Zama's $118.5M ICO, Tom Lee's $BMNR Owns 3.52% of ETH Supply, XAUT $4B+, Dash and WCM Join

Transcript

[music] [music] I'm up the [music] [music] hop on the >> [music] >> I'm off the [music] >> [music]

[music] >> JP Morgan, Black Rockck, DTCC, Fidelity, the entire thing was just institutions. It's [music] just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. [music] You said it. finally said it. So, boys, boys, I'm bullsh [music] [music] the [music] >> [music]

>> H the back [music] [music] up on the I'm the mother. [music] [music] H the back [music]

[music] rollup is headed to the top. [music] If we're not already at the top, we're going to the top. We're on fourth floor today. We're going to be on floor one and then we're headed straight to the moon boys. >> All righty. >> Hello. >> Someone pump the market, please. >> Ronnie needs a pump. Bad. >> I need a pump. >> He needs a pump.

>> We haven't seen you on the stream in weeks. The market's behind the [ __ ] >> What's going on out there? >> Where have you been? We were trying to pump the market with our own bare hands around here at the rollup. >> Wow. New alltime highs coming for the indexes. New alltime highs for gold. >> We thought you were you retired from your uranium position. >> Is the catchup trade going to work? No. No. Uranium looks great. >> Uranium's ready to go. >> Uranium is ready to go. I'm a I'm a fiat debasor. I'm an invest >> I'm the I'm an investor in the assets of the debasement trade.

>> Oh yeah, that's for sure. I think uh I think everyone's starting to come around of that. >> Happy Tuesday. Lots going on, Rob, in the uh in in the NEO finance space, raises, launches, tokens, and more. >> Um yeah, we have a ton to cover. We have two guests >> today. We've got um our lovely friends from Dash, Joel, and then we've got a a new project WCM uh which is actually this guy Hersh's company with Kevin and so haven't really done much research into it, but seems interesting. I got some feedback on Mega ETH launch maybe February question mark. Um, USDA

announces chip go uh, Tether Gold hits four billion. HIPP3 with $750 million of OI. >> Hyper liquid >> secure size new VP. Mesh Pay raises 75 million at one bill. And MOIC Digital puts out a new NEO Finance report. So, why don't we get into it? Let's go. Let's go straight into it and uh get this party started here with our with our first set of news which [snorts] I think this one's um so this is kind of like an anti-neo finance.

>> Exactly. Exactly. This is this is why I wanted to talk about it because you know you remember the scientific method from when you were in school. >> Of course. Yeah. And so part of the the scientific method is right, we want to collect all hypotheses, all data out there and then make a valid conclusion. And so I think part of the method is hearing strong man thesis and counterarguments to our thesis so that we can see if it really stands up. So crypto is getting co-opted by fintech, my thoughts and how I'll keep fighting. It was a really great article. I read it all the way through and I'll I'll just kind of give the cliff notes and and uh Leo feel free to scroll down and we can we can kind of see here the idea here is is the same as Neo

Finance. Um he he you know they go on to say that essentially the the stable coin issuers the circles and tethers have such a stronghold in DeFi that they can shut it all off at any time which is very important. I think we're going to continue to see there are centralization vectors and bottlenecks that that take place. Black Rockck would be another another one of them with Biddle Circle obviously overtook them in their RWA space. And so we have here these large asset issuers which are are accounting for significant amounts of the assets that that are on chain and systemically important things here like stable coins are effectively like too big to fail

almost in a certain way. But if they do fail, they're still early enough where they could it could take down the whole system. And so the point here is like yes, right? This is why we believe we're going to see more of them because you have Circle, you have Black Rockck, you have JP Morgan, you have PayPal. These guys see the value proposition of blockchain. They're coming on chain and realizing value from it. We believe a lot more institutions are going to see the same thing. Come on chain and and and see value as a result of it. and this is going to be get more and more liquidity, more and more institutions.

That's the premise here. And I think the premise is correct. And and so the the author of this article goes on to say why this is systemically bad. Uh you know, these are centralization bottlenecks. They don't value self-custody and and and they really forego a lot of the ethos that built this industry. And so he's going to continue to fight the onslaught of this ethos and this and this institutional wave. I I see these institutions coming on chain, the circles, the black rocks, the tokenization platforms, even the representative tokenization platforms where it's just, you know, it's just an accounting layer. It's just a copy of what's held in DTCC's database. Even

that I think is still a net net positive for the industry. as a stepping stone to greener pastures as they bring on more institutions. >> I think yes, you know, maybe these things end up in private permission blockchains to begin with. Maybe they're representative tokens at first, but ultimately we will realize the benefit of bringing these things into a public blockchain and and a permissionless one and financial experimentation ultimately ultimately comes through. So while author argues that neo finance is a net negative, I agree with his premise. But I tend to think that this institutional neo financial wave is a stepping stone towards the open permissionless DeFi

world that we we all we all hope for. >> Yeah. I mean Lex Node is also a lawyer um so has interesting perspective on things. He, you know, he's arguing a lot that the power comes from the ability to freeze funds, shape hard forks, and just like kind of dictate the norms of this of this kind of onchain environment. He also makes a good argument that the Clarity Act slowdown shows this there's like the centralized yield and custody influence happening from the policymaking level, which I think is interesting. Um and and specifically what's on the screen here is the sta it's these stable coin freezes are the obvious risk and you right that that tether and circle can just freeze stable coins and they been known to do that in

different hacks and different exploits. Um but like now what he's saying is that Ethereum is now unforkable thanks to DeFi. Well, it's actually thanks to custodial stable coins. um because well you couldn't really uh fork it because well you've got decentralized stable coins on chain and uh once you fork it basically you kind of get into the issue of of um you know kind of like the double accounting problem. Uh and so you know he goes on to argue that DTCC uh could end up being kind of like the circle or tether or its affiliate CDI uh of of tokenized equities. And he's just basically arguing that this undermines the entire promise of sovereignty and

and decentralization. And I think the most interesting part for Lex note here and why he argues that you know cipher punks are kind of skeptical of Ethereum and smart contracts because they see the sub you know as he says the subversion of the best smart contract chains by fintech. Um so the interesting part here that that he argues for direct issuer native onchain securities which I think is like interesting because basically you can get a you know different broad set of issuers to kind of counterbalance some some pure stable coin dominance. Um, and yeah, you can have a more a more direct, less rapper version of uh these kind of uh tokenized equities, tokenized

securities, and kind of counterbalance some of the stable coin dominance that we see uh right now. I think like the big argument that he's trying to make is that the failure of of this part of the market will end up being crypto with just backend fintech behind it, like pure fintech plumbing. Um, and the goal is to keep the goal is to keep Ethereum and and web 3 like, you know, structurally autonomous and make it actually work for the true decentralization ethos that we got here for. So, look, I think it's a good piece. Um, and I think, um, Lex Node is does really cool stuff with Metalex and

their and their legal platform. And this honestly might be what Kevin from Delphi yesterday was signaling about that Legion's doing next is perhaps doing an issue direct tokenization platform. So we'll see how that kind of comes about. >> Yeah. Yeah. Well, we can get our next headline ready, switch over. Yeah. >> Um because yeah, I think that we're going to continue to see this this trend. I I think you make a good point. you know, will fintex be the backend and we'll have some representative tokens issued on chain and you know that that's not the future I think that we're headed towards. I personally think that we're headed more towards uh blockchain rails on the back end rather than but look

these are you know we I think still think one of the best quotes I've heard in the space it's all just asset issuers and bridges shout out to Rashene from Twine I think came up with that one it's just asset issuers and bridges and I think at the end of the day you know whether circle or black rockck is issuing the assets or these things are natively issued we're going to have to end up in a world where we have some sort of if we want quality assets, there's regulation and compliance that that takes place behind the scenes for there to be quality assets.

>> And so I think we may end up in a world where yeah, those like compliance, back office, all these things, those are the asset issuers. And then we're gonna have um you know we're gonna have blockchain rails hopefully underscore that but you know accessible and we'll have peer-to-peer finance still be a real thing um self- custody can can come as a result of that as well but we need forgot password buttons we need to improve the front-end UX and Wells Fargo Bank of America these these banking frontends neo banks uh ultimately I think are the cure for uh crypto's UX problem. But let's go to our next headline.

>> Yeah. Yeah, shout out to Lex Node there for the uh quality quality uh article. Jama runs the first >> encrypted ICO on Ethereum where you had to contribute your USDT and then you could basically encrypt it and then contribute to the platform $18 million committed for the first encrypted ICO on Ethereum. Um shout out to Zama, a partner of of the rollup. >> Yeah, these guys are a friend of the show and we participated. Yeah, the auction app became Ethereum's most used D app on January 24th, surpassing USDT, USDC, and unis swap. There's actually a chart that was posted on uh Blockworks from Yano about um you know, kind of showing that the Ethereum transactions

are all at all-time highs on L1. I think this contributed to it. $121 million uh in reach in three days proving or or sorry total value secured reach in three days proving FHE is production ready at scale. What they did was they used a confidential sealed bid duck au auction with encrypted bids and homorphic clearing. No bidder bot or team could actually see the bid sizes before they closed. And the numbers were pretty insane. They ended up with 11,000 biders, 24,697 bids, and has overs subscribed by about 215%. So, it ended up with a clearing price of about 5 cents, >> which is a 10x for anyone who had the OG NFT, those guys made out. Um, and total

value shielded, like you said, over a hundred million. Um, these guys also raised over 100 million. So, you know, these guys have a war chest of cash that they can do incredible things with. Um, and and look, we had Rand on the show last week and he walked through the game theory of this auction and how, you know, it was very dissimilar from a lot of the other Dutch auctions where, you know, you have you have a falling price and then ultimately it finds a floor. You know what happened here because it and this was only possible because it was encrypted. You had essentially this blank slate and you had all the biders putting in bids at where they thought things were going to clear.

