Hivemind: Circle Valuation, Pump.Fun Token & What We’re Bullish

Everyone recently, all they've been talking about is Circle.

You were saying, Duncan, last episode, credit to you, that $5 billion seems cheap. What's it, what's it trading at now? Like market cap-wise?

It's around like $21 or something. It's actually $26.8 right now.

I'm not saying this valuation necessarily makes sense, but I'm thinking like this is like the easiest story to tell. The TAM is like all US dollars and like super sticky business, like for the rest of time.

Nothing said on The Hive Mind is a recommendation to buy or sell securities or tokens. This podcast is strictly for informational purposes only, and any views expressed by anyone on the show are solely our own opinions, not financial advice. Hi everyone. And welcome to another episode of the Hive Mind podcast. The goal of the podcast is to provide an inside look into what we like to call the Delphi Hive Mind, bringing together some of our brightest minds from each of the divisions to share insights, alpha, and shitposts. Today with us, we have the usual cast: Ceteris Paribus, heads up our institutional research arm, Jan Lieberman, managing partner of Delphi Ventures, and venture partner Duncan, also known as Flood Capital. I lead Delphi Labs, our protocol R&D arm, focused on incubating and accelerating new web3 primitives. And my name is Jose. I realized I didn't say my name there. Yeah, back today, markets are green, coins are up. Maybe we can start with that. How's everyone feeling about markets here? What's the most important stuff that's been happening?

You had a lot of positive developments. Very recently, right? You had yesterday the Bloomberg article came out saying that they think Sol ETF is happening in 3 to 5 weeks. You had the Trump—

the Cointelegraph moment for the Sol ETF potentially.

Although, yeah, yeah, maybe I'm not trying it.

It's not an insane amount, but I think it's a little less certain than the Telegraph moment was. And it's still like a bit of a ways away. We can chat about that though, definitely. Just like, so, um, you have, uh, seems like resolution, uh, to the China tariff situation, which, you know, you have this, the July 9th deadline, but realistically the one that really matters is, is the deal with China. And so it seems like that, that's moving along well. And then you had the soft inflation print today too, which opens the door for some dovish Fed action.

So yes, we went to the Trump-Elon stuff. Well, that was last week when they— yeah, yeah, because I feel like the big signal from all that stuff was like, okay, they basically like gave up on trying to cut deficits and like do, um, like be like fiscally responsible.

That happened, I think, well before that though.

I know, but I think that's like the escalation of like, okay, we can't really do this. It's not politically feasible. And now we're going to like switch to like grow our way out of things. I feel like that's probably the biggest catalyst. It's like if deficits are just going to get bigger and we're going to want to grow our way out of things, like that's like the over— that's like the big wave that's pushing everything higher over like the next few years. If they're going to be running, you know, $2.5, $3 trillion deficits. Then, and then also like, um, you know, Germany, China, Canada have all kind of switched into, you know, deficit mode as well. So if all these banks, central banks all around the world are going to be running massive deficits for the foreseeable future, that's just like a big wave for crypto and markets.

Yeah, I do think like the, the animosity from Elon on Trump was kind of misdirected in the sense that I think Trump's hands were a bit tied, right? He had the, the tax cuts that, that he put in place in the previous admin— in his previous term. They were about to expire, and so if those expired, you'd get big tax raises across the board, which would be pretty bad, right? We're, um, and, and so at the same time, uh, it's really hard to get anything through Congress with it being this divided and Dems only voting one way, and, and you basically needed every Republican to get on board in order to get, get it through. So if you had a few defectors, then it wouldn't go through, and, and you'd likely have defectors if you put in some big spending cuts. So yeah, in order to kind of get the tax cuts through or, or to keep them in place, you, you had to, uh, you know, make concessions on, on spending reductions. And so I think that's just kind of the the nature of the, uh, the beast in terms of our political system.

Yeah, I'm not making a comment specifically on that. It's just like, if there's anyone to do it, it would have been like this administration, like, kind of now. And instead it's like not happening. So we're probably just going into more deficits for the foreseeable future.

Cutting, cutting would have realistically was never really going to be that feasible because you'd have to cut so much. Like, you, you have to grow your way out of this, right? And so I do think That's really the only way to do it. And, and, um, with the amount of just CapEx spending you're seeing on AI, it seems like it, like if there's at the same, in the same way that the administration, this administration would be the only way to do it. AI is actually the only real way to, to grow the economy at a—

I wonder if it's like AI, robotics, and like nuclear could grow our way out of this. I don't know how much work, like, anyone, if anyone's done a ton of work on that. But you essentially need a productivity miracle, and it seems like those three things could potentially provide.

Yeah, nuclear just seems too far away with the amount of red tape involved based on kind of like, yeah, everyone who's knowledgeable. I'm not, this isn't my insight, this is just like quoting.

Yeah, it takes a long time to build the plants and everything.

It's just if, if I think if we get more productivity, the government will just spend more.

Yeah, I don't think that this is actually a catalyst because I don't think people really ever expected like—

well, the latest— and now like, I think, I think they did, but people—

markets de-risked ahead of, you know, Trump, like, oh, Elon saying he wanted to cut $500B and then Lutnick wanted to bring another— or was it $1 trillion and $1 trillion?

Yeah, yeah. A few months ago it was like, look at what happened in Q1. Yeah, a few months ago it was literally like We're going into a fucking massive recession.

Yeah, yeah, yeah. But I'm saying now, I'm saying now, this isn't a cut. Like, it kind of— the market realized this over the past couple months. It wasn't some like random event.

They legitimately, I think they gave it a try, like, we're gonna potentially pursue austerity, and then they're like, oh, never mind.

This bill was the nail in the coffin though, right? It was— it went from, you know, a directional understanding of this is how we need to go to an actually implementation, and like an actual implementation showing that this is the way we were gonna go. Yeah, which kind of gave certainty to the crowd out there.

And for his—

Elon seemed— Elon's like, like, he got— spent $300 billion or whatever, whatever it was, getting— not $300 billion, how much did he spend getting Trump elected?

$50 million or something.

$300 million, that's, that's the right order of magnitude. Um, something like that. And then he, and then he like—

I think that's the wrong calculus. The, the calculus is basically how much would he have lost if Kamala won? And that's the true expense, the difference between that loss and the $300 billion.

I don't think he did any of this for money.

No, I don't think so either. None of this.

