Ethena Founder: The Next Chapter For Ethena | Guy Young

When capital can move around the world at the speed of information and these things can scale at like the marginal cost of software, it's like the first time that finance can actually scale at the cost of software. You get outcomes like this, or, you know, the hyperliquids or the pumps where you've got, you know, 10, 20 people sitting in there and they're generating billions of dollars without needing more people to sort of get there. So I think that's actually one of the really interesting things about on-chain businesses where when you hit real like escape velocity, they don't really scale like linearly at all in terms of the cost. Yeah.

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds or projects discussed. All right, everyone, welcome back to Empire. Very excited about this one. We got Guy from Athena back on the show.

Guy, what's happening, man? Not too much. Thanks.

Good, good, good. Guy, there's a ton to talk about, including Stripes Chain and Hyperliquid and perps. And but we should start with Athena first, right? Because I was going through the numbers before this. I think most people who are listening will be very familiar with Athena, but maybe unfamiliar with just how quickly you guys have grown. So let me just call out a couple of the numbers. USDE just crossed $12 billion market cap, the fastest stablecoin in history to reach that. USDE outpaced all USD assets in notional supply growth. Athena crossed $500 million in cumulative gross interest revenue, $30 million of USDE rewards distributed in the last 30 days. Athena is currently the largest— the third largest stablecoin issuer behind Tether and Circle, fastest USD asset to reach $5 billion in history. Second fastest crypto startup to reach $100 million in revenue behind only PumpFun. What do you think is like, just as you look back and, you know, we had never spent too much time together. We got to spend some time together this summer. Like, it's fun hearing about the early stories and the journey and stuff. Like, what do you attribute just this, like, massive parabolic growth to?

Yeah, I think two pieces. I think one was actually just luck because I think when we first came out, I remember when we had the first pod maybe back in March of 2018. Yeah, like 2 weeks after Athena had just launched. If you remember back then, funding rates or like rates in crypto were kind of like 50%, 60% annualized at that period of time. And so there was literally not a better period in time in the last sort of 5 years for us to come out. And we were very fortunate, I think, just with the timing. So I think that obviously helps the growth because it's very— it's not very difficult to sell a product when it's got like 50% APY basically to people. Some of the cash flow numbers that you're describing now obviously helped by that fact as well. I think the other piece is, I feel very fortunate, I think, with the team that I have around me, who kind of even, you know, despite how much we sort of achieved in the last 18 months, still kind of work as if, you know, it's day one within the startup in terms of motivation and like urgency. I think we try to have like a pretty urgent mindset within Athena, which is like every day you're going to battle and trying to do things, you know, as quickly and aggressively as you can. And so I think we've never really slowed down in terms of, you know, motivation, ambition to keep pushing at the same pace that we did in the beginning. So I think it was kind of a confluence of, you know, luck. And then I think just the attitude that we have within the, within the business to just be aggressive and motivated even at this stage. Yeah.

Yeah. How do you think about the business today and just the suite, if you're maybe explaining this to a non-crypto person, right? Because you guys launched with the synthetic dollar, right? USDE. You now have— I'm going to try to remember these— SUSD, USDTB, The institutional one, which is iUSDT. You have ConvergeChain. I'm sure I'm missing some stuff, but how do you think about the business model today?

Yeah, the core business is still fundamentally driven by USDT. And I think even though we sort of put ancillary products that sit around it or different distribution channels, whether it's a chain, exchanges, all these different pieces, the core piece that still drives the business is just the size of USDT. I think one piece that people don't fully appreciate is just because of the gross interest income that's actually produced on the USDT balances, i.e., in 2024 produced around 18% APY on USDT. You don't actually need USDT to be $50, $70, $80 billion in size to be producing basically the same cash flow figures that you're seeing coming out of a business like Circle. So for us, if you even just take simple maths, it's sitting at just under $13 billion now, rough annualized APY in terms of gross interest income. Around 10%, uh, before you sort of take the take rate, that is like already $1.3 billion of gross, uh, interest revenue that's being produced there. And that's what's like an interest rate that's below what we saw last year. Uh, so these numbers can get pretty big pretty quickly, especially when you're growing at the speed that we are. And I think the view that we have is that, um, pretty consistent with, I think, uh, where the world has actually arrived in terms of their views of like dollar assets now. I'm pretty convinced that this space is going to $2 to $3 trillion in the next like 3 or 4 years. And actually the subsector, subsector that we operate in, i.e., like yield bearing or reward bearing pieces of this are actually going to grow quicker than the rest of the market. So like internal view of where we're wanting to take this in the next sort of year or two is like $30 to $50 billion in supply. And when you're producing like 10% interest on that size of balance sheet, the numbers obviously start to get pretty attractive there. So I think the other business lines can never really get to that scale, except for potentially what's going on with a few of the exchanges that are building on top of Athena, where I think perpetual swaps are kind of the only thing that are more profitable than dollar issuance if you can do it at scale. Yeah.

And you guys, I'm going to ask a bunch of dumb questions in this podcast. This will be the first dumb one. You guys are taking 20% of the interest.

It's changed quite a bit through time. So yeah, it's been anywhere between like actually 0 to 50%. You know, there's been discussions around like a fee structure and how that's going to be formalized around the thing that's, you know, basically just waiting for a few more milestones to be hit. But I think in the beginning that number is actually going to be a bit lower, probably closer to 10%. I think it's something that makes sense. Cause I think fundamentally, if you believe what I've described here, that we should be growing to $30 to $50 billion in the next couple of years, I don't think you want to be trying to capture as much value as you can right now. You actually just want to go and grow and become more dominant within the market segment. So I think, uh, it's maybe a piece that I've disagreed with the market a little bit, uh, today, which is there's a massive obsession around, um, you know, buybacks and that kind of stuff when it's a startup that didn't exist 18 months ago. And I just think that the market opportunity to go and become a bigger business than Circle is a far more interesting one than kind of capturing a bit more at this stage, if that makes sense.

So you guys get to $30 billion, 10% interest on that, that's $3 billion. You guys are taking 10%. That's $300 million in revenue.

10 to 20%. Yeah. So call it like $300 to $600-ish like range. And Circle was at like $150 last year basically.

And then you take like 10 bips, I think, 10 bips I think it is on mint.

Yeah, correct. That does add up a fair bit, but it's, yeah, it's not going to add like 9 figures. Yeah.

Yeah, yeah, yeah. Um, all right, man, bunch of talk. So with that as the context, bunch of topics I want to get into. The first is, um, you guys just announced the second round on this digital asset treasury, right? Stablecoin X. Um, I'm gonna get these numbers a little wrong, uh, because I don't have it in front of me, but roughly a $500 million raise. There's like a couple hundred million in buybacks. Um, I thought the best place to actually start would be before we go into the, the actual second raise and stuff like that. Tell me about the structural— you had this interesting tweet back in end of July, which is about the significant challenges with VC unlocks. And I like seeing you say this because I think a lot of founders are facing this, but rarely anybody actually confronts it publicly. Tell me about the structural challenge that you were trying to solve with the digital asset treasuries.