If you bid too much, well, you and you didn't have that clearing price, you got everything refunded. If you bid too low, then you weren't able to get your allocation. And so you had to end up in this happy medium where um you know you you were close enough that you could ultimately get your allocation and you didn't have a lot refunded. Um and so it's not like you know people who paid or bidded exorbitantly higher uh you know were were able to um they they didn't just get you know get their money taken they were refunded. But you know ultimately if you're bidding high you want your allocation. So it it was some really interesting game theory to see because it was encrypted. You couldn't base

anything off of other flows. There were some people trying to understand, you know, some some intricacies here like some parts were were decrypted. You could see um where some of the things were coming in, but you couldn't see the amount. And so there was there were some really cool Dune dashboards that were created as a result here. >> Um >> so the unlock Yeah. Go ahead. >> Yeah, the tokens are going to be fully unlocked. ERC20s on I think it's February 2nd or third. >> Yeah. >> Um yeah, February 2nd. Um and you know, Zama can be staked to secure the protocol and yeah, it's just a big launch, big auction in the middle of a kind of a time where honestly sentiment is pretty bad around everything around

all tokens. Finally, Hyperliquid is starting to move uh this week and so hopefully that we kind of revives the tokens a bit and and if the strongest best fundamental token on the on on the market is finally able to catch a bid, then hopefully we can see some more. >> You think Hyperliquid's going to drag the market up? >> Congrats to Zama. Um and let's let's move on to to our next set here. Do I think Hyperlid's going to drag the market up? No. But I surely do think that uh this thing I I don't know. I I don't know what's going on, man. But if if this thing doesn't send with gold at 5134, I don't know what's going to happen in this world. Let's move on now into Bit who owns a ton of Ethereum as we already know. I believe the exact

number is 3.52 >> uh percent >> nearly 70% of the way to the alchemy of 5% in just six months. Remember, Tom is trying to get >> he's trying to get the 5% of Ethereum supply. um Bitcoin mine crypto plus total cash plus moons total 12.8 billion including 4.24 million Ethereum tokens $682 million in cash and yeah I mean Bitine is the 90 first most traded stock in the US trading 1.2 2 billion per day and it's just absolutely insane.

>> Like people have, >> you know, mixed opinions on DAT, Bit Micro Strategy. You know, they're going into Mr. Beast and they're going into some of those moonshot ventures. I uh I watched most of Tom Lee's presentation at the BitMine uh their annual shareholder meeting and I actually learned some things about tokenization and how some of the things that are possible with tokenization that are not possible in the traditional legacy finance world. Um like for instance did you know that you know essentially an equity is is a uh a representation of shareholder value right and and you can get dividends you can it it represents the earnings

potential of a company and so through tokenization you can actually split up like I want earnings potential in quarter 4 of 2028 and I can buy I can if I tokenize something I can split up this this thing so that I can own just that quarter earnings potential or I can I can chop up these things. You can do fractional ownership. You can do all these things from tokenization that I think we kind of talk about it as like this broad thing sometimes that we don't really get into some of the concrete examples of how it can provide new financial products and structure new types of ownership around these around these assets. So, a lot of people I think Tom

Lee is doing incredible things when he's bringing tokenization to the world. Um, I think, you know, he's going to continue doing moonshots, but he's also going to continue doing, you know, staking activities, DeFi activities, things that are at the heart of the Ethereum ecosystem. And, you know, he he basically was self-described as the investor relations of Ethereum and I think personally think he's doing a great job. >> Yeah, I mean, look, he was at he was in Davos. One of my main takeaways from listening to speeches and media reports from Davos, it's clear to me that Wall Street has embraced crypto and blockchain assets and sees the convergence of traditional assets and digital assets similarly between crypto and AI convergence. Um, man, Tom Le is going to keep going. He's going to get to the alchemy of 5%. He's going to do

it fast. Um, and guys, if you're an ETH holder, you got to be happy that he is basically supporting you. Um, especially in these crazy times of underperformance compared to other assets. We'll see how long that lasts. Shout out to Tom and uh yeah, >> congrats on the paybackage. >> Payback. >> Pay package. >> So, we'll we'll see what that means for ETH. >> So, this is an interesting one. The ceiling on DeFi yield without off-chain cash flows. In a closed onchain system, DeFi can can redistribute cashes very efficiently. It cannot manufacture net cash flows. Interesting, right? So, as

stable coins scale, right, 300 billion right now, there's a demand for stable money market like yield. It grow it's this thesis is that that the the demand for stable money market like yield is growing faster than onchain fees can support. So for example, pure onchain yield comes from trading fees, leveraged driven lending, incentives. This is all kind of boom and bust. It's cyclical. It's capped, right? Like there's a certain amount, you know, when the market tops out, the market tops out and all those fees come down. However, at scale, stable coin yields require external cash flows. Obviously, T bills, repo, money market funds, private

credit. So this drives the rise of tokenized treasuries and RWAS as the base yield leg. No shocker. We've seen this. Um and so you're kind of what you're what what our our guy here is getting at in the fractalized substack which is a fantastic substack is basically what we've talked about on stabled up with Sam from Fracks and others is that there's just two separate forms of stable coins happening. there is the genius compliant um you know payments coins and then there is the yield sleeves or the yield coins. And so effectively what our guy here is getting at is that there is a a big split happening and regulation is pushing

yield off the stable coin itself into rappers and vaults which is these yield coins susdf sfrx USD and it's actually making that separate from a USDT or a USDC or a dot or or USDS. And so basically the argument here is that we need off-chain yields to come in for stable coins which we know this is a big part of the neo finance thesis and yeah I mean that's kind of like the boom bust cycle of yields in DeFi onchain is not going to last to be able to provide sustainable resilient yields on stables long term.

>> I I think the top part of this section that's on the screen now sums it up perfectly. We have two two big buckets of how yield is generated in the space. We have the first yield that is funded inside crypto. We call this indogenous sources of yield, fees, leverage. Key word is leverage because the the reason why indogenous yield is not sufficient for a thriving financial economy is because you end up with leverage. That is the way in which we see this. It also we've also seen this in pool two emissions and and you know you see incentives are also part of this uh this indogenous source of yield as well. And so you end up

coiling the spring. This leverage gets wound so so tight that it it causes these liquidity contagions. And this is what happened when three arrows capital and and uh you know and uh Alamo FTX right and Gemini everyone's in each other's pockets. You end up with the snake you know eating its own tail. Yeah. >> Um and and we don't want that, right? A little bit of that is is going to drive some speculation. A lot of that is going to is going to break the entire thing. The other side of this is something that's really sustainable which is exogenous because you know if there's always a net new buyer and I'm not saying that ex like there's always a possibility for exogenous sources of

yield but if we are able to go into the world outside of crypto then we're going to be bringing in net new sources of yield net new buyers we've seen USDA go into the AI space um we see how rappers and vaults are going we see how Maple is going into the onchain credit markets. We see how daylight is going into energy. These exogenous worlds also need credit. They need uh stable coins and they are willing to pay for it just like they're willing to pay any financial institutions. The key is now then bringing that yield back to crypto. And and you know, if we can consistently do that, we don't need to use leverage and incentives and emissions and

rehypothecation to squeeze more yield out of these oranges. we can just go outside and and we can go find a net new buyer, a net new payer of interest, someone who needs credit. This is how money moves. This is how credit is created. And ultimately, the credit multiplier is how it's how there's more money in the world today than there was yesterday. And that's how banks work. So >> yeah, I mean the argument against that is just kind of like the interest rates going down. People are like the rates are lower, you get less yield. So then you got to go and kind of like take more risk and go go to credit.

