LIVE Hivemind: Crypto Treasury Companies, Sui Hack & Solana’s New Consensus

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. This time we're going live, trying some— something new out. So as always, 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, who heads up our institutional research arm, Jan, who heads up our managing partner at Delphi Ventures, and Ventures Associate Duncan, also known as Flood Capital. I lead Delphi Labs, our protocol R&D arm focused on incubating and accelerating new Web3 primitives. All right, it looks like we're live. Shall I? Yeah, maybe everyone should go tweet this just to make sure we're not just talking to ourselves.

No, we're live. I see it. We have 27, 29. You can see the number clicking up there.

Oh, no way. That's dope.

Yeah.

Welcome, guys.

You can actually see There's 2 watching on YouTube and 34 on Twitter. I wonder though if on Twitter it's just like, if it's like in their section or if they click into it.

Anyways, how do I go on to— because we should probably look at these comments. People are going to be—

all these comments are about some shitcoin, which is like the majority. These are the majority of our XAI-42P.

XAI-42P. Yeah. Changed a bunch of people's lives according to the comments. Duncan, our shitcoin scavenger, what say you? Should we ape some XAI-42P?

It's like another one of Elon's kids.

Yeah. All right, should we start off with markets? Uh, alts are getting wrecked right now. What's happening? Who wants to start maybe on the latest with markets?

Yeah, we had the, the fake out temporarily on, on, uh, courts blocking tariffs, and then that got undone in 12 hours. Um, seems like, yeah, the, the majority of the bid has been coming from these treasuries, uh, the company treasuries buying. Um, considering we haven't really seen a great deal of alt strength And then the stuff that we have seen, I guess thinking about ETH, uh, has been on the Treasury announcement and kind of probably some front running of it. So yeah, those seem to be the primary driver. And then you have these like periodic dips in BTC dominance when, when alts go for a little run, but the second BTC pulls back, the bid is gone everywhere and you get double-digit candles, double-digit percent candles down.

Yeah, this is like the story of 2025. It's just like BTC dominance grinding higher even during the Terra stuff, right? Like BTC's bounced back to new all-time highs, and I think only like major coin was Hype who made new all-time highs, but it's even down like 25% off those already.

Yeah, I think like ETH has been not bad over the past like month. SOL has been pretty bad. It's basically, yeah, it's basically just BTC and hype. I think the meme was like BTC hype SOL. Now it's basically BTC and hype right now.

Uh, right?

Yeah, yeah, that's not— yeah, SOL's been pretty weak, which is interesting because you have a lot of those treasury plays buying SOL and buying like the locked SOL and everything.

Yeah, they haven't—

yeah, with like an intro to these treasury plays, like, uh, I think there's one popping up every like second day now. They're doing these, these, these treasury plays. Um, there's obviously the OG was, was MicroStrategy, then there was a bunch of people doing it. Um, yeah, Trump announced one. There's like Metaplanet in Tokyo, there's SOL, their SOL strategies and UPEX and stuff. Maybe, Jan, you want to like just summarize what they're doing? There's also a lot of people saying this is like the next existential risk for crypto, or the next bear market's going to be caused by, I guess, like liquidation cascades of these treasury vehicles. You want to like queue it up and then give your thoughts on it?

Yeah, yeah. So, you know, equities have this natural gravity going higher from the, you know, biweekly bid from 401s and retirement accounts. Crypto kind of has the opposite scenario, right? We're long-term bullish, but you're kind of always thinking about, you know, who's going to be bidding in the next couple of months. And the story has been these treasuries buying, right? And so it's important to kind of understand how these things are capitalized, and I think that helps you kind of understand the length to which this can last and what happens. So Why are people giving these companies money to buy these assets? So if you look, the primary buyer of the convertible debt are convertible arbitrage or convertible debt ARB funds. So what they do is they buy convertible debt and then they'll short equity. They'll short the equity and that's their general exposure. There's a lot of legs to how they make money, but the important one for this conversation is volatility. So you've always heard Saylor say, "We're selling the product as volatility," and he's right. How it actually manifests is basically, so these funds buy the convertible debt and then short the equity. And so they're delta neutral, but what they'll do with this volatility is they'll harvest the vol. So The convertible deposition is debt and then a call option on the equity. So as the equity goes up, they need to short some stock. And then as the equity comes down, they will buy— they'll like reduce the short by buying. So, you know, as their— the, the debt position increases in value, they'll short more equity to, to get delta neutral. And then conversely, they'll buy. So what they're actually doing is selling high and buying low, right? right? And, and so they're kind of clip— like, what's called is, uh, uh, gamma clipping, basically. So, uh, gamma scalping, rather. So what they're doing is they're constantly buying low, selling high, and the, the more volatile the stock, the better it is for them. So they're not super concerned about the actual price itself, but more so the, the, the volatility of the product, and, and that creates an opportunity for them. And these are buyers You have your Citadels, your Millenniums, they all have their specific strategies within their multi-strategy funds, then you have convertible debt-specific funds. And so this is really attractive because this product is very volatile. And so they're able to generate a lot of returns on it and they're the primary buyer of these convertible issues. If you look each time, that's who the buyer is. What's also unique about these, about MicroStrategy in particular, is that they have this leveraged single-stock ETF. So there's a 2x leveraged MicroStrategy ETF. So on top of Bitcoin volatility, you also have this thing adding to the volatility. And, and so basically, you know, so the convertible debt ARKK funds are, are suppressing volatility, right? Because they're, they're buying the stock when it comes down and selling it as it goes up. But the ETF is actually exacerbating volatility because you put in $100 into this ETF, it has to go borrow $100 to go along When MicroStrategy pumps 10%, the position is now $120 of equity, $110 of debt, so they need to go out and borrow $20 more of debt and buy MicroStrategy. These levered ETFs are actually buying tops and selling bottoms, and they are exacerbating the volatility, which is feeding into the harvesting that the convertible debt arb funds can do and just That's why they keep buying. So there's basically, so far, what seems to be an endless source of demand for this convertible debt. And even more so, they'll offer these convertible bonds with crazy high strike prices. And the reason that's attractive for— it seems nonsensical if you're looking at it from the surface, but the reason being is when you're selling this debt, the strike is a call option. And so if it's really far out of the money, it's very cheap.

Cheap.

So it allows these buyers to actually pay less for the bond and have more price appreciation and other ways they can generate return. So they're basically the primary ones buying. And, and yeah, it's been— you could see like short interest kind of go up in lockstep with all these issuances because that's the game that, that these convertible debt ARB funds are playing. But they're going to keep buying because the, the returns for them are, are mostly volatility-based and, and, and to some degree Bitcoin, but um, they're less concerned really about that.

Yeah. And then the other piece is the equity, which is like the main, the main component for, for MicroStrategy has been the equity. I think I just looked up, they've done $7 billion, $7.3 billion via convertible debt.

And then they own 3% of the Bitcoin supply. Like MicroStrategy owns like 2.8% of the Bitcoin supply right now.

