Uniswap's Dilemma: Prioritizing Equity Holders or Token Holders? | Analyst Round Table

Transcript

kio's debut are you nervous oh I'm very there you go we just clipped we've just clipped the intro there thanks Joseph not do this one again Joseph don't do it don't do it he did it before we get into today's episode just a quick disclaimer the views expressed on this podcast by either myself or any guests are their personal views and do not represent the views of any Associated organization nothing in this episode should be construed or relied upon as Financial technical tax legal or other advice all right let's jump into the episode all right guys welcome back to another episode of zerox

research the block Works research team is back to bring you another analyst round table today is Monday April 15th I'm joined by long time no see Dan and bachio from the blockworks research team jam on the latest Market happenings before we dive into it I do have some exciting exciting news for you all bacho is going to be the new co-host of zerox research so expect to hear a lot more from him going forward let's go hype super hype anyways diving straight into it for some news and governance updates I think it's been quite a busy week to be honest starting us off we have the Hong Kong ETFs that were just announced spot Bitcoin and ethereum ETFs are going to be tradeable very very soon I think obviously the US

ETFs was like a sort of a larger unlock for the crypto markets but just having Asia have like easy access to these ETFs is just good I don't know how much money there is in China that's gonna bid the BTC and E ETF through like Hong Kong but that's still like a nice narrative to have you know like I think people forget that Asia has a lot a lot of money at the end of the day to V crypto uh some other thing on the news and governance update parel token will become tradable at tomorrow 1 pm UTC or when you're listening to is going to be Wednesday so actually it's going to become tradeable yesterday um on April 16th 1 pm UTC so for those that are unfamiliar parcel sort of like a via State perpetrating

protocol but more than that they also have a via State Oracle they sort of pioneered this data collection SL evaluation method for like V State prices and bring those onchain and they're not just used for parcel's own Pro trating product they're also used relatively frequently and quoted in sort of like more tradire articles when it comes to VI estate pricing so that's pretty exciting to hear I'll take a pause and any thoughts on like the Hong Kong ETFs or Parcels token I can chat a bit about parcel um I like I read a bunch about the other uh real estate real world asset protocol parcel isn't one but it's like the alternative and the other I think one of them is called realy and these are like

so complicated and just like very difficult to work with I think one of them's on nosis and it like you can only swap it on a sushi swap Fork deck so I'm I'm not sure how useful like the pro like the that you can short or long real estate is like realistically but I I do think it's like the best um product out there if somebody was interested in doing that that would like they would do it through parcel yeah it's interesting that I don't know that seems kind of like a goofy thing like in general but I it's it's an interesting Suare into what real estate and blockchain what the overlap between the two will look like I'm not

sure if we've really cracked the nut on that um because yeah I don't know how valuable it is to like long Miami short the Midwest but we'll see what's uh did you mention the pre-market Futures valuation Ren I didn't but if I'm not wrong on AA was trading around 1.6 billion I mean we we're seeing some pretty hot valuations these days so I guess that's yeah a fair on a relative basis at at the minimum I mean that's really what matters like the looking at the the nominal number doesn't get you very far but on a relative basis I think that's what most people in this industry are

looking at and that's probably the best thing to do I don't I don't know if there's really any good comps for parcel that are trading today um um yeah I don't think so I'm not hyped about anything like real State related on chain until I can pay for my mortgage with like I can layer ABS yield I think that's the ultimate end game to be honest but I mean Pro I think it won't be like a crazy air drop just considering they're air dropping 7.5% of the supply at a 1.6 billion FDB to like 240,000 wallets with like some ridiculous numbers if you just like do the ma that's like 500 on average so but still like it's it's

an interesting protocol I think they've like done growth like pretty correctly they did like season one and then they had like a sped up season two and like a even more sped up like season three and they have this sort of like Perpetual points program so all right a few other things on the news and governance side of things um abos sort of announced that they are working with IET I'm not sure specifically what they are actually doing on abos but if I had to guess um this was sort of like a move that they had to do just because of salana congestion there's a lot of protocols where the core functionality just doesn't work and because it takes like way too many tries to get your transactions through so it'll be interesting to see like what aching components they're actually sort of like

doing on atas now and whether you can split that workload between two different chains because I mean if your core like infa is on one chain you would need some form of like bridge to bridge like the messages from like abas back to salana to register that some event has taken place so yeah would love to hear like any thoughts on like whether that was the correct business move but another thing on the new s is Black Rock has allowed black Rock's USD institutional digital liquidity fund also known as build um holders to exchange their shares for usdc with circle I've always felt like if there was a stable coin that was going to become a cbdc it would probably be usdc and I think like we're just like slowly

but surely like inch towards that future with like everything black Rock's doing with uh usdc and cirle especially because black rock is often known as like sort of the fourth arm of the government yeah on on the on the first piece um the Aptos and IET overlap there that's really interesting to see uh we had greguri from aosh Network who's also building a GPU Marketplace um on the podcast a couple months ago and he had an interesting takeaway saying something to the and I'm paraphrasing here but something to the effect of you know there's trade-offs to be had with building your own app chain because they are built uh in the Cosmos on the cosmos SDK and you have to incentivize a validator set to secure your chain and that can be costly in the form of

inflation uh to the protocol and so he was saying you know back when we made that decision to build on the cosmos SDK Solana just wasn't capable for us uh and this conversation occurred in the pre uh congestion era for salana you know Sal the ux on Sal is quite poor right now um because of trans trans action overload effectively and he was basically making the point that you know if there was an L1 that could handle the throughput reliably that we need you know that could be a better choice for us um and I bet you he's feeling quite Vindicated that he's not on salana right now and they did invest the time and effort into building their own app chain to kind of have their own State uh that they can you know not have to this Noisy Neighbor

problem where other activity on the chain is is now impacting you I can't speak directly to the IET and overlap um but yeah I have to imagine BR to your point you know it's hard to land a transaction on right now on salana and that's becoming a problem they're rolling out some fixes we can talk about later but um that's the current state today and so if your business building on top of that chain you need to continue your the operating your business at the most maximum level uh getting onto some of these gen 3 chains that are optimized for performance similar to how salana was but using newer uh research and Technology to power your chain and that don't have a lot of usage today you knowu and Aptos are kind of the two Market leaders in this like gen 3 chain if you will uh era

where they're kind of came a the the chains that came after salana in terms of when they hit the market uh mostly in the 2023 time frame and they have Great Tech and not a lot of adoption so honestly I'm very fascinated to kind of see the the two of them make their plays at what segment for the market that what market segments they're going to go after um I think deep in makes a ton of sense right that's deep really only exists on salana today because it did have that initial higher throughput um capability that other chains did not uh and now that that's kind of coming under crunch I think salana on an average day does anywhere between like 500 and 1,000 sustained TPS um which is the most of any chain today and so once we see some

of these larger deepen project projects that kind of get uh get the ball rolling in terms of their usage and their adoption move on to some of these newer chain I'm really really intrigued to see how they handle uh this new wave of adoption because the problems for salana are there's like it's kind of twofold at the networking layer and the the economic side of things at the the fee mechanism side we didn't really know this was going to happen until we hit this scale right again it's the most used in terms of transaction count chain today um and so yeah I'm just super fascinated to kind of have this mentality of what's the fastest thing we got today let's push it to the limits Until It Breaks fix it and then just like keep rallying around whatever ends up being the best

thing and like sort of some like natural selection Evolution playing playing through here in terms of uh what tech what tech Stacks we continue to build I think you're seeing some really good development on on of course salana but also on the op stack with what Bas is doing and then again if we can get some adoption to S an aptose I'm I'm super intrigued to see how those chains handle like a wave of higher throughput do you think I'm not sure how it works but do you think this makes the case for like salana LS then I have no clue how I know too on like salana works when it comes to like data posting sequencer and like whether like transactions like data posting transactions would still need to go through like the whole networking layer congestion but I mean you've already

