Why the next crypto winners may not be layer 1s

Transcript

I mean, what's interesting about crypto is that it it enables people to launch companies and get liquidity a lot earlier. I mean, now companies are IPOing significantly later. Like, there's lots of conversations that you probably shouldn't IPO unless you have $500 million in revenue. What's up everybody? It's LGD here and welcome to the Milk Road Show, the daily crypto show that accepted the bare market a long time ago, but still can't quite find our way out of hibernation. Today is May 20th, 2026. If you were launching a crypto business today, how would you shape it? Would you raise with promise of a token? Would you use your revenue for growth, marketing, or maybe even buybacks? Today, we're going to sit down with an insider on the venture side to get a download on how this stuff works and where our industry is going. Joshua Frank, CEO at the TAI, is on with us

today. Today's episode is brought to you by Cape, the privacy first mobile carrier, Ferros, the layer 1 built for Real Fi, and Nexo, earn interest, borrow, and trade crypto. Joshua, welcome back to the show, man. How you doing? >> Doing well after the the Knicks comeback victory against the Cavaliers last night. That was last night. Of course, man. That was epic. I checked the score in like the third quarter. I was like, "Oh, wow. Maybe the Cavs are for real." And then I saw I didn't check in until later. And uh yeah, congrats to you, man. Congrats to the Knicks. >> Game. I think, you know, having uh James Harden as your primary defender against Jaylen Brunson in the fourth quarter is maybe not the best coaching decision, but >> Oh, man. And I saw I saw those highlights and I saw I have a few

friends who put up some polymarket bids right as like they knew even when the Knicks were down like 10 points they were like or 15 or whatever it was they're like this is you know their odds are at like 6% or 10% like that's going to change. So I know a couple guys who made a little bag last night from betting on a Cavs collapse. Uh and of course listen people listening I'm always going to bring this back to something on chain. Okay we can talk about sports or whatever. I'm always going to relate it back to some DGEN play I wish I made somewhere. Uh but Joshua, congrats on the Knicks. Uh hopefully they they continue on from here. It' be great to see them make the finals uh for the first time in a really long time and and face whichever jug juggernaut of choice uh that they want

to play against. Uh but let's talk about crypto, man. Let's actually let's actually focus on on the stuff that people want to listen to today. Um on the institutional side, I think we had you back we actually had you had you on the show back in January. I think you were with Jay on last year and you're always good at giving us like a state of like what's going on in crypto, how people are feeling, how you're feeling about price action. Um, as well as I think you know concerning the tie like you guys also know where funds are going which I think is always so important to uh ask like where is that institutional money where where are things being deployed? So that's what I want to talk about wi with you today. You guys were at consensus a few weeks back. What was

the vibe like? Like what were people like ecstatic? Were they worried about price action? like what were people saying? >> Yeah. So, we actually did our own um we had about you know 800 people institutional only event at consensus called innovate. Yeah. And the institutional you know it it's this interesting dichotomy. I mean you know people in the institutional world are are not really negative on the space right now whereas retail is very negative. Like I think if you walked into a you know a crypto developer conference um you know the vibes would would probably not be you know quite the same. But I think also there's this disconnect that's starting to happen between uh building and and using blockchains for tokenization, for infrastructure and price, right? And it's kind of this disconnect is starting to happen where you have real adoption

and does that mean prices will go up, right? And so a lot of the institutional folks coming in are thinking about how do I use blockchain rails to make settlement more efficient, faster, more, you know, uh less expensive, right? like you know how do I run my business using blockchain ros how do I use stable coins whatever the whatever the thing might be and and and that world is very positive and is excited and is building and and and I hear it in my conversations I mean I spoke to a um top five you know US bank everyone knows you know who they are I'm not going to throw out a name the other day but you know they're like you know we are planning on offering crypto custody and you know trading to our customers and the ability to uh in

kind create and redeem um you know ETFs and other products. These are like crazy concepts 12 months ago that are now just part of every single conversation. I mean every bank is coming in especially with regulatory change in the US and is fully embracing and offering digital assets to their customers. And so I think from an it's just a very different vibe, right? You know, there's no and and to be fair, I didn't I you know, I I didn't make my way to the main conference. Uh but I think, you know, those that did express similar um similar perspectives, right? It was no, you know, it's still Miami, so you still have your Miami nonsense, but it really is not like a, you know, a Dogecoin wrapped Lamborghini around every corner.

