Macro Updates, Industry Narratives & Big Tech Coming For Crypto | Permissionless IV Recap Bonus Ep

This episode is brought to you by SKALE, the next evolution in Layer 1 blockchains. Explore the gas-free ecosystem at scale.space/ecosystem and follow their journey on X @skale_network. Thanks to SKALE for making today's episode possible.

Well, here we are.

We're doing it live. Welcome, everyone. It's a bit of a permissionless wrap. We gathered the Blockworks Podcast Avengers. To riff a little bit, talk about the conference. We should be doing this over beers, but unfortunately it's like noon, so not quite yet. But yeah, I guess I'll introduce. We have Felix of Forward Guidance fame, Rizzo of Supply Shock fame, and then the research guys.

Wow.

Dani and Micaccio, my rivals a little bit. Um, real.

Yeah.

I, I mean, we've all been at various different panels running here and there. I've been drinking lots of the, uh, the free espresso drinks has kind of been my focus this week, but, uh, but we all have different vantage points. So, um, maybe I'll just throw it for some opening remarks, toss it over to you, Felix, like leaving Permissionless 4, uh, how are you feeling? What are the takes? What, what stood out to you this week?

Yeah, so I was up here just a couple hours ago doing a piece on treasury companies and token acquisition companies, and yeah, that's where a lot of the momentum is right now. It's interesting to see, you know, it always feels like every crypto cycle is we take one new thing and then suddenly you get a proliferation and you get 30 of them in quick order. And we always love to to test things to their logical extremes. So, you know, we're in that moment now. It's— I think there's still a lot of runway. There's a lot of demand for this. You know, there's a lot unlocking new asset classes in terms of being able to have access to these debt markets. That's a whole different investor base than equity. So it's really exciting. I am cautiously excited about the meta. I think obviously, you know, Michael Saylor and Michael's strategy has just been exceptional in leading and innovating this. It's, it's truly fascinating as a huge finance nerd to see some of these, these new debt issuance vehicles that they've had. Obviously, they spearheaded the convertible debt idea, and now there's just a whole bunch of other issuance as well. So that's been really great. Yeah, you know, it's interesting. Now it feels like every other crypto token is going to have their own acquisition company. We had Joseph Lublin on earlier about Aspet. So yeah, interested to see where it goes from here. And yeah, still, you know, trying to present the risks associated with it as well. You know, there's no such thing as a free lunch in finance. It may seem that way in the short term, but you always got to be conscious of some of the risks associated with it. So cautiously optimistic.

Rizzo, what's your— yeah.

Yeah, I'll dive in there. First off, great to see Bitcoin leading the discussion here on this panel. And I think Bitcoin's been very well represented at this conference, which I think is a contrast, right, to maybe even last year or the last couple of years, right? I think Obviously everybody here knows Bitcoin. How many people here own Bitcoin? I want to get a sense of the crowd.

Okay.

How many people here don't own Bitcoin? How many people are proudly non-Bitcoin owning? Okay, we've got a couple of hands. Okay, so it seems like Bitcoin is winning, right? I think that's great. I think you talked about the— was it token acquisition companies? I call them Bitcoin treasuries for the most part, right? But yeah, it's been nice to see Bitcoin at the forefront of the discussion. There was even a huge track on Bitcoin L2s and porting a lot of the crypto technology over to Bitcoin, which obviously I'm cautiously optimistic about as well. But yeah, nice to see Bitcoin represented in the discussion, maybe in ways that in years past it has, has not been.

So do you guys think the, the token acquisition thing has peaked, or—

No, no, this is gonna get 100 times larger. Yeah, because in every one of these markets, these capital markets, there exists inefficiencies. You know, Metaplanets, I don't know if people are familiar with this, but this is a company out of Japan that's executing the strategy, Michael Saylor's strategy. Why is Metaplanets the best performing stock in Japan? Weak yen, ETFs don't exist in Japan, and the tax if you own Bitcoin and you sell it in self-custody is something like 50% compared to 10% with the stock. So these are natural market asymmetries. And if the prize for closing one of these asymmetries is that you end up owning 20,000 Bitcoin, you're going to— you better bet that everybody in every capital market in the world is going to be racing. And when we say every capital market in the world— Africa capital markets, Europe capital markets, Indonesia capital markets, everywhere. If everywhere there is an opportunity for you to start a company and to own 5,000 Bitcoin, That's huge.