seen a few protocols launches like or announced l2s on salana notably like grass I think they're doing in L2 and there was one more that I'm banking on um but yeah do you think salana L2 season is coming I mean it's definitely an interesting question um I mean functionally it would look a lot just like ethereum right like you're posting batches of of transactions down to the L1 um you could do something maybe potentially more interesting with Bas sequencing because the L1 has shorter uh shorter block times um and so like the hassle of going in between two l2s using the L1 maybe isn't the burden isn't that High um you could also do other things where

you can look at the shortcomings of ethereum l2s which is hands down the fragmentation of liquidity like yes and no like there's def frag liquidity is fragmented across these uh different l2s but quite quite honestly they they all have so much liquidity at this point it's not a huge issue uh it's really just that the apps themselves are fragmented across these l2s right so if me as a user I don't want to have to pick which L2 I go play on I want to like use the app on that L2 um and when you know there's three apps that I want to use across three different l2s that's three extra bridging transactions I have to deal with uh and so you could kind of try to make the play where you as the Bas layer make a little bit more opinionated a decision so you're not as

credibly neutral that's very much a stance ethereum has taken um and you look at like something like the polygon aggregator or the aggregation layer the AG layer as they like to call it you say like hey this is the salano foundation who's going to build this thing we're all going to use it you can go build your own thing that's fine but like this is going to kind of going to be the one we kind of coales around um and then try try to build out that way I think that that'd be a great way to kind of learn from some of the shortcomings of ethereum I think it's be really hard for polygon to kind of bootstrap their Network around the their specific AG layer I think they're doing the right things I just think the incentives are for everyone to have their own AG layer

right now right ZK sync's GNA want their own one scroll's gonna want their own one polygon's GNA want their own one of course um and ZK Tech is really hard and really expensive I think polygon said they've invested over a billion dollars over the their life time into ZK Tech um we had uh the polygon team on on the light speeed podcast and I believe that's what uh Mark the CEO said um and if it's not quite a billion it's it's probably a ballpark that number and so that's why the incentives are for everyone to be right right if you invested a billion dollars then everyone just ends up using someone else's solution you know at least push this space forward but like you know that's that's kind of the pull there so I guess that was kind of a really roundabout answer to say I don't know uh I don't

think you're going to see general purpose l2s on top of salana but you might see some app specific stuff I mean uh vibu the founder of drip has been kind of vocal about the shortcomings of the Bas layer for his product you know they're building an app they're building a business on top of salana and this congestion is negatively impacting their business and the fees were negatively impacting their business and like it's a fair point of like do I need my own dedicated block space so I think like app specific space makes sense um the way we need to figure out is like how we do that in the in a way that has the least amount of friction right you need to do this in it like the most seamless way possible I don't know and there's like a lot of chatter

starting to turn up around uh a lot of avss on igen layer are building using the cosmos SDK which is of course natively interoperable with IBC um and so that gets pretty interesting you basically have like something that looks sort of like an L2 right like an ABS and they're all kind of they have this pretty reli pretty solid Communication channel in IBC um if you wanted to know like what the ux of IBC looks like I would recommend ibcf fun uh skip team's building that super fun way to not really fun but super easy way to uh interact with IBC and and move from chain to chain uh with the launch of circles cctp they've also integrated salana directly into their UI so you can

move from salana to any usdc on salana to basically any Cosmos chain it's actually quite cool um but yeah long longwinded answer to say I don't think we're going to see general purpose l2s but that said I do think we will see maybe some app specific stuff I don't know TBD you'll see general purpose svm l2s though I mean we already know we're going to see eclipse and I wouldn't I'd be surprised if Eclipse was the only L2 that says hey we're gonna you know build on Celestia da and maybe settle down to salana instead of settling down to ethereum so I don't know you you'll see some exciting use cases with the svm but I don't know about directly a general purpose salana L2 that'll be

interesting yeah I appreciate the insight there and yeah fully agree I don't think we're going to see general purpose uh salana l2s if there will be definitely be like app specific but I will shoot it over to bachio now who also has some news updates for us yes um so monad raised 225 mil led by Paradigm to bring 10,000 TPS to the evm um I think it's reportedly at a$3 billion doll valuation but I'm not sure uh previously they raised 19 mil uh back in February 2023 um I don't really have like a take on this one I just think it's we talked about this last time I was on um Ox research about like how valuations are

kind of creeping up and I think this is like if it is free bill which I think it might even be a little bit higher I think it's like a good Showcase of like how valuations are setting to creep up a bit and like VC saying we don't really find the returns that we want in the private markets anymore like I think that makes sense um apart from that sui launched their handheld gaming console sui ox1 um which will allow for users to play both crypto and non- crypto games um this is like the third attempt that Hardware uh by l1's uh The Saga phone did well and then apos did Jambo phone I don't know if you guys looked into that one um I'm not sure how

good a handheld gaming console will do for um crypto gaming especially since crypto gaming is not doing particularly well so like investing in Hardware seems like a bit much but um I guess it's a bit better than like incentive programs um because in this way you're actually just developing hardware and one last thing I feel like they should have just gone into Mobile gaming instead of I can see Dan kind of getting ready to hop in this one but I feel like they should have gone into Mobile gaming instead of like developing this like but I don't know what do you I mean it's an interesting question right like if you're gonna make a device what device do you make so the you mentioned the Saga phone from salana and that's really interesting it it like didn't do

well out of the gates and then people the Bonk price ran up and people realized all the phones had an airdrop of Bonk that became worth more than the phone at one point uh then they sold sold out and then they made the the 2.0 and uh I will say I I feel a little bit Vindicated here because my uh prediction I think I made it on this podcast as well was it's sort of like a Tesla when you're making this like new blockchain enabled phone you don't want to own the first Tesla right those were the ones that like randomly combusted and the pedals would fall off on the new Cyber trucks I don't know if you guys saw that clip where the the gas P the accelerator pedal like broke off and slid and got wedged in the fully down position um fortunately the driver was okay but like

you know there's just like that breaks on the Gen one of things and that's kind of how I thought the the saop phone would play out and it's sort of how it did right like I got got the privilege to play with one and it's quite cool um but like there's like a real app store and then like a a defi crypto App Store and it's it's just empty um basically there's a couple apps but uh you can see how it'll get somewhere really cool but it's just not there yet but you basically have two options right like what device do I build do I want to go the mobile phone and if I win the mobile phone Wars uh I will have the device that everybody uses to access the internet in you know my device is in everybody's hands that's very very powerful uh it's so powerful that Google

and apple have like armies building the best phone possible so it's like very hard to displace you know it'd be a huge burden for me to like take anything that like swapped out my iPhone I'm just not I'm like probably not going to do it even if it's better the iPhone is so ingrained in my life all my friends have iPhones I don't want to be the guy with green messages it's just this is not going to happen uh but you know my gaming I like gaming so I would consider buying this device and I haven't touched my Nintendo switch in probably a full year so there you go they have a very low bar to hit for this to be a better game to be like my go-to uh my go-to device for gaming so but you know if you win this war of being the

go-to gaming device you have a narrower scope um so it's kind of just like a different trade-off is how I think about building a phone versus some other form of Hardware is your chance of winning so and the size of the market right it's sort of like a venture play right what's the Tam and what percent of that do I need to be successful um yeah I don't know it'll be interesting and it looks cool looks slick looks like a PSP I'm definitely excited to to get my hands on one I will Cav that I've been a PC Gamer for like most of my life but you know like that I used to have a PSP 2000 and like those are definitely good times but I haven't bought like any of these like new sort of like handheld gaming consoles after like the PSV I don't know