Yeah, but it's, it's kind of just like another ETF in a sense. It's not like Saylor himself owns all of that, right? That's where I think people get scared because they're like, oh, Saylor owns 3%, but he has the voting shares. So sure, yeah, yeah. I guess the risk, the risk with MicroStrategy is that it would just trade at like a steep discount and then shareholder activism would kind of like try and force liquidation, right?

Under what? Yeah, exactly. So that's what I wanted to maybe dig into. Obviously a lot of these have different debt structures, and they're not always transparent, like the, the Solana and ETH ones. But for MicroStrategy, which I guess is the, the one most are based on, under what circumstances would they have to sell their Bitcoin? Uh, as far as I understand, they would literally have to get sued by shareholders, right, to sell their Bitcoin, because the convertible just converts to equity. And I guess if at some point the equity is trading way below, um, like this thing is trading way below net asset value then shareholders can sort of demand that they sell some Bitcoin and buy back stock. Is that basically the way this would go down?

He's kind of mentioned that he doesn't want to do that, but I think, you know, if you're thinking about— so they always quote this like Bitcoin yield, and the yield is basically the increase in Bitcoin per share for a holder, right? And so that's how they think about yield here. And so if you're trading at a discount to NAV, then it makes sense to issue it. To sell BTC to buy back stock because that increases your Bitcoin per share. But I think there's more of a— like, that, that would be the, the financially engineered perfect way to do it. But I think there's also kind of the tribalistic, I don't— I'm not gonna sell Bitcoin, it's— the game is only accumulate. And that, like, you know, as far as he's always said that that's what he's gonna do, but obviously you have a plan until you get punched in the face. And so who knows what happens when um, when it actually trades at a discount.

Yeah. And also on the convertibles, like, they have to hit the strike in order to convert into equity, or else it stays as like a debt liability. So like, probably there is some theoretical liquidation price, but it's got to be really low.

And most of the stuff is 0%.

Yeah.

So there's no like, you know, debt service issues.

But it's— yeah, MicroStrategy, I feel like, is probably less of a worry than like As long as the market keeps putting these massive premiums on treasury companies, then they're going to keep on— like, new ones are going to keep being announced. And I think in order to differentiate themselves, like, some will take on more leverage, and then you get into a situation where you could actually, like, have to liquidate the Bitcoin and this, like, negative reflexive loop. And, like, even some, some, like, the Sol strategy ones have said, like, if they start trading negative to NAV, like, then they will sell the Sol and repurchase the stock. So I think that it's kind of this thing, like, this is almost like the new low float, high FDV. It's like free money to launch these right now, and everyone is launching them. And a lot of these new ones, like, their shares haven't even actually been issued, or like the, the new equity isn't even tradable yet. Like this SBET ETH treasury play, which is up an insane amount, only has like a million shares outstanding or something, and they're going to issue like you know, 50x that, like, to actually fund the ETH purchases. So like, it's trading an insane premium right now, but like, the shares, the new shares haven't even been issued and like are freely tradable. So that's gonna like come down a ton. We're kind of in this like Goldilocks period of like these things trading at insane premiums, everyone rushing to do them. Like, I've heard there could be ones for, you know, other major assets. So I think in the end, probably there's something's going to stop this, and that's probably when some of them flip to discount. Else, because you can't just like have this perpetual printing forever.

I think you get them in every, in every jurisdiction, right? That just makes sense because you tap into capital that can't participate in these. But I think, you know, thinking about what puts an end to these— not saying it won't happen sooner, but I think one really big test will be once the debt starts to mature, right? Because If you have this endless source of convertible debt that doesn't actually create any dilution, that just means they get to continue buying. And so as an equity holder, you know, for some prolonged period, you get to have increased yield, right? Like, you get non-dilutive capital that, that boosts your Bitcoin per share amount. So that, that kind of keeps the premium going.

Um, and that is basically like one, you know, time bomb is going to be when the debt starts to mature because, yeah, yeah, if the debt matures and it hasn't converted yet, then it's like, all right, like, are we going to issue new converts?

Even conversion, even conversions though too, right? Like, yeah, like, they themselves would be a lot of downward pressure on price. Yeah.

So yeah, so conversions would lead to people selling and potentially this trading at a discount, right? Which is what can then force them to potentially sell the treasury assets. But it seems—

and obviously that gets priced better in advance, right? Because you, like, Bitcoin price somewhat reflects this bid. So like, as that starts to come due, you, you anticipate there being front-running of selling, and, and then you get the reflexivity downward.

It seems not as bad as people are saying, just given the fact that— well, here's how it's not crypto collateralized, it's collateralized by equity. There's like, I don't know, the way—

no, no, but this is the— I think the way it gets bad is that lenders who have been pretty, um, tight on credit this cycle start like lending against these assets as collateral. Um, and that's kind of how it could get dangerous because that's kind of the GBTC thing, right, is that it was used— it's not just the fact that it started trading at this massive discount, it's the fact that it was used as collateral for billions of dollars of loans in the—

so you're saying the equities will be uses collateral.

Yeah, like if people start borrowing against, uh, Mester or all these other ones, right? Like if lenders start extending credit there, which I don't know, we'll see. I don't think they—

at least the brokerages are like pretty, pretty risk— like, I— maybe there's going to be some other way to do it, but like the brokerages themselves are like pretty— like, uh, have pretty high margin requirements on, on these.

Yeah.

This one guy said once you get past 3 or 4, they can't get any, uh, there's no new product offer and can't get good debt terms. I think that's like fair criticism that the, the later of these ones probably have worse debt terms than— like MicroStrategy is going to have the best, that's the one the most liquid, that's the one people like to own the most, right?

So yeah, eventually they're gonna have to— like some of these are gonna have to sell crypto and it could go in the other way.

Yeah, the counter is that a lot of these funds that really want to participate have concentration restrictions on single name issuers. So they have more appetite to deploy but can't necessarily. And so as more of these pop up, they can just deploy into other areas.

True.

The— and it's got to be weird working at like MicroStrategy or like this S-Bet thing now and like literally you're— all your work like has literally no reflection in the stock price.

Yeah, but you, if you have equity in this S-Bet, You just, you just, your equity just went up 25x if you work at this company, like any, you own the equity in 5 days.

Yeah. Like, but they're going to get diluted by like 19%.

You can just sell it now if you're an employee. It's like, yeah.

Yeah. Interesting setup. I think SBET's losing like $4 or $5 million a year. I guess it's pretty meaningless in the—

it's a small number to lose that you kind of want. It doesn't matter if they make money. It's just if they lose a little amount, I guess that's fine.

Yeah, you just, you allocate some portion of the raise to clean up the business, to reduce burn, go forward, like if you have some debt or whatever.

I know I said on the last episode I didn't think the ETH one would be that interesting to people just because there's the ETF. Um, do you guys— and I feel like the SOL ones will be more interesting because there's sort of no way to get that exposure on, on the market right now. Like the UPEX and SOL strategy and stuff like this. Um, do you guys agree with that? Would you predict that those SOL ones are going to get more flows, or how are you thinking about it?

