Trading Exchanges Are The Biggest Opportunity In Crypto (Revenue Is Exploding)

Transcript

2025 spot exchanges did about $5 billion in fees. >> Mhm. >> And that's close to the amount of fees generated by lending, by the chains, by derivatives combined. >> Welcome to the Rollup. Our mission is to educate, empower, enrich so that you can be more bullish. Like, comment, subscribe, and enjoy the show. And we're back to us Asia 2026 live from Token 2049. My friend Alexander Cutler, the man of the hour, the man bringing tokenized equities to the masses, the man that is bringing liquidity to everyone and everything. Alex, welcome to the show.

>> Good to see you, my friend. >> to do intros for you, man, because you're really doing it. You're really out here doing it, and I am I just can't tell you how excited I am to bring Aero not only to mainnet, but to bring it everywhere. >> Yeah, man. >> Give us an update. >> I mean, it's a crazy moment. As of this morning, we are 2 weeks away from >> Let's go. >> And this is a launch we've been building towards for over a year now. And we are super excited. So, the all-new Aero will go live in about 2 weeks.

>> Okay. >> It'll go live on Base, Optimism, on Arbitrum, and of Robinhood, of course. >> Oh, very cool. >> Mainnet Ethereum. >> Okay. >> And it's very much designed to be, right, the single definitive spot exchange of not just Ethereum, but the on-chain economy. >> Yeah. >> And this is because we see spot exchange as the single biggest opportunity beyond chain. Last year in 2025, spot exchanges did about $5 billion in fees. >> Mhm. >> And that's close to the amount of fees generated by lending, by the chains, by derivatives combined.

>> Yeah. >> So, you know, we want to go launch the big V3, connect liquidity together across networks, and dominate this moment in spot exchange >> Yeah. >> when trillion-dollar markets are beginning to come on chain. >> Yeah. I I'm really excited for this because I I can't help and look we've got a perps platform coming on just after you but I feel like the ratio of expressing a thesis in a financial market the ratio of perps to spot is maybe reaching a a local top and I think we might start to see that flip back and I think especially as we're tokenizing additional asset classes and we're bringing high quality equities in

particular on chain. I mean the moment has never been more real than it is right now for this launch. >> Yeah, I mean look derivatives and in particular hyperliquid right have proven that there is demand for these types of on-chain products. >> Yeah. >> Um but derivative markets allow you just to speculate right on the price of a given asset right? It has to derive a price from something. >> Yeah. >> So especially when we are now tokenizing real world assets and we're bringing things like stocks on chain that don't trade in 24/7 venues.

Um we need just as much as we have want an on-chain CME. We need a an on-chain NYSE or you know Nasdaq right? Because you need um deeply liquid spot markets real world assets in them. Things that actually represent the underlying they aren't just like derivatives or wrappers or things like that. And those will be the foundation on which these types of markets I think increasingly price. >> Yeah. >> Um in which uh even derivatives markets increasingly tap into. But yes, I think uh we've seen what's possible now with a derivative market like um hyperliquid that wraps 100% of the value and says hey look we're the on-chain CME.

Come find us you know, you can bet on the growth of the on-chain economy. I don't think anyone's yet done that for the uh uh spot exchange vertical just as critical the on-chain economy. So that's what we've been building for the last year to go do. >> Yeah, absolutely. And so take us through the the sequence of events that have taken place right obviously this was a big moment that you've been working towards for a long time. Aerodrome has been live on base. You guys have been absolutely crushing. And you know, you made the decision. I saw audits wrapped up, no major hold-ups. So we're we're forging ahead, right? You mentioned that we're about 2 weeks away and we will see and on a number of chains. You mentioned Arbitrum Robinhood Optimism Ethereum mainnet. Give us a sense of what is

going to unfold over the next 2 weeks as we ultimately culminate in this big go-live moment. >> Yeah. I mean, I think let's take a step back to 4 years ago when we first launched Velodrome. Uh we were five basically anonymous guys, right? Who had met in a Discord. But like we aligned around this shared vision of building better systems that redistribute 100% of the value. And we have never been first to market. But we believe we brought the best product to market and that is far more important. So when we launched Velodrome, so this is like a preview of I think what's coming.