I think when it comes to crypto gaming I would definitely say mobile gaming is probably the sector to Target uh like the mobile gaming is just like insanely huge in Asia like however big you think like Mobile gaming degeneracy and addiction is like just 10x that like honestly like the the amount that like Asian and especially like Chinese spend on their phone and just play like these like games is just crazy I'm not sure if like knowing that fact and knowing that like Mobile gaming is huge in like China and like especially like emerging markets in the Asia Vision I don't think trying to like create your own Hardware phone is The Right Move given that like this purchasing class already has like

established Brands they sort of like middle tier like phones that like provide like in insane bang for your buck um and both and these sort of like middle tier bands also have like high tier phones that are able to compete with like say like apple and like Google pixel so I think at this stage like just trying to create like quote unquote like Crypt native Hardware doesn't make a lot of sense to me to be honest especially for gaming I'm not sure like how hard it is is it is to like Port over like gaming libraries or whatever but if I'm living in like a Emer market right like I'm not spending like $300 or whatever to buy like a handheld giving console to play um like whatever like crypto game

and if I'm living in like a developed Market I'm just gonna buy like a a steam deck or whatever it's called or like a Nintendo switch I'm not gonna like buy this new like handheld gaming console so I think the right move actually is to build games that in or off of with like existing gaming systems since these are such like large and existing ecosystems already I'm not sure if Hardware is a right move I can like kind of see like the point of like salana Saga um since like he's trying to like dis like the app store or an toally trying to disrupt the as too awfully but gaming I'm not sure to be honest I feel a lot less comfortable with gaming a gaming Hardware push yeah I I definitely don't think this is for developed markets though and honestly I don't think likeu

is the blockchain for developed markets there's only 100 validators it's not really scalable uh it's all to all communication between the nodes not scalable sense of like adding you know getting to 10,000 nodes I don't think that's on the near term road map or anything um and so their play just feels like to try to be a little different and I mean block like onchain gaming is such a strange thing right it's like we've been talking about it for four years now and it's still not even anywhere near having any fun game to play um it feels I mean I can see picachio being like there's card games brother but um I don't know I just I I I I like that they're doing this because it's a

different route and I you know to the Mt always talks about this on light speeds now I feel like I'm just a broken record uh of of saying things mer says and that's a very dangerous game to play but you know we got to try all the paths and this is a new one so I'm I'm excited I just feel like it's kind of like a somebody was like oh like we need to do something in gaming what do we do oh there's like my kid loves the Nintendo switch let's just build something like that and then they partner was the one to get it out I I I know it's like A New Path and I do think that it's like it's better than the Jambo phone because I don't know what that is like do you know what I mean I feel like that was a

straight copy base of the SAG but go I I'll chime in here I actually think that Jamon is a lot more interesting to me than both The salana Saga and the S like handheld gaming console for a few reasons first of all it's priced at $99 which is like insanely cheap and they are like laser focus on if I'm not wrong sort of like the Africa southeast Asia that in America region and for a lot of these like phone users the brand doesn't really matter like they just want like a cheap functional phone and like $99 is as cheap as it gets and I talked to one of the persons working at abos working on the Jambo phone and basically the strategy is like

there's going to be like 16 crypto apps like preloaded from day one and then there's going to be like task and like you do these tasks there's gonna be like daily rewards and there's this like ridiculous like token like Drop flywheel and it's like salana Saga is like for rich people and then like Jambo is like the slightly less like developing economy version of that where people are going to get probably like a stupid amount of money that will like offset the $99 cost of the phone in like I don't know like two weeks so I think like fundamentally that phone is a lot more interesting to me than like a handheld gaming console and maybe even salana Saga there I say to be honest

salana Saga isn't great though that was just like like Dan said it's the Bonk air drop at some point you recovering tox and then people were like the same thing that they did with Tia where they were like oh this is infinite airdrops and then everybody bought like I know people who bought 2.5k um sagas so and now I don't think they've had an air drop in a while so I don't know um I just looked up one stat real quick picachio uh I was curious how many units of a Nintendo switch have been sold and this is off of 30 seconds of Googling so take it with a grain of salt here but apparently according to Wikipedia the world's most trusted Source 139 million units were sold as of December

2023 so let's say you get 10% of that you get a gaming a blockchain enabled gaming device in the hands of roughly 40 14 million people I don't know that's kind of cool I'm I'm intrigued I'm intrigued of the people who created Super Mario and everything you think that you're giving it that like oh yeah I just the thing is I feel like at this point if you're SOI like even Solana didn't have like a lot of apps until the start of the year not this year but like let's say last year like a lot of apps that you could use true and they started air dropping money and then like to incen and SOI also did this very well as well they had last October or maybe 2022 October they had

an incentive program uh I think like $150 mil and so it got a lot of tvl and activity on so I feel like that's what they should be focusing on like for gaming as well not like an incentive program where you give apps money or like game developers money but like directly to people so that like that's how I feel like you should boost it as opposed to this but I mean it's I think it's okay like I don't think it'll be 10% of I don't also don't think you think that but I'm going to make it seem like you think that I disagree with you Daniel I don't think they'll get 10% of Nintendo's sales okay that was aggressive I'll give it to you that was I'm glad you called me out that's fair

that is that is far too aggressive if they sold 14 million units that would be the most successful blockchain related product in history I don't think they could produce like 10% of that there's no way that they're making 14 Mill of these things they they'd have to like double down and order a new batch um last piece of news is binance listed bit tenser tow uh for spot trading um this is relatively big because one of the big issues with to is that um you can't custody it very well so funds and institutions can't buy it um because it doesn't work with ledgers and it's not on it wasn't on any like

Trust exchanges it'll be exciting to see how it turns out I don't know I know Daniel doesn't really believe in to that much but um I think to's the narrative leader so I think it'll be cool to see how this goes over the next few months I mean it's I'm just yeah I'm a little sus but that's fair I think I don't think that's a crazy position is it the narrative leader 100% agree um I'm just very sus of like 99.9% of the AI plays and I want AI agents specifically to be more real than anybody else I can promise you of that but anybody promising AI agents before chat GPT gets right access over your computer is is not true that it's not

happening they'll be first and then everything will come after um I don't know wayfinder posted a screenshot of AI agents so it's it's very close it's coming I know I I just think that that's my that's my mental barometer I think that's this summer so you know a couple months from now so I do think we're close um and then then I think AI once like why I think that's my barometer is right now you ask okay so I recently bought a house and the realtor asked what I did at one point and right when I told her it was like I'm I'm very I do not say crypto right out of the gates to be clear you start with like tech company then like research and then kind of like Whittle down um the second I said Tech she asked me about AI so like

normal normal ass people are like AI aware but they think you like high schoolers use it to cheat on their their homework right and they do but it's obviously much more than that once you can start using it to like do tasks that you tell it to do uh that's when gets real for the average person and like if you're really into the AI space or like software engineering or any of that you probably heard of the the Devon release uh Devon's like this software engineer based AI that you can just say hey build me a website that does X Y and Z and it just does it like it's it really is like an agent um instead of like the current chat GPT which says you know here's the instructions to go do something that's the difference is is

doing it versus being told how to do it and once the average person can be like send an email to my boss that I have the flu and won't be in today and you just press go and then you like go back to bed and your boss gets notified from this AI agent that's the that's going to like start this this next wave of AI discussion so um yeah I'm definitely paying attention I think ta is a little bit sus and I don't think that's a crazy stance to be in um but but yeah it's not it's a completely Fair s to be in um yeah all right I think that's a good spot to move on from our news and governance sections but now moving on to our dydx segment with a quick word from