>> Yeah. But if you're if you're sourcing from like we're we're going to see how it shakes out. It's still very early. We're going to need to get to see where the data plays out. But the idea is if you can provide credit at a lower rate from an onchain source, but you can crowdsource it, right? So the protocol still gets enough to give some sort of credit but does it at a lower rate than can get in some legacy financial institution if if it's apples to apples like I'm going to go get the credit from where I can pay a lower rate right and if the liquidity is sufficient onchain to do that that's where the credit is going to get created and then we're going to continue to originate loans from onchain

onchain sources >> I agree I agree well this is this This is a good article. Um, let's go ahead and move through into our next our next topic here, which is Tether Gold. Absolutely just dominating as gold rips. Uh, as we speak, gold's trading 5138 per ounce. Pretty a pretty insane. I mean, pretty freaking insane to to just have that. And of course, Tether Gold is dominating that that market. Um similarly right like similar idea here to this DeFi yield ceiling conversation is this idea that is there potential to get uh yield on gold like is that a thing you know are we going to see this so tether gold accounts for more than

half the entire goldback stable coin market as x surpasses four billion in value I mean come on right controlling 60% of the back goldback stable coin market stable coins grew from well it's not a stable coin goldbacked assets grew from 1.3 billion to $4 billion in 2025 driven by record gold prices and uncertainty. Spot gold is now, as I said, cross over 5134 an ounce. I mean, guys, Tether added 27 metric tons of gold in Q4 2025 alone.

>> Yeah. >> How many pounds is that? >> 27. There's 2,000 pounds in a ton. So, it's 27. >> They bought >> 54,000. They bought 952,000 ounces of gold >> in Q4. Over >> 952,000 ounces. >> But Andy, don't you don't you think that's a result of like they need gold in their vaults to back their Tether Gold product, >> right? >> Yeah. But like they also bought it before this rip and then and I also would just assume that they're buying back tether >> like they're buying it to back Tether like like Bathway. There's probably some of that and they're probably putting putting some of their own profit into gold and other sources just

to preserve wealth. But there there is some something that you know they have liabilities right they have outstanding tether gold issuance right and as that tokenized gold product rises that appreciates in price and then their liabilities to all of the owners of the gold tether tokenized product goes up and they have to have some sort of reserves and assets to back that. So I I I would imagine that a lot of this is coming because they anticipate a lot more uh adoption of tokenized gold and they have to have some gold in their reserves to back all of that tokenized product.

>> Yeah. I mean that is for sure it but I also I kind of think it's just Paulo accumulating as much assets as he can and just saying you know what I'm going to go out and I'm going to buy as much gold as I can because I want to own fiat debasement hedges. I This is This is the new bank. Tether's a neo bank. >> I mean, that's it. So, pretty insane. All right, guys. Let's keep it Let's keep it moving. This is an interesting one. Next here. Um tokenization is obviously inevitable. We've been hammering this home with regards to NEO Finance for so long. It's very obvious that this is going to keep happening.

We're going to New York in the biggest center stage possible to make this a a reality. Tokenization is becoming inevitable in 2026. Um, Superstate put out their predictions that I think were super interesting here. Um, so first of all guys, capital formation is very much so moving onchain. It's enabling global issuance with faster settlement and fewer intermediaries. Obviously, that's the beautiful thing about crypto. Um, dual listings are now a a thing. Um, so if we can scroll through here, we can kind of see some of the uh predictions, but this was like the first onchain IPO with Bitco.

We were talking about that yesterday. It's now a matter of doing them, not just theory or not just like it could happen. Um, another cool one is that tokenized stocks and funds are actually gaining real DeFi utility and not just representation. So, you can actually take tokenized uh credit uh or credit loan offerings or you can take tokenized uh treasuries and actually put them into DeFi, loop them, borrow with them, borrow against them, lend them out, etc. Um, and so that's like a really cool thing like RWA FI or actually like doing stuff with your assets. Uh, that was something that was not really a part of the system until like pretty recently.

Um, yeah, I mean DeFi vaults are huge. Institutions just want to deposit in vaults. They don't want uh complexity. Um, they want risk management from trusted curators. So that's another big one. and wallets and exchanges evolving into financial super apps, right? So we, you know, this is the kind of Mike Novagrat's thesis about how a lot of these wallets and exchanges are going to evolve into like the Neoank like platforms. So I think that, you know, the tokenized assets being like kind of the connective tissue there. There's just a lot happening here. Um, and these predictions I thought were were pretty good.

>> Jim came on and uh talked about Superstates 82.5 million series B. you know, they were uh in New York. Yeah. And they they helped with Bitco's IPO on chain, which we're I think we're going to see a lot more of. Ultimately, these, you know, and if you look at something like Hyperlid, you you can see how these things really do work together because you end up with a market where you can start to, you know, speculate on equities and then it transforms into a spot market. And, you know, we'll also have native shares that are issued on on the New York Stock Exchange. And so, you know, I think tokenization takes on many different forms, but ultimately the cleanest, simplest way are, you know, the way Superstate's doing it, uh,

Securitize is doing it. Um, you know, this native asset issuance. I think actually, Andy, I think, uh, we're going to work on a debate. We're going to get a debate going in here and, uh, I think we're going to get a native issuance versus representative issuance debate going. >> Yeah. um because this is uh this is one of the hotter hotter topics in uh >> in tokenization. >> But yeah, >> we've got our first guest coming in here pretty soon. So, let's speed run through a couple more of these. >> No, I think he's ready to go. I think we're going to bring him up. Uh I think we go to a quick commercial pause, guys, and then we'll get our first guest up.

We got two guests today and then we'll finish up on some of the news there shortly after. See you guys in just a sec. Yeet is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. [music] Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, if you are still using hot wallets in 2025, 2026, you are missing [music] the entire point. Secure your

coins. Get a treasure at treasure.io. Go anywhere onchain instantly with Relay. Relay is closing in on 10 billion transferred. Go to relay.link to bridge your assets now. Money shouldn't wait for Mondays. Following his Rio upgrade, Polygon is now one of the fastest [music] chains for stable coin transfers and payments.

Visit Polygon Technology to learn more. Khi is the world's largest [music] prediction market. You can trade on anything in all 50 states. Go to call sheet.com to trade today. >> All right. All right. We've got uh Joel Valenuela, Dashd Dow core member coming back talking about the return of privacy in 2026. Uh clearly we've seen the Zcash run. We've seen the Monero run. Dash was getting a bid. Um so it's on.

>> Zama raised 100 million. >> Um I think they they cleared 44 million. They had 100 million that ended up getting shielded, but again, some of that got refunded. Um, so yeah, privacy is huge. You know, I was pushing back uh curious to get your thoughts on this because I was pushing back a bit on the um uh what Kevin from Deli was saying about privacy, right? And how, you know, self-custody and privacy is something that, uh, people are going to continue to, you know, have more and more of a of an appreciation for. This privacy bit is going to continue. Um, you know, my my two cents was essentially like look, you know, we we went to Argentina. We see how instrumentally important these things are in emerging, you know, h countries and nations that have been

plagued with hyperinflation. But there would have to be some sort of catastrophic event in order for people in America to really have a distrust of their financial system. I think like government distrust is starting to creep up and and you know we're we're kind of nearing an apex around government distrust but I think people still have relatively um significant you know high trust in financial institutions that their money is there. >> Yep. Yeah. >> So I I just I don't know may maybe there's something that is going to happen that is going to clue them into the privacy trade.

>> I think the reg I think the regulation change has been positive for privacy. I think um just the general yeah the general distrust and more. Let's get Jo's take on it. Let's get him up uh and let's get this show on the road. Joel, welcome back, man. Thanks for being here after the uh after the intense day last week. >> Yeah, thanks uh thanks for having me. It's always a pleasure, of course. >> Yeah, [snorts] man. I mean, we got to get your take. The return of privacy in 2026 is on. Obviously, Dash has been I mean, Dash is one of the first coins that uh I was trading in 2017 on Kraken way back in the day. Um has been pioneering a lot of the uh kind of proofof work efforts in the space for some time uh into now privacy with the

likes of Decar, Monero, Zcash, and it's just great to see the the originals stick around and keep building. So, Joel, maybe you can give us your take. Why is privacy coming back in such a big way in 2026? How investable is this category? How do you think about it from a from from your perspective being at Dash for so long? >> Yeah, for sure. I definitely think that u privacy has always been critically important to crypto. I mean, we've always needed to shut our windows and our front door, etc. Uh, and I think that a lot of people up operated under the assumption that the crypto we used in the past had some sort of privacy.

And the reality is the privacy it had was no one was looking. No one was scanning the blockchain. >> Oh, man. People would be like, "Oh, you're using Bitcoin. That's like that anonymous thing, right?" And I'm like, "Well, no, it's actually quite literally the opposite." >> Yes, for sure. And I think that now that this is considered real money, now that there's real financial institutions using this, now that people have large source of wealth on this, now all of a sudden people are paying attention and they're seeing, especially in the age of AI where you can just kind of scan the entire blockchain and find commonalities, that it's something that could be a big risk. And we're seeing unfortunately, for example, a lot of what they call $5 wrench attacks happening around the world where people

are being physically targeted because their crypto holdings have been traced and now they're in physical danger. And I don't I think that this is one of those missing pieces for mass adoption to really kick in is people are not going to use something that they don't feel safe in. And that of course goes to they don't want to lose their keys, lose their funds, but also that they don't expose these risks to privacy. And now that I think that privacy is a little bit more understood, it's less risky. You're you're not as afraid of going to jail for using a privacy coin. Now I think that the floodgates are kind of starting to open.