>> Yeah. >> When we launched Velodrome, we were up against billion-dollar incumbents. >> Mhm. >> With BC back. >> Mhm. >> And it was through the quality of the product, right? It was through the combination of technology and economics that we were able to win dominant share first on Optimism becoming the largest exchange there. And then of course launch and become the dominant exchange on probably the single most important chain of the last cycle. And so for us this moment of bringing these two exchanges together. Unifying them around a single token.

>> Yeah. >> A token by the way that represents a 100% claim on the current and future productive value of the exchange. And now going from servicing about 15% of the addressable spot market. >> Yeah. >> Uh to something four times larger, I think is super exciting. And the other thing that I think is super exciting about this moment. I mean, I was just looking at uh DeFi Llama yesterday. >> I saw this. >> Yeah, so over the past 30 days, right? Aerodrome exists on one chain. That chain does about 15% of on-chain spot volume.

>> 15, 1 5. >> Yeah. >> Yeah. >> And uh we are doing over the past 30 days more revenue than any other spot exchange. We are doing more revenue year-to-date than any other spot exchange. And in our lifetime, we've done more revenue than any other spot exchange. So, we're doing that while servicing a fraction of the market. >> 15% of the market and generating more revenue than anyone else in the market. >> Yeah, I mean, you know, I think we look at the competitive set and we we see them as being capped out on growth, right? They already service every chain.

Uh they service every type of pair. They've been everywhere uh for quite some time. We have just started, I think, our growth journey. And so, if we're already leading on uh revenue today and we're going to be able to enter new markets that represent Forex. And by the way, at a moment in which uh we're not just like eating away at the existing pie, but we're growing it >> Yeah. >> through things like tokenized stocks and FX. Uh I think we have a tremendous opportunity to shock people, I think, much like people were shocked by Hyperliquid. And that was the type of token and platform and asset that didn't just get the attention of on-chain audiences, but uh traditional investor audiences as well.

>> There are a little a lot of similarities in the community and in the structure of how you've put together this token. And so, I I I want to talk about first maybe what to expect because you've you've, you know, already alluded to how exciting this this is, the the opportunity at stake here. I'm curious about Robinhood and maybe we'll talk about tokenized equities, we'll talk about Forex, Forex, and maybe, you know, some of the other chains here, but I'm curious, was Robinhood always in the cards as you were looking at kind of the the on-chain landscape and where to launch?

And and what is what can we expect? I mean, obviously, there's been so much activity and so much excitement around what's happened there. Maybe it's it's subsided a little bit, but I don't think by any means is it going away. And so, was it always the case that you were going to launch Aerodrome was going to launch on Robinhood chain? And and what can people expect in terms of the flows once Aero is live? >> Yeah. I mean, I think we've said from day one, you know, going back to New York when when we announced this last fall that our goal is to be the exchange layer of Ethereum and of the on-chain economy.

And so, our intention was always to ensure that our platform existed anywhere people are issuing new tokens, anywhere people are trading them. And so, of course, when you have a player like Robinhood come on chain in such a significant way, we expected that obviously we would be there servicing them and building the same type of deep liquidity mode that we have on base, on chains like Robinhood, on chains like mainnet Ethereum. And of course, we also recently launched on Arbitrum. Um so, yeah, that was always the plan. In terms of expectations, I mean, I think what we have shown from day one is we focus on one thing and one thing

alone. Uh a DEX is powered by liquidity. And if you win liquidity, you win more trades, you win more fees, you win then more revenue, and then you can inject that value right back into the system. And so, we will use the same edge that we used to that we used to win chains like Optimism, chains like Base to win increasingly large shares of chains like Robinhood and mainnet Ethereum, which is just capitalizing 100% of the productive value of the DEX in the token, wrapping it something in excess of just trading fees alone, and rewarding liquidity providers with it. And you know, I expect liquidity providers to make the same choice they have on