Winter mute all right guys for this week's dydx segment we have Kalen head of governance from wintermutes thank you so much for coming on no worries thanks for having me right and it's uh great to be here yeah so for starters what role does winter MW play Within the dydx ecosystem sure so uh winter mut's been pretty involved in dox for quite a long time um firstly we're investors but we integrated into the V1 product back in the day and have ramped up our liquidity provision ever since we were one of the largest market makers um on V3 and integrated into V4 shortly after its launch um we've also been very active um in governance since Inception most notably proposing changes uh towards the

lp Rewards program where we introduced Mega volume um and also shifted rewards to more active LPS um we also had the V4 Vanguard which was a myriad of proposals um targeting some areas we thought could have been improved before the launch of V4 most notably a 45% reduction in trading rewards um and then other than that personally have been a part of the DX operation subow and we also hold a seat on the dox grant subow that's great to hear and I think it's a really unique opportunity for like a market maker on winter M to have such an active role within dydx I think that's something that you may not always

be able to see for example when when a mute Market makes on like a centralized exchange like you guys have zero say on like maker rebates or whatever so that's super cool to see the next question I wanted to ask was what type of D5 protocols does winter interface with and have there been any challenges SL learnings throughout the years yeah I mean it's pretty obvious to be honest like we mostly deal with def applications that are like relevant to us on the trading side right so we interact a lot with a amm and limit aut book dexes rfqs aggregators all that sort of stuff um in terms of learnings I would say like it's pretty much ongoing you know there's always our main

challenge is really like counterparty risk and smart contract risk and so we're always ensuring that we're minimizing this risk um according to you know how much funds we have connected to I guess you know these D5 platforms i' would say um we also occasionally touch lending platforms but other than that that's yeah really the most of it just a quick question what do you guys do on lending platforms just out of curiosity um sometimes you know there's like we have looked into liquidations but if we do need to borrow certain assets um that is definitely a Avenue that we do look at okay super interesting and sort of the last question I had was how has winter me's involvement within various defi

protocols evolved over the years for example I noticed if feel like in 2023 you guys became a lot more active in governance perhaps than before and would love to hear sort of like how that has evolved yeah of course um I mean I guess you know as amm and perss or some of the larger sectors of defi were constantly integrating with new protocols so that's kind of like our horizontal expansion in that sense but yeah I mean one of our main goals at win mute is like to really Empower decentralization and push that world forward so you know at the beginning of 2023 we launched our delegate platforms um and that was like a super important Initiative for us which in some cases wasn't even strategic it was Lally that we want to

empower decentralization so yeah we're um a big delegate across like Unis swap optimism compound dydx RV and arbitrum um and yeah it's been really great you know we've managed to get quite a lot of voting power across these platforms and uh we've had a really good time participating there as a quick followup to that obviously I can see sort of the synergies between like you guys being a delegate for something like unisoft a dydx what about arbitrum and optimism you know those are like L2 ecosystems how are you thinking about your dedicate position there and like what is your maybe like end goal if there is one yeah of course I mean firstly like we are

investors in some of these projects so that's something that we do offer as we really want to help out our portfolio companies on that side and ensure there's like great governance efficiency so that's the main point why we do it is ensuring great governance efficiency um but I guess like in terms of like arbitr and optimism we also really only put our hand up when we know we can like truly add value to certain initiatives um we've had a lot of experience with designing like intensive programs um dealing with grants dealing with operations so when things like the arbitrum you know long-term incentive program came up we put our hand up to join as a council which we were successful in um because yeah these are the areas in which you know we think we can actually provide value to the Dow

and the community um yeah all right that's super super interesting here and really love how involved you guys are governance given that you know there's a lot of stuff that can be fixed and it's great to see you guys taking active but thank you so much for coming on Ken no worries thanks for having me now moving on to our hot seat coup Throne segment I'm gonna throw it over to bachu first for this week's hot seat who's own um I am putting margin fi on the hot seat this week they um last Thursday Soul Blaze Solana liquid staking protocol tweeted out that margin F sto distrib um Blaze rewards to users and instead that margin F had been selling millions

of Blaze per day under the excuse of Treasury management um I thought this kind of made sense for margins well you should obviously be Distributing the wordss if that's your like mandate but it made sense because you you don't want to hold that in your treasury but um eventually they ended up solving the situation and soul BL stated that like it was all fixed and that emissions would be turned back on one kind of wonky thing here was that margin fight claimed that they weren't Distributing emissions because of um Solana congestion but then users were like we haven't been receiving it for months now or like weeks now so that was a bit sus um but I think like one of the bigger parts of this was that basically

all of CT took the time to like pile on to margin VI which I think shows that a lot of people harbor not bad feelings but kind of like they're kind of upset with the team um and I think this made sense especially like we've had this twice now I think starkware was also a little bit too negative to users and they were like oh you guys are ebeggar and I feel like margi they haven't called anybody ebeggar but they're kind of like on that line of being a little bit rude to users and so I my like I think quite obvious take is that there's like these are like mutualistic uh organisms like the protocol and the user and like there's

like a agreement the user pumps the fees and the volume and the transaction counts for the protocol so the protocol can raise more and that's like the protocol rewards the user with the airdrop but I think if you take it this far um I think like you start getting like a lot of hate on Twitter and I think margin f is kind of like reaching that point where it's like a bit they're they're kind of they're draw they're dragging it along a bit much but um I don't know a lot of other people are saying that this is the biggest fumble of the year I don't think that's the case I just think like one of the founders quit it's like they were talking about a lot of explicit stuff on

the timeline um I don't know what's going to end up with them but I assume they're gonna at least like release some more explicit stuff about the token relatively soon yeah it's interesting they so they started their farming program in July of 2023 so we're going on like n and a half months at this point um they points farming specifically so the users I I don't I don't know for sure but I'm I'm I would guess that that's the longest running points program that we've seen in this industry um so users are kind of fed up now this gets into the baate of like should like is that just being entitled

or and you know like give me my token or you know I've been helping your using your protocol for the last nine months I deserve a reward and it's like it's I see both sides on this one like at the end of the day like just withdraw your Capital like you don't have to you don't have to be there you're trying to get a free reward uh from this team that's building a protocol and for one reason or another you know they haven't released the token um I don't envy the position of being a US resident uh and having the burden of of you know people wanting me to launch a token that said I think Mac like openly said he was rage baiting the community about the token um and like wow gee you pissed off

all your people using your product and now they're mad at you you can't go crying about it like that H so it's hard for me to like really take their side as well um and to be fair like he said that's how he acts on Twitter and not in person and like that's that is very much so how you get engagement on Twitter is like by getting arguments with people so there's a bit of playing the game there uh and there's also a bit of being a dick so it's hard to kind of like like I get why the community is pissed but like I don't know it just feels like a a push and pull there and to be very clear again like I do not envy the position they're in that's that's stressful um so I see really I really see both sides on

this one I thought that there was like no such thing as bad PR but I think this Marion I was like genuinely bad PR if I'm not wrong maybe like 25 to 30% of the protocols TBL has withdrawn ever since that whole like PR Fasco took place and I wouldn't be surprised to see like more sustained withdrawals from the protocol but at some point like the it's going to be like enough outstanding BS that like people can't withdraw anymore and I think that's where it might get like potentially interesting as far as Mac I I do agree that you do need to be a little bit like contentious or like strongly opinionated to get views on Twitter but I'm not sure

you need to go to the extent of posting a half naked of yourself repeating the word like when token for two minutes I think that's a bit pushing it a little as far as like the the entitlement point I do think crypto users are pretty entitled to be honest like if if you are using a product you should be using it because it provides value to you know and sure okay I can that like everyone wants free money like the incentives are structured that way but for example like uh using a web to analogy like uber in the early days right even accounting for the fact that like uber gave you like sort of this like ridiculous like $5 $10