Yeah, I think this dovetails a little bit with the take I was bringing, which is that I think as, as fellas in the content world, we're actually going to look back on this like these past 6 months is like a golden age. A lot of times in crypto, like something will work and then there's like 100 copycats of it until you're bored to death about talking about it, which is going to happen with, you know, treasury acquisition vehicles. But it actually feels like in recent months we've seen a lot of novelty, to the extent you can call like crypto treasury vehicles novel. The proliferation of them at least has been something new. And I would agree with y'all's answer to my question that I think this thing hasn't peaked. You're going to see crazier versions of it, more unhinged kinds of ideas.

Wait till you see these bundled ETFs and they get wrapped into each other. We're just starting, man. And it's early.

We're now tokenizing the, tokenizing the stocks that buy the tokens. How deep can the rabbit hole go?

Oh, it just keeps going.

And you also, I think another place to look for this is in sort of big tech crypto M&A. So Stripe acquiring Bridge and now Privy recently. I think a lot of traditional tech or finance firms are probably looking at that and saying, hey, you know, what can we go buy? There's probably not a lot of great stuff that you would want to buy, but that doesn't mean that it's not going to happen. And so I would expect a lot more like M&A-like deals. Following Circle's IPO, I'd expect more IPOs, maybe a return to some kind of like SPAC vehicles. And that might get tiresome, but like right now, you know, Felix told me in Slack, don't buy Circle, you know, whatever you do, it's overpriced and it's just gone up.

Thanks for throwing me under the bus.

Join the Telegram for the alpha.

Yes, exactly.

But we're going to see like many more IPOs trying to recapture that Circle magic. So I think, I think right now is kind of a point in time where there's actually a lot of novel, interesting things to talk about. So I've been appreciative as someone who kind of writes about crypto every day.

I don't know what's going on in the trenches over there.

Yeah, I'm going to—

the trench guys.

I was going to actually agree. The, you know, this, this talk about we like to take things to the extreme, you know, one thing works and then we do it 1,000 times. And I think like from my POV, I think we're seeing that a little bit, right? You know, Polymarket, Kalshi, they just announced big raises. I'm seeing a lot of talk of smaller, different experiments around prediction markets, you know, PumpFun as well. They've got, you know, their rumored ICO coming up in public sale. And we're seeing tons of like launchpad competitors coming into the space. And I feel Hyperliquid is another one. I'm sure Bakhtiar would love to talk about that one. But, you know, Klobz, that's become a big narrative now, too, because of that. And I think it's, you know, we like to hinge on these big successes and then, you know, 100 more people come in and they say, let me see if I can do that better or capture a little piece of that pie. And that's what the past few months have felt like to me. I think the big themes and we've been running with them.

Yeah, I agree with that. On the other hand, if you talk to funds, allocators, typically they're kind of bored. Like they're in Bitcoin hype.

So you think owning 5,000 Bitcoin is boring? That bores you?

I think they're bored.

I know, but I legit mean it. Like you talk to these guys and they're, they're talking about only a few assets as opposed to before where I felt like everybody was doing a lot sillier stuff. I think I'm talking less about the big guys and more about like small to mid funds, who is like the analyst, etc. I feel like, I feel like I don't know if you've heard the same thing, but this is what I'm seeing on my, with those funds, if that makes sense.

Do you, how do you think that boredom ends? More tokens, more launchpads, probably more tokens.

We need more, maybe not more launchpads, but more tokens. I think DeFi has become more serious. So if that makes sense, like people want AAVE and Syrup, Maple.

Yeah. Well, I, you know, I don't, I don't listen to your, your podcast whenever I can help it, you know, but the one time I did recently, you kind of made a good point, Boccaccio, I have to admit, where you're basically like back in the day you could just wait till a new L1 came out and then buy like the top DEX. Buy the native token, stake it, whatever. And that would book a pretty good return for you. And it seems like that meta has gone away and maybe people are trying to artificially recreate it with Hyperliquid. Wow. Just for the love of the game, just to recapture that old feeling.

What's the backstory here? I feel like I gotta know the backstory.

Hot take is Solana guy doesn't like Hyperliquid, huge.