>> Yeah. You know, Joel, it it feels as if there's two competing forces. on one hand, you know, we're we're seeing more adoption in the institutional world, tokenization, all of these things are are really taking hold. Um, and and that's causing a lot of kind of trickle down to retail of people getting involved that maybe hadn't even been interested in before. We think that even banks could potentially open up and and say like, "Hey, you want to buy Bitcoin or you want to earn some high yield, you know, you can do that directly through your online banking portal, right, from some of the, you know, the biggest financial institutions in the world."

And and then they don't even have a concept of self-custody or or anything like that, right? They're just kind of maybe plugging in to some DeFi on the back end through a neopank type format. On the other hand, we have this this rise of privacy. It's more regulatory acceptable, sure, but it's also like the rise of AI like you're saying is everyone is sort of paranoid now about their privacy and and you know, we get millions of scam calls all the time. It it's it's felt by everyone um not just people in the industry and I think people have a concern about their privacy and that's you know causing them to go deeper in this world. H where do you think we go from here? because it it feels as if there's a divergent path in

front of us. >> Yeah, for sure. And I do think that uh crypto is becoming less one thing. It's becoming more many things for many people. I think that um the rise of privacy doesn't have anything to do with the rise of paranoia, the rise of cipher punk attitudes, the rise of anything. I think it's just an objectively useful trait to have and everyone kind of can benefit from it. And same thing as the 21 million supply of Bitcoin that has kind of become a big fixture of that. Very many people who invest in Bitcoin do not necessarily care about the ability of a central bank to inflate the currency or not. They don't have a philosophical alignment. They just see

that the value goes up because there's scarcity to it. And so it's the same thing with privacy. there will be a lot of uh a lot of value to people using these kinds of systems that can provide basic privacy for users and I have to say there is it's not like there's one kind of privacy only I do think where you speak up on that divergence I do think we will find a lot of institutions wanting something that does still have some kind of a backdoor or some kind of a a way for people to circumvent that for whatever you want to call it safety reasons or government oversight And there will definitely be that. And then there will also be a high demand for a system that cannot be tampered with. It is just private. And that's

kind of the final word. >> Talk about Monero. I've heard >> Yeah. >> Well, just real quick on that government back door thing there. Isn't there rumors out there like the FBI or see someone has a back door into Monero? Feel like you would be the guy that that would know. >> Damn. Well, I would say probably there is not a a back door. One thing that is publicly known is that there are some limitations to the way the ring signature setup works with Monero. There have been some researchers, mostly by the way, very pro- Monero researchers in the community who've been able to sort of reduce the effective ring size to a relatively small amount and be able to trace some transactions. So, the the science is out there, the data is out

there. It's not easy to trace, but you can. Thankfully for Monero, they're working very hard on something called fullchain membership proofs, which would uh eliminate these kinds of vulnerabilities and kind of do the next step. And I think that's what all crypto uh projects have to do is they constantly have to innovate and evolve because it's a a constant uh challenge between surveillance and privacy. There's it's an arms race going on. >> Y um another >> Yeah, go ahead, Andy. I was just curious if Dash is is like what is the spectrum of privacy in in the Dash design like what do you offer to your uh holders

users? How does the spectrum of privacy work in Dash's mechanisms? >> Yeah, so Dash has a optional privacy feature which does obfuscation at the blockchain level. On the actual level, the uh Dash transaction doesn't look any different really from a Bitcoin transaction, but there's some sort of a a feature that's uh kind of like a high-powered coin join that makes it very difficult to then trace with that. We're doing a an overhaul um hopefully this middle of this year will be out, which would implement confidential transactions, which would hide address balances and amounts. And that when paired with our original thing would give us something a little bit more

similar to what Monero has today. I would argue better, but obviously Monero is also going for a further upgrade themselves. And um we also have a built-in username and contact list setup uh username and contact list setup which acts as a stealth address. So like if I add you as a contact and I want to send you a payment, it does generates a new address every time and that's not publicly exposed anywhere. So that helps privacy as well. So basically we've always sort of prioritized having privacy for the end user but also prioritized a lot of other things like usability and fast transactions and wide adoption and so we're constantly sort of evolving in that direction.

>> I've got a another highle question for you Joel. um you know as as we're thinking through the rise of privacy at the same time we're also seeing a rise in in the precious metals right the golds the silvers coppers specifically [clears throat] on gold you know what's driving that is that central banks around the world and we know this because we heard a lot of the the central bankers at Davos talk about how you know they're they're becoming less dependent on America the US dollar is kind of you know the their the global monetary order as they said, is reconfiguring and and the US dollar is sort of fallen out of favor as the reserve currency for a lot of these central banks. And so they're opting for

gold. And so the gold trade feels like it's more about sovereignty, right, than privacy. And I'm curious if you think, you know, on on the other hand, you know, we have, you know, the California wealth tax. They're taxing millionaires and billionaires and and it seems as if, you know, people are using privacy as a means to sort of protect their assets from seizure, right? And so I'm curious if you think that the recent rise in in Zcash, Monero, Dash, but also the golds and the silvers and the coppers, is this driven more by, you know, a desire for sovereignty and and sort of, you know, removing from the system or is it more a sense of is it driven by a sense of

privacy and and shielding these things for kind of that intrinsic private nature? Yeah, I would say in this case the the assets you mentioned in particular that's more the sovereignty angle. Um when you're seeing companies like say Circle or PayPal start to implement some confidential transactions features to their payments that's more just the privacy angle. But so I definitely think that when you see all this moving there's a big global shakeup in the the world order. I know the the you know not to get too political with all this but the the US is migrating away from sort of a uh from the current setup of like all the nonprofits all the uh NOS's etc

and is kind of forging its own path and that's causing a lot of risk and uncertainty being felt along among other nations and that's why they're choosing to sort of find a new uh you know lack far the pun but tether for their currencies in order to make sure that, you know, they they retain value. And I definitely think that a lot of this uncertainty is sort of driving the desire for privacy, the desire for sovereignty as a whole. And I kind of think a lot of this influx has a lot to do with the path Bitcoin has chosen where Bitcoin was sort of the original uh sovereignty asset and over the last 17 years has not made meaningful uh

overtures into privacy into scalability able to be used so in a sovereign way. And a lot of the biggest wins on the Bitcoin scoreboard for the last year or so have been institutions, uh, governments, and a lot of speculation. And so it's becoming maybe seen more as like a riskon asset or a a some kind of a an invest a speculative investment asset rather than a store of value necessarily. And so the original kind of niche that Bitcoin dominated is sort of slipping a little bit. And I think that the the privacy assets are sort of the next wave that's looking to sort of capture or nip at those heels and try to get a little bit of that original value

proposition. >> Yeah. And >> yeah, I mean, yeah, >> I no, I I think this is important to understand the driving forces behind the rise in these coins because we can sit back and say like, yeah, let me ape into this privacy coin and you know, privacy has been the meta, but it really does feel as if like sovereignty and the is sort of the aligning force that both at the institutional, the central banks as well as on the individual sense. This is kind of where it it really feels like that's the meta here. >> Absolutely.

Yeah. Yeah. So I'm curious kind of from the investment perspective and thinking about things from a uh capital allocator perspective um is there any sort of significant interest in institutional funds into allocating into these uh types of assets whether it be Dash or Zcash or Monero or others and kind of like how how do we think that that the adoption of privacy assets itself is going to happen right because I feel like for the for like the longest time there's been a regular regy obstacle around getting into these things and there's been also a lack of education understanding but finally now Bitcoin is being faced with this quantum threat quantum curtosis is kind of what I've

seen uh some memes tossed around and and it feels like there's there's other assets that may be able to fight this better than Bitcoin as you're saying here Joel in terms of like the response to to uh to to Bitcoin's kind of lack of of change or even better put oification of its protoc call, how do we think about like the capital allocation towards these assets from in institutions or large funds? Um, you know, like what's going to move these markets? Yeah, that's an interesting question because it does seem like institutions seem to be uh the most risk averse and I think that we have traditionally seen that where almost no privacy assets have had any kind of uh traction other than

for example the the Zcash Grayscale Trust has been kind of old steady there as the kind of the one difference in all that. Um I think that however what we've seen is uh Monero has sort of been in the standard bearer for the space to to a certain extent for being kind of the most extreme example of it and we have seen a lot of D-listings happen and we've seen a lot of I guess lack of financial consequences long term for these D-listings. I think a lot of people thought, oh, you get cut off from the markets, then all of a sudden then you're you're going to fade into obscurity. But instead, Monero's done, I would say, objectively pretty well. And one of the most recent kind of wrinkles in this has been the DEX game where sort

of Zcash made a big splash by being integrated into near intense as well as the Maya protocol which Dash is on as well but also uh both Dash and Zcash are on Hyperlquid and Asterex for perpetuals. And then recently like middle of December uh Monero had uh was bridged there as well and a whole lot of volume happened. And so there was just a lot of floodgates opened from for demand to at least speculate on these assets that was kind of not really enabled because of a lot of the major exchanges just don't support uh it definitely don't support Monero but it it also don't support most of the other ones as well. And so we've seen as soon as we