He's not firing off tweets hemorrhaging $300 billion of market cap in a day on Tesla. He's probably ketamine'd out firing off tweets.

But the latest—

like, he apologized though today, right? He was like, I regret my words last week. Which, fair enough. Probably too late.

I don't know.

Let's see.

I think people would forget.

Yeah, I think—

Will Trump forget though? That's really the only person that needs to— that he's worried about forgetting or not. Trump's been pretty civil, like, compared to what I would expect after someone accusing him of, like, potentially being a pedophile. I would have expected more— Yeah, it's bullish in terms of his emotional control. Yeah, he's definitely got more emotional control than Elon. Like significantly more. Yeah, I think we should not expect—

yeah, we can move to sobriety, I think.

Okay, yeah, let's do markets. Okay, wait, wait, wait, wait, that last thing about— because this is interesting. If like long term, the last time the US was in this situation was like after World War II when they had like this level of debt, uh, to GDP. And what they did is they, they did yield curve control, so they capped the 10-year interest rate at like 2, um, 2.75%, and then like the short end at something a bit lower than that. Then they did like these massive infrastructure spending bills, and they had, you know, inflation of like 5 to 10% a year, plus, you know, 5 to 6% GDP growth a year. And then they were able to like delever out of their massive debt position over like 5, 6 years. But like, they had like a lot of, of growth there. So like, that's like the playbook in terms of growing your way out of it. You need to like put some sort of cap on yields, spend and like, you know, ramp up.

There's also like 30% inflation over 3 years. Yeah, after that. Yeah, that's what I said.

It was like 5 to 10% inflation a year for like 5 years and 5 to 6% GDP growth, and they capped yields. So it's like, could we get that level of GDP growth like through AI and robotics? Maybe. And then you just kind of soak 5 to 10% inflation. It's like, potentially it could happen. I don't know. But that's like the only realistic solution out of it.

It seems like yield curve control is a lot easier when you have a smaller debt load though. Like, it's, it's going to be a much harder thing to manage. Like, we just don't have—

the Fed just puts the infinite bid in at like 5, 5% on 10 years or whatever.

It's also like just easier to get out of like treasuries and dollars than it used to be. I just feel like it could be a lot— there could be an actual exodus if, if, if they, if they try something like this. I think it needs to— it does need to be paired with like capital controls, but I also think capital controls are just harder now. I'm— it was interesting, the view of like, forget what it was, it might have been like Stephen, like the Trump economic advisor, is it Stephen Moran, about like capital controls on US Treasuries and stuff like this, like foreign ownership of Treasuries, just like clipping a fee on that.

Yeah, like putting a tax on it.

Yeah.

I don't know if that's gonna go through. There's been a lot of pushback because that's gonna— that impact I mean, like, Duncan, that would impact us, you know?

Yeah, no, they're not in an easy situation. But if you look at over the next 5 to 10 years, it's like, how does this resolve itself? It's like you pro— you need some— you need to do their growth or inflation. Like, austerity is like off the table.

I think eventually the US is going to mint the coin. Like, I think this happens at some point.

I think they just, they just pump gold because then everyone can kind of agree globally. They're like, okay, let's, let's take gold. To $20,000 an ounce.

Or if you can issue some like giga long-term debt and make the banks hold it.

Yeah.

Like force them to buy it.

Yeah.

The other thing is QE through the banks. You basically just like, they did this during COVID for a bit. You basically like lower the reserve requirement for the banks and then the banks just kind of like sneakily, sneakily buy all the debt.

I think that's the easiest one. That's the one Arthur keeps talking about, right? As well.

Yeah. It's like inflationary for assets either way. And probably for the real economy.

Yeah, PTJ just came out. Yeah, he spoke today. Um, he was just basically saying he thinks inflation is going to creep up and the long end of the, the curve is going to blow out.

Yeah, it's hard to see. The thing is, in, uh, like 2021, part of why I didn't get bearish enough or really bearish at all is because this is like what I always thought the inevitability is. Like, this is the only way out of all this.

Just do quick.

But then there was like, but then there was like a 1-year period.

NFTs are the way out.

There's like a, there was like a 1-year period where we actually just went hard to like kill inflation, everything, right? But it does just feel like that's the natural only really I don't know. It's hard to see any other path for the world at this point.

Well, that was it. Like the Fed tried and then they had the government. Like you basically need, in order to tackle this, you need the Fed and Treasury to work together in some sort of way. Right. And the Fed tried to kill inflation with rates and like the Treasury like fought back by issuing more bills and stuff. And now like, you know, I don't know what's going to happen. With whoever's elected next as the Fed chair. But I don't think the government has the political will to try and like Congress and the Treasury has a political will to try and like do austerity.

Yeah. All right. Should we move to— what do you want to talk about? Circle IPO first or Pump? I feel like Circle is relevant to what we're discussing here. Like, that was crazy, right? You were saying, Duncan, last episode, credit to you, that $5 billion seems cheap. Um, what's it, what's it trading at now, like market cap-wise?

It's around like $21 or something.

$21 billion.

Well, because I looked at it, I looked at it, it was $5 billion after— I'm like, this doesn't make any fucking sense. One of these is completely wrong.

It's actually $26.8 right now.

Wow.

Yeah, it's trading on like insane forward earnings, and if Fed rate If Fed cuts rates, like bye-bye to like a quarter of their revenue.

I know, but I just think if you think about like their long-term positioning, I'm not saying this valuation necessarily makes sense, but I'm thinking like this is like the easiest story to tell. The TAM is like all US dollars and like super sticky business, like for the rest of time.

And it's like, yeah, but like the second you look, you know, you take a step beyond that. You're just like, this makes no sense at this value.

Even we looked at— I looked at the contract. It's like, so they signed that contract with Coinbase on, on the interest sharing, um, in August 2023, which lasts for 3 years. And then like they have the option to renew it or re-sign it. But it's like, if you look beyond that, like if they get to a certain point where they don't necessarily need that or they have more leverage over Coinbase, like I can't— I don't think you can like discount like what their future earnings could be if they can renegotiate some of these like growth spends that they—

I mean, it trades at over $110 earnings.

Banks for essentially what is a bank, that $25 billion.

And like, the lamest part of the bank too.

