Why Santi Bought SOL | Roundup

Transcript

[Music] Flora is the easiest way to send swap collect and purchase digital Goods on the cello blockchain download the app and start exploring daps like Ari Gallery today at valoraapp.com forward slash Empire what is this banter that you speak of what is Banter no fluff and Empire no we don't like to talk about fluff there's a lot going on how you doing man you know how's the week treating you feeling great you know I'm on a runner's high I told you I was going to run last uh Roundup so I went to London ran that marathon and uh hey I had a good time London's great Marathon so yeah I heard it I heard you uh yeah you broke down

and of course all the stuff is going on uh 242 hours 47 minutes and 18 seconds sub seven huh sub seven minute average nicely done sir uh six six twenty per mile or 347 uh 357 per kilometer so it's good not that we're tracking this yeah I'd rather track my I'd rather track my running stats more so than look at TA on a crypto chart you know or like all these uh you know because that's not reliable or are alerts in crypto as we've seen this week so anyways I'd rather just stick to you know looking at charts of my running performance which also sucks really nice preach so do you have a trainer what goes on with these

marathons is this an annual every year thing multiple marathons a year uh I try to do at least one a year yeah nice well we're back into the markets it was kind of a weird weird week for the markets huh you basically had um yesterday you had what's their name I think it's Arcam or something like tagged a wallet and then it was DB news tweeted something out um and like it was kind of just a bit of Chaos in the markets with this like flash crash you had this like open interest got wiped it was I think it was that mount gox wallets were selling and um so if you looked at the if you look at the charts from yesterday Bitcoin started the day around 27k pumped to 30

fell back to the low and then the the daily candle finished right in the middle like 28.5 so you had like a 10 bitcoin price swing pretty crazy price action can't remember a day like that in a while um what do you make the markets this week uh it's probably one of the strangest trading days like referencing specifically yesterday where you had you woke up during the day and you know the market was rallying Bitcoin was up a ton and everything else kind of followed people of course were like hey there's you know every time there's a bank run specifically First Republic was down like 22 pre-market and then people were correlating that to like the rise of

Bitcoin it's like this is the case of you know why Bitcoin why crypto you know ensue narrative you close your laptop you came back six hours later and you're like totally reversed um that rally of course then turns out that you know as you reference there was like this sort of fake alert I think I think the biggest takeaway is it feels like crypto like in 2016. I think this is a more of a a a a side effect of the low liquidity in the market um just these these dramatic price movements I think uh my estimation and all the accounts that I followed are way more sophisticated that are looking at like liquidity across kind of exchanges

and on chain is that uh it takes far less liquidity to move prices including Bitcoin right and I think that's just a testament of uh liquidity has really dried up uh over the last six months and so you do see greater volatility um you know like of course people could say there is volatility in the traditional markets increasingly so and I think that's more of a Testament of you know this sort of Wall Street bets movement and you know people are really you know click a button can trade and a lot of it is just retail I also saw a chart that says look the average holding for for stocks has gone down from like seven years in the 60s to

like basically a couple of months or weeks and so I think it's just a kind of our generation is just more trigger happy to trade a lot uh and crypto obviously it's just on steroids right but specifically on this day I think it's just highlighting the lack of uh relatively low liquidity in the market yeah so what what happened is that our Arkham is a is it this like new data platform in crypto they alerted users that mount gox in these government controlled crypto funds were both on the move they later said this was a bug fix deployed um that that previously was causing alerts to be sent uh sent by accident to like the small subset of users what was also interesting was the um the amount of

open interest that was just wiped off the wiped off the table so within crypto uh the global cryptos future Market uh wiped off 3.5 billion in open interest and then actually if you I was looking at the global the global metrics for this outside of just crypto it was uh the uh Global open interest dumped from 22 billion to almost 18 billion um that seems low though I was using Global crypto open interest yeah um so a bunch of I mean yeah a bunch of Futures Traders got a yeah took off their interest yeah contracts yeah it's a crab market I feel like anything between 20 and 30k range is just going to be these weird days so

like if again none of this is a recommendation of any sorts but you know I would cautiously advise against using leverage uh given market conditions you know it's just you see days like today and and uh or yesterday and you know it's not uh I mean look using leveraging crypto has always been a recipe for blowing up at some point uh but particularly in these conditions is just uh you know uh it's It's Tricky um yeah but anyways uh talking about today I think you also saw a pretty sharp uh rally on low um you know obviously you could talk about a lot of folks are still sitting on stable coins right I haven't really

fully deployed uh they went to you know and so I think they're using these dips as opportunities to to cost everything they were their way in so you know maybe that's a good segue into kind of positive news or or something else but I mean that's really kind of everything that I take from it I don't know if there's anything else that you have no I mean before getting into the positive news let's talk about one more thing which is uh First Republic you mentioned it briefly But First Republic reported on Monday that it's total deposits had fallen by 41 in the first quarter stock fell to to record lows shares plunged I think by around 50 on Tuesday fell as much as 35 on Wednesday new low of uh let's see what it's trading at today last time I looked it was like 480. now it's back up to 650. market cap