like off your Uber R you were still using it because Uber provided like valuable service relative to you standing on the street and like waiting like five minutes to flag like a taxi or a cab and I think the same should apply for crypto you know like you should be using something because like it genuinely provides like a valuable service or product to you and maybe that's just the S of the industry today you know like 99% of these things do not provide a valuable product or service and they would have no users if they did not sort of like promise any incentives and I think that's just like half a symptom of like the state of the industry today and half like the way like just like incentives and sort of

like the human desire for free money I mean you would be kind of like stupid to not want free money to be honest as a human yeah but that's like also fine you just have to take the mental stance that you're gambling and you know you have a cost of capital here exactly yeah I thinky though that's the thing like you're taking on risk and also like it's quite a lot of well not on Solana salana there's very limited fees but you're still losing money like Ren I'll let you finish in sorry no I was going to say like uh I think tarun put out a paper one year ago about like sort of modeling uh air drop farming as like call options um it's like a really like

quany like nerdy I'm not gonna dive into it and I think that's fair you know like when you are like farming you are explicitly using this protocol for the sake of farming and not just because like you're using it because it provides a valuable product or service for you like you should be like quote unquote like doing the math like you can't really put numbers to but should be doing the MTH as like what's your cost of capital what's the potential like smart contract risk what's the type of like return you want to be getting and there's like generally two types of farming right one is like the type where you like just like execute transactions uh through like a DEX like amm and so like those are cases where you for example like Farm like ecosystems or like per Dees or whatever like where you don't need to quote

unquote lock up Capital you just like run these transactions and you get your collateral back inantly and there's like the other type of farming like parcel or like Camino or margin fight where you have to like lock up your capital for an extended period of time and there is a definitely like a cost of capital to that right and I think like you do need to take into account these Dynamics if you are like actively I'm not going to say like maliciously but like actively farming these protocols for the sake of like farming and sure I I definitely agree that it's like a SYM symbiotic relationship at the end of the day you know like the protocol gets like a higher engagement retention tvl whatever choose your metric and then on the other side like

the user expects something in return but it's not like there's a legal contract saying like you have to get something back it's not a legal contract the only issue that I have is that I feel like a lot of people read that not the T the tum one but the other one um like the cost of the Unis swap air drop or something and they were like oh like it was actually quite expensive and it's not actually for protocols to do this well the cost of not doing an aird drop is like or doing a bad airdrop is like ending up like Paras swap where you have no users nothing and like people can one of the things is like you can pull out your capital and go to another protocol but I think like because a crypto has such a like small Niche

Community um still and like they're power users so if you like piss people off they will probably avoid using you and I think like if you're a protocol yeah okay you can tease people and you can be like mac where you're like haha like am I going to drop the token am I not going to drop the token but at the end of the day like there's maybe like 10,000 people on chain so you really don't want to like take it too far um yeah I think that's it I mean I I'm sure they're gonna have to air drop and I I'm kind of surprised that Mac had to go on Twitter and be like oh guys I was always like putting on a um face or something I thought that was obvious so

it was kind of like and I I also don't understand why a lot of people hate like the product is fine um it's not I revolutionary um it's borrowing and lending on the blockchain but I mean the way that they were acting is like there's I feel like there's a very fine line I think they kind of overstepped it a bit this past month yeah yeah that's fair and honestly my hot seat cool Throne kind of parlays into this and I I still don't know if it's a hot seat or a cool Throne uh but we'll make it we'll do it in a non-c contentious way and put the SEC on the hot seat uh so the SEC has put out a Wells notice to Unis swap labs to uh

regarding uh the creation of their protocol and so a quick one two on the wells notice so a Wells notice from the SEC is a formal communication notifying the recipient that the SEC staff intends to recommend enforcement action against them so basically it's a letter that says hey we're coming and here's why but basically it's an opportunity for the recipient to respond to the allegations and kind of get your case ready and make it to the SEC before they they bring that enforcement action to you you know these generally end up in following into like a court hearing uh so they they basically turn into a lawsuit uh as the recipient will likely sue the SEC back uh Hayden put out a tweet on this Hayden Adams DC uh founder of of Unis Swap and

said I'm confident but that the products we offer are legal and that our work is on the right side of history but it's been clear for a while that rather than working to create a clear informed rule set the SEC has decided to focus on attacking longtime good actors like Unis Swap and coinbase all while letting Bad actors like FTX slipped by the industry rallied around them um when this news came out and rightfully so there's there's plenty of Bad actors in this industry so it's a little bit frustrating to see um there's plenty of malicious actors when I say Bad actors right like people that are genuinely just straight up scamming you uh and so you know people that have been around and have been built a very useful product for a lot of people it's it's kind of upsetting to see so there's a

couple questions here around what exactly the SEC is going to go after uh you know whether or not the web app or the the wallet that they have are are brokers in in in terms of like being the interface that users buy and sell Securities through um whe whether or not the uni token itself is a security and whether or not again the protocol so like the actual amm contracts are unregistered security exchanges there's a couple different angles here don't really know uh how this is all going to play out I am very much so not a lawyer and have no desire to be so I I will have no indication uh on whether or not these are going which direction these will

lean um but the uni token as a security one is kind of interesting because there was an airdrop to users so that there was like no investment of money on behalf of the users uh but there were they Unis swap Labs did raise for the protocol using a token sale to U investors um so there is still this like push and pull here between Unis swap Labs like the private centralized company and Unis swap protocol again really just the the Dow that controls and owns the uh amm contracts themselves so it's interesting to see this push and pull because uni swap

Labs uh has there's been like a long push there's been like token holders are very upset because they're not getting a portion of protocol Revenue uh we'll definitely get into that and Labs is like you know again this like the centralized entity that's like a business a company in the traditional World um and they have a team and they built a product and they built you know ancillary products around the protocol and they have to continue funding themselves but there's the the token holders feel like they're playing second fiddle to the equity holders right so Labs will create a new product instead of like giving this and doing this on behalf of the Dow they're doing it on behalf of themselves and that revenue is you know retained within the decentralized entity

so recently there was another development for this um I discovered this on Saturday the what was that the 13th um Unis swap actually Unis swap Labs uh has a fee for anything that goes through their the uis that they've created whether that be the the web app I think it's like app.is swap. org I want to say don't quote me on that just the the traditional Unis swap web app or whether it be like through the wallet that they have formerly that was a 0.15% fee uh from the like tokens you would receive uh and that was only on a subset of swaps so it was on like basically the largest pair was like e swapping between like a sa coin and eth

but it wouldn't be anything like related to like a meme coin it was a very small subset of assets um and they also excluded uh unwrapping and wrapping we and stable coin to stable coin swaps so they were just trying to take a cut of fees and generated a new source of Revenue they were annualized at about 20 million or so uh over the last couple of months of this fee existing but after the announcement from Hayden was a couple hours later they quietly raised the the the fee from 0.15% to 0.25% and they actually included all swaps as eligible with the only exception still remaining to be stable coin to stable coin swaps and wrapping and unwrapping wrapped ether so uh uh it was a little interesting they didn't

announce this I think that's kind of two reasons for that is one I don't know if you want to go screaming this from the hilltops after you just received a wellness notice that you're taking a fee from your front ends I don't know like it was still going to be become news so it does feel weird they didn't announce it um and this rubbed people the wrong way while the first wave of of when they received the wells notice everyone kind of unanimous unanimously was hey we got uni swaps back um then this fee hike gets prop back up uh which reminds everybody that there's a front-end fee and that does not go to the Dow and the sentiment very quickly changed and it feels like everyone is now again like hating on Unis swap labs when they first announced this feed maybe six or so

months ago it was chaos like people were so upset um and this kind of gets back to the the entitlement or like what do token holders deserve question of you know you raised four Labs using the token and sold the token yet the token is not getting any cut of revenue generated by um these ancillary products from that Unis swap Labs creates uh and this is like a very interesting discussion because there's also the the protocol call level fee switch which would take a portion of the fees that go to LPS today and give that to the Dow and that has been long long debated uh it's been made the most progress It's ever made in the last couple of months I believe the