Yeah. So I think the first thing to say is that I've made many mistakes when it came to fundraising in the last 2 years. I think this is the first time that I've ever started a business, raised capital for what I'm doing. And I think naturally you make mistakes when it is your first time. I think the summary of that is that we raised too much at too low of a price, which should be pretty obvious to most people.

And you raised too much money at too low of a valuation.

Yeah, exactly. Yeah.

But isn't that a circumstance of like you were a startup so you couldn't get a high valuation?

Yeah, no, I think that's fair. It's just we actually didn't need as much money as we did raise. I think that there was a— like, raising was kind of at the bottom of the bear market and it was a question of like like, is there even a VC market that's left here in like 18 months? And so kind of overraised at the wrong time. So I think like, I'll admit that we basically made mistakes, but you try and you can sort of like course correct these things obviously through time. I think the big issue though is that, and it's something that's been spoken about quite a bit, is that there's just not enough capital on liquid markets to actually carry these tokens from TGE and through their lifecycle after that. So there's a ton of VC capital that's willing to get in in private markets. but actually like the gross aggregate liquid fund, you know, cash that's sitting around, I think is anywhere between $10 to $15 billion. So that covers like 2 alts basically in terms of their emission schedule for like some of these big, bigger alts that exist in the market now. And so I think the fundamental thing is that if you, even if you look at like total alt notional market cap, where did you peak in 2021? And then 2024, it was basically the same number, which is $1.2 trillion. And to me, that was an indication of like, Maybe that's how much money there is in the world for people to just be punting, you know, retail money, just punting like what is 95% vaporware. And the view I have is that basically you need to mature at some point where these things become investable by tradfi, where there's real pools of capital that are willing to sort of carry these things further through their lifecycle. And I think we could see that in a very powerful way when we looked at the way that Circle traded. You know, everyone was pretty negative actually when Circle was coming out on their IPO within crypto. You know, you had people saying this thing was overvalued at $5 billion. And it ripped in everyone's faces, you know, 10x to 300 times earnings. And to me, it was a very strong indication that there's excessive demand within TradFi for this narrative, but we haven't found connective tissue to sort of, you know, connect what we're doing within crypto to those markets and the pools of capital that sit there. And so to me, it was a very obvious, like, we have a problem. There's not enough capital that's actually bidding these things within crypto. And then you have another problem with TradFi, which is like, we don't have other ways to express a long view on the growth of stablecoins and digital dollars. So why don't we put those two things together? And that's sort of where we arrived at the logic was made very, you know, I would say like uniquely, this was uniquely interesting to us, you know, just based on where we're sitting a few months ago.

Before the DApps came, how did you think, because you obviously saw these, I mean, basically from now until sometime in 2028, you have these like big, you have a bunch of unlocks, right? And the VCs are unlocking, they can sell the tokens. How did you think you were going to solve that problem?

Yeah, I don't actually have like a proper answer to that. I think if you spend too much of your time thinking about that, you don't actually build a product that can actually grow into your valuation. So it's not something that I spend a lot of time thinking about. It's one of those things I sort of hoped would work itself out. But I think we just got presented with a very interesting opportunity, which was you now had the opportunity to try and fix that problem yourself. And that's when I think we focused in on trying to get these support NFTs to market.

Yeah, yeah. Right. Well, let's get into the data in a second. But for founders listening to this who are fundraising, there's, because this, this is kind of the time of the cycle where everyone's fundraising, right? What advice would you have for founders who are out in the market fundraising right now?

Yeah, I think just think very carefully about how much cash you actually need and how much of your token you want to sell. I think if you're selling more than 15-ish percent of your supply, you're going to have a pretty tough time going forward after that. It's easier said than done because, you know, important things take money to build. And I also just think about, think about like the DNA of who's sitting on your cap table, because there's a lot of people within crypto who masquerade as venture, but they're really just like hedge funds who are trying to make a quick trade. So I think we made some mistakes with, you know, certain market-making trading entities, which just ultimately are not— they do not have the DNA of like venture funds who are actually willing to sit on this for 10 years. And I think if you can get, you know, one or two partners who aren't as aggressive in terms of trying to find liquidity early on in the lifecycle, I think that can be very meaningful for people that you bring in. That's also like, you know, when we speak about who people perceive to be the best VCs in the space, that's why people fundamentally want to raise from them. It's not only just their own brand, but it's actually the best VCs are actually the guys who hold it the longest because that's how they actually make money over 10 years. So generally, I think people who have the best reputation are those VCs who act less like, you know, liquid hedge funds. Yeah.

All right. Let's get into the dApp. So you guys had this, so you guys have Stablecoin X. Did a big raise over the summer, started the buybacks. You guys just completed the second raise, got announced on, I think it was Friday, raised $500 million, started buying back a couple hundred million. Walk me through this, the second, second raise for the debt.

Yeah, it was really just rerunning the same structure that we had in place there in the first one. So just so people are aware, this looked quite unique, I think, in terms of its structure, in terms of what it was built together with TLGY and StablecoinX. So essentially what's happening is like investors are buying locked tokens and then the proceeds of the locked tokens that are going into the vehicle are recycled in as spot purchases on the open market. I think the market responded extremely well to that structure and it was actually a new one that we brought to market that didn't really exist in the same format before we came out with the first raise. And I think the reason for that is that a lot of these vehicles are being set up in a way where they're kind of just excellent liquidity for either, you know, VCs to put in tokens and then or the cash that's actually coming in just goes to the foundation as an OTC and sort of sits in a side pocket on the side. So I think a lot of the time you see these raises and then people are like, why should I care? The foundation just raised $200 million and sitting with them and nothing's happening afterwards. So I think the piece of the market responded to reasonably well was actually the foundation saying, we're getting alongside you and sort of bidding in the open market alongside you. So yeah, that was sort of like the basic structure. Uh, it was just, uh, you know, a repeat of the same structure at a larger size in terms of what was completed now. And I think the other thing that looks structurally quite different in this vehicle, um, is actually, it was actually a SPAC rather than, uh, some of the shells that you're seeing coming to market now. Uh, the, the fundamental difference here is actually the time to liquidity or the timing in the market. Um, is, is much longer for a SPAC. So it's, it's typically somewhere between a 3 to 4 month process until, uh, the, the shares are actually trading in liquid. There are a bunch of different reasons for why we thought that was the right thing to do. And I think you've seen some news come out this week. You might have seen the NASDAQ was getting a bit upset with some of the in-kind contributions without shareholder votes and that kind of stuff. I think we're starting to see a bit of the cracks now of people taking shortcuts with a few of these things. And I think the view that we took was that it's, it's harder to raise money when the liquidity profile is longer, obviously. But we wanted to set it up for something that we thought was built for the, for the long term. And so, yeah, we didn't take the same path that everyone else did with a vehicle that could get to market with a much shorter liquidity profile. Yeah.

