wrapped, lock, mint, burn, unlocked, one supply, gas me up. Coke decks, wild handle, wild username, wild show, guys. That's been the roll up for today. We're not doing markets. We're not doing weather. We're not doing topics. We've got plenty to do behind the scenes to keep bringing you guys the show that you love. Big W's in

the chat. Little Miss Gun, you know what's up. Shout out to all of our guests today. Thank you to everyone behind the scenes. We couldn't do it without you. We are getting ready for an absolute blitz of a conference circuit. I hope all of you are ready for everything coming out of the rollup. We will see you again very soon. Same time tomorrow, Friday show. Finish the week strong. Thank you and good night. [music] >> [music]