of a little over a billion uh stock was halted a couple of different times um they had tried to find a kind of a savior they I think we're talking to the government about bailing them out they're talking to a couple other Banks about bailing them out and uh what what some folks reported um last night was that the government is not going to bail them out the fed the FED will not be stepping in it seems like so now it's kind of at least not that there's a very interesting uh piece of language there that said not currently uh which was a lot of people reading into that saying well maybe they just will wait for the situation to really really deteriorate although arguably as you said how much more can it

deteriorate right uh yeah that's sort of the question yeah I mean and they also already had two multi-billion dollar bailouts right a couple weeks ago so um I think option one is basically you stay the course if you're if you're first Republic you stay the course you maybe wait for their secure the Securities and the loans mature that's a long road they do have a little bit of liquidity that could could help them survive um and that I mean that's kind of a dangerous game option two is you try to appeal to either the big Banks or to private Equity so you could try to sell some of the loans and securities at the same cost they bought them for in exchange the buyer comes in they probably get some some sort of preferred Equity interest in in First Republic probably a pretty tough sale because

those assets are are selling for well above the the market rate um uh I think first Republic's Bonds mature in like 2045 or 2046 and they're trading at 43 cents on the dollar right now so I think if you're a bank if you're like JP Morgan looking at this deal you're kind of between a rock and a hard place right you're if First Republic fails the FDIC is likely going to want to avoid systematic risk offers Insurance to all depositors um you probably even those without insurance right and then that costs a pretty penny to like the banking system probably has to get funded by large Banks and that ends up costing them tens of billions of dollars so even

if they don't go forward with an acquisition if first Republicans are failing FDIC system is probably gonna in one way or another end up costing those Banks a lot of money um so that's yeah yeah we'll see I mean is this a systemically important Bank unclear certainly it's uh my estimation to what is it the 14th largest bank um you're right I mean in in March roughly a little over a month ago March 16th uh a Consortium Banks including JPMorgan Bank of America stepped in and Infused like 30 billion um naturally those probably are the folks that are now looking at as you say kind

of picking up the depositor base um the the question of course then is like how bad will it get well like If the Fed really well like you know if they if they let it die quote unquote and don't step in like they did with Lehman and others in the global financial crisis then what happens look they get bailed out by Bank they basically buy it for pennies in the dollar as you say and like pick up all those depositors and like uh and are willing to absorb any withdrawals and like they they take all the kind of the assets and liabilities and then they hold to maturity because they can because they have a much stronger balance sheet if you will most likely but the the thing that I am thinking about is like the game theory

of like how long do you wait you know obviously there's a bit of a you wait as long as possible if you're a bank you wait as long as possible but right before it goes into receivership because I said there's two options there's really three options the the third option is what happened to Silicon Valley Bank on March 10th when the California Department of Financial Protection took possession of and closed forced closed down svb um and then March 12th when signature bank was closed by the New York State Department of uh of financial services that the NYS DF right that's like I think the worst case here is if it goes into receivership which just means that like a regulatory Authority or government agency takes control of the bank takes control the assets usually

the goal there is liquidate you liquidate the bank's assets to repay the creditors so I think if you're a bank or a private Equity Firm you essentially and you're trying to optimize for the deal you're basically trying to take First Republic to the brink of receivership but not let it go into receivership that's that's my understanding of this yeah I think you're right the only question is like well what about other Banks and the potential cascading effects of people re like there is a lot of jitterness fear in the market if this really goes to that level I wonder if it's going to trigger a whole cascading effect of backgrounds on other Banks and then of course the thing that most

people are now looking at is commercial real estate and banks that have a big exposure to commercial real estate and you know and so yeah uh if you're the FED of your J if you're Jamie Diamond I understand like look not every bank is Silicon Valley Bank right um there's some great charts going around in terms of the exposure they have the commercial real estate to some concentration in terms of Industry region right uh a lot of the bigger Banks back in America JP Morgan I mean they have a very Diversified portfolio their exposure to commercial real estate is fairly lower uh relative to other Banks um or there's no particular exposure to Any Given industry right so look all those things matter but I do think that by and large like

I think I do worry about the second order effects of really letting it uh pushing it farther and farther to that point of being very close to being taken into a receivership and someone's stripping in and buying it like a JP Morgan yeah in terms of just general confidence in the market and depositors so Bitcoin I'm looking at the chart right now Bitcoin pumped 10 basically on news that First Republic of struggling and it was it started the week around 27 pumped all the way up to 29 what is this number 29.9 we almost touched 30. so I thought Nick Carter had the best take on this which is I tweeted out he said the fact that Bitcoin almost mechanically rallies on news of bank

failures is one of the most validating phenomena I've experienced in a decade of doing this he said to be clear I don't want Banks to be to fail and I'm dismayed at how fed policy has zombified the sector which will surely slow growth but having Bitcoin act in this manner's remarkable nonetheless then he said which I think is a good take also I suspect the reason Bitcoin behaves this way is not because of some long Bitcoin short the banker narrative but because each bank failure drives the FED closer and closer to the liquidity bazooka driving down the denominator in bit in BTC USD I think that's a good thing yeah I think that's right you know it all really comes down to liquidity you know and as soon as uh as soon as the FED