uh it's it's much more how does crypto help us improve some existing product. It's really feels like we're kind of at this, you know, this point where finance is just starting to use crypto as part of finance, right? And and we also see that with a lot of the funds that we talked to, I know that's something we're going to talk to later, but a lot of funds that we're talking to now, they're not thinking about investing in crypto. They're thinking about investing in finance products that just happen to use crypto behind the scenes. >> If you're not seeing this, you're trading blind right now. There are real moves happening behind the scenes that most people don't see until it's way too late. Inside Milkroad Pro, you can track exactly what our analysts are buying, selling, and what's on their watch list before it moves. You can try it out for

just a dollar for seven days. The link is in the description. And are they do they want to invest in those specifically because crypto is the back end or is it the other way around where it's like these products that they want to invest in happen to be to have crypto as >> well? I think I think it's I I think there are those that have the belief that crypto is an enabler to make these products more successful than they would be otherwise. But now it's more like a I'm investing in a fintech infrastructure company that happens to use digital assets to do some part of the business, but the entire it's not a crypto business in its entirety. Right?

We're we're hearing that a lot. I'm seeing that a lot from funds where the mandate or what they're allowed to invest in is starting to expand on the venture side a little bit. Uh and it's things that are crypto adjacent as well. Uh and at the end of the day, I mean, you know, I think it's a sign that the industry is is maturing and and and and growing up. You know, you don't think of specific asset classes really as their own things. You know, all of the big banks trade, you know, commodities, they trade equities, they trade fixed income, they trade, they trade any other asset class. And crypto is just another asset class. And it's a technology that enables things to operate more efficiently. And I think that's what we're, you know, that that's what the conversations are are starting to become. The question that obviously

everyone has is what does that mean for my bags? I don't have the best answer for you on, you know, today. But >> I think that that's one of the biggest questions that we we try to answer on the show and and there is no clear answer though is that like when you hear this kind of stuff and we look at like the RWA charts, we look at stablecoin charts, we look at um you know all these these institutions posting digital asset jobs all over the place, right? We talk about this all the time. I think a lot of people listening and including myself, I'm like how do I participate in that value generation and will where will that value acrue? Is that something that even some of those people also ask you Joshua on top of just like here here's where the funds are moving?

Here's the kind of apps we like. Do they also ask that question? >> Well, I think it depends who you're talking about, right? Like because we have all the cryptonative hedge funds that come to our events that we engage with and the cryptonative VCs and all those too. And it's not just asking us, it's their part of the conversation. I think the one clear thing is that just like equities, you'd rather own something that makes money than something that doesn't make money. and and and ultimately, you know, like as the market matures, you know, people are thinking about tokens as if they were equities in in in or cases and there's conversations about does it make more sense to actually convert my token to an equity and shut down the token and like like ultimately

>> as an investor in anything, what do I want? Like I want to participate in the upside. I mean, these tokens that existed in the past that didn't really give you any participation in the upside where there was a separate for-profit company that was making money. >> Yeah. >> That that's probably not what you should be owning, right? And so, obviously, there's conversations now on does the value occur on the application layer now significantly more than on the chain layer. And I think that it's right now it's looking like it it will and and maybe not yet. Obviously, there's still new chains that are launching at multi-billion dollar valuations. But if you look at the highest revenue generating um tokens in the space, a lot of them are are the applications, right?