get this sort of DEX bridge going, everything goes crazy and the massive amounts of volume sometimes um like the other day I just checked the volume to uh market cap ratio for Dash and it was over the market cap. There was more volume in a 24-hour period than the entire market cap for example. And so we're kind of seeing this I I think it's a lot of it's driven by you know perpetuals but also perpetual dexes. >> That's so good man. Jeff from uh Hyperlow just posted uh something about the Binance order books uh comparatively for Bitcoin and they have better liquidity than Binance does on Bitcoin for per as of yesterday. And so you're so right like I I remember Binance went

through a d-listing process, Coinbase went through a d-listing process and it was just because of the yeah the privacy nature of these assets. Now, when you have these open kind of permissionless finance onchain, I mean, sure, it's still a wrapper that you're trading uh in a per, that's always what what pers are, but with uh with the hyperunit bridge, bridging in directly soul or dash or whatever it is directly on chain and then using those assets uh in the pers form or being able to just like speculate on the per of that asset effectively enables you to do what you want to do, which is get the you know, speculate on the asset, but you do still miss like the shielding aspect of Z of Zcash or you still miss like the actual

privacy aspect of Dash. Like how do you how many people are or like what percentage of users or what's the user type or behavior of people that are actually going through and using the prival privacy features in Dash like because like the per solves the issue of getting exposure to these markets which kind of answers my investment question. But when it comes to the actual fundamental kind of like uptick in using the privacy features, what does that user behavior flow look like? Like if I'm a user, I want to come to Dash, I want to be able to get optional privacy on on some assets. How does that work?

>> Yeah. So, uh part of it is or the main part of it is um Dash's purpose, the name is digital cash. The point is should be actually used as money and so we have a a wide u range of integrations for payments etc. For example in most of the world I think I calculated possibly up to three billion people could pay at least some of their bills their everyday bills with Dash like utility bills and things like that. So, um, the Dash main wallets, for example, the the Dash Core desktop wallet, the Dashpay mobile wallets, uh, have these features built in. So, you can download it, you set the setting on, and then you can add people to your friends list and start

transacting, and then there you go. And that's kind of the the the vantage point, I guess, from which you enter the rest of the ecosystem of buying things, paying for anything. We just uh partnered with Eon Pay which gave us another 50 million merchants around the world for example. And so we're constantly making those moves to make that um to enable that for more people. I don't think people are as concerned necessarily on those privacy features when they're just doing uh for example speculative trading in some cases. In other cases, you know, it depends on the bridges. We're talking with a few different privacy focused bridges for grabbing assets and being able to trade on other networks for example for that.

But uh where people do really care about privacy it seems to be is the money aspect. Do people want to withdraw from an exchange or wherever or if they earn their crypto for example they want to make sure that that is not linked to them in some way that no one knows how much they have. and then when they go to use it, they want to make sure that the disclosures are kind of up to them. It's not that as soon as they buy coffee, the whole world knows that that was them. And so, yeah, that's kind of what we've been sort of focusing on and we're we're constantly trying to improve that with our end user apps to make sure that the digital cash experience is kind of um universal.

>> Joel, I I've got another higher level question here. Andy's been in the in the weeds guy today. I've been I've been thinking in outer [clears throat] space, privacy, sovereignty, because I can't I can't help but think like what comes next, right? Like, you know, we had globalism, we had populism, at least like neopulism, and now it feels like this is kind of coming out in the privacy sovereignty world as it relates to the whole macroeconomic front and global monetary order shaking things out. and and it it really does feel like we're at the the the the cross se like at a crossroads here and things are restructuring. And so I'm curious like what category you think stands to gain the most from here looking forward like

you know it it feels as if we've gone deeper and deeper in one direction. We were kind of like one big happy global family then we started segmenting and then it was kind of like the east versus the west again. Now it feels like we're going one step further and we're localizing even further to the individual. Is there any more that we can go in this direction or do you think it's time for a pendulum swing back the other way? Back towards equilibrium, back to globalism, free trade type type of situation and and as a capital allocator, what like how do you navigate that? Where do you where [snorts] do you place your chips?

>> Yeah, that's a very big rabbit hole of a question and unfortunately I do have a lot of thoughts on that. But uh what we're seeing is definitely the end of the uh liberal international order where it was like the US and its allies sort of running the show using organizations like the United Nations, like NATO, etc. And now that seems to be broken apart a little bit. It's in the process of it at least. You're starting to see countries act in a much more individualistic standpoint. Again, not the individual person, but the country is. We're starting to see that sort of shake out.

But the next wave that I think not enough people are commenting on is where the nation state is not going to be the apex of power in the world anymore. We're starting to see things. So for example, uh Elon Musk is the best example of this where you have someone who has nation state like capabilities. He's got a a remotely controllable fleet of armored vehicles. He's got intercontinental ballistic missiles. He's got the best satellite network and communication network in the world. He's he's got X which is like the global town square. And so to a lot of people uh citizenship as it were membership to uh a for lack of a better term a tech

overlord's empire might be more important especially for a digital nomad today uh than actual country citizenship. And we're seeing this with Amazon as well. Of course Amazon does everything. Amazon's launching their own health care services as well. uh we're starting to see that kind of happen and I do think that people's membership to not geographically based like allegiances and companies and service providers will sort of supersede the nation state and that ultimately does have some dependencies though because you do have a company you do have a head of company etc you can still sort of twist those arms in some cases and exert influence I think that's sort of the

laral stage for decentralized versions of these decentralized networks that kind of run all this. And so, uh, I think that that's for me that's kind of like the long-term vision. What I'm looking at, I'm looking at where can we have something similar to, let's just say, Elon Musk's empire or Jeff Bezos empire. Where can we have something that looks like that but is decentralized, doesn't have a head you can cut off and start moving into that. >> Got it. Okay. Last thing from my end on this is just to put a bow on this idea, our audience is primarily founders and investors. And so with this in mind, what what do you build? What if you know

what do you invest your time and resources into if you're if you're someone watching this and they you know agree with kind of the direction and the trajectory of of where we're headed. Yeah, I would say that crypto has two big failings. And what I would think to do is to invest in things that don't have those two big failings. The one big failing is the user experience is just not good. It's where people only use this stuff. I've been trying to get on Farcaster for a year. I haven't figured it out yet. So like these apps should just work. So if you find a just works experience in crypto, that's that's a good idea. The other thing is in order to sort of get halfway to a good experience, again, not all the way, a

lot of these networks have made massive trust and centralization trade-offs. They've said put it on a blockchain said there's 12 validators, ain't good enough. And under any kind of a pressure, this thing, this system would collapse. So, I would, you know, myself personally, of course, I'm looking at systems that are super easy to use where you don't have to cajul your friends and family into using them. they will actually be like, "Oh, this is cool. I want to use this." And then on the other side of the of the of the equation, things that are resilient under pressure, things that actually work, that are actually decentralized, that you can actually do something like when China banned mining for Bitcoin and hash rate flowed anywhere else and now it

just kept kept working. Those kinds of things. And probably the sweet spot especially is the ven diagram crossover of those two worlds of something that's actually robust, actually decentralized, but is actually a joy to use and has enduser applications that you don't have to, you know, bribe users with, you know, freebies from VC money in order to use. >> That's a good idea. >> Very, very cool. Joel, thanks so so much for coming on, man. It was a pleasure. I think you're you're generally on the right track here and um you know it's been it's been a joy to watch uh watch Dash's success over the years and uh best of luck ahead.

>> It's been a journey, man. >> Absolutely. >> Yeah. >> Yeah. 12 years. >> 12 years is insane. Have you been at Dash for a lot of that time? >> Uh fulltime. It's only been like two and a half years, but I've been involved in the community in some way for almost 10 like nine and a half 10 years. So, I've seen a lot of generations come and go. >> Yeah. Come and go. Oh, yeah. Oh, yeah. >> Man, thanks for your time, man. >> Absolutely. >> in six months or so or less and do a return of the privacy trade part two.

>> Have to get you on get you on with the rest of those privacy guys from Near intense day. >> Yeah, anytime. I'm I'm ready. >> All right, we'll do it. Thanks. All right, Joel. See you next time. >> Thanks, man. >> All right. Cheers. >> Cheers, man. >> The privacy run. And meanwhile, gold is only up another percent and a half while that guy was on the show, our lovely friend Joelle. I mean, come on, guys. What's happening out here? >> I I think I Yeah, I really do think it's the sovereignty trade rather than the privacy trade. And so, like, as capital allocators investors founders like trying to think of where the puck is going and what's coming next, I think getting too caught up in privacy is actually gonna be an illusion. Like I

think that's actually the wrong way to think about it. >> Sovereignty is the trade >> and and I think >> sovereignty is the trade. >> I think sovereign I think Zcash, Dash, Monero like the privacy elements I think are a are a complement to the sovereignty elements of Bitcoin, Zcash, like these other privacy coins, gold is like central banks are moving into gold and dropping the US dollar because they want more sovereignty as a nation. >> Yep. >> And as a central bank. So I I I don't have a concrete answer as far as what come next. I think Joel gave great answers in terms of resiliency and and good UX. I think those are great ideas, but yeah, as far as a category, I'm not quite sure. I just tend to think that

sovereignty is going to continue to push the needle. >> We got Lucas, the CEO of World Markets coming up, uh talking about capital efficient DeFi, what they're building with WCM. have not done too much research. So, excited to get them up uh and get get this one started. Lucas, welcome to the show. >> What's up, brother? How's it going? >> It's good to have you. >> What's up, man? >> We see that you are in one of those New York City pod podcast pods. >> Yeah, you got it. There there's an office out here. So, >> nice, man. >> There you go.

