Trump’s Meme, Solana’s Activity Boom, and Base’s Next Step | Analyst Round Table

Transcript

one thing that I find interesting about salana is that in contrast to ethereum the majority of the stable coins uh are usdc like usdc is the leader in the stable coin vertical uh whereas in ethereum we see like kind of a dominance by usdt so I I just think it's an interesting Dynamic where Solana I think it's more like America aligned if you want to see it that way and I I think that may be interesting like for the next uh four years Today's Show is powered by scale we'll hear more about them later but first let's dive into today's episode nothing set on zerox Research is a recommendation to buy or sell

Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice bachio Ryan and our guests May hold positions in the companies funds or projects discussed hey guys welcome back to another episode of ox research today I'm joining by Mark Carlos and Dan Smith um we had a bit of a crazy weekend probably one of the craziest weekends um in crypto's entire history um or at least for for those of us here I would imagine um I cannot recall um anything more insane um that has happened in a span of two to three days um in in my time here so um how are you guys doing happy sad worn

out exhausted that was I definitely agree with you I was I don't know I think it's there's been a lot of crazy stuff that's happened in this industry and a lot of the crazy stuff tends to be like extremely bad like there's definitely people who will hate this moment and that's perfectly okay in my mind um but it is objectively a different type of bad even if you think it's bad versus something like an FTX implosion what like fraud corruption and disaster uh versus this is I think like the argument is it's embarrassing I think actually I think Eric V he said this best um and it kind of like captures my thoughts on the whole moment is like he's like something to I wish I had the Tweet up in front of me but I

don't maybe we'll link it in the show notes but something to the effect of this is really embarrassing but you have to take like not moralize about it and and and realize that the president of the United States just used a blockchain to launch a mem coin um that is going to change the like regulatory environment uh so I think that's just like the very plain reality of the situation and again there's people who hate mem coins there's people that love mcoins and there's people in between I tend to find myself in between so my first reaction was like Jesus this is horrible and then I was like okay this is there is probably no human on earth and this exact point of time that has more attention and more eyeballs surrounding this person I'm

like okay like this is going to rip yeah I totally agree with that I think the Tweet was something like both things can are are not mutually exclusive like one this is stupid and cringe and number two like yes it's the president of of the United States using the salana network to launch his own mem coin which is absolutely insane so like I think both things can be true at the same time to be honest when I saw it I I thought his account was hacked so I I did I didn't buy any I just and I just cope the world all the way up but like it was it was absolutely crazy the reason why I never thought it was hacked is that is I don't know I have no idea how this actually works but

in my head like that account simply cannot be hacked um because there's like a national security risk to you know someone hacking the president's Twitter account and declaring war on another country or something uh so that's how it works in my head I have no idea if that's how it works in practice though but like I feel the same way about Elon uh I I don't think his account can like just be hacked at least I hope I feel like there should be some additional security measures that gets put on extremely high-profile accounts to be honest I'm more disappointed that it launched 3:00 a.m.

my time so when I woke up all the news was already there and I mean the first thing I did was buy it because you know even though I missed the first leg up but I didn't think it was hacked because metaplex also said you know like oh look who created an nft or a coin using our product I was like okay so this this seems legit let me just get in I'm also disappointed because I was like okay so the president of the United States is using blockchain Technologies introducing memes Collectibles you know I think last time he was President he sold these coins like literal coins with his face in it like fake gold coins that you see on those infomercials so this is kind of like the digital version of that and you know he's more techsavvy um than

other presidents but then I got disappointed again when I saw the Millennia coin launch and I was just like I went from or this is nice or this is a cash grab so uh that's my um end feeling of the weekend also disappointed I didn't close my Solana perss over the weekend when it hit those alltime highs so yeah three-fold yeah I opened up pretty abstract but I think um we've gotten into the topic a bit maybe just for the quick recap um as we've alluded to now the president of the United States now standing um has released a meme coin under his name or brand or image the official Trump token um it ran up to something like a $75 billion fdv

within 36 hours or so um 80% or so of the supply is controlled and locked up for you know Insider emissions um that start if within the next three months so the real circulating market cap is something like you know even at those high levels was something like maybe 12 or 15 billion at at most um it's only around 20% of that that total number um and like Mark mentioned um a day after the Trump token launched we also saw a millennium meme token launch as well it's un it seems from just some information like that's circulating that um this was maybe launched not to the sort of awareness of the of the Trump team um it seems like

this was maybe a separate party like they perhaps realized how or were shocked by how well the Trump token did and thought you know maybe we can um capitalize on this same opportunity with a millennia coin um regardless we kind of had a back toback there um and there have been countless sort of you know there was the inauguration there were various speeches and rallies that have been held over the weekend and there's been an insane amount of volatility and activity happening on the salana blockchain which is where the token was launched um so we've we've seen lots of crazy crazy things around congestion um fees Etc which I want to dive into um we can maybe talk about some of the other impacts after that but clearly there's been a very massive impact to like Salon of the network um and I know Dan has

some data that we can dive into yeah we can jump into that um and one of the other interesting pieces though is well I saw what you're talking about and like it does seem like it was two different teams but the Trump Twitter account again going back to my previous Point like that is a source of Truth in in my mind uh because of how high-profile the account is like it did retweet the Millennia thing uh so it's like okay even if it wasn't originally intended and then it happened like it was still endorsed and that's really all that any of the stuff is just like endorsed by you know kind of gets the the Donald Trump blessing basically um so I don't know I think that really just summarizes how like there was no strategy here it feels like it was just like oh let's

just shoot this thing from the hip that's similar to what they've done with the other nft collections as well so not totally shocking I think the most shocking piece for me is how well this did relative to to um the nft launches in the past like those were successful by their own metrics but not in the same Stratosphere as this right I don't know if there's ever been a token that went from like it launched extremely low sub one billion for sure and then raced up to you know the a crazy fdv but in reality a market cap that you described Danny of Fairly high in the tens of billions has that ever happened before like I I do not think

I and pepe was maybe similar but I'm trying to think of like what was the what are the closest precedents to this type of price action because that's ultimately why again with a meme coin it's like you're bidding on the social narrative like there is no tangible value obviously so the price is what you're playing uh very directly and entirely so I'm just curious if this has like something similar has happened to this degree before and importantly not like you know one of those things where yeah it goes to like seven like I don't know I'm thinking back at the Adam Cochran token launch that went to like 70 trillion or something because the the liquidity got absolutely torched but not one of those something that saw extreme immense growth in both price appreciation and market cap appreciation

and had some level of sustenance so it wasn't just like a flash in the pan in terms of like minutes to hours but rather like you know we're on a couple days you're putting too many caveats on it no it's never happened with all those caveats applied but you can think of maybe ICP that token launch it went instantly to like number two or three in market cap like instantly 300 billion fdv um because it was a price so aggressively on centralized exchanges at the launch but yeah there's never I don't think there's ever been a token like you know not from zero but I think it maybe it started at around 100 million market cap um and then just absolutely went on a tear um I don't think in this short of a time period anything with all of the caveats applied that you just mentioned has ever