You know, yeah, I mean I think it's it's it's uh people are flocking towards safety and safety is assets that generate revenue and you know have some way of acrewing value to token holders. Mhm. I think, you know what's interesting too, what I've learned, especially talking to a lot of people in similar conversations on this show, is that it feels to me like revenue um gives a lot of these companies flexibility in terms of what they're going to do, right? Whether they have a token or they don't. Um but it's it's something that they can use as a lever to enable buybacks, which is something that a lot of people want to see. A lot of a lot of our own milk road analysts, they want to see that uh you know the hyperlquids and the skies and and all these different types of protocols are

actually buying back their tokens. >> I'm less I'm a startup founder myself. I started the tie about nine years ago, >> right? We are we are profitable. We generate IBIDA but the best use of that capital would not be buying back shareholders. It's taking that and it's investing in growth and it's we made an acquisition of a of of a company at the end of last year. You know, we're continuing to make acquisitions. We're launching new business lines. We're launching new products. And I think the thing that's weird about buybacks, and I think this is still something that the market is obviously thinking about and pricing out, is are buybacks the best use of capital? I mean, what's interesting about crypto is that it it enables people to launch companies and get liquidity a lot earlier? I mean, now

companies are IPOing significantly later. Like, there's lots of conversations that you probably shouldn't IPO unless you have $500 million in revenue. There are very few companies in the world that get to the point where they have hundreds of millions, let alone 500 million in revenue. And so, the interesting thing about a token is that anybody can participate in in the upside of something and it becomes liquid, you know, on day one or very very early on. And so, there are things that are unique about tokens. But with that said, while those benefits do exist, I think they also create this expectation that you need to then go spend all the revenue that you make buying back more and more of the token to push price up.

But ultimately, is that the best? Like if you were a private company, you would never ever ever do that. And so I think we need to there needs to be a balance that's that's struck between investing in growth and uh buying back tokens. And I think there's examples like Hyperlquid is generating such an obscene amount of money that certainly they can go and they can buy back a ton of the token. But if the token is, you know, generating $5 million in revenue, should they be spending two and a half million of it on buying back a token? What happens if the market turns and everything goes negative and then they have no runway left, right? So I think this is something that the market is thinking about and I don't think that there's a clear direction yet but I do think we need to be a bit more um

thoughtful about use of proceeds and I think the market also needs to mature in how it evaluates businesses and understands that the best use of capital is is not always you know burning tokens. >> So what would you do? So, if you were if you were launching a a crypto protocol right now, let's say you're launching a I don't know, a DEX on base or some I don't know some some kind of something that you think has some competitive legs is in an area where there's a lot of volume, there's a lot of traffic, there's a lot of potential fees to be made and that's just an example. I don't I don't know that Joshua is doing that or anything like that. Just the first thing that came to mind.

>> Yeah, I think how would you how would you design that? Let's assume that you're going to have revenue day one. How what would you advise a business to do in terms of role of managing their fees a potential token waiting to go to be an equity you know what I mean like how would you how should a cryptofocused business start today >> I'm not advising anybody to do anything so be very but my my my I think the first question that they're people are starting to ask themselves is do I need a token historically the answer to do I need a token is with a token you're effectively printing money out of thin air right and so for a very long time.

The answer to do I need a token was you know a resoundingly yes because I can print a billion dollars out of thin air and you know with a lowflat high FDV token I can make a ridiculous amount of money for myself and and that was the answer for a long time. Now we are seeing you know multiples significantly mult multiples market cap significantly compressing there's not necessarily multiples in a lot of these cases market cap significantly compressing so I think the first question is do I need a token or do I not need a token what is the benefit of having a token is there a way to incentivize my community is there a way to get back and I think there are many cases in which tokens do exist or do should exist and do need to exist and are better than equity but I think you

need to weigh that option and then I think ultimately I don't think that there's a best decision whether it's buying back you're not buying back or anything. The best decision is transparency and transparency with your community and explaining why you're doing something. And ultimately, I think I think the projects that will be successful, the projects that are more open, are more transparent, are explaining why they're doing and why they're making the decisions they're doing because ultimately it depends on the situation what you should be doing, right? There's not one I don't think there's a there's a um a best way to do anything. And ultimately, if we look at crypto over the last, you know, I've been in the space 10 years, the best way to do things changes so frequently. And so, I don't think, you know, you can look at something and be

like, oh, this thing works. It's necessarily going to work 6 or 12 or 18 months from now. And so, I think it's more you have to think about, you know, what is the, you know, like ultimately, you know, the the the the like as as a fiduciary, right? you know, your your job is to maximize shareholder or token holder value. And so I I think, you know, I think about things in the long run. You know, how do you maximize token holder value in five 10 years? And how do you make sure the token's actually still worth something in 5 years from now, >> which I think most people have have not done a good job at doing.