really dried up liquidity then you saw a huge correction in markets including Crypt though and so yeah I mean I think a lot of folks are just uh It's Tricky right because before before that there was a really uh two headline inflation numbers one in the UK one in Japan that was really sticky and fairly high in the UK I think was 10 Japan were also recorded like record inflation and so those those two things I think the market really kind of responded to that and um I think it was like last Friday and Thursday and so this sort of sticky inflation narrative is something that I think folks will continue to hear um and but of course specifically the US is sort of Bank uh failure situation really um you know and and the short of it is

as if you keep raising rates then that poses a huge problem to folks like Silicon Valley Bank that had a huge portfolio of bonds or just for every increase you know you basically like if you need to mark them down if you have like liquidity crunch then it becomes very problematic where it creates a shortfall um in a mismatch between assets and liabilities so yeah if they raised to four and a half five even yeah there will be more pain in the banks and and more backgrounds and so I think they're probably not going to let that happen right agreed one of the most interesting things to look for in the next Market I think is going to be the correlation between the spy and BTC because I think of you a lot of remember when Paul Tudor Jones was like

bitcoin's the fastest horse in the race I think that basically unlocked a lot of hedge funds to start maybe not allocating to bitcoin but at least looking at Bitcoin and so before that they probably didn't have these complex correlation models and after that they probably I think a lot of them basically set up their correlation models um from the 2020 to 2022 era when Bitcoin and and the s p were actually highly correlated and I think one of the interesting things that we should all look for is like if there's decoration between Bitcoin and the s p decoration ends up creating long-term flows so that's um that's probably something to look for here yeah

hello well is it I mean correlation is always a funny thing right because people use it's very sensitive to the particular date that you're using in the time period well that's what I'm saying I think we're using I think a lot of asset allocators use that 2020 to 2022. you go even further I think people are just using the correlation since like Inception and the problem was you never really had a global financial crisis you never had a liquidity crunch you at record low interest rates like everything was pumping guys it's not an uncorrelated asset clause like I never bought that argument I I still don't buy it going forward I I think simplistically and I don't want to over intellectualize things as I think if crypto rallies initially will be just purely because there's way more

liquidity in the market you think everything pumps and Bitcoin further out on the risk Spectrum so Bitcoin yes absolutely yeah yeah that like I don't want to it's a good level as much as I'm a Believer we talk about like we bring in great Founders we talk about the promise of the technology but another part of me just is acutely aware that it's it's really high on the risk spectrum and naturally has a way higher beta so yeah you get more liquidity in the market it's going to flow into this high risk asset then it's gonna have exhibit a higher beta than the Spy that's it yeah agreed um all right next topic I have a quick interlude though one is um 1000x podcast is back you're probably listening to this on a Friday or Saturday yeah Bobby

and Jonah brought back thousand X podcast after a couple month delay because of some compliance issues so uh that was episode two of thousand X it goes live on the Empire feed so if you're listening to this you hopefully saw it yesterday but if you didn't listen you can uh you can listen a thousand X is just a show by Traders for Traders um really good show so go listen to that the second is um we block works is hiring we have a bunch of open roles but one role that might be interesting to listeners of this is a director of podcast role so we have seven shows at podcasts at uh at blockworks I want to say now we'll probably end the year around 10 shows in the network we're launching a couple more in Q2 and Q3

um this is we are hiring someone to oversee the entire network so if you are really deep in the weeds with crypto you like macro a little bit um you have ideas on like how to grow content and like ideas on how to make content like Empire even better how to grow shows uh you're comfortable working with Talent like Santi real pain in the ass tough job so yeah we're hiring this role it's a director podcast so if you have experience with podcasts or content and that sounds interesting to you just yeah do you have me on Twitter yeah I think it's one of the greatest roles because I think the challenge for crypto's always been how do we keep people engaged I think we're trying to do here is just create pure edu as much as unbiased educational

content for people to really learn about this space but growing that audience and acquiring that and keeping engagement high is is is a challenge a good one I think uh how we present crypto to mass audience and really keep them engaged and it's been really rewarding like you and I have been both in situations where we're in a random place and it's not your crypto native it's like a pilot in an airplane and it's sort of like some random other person in the people listening so they're interested so all we got to do is just I think that's really the challenge and the opportunity for someone to come into this role and really help us with that yep good Flora is the ultimate wallet for exploring the cello ecosystem easily access over 50 crypto assets and 30 different dapps for swapping sending and growing your crypto

all from your mobile phone if you want to see real world use cases for crypto velora's dapps page is the easiest way to access a growing list of the latest refi and defy applications including nft marketplaces like the re gallery apps like Ari Gallery which is available for Android users and through velora's web browser are merging web 3 with traditional Commerce to give local artists around the world the power to transform their art into nfts and digital Collectibles discover artists browse Collections and use your velora wallet to Min or purchase nfts for real physical products download the app and start exploring today it's valoraft.com