Sorry?

Nothing, continue.

But like, how does that— where does that meta shift? Like, where's the free money going to be for these funds?

I don't think there is free money anymore. I think a lot of long-only funds underperformed because they didn't buy Bitcoin. Rizzo, you were right all along.

Sorry, what'd you say?

You were right. People needed to own Bitcoin.

People need to buy Bitcoin, yeah.

In terms of—

The headline.

Free lunches.

I think overall it's just the, the altcoin, the way, the way they are created, the structure of them is just, you know, there's no real claim on, on equity. And the only ones that do have any sort of at least close value to cash flows have done well. But overall, I think there's a, there's a good fundamental reason why the equity world is where things are going off right now, because we end up back in a world where it's like actual claim on equity.

Well, here's the thing is that the treasury companies are the new tokens, right? Because they give you everything that you get with a token. You get a logo. You get a symbol, and you get some beta on Bitcoin. But here's the thing, is you get access to the largest user distribution portals in the world, right? The NYSE, NASDAQ, they have hundreds of millions of users, so they don't need to go out and get users, right? So this is the hack here. I think, you know, you're looking at Bitcoin treasury companies are the new tokens, and they're competing.

Very good.

I don't like the decision to have Rizzo in the middle of this panel. It feels like he's kind of just like, you know, Spreading his Bitcoin—

oh, sorry, I guess—

maximalism around to the edges here.

I don't know.

I think I would have to take that, you know, a lot of people maybe in 2021, they had the idea that you mentioned free lunch. Like, we thought that this free lunch would happen over and over with, you know, call them vaporware or shitcoins or whatever you want to call them, but just any old thing you buy it and it goes up 10x and you're a happy guy. But yeah, I mean, the reality is that just can't happen endlessly. Forever. And we're seeing, you know, the more mature protocols. I mean, Bak mentioned a few, right? The Aave, the Syrups, things that they have a, you know, a business that's kind of formed and they earn revenues and they're giving some of that, you know, guarantee to the token holders. Like we're seeing a slow maturation and it's natural that if that business model and the kind of token model matures that, you know, you don't typically see equities go up 10x in a few weeks. unless something crazy is going on in the markets.

So this episode is brought to you by SKALE, the next evolution in Layer 1 blockchains with a gas-free, invisible user experience, instant finality, and robust security. SKALE allows for limitless scalability and has already saved its 50 million users over $11 billion in gas fees. SKALE's high throughput, zero transaction costs, and powerful Web3 infrastructure make it the ideal platform for gaming, AI, and other high-throughput apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their journey on X @skale_network. That's scale spelled with a K. Thanks to Skale for making today's episode possible. Katana isn't another new general-purpose blockchain. It's purpose-built for DeFi users to provide the best experience possible. It does this by sustainably generating deeper liquidity and higher yield than any other network. If your assets are sitting idle, then they're dead. Katana is built from the ground up with DeFi mechanics to bring your bags back to life. All you have to do is bridge over and Katana does the rest for you. Incubated by Polygon Labs and GSR, Katana launches with a notable ecosystem of primitives, assets, and partners like Morpho, Sushi, Vertex, Lombard, Chainlink, and Yearn. Be early to Katana. Join the pre-deposit campaign before mainnet opens at the end of this month. Deposit funds and open rewards filled with randomized amounts of KAT tokens. There's also a CryptoPunk and other exclusive NFTs hidden for the lucky ones. As always, investments in blockchain technology involve risk. Terms and conditions apply.

Well, I have a question for you guys, and this is, this is less of a Maxi question, but where does the value accrual happen on the chain? So you guys are fighting because this application is on its own chain. Maybe he wants it on his chain. In a world where stablecoins are coming out right next year, every bank is going to have their own stablecoin. Every large company, they're probably going to compete on the level of having their own rails. It seems kind of incomparable to me to think that you're a large financial institution, they're not going to band together and run their own networks. So I guess like, where does value accrual in the token world happen if you're ultimately competing against networks that maybe are launched a year from now that are owned and operated by banks?