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reserved for loyalty program members. Get started at milkroad.com/nexo. No, I think even tokens now that are 5 years old, I don't like foresaw what their token would look like today either. um as we kind of navigate the second bare market for a lot of those tokens that were launched in in the big mania that brought me in in the 2020 2021 bull run. So um that's a good way to look at it. Uh Joshua, I do want to ask you like uh you know last you you're always good at giving us kind of like perspective on on what's going on in the market these days and you kind of given us a little bit more behind the scenes, but last time I think we were actually looking at charts with you together.

What is your what is your kind of current vibe? because I think we spoke in early January and then we had that massive we had another big sink down into like the 60K range for Bitcoin in February. Um now we're kind of slightly rising out of that. Do you have a an up-to-date thesis on whether that we have bottomed in this horrific bare market that we we we do a podcast for every day? Yeah, I mean crypto is not trading too dissimilarly from other assets and you know the market is now somehow pricing you know Kevin Worsh coming in and hiking rates and so you know with everything going on in Iran with oil I'm a I'm a big believer in the fact that

Trump is extraordinarily and always self-interested and the thing that he cares about more than anything and this is not saying I like him or I don't like him But the thing that Trump cares about more than anything is the price of stocks. I think almost everyone would agree with that. And I think ultimately he's going to do whatever, you know, he can. Obviously, he wants to fight in Iran, but I think he cares about the the S&P 500's performance more than anything else. And we've seen, you know, with him backtracking on things over time. And so I think ultimately as we look towards, you know, midterms that are coming up, we're not there yet, but obviously we had, you know, primaries uh this week.

as we start looking towards midterms, Republicans are not in the best, you know, position given everything happening in Iran, given the market, given incredibly expensive gas prices. I do think he probably thinks about how do I solve this and how do I fix this? And I think ultimately that that becomes bullish for all risk assets broadly is my self-interested Trump kind of thought process there. But yeah, I think I think the question that you always need to ask in crypto is who is the buyer and where does the bid come from? Because we always talk about bull market, bare market, cycle, blah blah blah. At the end of the day, when you click the sell button with the token that you're holding, somebody else is going to have

to buy the token on the other side or price is going to continue to go down. And I think the question is where where is the marginal buyer coming from? I think one thing that's good is we're seeing, you know, positive developments on the ETF side. you know, the Bitcoin ETF has seen, you know, has seen positive inflows over the last few months. The Hype ETF has been relatively successful. And so, I think, you know, and I think a lot of these banks and and other traditional pro uh, you know, platforms starting to offer crypto exposure to their clients brings in more buyers. But we also need to see cryptonative hedge funds and liquid funds raising capital and they have not been. They've really been struggling to raise capital. They're seeing redemptions or investors asking for their money back. So, you know, the question I everyone always talks about

charts and cycles and this and that. I always ask the question of who's buying it. Do tell me the person that you know that's buying the token that you're selling and is that a net new person to the space? I think ultimately that's the most important. >> Do you think there are a lot of net new buyers? No, I don't I mean I I I don't like I don't think there's that there's that and I think it depends on obviously what the token is and what the asset is, but I think for the majority of the altcoin I mean I'm not saying anything revolutionary. Go look at the chart of any token clearly there's not there's more sellers than there are buyers on a lot of these assets. I I don't think that there's a lot of marginal new buyers. It doesn't mean that that can't

can't change. And also the thing to remember about crypto historically is that you know the market starts to run and then people start you know piling in and piling in and piling in and piling in and like I don't know when's the last time your Uber driver tried to pitch you a shitcoin. Usually you know that's when the the the you know that's kind of when we're on the spectrum of are we in the seventh eighth ninth inning of the of the bull market and I I have not had any Uber drivers pitching me or watched Uber drivers you know trading crypto at any any point recently. Uh, you know, I always like to I always like to say, you know, when no one's talking about crypto, buy Bitcoin. When everyone's talking about Bitcoin, buy shitcoins.