I think that this is just honestly, like, I was talking to Jordan about this, who runs our DeFi arm, and his wife works, I don't know, some trad fi thing. And whenever he's at these events, he's like the crypto guy people know, right? And they always ask him about like XRP and stuff, right? All these trad fi people, like trad fi people just fucking love XRP. For some reason. And everyone recently, all they've been talking about is Circle. And I think it's just like, I compare Circle to XRP.

Like, one is like, the TAM is literally the entire US dollar. Like, there's— it's a— it's such a big vision, I feel like, and so obvious the way to get there.

And like, I think it's more a reflection of just retail appetite on the equity side.

I mean, the float's pretty low too, I think, right, on Circle?

I'm— yeah, I think driving is expensive, but I'm just saying, like, I can see why people are so excited about it.

I think TradFi needs to go through high float. Yeah, man, high FTV, low float. It's just— and then they'll understand.

Rates go down, something like Circle just gets, gets crushed, whereas I think Athena just benefits a lot. Like, I think the, the Athena yield is like— will go up.

We might have different time horizons on this, like If Circle keeps on growing over the next 50 years, it's like so fucking huge and it has a good position.

But like, it's good to see. It's good to see people buying this, right? Like, sure, it'd be better if it went to our alt bags, but like, there is that. There is appetite for, you know, the stablecoin narrative is real. People want to, people want to ape it. And so, yeah, it's good to see demand. It's good to see the demand.

I think it's just a— and it's, I guess, a, a supporting argument for what's the trend that's already been happening, which is basically people in crypto trying to exit on equity retail instead of crypto retail, because crypto retail got destroyed. And now it's like, let's wrap our stuff in equities and exit.

This is a real business.

I mean, sure, it's a real business, but like, it doesn't make. It shouldn't. It's, it's not at this valuation.

Yeah, I think this is expensive, but like there is a path. There's a path to getting there. Whereas some of this other shit in crypto that launches, like, talk about how bad of a job these bankers did pricing this. They were just, they were doing the crypto play. That's green candles in the beginning.

Like they ran the hyper liquid playbook, but their job is to get a good exit. Yeah.

Yeah, you want to pop, but you don't want a 4x. You want like a 20-30% pop. You don't want like a 4x. It's insane.

I think that the other interesting thing is like now with this, with this treasury play, it's like for ages, um, you had like normal companies with shares. They saw, they issued a token because they saw it as like, oh well, we'll issue like a valueless token and just show it to these like crypto tards. And get some more value out of them. And I'm kind of seeing the reverse trend now where a bunch of crypto companies are like, let me wrap this token in an equity vehicle or like a NASDAQ ticker and do this treasury play and basically like sell my token to these stock market retards that want exposure.

But most of these treasury plays— it's really interesting.

I think it's an interesting structure too. Like Miles Jennings wrote that article about the end of the foundation. I'm seeing, like, I spoke to one this week, like a labs entity that is basically trying to take, effectively take their labs entity public, like whatever cash flow sources they have, use them to buy the token and then just take all the tokens on balance sheet and issue equity against them and buy more tokens with it. And like, I think it's interesting because you have the token as the primary value capture vehicle and you just have this equity entity that just serves to allow you to reach another market with your, for your token, right? Um, I think it's a pretty interesting structure, but it's like such a reversal of historically what, how, how people thought about tokens and equity that it's just funny to me.

Yeah, I still think a lot of these, like, a lot of these new shares and stuff haven't come online, and like, this meta might end, but maybe not. Like, this meta might end quicker than we think, but maybe not. That's good for tokens, honestly.

Like, yeah, no, I definitely— it's definitely a concern that it ends, but I think the, the, the interest around Circle, it'll be interesting to see if it's in, like, if that's crypto-related, if that's purely stablecoin-related.

Um, you kind of need a bigger sample size to start to isolate the drivers because just like you can explain stablecoins to like try to find people and they're like, wow, this is a good idea. Nobody doesn't think stablecoins are a good idea. The biggest risk to stablecoins, I think, is like they kind of put the banking sector at risk because basically like they're just a better way to like send and deposit money, but they directly own the Treasury bill. And like if they start flowing through on a yield, then who the hell is going to deposit at a bank with like 0% interest rate? That's the biggest risk.

I know, but I'm saying if they do, then they'll be even lower revenue business or lower income. Like, this doesn't make sense.

Doesn't Robinhood do it?

Yeah, but they're like, that's probably more of a customer acquisition strategy, right? Like, their, their business is trading, so like, they're just going to get you to do anything.

They just like sold through the UST yield, right?

Yeah, but that like, that's just user acquisition, right? Like keep your money on our platform where you definitely won't gamble it.

But I think that that's probably the bigger risk to like the banks and Circle and stuff is like someone doing that and then that creates— I don't know what happens in that scenario because you like start undermining the banking system.

Yeah, I mean, I think it's inevitable, like the pull of stablecoins.

So like what even would the bank—

Circle is like is just the banking system.

How does the banking model even work? If the— because basically right now you deposit in your checking account, you earn like nothing, then the bank is going and lending out that money either as treasuries or like, you know, loans. And so they're making that spread, which is like a massive part of their business. Now, if there's all these easier products to— for the user to essentially capture that spread, does that just like put the whole system at risk? Because those banks, like, they, they make loans to kind of fuel the economy.

They make And like I was just saying, it's like the, the least interesting part of a bank because banks take on duration risk, right? They're not just going out and, and yeah, growing this stuff in, in 6-month bills.

It's—

they have a variety of stuff that they lend out at higher yields, so they're actually able to capture a higher, uh, net interest margin. And then they have, you know, uh, investment banking services and kind of other stuff. And so, um, this is just like the the most boring, most risk rate, interest rate sensitive part of the bank.

But it's also kind of the most important for the economy. It's like the most important role of a bank in terms of what it does in the economy.

So people have been trying to get out— people have been trying to get retail bank accounts at the Fed for years that would pay interest. And the reason why they haven't done this is because it puts the banking system at risk. Because everybody now gets Fed interest rate in their checking account. And that's the only reason why they've never actually approved this, even though it would be like a lot better for the average person, um, is because it would— could literally blow up the banking sector. So I think like, yeah, there's a lot of truth to what Duncan's saying here. Um, yeah, the banking sector has got it. It's just going to change a lot. Like, yeah.

And then the other force is like, oh well, the government at the same time is like, this is a huge demand for our debt. So it's like there's two pretty big opposing forces fighting here. I'm just curious how it ends up playing out.

Um, I mean, just got tree news, Bank of America CEO says bank is working on stablecoin.