>> Are you are are are you in in New York? Is that the case? >> So, I I live in New York City. Uh I'm in London until uh midFebruary um with the mega team and I have a fund that's based out of London. So I'm in that office as well. And >> nice man. Nice. >> Yeah, I was just talking to Shu yesterday getting caught up waiting for I know there's been there's been a lot of uh unfoldings happening in Mega E from the uh testing to some of the applications to some of the drama to more and more. So happy to have you on talk about uh what you guys are doing with WCM. Maybe you could just give us a primer before we get in into into what you guys are building as to your current worldview on DeFi onchain, right? You've

got the likes of Hyperlid and Lighter dominating per obviously HIPP3 has just gone in and it's over 750 million dollars of OI right now becoming one of the best plays to trade stratify assets on chain. Then you've kind of got a lot of the dexes, the Aeromes, Uniswap, Sushi, etc., etc., etc. dominating a lot of the spot trading still on chain in those are deeply integrated into the likes of MetaMask and Rabby. You've also got prediction markets that have really kind of grown and then finally of course you've got lending which is like a lot of the a morphos ulers fluids which are really being dominated now by institutional uh RWAS tokenization stable coins and that's really where a lot of that the growth is coming from. So you've kind of

got all these different like little pockets here making up DeFi that are growing in separate ways but almost in parallel fashion. What's your current mental model of DeFi as it exists today? And you know I assume that kind of led you into wanting to build something better. >> Yeah, that's a a fantastic question. So um so really in terms of kind of overview and how it relates to world markets the my view is is pretty simple and this comes from you know I started my first crypto company in 2017 and that was an exchange as well. Uh and I can talk about insights from from that business.

We sold it to Amber in 2021 and that gets into sort of like a lot of the nitty-gritty but high level uh Vitalik wrote this great article called lowrisk DeFi on his blog in which he says the product market fit of Ethereum is essentially your whether it's your lending apps or unis swap but it's the code is onchain is transparent it's immutable and that gives users kind of no matter who you are a level of safety that you can't get anywhere else. Um it's obviously crossber and composable so on and so forth. And so like in my view what I want to see is low risk, high return,

low risk and productive DeFi. I feel like there's kind of a missing a missing variable in that equation which is like you know useful, right? And so world markets is fundamentally lowrisk, useful DeFi. And that useful is really, really important. >> Low risk, high return. And I want it now and I want it served to be on a silver platter Lucas. >> That's right. You got >> smart contract risk, please. And I'd like to onboard my boomer friends and let them know that. >> Right. Exactly. >> But it sounds I mean so so tell us a bit more how it works because honestly at the face of it, it sounds too good to be true. I mean this is the holy grail, right? Low risk, high return. It's always finding where that frontier is to so so you know tell us more um about how

you guys are able to provide such high returns with such low risk. Yeah, and obviously nothing's guaranteed. None of this is risk-f free. And you know, um I can kind of explain in detail like where the risk sits, but in short, there's the technical component, which is that everything's on chain. Hyperlid is not on chain. That is centralized as Binance. It's more transparent, which is great, but there's not a I don't think there's a [ __ ] out there who thinks that's a a DEX. Uh you can glue it to your name all day long, but it doesn't actually kind of make you the thing. and lighter you know God bless him like I I think zero knowledge I think you know but I I don't so onchain I'm talking unis swap on chain I'm

talking I can see the code on chain right none of this nothing complicated all right that's the tech let's park that for a second and talk about the financial engineering which is what's interesting so capital efficiency is sort of the buzzword but what it really means is you make more money with less this money. That's it. And let me give you an example. So if you go into Hyperlquid today and you deposit your hard-earned USDC and you use it as collateral for trading purps, it just sits there. What would be great is if you could lend out that collateral, earn an interest rate and use the loan as collateral for your PES trading, right?

you add in other markets and other products and you take that concept of like earning yield on your collateral or uh for example if you're short E futures and you hold ES spot those positions actually offset each other from a kind of a risk perspective right because it's the same underlying asset just in two different directions and so the exchange should understand that right the protocol should understand that um and so that's when you when you understand that the risk profile of holding those two positions together is lower than if you were to separate them then it allows for more leverage safely for example that's the core concept and I can get into the the

details but kind of sort of a a summary of the rabbit hole if you will >> yeah um so I saw that Megath hit like 20k TPS on one of their recent benchmarks and then I had a I had a friend Logan from um frictionless kind of comments. He's always commenting about how Salana is the endgame and how like I don't know it's it's a lot of this kind of commentary and he he he wrote like um I don't really see many use cases for this much TPS outside of trading >> and I thought it was kind of like contradictory to a lot of his thesises but it it it kind of struck me like like why do you need this much TPS? But

you're saying that you guys are are trying to build basically fully onchain order books, CLB, etc. That's right. And and so 20K TPS, I think Hyperl gets up to like 12K or something. Um, right. >> What do you think about like the landscape of Mega as as it pertains to the TPS requirements to get these things through uh and to make WCM work? >> Yeah, that's a great question. So um actually that's a fantastic question because I think it's in people's minds and the answer is counterintuitive right the short answer is that it enables things that we haven't seen before and the reason it's counterintuitive is simply we haven't seen them before. So let me give you an example. We're not

building the whole order book and the matching engine on chain for shits and giggles. We built the protocol on chain because in my first company we actually realized that there is this relationship between calculating risk and uh effectively state synchronization uh which just means that all the data has to show up in the same place very quickly. And so the hybrid architecture uh is suboptimal for that reason.

sub-optimal in that users will on average make less money, right, than if the exchange is either fully centralized or fully decentralized. And so we took the view uh very early um that uh in in effectively 2022 we had the the idea that the EVM would eventually get very fast and very cheap and that if that happened we'd be able to run the whole thing on chain and so that's what Megith has achieved. I think that we're probably we're definitely one of the first, if not the first, and sort of at the forefront of that because we we had that thesis. We've had that thesis for so long. But I think what

you'll see is actually apps consuming that TPS uh like capacity very quickly. And I wouldn't be surprised if in two years we think, you know, it's like uh it's it's you know, it's not enough. I wouldn't be surprised if in a year it's not enough and we're kind of like we really need a hundred and we really need 200 and whatever. This is Jevans paradox right which is you know is the idea of induced demand and so if you have an exorbitant amount of supply like the the same thing happened in AI like with compute exactly right you know we didn't realize that it was possible

to run LLMs because we were so constrained by compute now we have this abundance >> right and and you know look what's possible with LLMs and so you think the same thing is going to happen with uh with throughput here. >> Yeah, that's the I was going to use that exact analogy. You're that's that's perfect. I mean, >> we had papers describing LLM in 1950, >> right? And now we have superhuman intelligence in our pockets. >> I think a similar thing happens when TPS is abundant.

>> So, let's talk a bit about some of the stack here with uh what you guys are doing with world markets. I mean, one thing that we had been looking forward to in DeFi for a while, we finally have gotten is this like un under collateralized borrowing. Um, and it's something that you guys are really pushing forward. It's a very common thing in all markets to have credit extended in an undercolateralized fashion. Um, right. You think about loans, when you think about mortgages, when you think about personal loans, etc. Right. Um but it's just it's been yet to be truly solved on chain due to liquidation risks, due to issues with with uh oracle designs. Um yeah, all these different types of kind of problems. How do you guys approach under

collateralized borrowing as it pertains to kind of like the stack that you guys are building out? What is the mechanism that you guys have chosen to build uh to make this work? How like how much of your focus is here? Just curious kind of like what you've uncovered here. >> Yeah, another Yeah. also a fantastic question. So under collateralized lending that is so essential to the design of the whole protocol and the whole venue um we really started from the ground up and thought okay we know we need this feature how do we build around it? The first thing is that uh you can't take the capital outside of the protocol. You can't take it off off

the venue, right? That's obviously important. Um, you know, you can take capital off if it's over collateralized, but you can't take it out if it's under. So, when you have everything on one venue and you have an intelligent risk engine that understands these relationships between positions and you can calculate your portfolio value, effectively your state atomically with the risk engine, that's when you start to see these really big unlocks. Um, and so that's like in short how we're able to to do it. I think the another question is well why hasn't someone done it before and you've seen it tried with Gearbox and and they have a version of it um that

works. Uh I think the reason you haven't seen it really take off in DeFi actually goes back to this TPS uh conversation which is okay let's say you can borrow under collateralized what do you do with it? You know what I mean right? like if you're on a you you can't what you you know there isn't a second step right and that's what gearbox solved and why you know gearbox has seen like meaningful adoption but here you have spot and per loan productively and that's why there's demand like there's going to be massive borrowing demand for capital on world markets simply just to to service the

arbitrage opportunities that are uniquely enabled on world markets. If you think about like we like to talk about the lever basis trade 10 a $10 deposit in that trade can easily borrow $20 sorry $200. All right, that's a 20x multiplier on demand for borrowing uh due to this like single arbitrage much less sort of the second order effects. >> Could you walk through the mechanics of that? like how how does $10 h how are you able to safely >> lend $200 or $190, you know, in credit to this user?