Then when your grandma, you know, says she read an an article in the Wall Street Journal, that's when you run away. Um, and so, you know, I think I think we're probably in the somewhere in between no one's talking about crypto or people are talking about Bitcoin kind of phase of the market. >> I mean, what what are what are Uber drivers talking about right now? I feel like I feel like the joke would be semiconductor stocks and andor Pokemon cards. I feel like those are the two the two top markets. >> Yeah. Yeah. Yeah. I I I I need to do a gut check. I've had this idea, somebody listening should take this idea. I don't need any credit, but uh during, you know, the DPIN bull market, which was very short-lived, I had this amazing idea of installing a device in Uber

drivers cars that basically recorded all the coins that they talked about and did like a sentiment check and created a leaderboard of all the nonsense tokens that Uber drivers are talking about. I mean, if you you know, you know, they they've they've been the ones that have been leading the XRP, you know, army bandwagon and a lot of these other they've been more ranked than we've been. So, uh, you know, when I say we, I don't mean me personally. Uh, not saying I've been right or wrong, but but the, you know, the crypto natives on Twitter, you know, a lot of, you know, the the a lot of the the non-crypto natives, you know, have outperformed.

So, um, yeah. So, somebody should launch this DPIN Uber uh, device. Uh, I think it's I think it's a real winner, >> dude. I think, you know what I could see honestly, Joshua, is like some kind of service where uh Uber drivers pitch you on some kind of token or some kind of equity or something like that and then you can pay an extra charge for them to not pitch you. You know what I mean? It's kind of like YouTube. It's like YouTube, what's YouTube premium or whatever it is where it's like you don't get the ads or it's like this. It's like a new ad. >> Yeah, that's it. and XRP and anybody else who wants to get their token out there uh you know can can partners with Uber and Lyft uh and then eventually autonomous vehicles like Tesla and you can turn it off with a fur feet. I've

I've I mean I remember 2021 you know you know height of the bull market just you know I I always try not to tell people what I do because the last thing I I do is want an Uber driver knowing that I'm in crypto and try to nonsense coins but it's happened before >> and they always somehow manage to mention a coin that I've never heard of before. And my biggest question is where are they finding these things? How are they finding out about these tokens? Like I'm I'm genuinely curious and and I I think some of them have made money. I don't I think the majority probably have not but I think some of them have made good money. I would not listen. You know, there's a lot of research I wish I could do. Joshua, there's a lot of time I wish I had.

>> By the way, as an Uber or Lift driver has fixed, drop it in the drop it in the chat. >> Dude, this is what I'm talking about, man. If you're out there 8 hours a day, 10 hours a day, 7 days a week, driving around, mainly people who do not want to talk to you, right? What else do you got time to? You're sitting in traffic. You're in New York or something. You're sitting in traffic half the time where you could definitely just look at some other iPad or screen, look at charts or whatever. you have tons of time to listen to Milk Road uh and all our other colleagues in the industry, go and listen to Moonshots or TBPN and cover all this other stuff. You know, you have tons of time. I wish I had eight hours to sit in the car to listen to podcast.