forward slash Empire v-a-l-o-r-a app.com forward slash Empire we're gonna talk about next don't talk about mad Lads the mad ladsman we can talk about that we can also talk about the episode we just recorded yesterday oh yeah let's do that let's do that for like we had a great episode on this question of can we decentralize sequencers because it keeps coming up right like scalability as an overarching topic is something that we're going to continue to cover here because it's important right it's it's one of those things that uh you know you have optimism and arbitrum and and coinbase bass and ZK some zincy implementation it's like it's going to be it's probably one of the most important phenomenon happening in crypto right now

but the question uh and you know a number of people raised this question is the problem with a lot of l2s and the architecture between theorem L1 L2 is is that um you have the sequencer and and it's centralized at the moment and so that has the question is can you actually get to a point where it's decentralized with a compromising performance and you know we all kind of want to progressively decentralize these systems so we brought on maybe you know you can kind of talk about who we brought on and how the episode went yeah we brought on uh Ben who's the CEO of so there are three there are three companies that are building out decentralized sequencer layers there's espresso Astra and radius and we brought on the CEOs of espresso

and Austria Ben is the CEO of espresso espresso is working on actually a privacy L1 and ran into a bunch of issues around I think decentralizing sequencers um also I I I'm pretty sure privacy just a business interesting to users as they originally thought it was going to be and then Josh is um is building Astra which is approaching approaching the same problem but attacking it from slightly different angle uh they're both working on decentralizing sequencers and attacking it from kind of different angles so um if you think about like what a what a blockchain does you have like the data available you have to make the data available that's the da layer then you have to like order everything and then you have to execute the transactions and

what they're doing with the sequencers is like basically trying if you have a centralized sequencer that second step of like ordering everything um again this is my understanding after after getting the breakdown from Josh and Ben is like the group that orders those transactions right now oftentimes is just one one party and they're working to make that many many many different parties which is decentralizing the sequencer my um my take is that were still really early but I'm happy that someone is like focusing specifically on this issue because it seems like a huge issue I originally I the the why didn't fully make sense to me so like the why of the I get the why for a user right um there's a there's a bunch of risks of

having like a of having one centralized sequencer there's like censorship risks there's reordering there's the fact that it could go down there's monopolistic Behavior those are like the risks of a centralized sequencer the I didn't fully understand the like why of Y and L to so right now like if you have a centralized sequencer that's a Honeypot for Mev basically and you can make a bunch of money why would an L2 want to decentralize the sequencer like that answer I think wasn't as tight as it as it could have been um but overall I thought it was a really good episode what'd you think yeah I agree with you um all everything you said is super important and I agree with I did ask him this question of like what's the worst that can happen for a user at the moment if they're

interacting with optimism and arbitrum and you know band gave a more kind of nuanced answer but it was not like super clear um I do think that you know I I I I guess I also asked him like why do you think a team like optimism and arbitrum haven't done this already um because of course some people raise this question of it if something is centralized then you know you can have some regulatory issues with that right if there's like one particular party that you know it is centralized right the sequencer then but that you know you'd want to decentralize that um when we've had the guys of arbitrary on the Pod talking about this right um and fundamentally I think that

you know I guess I'll take a different take which is users the question is will users really appreciate like the fact that it's centralized today uh because what are the incentives for arbitrum to fork or what are the incentives for arbitrum to really be super extractive on Mev right uh the sequencer itself right because it will degrade the user experience like the incentive is not really there for them to like do certain highly monopolistic stuff that degrades the user experience because users can always go to uh alternative L2 um the on the other end of the spectrum if you decentralize the sequencer but the tech is really not there or it degrades its performance users will probably notice that and and be perhaps

more critical of that and then go to maybe another L2 you see what I mean like if for instance 1l2 decides to decentralize the sequencer and another one does not and all of a sudden fees are much higher in that other system or transactions are slower to process I wonder what happens there from a user perspective right I think his history blockchain history tells us that they will really focus on its higher fees and slower transactions I'm going to go to another environment right and that's just a state of like user experience and user behavior and so yeah I'll be really interesting it does feel early to me I at the end of the podcast I asked them hey like are we a year out two years out like when are we

actually gonna see these systems like the decentralized sequencer go live and they both seem to think that it was going to happen soon around later like within six months they said I believe like they referenced ECC which is actually coming up this summer and so um you know be fairly interesting it is no different like decentralizing a sequencer and as they would say is no different than like kind of bootstrapping your own L1 right it also reminds me a lot of the history of Lido like bootstrapping like a a decentralized validator set right so it's more of an economic challenge not a technical challenge as they said but you know we'll be interesting to see how both teams kind of um develop and work their way towards actually getting this live

what did you think about it in light of two Char's comment from the multi-coin podcast about that yeah once I think you said that once L2 starts to decentralize you have to add consensus for agreement and at that point why not just use an L1 yeah that's sort of like the biggest question in my mind right and I don't think I have a it's one of those things you're really not going to know until um they they go live um I don't know really because because I mean you you both you heard you heard both of them say decentralizing a sequencer is no different than like bootstrapping around