foundation recently posted in the forums that they kind of wanted to push this forward this was all pre Wells notice and I believe that contracts are going through audits right now uh so timeline was like you know a couple months Max uh for this to to start it sort of Hit the forums to really start moving uh I don't know what's going to happen now like it would be kind of crazy if you were to push the the fee switch through while you're in a lawsuit with the SEC in some regard but it's also a power move of like uni Labs is the one being sued here or the one uh under investigation here and you know no one from uni laabs is pushing this fee switch through it's like this is a decentralized protocol and it is you know there's this is two the distinction here is quite important

where there's the lab's entity the one has created and launched the protocol uh the one that is being investigated by the SEC and then there's the onchain contracts controlled by the Dow and the token holders and that would be the one that would push the protocol LEL Fe switch through so I know I said a lot there so I'll pause but it's pretty interesting development I think Dan might get caught as a witness during the SEC court hearing just given how comprehensive that was to be honest um but on a more serious note I think this feeh hike is like the biggest fu that unisoft could do to the SEC after they announced like the after they send the wells notice I mean I mean like without rehashing the

entire debate too much there's always going to be fundamentally like a clashing force between labs and the token it is very much so like a zero some game however I do think with the Advent of like unisoft V4 and other existing or like sort of like up and cominging lvr mitigation solutions that will probably deliver a lot more like yield SL returns to LPS that debate becomes a lot less of a concern just because like if you still have lvr and you manage to like capture a lot of the lvr value that's being captured by such just today and that is the bulk of like sort of like the il/ lvr loss that's seen by LP today then you're gonna like

basically there there's going to be a lot more money flowing around and people are going to be a lot less like stingy and thinking zero some and think like a bit more positive something you know like my LP returns just went from 5% to 15% I'm totally chill with giving out like 15% of the lp fees to UNI token holders now having say that if I bought the uni token before like the protocol fees s like Announcement by unisoft Foundation like one month ago I don't think I would ever have had the expectation of there being a fe switch like ever to be honest may there's probably like a lot of Jers out there who like put on a position thinking of like a prodal fe but I would have like expressed that pH just slowly in the

hopes that like unisa continues to maintain or even like increase its deck market share like dominance in terms of volume and over time like increase its market share or like expand into new verticals such as like unisoft X or like sort of like cross bridging um but yeah it's it's an interesting position and I think you will probably see that tension appear in many more D5 protocols to be honest just because there's a lot of sort of like these like crashing Dynamics between like the equity side of things and the token side of things however I'm not familiar with VC and like when like safs became a common thing where like the equity is converted into the token and so there's not so much of like a equity token like

divide maybe that divide is a lot bigger for unisoft where there's like a lot of investors in the equity side of things and there's a lot of investors in the token side of things but I would guess if I had guess like in sort of the more recent years that Dynamic has shifted like a lot more to the Token side of things rather than investors like still holding equity and like even thinking about that to be honest and so that Dynamic probably is like less of a problem going forward yeah and I would hope for that problem to be less of a problem going forward it's definitely not ideal um so it's the the protocol level Fe switch is an interesting one I'm glad you mentioned V4 though Ren and like what that could potentially do uh because you

know maybe in a world where there's actually Pro like Okay so let's I guess let's back up Unis swap the protocol is a Marketplace that matches Traders with liquidity and the trader pays a fee on for the the execution uh and so Unis swap the protocol has the ability to take a portion of net fee uh and you know retain that as their Topline Revenue so let's say there was like you know thousand trade that went through uh the trader paid a $1 fee to the liquidity provider Unis swap could take you know 10 cents of that $1 fee uh and like that would be their revenue and as the Dow doesn't really have a large amount of costs today you you could

basically pass that back that that 10 cents back to the Token holders to me that doesn't make any sense your product is really good people use it people love it and on an lvr basis as Ren mentioned like your LPS are getting smoked on average there's sharp LPS that are like very actively trading uh or moving around their LP positions to stay profitable but on the whole you know it is not profitable to deposit into an amm and leave it there um and so now you want to LPS are essential to make the whole protocol run if if lping was like egregiously unprofitable there's probably a break point where um

you know LPS leave liquidity weakens and goes elsewhere and less people trade there there is probably a breakpoint there um or if you wanted to just like increase the total fee and then the the Dow takes a cut of the the higher total fee where LPS still end up making the sense uh the same amount of money but Traders pay more your volume will decrease Gauntlet done some pretty interesting work on like what that trade-off would look like and there probably is a happy medium here but like just zooming out a bit you're basically saying let's make our product worse for LPS who are essential to to making this protocol run or our product work for Traders by charging more just to like return Revenue to the Token holder like to me that just

doesn't that does not add up there and the the the ideal result would say we need to build more products to make that actually generate profits right like the even the notion of returning Revenue to token holders doesn't make sense you would return profits to token holders right after all of these costs have been subtracted so I don't know I I think there's just a mismatch in like the reality and let's say you did turn this fuse switch on like you're looking at like like one one and a half percent yield like that's not like guys like half the half the people demanding it don't get out of bed for anything less than triple digit yield and when they go farm these things right so it just

doesn't it seems like there's it just became this huge narrative that most people just are not thinking through um but like and to put a a bow on this I think you can really hate the practices of you know prioritizing the equity holder and not the token holder and think that Unis swap Labs as terrible people and think that they've had some shady malpractice or are pretentious people that's all fine you can think that and be like yeah but at the end of the day the protocol is still pretty immature doesn't doesn't generate a dollar Revenue today and turning the fee switch on kind of like negatively impacts the quality of our product like you can both of those things um and I don't know people kind of you like turn them into camps and and I don't know

it's strange I agree with you on the lp like adding a fee on the lp side of it and then for to distribute to token holders I don't think that makes any sense I think if you were going to do it you should have done the front end but that's owned by Unis swap Labs not the protocol so you can which does get into this really weird thing of like if you're going to a Labs team and you're going to raise using the token what do you have to give to the Dow like to control because I agree like there is the there's very clearly a weird push and pull um but we like they're not the only people that do this uh if you look at salana for example jeto is very beloved and jto Labs owns the block

engine and they take a 5% fee of every tip that runs through and nobody seems to have a problem with that the one thing I will say about not abouto about Unis swap is you know know you were like why are why do people care I feel like people care about like Unis swap specifically because I think their Unis swaps kind of like the the decision that Unis swap has will likely affect the rest do you know what I mean like it'll just create this create this new like Paradigm of returning 1.5% to token holders no but that's like I think a lot of Protocols are first I don't know if you're a protocol this is one thing I UND like when MCB Brennon was tweeting about it

on the margin F side I was like okay that's fair that they were like we're an American based team that's why we're not dropping a token that makes sense but I feel like a lot of those teams first of all I don't know why you're in America if you're do you know what I mean the great United States great country but also like it's very difficult to drop a token there because of the whole regulatory stuff but um I got I got distracted talking about the us again basically what I wanted to say ripping the gator ripping the gator s Pop um basically what I wanted to say was I think a lot of these teams are waiting for UNIS swap to kind of make a decision and like for there to

be a decision made for there to be a decision made about Unis swap to drop tokens so I think that's why everyone's kind of interested in that not because of the one and a half yeah yeah I mean I I agree with that and like that's that was the original sentiment around the wells noticed was like you guys are fighting a good fight you know where if you're like really trying to win this you kind of want them to go after the Unis swap in some way like they're well-funded they're you know they're they're kind of our bet D's best shot at winning this and people may disagree with that but um and just to be clear I wasn't trying to like throw jeto under the bus here at all either I love what they're doing I love that team uh it's just an interesting comparison where Labs is