I mean, you know, if the flywheel— one of the flywheels, like, yeah, we've mentioned that one of the flywheels being buying discount, the other one being just the, the demand for convertible debt, which I think to some degree is going to be a function of asset volatility. Um, and, and just bullishness on the asset overall. So I could see ETH getting some. I'm like, there's no way it doesn't get some, right? There's just going to be too many people. It only takes a handful of kind of buyers of the converts to then short the asset. So I can imagine they'll get some. I don't, I don't know if it'll be to the degree that, um, like BTC gets. Yeah. It is because these things haven't really deployed anything yet, right? So all this ETH strength is just front running.

So have the SOL ones not deployed?

I think they have, but not, not, not, uh, in massive size. They're— so like you've had the announcements, right, that they're, they're putting together like a billion dollar shelf, but that doesn't mean they've actually raised the money. It's just the filing to do so.

Yeah, like, do you think some of the SOL weakness is people selling SOL to then do this, or like to do the conversions?

Potentially.

I think like a lot of the meme stuff is falling off.

You think it's just unrelated?

I think it's two different buyers. Yeah, yeah.

Uh, the meme stuff is like falling off pretty heavily on SOL though. So like, do you think that—

that I feel like that's kind of been one of the reasons that it's hype too, right? The vision was like, yeah, um, so is where you build on-chain NASDAQ. And, and right now Hype is kind of taking the lead there, which I think is hurting, hurting the SOL narrative.

Interesting.

Yeah, maybe do we want to touch on— actually, maybe we can go to the SOL upgrade this week, or I think Plasma actually is a more interesting topic. I don't know if you guys looked at Plasma at all. I know we looked at it for Ventures back in the day. And, and past, which is maybe why I'm salty. But does anyone— like, I, I made a post on Twitter kind of asking, like, what's the— what can you— because I don't know if— for those who don't know Plasma, it's sort of like a stablecoin specific, like, uh, a stablecoin chain backed by Tether, right? Um, and yeah, yeah, or what people are saying is that it's like it's a hedge for the—

kind of, it's like It's like an EVM chain that you can do free USDT transfers.

So there's a few other things that— the USDT is the gas token, and there's like some other like little things that people mentioned. But I think based on like— I— there was a lot of views on the thread, a lot of people responded, and like none of the, none of the fundamental things were really, really made sense. Like USDT being a gas token, like you can do that on any L2, if there was real demand for that, people, people would do it and you'd see it make a—

No, this is basically orgasmic. No, this is, this is, this is what it is. Tether has seen how much Tron is making off of having the Tether chain and they're just like, what is the point of having Tron do all these USDT transfers? We can just do all those themselves. And we'll just make those free, and then we'll build a whole like DeFi ecosystem around it. That's the kind of way I look at it. Like Tron is some— Tron is this weird outlier where they actually make money off of stablecoin transfers, but like in the long run you're not going to make money off of stablecoin transfers. But it's something that like every chain needs to have. Like even take Solana for instance, right? Solana needs to be a good payments chain and like a good stablecoin chain, but the amount of money it's going to make off of stablecoin transfers is like irrelevant, right? It's incredibly small. So this chain is just kind of going one step further and they're just straight up making them free, uh, but all the other applications on the chain they're still going to make money from. And so that's kind of the goal. It's like, take all the transfers away from Tron because why just give them all that money? And then we're not gonna— and then if this DeFi chain becomes like, you know, you get a lot of these interesting new apps there and everything, and then there's like more, you USDT minted and all this stuff. I don't know, they have like basically the brand to do this. Um, I think people have kind of shown over the last couple years that they don't really like, you know, Hyperliquid is like got $3 billion in a 3-4 multisig. It's like people will use products that they like, um, and they like trust Tether, and so this is just them Every single crypto app just ends up like verticalizing, right? Um, it's kind of just you, you start successful in one area and then you kind of just want to own like everything. And that's basically all this is to me.

Yeah, the, the left curve and right curve is like TetherChain good, basically. Yeah, it's not like this chain is only going to be for stablecoin really well. Yeah, um, apparently they're executing really well, kind of like a fintech company. Like, they're really focused on payments. They've got like some big integrations lined up. A few people DM'd me saying that—

the—

and a few of them are investors, but still they said that this is one of the teams executing at the highest level. Um, and I think that's why all the hype is there. Um, but yeah, I mean, I, I guess given it's the Tether chain at this point, it's going to do well off the $500 million ICO, um, we— would you guys be bidders there?

Yeah, I mean, the ICO isn't really like a very democratized ICO. It's very much a whale game, right? It's like deposit stables and you get points, right? And your points are a function of how long you lock and how much money you lock for. And so, um, it's, it's just going to be whales with cash. That they're going to clean up on that one.

Do you have to KYC for this?

Probably, probably, probably. Uh, yeah, but if you look at like, pull up the Tron chart, it's like literally just straight up into the right. It's pretty incredible over like since like 2018. Like it's obviously had some spikes, but overall it's pretty crazy. They make a lot of money off these stablecoin transfers.

Yeah, so I mean, I think the getting this— the centralized exchanges to switch from Tron to this chain will be pretty easy. Tron does have some sort— some like decent, um, lock-in with this, like all this Southeast Asia and all this stuff. And so that might take longer to get people off Tron. But, uh, yeah, it will be interesting to see how Tron does. With this, um, because you would think that's kind of like the main loser from this.

Yeah, Tron's higher than Ethereum in 24-hour chain fees. 2 million in 24-hour chain fees versus Ethereum 1.8, Solana 1.3. And it's just consistent, just consistent churning.

I'm guessing this thing will get farmed in size, kind of like a Binance Launchpool type. Like, I'm guessing there will be like tens of billions farming this. Um, and it's interesting, it's also a vampire attack on like USDC, um, in that you can deposit— I think it's US and DAI— you can deposit USDC, DAI, USDS, or USDT, but they— it all gets swapped to Tether on the back end, uh, and locked. So, and you assume that like there's going to be some other games to play on the chain with Tether, like Yeah, it could be a lot of— or especially for DAI, it could be a decent chunk of DAI that gets like converted here. And yeah, it's an interesting play. It makes sense for—

I mean, who's actually holding DAI? That is like, I don't know.

I mean, DAI Pay is the highest. DAI Pay is like a pretty good yield, like sDAI or sUSDS or whatever. But yeah, there's a lot of people holding just naked DAI. Which is, uh, which is hard to understand.

I guess if you have a lot of it, they're like, I don't know, liquidity.

Yeah, yeah, I agree on the, uh, this, the Circle vamp. Um, it'd be interesting to see if this impacts their IPO, uh, price action.

Yeah, what is it set to? Because I know it was like set to launch at $5 billion, and then there's like—

it's around $5. Yeah, I just— it's just, uh there's too many headwinds. I mean, naturally, like, yeah, you want to be long stablecoins, but, you know, interest rates come down and like, that's just direct margin for that.