Stablecoins are really, really tough because payments, they don't generate a lot of fees. So at Blockworks Research, we mainly focus on revenue and fees. Simple sending money from X to Y doesn't— you want complex interactions, you want MEV, you want people spending a lot of fees on buying and selling stuff. Honestly, I'm not sure it— Daniel Smith would say we're gonna have low transaction fees per transaction, but we're gonna have billions of transactions, and that's where the value accrual comes from. That is clearly a Solana thing. I don't think Ethereum could compete in that sense. But I think it's, I don't think anybody really knows right now. Like on the one hand we have what Felix said, which is we don't know where the token value comes from for apps. For L1s, I think part of the reason why we've had this debate for a year and a half about REV is because nobody really knows how to value an L1 very, very well. Ryan would yell at me and say it's cash flows. And that's what I agree with as well. But we're gonna have to see, 'cause these are new startups as well. So you can't just be like only revenue.

Another theme that I've been thinking about a lot, I'm the macro guy, do the macro things. So I've been thinking a lot about stablecoins and just the intersection of the big question at hand in macro these days is who's gonna be buying the debt, right? You know, we're running a 7% of GDP fiscal deficit. And there is a short-term attempt to try to normalize that. And, you know, that was the theme of Doge. And we quickly saw just how difficult it is to, to change these, these ingrained institutions. And so that failed. So now we're back in this world of huge fiscal deficits. And if the big beautiful bill passes, we're going to actually accelerate further. We're going to go to an 8% of GDP fiscal deficit. So you have that dynamic happening. And now you have the rest of the world, too. They, you know, It's always so interesting. People feel that, you know, every other country— I'm Canadian, right? And so like the theme over there is when you go to the other— when I come to the US, it's, oh, you know, the socialist Canadians, they must be like printing even more money. There must be even more debt. But we've actually only been running like a 2% of GDP fiscal deficit over there for many years. And the theme we're seeing, you know, just yesterday there was a NATO summit where they discussed increasing defense spending up to 5% to meet that level. So So we're going into this world now where fiscal deficits are going to increase across the world. And the big question at hand is who is going to be the ones buying this debt? And there's a very logical reasoning behind why we're seeing such a push for the Genius Act right now, because that is a huge unlock for US Treasury T-bills coming forth. So you can see that happening right now. So there's a lot of this discussion around who's going to buy the debt. And so Stablecoins are going to be a huge unlock. You know, I hear many stories of people actually keeping their money in something like Tether that are outside of the US system. And, you know, it's an interesting dynamic because you think about— you talked about Circle and you roasted me for it because I thought it was a bit richly priced. But it is.

It is overpriced.

It is. It is overpriced.

Yeah, it's currently wrong.

Yeah, exactly. You know, we'll wait a few months until the IPO lockup hits. And I'm sure it'll be a different story. But in the meantime, it's a fantastic business because if the Genius Act passes, they are going to restrict any sort of interest being passed on to the consumer. So you're in this like wild situation where you have, you know, stablecoins are basically money market funds. It's a new version of a money market fund where they own T-bills and they pass on the yield. But what's unique is that all— they don't pass on anything. They're not allowed to, especially if the Genius Act passes. So So you have all of this, this net— they have 100% net interest margin. It's an absolutely absurd business model. So I think even though, yes, most of the money, most of the revenue does flow to Coinbase, the fact is it's the only option right now. So you're seeing so much attention for it because it's just an absolutely absurdly profitable setup where they just don't have to pass on any interest to the consumer.

But won't that accrue at the bank level? Because eventually they're going to launch their own services that compete. And if you're a Circle, it's like, how do you compete with the distribution that You know, Bank of America comes out with their own stablecoin. Boom. Everybody here has it in their app. Like, that's how quick the distribution is going to be. So how does a Circle even compete in that environment? They need to access the end users, which they can't really get right now.

Yeah, it'd have to be out of the US, which is why, you know, I think Tether is more set up for that out of the rest of the world because, yeah, like nobody wants to invest in a business of a money market fund. It's honestly not that profitable of a business. Banks make their money by lending on the short end and— or sorry, borrowing on the short end and lending on the long end. Right. And just earning that spread. But this is like very, very short duration. So it's just like this weird in-between moment. So I think that's why it's done so well recently, because it is that short term. But to your point, there's— every bank's going to be coming in.

It's also the only way to trade the better right now.

Yeah.

Yeah.

No other way to trade. If you think— see stablecoins in the news, there's no— there's no other thing else to trade.