Yeah.

How much—

the big difference from the first— your first debt to the second debt, I guess, same, same debt but different raise, is that the navs have drastically compressed. How big of an impact did that have on the second raise?

I'd say a little bit of an impact, but not an enormous one. I think if people were trading this to, you know, get in and out within a month, I think there would be a bit more sensitive to what's happening week to week in terms of the markets. I think fundamentally here, a lot of people were actually just using this as a good way to get an entry onto Athena with a longer-term view of we want to be long Athena and like the growth of like the secular growth of the narrative that it sits within for a longer period of time. So I'd actually say like the capital that's sitting within our DATs is like 80% extremely long-term venture capital rather than some of the guys who are playing extremely short like flip games around the end now, you know, within a month. So I'd say, yeah, obviously people are looking at these things in the market. I think this week was particularly weak for some of the ETH vehicles in terms of how they're trading. But I think ultimately people are getting in here with a longer-term view than like a month. So it didn't have that large of an impact.

Yeah, I was talking to these guys who, the team of another dApp that's been a pretty big one that's coming to market, but the mNavs compressing of a bunch of these ETH dApps has basically like probably 50% of the funding has been ripped from this stat. And, uh, the thing I was telling the— found this team is like, look, you probably just saved yourself a bunch of headache that was going to come in, you know, 90 to 120 days because, yeah, you know. So what's, what's your guess on how these things evolve?

Uh, yeah, it might be surprising to hear, but I'm, uh, I'm pretty skeptical, I think, on a lot of them. And I think the long-term, like, viability of why a bunch of these should exist— like, I don't think, you know, the 7th Alt L1 vehicle of the same token kind of has a reason to exist. And I think a lot of these things are going to pretty quickly trade below NAV. I think for us, it's something I was talking about before. For us, it's really just a distribution play. Like, I would encourage anyone who's listening to this, don't buy any of the DLTs associated with Athena if they're above 1x NAV. That's not something I think that makes sense in the way that they're designed now. What we want is just easy access to people in the markets to be able to get in. Maybe a one-time snap in terms of getting their hands on the underlying. And for us, it's really just those big pools of capital within TradFi that we haven't had access to, and we just want to open up to those people. So I think for us, it's a slightly different story, which is like, people want something else except for Circle to express a long view on the growth of, you know, the stablecoin sector. And this is a very uniquely interesting catch-up play because we're growing faster. It's like the first legitimate competitor that's actually come up to the big two, i.e., crossing $10 billion. And then I think the most interesting piece about this is that the rate, the responsiveness of Athena to rate cuts is very different to Circle. So like when rates go down, Circle's business model is actually quite challenged, right? Where you just immediately lose all the revenue that will be coming through there. We tend to see actually like funding rates and the rates on Athena's product go up at the same period of time when rates go down in the real world. And that's a very powerful impact, right? Because people will look at that and say, right, we're going into an easing environment. Is there a rotation from these businesses that are like negatively geared towards falling rates to something that's actually going to benefit from it? So yeah, I think ours almost looks like a pseudo equity story rather than something that's like a pure DAT where you're just buying BTC or ETH at some sort of premium to have. Yeah.

I want to get into other aspects of Athena's business, but anything else on DApps that you think is interesting or relevant?

Yeah, I think one thing we haven't spoken about a bunch, which is actually a pretty interesting tailwind for DeFi in general, if it can be done in the right ways. Really think about like connective tissue between capital markets in the real world and like on-chain finance in terms of like deployment in DeFi. So you've seen a few of these start to deploy like ETH into some of the staking products that you see on-chain. One idea that I think is pretty interesting to explore with something like Athena, right, is that so you can raise debt financing within the vehicle at 5 to 6% within tradfi. And then deploy that into USD at like 10. Now you've actually created like a very interesting, like, TradFi to DeFi carry trade where you can do that at mega scale. Obviously, like, fixed income markets are huge in the real world. And then actually push, you know, the TVL and like growth of your own products on chain and then monetize that spread that you're actually creating between TradFi and DeFi. So I think we're going to see a lot of very interesting structures that actually find, you know, compliant pathways for capital to come at scale from TradFi into DeFi. All of the products that provide like leverage, yield, all of these different pieces could be enormous beneficiaries of those flows because this is slightly different to ETFs, right? Where the mandates of some of these DATs is much broader than any staking ETF, for example, because it's almost like an open-ended hedge fund to basically take the ETH and just say, maximize the return that you can make on the other side. So I think that there's an interesting tailwind that might sort of evolve with like DeFi TVL that falls out of this.

Guy, can we go a little deeper on just like what you think will actually happen here with this carry trade? Can we just, let's follow this a little bit.

So yeah, I think as rates fall, your ability to like raise leverage from TradFi obviously becomes cheaper. And I think what we've generally seen in the last cycles, and even at the beginning of this one in '24, is like when rates start to fall in TradFi, people speculate more on the longer tail of assets where crypto demand for leverage picks up within DeFi, within CeFi. And actually, as rates are falling in TradFi, we tend to see actually crypto rates go up in the opposite direction. That becomes like a very powerful impact when you have access to borrowing within TradFi. So let's say you set up a DAT, it's got $5 billion of ETH, and you can go raise $10 billion in dollars to go and deploy in DeFi after that. One of the most— this is going to be a very compelling way that people can actually argue why should you pay more than 1x NAV for the underlying. Because if you listen to some of the ways that like Tom Lee describes, like why a premium to NAV is justified, he talks about like the ETH staking yield, right? Which I I don't think that's like a very, that doesn't stand up on its own two feet in my view. Because I don't think it's like fundamentally inaccessible unless you sort of went through the vehicle. But let's say he put a capital structure in place where they were monetizing that spread of like borrowing $10 billion from TradFi, deploying that into DeFi, and then earning, you know, 3, 4, 5% on the $10 billion that's just been borrowed. That income stream, you cannot replicate yourself, right? When you're holding ETH, that can only be like done or put in a package. When it's sitting within one of these vehicles. And so I think it's a way that people are going to start to want to differentiate themselves, which is like, how large of a scale can we do what I've just described there? And how effectively can we do it in terms of monetizing that spread? And that's actually the way that these DATs can compete with one another to say, you shouldn't be paying 2 times now for this because I can construct the capital structure that no one else can. And that is fundamentally why, why is it that Sander is different to everyone else? It's because he can raise leverage and a capital structure that you and I do not have access to. We cannot get access to non-callable, non-liquidatable debt or leverage on BTC. And that's why it actually makes sense to pay more than 1x now for Bitcoin in strategy.