I feel like I'd be a much better trader. Um but it's funny that despite that, they still end up with things like XRP. That's what's kind of funny. So then maybe that tells you something about XRP as well, that there's there's a lot more value there than than we realize. Uh at least for the the the more retail side, I guess you would call it. Okay, we've gone down a a very strange rabbit hole. >> Well, I do think one thing to add though, you asked about, you know, the state of fundraising broadly and and and capital. One thing that I think people are not talking about and I was tweeting about this and people were giving me about this a couple of months ago is, you know, I made a tweet that crypto venture funds are raising a ton of money and no one is talking about it. And

everyone was like, you're wrong, the market's dead, whatever. And then A6Z and HAN came out and there's way more capital than that that's flowing into the venture space in crypto. I don't like to give away people's, you know, like to me if if if if you raise $300 million, that's your news to share. It's not my news to share. So I don't want to, you know, share the news for anybody in particular. But there are a lot more $250 million funds, $300 million, $350 million, $400 million crypto funds that have raised capital recently. You know, the way the way to think about it is there were a zillion crypto funds that were launched in the last cycle.

>> You know, the ones that performed poorly are not going to raise again, but the ones that performed well are. And you know, there are a lot of funds that were in the 25 to $50 million range that are now sized up and they're in, you know, the 75 to $150 million range. You know, there are funds that maybe were 400 million. Maybe they're not 400 million again, but maybe their their fund this time is 300 or 350. You know, there there one thing that's very difficult about being a crypto venture investor is where do you put the money to work, right? A lot of people are like, "Oh, you'd think you want to raise as much money as possible, but but but LG, if if you ra if you had a billion dollars right now and you had to invest in crypto venture deals, you'd struggle to

figure out where do you put a billion dollars to work?" And so, I think some of the funds are going to be a bit smaller than they were before. But also a lot of the investor mandates we did I did I I did you know say there's not that much new capital coming in but a lot of the VC funds do have the ability to deploy into liquid crypto and so they can take maybe 20% of their you know the book and buy tokens for the long term and hold them and stuff like that and so there is a lot more capital coming into the space. I think the capital is is is much more selective in that they're looking for funds that perform really well, had a really good fund one and fund two and they're looking to deploy into a fund three, fund four or whatever

it is. And also that capital that's being deployed is also going to be more selective. I think you know obviously people are looking for later stage, they're looking for growth, they're looking for success. And I think now whereas there were a lot of funds that were like I'm 100% tokens only. A lot of that is now people are it seems like a lot of people are agnostic. They don't care if it's token or equity. They're just looking for good investment opportunities, right? And and and it also creates the right kind of long-term, I think, alignment between investors and uh and and founders as well. >> Trillions of dollars in real world assets are stuck offchain. Real estate, commodities, private credit, all locked behind outdated systems that weren't built for a global 24/7 economy. The fix, bring those assets onchain. Problem is, most blockchains weren't designed

for that either. Feros is. It's a layer 1 purpose-built for reali, a real world financial infrastructure that lets assets be tokenized, verified, and traded at institutional scale. We're talking parallel execution for serious throughput, compliance baked in from day one, and infrastructure that actually connects onchain and off-chain systems. They've got a $10 million incubator backing builders who want to make real a reality. Join the Atlantic Ocean test net and start building at milkroad.com/faros network. Do you think that people that are listeners of the show and me included, people that are not in venture like you, let's say, um, and don't, you know, are not VCs or not accredited investors and all that kind of stuff, but are still

keen to get a piece of the private market. Do you think it's a good idea at this point in time in this point in the timeline of crypto where we know things are going to go up long term, there's a lot coming, but we don't know. We're still looking for where that value is going to aggregate. Is it should we be looking at some of these kind of private market platforms like Echo and all the other ones that are like that where it's like you have some of these companies coming into crypto raising some form of like a public round and these kind of private groups where more I guess kind of like average investors like us can actually get access to these in in exchange for probably a future token or something like that. Is that is that a good place for us to maybe look for some

of these types of companies? Is it worth the work? act. So my view on that is are they raising through the platform solely because they were unable to raise from VCs because if they're only raising from the platform because they were unable to raise money otherwise then definitely not. If they're raising from one of these public crowdfunding platforms because there is a reason that they want to do that. It could be about building a community of token holders. It could be about getting users of their platform. Like you need to kind of look at these things and and try to get a gauge of like are they doing it because they had no other option or are they doing it because there's a strategic reason that they're doing it. If they're doing it because there's a strategic strategic reason that they're doing it, I think