Yeah.

Can I—

can I drill down on like another macro question, Felix? Yeah, I think there's a version of the past few years where what we were speaking about with token value accrual and the disappearance of the free lunch is not so much about the crypto market maturing as it is about a very idiosyncratic period of time where a lot of 20-something males were sent $1,000 by the government and didn't really know what to do with it. And so they went and bought like Curve or whatever.

You guys had great parties though.

Yeah, exactly.

Even in Bitcoin, we're jealous. You know, like, these are great parties.

And I think, like, what are the monetary considerations for you in the token market? Because I wonder if, you know, if we're facing down a ballooning deficit, but the government just keeps printing money, is that actually bullish for people's tokens? Under— I don't know. I know you've been having a lot of these, like, modern monetary theory people on the pod recently.

Yeah. So they better acknowledge the economy that we're in today versus traditional Keynesians or monetarists, because we're in a really weird set of circumstances that we haven't really seen before. When you have debt-to-GDP levels as high as we have, that's a lot of debt out there. You have that at the same time that corporates and households have termed out their debt very significantly. So households You know, they locked in a 2% mortgage and in the US it's a 30-year fixed. The Fed could jack rates to 30% and it won't affect them. Corporates have also termed out their debt, so they are, they are fixed at those low levels. And then what happens when we have such high debt levels? Well, all these boomers are in money market funds and as rates go up, they earn more interest income. So this is going into money market funds. This is why you see charts where it's just like money market fund flows are just like up and to the right. So that money goes into there and then they rebalance it because, you know, these are— that income class, their marginal propensity to consume is not that high. When they get an additional dollar, they're just going to invest into other things. So they'll rebalance. That rebalancing is not happening into on-chain tokens. You know, these are, these are rumors. It's rebalancing into stocks. So this is why equities just keep grinding up higher and higher and higher. And this is why I think valuations is just the wrong thing to anchor yourself to in this dynamic. It's a flows thing. It's, it's a lack of other options thing. And overall, just to circle back to your question, is that there's just— there's no mechanical move towards that into altcoins. That's, that's just the side capital. And anything that can be close to that, i.e., you know, these treasury, treasury companies, Bitcoin ETF, there's obviously so the Ethereum ETF which gets some of it, but that's where the marginal dollar does go when it goes out the further out the risk curve. But it just— there's no linkage to altcoins, to on-chain.

Bearish.

I just said bearish. I just want to underscore how bearish that was.

This episode is brought to you by SKALE, the next evolution in Layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, SKALE allows for limitless scalability and has already saved its 50 million users over $11 billion in gas fees. SKALE's high throughput, zero transaction costs, and powerful Web3 infrastructure make it the ideal platform for gaming, AI, and other high-throughput apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their journey on X at Skale Network. That's Skale spelled with a K. Thanks to Skale for making today's episode possible. Katana isn't another new general-purpose blockchain. It's purpose-built for DeFi users to provide the best experience possible. It does this by sustainably generating deeper liquidity and higher yield than any other network. If your assets are sitting idle, then they're dead. Katana is built from the ground up with DeFi mechanics to bring your bags back to life. All you have to do is bridge over and Katana does the rest for you. Incubated by Polygon Labs and GSR, Katana launches with a notable ecosystem of primitives, assets, and partners like Morpho, Sushi, Vertex, Lombard, Chainlink, and Yearn. Be early to Katana. Join the pre-deposit campaign before mainnet opens at the end of this month. Deposit funds and open rewards filled with randomized amounts of KAT tokens. There's also a CryptoPunk and other exclusive NFTs hidden for the lucky ones. As always, investments in blockchain technology involve risk. Terms and conditions apply.

Danny and Boccaccio, I want to ask you guys, I think I feel cautiously certain that the, the movement of big tech firms and like large legacy firms into crypto is real this time. For much of the time that I've been covering crypto, it was kind of this thing where, you know, JP Morgan would like settle a transaction on a blockchain and there was no reason that they should have done it and it lost everyone money, but like, maybe some money, you know, changed hands between the Blockchain Foundation and JP Morgan and that was, it was all basically just marketing. Now we have, you know, Robinhood seemingly embracing crypto in a real way, um, hearing like you're seeing Stripe embrace crypto in a real way. And then I think there's lots of whispers around of other big legacy firms that want to do more and more in the crypto space, especially as, as legislation passes and that becomes less scary. So what do you guys make of like our big tech overlords? Is this, is this a good thing? Is this a bad thing?