Yeah, that's interesting. You probably end up having an evolution of these DApps where instead of just putting like a 1-to-1 token in it, DApps basically become this vehicle through which capital ends up getting mobilized in TradFi world and then deployed on-chain at scale.

Yeah.

Yeah. Did this, for people who were, you know, kind of saw the leverage, the leverage run-up of 2021 and then the leverage blow-up right at the end of '21 and into 20, really in 2022, does that scare you at all?

Yeah, I don't think it's actually the same because, uh, let's say you're raising $5 billion of debt to put it like $5 billion into USD as some example. You're not actually levering the underlying crypto asset, right? Like your ETH is not actually encumbered by that trade, you're encumbering it by the USD that you're putting it into on the other side. So I think that sort of carry trade that I described there doesn't actually necessarily increase risk a whole ton because it's kind of like collateralized one-to-one with what you're deploying it into. I think the risk obviously becomes like if you start to lever up all of the underlying assets and you're, you know, 2x long ETH within the vehicle itself and then these things start getting liquidated, obviously that becomes a bit more challenging. I think the one thing that's good is that they're all much more transparent vehicles, right? Like we couldn't really see into the balance sheets of all of the entities that blew up last cycle. While here it's like you actually have disclosure requirements to be showing to the market. So anyone who's kind of reading those documents will be well aware of how much leverage there actually is when it is sort of building up.

Yeah. Who, as you think about it, so other than Athena, who ends up benefiting the most from this? Like who, what on-chain protocols?

Yeah, I think it could be stuff like Syrup, Sky, Spark, Aave, basically anything that facilitates leverage or is providing like a dollar with a yield type product. I had a tweet on this actually describing— I quoted the video that you did with, with Michael when he was talking about the spreads. And I think, yeah, those names I described that are basically the biggest beneficiaries of that rate shift dynamic. Yeah.

Yeah. Maybe we can get a little more into this relationship between Athena, AAVE, and Pendle a little bit. So Athena assets on AAVE crossed— I don't have the live numbers in front of me, but in my notes I have $6.5 billion in total deposits. Since launch, liquid leverage on AAVE has grown to $2 billion across USDT deposits. Athena assets now comprise over 70% of Pendle's $10 billion TVL. So you've got— there's a really interesting dynamic that has played out that I don't think people are— maybe people who are really close to DeFi have seen it play out, but I think probably broader Empire audience doesn't realize this, where you have Athena, Pendle, and AAVE basically have this like very highly mutually beneficial relationship. Where each offering of each business is kind of growing the top line of, of the other one, right? Athena is the fastest growing and largest yield-bearing stablecoin issuer. Pendle is the yield market and the kind of bond platform, and Aave is the money market. Can you just expand on, uh, both what, what is this dynamic, what is this relationship, and how did this come to be?

Yeah, I think it's— well, I think it's actually the best example of like DeFi money Lego composed of both. Yeah, I agree, I agree, uh, that we've seen the cycle, um, And that was kind of what drew me to the space in 2020, was kind of doing that kind of stuff, but at a much, much smaller scale. Yeah, I think at a very basic level, all that's happening here is that you have two disparate interest rate markets between DeFi and CeFi. So funding rates just in general tend to have higher rates than where you can borrow money from Aave. Actually, what we're describing with the TradFi to DeFi carry trade that we just spoke about in those DATs, That's actually exactly what's happening here within this construct. It's just you can borrow money cheaper from DeFi, i.e., from Aave, than you can earn from providing leverage into CeFi. And all that Aave is doing is essentially saying you're getting paid 10% to provide dollars into CeFi and you can borrow at 5% within DeFi. Someone's going to just lever that up basically until those interest rate differentials converge. And the cool thing that Pendle's really bringing to the market is that funding rates tend to be extremely volatile. So, you know, one day they can be plus 60% and the next day they can be minus 5%. And on average, on average, they sort of, you know, come out near 10 to 15 on an annualized basis. What they're trying to do is basically just reduce the volatility of those interest rates so that, you know, when you're entering these extremely leveraged trades where you're trying to close these, the borrow rate within DeFi and what you can earn within CeFi down, Pendle basically just turns what is a floating rate of interest into a fixed rate for you to do the same trade. So I think it's just a pretty amazing thing. I think seeing this sort of, all come together at the scale that it is between these three projects where you're basically just taking a floating rate of interest, fixing it, and then levering up the differentials between the two, which I'm not sure if there is like an analog within DripFi.

Yeah. How do you pick who to partner with? So why Aave instead of Euler and Morpho? Why Pendle instead of someone else? Like, how did these come to be?

Yeah, so we work with all of them actually. Like, we haven't got any exclusivity with anyone. It's just, uh, these liquidity network effect type things tend to compound in a pretty aggressive way where if someone does it first at scale, it tends to just compound, you know, and all the volume and stuff tends to go into one place. So yeah, Pendle was kind of the fastest market. They created the market niche that they're in. And so naturally we sort of use them. And funnily enough, Aave was actually pretty slow to work with Athena. I think that they were a bit more wary than like Sky and Maker, if you remember the big Aave line then. I'm not sure about that. But I think they eventually did their work, got comfortable, and then actually committed to it at huge scale. So yeah, I think there's also something that's unique about Aave, which is like the Morpho markets and Euler and all those different ones tend to run like isolated markets for some of their offerings, which is like, we want to isolate the risk for a very specific use case. But actually Athena benefits from a pooled model because people view Aave as like the risk-free rate for dollars in DeFi, right? Which is, I'm just going to leave dollars there. I don't care that I'm getting paid like 500 basis points because I consider it extremely safe. Well, Athena is actually tapping into that because you've got a lot of inertia of dollars just lying around and not very going like, I'm not really watching what's, you know, whether actually being deployed and used. And so from that perspective, Athena actually benefits massively from like a pooled model there because people aren't trying to like price the risk individually, basically within the isolated markets that you see on Morpho.

Yeah, I think everyone listening will be familiar with Aave, maybe some less familiar with Pendle. Can you Can you explain Pendle's relationship in this dynamic and like what, what they are providing here?

Yeah, all they're doing is basically just saying like USDT's rate is fluctuating quite consistently between like 5, 10, 15, 20, and it's always jumping around. All they're doing is essentially saying, where do you want to provide a fixed rate across like the forward curve of expectations for the yield on USDT? So you're basically just saying, I'll trade the upside of someone else making more money on the floating rate, but I want to fix in 12, even though, you know, on average we think it's going to be 14. I want to get a fixed rate of 12 and I'll pay for the convenience of that, basically. So that's all they're doing is kind of reducing the interest rate volatility around the USDT collateral. Yeah.

Yeah. How much of this growth do you think is— what's the right word here— like organic versus like incentive speculation? Speculation.