it's definitely worth considering. And by the way, if we look at, you know, you know, crypto in the past, you know, you look, I think Coin List is an amazing example of a platform. You know, Salana, I think, had an ICO on Coin List. You know, there were so many different, you know, tokens that launched and and listed through Coin List. Uh, Flow, which obviously is not worth much anymore, but it was a >> they sold for 10 cents. That was 10 cents, you know, and that that that peaked at like 10 bucks. So, yeah. >> Yeah. I mean, there were some mega returns. So, I think there's definitely opportunity. It just got to be for the right reason.

>> Got it. Okay. Okay. I mean, definitely worth maybe definitely worth. There's also a lot of stuff that's out there now that's enabling retail investors to get exposure to private companies. And my biggest >> pet peeve or thing is making sure that you're not stuck in layered SPVS. So for anyone who doesn't know, an SPV is a special purpose vehicle. It's basically an entity that goes out and raises investor capital to invest in something. So for example, a VC, let's say a VC wanted to do an $100 million round. like they want to invest $100 million, but they only have the ability to invest $20 million out of their fund. They might go raise an SPV from their existing shareholders to get an additional $80 million to actually do the $und00

million round. So, a lot of the times when you see somebody invest in round, sometimes it could be them combined with an SPV, but there's different reasons to to do SPVS, but SPVS add fees. And a lot of the public companies or the a lot of the private companies that are out there, sometimes you're in layered SPVS. So imagine you want to invest in Anthropic, which I think, you know, has banned, you know, said basically, you know, absolutely not. But let's take SpaceX. You want to invest in SpaceX. You want to know how many fees you're paying when you're investing in SpaceX. If you're one SPV away, maybe it's a a 2% management fee and 20% performance fee. If you're two SPVS away, it might be another 2% management fee, 20% performance fee. on top of the 2% magic

fee, 20% performance fee which then holds SpaceX. It might be I've seen third and fourth layered SPVS where you end up actually owning 50% of what you thought you own and you end up paying 70% of the upside and fees. And so it's also very important to understand the structure and how you're actually like what the exposure to the underlying, you know, product actually is. >> Oh man, that does not sound fun, man. I'm glad I'm not an adventure. This is I'm happy to be here on a podcast. That sounds like that sounds like a lot of stuff to navigate uh for your investments.

>> It's it's well venture investors ideally are not in layered SPVS, but a lot of products that we've seen it made available to retail >> are layered. Oh, I see. I see. I see. So something like an Echo, and I'm not saying that Echo does this, they would be >> No, no, no. It would be like a token, but a lot of the private company platforms that allow you to invest in private companies have layered fees some layer fee. Yeah, I guess. Okay. >> An obscene amount of layered fees behind the scenes. >> Okay. Okay. Okay. Well, we're going to stay away from that. Let's Okay. For everybody who's listening, just do your own research if you want to get into it.

We're we're going to come back to just just crypto tokens on the market to wrap this up. Joshua, just something that's a little bit more accessible, something that people can just go into their their Coinbase or whatever and just buy today. Um, is uh is there anything Joshua kind of like in in uh in the conversations you've been having the last 5 or 6 months and the trends you've seen kind of change or permutate or whatever, are there any particular areas that you um and I'm talking like I'm talking like altcoins, cocoins, whatever you want to call them. Is there anything that maybe has some of your personal thesis has changed? like if you become more or less bullish on something like an Ethereum or Solana or Hyperliquid or any other kind of of the the popular kind of protocols and chains that we hear about especially as a lot of this

adoption starts to kind of take place and take a bit of shape. >> Yeah, I think the question is where does this adoption happen? >> What chains do they use? How do they engage with those chains? And how do those acrew how does that acrude value to token holders >> uh and your chains or applications or anything else? And so, you know, I think some of the really interesting things like seeing, I believe it was Apollo partnered with Morpho, uh, seeing BlackRock partner with Uniswap. I think those are the types of announcements where they're really they're investing in these applications. They're using those applications which are extraordinarily interesting to me when like these, you know, large asset managers are tokenizing things, but it's more than just like, hey, I want to get somebody to buy the product. It's like I'm really engaging in this ecosystem