taking a cut of something the protocol is doing um and in my mind like these Protocols are like very much VC stage stage bets and they you got to fund the people building the thing and yes there's a token and like we still don't really know what the incentive trade-off there is but I don't know I I I don't think it's crazy that the lab's team is making money like I just don't think that's crazy I think that's something not a lot of people think about is that Unis swap is still like a venture stage team because in crypto it feels like every month is a year they're like oh like Unis swap is already an established protocol like it's it's there now it's like Costco Etc but it's not it's just like it's new realistically I think

where crypto is today like everything is still in like the growth Venture stage like nothing not maybe not even like ethereum dude has reached like the proper like stable like long-term stage a few random points in terms of like the yield on like a uni token fee switch sure like it's not ridiculous and that is definitely a sympto a symptom of crypto having these like completely ridiculous yield expectations uh from the user side but if you look at it like the S&P has an average dividend yield of 1.35% and at current prices the uni token yield would probably be I don't know maybe like two to three% maybe a bit lower than that and so it's doesn't look too crazy I'm like a mature company like should a company be returning like

paying out a dividend yield at this stage like definitely no yeah I know it's crazy it's just it's crazy reinvesting you're in the one of the most high growth industries at the far edge of the risk Spectrum returning profits at this point makes literally no sense I cannot wrap my head around it reinvesting growth every time and maybe that's part of the problem here is you know Labs is taking a cut of this the the or is creating this front-end Revenue stream and we have no idea where it's going you know today maybe it's a little bit more obvious it's probably going to to lawyer fees but prior to that it was a little less clear but yet they created this wallet which again plugs directly into the Unis swap protocol and they're building ancillary products around it that drives more

volume to the protocol making it you know increasing the utility of the protocol so that that to me that is reinvesting in growth so I don't know I I but again I I also see the other side where the incentives are pretty misaligned yeah I think that's a good point to move on to my hot seat kones I try to keep it short I have tenzer in the hot seat this week so tenzer did their urge off I want to say last Monday um they Ed up 12.5% of their token Supply at its peak the token reached roughly like two billion fdv is now trading pretty down um at 913 million as a point of comparison brur is currently trading at a 1.2

billion FDB so it's not that different um to be honest I think still a relatively okay or J for most people however I do think that there were some it's mostly whales that were relatively unhappy with the amount they got and as a result tenser announced a few days ago that they will be Distributing an additional 2.3% of the supply to top up the top 2,900 wallets to make their distribution entirely linear I'm not sure if that was the right move to be honest that seems like a wild move to do like post tge even if like your wheels are really pissy about like Notting it and I think that shows

in the numbers right like even with that herob allocation magic Eden has gone from like a really really small percentage of salana volume to like dominating salana volume at like 90 plus percent if you look at like 24hour um trading volume and similarly on another F like torans the nft collection of tenzor has gone from 10 a peak of 138 so to the current 18 so like so obviously there were a lot of expectations of people buying it for solely for the air job then nothing more um I don't know I feel like I don't think T are like did this air J perfectly I feel like there was a lot more they could have done for example

like Perpetual incentive programs giving out like less of the surprise so that they save more as like future incentives because like it's not hard to see that like magic Eden has something else on the road map you know and that you will be competing with them post your tge and like nothing ever exists in like a siloed environment you're always going to have compared in crypto especially given like how many copycats there are and how fast it is to the Golden Market a lot of the time and yeah I I just feel like there's a lot left to be desired to be honest from this air job I mean it was it was a good air job don't get me wrong like I think a lot of people did really well in terms of like just the amount of money they got but from a sort

of like a business like strategy point of view I feel like they probably could have done better I feel like a lot of people who weren't expecting to get air dropped got air dropped on this one like I think a lot of people were expecting directly like linear um like entirely linear and then not like the ones that I don't know what they're called the ones that reward sies where you just do like one nft transaction and you get like 800 tens or something but this one like I think actually rewarded them so it's interesting I don't have like a big take on how they did the airdrop I think it is I agree with you R I think it's a bit weird to distribute like more after you do it but I I mean you don't you never

want to make the people who have the most money angry um or at least like that like Angry enough to yeah but yeah like you say that but I think like these people still left regardless even if the Edition no 2.2% so like it's obviously like really hard to know it's not like you're a Founder you can go ask like your will like hey like if I give you like an additional 2.3% and make your urge of L will you not go and for magic Eden please like it doesn't really work like that so you just have to use your best Judgment of the competitive landscape but yeah you know one thing is I was talking to a friend and they were like I actually prefer magic Eden to tens and I was like do you prefer open seat to blur and they

they prefer open seat to blur and to me it seems like so crazy but because I feel like blur is the superior product there obviously like magic Eden is dominating volume because of the air drop but I'm just saying like there are actually people who are like oh I'd rather use Magic over uh over T I've uh I've pulled up this dashboard from Maru he's a he's a beast we'll put a link to his Twitter um in the in the description here but for the the listeners there this chart in the top right here uh is or for the viewers there's chart in the top right and for the listeners it's a chart on organic trade count so just looking at the number of Trades by Marketplace on Solana uh so this specific dashboard filters out wash

trading versus organic trading uh there's a couple cool filters that they've created to do so uh but you'll actually see this huge sharp drop off in tensor this this uh tensor Swap this greenish yellowish color um post air drop right uh you've seen a huge material decrease in the number of of Trades even these are organic trades so this is getting past the the wash trading filter um so take that as you will but it's interesting to see the huge drop off and the question is okay well where are those users going uh and later on this dashboard we can see the wash trade count so basically the other side of of the organic trade uh and you can see there was never really a ton of like previously there was like a in

February there was a lot of wash trading being picked up on tensor swap but these filters didn't catch a ton going into the airdrop uh but you will see a pretty steep in increase in the number of wash trades occurring on Magic Eden uh which like magic Eden I think had 98% of of total nft volume on salana quickly I think today actually um and so it's it's just kind of interesting to see how that has quickly shifted where you know we just talked about Farmers with with with margin fi and if you airdrop to Farmers and they just go somewhere else and sell your token like that is not an effective distribution of your token um sure you made them rich and maybe they'll come

back later but like if they literally just pick up and leave and go somewhere else and sell your token like that's kind of a miss you know you want to incentivize people to use your product uh they use it and then they're like oh this is like a really great product for X Y and Z that I do um and then continue to use it like that's really the goal uh so I don't know it's I don't have too many thoughts on the specifics of of these stats and as it pertains to the quality of the tensor airdrop but it is kind of interesting to see that you know with magic Eden running its diamonds points program um it's already picked up some of some of the active trading activity by the way the magic Eden team has done a great job with the ordinal

stuff like there's nowhere else um this is not related to tensor at all but I just wanted to bring that up in case they're listening you guys did a like I'm very happy with that what they're doing and I wish blur had done that instead of launch and L2 like I wish they had gone into ordinals no I agree I feel like six months ago everyone was calling or maybe a little more than six months ago everyone was like oh my God it's like the craziest thing like 10 just run up from uh like nothing into like dominating like 80 90% of salana NFD volume and now you're seeing like obviously there's incentives involved but magic e like completely dominating uh ordinal and I think they would dominate even without sort of like any

incentive program but now they're also like dominating uh the salana side of things so I think just like looking at like the ordinal side of things like not considering the salana side of things I think like at the end of the day that was a fantastic pivot from Magic Eden and like a really really good move and it's interesting you know like they launch on like salana and ethereum is their like home bases early on and I think that just shows like how Nimbo you have to be on your feet in crypto right and sometimes like the opportunity may not be where you think it lies yeah I think ordinals is like a natural place for um like openc classic um and Magic Eden because it's like