There is definitely still like incentives that are involved, but I think at a certain scale, like incentives can't move the needle, right? So like $13 billion for Athena, you literally can't afford with any FTP to be like sustaining that. That has to be like a core product that's making a return that actually interests people. So yeah, there's a light bit of incentives that still sit around it, but like fundamentally you'd never be able to sustain the size. You can't even really sustain like $2 or $3 billion if you're primarily doing it with token incentives. You die very quickly when you're doing that.

Do you have any concern that the, the large, the USDE growth is recursive to the price of ENA?

I think there's some of that, but I think that like reflexivity within DeFi and a lot of these products is kind of inherent because like, why is it that USDE even grows? Like pretend that ENA doesn't exist is because funding rates and like demand for leverage is going up. And that, that tends to be like water correlated to, to the price of BTC and ETH, i.e. when BTC and ETH are going up, people are chasing it up with more leverage and paying higher interest rates to sort of chase it. And so I don't know if the correlation is like necessarily just in itself, but actually like Bitcoin and Ether going up. And so naturally like USD follows the same correlation now because the interest rates sort of follow the prices.

One other question I forgot to ask on, on AAVE. So there's about $2 or $2.5 billion in supplied capital. No, is this right? I'm trying to look at the numbers in real time right now. Basically, you guys have increased the risk parameters of how, of how much you've deployed on AAVE. How do you think about like where to cap that out?

Yeah, I think, you know, fundamentally this is actually a decision for us on like the Labs side to make. So we've got this risk committee obviously where I think— Yeah, I think Brock works actually as a CTO on it.

Yeah.

And so a lot of these decisions, we've basically just given a framework to the risk committee to actually, you know, draw up what they think is sensible and everyone debates and we come forward. So I think ballpark, that number kind of makes sense to me. I think if you're like more than 50% of the market, that feels slightly too large versus some of these money markets. But I think we're kind of guided by the professionals on that side in terms of like, you know, exposure to some of these things.

Yeah, it's like roughly 20% today. Does that feel right to you or would you push it higher?

Yeah, no, I think a ballpark around that area. Yeah, it does the same. Yeah.

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Yeah, huge. But I think what I've learned through time is that there's just such an insane power law in terms of like outcomes being driven by 3 to 5 entities, basically. And I think what we found is like, if you divide what we're doing between DeFi, CeFi, and TradFi, if you stripped it down to like 3 entities that are sitting within DeFi, CeFi, and TradFi, we'd still have like 95% of the balances that we have within USDT. So I think when you're asking the question around if there's advice for founders in this space, I think the advice is actually just try to be, try to be very honest and surgical when it comes to thinking about who are the 3 to 5 entities that are actually going to move my business at scale and make sure that those conversations go well and don't get distracted by the noise. I think you sometimes get tempted into trying to do too much with everyone and be, you know, everything to everyone. When we found that actually just focusing in on like the 3 to 5 things that move the needle the most has a massive impact. I think it's also different by business, right? So like Hyperliquid is a good example where they don't need to partner with anyone because it lives on its own island. And it's like, if you want to come trade here, great. But I don't need to go, you know, BD with Coinbase or Binance to get anything done. You either want to use the product or you don't. I think the nature of what we do as a product is, you know, the fabric of it requires you to be very good at actually distributing with BD because you need all these platforms to actually say, I want to support Athena and I want to push USD to my users. So I think it is also dependent on the type of product that you're offering to the market, how much you need to think about the importance of those type of things.

Yeah. Yeah. Where do you see USDC in terms of like in the, in the broader stablecoin landscape? So one thing that's been kind of reading between the lines of, you know, our conversations and looking at tweets and things like that, it does feel like you see USDC as a competitor that you want to eat into their market share. Tether, that's USDC. Tether may be a little different, right? Tether is like both a competitor because you also have a big stablecoin, but also maybe a partner. So how do you think about these relationships?

Yeah, I think that's fair. I think one thing that people don't appreciate is that we hold a ton of Tether because to put on the perp positions on centralized exchanges, you need to hold Tether to do that. So I think during different periods of our, you know, Xena's lifetime, It's top 10 for sure. Top 5 tether holders in the world.

You're one of the top 5 tether holders in the world?

Yeah, definitely during periods of Athena's lifecycle. Yeah, for sure. And yeah, I think—

Is Paolo a fan of Athena or not? Or does he see you guys as competitive?

I wouldn't speak on his behalf, but I think when I explained that, what I just said to you to him, he definitely seemed more friendly.

He's like, ah, okay, okay.

Yeah. But no, yeah, we have a good relationship with them. Obviously, the USDT Zero guys are doing all the cross-chain work and stuff on-chain. We very frequently sort of partner with them on new chain deployments. So we also fundamentally, I think, have quite different products. Like Tether is never ever sharing any of the yield with anyone. And it's found a niche where it can sort of get away with that. I think, you know, I see Athena's product as more of a piece of savings technology rather than like a payment stablecoin, which is like ultimately where I think Tether and Circle is sort of going when it comes to definitions under the Juniors Act. And so, yeah, I think if you think about where Circle is going right now, they are doing a lot more of the yield distribution to users on platforms. So when you're holding USDC on Coinbase, you're collecting close to the 2-bill yield by just doing that. And I think Circle and Athena are actually sort of crossing over in middle ground where it's more competitive now than it used to be. But I think Tether has kind of just defined it as part of their strategy that they're never going to be doing the same sort of stuff when it comes to income sharing. And I think we have like different segments of use cases for stablecoins where Athena has like no interest in, you know, competing on payments, like type use, for example, with like a PayPal or a Visa or a Stripe on their blockchain. That's just something that will never win. But there are very specific use cases where I think actually Athena's product is like 10 times better. And that's all we need to focus in on winning. So I think there's like, sub-use cases that, uh, that, uh, we can win and we sort of leave the rest to everyone else.

Yeah. Do you— where— so Tether's, uh, net profit margin is somewhere between like 80-85%, I think it is. Circle's is somewhere between like 9-10%. Where do you think Athena's— as you guys hit scale, where does your net profit margin end up? I was thinking somewhere more in the middle, 50-60-70%.

Yeah, I think that's fair. Uh, the, like, you know, OPEX base of Athena is pretty slim. There's like sub-30 people, roughly 27 at the moment. And so yeah, maintaining what Athena does, or even tripling the size of where we are, we don't need to add any headcount to be able to do that. I think Circle's employees were sort of sitting somewhere around 600-ish, I think the last time I looked, I might be wrong. So it's a very different sort of like opex base and it scales extremely aggressively. And I think to me, this is actually like probably one of the most interesting things when I thought about like, why was it that DeFi protocols were interesting in the beginning? It's kind of like, when capital can move around the world at the speed of information and these things can scale at like the marginal cost of software. It's like the first time that finance can actually scale at the cost of software. You get outcomes like this or, you know, the hyperliquids or the pumps where you've got, you know, 10, 20 people sitting in there and they're generating billions of dollars without needing more people to sort of get there. So I think that's actually one of the really interesting things about like on-chain businesses where when you hit real like escape velocity, Um, they don't really scale like linearly at all in terms of the cost. Yeah.