Yeah, no, I mean, everyone, we're all in the same camp. The stablecoins are going to be a much larger size in the future.

But I do think it's an interesting, uh, point Duncan brings up, like this conflict between the US wanting people to buy treasuries to finance itself, but also the banking system and the entire economy being dependent on credit from the banks, which in turn is dependent on this scam that you can put your money in the bank and it's like a deposit, but actually your money is not there. It's being loaned out for free and you're not getting anything for it. And if that kind of illusion scam disappears and people just hold stablecoins, then how do you have credit flow through the— you just have to have like an Aave basically on top, right? Like an Aave, but like, or a Maple maybe is a better example, a Maple type thing where there is banks built on top of the stablecoin system and you can choose to selectively lend to them, but it's just not going to be the same rates, right? Like, because banks get capital for free from all these depositors that think it's just—

the banks are just going to be way worse as businesses and maybe lend less, which like, could be bad for the economy, right? Because their margins are just going to get chopped in half. Like what Jan said is like they're not just lending to the Treasury on like whatever, 3-month risk-free, like they're going a step beyond that. They're doing like loans to businesses and stuff. So like their margins are just going to compress significantly and they'll only earn the spread over like Treasury versus what they lend out on like a multi-year loan.

No, I mean like that's part of what like they manage is their liquidity, right? So I think they'll always continue to do that.

Yeah, I'm saying they're going to have to do that more because the— right, the— like, there's going to be these alternatives to stablecoins.

Anyways, it's interesting to think about, which is actually stimulative though in that sense, if they're going out and lending to the economy rather than to the government.

But they have less to lend, right? If everyone's using stablecoins, they— the rates—

their margins will just shrink.

Like, well, money in the system, literally money is created by loans. right? And so it literally just shrinks the entire economy if you get too much of this. Like, this is how money is created by commercial banks, right? Loaning out. That's literally how money is created. And so it's just— thanks. What?

Murad— watch Murad's videos.

So yeah, it would be pretty— it would be pretty—

the key is to buy SPX 6900. $69,000 or what is it?

This guy really just has like honestly memed this thing way back up.

Dozei, don't you own some? Aren't you, aren't you an Aeon believer?

I own some.

Yeah. Yeah.

Nice. So should we talk about Pump?

We all, I mean, if we're on stablecoins, Plasma, like what do we think? Obviously it seems like, so they had this, you know, pre-launch contract thing where you're farming points to like get allocation.

They got someone paid $100K in ETH to get into that thing. Yeah. Yeah, maybe we want to describe how this— how the, how the system— how the whole system works.

Like, yeah, it's like you deposit, you deposit stable— maybe actually Yan can explain it more because I don't know all the lockups and everything.

Yeah, yeah, the idea is basically if you deposit stables to earn points, a share of these points that are issued, and then depending on how many points you get, that determines how much ALU you get. So, you know, in simple sense, if you deposit, if you're 1% of the capital that's deposited, then you get to buy 1% of the allocation. In the end, you get to withdraw the cash, but it, it just gives you the right to buy into the round. So basically it's kind of a whale game, right? Where it's, you need to have a lot of liquidity to have the privilege of participating in the round, which I think is kind of counter to what these platforms are designed to do, which is open up the investment landscape to retail participants that were otherwise locked out.

It's also silly because, well, in my opinion, it's just like you have— so you put in stables in this pre-deposit period, then there's the ICO where you get points based on how many stables you put in pro rata, which is going to be a whale game. And then everything gets converted. Whatever stables you put in get converted to Tether. And locked for 40 days. But then at the end of the 40 days—

Do they get used on the chain or anything? Or like, what do they use for?

No, I think Aave is launching on the chain right now. The deposits are in Aave, I think. So they're earning yield. I think Aave is going to launch on the chain. So maybe they get put there. They do get migrated. Yeah, they get migrated. But after the 40 days, what do you— like, people are just going to— if there's nothing to do there with your stables, people are probably just going to pull out, right? I guess I don't know why this makes more sense than a traditional points, targeted points system where you can say you get points for using the main money market, you get points for using this for payments or whatever. Like, why do this?

Well, in those scenarios, points are usually just a marker to get airdropped, right? This is— you're getting— so because you're buying, it has to be in a more structured KYC jurisdictional way, right? They have to do it to European or rather non-Americans. And so If it was an airdrop, sure, you could do it that way, but this is the right to buy, and, and so they need to follow regulatory, um, kind of regulations.

But you could do points for a right to buy and just have a longer, like, points campaign with more, more activities and stuff like this.

But isn't—

yeah, but they, they're not selling it to Americans, so like, you have to do it.

They are selling it to Americans.

Oh, with a lockup? Yeah, yeah. Well, so you still need this KYC system. So it, like, unless you want to— they could do something where you link wallets to your account, right? You earn points over time and then you link your wallet to the, to your account on the platform and do it that way. So you still have the gating.

What's the main purpose of the chain? Is it for DeFi or for payments? Like, I feel like a lot of people have said payments.

I think they basically saw the activity that Tron is doing And that's the goal. I mean, it's like a shorthand way of thinking about it.

So I guess, yeah, it's like, how do you incentivize people using like whatever the—

I think zero fee is what I'm understanding.

Yeah, exchanges will probably just move over because it's zero fee. Pretty easy for them to do that.

Do we know what kind of—

Although, how's this not just going to be spammed to death? There's like a lot of unanswered questions. With this.

Yeah, I don't get how the gasless transfers don't get spammed to death. Yeah, and do we know what chain it is? Have they said, is it a layer 2 or its own chain or is it EVM?

I guess it is EVM.

It's EVM. It's, dude, read the report we wrote. EVM, it's like, it uses like, like a derivative of HotStuff.

Okay.

What's hot?

No one. Say consensus mechanism. Okay. It's like Cosmos type.

Turbine.

Turbine.

We're telling Jason Yanowitz to explain when he just throws out these random fucking words assuming we understand what he means. Oh, it's a hot stuff. What the fuck is hot stuff?

It's like this, it's like this fast consensus mechanism, but it's like, yeah, that's all you really need to know.

Odd potato.

It's an L1. It's an L1 with EVM. Yeah. We want to move on. I mean, that's what I mean. What do you think Plasma? So you're going to buy the token at $500. Circle is trading at $20 billion.

So it's cheap now.