>> Right. Great question. So, um I'll tell you that the there's a a simple part and a and a more uh sophisticated part. The simple part is as long as all the capital stays on the exchange on the venue and I have appropriate risk limits which is to say that Bitcoin is more volatile than dollars and ETH is more volatile than Bitcoin and they also have different levels of liquidity. So if I can factor that stuff in correctly, accurately, then I have an accurate view of what the portfolio is worth at every instantaneous moment. And so the liquidation engine is able to protect

the loan because it has that accurate view that factors in all those variables which are set on chain. Right? Again, you can't can't take the capital capital off. We can't list uh shitcoins uh for you know for better or for worse like we can't list memecoins. We can list new assets but only new highquality assets. Nothing that goes to zero. Um so uh that's the short answer to extend that slightly and that that's different from hyperlquid by the way like we can't list everything they can list and so that's a disadvantage but we think it's worth the trade-off. Um the the short more sophisticated answer we can dive into it if it's interesting.

The exchange understands net market exposures and because it is able to look at your risk post execution, it then allows you at the beginning of these atomic transactions to actually slot in more portfolio leverage, which means more borrow. That's a rabbit hole which I'm happy to go down, but just that's sort of the summary answer. >> Lucas, is is this going to be ready for Mega E mainet? I mean, is there a timeline on on you shipping this? Where are you guys kind of at on the product development side? Where can like can we get a test on this? Can we see a a UX?

Yeah. >> Yeah. So, we're gonna I can share my screen. Um, and uh I think I can share my screen, right? Open system settings. Jesus Christ. Okay. Um, >> yeah, we can just >> Yeah, don't worry about don't worry about sharing screen. >> Yeah. So, uh, we're going to be live with Meg day one, uh, day zero, if you want to call it day zero. >> It's actually built. Um, there's a couple of things that, uh, need to happen between now and then. Um, the protocol is deployed on Mega ETH mainet with test tokens. Uh, so the pro the um and and that's a testing deployment. the production deployment which is owned by

you know a foundation and and therefore operated by them will be deployed I expect this week uh probably within the next two days even on mainet um and then it's the market maker integrations uh the only reason that so I expect we to be fully functional by the end of this week um and then launch date is to my knowledge February 9th um that's could be subject to change You know, obviously I'm not the Mega team, but um I I would expect that's kind of when the proto when the blockchain launches and us with that.

>> Yeah, cool man. >> Lucas, what's your uh what's the what's the expected growth here? Like like you launch this thing, Mega E goes live, people are excited. What is your first month or two going to look like? >> Yeah, dude. Um, you know, these challenges are hard to tell, but I will say that I think Mega ETH is extremely well positioned and we're all kind of aligned and in the right place. So, you know, when Megie like me isn't looking to kind of do like a soft launch, you know, kind of kind of kind of with kind of launch, right? They're looking to like launch, right? You know what I mean? So, I think that it's going to be a big launch. I think it's going to be uh well incentivized. Um, I think you'll see like most of the apps, um, Oh,

sorry. Can you still hear me? >> Yeah. >> All right. Sorry, headphones. Weird. Uh, I think you'll see that, you know, most of the apps um are, uh, kind of well coordinated. And I think what Meg understands really well is sort of connecting apps like every user action on Mega ETH should hit multiple apps at a time >> and that's going to drive the value of the platform, the volumes, you know, the liquidity. Um so we have bricks uh listing on their uh tokenized uh sort of emerging emerging market yield products.

We have hit one which is the best retap I've seen in at least two years. Um they're all integrated and and kind of settling on world markets. So I expect it to be big. That's my personal take. >> And Lucas, what what would you say is the the number one or two actions that people should take when it first goes live? like what should they be doing either on world markets or something else on mega ETH you know as soon as it launches what what would you suggest that they that they go do >> yeah great so I would do two things I would go to hit one if you want entertainment value I think that's a great app for entertainment and if your goal is to make riskadjusted returns I go to world markets and I

would do the lever basis trade and we've packaged that up so it's one click you decide hit what leverage you're comfortable with and you hit a button and you're done. And that's going to give you a sense of like it once you hit it, it's going to feel you're you're going to feel that you're doing a lot and it's going to also kind of like integrate you with sort of how the exchange works because you now have multiple positions which are related to each other. We're going to try and make that process easier to manage. But I independent of of the simplicity of it to kind of manage the positions. Uh I think the risk adjuster returns are at least the best I've seen.

>> Incredible. Early February. >> Thanks for your time, man. Best of luck. I I know it's heads down grind mode now for the next couple weeks. So, uh keep it up and enjoy that. I'm looking forward to catching up with the team there. And yeah, I mean, I think the whole market has been waiting and is ready for Mega to to launch and just to, you know, try it out. And I think they're going to compete directly with Hyperlid, Lighter, Bass. Exactly. >> And hopefully be, you know, top top of the food chain there. So, thanks, Lucas. >> Thank you, sir. Have a good one. >> See you next time. Thanks. >> Cheers, man. See you, buddy.

>> All right, Rob. Um, so we're we're cruising. >> Yeah. >> U Mega E February 9th. Not sure he was supposed to say that out loud, but here we are. >> Oh boy. >> Um, just got that out there. And yeah, I think the market was ready in December or or January, so I I think they're more than ready now for the mainet. >> Yeah, look, I I think TPS is actually important. Maybe that's a hot take these days. Like I I do, you know, it's the reason why L1 has the most activity ever, like all-time highs in terms of transactions. Like why go use DeFi on an L2 these days, right?

>> Yeah. >> And and and like we all have that feeling like that more secure feeling using DeFi on L1. Now that there's higher throughput, you know, it makes sense to actually do that. it just wasn't pragmatic and and really feasible to do it when, you know, costs and transaction fees were uh uh preventatively high. So, >> yeah. >> Yeah. Um >> well, I think we've got quite a bit more news to cover, guys. Um we've got Yeah. I mean, we're going to keep it rolling here. Uh we're on the we're on the tokenization shift here.

Back to the NEO finance kind of talk. Let's have a quick look into the market. Uh would you look at that? Gold is higher. What's new there? Silver ripping. Trump says he doesn't care about the dollar at all. He says it's going to yo-yo up and down. And uh Trump says he doesn't care that the dollar is going down. >> Good. >> So, I don't take it take that for whatever that means for for your portfolio, guys. But my goodness, holding dollars is just the whole world is realizing that nobody wants to hold dollars anymore in real time. And it's scary.

I mean, for a long time, we talked about US dollar hyperinflation. Um, it's pretty interesting to see that the US dollar is losing its reserve currency status. Not because of inflation. >> No. >> Like it the dollar is not getting dumped because they're inflating. It's just getting dumped because it's not as good of a reserve currency anymore, >> which >> yeah, >> I mean, it's scary. We're going to see what really happens once they do start printing money is my point. Once they actually turn the money printer on, they lower rates started >> and then inflation gets added into the the basement trade is happening and it's not even >> it's not even

>> the markets are usually forward looking in that regard, right? But yeah, I mean it it at least for Bitcoin and crypto, it hasn't really started yet until until Jerome Pal is out of there and and and the Fed chair kind of moves into more uh friendly policy >> and and if metals get so so if they swell so much that people just look elsewhere. >> Yeah. All right, guys. Wall Street's $80 billion tokeniz tokenization shift. The New York Stock Exchange is building a tokenized securities platform as they've announced for 247 trading. So not, you know, I think we all kind of thought this was going to happen where like the

world was going to get more financialized, go closer to crypto than the other way around. Instant settlement, stable coinbased funding. BNY Melon and City are supporting tokenized deposits across ice clearing houses. Um, and yeah, Legacy Finance is simply adopting crypto native market info. This is what we said. We thought this was going to happen. >> We had Omar from ZK Sync come on and talk to us specifically about tokenized deposits and how this is actually different from stable coins. You know, stable coins right now with Genius are fully backed, right? One to one. You don't have the uncolateralized lending, money multiplier, credit expansion that Lucas from World Markets was just telling us about $10 becomes 200. It creates credit. This is a wealth effect.

people use that money in that token economy or the broad economy as a whole. >> Tokenized deposits are different from stable coins. Tokenized deposits are actually deposits within banks. Banks have the power to lend out deposits and create credit and expand the monetary supply. Tokenized deposits don't have to be one to one fully backed. They can grow and they can continue to issue more stable coins or issue more deposits or issue more fiat once they have tokenized deposits. I expect that to lead to one of a a really significant um wealth effect and just money credit expansion to happen and and you got to think where does that credit go once it's created

well it probably goes into tokenized equities probably goes into tokens itself these platforms so on so forth >> yeah I mean look black rockck black rockck's buildle has over 2.5 billion in tokenized uh treasuries rwa market is going to be at 80 billion probably by 2026. By the end of the year, that's excluding stable coins. If we're including stable coins, we're probably looking at closer to 500 billion including everything, right? Once it this genius act is through, once we get more clarity on the clarity act, you know, u I'm thinking 420 450 billion stable coin supply by the end of the year. Um, and yeah, I mean the shift is going to move from competition across assets, UX, distribution, and now

towards like financial super acts, super apps, right? It's why Hyperlid's catching a bid today. People are realizing that you can why trade on the New York Stock Exchange when you can just trade on Hyperlid? >> Like straight up, why trade anywhere else when you can trade on Hyperlid? That's kind of a crazy thought. >> New York Stock Exchange is still more liquid for equities. >> Oh, of course. way more liquid, way more assets, but like the trend is going in one direction. So, you got like the New York Stock Exchange coming >> towards where Hyperliquid's at. Hyperl's going towards where where they're at. This crazy convergence happening.