Real other way, like, Circle's probably gonna be the cleanest way for like the average person to play it, right? Like, what else do you buy to play? Like Tron.

Maybe like, you know, you have this, yeah, you have, you know, you have Plasma Chain. No, but like, it's not, not necessarily about playing it, but more so just eating into their business model, right? Which then becomes—

I also think that, I think that Tether is pretty hard to like get rid of their moat, but it's pretty easy to get USDCs. Like, it's, it's like an American regulated fintech stable and there's a lot of those coming out these days. And people use Tether for a very different reason than just pure— like, a lot of people use Tether, don't want the US, you know, stablecoin.

So yeah, it's also a race to the bottom, right? Like, in terms of, you know, if someone offers a yield, then why would you hold this? And, and so Coinbase offering a yield is just eating into Circle's margin.

Yeah.

I think it's stuck in a weird place for sure.

Coinbase really did a good job farming Circle.

Circle's so much— like, they have $60 billion in market cap. Like, they're just so much further ahead of everyone else. But maybe that can change really quickly.

Yeah, yeah. But you price it on growth, right?

If—

yeah, I think there's like some pretty good network effects, obviously. How— so how much is Coinbase taking of the yield or of the earnings? Like, what do you know what the revenue agreement is between Circle and Coinbase?

It's a big line— cost line item. Yeah, if you look at their, their S-1.

Yeah, so anyways, I think it'll probably do pretty well because there's no real other way for people to play it cleanly, like super cleanly. Like, it's the clear number 2. And it's, you know, regulated American.

I don't know, do you think those rumors— I mean, it was like, so Circle was gonna IPO, and then it seemed like there was going to be no demand for it, and then you had these rumors that like Ripple and Coinbase were gonna buy it at like 9 bill, and then the next week they're like, oh yeah, we're gonna IPO again. Like, I don't know, do you think those are like real rumors?

Not sure. But yeah, but wasn't the rumor that, yeah, like 9 to 10 or 11 billion, like they're offering double the IPO price. That seems a little bit—

yeah, it seems like something just to hype back up the IPO. I don't know.

I wouldn't buy because it's just, I think Guy had a good post, like with, with stables, you, you kind of want to be on the extremes. Like you either want to be the most liquid or the highest yield. And like Tether is the most liquid, the most sort of accepted, like the base collateral pair, the base trading pair for a lot of this stuff, obviously used for remittances and stuff. And then USD is the highest, highest yield, at least right now. And USDC is kind of stuck in a weird spot where it feels like when it feels like their main, main bull case is just like regulatory capture that they can get these, which they've been doing a decent job at. And regulatory capture is an unfair way to put it, but just, just sort of making the regulations screw over Tether. Right, or enforcing like reserve requirements and stuff like this. But so far it's been— these regulations have been pretty toothless. Like even in Europe, like the stablecoin regs, it's like, I don't know, if you're trading on— I'm trading on some of these exchanges as a European and they just like come up with these workarounds. Like now you're trading Binance credits rather than the stablecoin as collateral, but the pair is still USDT.

Um, yeah, yeah.

Wait, so you're saying that like Circle at $5 billion, you'd rather own ENA at $5 billion FDV, which is what it's at, than Circle at $5 billion IPO price, even though Circle has like 10x the stablecoins, like 10x the market cap of their stable?

Um, yeah, I think so. Yeah, I think I would. Honestly, that's interesting.

Why?

Like, I don't think so. Yeah, like, I feel like that's kind of a tough argument, but yeah, I mean, I, I just think it's a—

I mean, for sure, like, so— but I just think I can see a clear path for, uh, like, USD supply to, to grow. Off just like the integrations, like they announced with Telegram today, it's like over a billion users. And you kind of saw like funding ticked up last week. I think it got to like 7% and they added like $300 million or $400 million in USD supply. And yeah, like the amount of integrations they have now, like last time they were, they added like, I think it was like $1 or $2 billion when funding ticked up. And now like capacity on AAVE is like 3 to 4x. They have integrations everywhere. Like PT is collateral on AAVE too. Like I just think if you see a real funding cycle, then this thing will do really well.

That's the thing is like, I think the environment is right now best for Circle and worse for Athena, right? As interest rates come down, then funding will likely tick higher. And, and the revenue source for the— like, the two are inversely related, the revenue source for USDC and, and Athena. So if we think over time interest rates come down, then, then that's just going to directly—

it's just been like a pretty— like, won't the basis trade just kind of get arbed down to whatever that interest rate is, like, over time? Like, I kind of feel like we've seen that this cycle a bit. Obviously there's still periods where it's hot, but yeah.

I don't know, just with 10, part of it is, is, uh, the, the fact that like these exchanges, their baseline funding rate is, is 11% or 10%, right? So like just that on its own I think puts in a floor yield.

But I thought that UST yield is like 5 or 6 or had dropped to like 5 or 6. Like, wasn't it mostly in treasuries recently or like a month, a couple months ago?

Yeah, yeah, when, when, when funding's below the, the treasury yield, they just move to treasuries, and it's been like pretty flat, um, for, for, for a few months now.

Yeah, Jason Yanowitz sent us a message, so it's a 50/50 rev share while Coinbase keeps 100% of interest earned by USDC on their platform. Okay, that's pretty fucking— that's hot.

Like, yeah, if you look at the earnings, it's trash. It's like that. If you— yeah, you gotta pull up I'll get the S1. Like, they earn so little in terms of cash.

Is that like an agreement forever they signed that, or do you think that that expires at some point? I don't know. I just think they're in a really good position as the number 2. Obviously Tether is in a fantastic position, but like in terms of the number 2, like order of magnitude higher than the next competitor.

The thing is like, well, the question is like, where are people—

so, you know, who owns— Coinbase owns the user. Kraken's eventually going to go public next year. They own the user. They're probably going to have a similar agreement with Circle, Right? So like Circle max extracts when people hold Circle on— when people hold USDC on-chain because they're not paying crazy vig to these exchanges. And so, you know, there's definitely a bunch of people who hold USDC on-chain, right? And that's where their margin is. But for the most part, people are holding USDC on exchanges. And then as you shift on-chain, you probably shift into other sources of stable yields. So like, yeah.

Well, I think it's like, where do you see like the more stable adoption coming from? It's like, I think if more enterprises and stuff adopt stablecoins, USDC seems like the obvious one, right? Like if there's regulatory concerns around USDT, like probably gonna go USDC, like for commerce and general adoption.

And also, why would you use that over PayPal?

PayPal's been around for like, yeah, a long time, of course, but PayPal is at like a sub-billion in their, in their, um, PayPal stablecoin. So We'll see. I don't know, I just think that they're—

I don't think it's a billion, but yeah, it's a lot smaller. But like Coinbase just did a deal with PayPal as well, and so it's kind of like who has the bargaining power here.

Uh, yeah, yeah, PayPal is— it's only $850 million.

Really? Wow, that's way smaller than I thought it was.