happened before um and prob has a president ever launched a token like this before it's like has a president ever launched a token then seen it go to X market cap I don't think so it may not ever happen again um but one interesting thing that I do want to mention um at least in terms of like pre-thought or planning is that it's very interesting that the Trump team sought out like Integrations with Meteora with moonshot um like they made it extremely easy to access and accessible from the get-go um and it's continued this trend of launching things on chain rather than on exchanges um which I think is a very you know clearly they

didn't have they don't have like just some absolute idiot swinging from the hip like that is kind of concocting these ideas or these plans to launch these things um because like you've mentioned you know there have been nfts in the past they've done various types of memorabilia um it's very notable I think that they kind of went the onchain route with a meme coin and did it on salana the home of memes and you know launched it and made it available on on moonshot Etc all of the things that like um we've kind of seen growing and and becoming more commonplace um in the recent months yeah yeah I totally agree I mean even with the pullback I just checked it it's still about a $40 billion market cap FTV it's that makes it the third most valuable meme coin and

just speculating here I don't know the exact ownership percentages obviously but does this mean that crypto is now the majority of the president's net worth I mean at 38 billion he own I sure he owns a good chunk of that so like I I just think that's good from just more like a biased like perspective in the sense that he kind of wants that number to go up in a sense because you know maybe whether it's for his own network or for his ego which you know I'm sure anybody would have if they launched that successful of a meme coin but I mean all of that does well and once he starts to learn about de beta to bitcoin then hello sbrs right this episode is sponsored by scale scale has differentiated itself from other layer

ones by offering users a network of gas-free interoperable evml ones where the user experience comes first explore the gas free ecosystem at scale. Spacey and follow their Journey on X at scale Network to learn more about the gasf free architecture and growth of the scale ecosystem visit the scale research Hub at scale. space resesarch this episode is brought to you by Ledger the global leader in digital asset security celebrating 10 years of innovation Ledger Remains the most secure Hardware wallet for your crypto and logins trusted by 7 million users and securing 20% of the world's digital assets follow the link in Today Show notes to grab your Ledger now um so what if it's at a $40 billion fdv I think there was 20% circulating so that's like an 8 billion

market cap that's pretty ridiculous but Dan if you go ahead and throw the H yeah perfect so we're sharing screen here so for the listeners I'll do my best to like walk us through this data both verbally but the charts are pretty insane just given the immense rise in activity we saw in salana so there kind of like three categories of topics I want to walk through one's on like the financial impact for the chain two is the onchain activity that we saw and then three is zooming specifically into Dex volume so on the first piece Topline r or real economic value or the sum of all user paid fees to transact on the Chain blew past all-time highs um on the day of the launch we saw something around $24 million of fees paid or rev collected and then the second day 56

million and then the third day which was yesterday as of the recording date on Tuesday the 21st um the the third day came in at another 50 million so we're seeing insane numbers the previous all-time highs were just shy of 30 so almost 2x that those previous alltime highs actually I think the the $56 million day was indeed over 2x the previous all-time high um it's pretty interesting to be able to watch where that Topline RV flows so we know about the way the uh chain is constructed about 70% of Topline RV flows back to token holders meaning that over the last couple days some Salon of token holders consisting of both stakers and non-sters earned about $91 million um in being distributed to them through both the

burn and staking rewards directly and that is excluding any inflationary rewards this is just looking at of the total amount of value that users paid to use the chain over the last three days how much of it went back to the Token holders again either through staking Rewards or the burn um very interesting to see so so salonus token holders are absolutely eating the chain uh saw record record highs levels of activity in terms of fees paid to use the chain and again all of this was driven by Dex activity so I'm actually going to jump second to Dex activity where we see again just ridiculous chart patterns here where the previous all-time high in Daily Dex volume was somewhere around 10 billion set at the same point in time as those previous all-time highs in rev back in November of last year uh over

the last three days we saw figure around I think it was 27 billion 38 billion and then 36 billion uh of daily Dex volumes a majority of this is so USD um and the second highest pairs like the Trump family tokens um so it's again mind-boggling numbers to see a blockchain handle this much volume that has never happened across the entire industry before uh this weekend um and if you're like measuring using this as a measuring stick to Solana's North star of decentralized NASDAQ uh the NASDAQ I believe does about $300 billion dollar of daily volume so this is about one tenen of that um and again an all-time high for everything in the industry um

so it's really cool to see that we're actually able to do heavy transaction are load on blockchain so again this has not been true in the past um I think the most interesting maybe second order effect here was the growth of stable Co so um uh let's see here uh as of yesterday's close we saw about 7.7 billion of usdc on Salon I think that's a little bit higher as of today and somewhere just over eight billion so we're still seeing growth and that's up from at the beginning like so the let's say three months ago there was you know 2.3 billion dollar of usdc and today

there's a little over eight billion uh that which is ridiculous growth and over the last three days we went from just under five billion again to just over eight billion so we've added about three billion dollars over the weekend and I think that's probably the most interesting um piece here because again love Or Hate meme coins I don't care I think you're more than you're entitled to your opinion you can hate them you can think they're stupid you can think they're embarrassing um but this is when it becomes having a tangible impact on the broader onchain economy mcoin launches massive influx of capital more stable coin on chain nobody hates St coins um so now you see the reciprocal effect of having this type of activity on your chain um I was tweeting about app layer

revenues the other day as well and actually I can pull that up here on our dashboard um and it's interesting to see you know if you like look at a longer time frame chart like on the quarterly basis looking back to let's just say 2020 is um you know ethereum used to be the only game in town for launching Revenue generating apps uh so again just looking at like the revenue generated by businesses built on the on a specific chain and sectoring that out by Chain so like l2s are their own chains so they're counting as their own chains here um and when you look at that salana has again another metric where it's just absolutely crushing when you start to PE back the layers on their the sources of this re app layer Revenue it is all in

the game of launching or trading tokens and reducing the friction to doing so and providing utility for trading tokens when you look at other Chains It's the same story um you know the largest revenue generating app on Bas is aerod Drome that's trading tokens and interestingly they uh partnered with Stargate to bridge the a wrapped version of the Trump token over uh so it's was no surprise that Stargate or Aerodrome again in the business of transferring or trading tokens wanted to get their hands on what we just described as the largest token launch of all time um so I kind of pause there I know I just kind of went on a rampage there but it's it was just fascinating to see the second order

effects of this like not only is the the event itself insane uh but the second order effects of what else took place on chain um because there's one more piece of the story here about like goo going down and andh what happened with that but I kind of want to pause and get your takes on everything else before we jump into that yeah I mean kind of if we go in order of the of what you presented like like first the daily Rev I think it was pretty interesting like Jito experienced like three hours of degradation like in terms of performance and that led priority fees uh to alltime highs like usually priority fees represent about like 40% of daily rev like on Saturday

represented or Sunday represented like 58% uh these had other second order effects like if you see the salanta burn it had its highest burn ever like daily you can see just even parabolic and it almost offset the entire inflation for the day so he had like the burn represented almost 80% of the daily issuance on that day uh this of course will be like uh these will be removed kind of by cd96 which will go into effect soon and that will remove the burn from the priority fees but it's pretty interesting like dynamic makes that we

see a play here Lobby or local cev we want Sim d123 and we want it now simd 123 share creates like an in protocol way to share priority fees with stakers right now all priority fees are 50% burned 50% to the validator as Carlos just mentioned 96 will effectively kill the burn entirely there'll be a very very small amount still burned half of Base fees which are you know less than 1% of total rev um so assume 0% burn then 50 instead of 50% going to the validate now 100% goes to the validators so validators what to absolutely eat um so I think that's like a an unnecessary breaking change to salana economics at a time when it's just again not that you needed so Lobby your local cev we want