Now. Yeah. So I mean, Plasma. We'll see. What's interesting is that L1s have really— the L1 premium is definitely going away.

That's what I was gonna go, um, a lot of L1s.

And like, you look at a lot of these L1s that people don't really use, and they're all like less than 2 bil now. And I mean, I know that still sounds like a lot of money, and it is, but you used to have these L1s that nobody used trading like 5+ for a long time, um, You know, like in jet, like I won't name a bunch, but like there's a lot of L1s now within that, even like sometimes less than a bill range.

So yeah, I could see the narrative there.

Hype could what?

Hype kind of, I think, hurt the L1 premium narrative because it's like this, oh, people are using this. Yeah. It's like, ooh, this actually generates cash. I feel a lot more comfortable putting money in this asset.

I think that would kill it altogether is if Pump Fund then launched its own chain, which I think is inevitable eventually.

Yeah.

And then like L1 premium really well, which is what the Cosmos people, the Cosmos people were right again. They're just poor.

They're not really right though. I think that's cope for, and like people just go along with it to make them feel better for like not being right for years. I think like Pump launching its own chain maybe like at the very end when they want to squeeze out like the small remaining juice. But pump launching their own chain right now is quite dumb and like a colossal waste of engineering effort and time. Um, and there's like— and we can talk about the pump launch. So like, there's no way that this— like, this billion dollars they're raising, I don't see how any of that anytime soon is going to go into actually building infrastructure for building their own chain. It's just going to go for like growing the Pump brand more. Um, it's a pretty big raise.

Like, yeah, I would also be a buyer at $4 billion.

Um, yeah, of this pump.

At $4 billion? Yeah, $4 billion. I think it makes a lot of sense. It's good because it's— everyone's unlocked, right? It creates a—

you guys are bullish on $4 billion and then bearish?

100%.

No, I'm saying very bearish Circle at $5.

It's like, yeah, dude.

Yeah, man, interest rates go down, that's bad for Circle. Good for pump.

I know, it's just like, uh, one's like, I think, uh, technology, the other's like—

yeah, exactly. I wasn't bear circle at 5. I'm bear circle here.

Um, I wasn't like super pumped up at 5.

I wasn't bullish. No, I'm just a— I'm a watcher at 5, but I can enjoy it.

You guys want to buy pump at 4? It's just, it's just funny because it's like one's a fucking 100%.

Well, so what do they have right now is like a large user base and a huge audience. And so If I'm not saying they can expand, I'm just saying like, it's like, fuck, like once I think, you know, if it fails, it, it goes up quite a bit first because of how much they're raising.

Right.

Like it's not, it's not a fail.

You could definitely over time. Well, isn't it? Aren't they still making like a million a day? Yeah. Yeah. Like I think it could do well for sure.

I'm, I just, what would be interesting to see is like how, I mean, raising that much money. Is no easy feat, right? Like, being valued at something is, is fine because you're just— it's the marginal buyers.

Yeah, you raise the billion and then you need like another good amount of money to take you to 8 or whatever.

I think it's a mis— yeah, I think it's— I, I don't like hating on ambition, especially in crypto, because not many people have it. And raising a billion is super cool. They're gonna do some— it's cool that they're ambitious. But I do think like overfunding startups, especially in crypto, has like never gone well. It's, it's just because you have to like— right now they're really focused on a core product that's crushing it. They released streaming, which I think is also doing pretty well. Um, and in startups generally, you just always want to raise like the, the minimum amount that gets you to the next stage, because in general you want to be focused on 1 to 2 priorities, like do the most important thing. And if you have a lot of money, you have too much money to just do 1 or 2 things. So you have to do a bunch of them and then you start to do a bunch of them not so well. Like now you have to do acquisitions, you have to do marketing, you have to launch like 4 or 5 products at the same time. And I just struggle to see, I know the founders are really young and like right now it's a relatively small team. They're gonna have to grow that. I just don't see why you would raise.

I mean, I imagine a lot of this money is going towards marketing type stuff and just getting, because that's kind of what the business is now. Like they're just trying to grow this brand and like crack out of the crypto.

But they have like, like $600, they probably have like $600, $700 million in treasury. Like what marketing do you want to do that you, do you need more than $600 million for? Like, I, like what do you need a billion dollars for on top of $600 million?

Like stadiums, like maybe they want to get a Pump Fun Arena and just Like Super Bowl ad, definitely not Top Signal.

Pump Island.

Maybe they just want to pay out a big dividend and just secure the bag for life. And then they have the bag.

They have the bag.

Yeah.

But like really secure.

I think they've just realized they can just try to make this the, like the biggest fucking product in the world. Like consumer product.

Just make this the biggest casino ever. The Pump Island Casino.

They could do that with $600 mil.

I feel like, I guess, but like at the same time, what's like the— why not? Why not?

GM or something?

You can raise a bill. Why not?

I just— yeah, like there's a lot of reasons why not.

I think there's—

yeah, but generally if you could, if you can get the money, like it's not always going to be there. Yeah, so I hear you on that. It's definitely, it's a recipe for disaster in terms of you know, being a little subpar in a lot of ways versus really focusing on a handful. But at the same time, there's a world where you don't spend it that aggressively, right? Which is very hard to do when you're that age.

MGM is $9 billion.

Yeah, I'll just, I'll just go through like Caesars is $5 billion. The biggest fundraising rounds in crypto ever, as far as I remember, uh, it was EOS, it was the ICO, which was like a couple billion dollars. No one knows exactly because they were recycling and stuff. It was FTX, which raised $900 million. Um, it was Forte, which I don't know if anyone even remembers now, that they raised like $700 million. Uh, it was Sorare, MoonPay, Um, like these, like raising a lot of money in crypto has not really gone well for anyone.

Uh, LinkPay is doing pretty good now.

Are they?

I think the difference is maybe that Pump already has the product built and so they're just gonna like be spending to literally for distribution.

And so maybe, I mean, they definitely need to expand beyond product-wise beyond what they have.

Yeah, yeah.

The Pump Casino, it's coming.

I think, I think the streaming is really— that's like, yeah, really their goal here.

I think a casino is a no-brainer move, right? The casino is, is a pretty commoditized product, and you compete on, on advertising and, and rewards programs. And so if you already have this massive user base and you could strap on, hey, come lose your money over here as well.

I don't know, we're so good.