L1 which kind of coincides with the two shards saying the the Nuance of course is like on the performance side of things and the execution side of things um and that I'm not uh I'm not sure on to be honest I think here's I think here's the counter argument to two stars take is that adding a consensus adding consensus into Char's definition of this adding a consensus layer make now makes you an L1 basically but in reality adding a consensus doesn't turn you into an L1 right an ll1 consensus is responsible for ordering uh censorship resistance uh providing data

availability and and uh validity guarantees to the light nodes the the L2 consensus does not do any of that so I think consensus on L1 versus L2 like does different things that that's my that's the middle of the point take on that yeah yeah there is still some there is still some consensus but I guess what you're saying is the intensity or the um of consensus is not the same for an L1 than an L2 even in a state where you decentralize a sequencer the level of effort and the the consensus that is required is not the same as the consensus is required for now one therefore the argument does not necessarily hold two shares argument we are getting beyond my ability to argue

with this stuff but my understanding is that L1 consensus is responsible for ordering for censorship resistance and for providing data availability and validity guarantees to the light nodes and an l2's consensus does not does not do any of that so yeah yeah it would actually I wish we I wish I had done my research on shared sequencers before recording the multi-coin episode so that we could have had that that kind of conversation with Tushar so I actually think it'd be really interesting to there's like this panel that I want to put together maybe a permissionless which is touchar maybe like Stephen from arbitrum and then like Ben or Josh I think that's a really interesting

conversation yeah yeah I agree that'd be nice yeah all right that episode comes out on Tuesday give it a listen folks yep speaking of shared sequencers Solana mad lads mad loud minted mad lad's minted and it was really interesting so I mean big shout out to uh to Tristan and um who's the other guy uh Armani uh on Mad Lads they minted it like seven Solana and the floor is now 83 Solana I think it is like objectively the most successful mint in the in the last year or two um so like just hats off there I think

there's a more interesting thing though which is there's the Solana worked very very well through this whole mint I mean the the backpack app got got DDOS attacked um so like they they kind of broke on day one or day two but like Solana worked really really well through all of this whereas eth gets hammered every time on these big mints and I think there's a conversation to be had around State compression and yeah and just and if like nft compression and um I think if you actually look at Solana with compression it's a couple of orders of magnitude cheaper than its closest peers and like let me I think it was Chris bernitski did these numbers

it's it cost 200 to Mint and deliver nfts to 10 million users on Solana using State compression if you think about like the evolution of nfts nfts in 2021 were these like expensive and exclusive things and if you believe that in the coming years they're going to become ubiquitous and driving experimentee and experimentation at the bleeding edge of of kind of like audience meets creation that connection that happens there and that nfts will sit in the middle of that I don't know it's a lot of performed pretty well here with with mad Lads so yeah yeah it'll be really interesting obviously it also was uh most recently who called the death of nfts uh and so generally speaking I I feel like

um it's very interesting to see a success of an nft project in Solana um we'll see how the floor holds and and the retention piece of it um you know a lot of these nft projects have a very short half-life right just getting all the hype and look there's renewed excitement and the Solana community's gone through a lot and you know I guess it's a breath of fresh air for a lot of folks right that it faded Solana and or you know and so um yeah it's it's great to see I generally think that success of nft of nfts in any ecosystem is positive because I gotta think that they on board incremental like users into the space yeah it's just a great funnel so so yeah did you invest in either magic Eden or tensor

no did you well um no I didn't I didn't but the reason I bring it up is because so those for those who aren't in nft Solana nft land those are the two leading Marketplace nft marketplaces magic Eden team of about a hundred people they've raised nine figures in VC funding uh tensor is two devs um two two devs and I think New York actually uh one of them was at two Sigma was on the research side at two Sigma the other one I don't know where they came from but I think trading trading world just two really really smart developers and I actually I mean so tensor just flipped magic Eden for like nft volume on Solana and

love to see it got two developers beating out a team of 100 who've raised over 100 million in Venture funding so and and they haven't launched a token so nicely done tensor folks there you go yeah it's like a blur openc kind of thing I mean blur now employs a bit more people but for a while it was just a very leaning mean team yeah so shout out yeah shout out to tensor um what would make you change your mind on Solana Santi I don't understand why people think I'm like bearish folks I had I had exposure to Solana first of all I invested in very early on both through being an LP and multi-coin

so I had exposure to that second uh at parify right we bought at uh you know as part of a Consortium like other funds invested as well um I've had close Communications Ben and totally I've been in I've been a break point a number of times um like I'm not bearish on slime I'm critical of like any system no no I gotta say like even I got it wrong too I mean I got like a lot of the Solana Community saying like hey there's no reorg here like you should really understand how it works and look I I was wrong right and so I would I would agree that I'm not as close to the salon ecosystem as I am to the ethereum by virtue of my portfolio