Anyways, so Circle is 60x that.

You either want to be like highest yield where you use as a treasury asset and people just use you in the back for whatever their stablecoin is, or you want to be the most liquid and have the most distribution. And it just feels like—

I think Coinbase is that, like Circle. I mean, yeah, like Circle, USDC is that in the US, right?

But they eat all the— there's like very little of that value flows back to Circle.

Yeah, those agreements are like—

and I mean, the exchanges own the user, right? And so they're gonna, they're gonna have I think that continued leverage.

Do you want to move topics? I think we—

yeah, let's do it, let's do it, let's do it. Um, so do you want to talk about the Sui hack? I feel like that was pretty interesting.

That or Solana upgrade.

I think the Sui thing is like, I don't think it's that big of a discussion. Like, I'm not really surprised. Sui is what, 2 years old? They got 200.

But you want to— maybe we give the context a bit. Yeah, yeah, I don't know if everyone says the CTS, the largest DEX on Sui got drained. I think it was like $250 mil, something like that. It was your basic overflow bug that Move was supposed to be immune to, but obviously now we found out it's not. And I think Misten has said they're going to invest more in security, which is pretty good. And then I think they only managed to swap out $60 million to Ethereum, to bridge $60 million to Ethereum, which is surprising. To me. I don't quite know why, but the same day, within a few hours, the Sui Foundation, the Cetus team managed to get the exploiter addresses to basically manage to upgrade the small config file to the validators that ignored transactions from the— from the—

yeah, basically they told validators, you're not processing transactions from a hacker.

Yeah.

And it's interesting because this would require a hard fork on, on like most other chains, but SUI validators, I think, synchronize software every epoch, which is like 24 hours. So this was kind of a hard fork, but it, but without requiring a hard fork, there's just this one address screaming into the void. And now there's like a proposal. I don't think it's been voted on yet. Although when I checked, it was like slightly over 50% in favor. Which, uh, which if it passes will execute like a counter-exploit. It will unlock the frozen coins, transfer them to a multisig controlled by Cetus and Sui, um, and then there'll be like a, a way for victims to, to claim for, for reimbursement. Um, yeah, I don't know, this— it's, it's crazy to me how— I guess the most surprising thing to me about this is how uncontroversial it was compared to what these things used to be in crypto back in the day, like whether it's the DAO hack, um, or even like the Blast one where there was the bridge hack and it was like a multisig, like there was so much more debate. Uh, I guess for these new chains, people just do not care about decentralization. Like the, the, this, this, this, this ethos is kind of like dead, I think, amongst the newer generation of chains.

Well, I think, I think the nuanced way to look at it is like Uh, so people say this is no different than like there's no censorship resistance because they're blocking a hacker. I think that misses a lot of nuance. It's like you do need to get 100 validators to like agree that this hacker who stole $200 million should be blacklisted. It's still going to be a lot harder if like there's some one person that Sui for whatever reason wants to like censor and they get all the validators to like run this, you know, they're going to be like, well, why would we do that, right? This is like an easier case to do it. So I don't think that it's like completely, um, it's not like using a single bank, right? And everything is like behind the scenes and they can just choose who or who they don't do business with, right? Like everything is still out in the public, so everybody knew they were doing this.

Well, in a private Discord group No, I mean like the decision, right?

Um, if they ever release new software that blacklists people's addresses, people are going to see that, right? It's not going to be some shadowy like behind the scenes thing that, you know, when people's bank accounts get frozen, all this stuff, right? I think, listen, SUI is what, 2 years old? Um, this has happened early, early in networks. Like people have forked like this in the past. I also think that SUI has never really pitch themselves as like some censorship-resistant one, at least not that I think. Like, I think it's pretty clear what they are. They have 100 validators that are KYC'd right now. They're going after like gaming, and they're basically like a Web2 team that is kind of used to all this. And so, yeah, for Sui to do this, it's like, I don't think it's too surprising. I think you could And listen, there's people out there that want this, right? Like, I think it was probably the right thing to do. Yeah, like all the depositors, all the depositors are like, it's, it's 20% of the chain's TVL, okay? You can't just let—

yeah, no, I mean like not doing it would, would satisfy this fringe borderline pedantic minority that don't even— aren't even in the ecosystem that are yelling they shouldn't do this. Like, those are the ones that are mad that they did this. Everyone who's involved is for this. Yeah, no, yes, that's some unilateral thing that one person's deciding. It's a consensus decision.

I just think the main thing, the main thing for me is that like ETH is really the only chain that I think I have confidence ETH L1 cannot do this. Like I think every other new chain that you have your, your, your assets on, um, regulators or, you know, whoever has, has a problem with you I think it's fair to say they can, they can like exert enough pressure to, to freeze your assets. Um, I don't know, I don't know. That's kind of like a big, a big value prop of—

yeah, I think that's, I think like that's a big stretch that people are trying to make as like this right case for Ethereum. It's the only one.

I would agree with that.

There's a lot— there's— that's—

no, that matters. No, no one government could force Solana to do this.

The US.

You don't think so?

You know, Lana also has home stakers, as much as people don't want to believe. Like, not home, like in their home, but Solana would be way tougher.

They have way more validators too.

And yeah, it's like, I think that people are taking this as— yeah, to my point, like they want this to be true, that Ethereum's the only one that you can do this for. And so like, you don't think that's true?

I mean, North Korea washing assets on Thorchain and nothing happened. Yeah, like, North Korea is arguably the worst actor possible to be doing this, right, if you're thinking from the government's perspective. So if they're not coming after somebody for that, then like they're not gonna come after them.

But it's just different incentives, right? Like, in that case, the validators are generating fees from the activity. In, in this case, the validators would get the SUI dumped on their heads, right?

If, if, uh, so I don't know, I think the incentives are I mean, a lot of validators, at least in SUI, just get delegations though from like Masternode.

They still have SUI-denominated cash flow. Like it's, yeah. I mean, everyone's long SUI.

I think it's a stretch to say, I think like obviously Ethereum is the most censorship-resistant L1. It is a big stretch to say that Ethereum is the only chain that you can't do this on.

So which one, which other do you think validators could? Coordinate quickly to—

yeah, I don't think you do this on Solana. And Solana, eventually it would get through, just like on Ethereum. You have validators that would process this eventually, right? You just have to wait a bit longer until that kind of leader comes around. But there's enough, you know, individual— yeah, validators on Solana that eventually these would get through. And that's all you need. You need one. Right? This is literally all 100 decided to like— I think it would be hard to have the, uh, to have Anza. You'd need a hard fork, I think, on Solana to release new software saying that we're blacklisting these addresses and get 80% of validators to, to run that software. I think that would be kind of tough. Maybe they could do it. Maybe they could do it.

Um, I don't know, big enough, probably.

We'll see.

I just think it was in the chain's best interest.

But then it's also like, what does this have to do with price though now?