I think it has— I think the illusion of being able to win is better on— I think PUMP's a better casino than— yeah, doing—

yeah, it's just different things. Like, I think you're just inclined to dabble here at the same time. Like, the casino business is monstrous.

I was just looking at that. I said MGM's $9 billion, Wynn is $9 billion, Caesars is like $6 billion. Like, they could be like one of the biggest like a Gen Z, because, you know, Robinhood. Yeah, I don't know.

It's interesting. I'm, I'm, yeah, it's going to be, it's gonna, and, and also like maybe following on from this, a lot of people have been saying how this is bearish for Solana, right? So it's been underperforming. I think it was down like 30-something percent versus ETH over over a month. And I guess the arguments for that is that this is the main application on Solana, the main source of fees. And so now people have a more direct way to bet on it than owning SOL. What do you guys think of this in general?

Like, it's true to an extent. Like, the more— it's like the same thing with ETH and all the L2s and everything. You have all these other tokens that kind of suck up capital. Um, and in the Pump instance, yeah, Pump makes— Solana makes a decent amount from Pump, um, through like Jito tips and everything, but Pump still makes more. And if they're actually going to pay out, which it seems like they're going to distribute some revenue, um, definitely takes some capital away. But at the same time, like, your goal as an L1 is to create valuable apps. And so it's like, it's just kind of the reality of, sure, in like a vacuum here, this may be a bit net negative for SOL flows and for the price of SOL, but over the long term, you have to— these are like bad— these are good problems to have that you have successful apps that want to— that are going to be worth billions of dollars. Right. So. Like you can't have all the value just flow to SOL. You have to have the apps on Solana make more than the SOL token make in aggregate, right?

Well, so the bearish— the other bearish argument is basically that they're just like constantly market selling SOL, right? And so, but I, I, it is an issue, but it's not because in the grand scheme of things, like, the flows should be able to offset it. I think the other reason it's short-term, uh, has been a drag is because they are gonna raise some of this money through SOL. So people are also selling SOL and are anticipating more SOL selling as part of this raise. So I think SOL bottoms around this sale because you've—

you—

people have known it's, it's been coming, right? So Trump happened. If you look at like what happened with Trump, right, SOL ripped because that was the only way to buy Trump. And, and so it ripped and then it dumped as everyone sold SOL for Trump. Here it's less of a surprise. It's been known. So I think it's created this longer, more dragged out drag on price. And so I think you kind of have the final source of weakness from this raise where, you know, both people selling SOL to participate in the raise and then people committing SOL into the raise and then them selling the SOL. So I think like that's going to be kind of the final source of it. And then you maybe rip into ETF from there.

I mean, if this pump ICO, if this billion, if they actually raise this and it raises quickly, I just feel like SOL is going to rip so hard after that because it's kind of like, okay, what's its users coming to SOL, right?

Like this is, they're not going to launch their own chain for a while. And so you want users in the end because you want these users to make all your other apps valuable. You create the snowball effect.

But like, yeah, I don't know, I agree. As I mean, I'm bullish Sol and I'm bullish Sol here actually. But as an L1, you want to have successful apps. You don't want to have one successful app. And that's been the killer of many ecosystems in crypto, right? When the successful app moves off, whether it's like Arbitrum and Hyperliquid, like, or StarkWare and DYDX— sorry, DYDX and StarkWare or Immutable. Like, because the thing is, Pump doesn't really need Solana, actually. Like, the composability benefits for Pump are pretty limited, especially now that they've built their own inbuilt DEX. Like, realistically, and again, I don't think it's as easy as this. There's a lot of work that goes into it. I agree with Ceteris that it won't be a priority short term. But if they launched a Solana fork with Phantom, they would have like a bunch of the users like just not even notice what had happened, honestly. Like people would just bridge there very easily and like all the users are in. Because like as an L1, you want to have enough successful apps that depend on each other that there's a network effect that means apps want to stay with you. You don't want to have one successful app.

But the thing is now you need to keep money on PumpChain. It's like when you have money on SOL, it's— listen, I've never I bought a fucking pump coin through the front end of Pump or like on the bonding curve. I'm like not in the trenches like that, okay? But 100%, I own Pump. Like, maybe no, I don't right now, but like 100%.

You got some—

I don't know, I don't own Fart right now.

Was Goat a pump token?

Pump, pump. Yeah, Goat was a pump coin.

Um, I've owned like a few pump coins and like I do it on Goat, sir.

Dude, Goat, I don't even know what it's at I'm not, I'm not a Murad man. I'm not just holding like, that was the first AI coin.

That was, yeah.

And then the thesis got invalidated once like virtual and AI-16Z problems started.

Once it dumped.

Well, no, once you had like—

It was no longer sentient.

Yeah. It was no longer sentient.

The price went down. The thesis got invalidated.

Yeah. But no, that's the thing is like the, the, the trenches are valuable because they can exit on all of the other liquidity.

People like me. Yeah, like they have me to buy meme coins at like 9+ figures and I'm not going to be there.

It's pump chain. You're going to buy it anyway. Like it's, it's, it's, it's, it's, it's, it's, there's not the same effect though.

Yeah, because it's like, all right, well now there's just— yes, some people will, but less people will. And now the game is less interesting because even though there is participation, there's less. And that feeds on itself. And it's like, all right, well, and then you just have this kind of gradual capitulation. So I think they need to get really big.

Yeah, I don't think, I don't think it makes sense because yeah, like Cedars is saying, like Solana, like there's all the pump gamblers who need like, if anything's gonna go really crazy, like exit liquidity of people who like aren't sniping.

Here's my main point with this. This is like such a crypto researcher type thing to concern yourself with. Like should LaPump launch their own chain? It does not matter right now. Like, they again have such a bigger market to take over than launching their own chain. It's a complete waste of time to like think about this. And yeah, one day I'm sure they'll launch their own chain. One day, like, I'm sure they will. I'm sure they'll also just keep it everywhere else. Like, Uniswap launched a chain, they still are like the dominant AMM on Ethereum, right?

So yeah, they'll just offer cheaper fees for people to use the PumpFun on PumpChain. They'll definitely keep it on Sol.

Yeah. I don't think there's actually been a good example of a really successful app leaving and like, you know, sure. You like dYdX. I mean, maybe, I guess, like, not really though. It's not like it was really beneficial for Ethereum. Yeah. It was beneficial for the Starknet brand, the StarkWare brand. Um, like, but none of them, all the most successful apps that Ethereum has ever had are still most successful Solana, Ethereum. Um, I agree, I agree that Solana needs more of a diverse— I agree that Solana needs more of a diverse revenue stream.