Yeah. What is the niche that USDC has? Okay. So like if you break down stablecoins, you said you don't want to be a payments competitor. There's also store value. There's like a savings mechanism. There's basically just like an exchange/trading instrument. What, what I'm guessing you want to win the exchange/trading instrument game, but how do you think about that?

Yes. I think like collateral trading derivatives is like a huge market. People don't appreciate how big that is, but like $80 billion basically of Tether supply is sitting there in centralized exchanges for trading derivatives and spot assets. So I think the very basic use case here, and we've kind of seen it with a few of the SACS integrations we've had, is your collateral paying you while you're trading perps is a pretty killer like feature. It kind of brings together what I kind of view as the most two killer products of crypto in one spot, which is like dollar with a yield and then perps trading. So I think that's one use case where we have a pretty interesting like edge versus the others. I think basic like DeFi collateral or use cases within like savings technology, I think is another area that a dollar with a yield is just structurally better than one without. I think it's more of the payments use cases, as I mentioned. And then sort of, I'd say like deep integrations and like remittances and those different pieces. We just haven't been around for 10 years to sort of put in the BD work to do what these guys have done in the last 10 years to be there on the ground, you know, with Tron integrations with merchants and all these different pieces. So I think that's just a much steeper hill to climb in a short period of time to get that kind of stuff done. So I think it's basically trading collateral and then savings technology use cases where we can put 2 million ADA.

Yeah. Speaking of perps, how much of the open interest for the, at any given point in time for, let's call it the, let's call it BTC and ETH, do you, does Athena make up?

Yeah. At the absolute max, I think we're like 8 or 10% of the whole market.

I was thinking maybe it was higher.

Yeah, it's a big market. I think people don't understand how big the OI is. It's like, you know, it's like $120 to $150 billion and it's producing—

Oh, I wasn't thinking CME too. I was thinking like crypto native OI, like basically crypto perps.

Yeah. So like at the moment we're like 90% of just crypto perps basically.

Are you limited by the OI of crypto? I guess you are limited by the OI of crypto perps, but I think you and I would both say that the perps market will grow massively.

Yeah, and it tends to grow quicker than market caps as well. So like the perp market tripled in size when BTC doubled in the last year. So like it's growing at a nonlinear rate with respect to like market caps. I think the other thing that people, uh, I'd maybe just leave is like something to think about is like, uh, I think perps on NFTs are going to become an enormous thing, uh, pretty soon. And if you study 3 times the asset base of what is going into linear instruments like perps, that does sort of like open up the design space of what else could fit into something like USD. So I think this is something that we're watching pretty closely and it's something that I'm incredibly bullish on, which is I think we're going to see hundreds of billions of dollars in equity perps in the next 3 years of open interest. And that's something else that actually Athena can access as well.

Okay. You mentioned CME. So one way you guys could scale is by leveraging just more, more capacity through both CME and ETF options. How do you— what's your, what's your plan for that market? Or do you already do that? Do you already do that?

We do actually have access to it. We just haven't done it at meaningful scale. It's just slightly lower returns. And the reason for that is that TradFi can access CME, and so they tend to push it down a bit. And that's kind of like, what is the alpha that Athena is actually providing? It's like the rates in crypto are kind of too wide versus where we think they should be. You can do that. It's just, you're doing it at a marginally less interesting sort of return. But yeah, I think the growth of that is obviously healthy. I think it also gives people in TradFi like a bit more comfort around what's going on with the market. So being able to demonstrate to them that are actually using venues that they're used to and comfortable the whole time, I think helps sell the product to them in a cleaner way. But yeah, I think aside from the CME, it's really that like pubs and equities piece, which I think represents the most, uh, uh, the largest upside from where we stand right now. And I think, uh, to me, if I wasn't building Athena, I think doing something within building, um, Perps and NFTs would be the place that I'm focusing my time now. And I think Athena will be the biggest beneficiary of that, uh, except for the exchanges who are providing, uh, Perps and NFTs. Yeah.

So what— say more about what you would build.

As in just literally like, uh, I don't know, Hyperliquid for equities. I just think, uh, the form factor of using options to express leverage directional views on Robinhood is not the right form factor for retail. Uh, all, all retail want, right, when they're buying an option and saying, I want levered exposure to the underlying, they're not sitting there going like, I'm pricing, you know, Greeks and the volatility and stuff like that, which you actually have to be pricing when you're buying an option. And so all that's doing is like leaking an enormous amount of value to like Citadel on the other side, who kind of takes that flow. I think if given the choice between like going long on a perp or choosing an option, I think retail users would prefer perps. And I think they've shown like, you know, explicit preference for that in crypto, as you can see with options versus perps. I just think that there's a huge shift that's going to go on within equities where if retail are given the option to touch perps versus options, I think that that like dynamic shifts pretty aggressively in the next 3 years.

Yeah, I agree with that. I've been using some of these products that are, I mean, they're like seed stage that are built on top of Hyperliquid. It's basically just like a Robinhood for perps. They're good. They're very good. Yeah.

Yeah.

IUSDE. This is going to be another one of my dumb questions. Is that live?

It's not live yet.

It's not live. Okay, cool. So my understanding is— so you guys announced it earlier this year. It's a permissioned— it's basically like an institutionally focused KYC institutional version of SUSE. Yeah.

Yeah, correct. You can sort of think about it as putting a fund structure on top of USDT, where essentially you set up an SPV that takes in money from like any type of fund. It could be an asset manager, it could be a credit fund, it could be a hedge fund, whoever it is. And all they're essentially doing is actually putting an SPV on top of, you know, wrapping around a pool of assets that include USDT. And then you can essentially just open that up to your LP base and say, if you want exposure to the underlying over here, just send me, send me fiat and you can basically buy the shares within this SPV to get like replicate exposure to the underlying. And I think the view that we have here is that, um, you know, the demand for this type of product within TradFi, like double-digit returns with zero volatility, uh, is not $10 billion. It's like many hundreds of billions basically. And we just haven't been able to put it in a format where it's digestible to these people to get easy access. So I think this is going to be the beginning of a bunch of different things that sort of come outside of this where, why don't we have these things in ETPs, for example? Like you have bond indexes and ETFs that are easily accessible by institutions and retail on public markets. Why can't you find something that actually looks quite similar to USDT to sit in a vehicle like that to give easy access? So I think there's a bunch of different like private and public formats where actually USDT for quick and easy access in TradFi probably represents an opportunity that's bigger than the size that we are like right now in total.

Yeah, if on the SPVs niche question, but do you create an SPV per fund?

Yeah.

Or yeah.