Well, I, I think a lot of the like value prop of crypto is that it's like dissident tech and like it's for capital flight away from corrupt governments. Uh, like there's definitely a lot of assets in crypto that are, there are people like, yeah, but this wasn't even government, this was social consensus.

This was the foundation and the validators deciding this is—

I know, but in all those value props that you're describing, would, would you see the 100 validators coming together and blocking your transaction? You know, uh, safety from governments, etc., etc. Like, do you think the, the 100 would come together and block it?

I think there's like, it, it's possible. Yeah, like, let's say there's a big US, like, Roger Ver type guy who's convicted of tax evasion or something like this, and his assets are all sitting on a blockchain, on an address, and the US subpoenas all the validators and says, I want you to upgrade your software to exclude this wallet. Like, the reality is, if you— if for a lot of people, like, this is the use case of crypto, and you just— why would you leave assets on a chain where this can happen if you can have them on Ethereum? Where you're way more guaranteed that this, that this, that this can't happen.

That's like the, uh, I don't know, that means if you're gonna make more money on that chain and you are, is it literally zero risk to have this?

Like, for sure you'll put some assets on there and like play some, play, play, uh, you know, like, uh, Ape some coins on there and stuff, but like for the majority of your, of, of your wealth, and I think a lot of like a long tail of extra, or, uh, not a long tail, the like a short tail of extremely rich users will choose Ethereum or something like it where this can't happen.

Right. Something like it. But I mean, I guess you could argue maybe back in the day Solana would've been in the position where they could have been done, but now it's not, right? And so it's this whole process of kind of gradual decentralization and, you know, you think about the decision that's best for you at the time to get to this end state where you can't do it.

I just think this is fine in the world we're in now. Like, there's, there's— if the stuff that Bitcoin maxis and, and Arthur Hayes and like a lot of these people talk about goes down, where— sure, sure, yeah, currencies collapsing, there's bond markets going crazy, and like governments are literally fighting for, for survival, which is like, to be honest, like the, the bull case for, for, for crypto, or at least for, for, for a lot of this stuff, then you have to assume like adversarial conditions. And, and this like a lot of these chains are not resistant to those environments. Well, so if you're—

yeah, but if you're thinking, you know, in terms of mass asset protection, it kind of goes back to the whole barbell argument for stables, but here for, uh, security, right? If you're gonna— if you care about security more than anything, then you're gonna go all the way to BTC, and then on the other side is kind of functionality.

But you might want to have stables, right? You might— yeah. How do you have stables when the governments are going after Well, yeah, I don't know, stables in AAVE, like, they're gonna, you know, there's, there's like, if you have stables in AAVE, you're there. I mean, they have to censor the, the entire market, right? Like, there's, you can wrap your stables, right?

But you're talking about like this World War III scenario, so why would you hold Circle USDC?

I would not. Like, yeah, that's fair. Uh, stables are, are probably a bad example.

So it's just going— it's, it's only the native asset. That's the only real thing that you would hold. And so then it's just like BTC versus ETH. And this is the thing about BTC, it's just, it does one thing well, and it's like censorship resistant. And like, if this whole World War III thing that people always talk about— listen, man, if World War III happens, you know what I want to do on blockchains? I want to send money back and forth. I don't want to eat perp.

It doesn't have to be World War III. Yeah, there's a lot of scenarios that aren't World War III where governments get super PvP. Yeah, but it's happened like many times.

This is the thing. The reality is that the last century— the reality in my opinion is this, is that Bitcoin, if you ever get one of these scenarios, is what you want. And then all the other use cases in crypto are like good time use cases and like they're democratizing, you know, products, like they're democratizing private banking products and stuff like that. And so those are kind of like the two— it's really the money industry and the tech industry. And, you know, I think that if Ethereum is only building to be this like backup Bitcoin with more— a little bit more functionality, it's like, I don't know how much of that functionality matters if you really get this doomsday scenario. You kind of just want money to like send back and forth to people.

I disagree. Yeah, I disagree.

What would you be using if like—

dude, it's hard to talk about like, uh, without sound— without sounding like a— like an idiot to talk about these scenarios, right?

It's legitimate. But I have a question for you, Jose. If so, on Ethereum though, like let's say they wanted to force something, could they not just like fork Ethereum and be like, we're honoring the stablecoins on this new fork and it has to be compliant with like these government rules, right?

Well, they don't get the choice to say— if it's a centralized stablecoin issuer, they get the choice, basically.

Yeah.

Although I actually don't necessarily agree with that, actually.

Yeah, there's been various counterarguments against that.

I think I do see—

eventually made the post about this. I think there's been a lot of valid counterarguments.

I do actually think that Circle would be forced to use whatever chain social consensus wants them to use, um, because then they kind of just like nuke their entire business.

Yeah, but if the government's telling you—

well, then their business is just dead. Like, if the government is gonna just decide to kill Circle's business, then Like, I think that's like the magnitude.

I just think in a world where, like, if you really get a world— I'm not, I'm not saying World War III, but a world where you just have less trust, it's more multipolar, uh, like fiat currencies are dog shit, every country is, is in some form of, like, most countries are in some form of debt crisis, like inflation, um, then you'll want to send money, but you'll also want to do various types of financial transactions, deals, loans. Escrow contracts, like all the stuff that we initially wanted like Ethereum and like blockchains for. And to me, like the credible one, the only one that you could credibly do this on right now is ETH and then probably Solana is the second. I would—

Well, that's the thing. It's kind of in this weird in-between where if you're focusing on money, you just go a little bit further to the left on the security spectrum. And then if you want utility, you don't just want to hold gold, right?

Sorry to interrupt.

Yeah.

Yeah, no worries.

But then if you want like activity and, and, and utility, then you kind of go a little bit further to the right on Solana, and you, you basically have near equivalent level of security at this point for all intents and purposes, right? Like neither one can really be shut down by one entity.

I mean, Solana is, is definitely like more of a Discord group situation than, than Ethereum, right? Like even the, the way The impressive way in which they've coordinated these restarts of the chain, like the speed at which you do it, like all these validators are a Discord group away. Like that's kind of been shown, I think, a couple of times. Like on Ethereum, you just, I just don't see how you could do that.

Yeah. But why is that?

And there's actually like 3 different clients.

Huh? Why is that a critique that like Solana is able to, has like good coordination when like shit hits the fan? It's like if there's like some bad bug, do you, do you prefer that? Like if there's some really bad bug in Ethereum that nobody can coordinate to fix it and then everything kind of just gets fucked?

Well, it's just the whole point of this stuff is that no group, especially not like a group small enough to coordinate through a Discord group, has enough control on, on these systems to be able to like change them. That, that's like the main— for me at least, I think it's definitely not the case now. And as investors, you have to adjust. But that was like the initial point of these systems is that you can't do that. Like, it's— I get that you want to have like this Web2-like experience where there's a bug, people can patch it quickly. But this is why Ethereum moves so slow, right? This is why like everything gets tested and formally verified. And there's like all the people making fun of the ETH research people and stuff is because these are their values. Their values are you don't want to have a bug because if you do, you know, it's hard to coordinate to fix it, so you just have to avoid it. Whereas all these other chains are like moving quick, more, more towards the spectrum of move quick and break things, which has allowed them to implement features more quickly and stuff. But I do think in a truly like scenario where blockchains are needed, like Ethereum is, is the one that most people would, would want to go.