>> And that convergence is called Neo Finance, brought to you by the rollup. >> And if I could get a bag, wow, hype's pushing 30. Insane run. Insane run. Um, so yeah, I mean guys, this tokenization shift is going to keep happening. Crypto has not replaced legacy finance. It's becoming the rails that legacy finance runs on. And from there, we can start to have the replacement conversation. So, um yeah, guys. All right, let's move on into uh Circle got some criticism actually from that swapnet hack that we talked about yesterday. Um they were criticized for not freezing the stolen USDC, >> which actually is pertains to what we

were talking about earlier, right? to how Yeah. >> Yeah. So, we don't have to spend too much time on this, but I think this is an example of how people are actually wanting these issuers to freeze assets. I thought we lived on a permissionless blockchain. Like, I thought this was like not your keys, not your coins. You get swiped. Sorry. You know, like that sucks. But now, like, you know, there's criticism being tossed around because there are buttons where you can blacklist, you can freeze assets, and they're not. We're in a really weird time, right? Like I, you know, five years ago it was like, "Hey, code is law." Like these hackers just played the game better. You should have been better at coding and programming.

>> Yeah. What was the Mango Markets guy uh um efficient markets or something? Uh what was the Mango Markets guys entire take? I wish >> No, no, you're right. It is. It is like we were making the market more efficient like you know, it was out there for the taking type of thing. >> Yeah. Yeah. Um, so the issue here was, uh, stolen funds remain unfrozen for hours despite onchain evidence. Obviously, Zack XPTt and this guy Tanuki42 had their own takes on it. Uh, Circle's track record is pretty solid when it comes to this. They've uh, frozen 110 million across 500 addresses.

However, Tether's frozen 1.6 billion across 2500 addresses. Um, it affected multiple chains. So, guys, I mean, you can't have both, right? You can't have this permissionless system, you know, with no escape hatch, but then, you know, complain about Circle not stopping your hack. And it's it's >> you can't have it you can't have it both ways. If I'm if I'm, you know, one of these issuers, it it is safer. Like, I might as well just freeze it, right, and then worry about it later because if it's frozen, like people can still get it out, but you know, if there's some sort of time lock, it's like, all right, let's just slow this thing down. But you can't be responding to every spam request like you don't if I'm circle I

don't know right when things should be or should be not. It takes some investigation. So yeah, it's a it's a tough situation, but we're we're going to continue to see we're going to see this more and more often. >> Yeah, it just sucks. >> We'll we'll move on through circle here. Um >> what's up next? >> Hopefully the hopefully the uh the exploit uh kind of can hopefully they can end up freezing it and figuring it out. I I'm sure that they will, but these exploits have gotten smaller, which is nice. Just don't know. Like, it's just very bare markety to just see so many exploits. Um I I just have PTSD from previous bare runs with like just like the 2021 uh exploit season was just

insane. 2022 was insane. Yeah, it's just, you know, it's um I I I actually think it's less than it has been, but you got to look at >> and way smaller size. >> Yeah, but the number >> there's not been any bridge hacks. >> The number of projects are growing and the the assets >> amount of hacks is going lower. >> The amount of hacks is going lower. The market cap of assets that are on chain is growing. And so if you look at percentage basis [clears throat] on a relative basis, these hacks are way lower.

>> Yeah. Um >> all right. Uh Securitize hires NASDAQ ETF leader. We are excited to welcome Jiang Bui as vice president, head of issuer growth at Securitize. Jang joins from NASDAQ where she led US equities and ETP strategies and helped guide the exchanges spot bitcoin efforts. What a win for securityize. Big ups. Congrats to them on the dub. Um, big big hire. Congratulations to Securitize for bringing on more traditional finance talent. So, she brings deep market structure and regulatory experience working with issuers and liquidity providers. Uh, I think her main role is going to be focusing on regulated tokenization. Right, Rob? This comes

back to what we were talking about earlier with the fintech co-op in crypto, right? The goal for securitiz is to have real ownership rights for their tokenized assets, dividends, voting, disclosures, and yeah, I mean, securitize is very clearly trying to make tokenization the ETF style next evolution of capital markets. It's happening. It's happening from the biggest sources of capital allocators, funds, and regulators at large. And it just fully reinforces the idea that this space is heading into a compliant, scalable, onchain securities market. It will keep happening in that regard. and you can't fight it. So once again, congrats to secure size there.

>> This is this is neo finance at scale. I don't have much more to add except there's a talent drain that's happening and we saw it in AI and we're now we're seeing this neo finance talent acquisition where companies pe people are no longer going into legacy finance. People are starting to skate where the puck is going as well. And so, you know, Jen obviously realizes this. She sees the future of capital markets is happening on chain. She goes, she joins securitizes one of the primary tokenization platforms and one of the leaders of NEO finance. So, shout out to those guys.

>> Great team over there at Securitize. Next up, we've got See what what have we got next up? >> Yeah, Hyperl. We got Jeff. >> Hyperlid. Jeff. >> Jeff is Jeff has been cooking. >> Yeah. >> Um, he's on it. Well, uh, I mean, obviously hype is up significantly. >> Up to $30 almost now. Let's check it out. >> 23% on the day is what I'm looking at. >> Huge run. >> 37 and a half% this week. >> Yeah. I mean, obviously, Hyperlid is at the pinnacle, too. You know, it's um the container for both of these for both quality assets, right? on the on the one hand, you've got, you know, you've got tokenized equities, you've got private

credit, you've got RWAS, but you know, the whole stable plus yield asset class, RWAS, private credit, I kind of bucket that all into one. And then you've got speculative assets on the traditional side, right? Equities, metals fall into that bucket as well. And then you've got speculative on the on the token side, Bitcoin, ETH, and and the longtail. I I see Hyperliquid as dominating kind of the bookends, the two speculative spectrums. They've got the tokenized equities market in a chokeold. Like pre pre-market, they've got these derivatives and then also they have the ability to convert those to spot markets. I'd imagine that Bitco's IPO onchain ultimately finds its way into

Hyperlquid if it hasn't already. Maybe it has. And ultimately more IPOs ending end up launching on Hyperlid as well. And so you've got the the high quality assets that are coming over from from Legacy Finance. I'd imagine that there's a tokenized gold representative on Hyperlid as well. So, >> yep, there is >> Hyperlid's got a a very significant presence in the speculi or legacy finance assets onchain, but it's also with this it's the best place to >> it's also the best place to trade >> to trade Bitcoin >> crypto assets as well. for so long it was centralized exchanges. And so now if I mean we're looking at the Bitcoin order book for Hyperlid and the Bitcoin order order book for Binance, right? And so on the left, you know, we've got a

spread of about 10 bucks 87560 to 87550. Um and and then you know on on on the I'm trying to make >> Yeah. So so it it if you look basically what you're looking at here is you'll see there's more spot bitcoin in in in the order books on both the ask and the bid side for these assets or or for the exchanges. So on the right you have hyperlid >> and on the left you have Binance. And basically as you can see the total Bitcoin between the same parameters or relatively speaking the same number of of of value.

Hypo just has way more uh depth in their books, >> right? >> And this is like the most highly traded asset in all of crypto. And so you got to think that like this is a significant turning point. This tweet led Hyper Good to pump like 45%. Insane move. It's definitely getting some excitement back in the market. People are like, "Whoa, we're back." Hype at 20 was a steal and we'll see where this goes. Guys, I think that wraps us up today. Hyperl's on a run. If you don't own Hype, I'm sorry. I don't know what to tell you. Things been dominating. It's the best asset in crypto. Pumped up fund looks great, too.

People are shilling those, too. Revenue Meta is here. Buybacks are on. Hyperl is on. Jeff is tweeting. Guys, we're we're looking good here. So, keep it together. Keep your hat on. Keep your If you're still If you're in the gold trade with me in silver, congrats. I don't know what else to tell you guys, but I'm up three and a half times on gold and I ain't selling. I'll see you guys in 2035. >> Your size is not size. We'll see you tomorrow, guys. I'm up like a I'm up 5x on silver. I'm not selling. 6x. Not selling. See you guys soon. See you guys tomorrow. Malo.

>> [music] [music]