Okay. Or give them the option to come into one that's like out of the box and has like unified liquidity across them. The issue obviously is that you're breaking like liquidity every single time you let them do each of these things. It's just the question is like, why do you want that token in an end state? Is it just to get like exposure to the underlying or is it to use it as collateral in a bunch of different places like lever it up, you know, maybe on a prime broker or something within TradFi? And I think if you want that use case of being able to deploy it and use it as collateral elsewhere, then you'd want to not be setting up your own basically and just using one that's out of the box. Yeah.

All right. So USDE right now is $12.6 billion. And let's call it like 2 to 3 years. What is the— what's actually forgetting the nominal numbers? What is the ratio of iUSDE to just USDE?

That's a good question. Um, I'd guess more than 50% sitting in, uh, uh, in iUSD. Yeah, really? Yeah.

Have you talked to funds about it already?

Yep. Uh, just waiting to bring it out with a bigger announcement in terms of who's involved with it. But, uh, yeah, we've been talking.

Oh, so people have— you, you have folks who have deployed already?

No, I haven't deployed into it, but, uh, I'm waiting to come out when the product comes out.

Nice, that's great. That's exciting. What about the Coinbase partnership? Coinbase Institutional? Has that driven anything?

It was only released like last week. That's just basically like Prime Holdings. Well, again, a lot of the institutional users want to be able to hold and custody within Coinbase Prime. I think that's like the default option that a lot of them go to. But yeah, it was kind of released just last week. I haven't actually checked where it's going.

All right. Two announcements this week that I thought were interesting that I want to cover with you were the Stripe and Paradigm launch a chain, obviously called Tempo, that we just talked about on the roundup. And also Hyperliquid is launching a stablecoin, or there's a team— I haven't dug into it too much— USDH, I think. USDH, I think it's called. I haven't dug into it, so I don't know if it's actually the Hyperliquid team building it or someone else building it. I think it's someone else building it. Let's start with the Hyperliquid stablecoin. Curious to get your thoughts.

Yeah, I think it's super interesting. So what they've done is basically just open up like a process where anyone can come and pitch to be the canonical stablecoin provider for Hyperliquid. I think a bunch of different teams are going to be submitting over the next 5 days to just why they should basically sit in the backend for what is going to be like a foundation-endorsed stablecoin for the chain. I think one of the interesting things is that, well, 2 pieces. One is obviously none of the hyper liquid users or the protocol itself has sort of benefited from all the USDC that sits on the exchange. So I think it generates roughly $220 million for Circle right now. The Circle, the USDC that's sitting on Hyperliquid. It's roughly 7% of the total supply. That's obviously interesting because I think there's a question, Mike, which is like, how much should the exchange itself be able to monetize from all the balances that are sitting on there? And this to me seems like a pretty interesting way for them to pivot away from something that they're earning like 0% interest on at the moment to potentially like supporting something else that actually shares it with users or the exchange. There is an interesting like downstream effects, I think, of this entire thing though, which is it's not easy to click your fingers and basically change from USDC to USDH because you have to actually rebuild liquidity on every single one of the pairs. It's not just like, you know, you flick a switch and that's actually done. And so there is a risk actually when you start to break down liquidity on some of these pairs and then try to rebuild them somewhere else, that they never actually get back to the same scale that they did before. I think this has always been a question that exchanges have gone through, which is you know, you want to capture the economics that actually come from the dollars that are sitting in your venue. But you're always running the existential risk that if you push that too far, you kind of lose the liquidity that was already formed around the stablecoin that everyone's using. And then your like golden egg of the business is actually lost in the process. So I think there's like a bit of a tightrope that, you know, everyone has to walk when you're sort of thinking about these things within exchanges. I think it's like generally pretty healthy that there's a bit more competition for Circle sitting on hyperliquid now. And I think also diversifying the risk because having all of the, you know, Circle that was sitting there within the bridge contract that's there with Hyperliquid, I think was one of the risks that people pointed to quite a bit for the last couple.

Why don't they just go to Circle and demand a higher percent of revenue?

I presume they have, and maybe this is a negotiating tactic for that. So yeah.

Yeah, that's what I was thinking when I saw this was like, maybe this is just a big negotiating tactic, but okay. So Hyperliquid launches this stablecoin. Why don't you buy for that business?

We probably will.

Yeah. Okay. All right. Yeah, I figure makes sense. Um, what else do you want to do with Hyperliquid?

Um, yeah, I mean, we're not actually like actively trading there right now in terms of like the hedge positions that are sitting on there. Um, I think there's an interesting opportunity to build basically like a fork of USD, which is actually just purely exposed on Hyperliquid. So you know, just carrying across the cash and carry, but only doing it specifically on Hyperliquid to isolate both the risk and return of that. And then I think one of the interesting, like, byproducts that might come out of this HIP3 thing, so HIP3 is sort of like permissionless ability to launch on the perp markets going forward. We've had a few teams externally who've approached us wanting to build versions of Hyperliquid, which are USD-denominated on HIP3. And again, the pitch here is like, have all of your collateral natively yield bearing whenever you're trading the exchange the entire time. I think that can be a pretty interesting upside in terms of the opportunity because when they take off, they're like multi-billion dollars in scale in terms of the supply that they suck up. And then the other interesting thing is that they're through Hip3, they're sharing 50% of the income that are generated on these markets. So 50% of, you know, some of the flows coming across is a pretty interesting like potential upside for whoever's going and taking to build that exchange as well. So Yeah, there's a few moving pieces and I think it's one of the most exciting, like genuinely new, interesting ecosystems that are out there at the moment. Yeah. Yeah.

Do you buy, do you buy tokens? Like just sit in spot and hold, like go long tokens? Like you're like, yeah, Aave will probably benefit from this stuff and Pendle and like talking about Hyperlipidemia.

I have a disclosure page on my Twitter, which has like what I'm holding at the moment. There's, it's pretty boring, but I do try and update that and just people keep people, um, uh, up to date. So I'm, you know, disclosing everything. Yeah.

What do you hold? I can read it. Significant token holdings: BTC, HYPE, PUMP, ATHENA, USDE. Nice. Nice. Um, why do you like PUMP?

Uh, I put a tweet out about this this week. I, um, I had a personal relationship with both of the co-founders there for, um, a while, and then, uh, I think just when they were going through the troubles or like teething pains in the first week when it came out, um, I had a phone call with them and just had like a bit of a heart-to-heart, and I could just tell that he was extremely motivated to run it back. I think the big concern on everyone's mind was kind of like, had these guys made too much money, uh, before the token was even like out there? And, um, I just got the vibes that he was, uh, extremely motivated to run it back and sort of had an ego, uh, to protect. And that's, uh, that I immediately just thought I just need to get along because he's still Ted. Yeah.

That's most of the game, isn't it? It's just the— The game is protect the ego. Yeah. What do you think about Stripe's chain?