Could you, could you argue that, that there's coordination when it's towards a single goal that everyone agrees is productive, right? And that's when you want the coordination. And then you don't necessarily have it when there would be dissenting opinions, whether it's censorship or whatever it might be. And so like you have coordination when you need it, and but then you have the, the resistance and decentralization also when you need it for these kind of unique events that are more opinion-driven.

I mean, listen, every, every main Solana stakeholder wanted them to pass this inflation reduction proposal. And it didn't go through. Like, yeah, you had totally— you had Mert, you had Multicoin, you had literally all the biggest Solana voices, and it didn't go through. And so I think it's like when shit hits the fan, yeah, it's easier for people to come together. I'm not so sure that it's a bad thing that people can do that. And I do think that Solana should be— I do think Solana should not decentralize too quickly at this point. Still, they're only 5 years old. I actually don't think that they should kind of be accelerating towards being super decentralized at this point. But I do think over time, eventually they'll get there.

It'd be good to touch on the upgrade.

Yeah, the upgrade is just a new consensus algorithm. So they're getting rid of proof of stake.

It's like the biggest upgrade ever to Solana. Like the most, the biggest change.

They're stripping out, they're stripping out. So they're keeping Turbine. They're stripping out Tower BFT. They're stripping out proof of history, which is like this checkpointing thing. I remember Liam from Firedancer a couple years ago, it started talking about how he thought proof of history was kind of bullshit. And then maybe not bullshit, but just like didn't exactly give the guarantees you thought it did and was kind of like redundant. Um, but what, what I find super bullish about this is that in 2023, these guys from ETH Zurich wrote a paper on how to like exploit proof of history and Solana. And it was like a small— it was like, you know, a 4-validator set, and it was in like test environment, all this stuff, whatever. And this went all over Twitter. The, the guys who made this new consensus for Solana are those guys who wrote that paper. So Solana literally hired like these ETH Zurich guys, got them to write the new consensus mechanism. And I think that's pretty bullish because instead of just like pushing away critics you know, Tully actually reached out to them, started talking to them, and be like, okay, let's, uh, let's get these guys on board and let's fix it, right? I think that's kind of the mentality within Solana, that they have this very pragmatic mindset and yeah, they'll deal with, you know, they— if you critique— the other thing too in Solana is that you see the engineers shit on Tully a lot too, right? Whereas I feel like in Ethereum, maybe recently it's changed a little bit, but at least historically you could never say anything bad about Vitalik, right? And so it's just like a very different mindset where they are pragmatic, they do want to fix stuff. If you come with like a critique and it's legit, like, they'll look into it and make it better. The other thing that this upgrade removes is like the on-chain voting, and so this is good because You know, every Solana validator has to vote on every single block.

There was like 75% of the transaction load, I think.

Well, that's one thing is like this, you know, there's this whole, the TPS numbers are high. That's one thing that's like pretty immaterial to me. But the main thing is that like, this is better for smaller validators, right? Because every single validator needs to vote on every single block. And so if you're a small validator and you only have like 0.1% of stake, then you're only earning rewards on 0.1% of, like, you're only the leader for 0.1% of blocks, but you have to pay the same SOL expense as every other validator, right? And so that's like pretty, that's like the kind of centralizing thing with doing on-chain voting is that, and I wrote about this when I wrote about Solana a couple of years ago, actually literally 2 years ago to this date, Um, we're like, these vote fees are very centralizing because whether you have a billion dollar stake or a million dollar stake, you, you have the exact same expenses, right? And so this will be good for that, getting voting off-chain finally. Um, and yeah, they, they said it's going to go live early next year. We'll see, like, these things always take way longer. And Solana now is not at the state where switching consensus while it's running, it's like a lot riskier, right? Because they have a lot more assets now. They have like 10 billion on them and people are using it literally all the time. So yeah, we'll see. That's going to be tricky. That's—

Yeah, I think I saw some analysis that the breakeven validator stake went from 5,000 SOL to like 450 SOL. So it's pretty meaningful for like smaller—

yeah, it's, it's mostly now just your actual cost of like hardware and bandwidth and all that.

And you also get to sub-200 milliseconds, right, with this new consensus?

Yeah, I think it's gonna be 150, I think, is what they're going— is what they're going for. They also have, um, it's like, so in most, in most BFT systems you have like a 1/3, um, safety guarantee where like up to 1/3 of the stake can be Byzantine or like malicious, and then you'll cause the chain to essentially halt. With Solana, the new consensus, they're pushing that a little bit where it only takes 20% of stake to be malicious for it to halt the chain. But I think the trade-off there is that they're able to get like way faster finality in latency and everything. So they're kind of playing with, um, that decision a bit. Like, this two-thirds thing has always kind of been the, the number that people use, right? And they're kind of pushing that a bit to, uh, yeah, there's some like technical nuances that I won't get into about like when blocks finalize and all that, but it moves it from, uh, like 12.8 true finality to like 150 true finality. And this is just important for like, if you think about a market maker making on-chain, um, the, the lower latency, like the lower finality times, the tighter your spreads can be, right? Because you have lower risk of somehow getting like some small reorg getting picked off or whatever.

Yeah. Do we think it's a like the— maybe the hype eating into Solana narrative is real?

Like, because I think there's like parts of this because it's, it's hard to—

it, it does seem like there's chain— like, Perps is one of the use cases where clearly app-specific stuff is useful. Like, even the ability to cancel orders and, and stuff like this is, is super useful. It's hard to see Drift or some of these, uh, and I really like the Drift team, but competing with Hyperliquid here. And if Tully's right that the biggest use case of blockchains is just minting and trading tokens, then, um, is Hyperliquid, or I guess like Fogo, which is like Solana with some app-specific stuff, is that the right design?

I mean, hype is definitely— yeah, this is a tough one. Like, hype has definitely taken a lot of pure trading activity from Solana, but Solana is still kind of like the launchpad.

Yeah, I think the narrative can be on the AI side too. It seems like a lot of your AI projects are choosing to launch there.

I mean, the HypeEVM does 2 TPS right now with a theoretical max of 7. It's like, you know, the HyperEVM, getting that up to the speed where Solana is, is a massive difference, right? Um, HyperLiquid just crushes Solana when it comes to perp trading and stuff. And so they're pretty different products, like, but maybe the same bucket of capital allocates to these, right? But they are like pretty materially different products. Like Hyperliquid is not trading at where it is because it's like, there's this general purpose L1. It's trading because of the perpetual exchange.