123 with 96 yell it into existence I'm sorry Carlos no what what I would add here is that I think 96 is actually good for users as well like if you like look at it from an economic point of view like like currently you have the priority fee 50% goes to the burn and 50% goes to the validator like let's imagine like a validator demands $10 of a priority fee like uh to include a transaction like in a block like as it stands now they have effectively a 50% tax on their like income right so if someone demands uh $10 to include a

transaction then a rational validator will just demand $20 priority fee right because 10% will 10 will be burned and 10 will go to the income right like I think cd96 can actually reduce priority fees across the board because now a validator can just demand the $10 instead of the 20 because it gets like the 100% of the of the income so I think it it it's obviously good for validators but I also think it's good for users yeah for sure I agree I just want to see a pair with 123 so we don't get this token holder net income chart doesn't just also fly to zero yeah I totally agree

there what do you think about the point on the like the second order effect of you know non nonsense happens on chain stable coin volume or stable coins not volume but uh Supply on chain increases by $3 billion that was absolutely insane I think uh we are seeing some good liquidity inflows into the Salen ecosystem and that's going to have massive wealth effects in the ecosystem like in the past week Solana stable coin Supply almost like almost double I want to say it's up like 80% and that's obviously going to have effects not just on the mcoin side but on the defi application

side um like one thing that I find interesting about Solana is that in contrast to ethereum the majority of the stable coins uh are usdc like usdc is the leader in the stable coin vertical uh whereas in ethereum we see like kind of a dominance by usdt so I I just think it's an interesting Dynamic where Solana I think it's more like America aligned if you want to see it that way and I I think that may be interesting like for the next uh four years it actually may be more America line because if you look at just do a basic Google Trend search and look at over the weekend and the the search term

for salana spiked and continues to do so since the highest has been since when Trump the election week of trump so those two things but those these two events Trump launching a mean coin and Trump winning the election correlating with Solana's search results not just in America but worldwide spiking I think I think that's a spot on point caros yeah I think the only thing I'd add on just this massive influx of stable coins is that it's very clear that um just the raw interest and demand from individuals who maybe previously were not on chain like this has been a massive like onchain on boarding event for liquidity and for users as well I

think moonshot mentioned something like 400k plus new users um on the you know 24 hours following the launch of the Trump token um and may even have mentioned up to like 1 million dius um for them as a as a product now so I just it's really interesting to see just a massive inflow of new users on chain um rather than just simply holding or you know managing positions on exchanges which I think if you're a you know fast chain good make a big beefy blockchain enjoyer um that's exactly what you want to see regardless of the issues with goo or the congestion of the network um this provides you know a new

set of data for developers core developers to to go and look at and app developers to go and look through you know the the bottlenecks that we just encountered um and kind of prepare for the next sort of mass event um and prepare to be you know if it's if it's decentralized nasda NASDAQ at some point in the future um like you like you mentioned Dan we're still multiples from there in terms of activity and volumes so um I think this really just gave us gave salana the ecosystem another sort of like big step up in in terms of um valuable valuable data to to learn from um and iterate upon and improve the chain for the the next Leap Forward um and a whole new set of users that are now trading on chain probably a lot of them on moonshot yeah the moonshot uh I did see

the $1 million da one million daus not dollar people are not money uh one million daus of moonshot which is nuts so you can see that mass onboarding event there and another metric around this you mentioned was the Phantom activity so Phantom wallet struggled a little bit in its execution of you know handling this large influx of requests so there was two things that kind of went wrong for them one is you know when you load up your wallet you shows you your B token balance is and the value of the tokens that you have in your wallet that kind of not kind of that broke and uh that's you know a horrible experience for the users because you get that immediate sinking feeling in your chest of like holy my money's gone um and then the other problem they had was

Landing transactions so obviously this has been a a long standing issue for salana um and we'll get into the bad piece there of why that happened but one thing I do find interesting is they put out a tweet that says despite all our challenges our users swapped over 1.25 billion in volume and made 10 million transactions and this was on uh the 19th so uh was that Saturday and um that is an insane figure 10 million transactions and the again these are users because you can safely call these users as a rare moment where we have actual user statistics because a wallet provider shared them Bots do not use inapp wallets to execute transactions they just create scripts that make private

Keys uh to pair with a public key and then transact on chain so anything when you get wall wallet to tickets wallet statistics whether that be like metamask Rabbi coinbase wallet Phantom backpack any of these that's like the Holy Grail of user activity um so to put the 10 million transaction number in these you know many people executed many transactions this isn't like the actual user count of notice they did not share that again it is incredibly hard to get those numbers out of these providers because it's such important information the 10 million oh God I keep doing that the 10 million transaction figure is insane so to put 10 million transactions in context that's the same number of transactions that the entire base chain sees in a day it is the same number of

transactions that all L all other l2s combined see in a day specifically like the ethereum focused l2s not in something like Eclipse um and it is the same number of transactions ethereum main net season a week this is insane and again these are actual user metrics um so to put the problems that happened into context we had this massive uh VA event basically where this level of I don't think a wall provider has any of them have ever processed 10 million transactions in a single day again these are just insane insane numbers we're talking about so I think it does kind of put put this Mass onboarding event into context and starts to make that three

billion of stable coins that came on chain also make a little bit more sense um so yeah I thought that was just extremely fascinating now for the bad so salana has struggled with staying online at times in the past it has gone offline many times over the years um I think most recently about etish months ago now uh I need to pull that up maybe I can do that after I finish talking but um it's got struggle with staying online in the past generally due to consensus halts which it did not have have this time and then earlier uh in the early half of last year Landing transactions was a nightmare it sucked to use the chain full stop mer I did like a series of podcasts on drop transactions and

what were at causing them over on light speed if you're really curious you can check those out U but tldr when you sent a transaction to the chain it never found its way to the leader and that has largely been cleaned up so the actual dat the Trump launch salana was humming along no problems at all uh but it was actually when the second token launch there was like this huge wave of problems that happened so the issue was uh J's transaction Landing service went offline and when that happened the median priority fee jumped 5,000x and the transaction count actually fell 66% and the cus per block fell 50% so when we look at this in charts um as we love to do the the gray bars here are you know transaction

bundles being landed so if you see gray on this chart that is that means uh transaction or jeto is online and bundles are being processed when there is a gap in those bars such as uh you know right around the seven hour mark and the you know nine hour mark in this larger piece that is when jeto goes offline so you can see there's like a let's call this like a 15 minute Gap earlier in the day a and this is on the 19th as well um and then maybe a 1 hour gap followed by another 1 hour gap and then a big three-hour Gap during that big three-hour Gap is when everything fell off so this uh right when this started was right when the Millennia token launched and that's when you know chaos just basically happened on chain