other networks, which is if you are taking on the risk of your capital, you are making those markets, do you want to get paid about 50 on the dollar, a dollar, or 75 cents on a dollar? And where we launched the product, people prefer our platform for exactly that reason, and we expect it to be no different on any chain that we we launch. >> Yeah. So, you've won market share on chains before, but I I think we understand, you know, liquidity begets liquidity and you guys have been the market leader on base for a while now and so it's a little bit of a different competitive dynamic after you've already won the market. Now you're going and you're launching as a fresh new exchange on some of these new chains and so give

us a sense of, you know, what is different to the approach of hey, we've already won this market, you know, we are continuing to maintain that versus we're going to be launching new and it's time to now bootstrap liquidity and grow liquidity from, you know, from from the from the jump on these new chains. >> I mean, hey look, we're just getting back to our roots here. You know, when Velodrome launched, we probably had few million dollars in TVL deposited in us and look, we were looking at folks like Curve, like Uniswap, like Balancer and going, you know, my god, wouldn't it be incredible if we could go toe-to-toe with them in this one single ecosystem. And what happens is it just starts building

up, right? Because if you do have a better product, if you can reward liquidity providers better, they will come, they will consolidate, that creates that growth flywheel. Um same thing on base. We were not first on base. This is actually something most people forget because we have taken such a dominant share there. 60, 70% of the chain volumes, people think we were just there early. I still today get asked, hey, did you used to work at Coinbase? Is that how you guys managed that? And I said, no. We just showed up with a better product and we started chipping away at market share.

And so yeah, we will enter these new ecosystems just like we entered the ones that we expanded to prior. And the most amazing thing is is like those were moments where we were still a small team. We were on the first and second version of our DEX operating system. What we are going to launch is our third and the most ambitious one we have yet. And now we've got a proven track record, and so I think it's going to be a lot of fireworks, and I think a lot of people will be watching. And frankly, I think it's going to be a lot of fun. I think we haven't seen a big disruption like this in DeFi in some time.

>> How fast is this going to happen? Like, is the switch going to flip? I I got to imagine you guys are already talking to liquidity providers and and understanding preferences, right? Obviously, people want 100, you know, 100 cents on the dollar. So, that part kind of goes without saying, but when it comes to migrating potentially, right? There are maybe some logistical and operational considerations that, you know, are are important to understand ahead of time. How are you approaching those, and how quickly should we anticipate some of these flows happening?

>> Yeah, I mean, I would think about it this way. Um I don't think I've actually talked about this on the podcast before, but, you know, we have of course existed on Base for for quite some time. So, that means we work with every every major market maker uh participates on our platform. Every major project uh participates on our platform. Uh token issuers launch on our platform. And these are um players that don't just exist on Base. They exist on mainnet Ethereum. They exist on Robinhood. They exist on Arbitrum. And for years, long before we even had a plan to expand, they would ask us, beg us to come, please deploy this in these other ecosystems because we know this is the best infrastructure. We have the

same choices on Base that we do on Ethereum mainnet, but we choose Arrow because it's the best place to launch. It's the best place to earn. It's the best place to trade. And we want this uh access to this uh in markets like mainnet Ethereum, Arbitrum, and Robinhood. And so, very much it's even less of like we're going out there, and we're having to, you know, line these people up. These people are asking for it. Yeah, asking for it. They've been trying to get us there for some time. I think this week we've just started announcing some of the folks who will be migrating over to Arrow on day one. And so, I think in some of these markets it's going to happen very, very fast, right? And you're going to see this sort of catalyst sort of moment.

You're also going to see that great moment of a pool, you know, with like a hundred dollars in TVL in it and infinity APR, you know, for those folks who want to get in there early and make those markets. So yeah, I think it's going to happen very, very quickly and the exciting part to us is like, "Look, even if it goes slowly, this is all marginal growth for us." And if we can just continue to chip away at it, you know, I want to see us by end of year having doubled our share on chain spot volumes at the very least.