and like building in it. So I think I think anything in that realm is really interesting and I think there have been a few announcements. I gave a couple of examples. I think obviously Canton fits fits that you know amazingly with the the amount of institutions that are starting to engage and and use the network and you can see a lot of this public you know you can go look at the Canton governance forums and a lot of the stuff that haven't even been announced yet. You know like you know teams getting super validators or validators or anything else. a lot of that is is public information there and and I think it's teams that are designing tokconomics to to take advantage of those things and so I think ultimately the market is clearly going very institutional and so it's who is aligned and who is ready for those

institutions but that doesn't mean by the way like pump fund is still printing money there's still retail things in the space that are printing money but I think it's it's it's looking at either >> folks that are aligning well with institutions that aren't just like you know there have been so many announcements of just like you somebody's launching a tokenized money market fund and the reason they might be doing it is because like a foundation behind the scenes is is like I'll buy $100 million worth of your money market fund if you launch it on my chain and that's the reason that it's happening. I think looking for these like very deep real you know partnerships that feel a lot more than surface level is important. I think looking at you know protocols that are starting to grow you know generate revenue and I think the

number one most important thing is non-incentivized revenue. So much of crypto is airdrop farming and points farming and stuff like that. And so, you know, when the, you know, when when you run out of Chuck-E-Cheese coins and you got to go up and and buy buy more ones because you don't have any free ones left, >> are you still going to play the play the game? And I think that's the question is what games are people willing to buy the >> And then the third one is anything with real retail traction. Man, I you know, I've heard a lot of analogies for like the crypto trenches of the DJ and stuff, but Chuck-e-Cheese coins is a good one, man. That's a good throwback.

>> That's effectively what most of these things are, right? I mean, they're tokens. >> People love Chuck-E-Cheese coins, though, man. I would I would kill to be back eight years old and be stuck in a Chuck-e-Cheese with infinite tokens. >> Well, growing up, you went and you you showed them a good report card. You got cheese to be awesome. It's the same thing. It's like instead of showing them a report card, you're showing them all the farming that you did and then you get their >> Yeah. And they they gave you like ambiguous rules for the farming you were supposed to do. Uh and then see if you were able to follow like that the you know read the properly before people wanted to buy your Chuck-e-Cheese tokens and now that's ended. The best Chuck-E-Cheese story though is during co I don't know if you remember seeing this

they were selling pizza on Uber Eats as like this fancy pizza place and it turned out it was Chucky. It was like you know >> Oh no the best. It was like, you know, something rat pizza and it was really like Chuck-E-Cheese, which is uh >> Listen, I was gonna throw this out there, man. As somebody with young kids, I wish Chuck-E-Cheese was still a thing in like every town. And I've said, I don't know why I talk about this on the show, but I wish McDonald's still had a play place. Like, I'm like, I have I need to bring them to a place where I can give them pizza and they can play games. And like, this doesn't exist anymore. At least not in the prominent way that it used to. So, I'm >> Chuck-E-Cheese's.

>> What's that? >> We got to tokenize Chuck-E-Cheese. >> We're to Here's how we're going to bring back Chuck-E-Cheese. We're going to tokenize them. I heard that people are bringing back Pizza Huts like the original Pizza Hut buildings are some of them are being converted back to the original Pizza Hut layout. So that's good. Maybe, you know, maybe there is a lot of traction in the 80s9s trends. Uh and maybe there's there's room for them on chain, but that's that's that's something we'll save for for a startup pitch for anybody who has that idea and wants to run with it. Uh sounds like maybe Joshua would be open to it. >> Devices and tokenized Chuck-E-Cheese are the >> That's awesome, Joshua. Pleasure to talk to you, man, as always. Uh thank you for all the great insight. Uh, and I'm sure we'll see you again this year, man.

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