so not only did median fees Skyrocket because nobody could land uh transactions using Goo and it became this just like bidding war of like the actual submission blanes were not working properly so everyone assumed oh my God I need to pay more so then everyone was paying more and when they did get through and it was just like trickling in they were ridiculous fe uh fees right like median fee went up to basically $2 during this very very small window this is aggregated on the minute so over the hour that didn't really happen but at the peak of this you're having like a $2 median fee that's insane I need to look but I can assure you there are some multi hundred doll transactions that were being processed during this minute uh again because people just like have this natural inclination oh my transaction isn't

getting in I need to pay more and now that the reality is true that people are paying more you do need to pay more to get in so it's like this self self-fulfilling prophecy in a way um so not only did fees get extremely expensive but if we look at this chart same backdrop with the gray bars when they're missing jto is offline uh but this time the purple line is the number of transactions being executed uh chain wide and so you'll see every time jeto goes offline you see this huge dip in the number of transactions being included in blocks um this is a piece I'm still trying to dig deeper on because you would think like okay the G Jos transaction submission pipelines go down okay well we already have this other pipeline that uses regular in protocol transaction fees that should

just be working for some reason it wasn't um I don't have a great answer as to why and maybe you know in the next week or the week after if I come on we can uh I'll hopefully have an answer to it but I'm trying to figure out why because again intuitively you would think geeto bundles aren't working great well we've got this other pipeline um and that wasn't really working that well I don't know if it's isolated to only validators running the goto client yet um or if it's just like a broader thing of you know th those Lanes just can't handle all of the traffic that it was receiving again I just don't have a clear answer yet I think what this does tell you is you know Market segmenting Market based the market or of use transacting users based on their pricing

tolerance uh does have positive positive externalities on the Chain more broadly right like if you want to pay uh high priority and you need good reliability use Goo if you don't care you've got another Lane the question is like can we build that other Lane in a way uh that can handle this type of load because right now the initial reaction is it does not look like that but again I still want to dive a little deeper didn't know why we weren't seeing as many transactions land when Jito went offline Dan is the irony here that Jito going offline for those instances may have actually increased Sol's R yeah 100% right like if you look at uh if I go back to this chart of P the Rev you know it's it's rare to see priority

fees get this high and for that three-hour window when it was offline you know again people were just like oh I need to pay more to transact and then it became true and you did need to pay more um you shouldn't need to ever pay that much to land a transaction but again there were in very much so over like overpayment was absolutely happening during this period uh without a doubt so agreed on the uh on the 19th piece and then you kind of see priority fees normalized lower um on the following day and J tips themselves actually went higher on the following day you had more up time from jeto and there was like very small Windows of it going offline on the 20th yesterday uh but nothing like that big three- hour gap that basically the chain was fully

unusable during that time yeah I'll add anecdotally for those of us in the trenches that were trying to gamble on Melania and Trump at the time um I paid priority fees of like upwards of 0.1 soul in some cases for single transaction so I think that median fee you mentioned is interesting um I wonder how high the average fees had gotten at a certain point yeah I'll try to run that real quick because like you say I would imagine that there were some insane multi hundred doll fees like very reminiscent of you know 20121 eth type activity yeah also kind of reminisence of eth these high fees also saw the burn rate on Solana hit like alltime highs it I think it peaked at over 80% probably I mean that's average by the day so I

think you know if you're paying those fees the burn rate probably hit over 100% you know thereare I say ultrasound but I mean that's that's actually crazy to see these kind of things it's like it's like 2021 all over again as you said yeah I do find it funny this sort of like dichotomy here of it's unfortunate that we had greatly decreased TX Landing rates um and far less throughput for that time period you know you get the nice little boost of hey well we got some extra fees from the people who were willing to pay them but at the same time it's it has you wondering like well how crazy would the through put have been if the network could have actually handled all of it um what would that total kind of TX throughput have looked like um and you

know as a chain clearly it's not quite there yet but um you know there we need we need to see some more multiples and throughput basically is what I'm seeing yeah and looking for um fire dancer kind of like proliferating through the network a little bit more um I wondered how yeah how how different would have been if that was online but on that on that same I mean on that on that burn ratio like I kind of at what point you know at what point do you start to think about token holders over stakers like yeah with the same um simd 96 that we were talking about before it's going to be it's going to be nice for validators but I mean you know there's this other proposal 228 which it's going to Target a staking rate of 50% and you know so that means

50% of all the soul soul will be staked and I'm just you know I'm using intuition here but I imagine that the 50% is not stake doesn't mean that 50% of Soul holders it just because there probably more Soul holders than there are validators and stakers so I'm just wondering like you know you're all talking about before how you know this the simly 96 is going to be good but what I'm asking what point in a you know if ever in a blockchain's maturity do we do you start to prioritize the just the token holders more or equally to the stakers all right for being extremely concise here not to be pedantic but let's call them stakers and non- stakers I think like token holders is kind of

the bigger umbrella and those are both subsets of the two uh but it's a very good question mark because agreed with the inflation proposal for multicoin you are basically saying we want half the network to be non-st um and then if you're you know aggressively pulling away the returns that those individuals get it does become like all right well you know is that a good thing or is it a bad thing I think the argument for it not mattering or or just not being a bad thing is you're forcing that 50% of capital to go seek yield in a different way than the you know let's call it the risk free rate if you will of the of the chain which is staking um you're forcing that to go like be active in Defi and or use an LST and do something else um I think

that's kind of where the puck starts move is is like yes you're saying if you're you're you're kind of a second class citizen in a way if you're going to be a non- Staker and and you are forcing half the network to be that so you're you saying all right go go be active in defa find other ways to find a return on your Capital um I think that's kind of like how I frame it in my mind but I I tend to agree with you like does it really make sense to kill the burn like for Carlos's point it does make sense like there is a marketting effic and you forcing the existence of out protocol uh activity but I don't know uh I I think we're just not at the point where like super super

matters uh whether or not it's like all the rewards are for stakers versus the token holders but I think yeah that's how that's what I'm looking for is let's say this happens then you know both proposals are live I think you're going to see an influx of just naked Soul if you will in D5 yeah I I agree and and the part that it's we're not at the stage where it matters I don't think that this is going to do any meaningful driver for demand or the price I think yeah pushing using it as a risk-free rate having people go seek yield elsewhere that that could be good for activity and move people from just like passively holding stuff and you know just and and maybe second order effect increase RV um but yeah no it's a tough one I I think and maybe it's um

you know people say they don't want to change the the curve because oh this is how it was and and I can't remember some I think it was multicoin refer it as the Bitcoin hangover maybe I'm having maybe I'm having The ethereum Hangover with this burn ratio but but I'll put this to you all but I mean like okay you pay 10 versus 20 it's it's an auction mechanism like we've seen just this weekend people will pay what they want to pay for to get their transaction landed so I mean like if if the market wants increase it and if that happens to benefit um non stakers then you know I don't particularly see an issue with that but maybe that's my my hangover as I say I like your framing there real quick Danny one thing I want to throw in here