>> Okay. >> But I think it could go much bigger than that. I think it all depends on what happens next but I've looked at it like in the past 30 days for instance, we went from 1/50 of the share of on chain stock volumes in AMMs to about 1/3. So this is the way in which we eat markets. We're growing our share of on chain stock volumes. We're the number one FX venue on chain. We're the number one Bitcoin venue on chain. And the only thing I think that's been holding us back at moments from winning an even larger share is just not even competing in some of these markets.

>> Yeah. >> So we're so excited to bring this product, you know, to everybody across EVM. >> Just a I I mean it's super exciting times. Just a couple more questions to to kind of close the loop here. When you look at a multi-chain approach, do you have to approach these chains differently? Does the deployment on mainnet look any different than the deployment on Robinhood? >> I mean, certainly um the composition of of activity on the chains are very, very different, right? I think on base you see it heavily weighted towards blue chip liquidity, towards FX liquidity and volume, and increasingly tokenized stocks, right? On mainnet, you see the [clears throat] same

kind of deep pools of blue chip liquidity, Um, E, Bitcoin. I think you're going to see a lot of um, RWAs issued first on mainnet Ethereum. So, that's very different than on Robinhood of course today. It's very much long tail, right? It's it's memes, it's launchers, and it's that type of thing. >> Yeah. >> Um, so yeah, it will be a little bit different in each market. Um, but I think we will go after our uh, bread and butter in in each, which is building that deep, super efficient liquidity on the most efficient pairs. >> Right. >> Um, and we know what happens when we do that, right? Slowly liquidity providers move over that creates these compounding network effects, and you win more and more volume, more and more share. But,

we want to compete for everything, right? >> Yeah. >> Um, uh, exchanges are winner take most markets, and we intend to take the most. >> Yeah. Last question for you, and and you know, I I think you're alluding to what people can expect on some of these different chains, right? Probably on Robinhood, these pools are going to have a little bit less liquidity to start with. They're a little bit more nascent, which means higher APYs. On mainnet, right? Could be a little bit different depending on the the asset distribution that we're looking at. Last question here is, you know, as you grow market share, and you grow volume, is that directly correlated to the revenue in the in the sense that these are growing at a very similar pace, you know, a linear growth model on volume and share

equates to a linear growth in revenue, or you know, it is incremental in the sense that you get a couple more percentile market share in tokenized equities, that leads to an exponential growth in revenue. How how do these two pieces of the puzzle work together? >> Yeah, I mean, um, I think if you're talking in aggregate of of all on-chain spot volumes, yeah, the relationship will be very direct. >> Yeah. >> Um, but in terms of attacking particular verticals, no, not necessarily. >> Right. Right. >> Like a a great deal of the liquidity on mainnet Ethereum for instance today is stable stable or correlated correlated pairs, right? These have a tremendous amount of TVL. Um, they do an an amount of volume, but they don't produce

a ton in terms of fees because they're stable swaps, right? So, what that means though is for you to win those pools over, reward them at a premium, it's not terribly expensive because they're not producing a lot of value right now. In fact, they're producing even less now that platforms have begun to tax the earnings of liquidity providers. So, we can outpay and win those LPs over and that will be, you know, less of a contributor, you know, to massive shifts and fees and things like that. Um but on like Robinhood, yeah, attacking some of these more long-tail 1% highly lucrative pairs, yeah, that will move that other needle. But I think for us, as long as we are growing, yeah, we want to be number one

uh volume, we want to be number one fees, we want to be number one TVL. Uh we know we're already number one on revenue, but we want to run up the score there. And I think it's probably, you know, in about that order and how we want to attack things. >> Alex, you're the man. Uh appreciate every time you come on. I I I love the perspective and the ambition of which you you attack these markets. And uh I think the market is starting to uh you know, it's forward-looking. I think it's starting to realize the opportunity at stake, but honestly, I I'm in incredibly excited and I think the market is as well for the launch of Era.

>> Yeah, super excited and I just wanted to commend you guys, too. Uh watching your growth over the last year, watching the last month that you two have had, I mean, it has been an incredible journey to feel like I've been able to be alongside of. So, congrats on all the success for you guys, as well. >> We're we're on this journey together. Thanks for coming on.