Um, but having a major one successful helps improve those chances.

Yeah, if you're going to launch an app, it's like, you know, oh, let's just do it on Solana.

Yeah, probably doesn't make sense right now. Okay guys, pull up the Hyperliquid chart. This is insane. It's at like 44.

Wild.

Yeah, hype is, hype is insane.

It's literally straight up from the Terra stuff.

Wow.

From April 7th bottomed.

Do you think because it's going to trade, they're probably going to, are they going to do an airdrop pump? I saw that some news about it.

It's like a delayed one.

Okay. It's going to trade with a pretty big float, right? —like, it's a 25%.

Yeah, you should short it, man. Float.

Do we think—

I'm a buyer at 40 for sure.

Do we think Hyperliquid is like under-owned, or is— you think it's consensus now? It's kind of hard for me to tell.

Hyperliquid? Yeah.

Um, because like their community is really loud, but I feel like people aren't really freaking out at like the fact it's at 44.

Uh, I don't know, like I think everyone, um, I think it's consensus and has been for a while, but everyone's underexposed to it.

They're like, yeah, it's gonna go up, but I don't own any.

And I say, I say, say that as someone who probably wishes they'd sized it bigger. I think a lot of people are probably around that camp of, yeah, wishing they'd bought more. Probably, probably a bunch of people don't own it, like a bunch of the ETH people and stuff. Uh, it's pretty like values opposed to them. So there's still a bunch of rich people to buy. But I do think it's been pretty consensus like all year.

I don't think there's a good custody solution for it, right? So funds based on just kind of the rules they need to follow, I'm sure many are not exposed as a result.

I think that's, that's in the process or has been fixed like now Fireblocks and those people are supporting and stuff. But yeah, it was like that for a while for sure. I remember that.

Yeah, I mean, the HIP3 stuff is pretty bullish, right? Because now you kind of start to really open up the TAM for other builders to come on board and share fees.

So yeah, you know, what are the use cases there that you think are like, um, additive rather than like parasitic for someone?

Different markets. Incentives. People can share incentives.

Oh, Stripe is buying Privy.

Yeah, there we go. Crazy.

Stablecoins are really heating up.

I'm so sick of talking about stablecoins.

Fucking red hat.

Give me some coins that go up.

There's just no good token to buy for them other than maybe Athena.

But it hasn't gotten yet. Well, I mean, yeah. Uh, is it gonna go up, guys?

Should I buy?

Not financial advice.

I think so. Are you buying more here? Are you buying more post-Circle IPO?

Yeah, I've been buying.

Yeah, I did.

Yeah. All right. Yeah. Always buying, always bidding.

I think HIP3 is really bullish Athena, actually. Yeah.

So explain HIP3. It's like if you launch an app on Hyperliquid, the fees that your application generates, they like send back to you, right?

It's 50/50. They split 50/50. Yeah. So they want to use the idea of you kind of using Athena or USDE in the same way they do it on Sexes.

That's honestly such a clean way of doing this instead of all this app-specific sequencing bullshit that people are like.

Markets, right? If you launch, you can launch markets like pairs on Hyperliquid. But I also think it's like the bots.

They do this with like the trading bots on there and everything too, right? That generate like trading activity. Yeah, that's different. That's builder codes. Oh, that's builder codes.

That's like kind of plugging into the front end where you can like add your fees.

This is like adding markets.

Yeah, like a new pair. Like they'll have BTC/USD, unlike their perps, and then they'll have BTC, Athena, USD. And I guess, yeah, it's like, Athena can, like, in theory, they could launch—

and obviously they have like Ethereum, which is going to be live on Converge, like, as a sort of exchange built on Athena. But they can also, like, uh, in theory, like, launch pairs on Hyperliquid, have them listed on the front end, and then they could do like, um, you know, you could have yield-earning collateral like USD, Bitcoin, USD ETH, USDT, you know, like all the major pairs, which would be, yeah, pretty dope.

And also you could have an HLP equivalent that's with USDT, so you're earning that yield on top.

Like a vault. They can make a vault. There we go. They don't even need Ethereum. Sorry, guys. We're going to Hyperroll.

Competition's always good.

Yeah. Do you think this builder codes thing that they do, which is a bit different, is honestly such a smart way to like give back some of the money because then you don't need to like worry about all these other weird designs that you need to like introduce. You literally just, you know, we just take care of all the fees and then we just send back you a certain—

yeah, it's a great way for front ends because it's like anyone can build a front end and like tap into really good liquidity and like add some extra fees.

This has existed for years in crypto though, like A bunch of projects did this before, like Thorchain had this. And yeah, I agree, it's really smart, but it's not the same thing as Thorchain.

I think it is incentivizing people to run front ends and get paid.

It's just not the scale, not as good of a product. Yeah, I agree with that. Anything else people have been bullish on? Binance Digital.

I'm in this group chat where they track his jet. He's been making a lot of flights. They're like, oh my God, he's going to the Google headquarters. Like, or like he's landing near here. He could be going to see Google. Galaxy Digital. I've tweeted about it a ton on my Twitter. But basically they have, they have two like, like very different businesses, but one like massive data center. So they have 800 megawatts of power approved and 600 megawatts like contracted with CoreWeave, which on like 15-year contracts, which is going to earn them like something like $15 billion over 15 years. So that's pretty big. And then they have 1.7 gigawatts in the pipeline to get approved, which is like huge. If they build out this full data center, 2.5 gigawatts will be like one of the biggest or the biggest in the US. Obviously it's going to take like probably 5 years to build it all out. And then they have this crypto business of like investment banking, asset management, uh, lending, um, staking, all these different crypto services, which like I think could be a really good acquisition target for like a Goldman Sachs or like a BlackRock. So it's like you have two very different businesses. Like maybe they'll, you know, spin out the, the, um, the big— or like the data center business, but they're basically like leveraging the balance sheet of like, they own like $2 billion of crypto, $2.5 billion, and they're gonna like leverage that balance sheet to like build out this, this massive data center with. So AI and crypto, what more could you ask for? All in one. Yeah, like the ticker is GLXY. Nice.

What about you, Jan? Anything you've been looking at?