is okay you know State great let's call it 70% I think it's like 66% let's just call it 70 um I don't think stakers this is just my personal opinion I don't think they're extremely tolerant to the rate that they get I if if this proposal went live tonight I think in two weeks we'd have a 0% inflation rate so if that held true then non stakers are not getting diluted because inflation would be 0% they're just not getting as like anything right so if they get no they're not diluted so they have no like cost in this equation and they uh don't get any burn either because there is no burn then they have no income and they're just neutral all right I think that's pretty

reasonable I'm curious what you think about that though like you have a neutral position and then like a staked yield bearing position again I okay yeah if I I agree with you I think I mean if it starts to decrease I'm not going to unstake I have some some soul stake I'm not I'm very unbothered by a difference between 4.7 and three and two so I think we can see it drop pretty quickly um but I think I said on the last call regardless of what the asset is like I would love to see an asset where it's where the supply goes down over time like I love that meta buys back their shares every day that Apple buys back their shares every year like that that's good for me as just a token hold regardless of whether I'm

mistake or not but I don't see it being a material difference like the burn rate was already so low that it was like negligable it's not like how it was used to be in like ethereum or something back in the day so again I don't think it's it's material but maybe it's a nice story in the future maybe it's for maybe trying to onboard new investors people with more of a tradire mentality who like um who like large protocols who use some part of their funds to buy back shares and You Know It just fits into that narrative but at the end of the day it really doesn't matter and I don't know if if at this stage of Solana's life cycle or even Investor's life cycle if they're going to go that deep into it yeah I like your point here Dan um like

individually as a holder of like Stak salana tokens for example like I am not going to change my behavior if the rate that I receive is lower than it was yesterday um I'm not going to swap those back for naked Soul it doesn't necessarily change anything for me um but I'm curious Carlos to get your thoughts here I know you did just spit out a nice flash note um and talked about some scenario analysis of this exact topic um so I'm curious what you think and if you want to like step through some of the scenarios that you you went through yeah sure so uh I don't think people realize how aggressive uh this proposal actually is like if you look at the like first of all how does Solana's emission schedule look like

today right today has a fixed emission schedule like it was pretty determin at launch so Solana's uh inflation started at about 8% when the network launched in 2020 and then it decreased by 15% every year until it reaches like a terminal rate of 1.5% in about 2030 as you can see in this chart now the current proposal is uh advocating for a market-based approach that dynamically adjusts the infl rate based on a Target staking ratio of 50% because the staking ratio today is like

76 uh percent uh the decrease in the inflation is actually pretty aggressive uh with the caveat that we don't know how sensitive like uh stakers are going to be to the change in the staking yield so let's assume extreme scenario and regarding that what Dan said right like what happens if stakers at r insensitive like completely insensitive to changes in the staking ratio that would mean that so inflation would go to zero in about 12 days like if the staking ratio stays constant and seemd 2028 is Implement is is implemented which is absolutely insane uh what are the second order effects of

this like off the top of my head what I can think is that it will incentivize uh Soul usage in defi a lot more because right now for instance you can get about 6% apy on a so position on Camino uh but you can get a lot more if you just St and have it idle on a wallet uh so from an incentive point of view it pays more like just to have a jetto soul in your wallet than to deploy Solana uh naked let's just say on a on Camino so what this may do is it may incentivize Soul usage in defi although the the analysis is not that simple because a lot of the so that's used on

defi is actually to Loop an LSD Soul position so if you reduce the staking yield then that may actually reduce the soul uh apy as well so you need to take into account both variables but one of the main takeaways for me is that this proposal may actually incentify so Soul usage in defi a lot more yeah you mentioned lsts there which I think is incredibly important piece of this puzzle that is also why I don't think you're going to see a meaningful budge in stake rate if inflation goes to 0 per. because let's think about what happens if let's say I'm a Staker if I'm a Staker and I see inflation is going to

zero so I'm like you know I'm getting less what am I going to do I have two options I guess I have three one I'll sell two I will un just unstake and go to try to take this uh naked soul and use it in Def or three I'll use Jos Soul or some other LST and you try to use that in defi so that that third piece there is is the piece I think that is is missing where why would I unstake and try to go use that piece of or that that token in defi when I can take an LST still earn my portion of uh token holder net income and I'll still be getting you know roughly three-ish percent on my tokens and then use that P that derivative in

um I think over a very long run in hyper efficient markets you'll see those rates normalize because uh there is like some semi Arbitrage trade to be had there but in the near term I think you're going to see a pretty big influx of Soul moving into lsts and lsts moving into defi yeah one thing that we saw this weekend was actually very interesting at some point someone removed like $300 million of soul from the Camino main pool that drove soul utilization rate to about 98% on the on kamina's Main pool and so the apy at some point was over 60% for soul what did this mean like four uh multiply

positions on Camino multiply positions are basically like uh looped LSD and so positions that give you like enhanced yield on your jeto or jupo or whatever like these positions were actually earning very negative apis uh when this happened so I think it it is like as you say like over the long term I think we will see an adjustment like if the staking rate decreases then probably Soul apys also decrease but we may see like shortterm changes like this where you see Soul apis go uh very high relative to the staking ratio and that to the staking yield sorry and that

causes the staking ratio to drop hey everyone we'd like to give a special shout out to the sponsors of today's episode scale scale is built different unlike other layer 1es scale is offering users a network of gas-free interoperable evml ones where user experience comes first scale operates like the AWS infrastructure model where developers pay for space in the network in skl tokens to validators essentially scale has chain fees and not gas fees this allows for free transactions on scale and has saved 46 million users over 9 billion in gas fees explore the gas free ecosystem at scale. a/ ecosystem and follow their Journey on X at scale Network visit the scale research Hub to learn more about the gas free architecture and growth of the ecosystem that's scale. space resarch

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the interest over the past few days but um we're also seeing interesting things coming out of the Bas EOS system um one thing I do want to mention um and I know Dan you've got some more data here to back us up but um we're seeing some very ambitious targets again from the base team going into 2025 they want to scale um Base by a lot um maybe something like a 10x multiple in throughput um curious Dan I know you have some data about Bas setting some kind of continuing to set new highs for itself um they've really been on this upward path like where are we going from here um and what are we seeing with base great question so uh working backwards they set a gas throughput Target uh measured in M gas

per second or million units of gas per second um of 250 by the end of the year today they're at about 20 so it's about a 12 and a half X increase which is Meaningful very very meaningful um it's very nice to see someone aggressively passionate about scaling like that that is very much what we need do again yesterday proved that or this weekend proved that we had this Mass activity event and salana did okay I think it did significantly better than it would have ever handled it in the past but you know it didn't work flawlessly um again we just talked about how jeta went offline in the implications that that had on the users um you know and if that activity happened on nl2 today like transaction

fees would have went to a gazillion um again that's the amount of transactions that happen through Phantom wallet is the same amount that happens on base in a day uh which is again like these are mindboggling numbers and it's also not it's not super clear if the sequencer would have been able to process that level of transaction through put if you remember back to the inscriptions Mania at the beginning of last year um arbitrum sequencer had like a a hiccup during that time period And that's pretty similar to what happened on salana with like a consensus was not halted the chain kept producing blocks there was just significantly less full blocks um so I think like that's kind of a similar outage if you will um or like it's not really an outage I suppose but it's