bitcoin's slow so and you can't really trade stuff that like cuz blur even now like blur you can't really trade that much because gas fees are so high and like um but like Solana and tensor just make perfect sense because you're like actively trading a lot but on like the ordinals be Bitcoin you don't really have to so I feel like magic he SS it really well it's you just need like something trusted and that works and they they provide that yeah strong agree there all right I got one last super quick Cru Throne Ian and Ian da main launch uh it was on April 9th I feel like a lot of people have been waiting for that one for quite some time to be honest with this launch

rakers can dedicate their entire stake to an operator of choice operators can register with IG lay and opt into running abss abss can register with the protocol starting with Ian da which is sort of like the first ABS there are two things that this launch doesn't include which I do think is like kind of important number one in protocol payments from abss to operators and number two slashing and I do think there's an interesting question to be asked here like you know if there's no slashing and there's no in protocol payments like what is being transferred you know like Risk is being not being transferred like Economic Security is not being transferred there's no payment for the economic security so is it just

like a database of like this person has on paper like half a billion an e in like sort of like restake commitments whatever that means uh I do think it kind of looks like that at least to me right now I do I do feel like it's a bit of like a silly season especially with alternative reaking platforms that have launch for example carck was like a pretty big thing last week where everyone was sharing around invite and carck is basically I lers but with a bunch of like other assets and with carck you can restake these lrts that are restak in I can there and you know very very good there at some point it starts looking a little city you know

like I take Eve i s it for like an LST I res it for like an LRT I put my LRT in like pendo and then like I buy like the yield token on pendo and I take the yield token and then like put that in car like I'm not really sure what we're doing right now to be honest we're having fun it's nice you know we're taking some risks it'll be good it'll all end up very well and very good no nothing bad could happen from this one yeah I mean at the end of the day we got to get the apps that all of this secures figured out um the ever the ever growing problem but yeah r i mean you bring up a good point with the the launch I mean a lot of things launch like you got to get it out there launch

it with the training wheels and then you know let's let's grow the question is how long do it take to take those training wheels off you know if we look at l2s launched optimistic rollups with no fraud proofs many of them still have no fraud proofs though they're on like the P stack has them on testnet in their permission list which is still an upgrade on on something like arbitrum which has permissioned fraud proofs um yeah like they all still have multisig they're all still going to have multi sigs well into the future the question becomes how long can we can we survive with the training wheels on and I personally have no ETA on what that expectation should be um but that's definitely something that's a question I'm I'm looking to ask when I think about Igan Lair I do think like

yes like maybe the security of l2s or like Ro UPS is like questionable given the fact that like they don't have fraud proof but it still provides the the value that like it was meant to do you know like scaling sort of like a the execution by moving it off chain uh and having like a slightly more performing like blockchain whereas for IG layer like you are the value and like service it provides right is that you're providing like this recent capital and you're sharing your security with an ABS in expectation for some economic return And the fact I would disagree though I think the value you're providing is a

cheaper way to go to market to launch my product like if I'm an AVS like for example a lot of the avss are building using the cosmos SDK and they could just launch an app chain spit up a validator set and create the same thing um but this should be a better way to do that um and so yeah sure I can't pay you that's good for the user uh and sure you're not really giving me Economic Security because there's no slashing it's basically just like this reputation based system that hey you're going to run this the thing I need you to run in in your your own Hardware um kind of gets me to Market and I have way worse trust assumptions now because I'm doing this uh but that's the same thing as like an L2 right the blast hack that happened not too long ago everyone was

talking about rolling back the chain was an interesting example because sure you could potentially roll back the chain and but if you nobody's ever done that before so you're the first person doing it Paving the way for other people to follow into your footsteps if this were to happen again uh and what that means is if you upgrade the bridge contract and end up bricking it then you just locked and just burned all the billion dollars of of value in that contract so nobody wants to be the person to do that so I don't know like my point there being like there's there's just different trust assumptions with l2s that get introduced and like it kind of feels like the same thing with these abss right no slashing no in protocol payments you're just kind of saying hey go run this thing for me how

how dissimilar is that really than a single centralized sequence or no fraud proofs in and a multi Bridge that's fair I think that's a very fair take and like f if I was I L and I knew it would take me like six months more to like fully develop in protocol payments and stashing like I would have made that hardly say move to be honest just a faster go to market right you don't want like wait until like the entire cycle is over to launch these two products and by then you know like maybe alternative Solutions have captured the entire mind sh and I'm sure like other reaking Solutions are also just trying to ship as fast as they can even if it comes at the cost of like some of these like functionality what are that's slashing and yeah I guess so you could

argue that at the end of the day like the thing that's the most important is that like Capital commitment however you want to like think of that and that is like the true enabler of like all of these abss and decreasing the cost of like permissionless Innovation yeah D do you want to talk a bit about your Ion token thesis or no I mean I don't know if it's a thesis I just don't if your end goal is to be ingrained or enshrined into the ethereum protocol I don't see how you can do that with a token or maybe not don't see the hurdle to doing so is much higher with with a Tok token right if there's an

igen layer itself token yeah how do you get enshrined and like my understanding is that's kind of like the end goal long-term end goal um you know we actually had shiram and uh subid I think it was on the podcast Ren and I interviewed them and we asked the question this is all fine and dandy you guys are building really cool but how are you gon to make money you know you raise Capital you're you know the labs team is a business you you got to make money um and their answer was we're going to build the best AVS is you know we've been around this technology for longer than anyone uh and I'm paraphrasing here uh but we've been around this technology we know some really really good ideas and we're going to send our guys to go build them like that was kind of their pitch was we're

not going to make money on igen layer we're going to make money on the avss around it um that said like a token could be very useful here right Ian layer will have really important governance uh processes around like how the slashing parameters are created and and what those what those look like how they change throughout time you know I mentioned the training wheels earlier how do we take those off when do we take those off like a a governance token would actually serve a purpose here so I do see why there can be one but I just think it sort of conflates with the end goal of being enshrined maybe that's not the end goal maybe like sitting on top of ethereum is perfectly fine um I don't know I just think if end goal in shined in ethereum then token

doesn't make sense um but like there's a points program you know this team also just saw what happened with margin fry margin f um that'd be disastrous for ethereum if you know all of these depositors are now furious with igen layer I don't think that would go over very well no I also don't think so especially since it's like because Solana's now had a couple of liquidity injections and I feel like ethereum people are expecting one as well but one thing about the in shinan thing is that I like this is an old this is going to be my first attempt at presenting something but I want to try it out but basically on the can you see it yeah okay so basically this is like

on the E Research Forum and it's very clearly that like shiram both shiram and vitalic are like we don't think that it makes sense to enshrine so I'm not sure because I've been hearing quite a bit is that they're going to enshrine and I'm just kind of unclear I thought that was a goal and I can I'm very happy to be be wrong about that I don't I'm not that's not a hill I'm trying to die on um so that's that's good to know but and the other reason I think it that is new to when we originally talked about this was you know kak is launching and there's another one launching shortly after that I'm blinking on the name I'm sure more of these will come to be uh you'll probably see like some launch on other

chains as well and so let's say there's multiple that launch around ethereum okay now you're not being incredibly neutral because you're picking one and like ethereum very much though has built itself around being incredibly neutral and not picking winners uh so that kind of like when we originally talked about this I didn't think there would actually be multiple reaking protocols yeah I don't know I don't know what they're I like also kind of does feel like something there should maybe only be one of I know we talk about like we all love competition free markets are are Elite but if we all try all these paths you know sometimes cesing around a few ideas might be more efficient I don't know yeah I agree it feels like IG should be its own

thing and like it should just be that well Pacho just defined the market for us thank you Picacho can you tell me what of my bags is going to be its own thing oh I meant like it should be its own thing not own thing I'm messing with you but I think that's a good point to close it off uh thank you so much Dan for coming back on ZX hope you come back more often and good job we cat you on your first episode the new host baby let's go [Music]