Um, I mean, I've just— yeah, I've kind of just been sitting in BTC, Hype, SOL, you know, or my, my biggest bags. And then like FART has been my, uh, with like some small allocation to PopCat, uh, but yeah, thankfully FART's been doing all right. Um, and then yeah, I think the, the next big thing is just going to be figuring out what happens around this pump launch. Um, I guess, yeah, how are people feeling about markets broadly here as we triple test?

Uh, you know, there's no such thing as triple test, right?

Yeah, exactly. I mean, there's definitely some treasury bidding happening. It's just like this very clear TWAP Coinbase premium thing going on. So, um, you saw, uh, GameStop bought $500 mil, which is bullish because they raised a lot more than that.

And, um, yeah, it's crazy to me that they're buying these— all these treasuries are buying so much and it's, and it's not up more.

It's a big asset. Yeah, it's $2 trillion.

I saw somebody is doing— this treasury meta has gone way too far though. Like I saw today, somebody's doing a FET treasury. FET? Yeah. The AI token? Yeah. And I saw someone doing a TAO one the other day. Yeah.

TAO, it's just like, this is like 7.5 million. I was like, there's like 30 minutes of TAO emissions that buys.

I mean, every major asset's gonna— it's probably gonna try and do this realistically. And even— and probably a lot of non-major ones too. It's just—

if they keep on getting premiums, people will keep on doing it.

It's like, yeah. What are the ones that people think could actually get bid? Like, what are the tokens that I think actually bid?

HyperStrategy, because it's actually hard to buy. No— yeah, that one could get a good bid.

I agree. How do you think—

I don't know, like the SOL ETF, if this actually goes live in like July or something, is it going to impact the treasury place?

Um, I mean, you need price to go up. I don't know how— I mean, I think it's bullish, right?

Um, well, it was bullish for me.

Yeah, well, because MicroStrategy— so these guys aren't going to have the convertible debt stuff, right? They're too small and there's less long-term conviction in SOL relative to BTC. So they're going to have a more equity-like raising process. And so, I mean, you do need price to go up and that fuels the speculative side. So I think it's helpful. I don't know that it, you know, the ETF is going to eat into the marginal buyer of someone who would be buying one of these things. Um, I think this is more of the speculative side. So I think net is bullish. It maybe like eats into the buyer a tiny bit, but I think they're just not that big where it's going to be fine. And so you need those flows. Um, I guess what do people expect the SOL ETF to do?

Probably good. Like, I think it seems like there's more demand for SOL than there is for ETH.

It's also got inflows recently.

Yeah, yeah, ETH has had inflows. It's also going to have staking though, which is— Yeah, that's just better design.

And that's also way more incentive for like these asset managers to push it because like if there's 7% staking reward, like they could probably clip like a fat fee on that.

Yeah, I mean, you can't stake all of it. You can only stake like half of it because you got to be— you have to have liquidity for redemption. And stuff, which is kind of the problem with the ETF structure. But SOL has a lot like SOL.

You can stake more than it is. Marinade, you could, you could insta unstake.

Yeah. So if they use, there actually was that was going to use Marinade. And so there's, there's ways to work around it. This is the problem with, this is the problem with the ETH. What is like a token? Yeah. I haven't like totally looked into it as much lately. They did pivot pretty hard. They were like first LST on Solana. And then Jito kind of took that. Yeah, they have this whole— I mean, their product's kind of cool. It's like this— it's like an LST, but it's native staking. So it's an LST in the sense that it's not liquid or anything, but it— how did they get—

other people don't— how, what? How did they get instant unstaking and other people don't?

I don't understand. I think it's like their own liquidity fronting thing that they have where they have like a pool, like you deposit to this pool liquidity. And then, yeah, I don't know how it's exactly funded, but that's basically what it is. But that's one of the problems with the eTTFs is that ETH on staking is, it's actually impossible to kind of like predict. I mean, not like when you do it, you can predict it, but it's always variable and it takes like a long time. And so you really can't stake a lot.

Well, there's some Solana products on the market. There's two that I know of. One is like takes the full staking rate plus charges another 2% on top, which is just like an insane rake. And then the other one from CoinShares, SLNC, I think gives you like a 3% yield, no management fee. So they're taking like half the staking rate or more. So it's like, you know, even if you were to get like for these products, the Bitcoin ETF is like 25 bps that a lot of these managers are taking. If they do, The staking rate's 7% right now, right, Cedrus?

On Solana, something like that. Yeah.

So like if they flow back 5% and they take 2%, it's like that's like they're making 10x more money per dollar. Yeah. So I could see them pushing it a lot harder.

Yeah. This is also part of why, like, I think a lot of people in Solana that SMD to reduce inflation, there's like this constant sell pressure on Solana that just comes from infrastructure providers. That charge commission on stuff like this and are just selling SOL constantly, right? I think like there is going to be another inflation reduction proposal that will eventually get through. I think the other one was like a bit too complicated.

How close was it to getting through?

It was decently close. I mean, the thing is, it had support from all the main stakeholders.

But how much would have that one reduced inflation by?

It would have reduced it like basically close to 0% pretty like quickly because my staking bags, because the yield was actually a decent like MEV.

It's just really hard to get validators to approve that kind of stuff. Yeah.

It's like, hey, hey, the people who vote on this, we're going to fucking destroy your business.

I think it's easier to do that once you cut spending. Yeah, I think once you take off When they take out the on-chain voting with Alpenglow, whenever that goes live, then there's kind of more room to do this too, because now validators don't have that expense of like paying SOL every single block.

I mean, that's going to be years. They want to do it.

Yeah. Like my baseline is that it's going to be years, but they're pretty adamant that like end of the year, early next year. Which seems kind of insane to me. But those are the timelines that they're talking about.

What happened to Firedancer, by the way?

Soon? It's— well, it's on mainnet. The problem with Firedancer is that it doesn't have Jito integration. And so if you want to make MEV, which is like a big chunk of money, then you can't— you don't really want to use Firedancer. That's kind of the issue with it right now.

What's the adoption rate?

It's like 2% or something like that on mainnet. Yeah. All right, cool. Yeah, this is a good one. No taxes on Jito tips in America. That would be— that would be bullish for Solana. Would that finally make you move? Well, I'm not a validator, so maybe set one up. This one really mattered.

All right, guys. Good episode. I'll speak to you. We'll, we'll see you all again in 2 weeks.

Yep. Thanks everybody.

Thank you.