a it's a a severe degradation in performance would be the maybe technical term for it so there is a I I say all that because I think it's fantastic that Bas wants to do this I think every a lot of the other evm Bas al2s have said they want to do this but nobody's really putting this as like their pzero for the year of like this is the target we're marching towards and they're very public about this figure as well um so I can share a screen here and um kind of show some charts related to this so here is the G if you can just throw it up on the screen um here's the gas throughput in the bottom or the top right here this is the gas throughput again you can see over the last few this is the three-month period they've gone from

about 14 to now they're at roughly 21 uh of gas M gas per second again they want to get 250 and this is where they are if you rewind to you know the the launch of the chain basically um um for a while they were kind of SE their ceiling was about two and a half so they've almost pulled a 10x since launch and again they want to do a 10x from here which is again just incredibly bullish um and I guess it is 100x since launch which is a kind of a cool Landmark for them as well as far as like TPS translation you know they with more gas there it becomes cheaper to spam the chain uh in search of arbit search for arbitrages uh and so you see this revert rate increasing as more gas is added

that's pretty typical it's something we see across most chains today salana is in the same boat um and if you've heard of The Flash Bots team building rollup boost they want to they're like they're building on something to basically help combat this by giving revert protection so you can like search offchain basically um submit your transactions to a t a te or a sequencer that's running a te and um kind of like help reduce this spam Factor because spam does take up block space from otherwise you know more useful transactions and that's kind of what they're trying to combat so very excited for that to come on come online I think the uni chain will be uh the pilot chain for that so Bas has absolutely been scaling um already and

it's going to continue in the future and they're an interesting recipient of maybe like an Aftershock of the chaos that happened on salana um so you can see that fees again started spiking to near right around three Monon highs of 800k and 750k respectively over the last two days and Dex activity actually broke past all-time highs So based Dex activity is actually differs pretty significantly from salana in terms of its composition base Dex activity is largely driven by Major pairs where salana is largely a small cap pairs driven by pump fund meme coins other meme coins and now things like the Trump family tokens if you will um so that is a very interesting observation that I've

had is if we look at this chart here in the top left of the daily Dex volumes by par type you see that there's pretty often uh a two-day regression in volume right if we see you know here's the two-day regression here's the two-day regression two-day regression and two-day regression two-day regression two-day regression two-day regression and they're all five bars apart uh those are the weekends and the reason why volume drops during the weekend is this is mostly driven by sexex Arbitrage so you need retail flow to be moving the price on a c or or institutional flow to be moving the price on a centralized Exchange and then uh the Arbitrage opportunity exists and can be captured and bring the prices back in line over the weekends there's much less sex activity and therefore there are fewer

opportunities and volumes come down um very interestingly that Trend broke to the upside last weekend where Trump token obviously launched there was a massive influx of onchain activity and we saw alltime highs in major pairs of eth usdc eth Bitcoin and Bitcoin USD um and the Bitcoin pairs here are largely driven by CBBC because this is of course base so we saw a massive break to the upside all-time highs across the board uh looks like those three pairs combined exceeded two billion in volume yesterday right around 2.1 and um yeah it just shows you that there are second order effects of all of this activity and I know I've said that phrase like 35

times now but that's basically what happens you have this massive V shock huge event happens and that there's like Ripple effects trickle through the onchain economies um I think base is the second most active onchain economy following behind salana right now and uh it's just again it's it's very interesting to see where these Pockets flow because that's where users attention and useful tokens to be traded are occurring to or reside today uh so if we look at full volumes here including all token pairs we hit 2.8 in the the past two days and then just to put that into context salana was north of 30 billion instead and this is 2.8 billion so you do see a dramatic shift here one caveat that's important to

consider when comparing Dex volumes is the short of the Dex or shorter the block time you will have more Dex volumes um another interesting piece of that march to 250 M gas per second for base is it's not just increasing the block gas limit it is also decreasing the block times I don't know their exact targets but they're definitely subsec um so if you know if I could like long the uh the base Dex volume chart I would absolutely be doing that more scale shorter block times they're going to get more volume there'll be more OPP Arbitrage opportunities that exist um and as we just walk through that is largely what's moving the the number today um we've talked about this on the show before as well but the 0xf1 address um I'll link that in the

show notes but they are responsible for a large portion of the activity um they are just crushing on the Arbitrage opportunity so I think this was yesterday's value this was the 19th looking at the 19th specifically this one entity was responsible for 26% of total transaction fees 28% of total Dex volume 38% of aerody Drome Dex volume 37% of eth USD volume and 45% of eth CBBC volume um so this entity had a big weekend I'm sure there's steak dinners all around for that team I want to tee up the question Dan you gave so much great context for this um I think really

the big question going forward for me is where do we see like eth blobs going we know I know we've talked about this in the past on previous episodes but base is something like what 70% of all L2 transaction activity um that's being submitted to eth at this point if we're going to 10x base this year and blobs cannot handle kind of this increase in in Bas activity um and dominance really at this point um like what are some of the kind of second order effects or first order effects that we're going to see from bases continued growth um and the l1's kind of slow path towards growing The Blob

Market or any key upgrades that are coming that are going to impact this directly yeah great question so um 70 to 80% in terms of fees paid let's see transaction counts uh am I an idiot do I just not see it here we go so base is responsible for 70 to 80% of fees paid and 50 to 60% of total transaction count um so yes totally agree with your analysis there um using grow the P to measure that I think they do a great job of the eel 2 landscape um sorry what was the follow on question

there and here I guess if I'll share this one if we're looking at blobs today right right the market become saturated so where are we going if if Bas is going to 10x yeah we're seeing an increase of three to the limit in the Target here so going from three to six which doubles the the target throughput uh of blobs and I'm still very heartbroken over our last podcast we did where I realized live on air we are not getting shorter block times uh in pectra which I believe is slated for March but Mark please correct me if I'm wrong there um and so yeah we're we're definitely going to see a scaling thing happened to blobs the question is is it enough um there's an interesting conversation between I think

it was Storm from Paradigm basically tweeted out like a screenshot of the road map for scaling ethereum and was like what's everybody's reaction to this of course everybody responded being incredibly upset um Jesse from base was kind of a leader in that and was like we need more like this this isn't an except able level of scale that we're trying to get to um and you're right like you know base consumes 40% of all blobs so they care deeply about this because it will very much so become their problem if they have built this chain that is doing you know the maximally optimized evm chain that you know is being rate limited or throttled by its base layer that will absolutely be a problem if ethereum does not scale quick enough um so of course he's you know trying to lead a charge there and given all of the

discourse around ethereum uh today and everybody's upset about everything I don't know maybe it does force this like hand of hey we're going to move faster uh I think donrad has been pretty vocal over the last you know we over the last couple days and as well as vitalic of like it's time to move faster um so that excites me the question is like all right we we have an upgrade in two months like let's see if anything changes presumably it won't but then the question is well when's the next change going to be slated for uh Mark you definitely have way more context on there but I'm curious if you think think that anything will meaningfully change over the the short term or the near term I think for the long term it does feel like there's it's pretty clear we've kind of had a shifting in the winds but