Yeah, I'm definitely a hype bull, and I think, you know, it'll continue to do well, and then at a certain point it'll kind of reach price parity, and, and then the next leg up is basically this transition from valued as a DEX to valued as a chain. I, I, I like Hyper, HyperVM, like I've used it, it's it's kind of butt. Um, but yeah, like, obviously Hype itself is great. I trade there a bunch. Um, and, and so then, you know, once that kind of reaches fair value, whatever that is based on volumes, then maybe you see some flows back. But it's— I don't know that it'll ever be able to get that L1 premium without massive tech improvements.

I think the tough thing for Hype is that they're probably around they're at the point now where they've taken all the DEX market share and they've taken like a decent amount of the centralized exchanges. But to actually start getting more material into there, they— it's going to be pretty tough for them because it's still like totally public perp exchange.

Yeah, I guess we'll see. Like, they have like— their numbers have been just like been insane. I'm trying to pull up the dashboard, but I think they have more. Yeah, there's a good one. It's something like Hyperflow, but it basically shows versus sexes and volume. And I think they have as much OI as OKX, like 40% as of Bybit, 20% of Binance. And it's kind of going vertical, especially after all this James Nguyen stuff. The guy had the billion-dollar position on chain. So it's still growing really quickly. I don't know if it's reached saturation yet. We haven't really seen it level off. Yet.

Yeah, it helps that it has that built-in bid too from the, uh, the fund just buying Hype. Obviously it doesn't move the needle as much as it used to because of the size of Hype, but it's still a non-negligible amount of buying into the market. So even during lulls where, you know, you don't really have new supply hitting the market on Hype, you still have this kind of bid that, that provides a boon.

Yeah, okay, I found the website. It's hypeflows.com. And the open interest, like, kind of slowly grinding up to about 9%, and then just since the start of May, it's at 14% versus all sexes, like, aggregated. So it's really just gone exponential in the past, like, month, month or so. So I don't know if it's reached saturation yet.

Yeah, uh, I don't know, do you have anything else we want to talk about? We've been over an hour now.

No, I'm good. Do we have any legit questions in the, in the chat? How many gold antiques Duncan has buried in the backyard for store value?

I think gold is good in case— oh, what's this whole quantum computing thing that could break Bitcoin.

Like, it's pretty far out. It's definitely worth, like, paying attention to. But quantum computing— I listened to a good pod with, uh, a16z, uh, a couple weeks ago. Um, it's gonna take a while. It's, like, worth thinking about but not making any rash decisions over. The thing with Bitcoin is that a lot of these— like, any system— like, basically, when you have quantum computing, you need to move to a new signature scheme. That's quantum resistant. And so that's easy to do if you have the keys, right? The thing with Bitcoin is there's just like a lot of lost keys, and there's like Satoshi's keys. So those ones, um, you literally can't move them to something quantum resistant. And so you can always do like some manual then, but then it's like, you know, is Bitcoin going to essentially burn those coins at one point? Right? When you get quantum computing, and it's a decent chunk, um, but are you gonna like— is, is Bitcoin gonna burn Satoshi's wallets? That's, I guess, like kind of the interesting question. Is that like bullish or bearish, right? It's like you're taking off a big amount of supply, but like that supply is already effectively taken off anyways.

Yeah, I think people right now, the ongoing assumption is that those coins will move. I think that seems to be the ongoing assumption.

But once you see the move, it's like, oh shit, China cracked, uh, quantum.

Yeah. And then that's their prize. Hopefully they hodl.

And then when that happens, the rest of them— then when that happens, the rest of the world breaks because every government secrets are just cracked. All your banking is cracked, everything. So once the Bitcoin moves, the world knows, oh, we gotta upgrade now.

Pillage Duncan's backyard for all that gold.

Yeah, I don't want the gold, I want the, uh, I want the statue head.

Yeah, so have a little bit of golden food in case that happens, guys, you know.

All right, I think we've gotten to the useful end of this.

Oh, the last thing is, um, I looked up the Circle thing, so it's— they have the revenue sharing agreement with Coinbase. They signed it August 2023 for 3 years, and then they have the option to extend it another 3 years. So like potentially they could like renegotiate that at some point in the future, and that could, could be pretty bullish. But obviously like you guys are saying, they own the, the user. I just think at $5 billion, it doesn't seem that bad. If this is like the one thing that everyone is consensus on, like stablecoins are going to huge, and you can buy like the second biggest stablecoin that's like still growing pretty fast. Yeah, rated in the US as like a long-term thing, I think it's not terrible.

Yeah, that's fair.

Yeah, I mean, I'll agree that it's not terrible. Would you rather own— I think you have some other equities that you'd rather own, so.

Yeah, but I think it could be good.

Anyways, cool.

It was a good, uh, that was good. I thought doing it live was fine.

Yeah, yeah, thanks for, um, and if, if you guys are listening live, yeah, if you're still here.

This guy said, imagine putting a long-term bet in the Fartcoin chain rather than the institutional chain. This idea that Ethereum is like the institutional chain, it's like pretty not true. To me, it's like these funds and everything are launching their assets kind of like everywhere. Um, I don't know, this feels like a longer debate.

I agree with that.

Yeah, I think that's a bad argument for, for Ethereum.

That's also not— that also goes totally against what your like whole rant about Ethereum's use case was too.

No, I think most of these institutions are just seeing this as like new markets to tap into. Like, these assets, most of the assets they're issuing are permissioned assets anyway. Like, they don't care what chain it's on. Even if they've freeze their address or whatever, like, this doesn't matter. They're holding the, the stocks or the bonds or whatever. Like, yeah, I think most of the use cases that people talk about have no use for a, for a chain anyway. They're just using it to tap into new users, new markets, new assets. Like, exactly. I think the— I don't think it goes against my argument for Ethereum. I think my argument for Ethereum was slightly different.

Uh, I just think it's like different. I— yeah, it's a different bull case, which I don't agree that's the bull case for Ethereum anyways. But, uh, the one this guy's saying, because yeah, institutions are just going to go to where the users want it at the end of the day.

Um, until, until, yeah, until like security matters, like, and you know, I agree. If—

yeah, but in what way? Even if like they always have the authority to just freeze their assets, um, what do you mean?

Yeah, but yeah, for sure, for, for the, for like, like RWAs. Yeah.

All right, all right. Yeah, let's not go down to the rabbit hole.

Uh, yeah. All right guys, thanks very much for joining us. We'll be back in 2 weeks. Maybe we'll do it live again.

I don't know, we'll see.

Maybe. Yeah, we'll see.

It's a lot of coordination.

I feel like it was pretty similar to—

yeah, not too different.

Yeah, you can get some better comments. Well, I haven't looked on YouTube, I'm just seeing there's nothing on Twitter that I can see.

Yeah, you know that the comments— you know that the comments show in here, right? In the StreamYard?

Oh yeah.

Yeah, and they come in from both YouTube and Twitter.

I didn't see that.

Yeah, yeah.

Oh really? I didn't see that either.

Real person here, late to the party. Yeah, Solana is going back, guys. 5-hour chart.

I'm gonna end the stream, but, uh, yeah, you guys, hey everybody, see ya.