companies a lot of them are in ethereum um but I made a number of Investments probably between 15 to 20 of my portfolio is has exposure or is working deploying in Solana so yeah like it matters and but I'm not like as as uh close to it that's just the reality of things um and I've set a time time again I was not not in this podcast it was in I was being interviewed in other pockets and I said we were talking about like what defines communities which I've always found to be a very fluffy construct and term which people throw around lightly but I do think that um Solana has always struck me as you've

already defined like a number of ecosystems I think Salon is far more different than perhaps other evm um L ones not only from an architecture perspective but also from a just the the DNA of Solana if I were to summarize it as like very resilient we've had on a toy here talk about like how they've gotten a lot of from the ethereum community and others in in crypto and they've actually used that to re-architect and change some Dynamics in including for instance how they determine fees which is not just one flat fee it's just based on depending it they've like re-architected the fee model and so on which I think was fascinating and I think is one of the

more important things that Solana has it's like in reality it's like uber right you have surge pricing in a particular geography you have surge pricing in New York that doesn't affect search pricing in Bangalore folks yeah shouldn't and so like those kind of their willingness to be very malleable and actually adapt is is very interesting I think they're going through a pretty important Moment Like ethereum did after the Dow hack um that will really Define their community and really Harden them and they'll survive like I um in private conversations I just had a price in mind and after it hit like it was it was goodbye in my mind in my book um like stuff 10.

um and but more importantly I think the the other piece that I want to talk about is the Solana phone which a lot of people are now getting and that type of thinking and out of out of the box thinking is what you see in companies like apple that just created like a new category like an iPad like of course they're not creating a necessary like it's an Android phone but when you think about the friction points in crypto onboarding like having a phone like that is the type of thinking that can get can go can get very like the upside of that experiment is very high and I think that is perhaps one of the more interesting things in a highlight of the team behind Solana and their willingness to like experiment with these kind of things

so yeah long answer like I'm not an expert in Solana no by any stretch of them I'm like acutely aware of that but I pay attention to that and it's the second ecosystem that I'm mostly most excited in terms of where I put my dollars to work does that make sense did I strike a Nerf there no I mean I I want to just clarify it because sometimes just people think that I I am of course biased it would be dumb for me to like I just I just do like where I put my money to work is where I'm most invested so obviously Salon is not like it's like the multitone guys right look at the world through Solana architecture and

they think that's the greatest and greatest I just sort of like I've never been a maximalist like I'm aware that I think we're perhaps more early than not and any sort of rigidity in your thinking is gonna be like is really going to cost you and more so how things get implemented now where you know ideas spread much faster and these projects and experiments get a lot of traction and dive much faster and so the half-life of that is so you can't really just is there a version here and probability that ethereum is not the dominant L1 absolutely it's greater than five percent I think like the race is not one yet primarily because we have like a few million users

in crypto active much less than that so like can't really say right um so the barriers to entry and open source systems are lower and so people can just switch very quickly as a lot of projects left Solana during this crisis to go elsewhere and now we're wondering was that a good choice now they can always come back right so you bought you you bought Seoul in q1 yeah I had a number in mine when it did below 10. like it would hit 8 30 something or I was like okay that was the problem is over day yeah yeah yeah so you know it's always like on the pendulum the the traditional investor that I

follow the most and he has a great memo now about like backgrounds and all this stuff is Howard marks and he is also always um one of the things that I've read he has also a great book that like uh the the most important thing I think it's a great book but his memos are free and you can like access them on his Oak Tree website and the thing that has always stuck on me is um like price is the most important thing now how you determine fair value in assets another but prices can make you can buy a great asset at a terrible price and it makes for a terrible investment you can buy a terrible asset at a fantastic price First Republic for instance maybe you think it's a terrible

asset maybe it's a shitty asset not as pristine but if you buy that for a a dollar it's great like UBS for instance like their acquisition of Credit Suisse they'll print because they just got it basically for free so anyways um I think that's what I um yeah tangent but I love how it marks um and I think price is difficult to ascertain in crypto but I guess you just sort of like when you see something really get pounded on and the sentiment uh gauging by the you know sentiment on Twitter or just crypto generally that just sort of tends to be a good indicator of when to enter or exit a market

agreed glad we got you on Solana you got me you got me folks like okay can we talk about something I'm actually really interested to hear your take now I can tell these Twitter comments we're getting to you about like stop asking me questions stop asking a question I'm gonna ask you a question question is so we had uh The Genius of tamath say that uh crypto's dead I think the media like the headline was he said the crypto is dead but I think he meant to say like crypto's dead in the U.S but not then for the crypto as a whole was dead and there's no promise there I'm curious what you think of that if you don't spend time in if you don't spend time in crypto every day I

completely understand how you think that crypto is dead but to me that is just a Telltale sign that someone doesn't actually spend any time in the industry because let's look at what we have going on today you have all this stuff happening with Solana that we're talking about you have these amazing conversations happening around El uh around Mev like this whole episode of Belk or season of Belk with Mev super interesting some of the smartest people I know right now working on what should happen with Mev you have l2s like optimism and bass and arbitrum and like all this great stuff happening on l2s you have like these Brilliant Minds who have like quit Google to go work on figuring out shared sequencers um you have like nfts make it making a comeback right now like with with the