what are the implications of that in the near term it kind of seems like um ethereum is one of these bigger kind of more massive bloated companies and they're trying to turn the ship around almost an Intel as you would say maybe probably definitely not as bad as Intel but something of the sorts um you know a doubling in in blobs that's going to be good we're going to see fees drop back down immediately well blob Fe drop back down immediately to zero um and maybe um pick back and pick back up again over the coming months well depending on how the market goes the next upgrade which is Pedas and presumably another increase in blobs like a 50% increase where the target would now be nine um that's slated for the end of this year in if

faka upgrade but it's the ethereum foundation so it's likely going to happen early 2026 um I think I would love to see like the relationship between number of transactions or maybe user operations depending on how you want to like Define it and data gas usage because you know it's not that you know if if they're looking to increase the mega gas per second it's not like a 10 a 12 and a half X directly dis you know correlates that 12 and a half increas in Blob usage as ways that you can amortize that you know even the signatures can get um Consolidated into one so it's not like a one for one you a relationship but it it will start to become interesting if for

instance fusaka doesn't hit on time and it's just becomes that the we're going above the target rate so like fees data blob fees start to get exponentially expensive will base continue to to push like that I mean I I was looking at their latest 10q and I was trying to relate it to base R by quarter so it's about like a 50% relationship right and this is sequence of fees this is you know and a lot of it comes from top of the block a lot of it comes from like let's just call it meev right not let's not get too technical about that a lot of that is profit right a lot of of that is profit and if I you know look at what coinbase the stock actual profit is last

quarter so they did 33 million from sequen of fees 75 million in profits like a good chunk of profits seem to be coming from that and then they don't have Q4 out yet um you know TR fight takes a while to post results whereas onchain is real time so we have the privilege of knowing what basis RV was for Q4 um and based on that there you know my estimated sequencer revenue for Q4 for base so should be north of 50 maybe 60 million which is going to be a good chunk of their of their Q4 profits so to see that eaten away if they start if blobs are above Target I don't I don't know how well they would like that

which probably makes sense why Jesse's pushing this this whole this this trying to get some fire under ethereum to to increase this the timeliness of their upgrades and you know I'm I'm seeing it vitalic like Dan pointed out I'm seeing it with like their you know last call I talked about Native rollups while they are starting a they had their first call about Native rollups they've um rephrase it in a certain way so maybe I need to stop saying native rollups and start saying embedded rollups because it's a little bit different but they're talking about what if ethereum launches it what if ethereum captures the execution fees right and you know the the EF Director is changing from Ming Dany Ryan seems to be the front runner so that there does

seem to be some there's acknowledgement of it but you know there was acknowledgement of it maybe last year when salana was eating their lunch but now it seems like now things are actually get putting in place we have specs for the minimum grade of a hardware we have actual change coming along we have um more aggressive timelines so I am I'm I'm more optimistic now on ethereum's shortterm road map than I have been in sometime very interesting I wna or Dan go ahead do you have something I just had a quick question I hate to put you on the spot with this uh too but so for the minimum uh requirements for the hardware do you know what the dollar figure cost is approximately to run a box under these

new conditions you mean dollar cost requirement for the hardware not not monthly cost Hardware yeah thousand us okay that seems very reasonable when the yeah I mean I guess we're moving into like a new era where you can run a validator with you know significantly less than 32 eth but um I know a thousand bucks seems reasonable I think it I think we need to punch that up a little bit you know but you can't even buy a new Macbook with a thousand bucks yeah exactly but I mean it's a start it's a start so I'm I'm gonna take that right um hopefully it increases with the same aggressiveness as they intend to increase the blobs I'd love to see a 50% 100% jump every year

or something like that but you know I mean if you like we talked about this 32 e a minimum has been for some time so you know I know we entering into a new paradigm whatever staking yields have been three to 7% over the past couple of years that's that's one you just you don't even have to sell any of your your your original e that's just one year's Worth to upgrade your Hardware like I I think it needs to be a bit more aggressive but I'm glad we're starting somewhere love it well continuing on with base um and coinbase actually um they had some interesting announcements last week um or end of last week before Trump took over the news cycle um coinbase and Moro um kind of agreed on a

deal to make use of moros the Morpho protocol sort of on the back end to enable um borrowing of usdc against Bitcoin on coinbase um and thanks to coinbase being the sort of um manager of CB BTC their product their Bitcoin product um and holding a bunch of that on base um this makes this a really interesting and unique sort of partnership for them as well as being a sort of a bolstering point for the base chain again um you know coinbase is at a point now where they get to build out products directly within the coinbase app or the wallet Etc um and then utilize the base chain um without users really knowing or caring or wondering

what's really going on they just get to reap the benefits of these defi apps um so there's some quick information on this one going through through a few things sorry um today like if we look at CBBC as just a primer on where we're at today um the total Supply is somewhere around 20,000 Bitcoin worth of CBBC um this has grown significantly since they launched it um you know over six months ago and it has it it appears based on really the trend of of rap BTC that it has been basically directly eating into the market share of rep Bitcoin today um and I think the interesting part of this specific partnership is in unlocking coinbase customer Bitcoin assets um

converting those into CBBC and really having a a very strong potential or chance to massively eat into um this this market share that that um rap Bitcoin has held for forever really um in the kind of rap Bitcoin Marketplace um if we look ahead like onchain on base um CBBC um thanks to the data team thanks to Dan and the data team um helped get some of this data um along with kind of the the growth of the supply trading activity around CBBC has really just been up and to the right um we've kind of we're maybe rounding out a little bit here in the past few months but um generally since the launch it's been um a massive kind of growth effort um in general and we've seen volumes reach upwards of 500 million a day um in

some cases um and overall transaction activity on this asset has been growing and and fairly strong um and if we think about really the relative kind of size opportunity what I think is interesting is that coinbase as a platform and as a custodian of customer assets holds 143 billion dollars worth of bitcoin um on The Exchange in terms of customer assets we're not talking about ETFs we're not talking about inflows to those things we're talking about users that hold Bitcoin um on coinbase is massive massive multiples of the existing CBBC Supply today 20,000 Bitcoin um so over two million total

Bitcoin units um are held for customers today so if they can unlock small percentages small bips of that number into CBBC there is a significant potential for for growth um of CBBC but then also the implications for Morpho here on base and for base itself um are very interesting there's lots of Downstream kind of interesting impacts here um if we look at just Morpho itself digging deeper into Moro um even prior to this part partnership Morpho blue which previously Morpho blue which is now just Moro markets um has been growing um rapidly over the past year they've crossed five billion in total deposits um in the past year um they've really just been up and to the right and

executing very well um and we're seeing them start to slowly creep upwards in terms of a percentage of A's market share um which is very interesting this partnership has very interesting implications um when we consider just the relative impact here we're looking at like I said before um coinbase Bitcoin assets you know 140 billion plus um in USD value of of those assets over 2 million units of Bitcoin this is just Bitcoin and so far they've just enabled borrowing usdc against Bitcoin on the exchange so that's you know taking Bitcoin converting it and wrapping it into CBBC putting it on base depositing it into the CBBC usdc Moro market and