I think it's super interesting. I think a lot of these chain announcements, I think people are getting quite tired of, but I think this is actually very uniquely interesting. I think in my mind, I sort of see it as like, what XRP wanted to be or like what Libra wanted to be, but like for real. And the things people that they bring around the table and I guess their expertise in actually delivering things in the last few years at Stripe is obviously like absolutely top tier. So I have extremely high expectations for the whole thing. And I think it's pretty exciting. Yeah. If there's one person that's going to make that work, I think it's them. Yeah.

Because of Stripe or because of Paradigm?

Yeah, sorry, I meant like more bringing together like, you know, real payment businesses in the real world that obviously comes from the background that Stripe had. But obviously, you know, Paradigm, we have a huge amount of respect for them as a firm. And I think blending the sort of like existing Web2 business with their expertise, I think is a pretty interesting match. Yeah.

Yeah. Having operated in crypto so deeply, what do you think these external like Web2 corporates can, will be able to successfully operate in crypto?

I think if they're doing what Stripe does, which is you get very close to a true crypto native firm, I think you can. But I think a lot of these guys, I think you can do it all from the outside and that your brand and reputation and stuff will sort of carry you through. But I think you do need a lot of native experience, especially when it comes to things like chains, because a lot of that is like ecosystem building, you know, getting your arms around people and getting them behind you. And you can't really do that behind, you know, like sitting in an office in New York and sort of feeling like you're above everyone else. So I think you need to have that blend. I think if you're coming in to try it. Yeah.

Yeah. Tell me about Converge, the plans there.

Yeah, there hasn't— I think since we last spoke, there hasn't been major updates on that side. I think the focus recently has been on the, on the DAT stuff and the core growth of the product. I think we're going to have some updates that are coming out basically Q4 of this year, which are more material around that.

Yeah. Do you, seeing all these other chains launching, does it make you more or less excited for Converge?

I think still. So yeah, I think the ones that are coming out now don't like directly compete, I think, with the same sort of like target audience of what's being targeted in terms of use cases.

Who competes? Who's like the main Converge competitor?

Well, I think it's like activity that takes place on existing chains right now. So like institutional assets and kind of like proliferating everywhere. And I think the use cases that like are securitized in different, I'd say like RWA issuers are kind of doing that on every chain. I wouldn't say it's like, there doesn't exist a chain that says we're doing this specifically for this purpose. I think the ones that you've seen come to market now have been much more focused on like the payment side, stablecoin-focused chains, which I think we've seen like 3 or 4 come out recently. And then I think the other big one was obviously Arbitrum with Robinhood. So yeah, I don't think there's a very clear, like, this is exactly the same. Maybe the Robinhood and Arbitrum one is probably the closest comparable because I think they're trying to do a lot on the tokenized stocks, real-world assets, and that kind of stuff sitting on there. Yeah. How do you think about—

we're moving into this world where I think, uh, regulation and TradFi will probably favor TradFi-friendly stablecoins. Um, like, if you're a— if it feels like someone would pick a very heavily regulated stablecoin or a non-yield-bearing stablecoin, you're— I feel like Athena is more of a crypto-native stablecoin is how I've kind of thought of it. I mean, maybe iUSD will iUSDT will change that. But how do you think about that?

Yeah, so we've also got a different product as well called USDTB, which is, we're working with Anchorage on that to be Juniors combined. And we came out with something around the partnership with Anchorage on that side. So that's sitting at like roughly 1.6 billion, I think, in supply right now. So it's not, you know, insignificant. And really the approach that we have here is that it's like a dual track, which is USDTB is supposed to be that very clean, payment stablecoin under the Genius Act. And then USD is more of like an offshore product for different use cases. I think ultimately though, like the big learning from Tether was actually you don't want to compete in the US, in the US financial system basically. And I, you know, I think it's amazing what's going on with the Genius in terms of like the signaling and like direction of where the space is going. But I think it's like a business opportunity. You're not going to make that much money competing with Stripe and Visa and Bridge and PayPal and all those different people in the US on their home turf when people have access to money market funds.

Right.

And so I think the view that we've always had is like, yes, we want to have access to that market. We want to be able to provide a product to those users, but ultimately like the real growth and profit opportunity sits offshore and actually providing the product that USDT does outside of the US.

Yeah. Yeah. It's kind of like you have, so USD, USDTB is the Treasury's product, right? So it competes with like Biddle and WisdomTree and Franklin Templeton and things like that. But those are all very US-focused products.

Yes, exactly.

Yeah. Let's talk '26. What do you think about— so we've like with Converge, IUSDE, I'm guessing some of those things will become the focus in '26. Is it more— yeah, I mean, broadly tell me about '26.

I don't even know what country I'm going to be in next week. I don't know if that's—

yeah.

No, I think we tend to try plan maybe like 3 to 6 months ahead because I think a lot of the time in crypto—

Yeah, you can't.

You just can't. Yeah. And, you know, honestly, where I'm spending 80% of my time now wasn't even a thing like 6 months ago. Like if you said to me, I'll be spending all my time focusing on the DAT and the different pieces that are going on there. Yeah, I think a lot of the time you need to be quite flexible to be responsive to what's going on in the market to jump on them. So, and I think the position that we're in now is actually just like The core product is working. There's a huge market opportunity ahead of you to go and grow into a much larger size. So I think it's just like executing on an existing product and actually just taking that to the next level. And then I'm sure there's going to be new and interesting things that pop up along the way, but I don't think we have like a huge pivot or different direction or anything like that that we're planning for next year. I just want to survive and get there.

Yeah, you and me both. I have a weird founder to founder question, which is, as we go into like the end of the year, how do you think about budgeting and forecasting and creating the plan for the year in a world where we have no idea what this— like, are we in an end of a cycle? Are we just starting because of rate cutting? Are we— what does that look like? It's crypto, it's very volatile. How do you think about like, yeah, just creating forecasts and budgets and 2026 plan?

Yeah, I think for us, the team hasn't actually grown much since 12 months ago. We kind of— we went from 10-ish when we first launched to 25-ish within 6 months. And then we've had, you know, a few people come in and out, but actually, like, we're not looking at this saying if USD went to $50 billion, we need to hire 28 people in the next year. And if USD halved in size, we wouldn't be firing half of the team. It's basically just at a very, I think, comfortable level in terms of where the business is sitting now in terms of like the actual individuals. So I don't think there's like, you know, I'm not going to be sitting here trying to second guess where directionally where we think the market is going. I think the sort of size and budget of where we're sitting right now is in a pretty steady state for the foreseeable future. Yeah.

Yeah. Guy, man, anything, anything we didn't talk about that you want to cover?

Nope. I think it was a good chat. Happy to do it again.

Cool. Congrats, man. Congrats on everything. Always good chatting.

Appreciate it. Thanks, man.