hottest nft drop in like the last probably two years with mad Lads um you have different uh you have like this whole Cosmos ecosystem like kind of trying to figure it out but like doing some really interesting stuff I I just think that that that just tells me like they don't spend any time and it's not if you but but like I don't fault them I don't know like tremath is investing in nuclear and like fusion and like carbon credits I heard is his new thing like I'm I don't know uh and that that doesn't that doesn't shock me that he that he thinks that crypto is dead but if you spend any time in in crypto right now you would obviously know that you're like the 4626 erc4626 uh the token Vault

standard gonna come out soon that everyone's gonna be talking about you have like ZK EVMS you have The Saga phone launch you have like a liquid staking derivatives like lsd5 is going to be a thing in like Q3 Q4 you have like yeah roll up sequencer decentralization payment for order flow and like the Mev latency Wars there's just so much happening right now in in crypto it's so that just tells me that he's not spending any time in crypto that's fine he'll come back yeah he was early in Bitcoin and then he like sold a bunch because he bought a house in Tahoe Bitcoin and that costs them dearly um I think you could have probably bought a whole lot of Tahoe with a Bitcoin that he transacted with for that parts of the land uh talk about like exciting developments I think um you know a couple of things

that uh I think we we've mentioned here that are gathering our attention I'd say there's been a lot of um surge in in base this is coinbase L2 there's been a lot of there's still intestine like a lot of deployed contracts and testnet uh I heard you know obviously Ave Sushi a number of other projects really kind of like you know uh lining up um there's still a lot of questions of how that's going to operate right it's going to have a decentralized sequencer what's going to be the validator set you're going to have to have kyc or you're not um yeah I don't know if there's anything you'd add to that but anyways I I this is probably the thing that I'm following the most in terms of like developments obviously the decentralized sequencer is farther out but like in real time this might be the most important thing

because I really want to track um you know the onboarding from like coinbase exchange users in the millions into you know this all too I think that that alone is going to could potentially be the biggest Catalyst that we're going to see um the cycle yeah I mean so if you're looking so blockworks research put together um a chart on uh on the daily contract deployments for base versus ethereum and if you look at Bass it's like I don't know somewhere like around 10K uh contracts deployed every single day and if you look at uh bass it's what is it right now 60k but earlier this month is it like over 100k a day on base so that

I mean that's pretty impressive I think there's actually a third bucket by the way in terms of decentralizing the sequencer so if you look at coinbase they have like one they have a fully centralized sequencer Network and if you talk to like Austria or espresso and if you listen to this podcast that goes live on Tuesday that's like a fully decentralized sequencer Network I bet coinbase will do a third option which is like one by one adding what like very very methodically decentralizing the sequencer so I have like I bet they will pick another big company in crypto for example that is very comfortable running nodes or something like that to to to be the second uh to like decentralize the sequencer by one so then there's two and

then they'll pick another one and then there's three I think that's how coinbase will will probably decentralize their sequencer yeah speaking of really exciting developments and l2's um I mean I'm really curious to get your take Franklin Templeton uh launched announced this was yesterday uh Franklin Templeton was one of the largest uh kind of mutual funds in the world I'd say um but they announced that the Franklin on-chain U.S government money fund uh is going to be the first registered U.S uh you the first U.S registered mutual fund to use a public blockchain in this case polygon to process transaction and record um ownership um so basically if you have like one share of you know this this Mutual money

uh this uh money fund fob XX uh is represented by one Benji token um and this sits and lives in polygon and so if you're a token holder you can exposure to the fund which invests mostly in uh I believe like uh treasuries or whatnot um and you have like a their own app and in the app you can see kind of this token which is like that represents basically Maps one one um it's interesting I I'm I'm curious to get your take because like you saw like make or basically kind of go their own route and have to set up as a dow like touch you know the real world and you know to get to buy treasuries like does this

mean that you know basically you can by Benji tokens and get exposure to like can you do the reverse right if you don't have like a broker if you don't have like a an account with Frank and Templeton or whatever or like some other you know Schwab or fidelity can you just buy the Benji token and that gives you access to the money fund and if you do that you have to like kyc do you have to do some like basically other process to like get onboarded does this only mean that like you can only is it just one way well you this token's kind of like restricted only to people that have like have access to anyways a whole host of questions but what's really exciting is to see someone

like that um you know come in and want make the choice of polygon into you know I think this is the first of potentially many of their products that they decide to register ownership um and and kind of transactions on chain which is very exciting I'd say yeah I mean Franklin doubleton it's cool to see making a big push into crypto there's their CEO spoke at uh uh consensus yesterday I think it was um like they've got a whole Franklin Templeton digital assets like division now I think it's kind of cool I think it's cool you know how big that is what are these like five people or like 20 30 40 100 people uh I don't know I don't know I'm not