then borrowing usdc from it um this is one particular product right we're not talking about other products that could come from here um there's a potential to unlock you know even 1% of 2 million Bitcoin is a ton of Bitcoin um it could have drastic impacts on the current supply of of CBBC today and then we're not even talking about um you know more aoral Vault product potentially allowing users to directly lend their assets um in like a coinbase CBBC Vault for example um and then not to mention other assets that could come after we could be looking at CBE we could be looking at usdc um lending and borrowing products all enabled directly on base via Moro um it's today just at you know

borrowing usdc based on from your Bitcoin and wrapping it into CBBC but um I think the implications of this are um far greater than that and it's likely what what they're thinking next is um kind of some of those steps that we talked about I'm curious from you guys after I just rambled here through this whole thing um what are your thoughts here like if it's about a if it's about Moro or if it's about Bas generally um some some impacts here and some Downstream things that we're likely to see yeah I'm kind of interested in how Moro competes with the a after this last time I checked rap Bitcoin represented about 25% of a tvl so I'm kind of curious after this integration that let's say

three months from now what percentage of uh morphos tvl is represented by a coinbase rap Bitcoin right and I think like the figures you provided like for the total address market like in terms of coinbase uh total deposits like even if just 1% gets converted into this product then that would be massive for morphos TBL so I'm just kind of curious how how that changes like the collateral positions of Morpho and and if it can like potentially compete with a in terms of TV does this include sorry sorry Mark

like just does this include like the assets that are custody like by ETFs no this I do not believe this includes ETFs this is specifically customer crypto assets it it's listed here on the chart but safeguarded customer cryto crypto assets on the exchange yeah if it was ETF assets that would be highly illegal um I'm just I'm just happy that it's it's you know this is defi mullet you know this is this is what I want this is people I mean they they obviously know but people are using the blockchain without necessarily realizing that they're using the blockchain keep all of this FY spans C BTC rap this Moro this I mean Moro RV CBC great products but users don't want

to know about I just want to borrow off of my Bitcoin right just let me pay in usdc put everything in usdc abstract away the difficulty and I think this is this is just another step towards that I think Bas is doing a great job I mean coinbase is doing a great job with their products like abstracting away some some of these more like technical blockchain stuff and I mean it's going to be hard to fade morphal great product parto efficiency above um pool to pool with this pool to pay to pool lending and you know I think with their distribution we've seen what they can do and it's it's it's going to be U it's going to be a a great few months or maybe even year coming up from more for yeah I think it's just the the

synergies piece is the most fascinating to me but strongly agree with all of Mark's points there around like I guess this kind of interplays both pieces together where because you have um this decentralized back end of Base you get the ability to pair these types of products together to give the user a better experience and that is like the ultimate missing piece here is being able to provide a useful product that people want to pay money to use it's really that simple um and in this case it's pretty interesting the one thing I'm still kind of scratching my head at is I thought that eth was supposed to be and I can't believe they picked Bitcoin to be the first asset here I'm kidding but I it's I it's

obviously Bitcoin is The Logical first asset especially with the CB BTC integration I'm trolling with the eth piece there yeah it's um curious why they picked the biggest crypto asset in the world um no going going from there um the thing that I didn't even touch on yet is what I find so interesting about this and and the use of Moro here and they don't have a vault yet coinbase has not deployed a vault product yet using Moro but um the design of Moro to enable basically Vault curators to capture performance fees on earned yield I think is just another reason for this like a partnership of this type where coinbase the exchange can massively benefit by

basically using this product that Moro has built and if their users are willing to engage with a vault product you know they can take 5 10% you know whatever some established accepted performance fee would be for managing the risk of that fault um and it's just it would be a really like a nice additional kind of bonus um Revenue stream for them um without having to go out and and build and manage you know the the product themselves it's it's a really interesting um thing this that this open opens up um and seeing this potentially expand from you know Bitcoin to if it's cbth if it's usdc if it's other assets um I think really thing really anything is wide open and it it makes me kind of

beg the question of like at what point does a need to start maybe punching back um and and fighting for this because if if coinbase is the first they may not be the last um and if all of the exchanges decide to do go a similar route and build products of this nature um you could see an a lose significant market share we just you know I mentioned the the relative size of coinbase customer assets it would be you know insane if various exchanges and all their customer assets were basically on locked into defi via partnership Partnerships of this nature I also think the um another Revenue Synergy is the fact that the

coinbase Venture is an investor in Moro so it kind of lines up nicely for them too um I think the the I'm I'm speculating here but I think maybe the slow phasing out of maybe why they don't have like a Mor for vaults um integration yet is I was just thinking who's ensuring this what happens if Moro gets hacked who's coin who who did coinbase go to as an end insurer or they just self-insuring right so I think maybe some kind of like legal framework is making this a more phased approach um I would love if they mention it in their next um 10 q but uh that that's something that might keep me up at night if I was uh if I was one of the coinbase product managers awesome well I think we've done a pretty long one today um we

talked a lot talked about Trump and the family salana issues potential fixes um and a lot lots of things happening for base going into this year um do you guys have any big takeaways that we close out with um I wish we could have talked about more um we'll just have to have you guys on again next time but any any less big takeaways yeah why does everyone keep saying update your priors I think that we can use a different word to say the same meaning that's my big takeaway but but more seriously um it's going to be interesting I don't know know it feels it felt extremely topish over the weekend to be honest like what the hell was happening um but that doesn't mean there's not a many Monon Road of chaos ahead of

us I liked Westy stake like this is reminiscent of the Dodge bomp back in January 2021 like it has many like similarities I think uh for sure there were some like topish signs but I don't think like this is the actual top yeah before the cycle started I literally had I literally had like a bingo card of top signals and I'm like I'm going to follow this I'm going to listen to this and I've thrown it out I've just literally ripped it up because it's half more than half of them have hit and over and prices continue to go up so um update your priors yeah Westy's point is actually really Salient um on that the Doge pump that he mentioned you could the

liquidity suck that Trump had was identical right Doge started running everybody sold everything to buy Doge and the charts reflected that and if you were looking at you know your watch list over the weekend basically everything was red except for two things and it was soul and Trump and Trump was up many hundreds of multiples from launch um it was crazy to see it we haven't had that moment yet uh and so I think it's probably the begin I mean if you already didn't think it was the beginning of the end you sort of have to think that is now the question is if we do get this spr that probably puts in a floor on the there's probably not a 70% Bitcoin draw down I would have to imagine that we've

seen in the past and if that is true how does that impact everything else um that's really the question that needs to be answered now yeah I mean like for me like my mental model is Bitcoin clearly is falling like a cycle of its own right now like uh he has become geopolitically relevant and I don't think it like the fouryear cycle I don't think it makes sense for Bitcoin specifically anymore but like like I don't want to get into this rabbit hole right now we'll wait we'll wait to make any predictions about the fouryear cycle being over I'll leave you guys with one sentence that Dan Smith said earlier in this pod um sex activity decreases on

the weekend I think outside of crypto that statement might not make sense but here it is commonplace um otherwise I'll leave everyone with uh go check out the ox research telegram uh join the group we love to chat about everything if it's Trump if it's your favorite protocols we're all in there chatting it up um so go check it out join in on the action and we will see you all next time thanks they're going to lock you up man [Music]