sure but I know they have 1.5 or 1.6 or 7 trillion AUM I mean they're colossal they're like a third of the size of fidelity it's a huge group so yeah I know it is I have something that I don't think anyone has reported on we didn't I don't think we've written about this I don't think any other media companies cover this which is I was looking at the um let's look at the fund structure and uh the expense ratio is 8.76 when this goes live in at the end of July that will make this the world's most expensive money market fund I don't know if that's a

typo I don't know if that's a like I mean they're off by an order can you send me a link like you know yeah where we usually communicate that that's I mean if that's true holy smokes that's Tiana you make it so context the expense ratio of most funds is like point zero four percent uh like point one percent would make it an expensive here look at your uh look at that message I sent you no okay hold on now they're waving no you're there's a fee waiver and expense reimbursement but why would that why would the total annual fund operating expenses be 8.76 that is the world's most expensive money

market fund explain that to me is that like a buffer it's saying the investor manager has contractually agreed to waive or assume certain fees and expenses in this case the 8.6 percent um so the total annual fund operating expenses excluding acquired fund fees and expenses in certain non-routine expenses yada yada related to litigation indemnification reorganization liquidation for the fund did not exceed 0.2 which is more standard for most of these type of products until July 31st 2023 so they were only waving it for this period okay look at the thing I just sent you so this is their actual website so then if you actually click the little thing above the expense ratio it says

expense ratio 8.76 percent and then if you look at the gross expense ratio this is in like size two font here says reflects the total annual operating expenses for the share class shown I mean then this reimbursement goes away over time well basically and it's only for like two months yeah so at the end of the summer this is going to be the who's going to buy these things this makes no sense like I'm sorry but you know that's like who in their right mind is going to do this that was like my initial question right maybe it's they're assuming and banking

on this like somewhat predatory behavior which is the people that are going to buy this product have basically no access to this fund structure and a normal situation so they're going to buy this token and you know get exposure to this fund yeah but it's uh it's quite strange actually yeah all right I have one more thing and then I gotta rap because I have a yeah well I was just saying this is just a reminder folks but great catch by the way because a headline is very bullish I'm curious who buys this stuff like they're gonna get like you know it's like the coinbase nft launch you're gonna have like two dollars people invested in this thing and then realize yeah I don't I don't get it but I I do want to highlight someone from Franklin Templeton or

polygon you know wants to come on and explain this yeah please do um Circle cctp uh final actually self-launched and I just want to give a quick overview I've talked about this a couple months ago when they announced it but I think it's actually I think it's a pretty big deal that feels technical uh and so it's kind of been swept under the rug but I think this um in case you guys missed it cctp allows usdc to be transferred to emails seamlessly between chains and it's just going to enable this like better cross-chain ux if you if so it's soft launched on eth and Avalanche yesterday cctp stands for cross-chain transfer protocol it's basically a permissionless on-chain tool by from Circle that facilitates usdc transfers between

blockchains rather than needing liquidity on the destination chain Circle basically just mints native uscc after burning usdc on the source chain so if you like to get basically like most bridges use this lock and mint right you lock and ask them one chain and then it mince another but there's this period where you have to have liquidium on and then there's all kinds of funky stuff that can happen there's been hacks because of this like like Oracle issues or whatnot what is so interesting here is that um you know Circle you're basically it's way more Capital efficient you're natively like they they can basically burn usdc and ethereum mint natively in salonout or pick your L1 of choice

and so when you think about most of the bridging is stable coins I mean stable coins are just massive in terms of like transaction volume um and and asset transfers in crypto so this is huge um yeah where do you think other Bridges does this mean like I mean of course the question for this cross chain transfer protocol um my understanding is it strictly for usdc but like what does that mean for other assets and what does that mean for other kind of bridges out there do you among it's unclear maybe you know this if at some point you're gonna it's possible to like extend this functionality to a token other than usdc what I don't yeah I don't fully know

what happens with other Bridges because as of today metamask and 10 different partner sdks such as layer zero and Wormhole have integrated with cctp and and actually five Bridges have integrated with with cctps I need to look into like is this a competitor to Bridges do the do the bridges integrate with them I don't I don't fully get it but so I'm reading here like cross chain swaps like you can they're saying you can like swap eth um on ethereum for avax on Avalanche and like basically they're using usdc as that connective tissue right but then you have usdc on Avalanche but you let's say you have usdc on Avalanche but you want to buy an nft on ethereum you can now seamlessly through adapt that uses cctp you can it'll it'll route your usdc

from Avalanche to eth then swap it to eth to purchase the nft so just I mean it creates a better user experience so yeah for a lot of for a vast number of use cases right no yeah but um anyways I think this covered a lot of it uh light week but uh interesting developments um so yeah hope everyone has a great week thanks for tuning in and uh yeah keep your eye out for next week uh this um sequencer decentralization uh pot that's gonna launch and and that's gonna be a good one indeed be well sir keep that right sir uh I'll try for sure all right guys have a great weekend [Music]