Is it real?

Or is it, is it just more marketing?

I think it's real. I, you know, I think Robinhood, Coinbase, I mean, pick, pick your favorite fintechs, Stripe, right? They see that there is a market here regardless of whether, you know, all of the boomers with their, their cash sitting on the side earning yield are investing or not. Like there is a real, you know, marketplace of people who are trading meme coins, you know, buying altcoins on-chain, what have you. And there are very, very profitable you know, teams, you know, PumpFun is annualizing at, you know, $500 million plus a year right now. Hyperliquid is doing, you know, hundreds of millions to maybe upwards of a billion a year just from really a lot of trading activity. And so, you know, when you have a business like Robinhood where they're tapped into the same mindset, right, people trading stocks, options, it's, it's a very similar type of, type of idea to dive into this marketplace. Place where the revenue potential is also great, given, you know, if that spreads or fees on trades. You can see this with, you know, trading bots. The consumers in, you know, this market are willing to pay 1, 2, 3% on top of a trade just to get it through, just to slam the bid button. And I think that's very attractive to these businesses, and I think it would be silly for them to leave that aside regardless of whether there's like some cyclicality there, I think, you know, they can tap into that certainly, and maybe they can even get their existing customers to, you know, jump into those markets as well and, you know, get some additional, you know, profitability per customer.

Yeah, I think we're gonna find out if a lot of applications did well because it was regulatory arbitrage or if they actually had good tech and they're useful, et cetera. Robinhood is very scary. I think there's a Gort tweet that's like, we built all of this open source tech, now Robinhood's just gonna come in and eat our lunch. Yeah, I think if I'm a DeFi developer, I'm kind of nervous. I mean, they have it figured out, like the UX, we can't compete right now at least. So I'd be nervous. And like Danny said, I mean, if you go up to anybody in TradFi and you say, we take 1% on volume, they'll call you a liar, 'cause it's ridiculous. So we're gonna see, I think it legitimizes the space a lot, and we've clearly seen a shift away from, it used to be about decentralization, privacy, now it's more about settlement. I'm curious where it's going to go going forward. I know Bennett was talking about how we're gonna have a shift back to privacy. I don't know if I see that. What we're gonna see going forward.

Yeah. Interesting. Um, like, so, so riffing more on that tweet, Boccaccio, which basically said like, you all spent years building out open source tech just for Robinhood to come in and, you know, use it to take all your business away. Um, is that, is that like a real failure of crypto if that happens? Like if, if we end up with basically, uh, everything on crypto rails but no privacy, and it's all controlled by, by big legacy firms that crypto initially meant to unseat?

Yeah, I think, Rizzo, I think this is where you wanted me to go with the stablecoin talk, how they get the value capture. Um, it really depends on like where Robinhood launches their products, but I think definitely, like, I think there's all this tech. We don't have that many developers with in crypto. There's a lot more developers in Web2, obviously. I think it's going to be real. Like, I think they're going to come in and build out.

Well, in the nature of decentralized solutions always compete with centralized solutions. So your question's a bit, you know, obviously if the user experience is going to be better and the product is better, people are going to use the centralized service, right? And that's the thing is that decentralization, while it's a nice thing to aspire to, it has to actually solve a real problem for the end product. And if it doesn't solve a real problem for the end product, it will get centralized, right?

I think what's, what's important to acknowledge, and I think, I think more people in crypto that are, that are building these applications need to go, go look at history a bit more, financial history a bit more. I was on a panel yesterday with my friend Austin Campbell, who does a lot of, a lot of policy consulting. He's done a lot of great work, and he always has this saying that I've never, I've never seen anything in crypto that I've already seen a French quant blow up in trad fi before. It's the cycle of repeating the previous mistakes. So there's a, you know, I think it's just exceptionally important to read financial history, to read, you know, cycles of booms and busts. And, you know, it's, and as well market structure, you know, as we develop these exchanges, et cetera, like there's a really good reason to have, you know, brokerage separate from exchanges, for example. Like this is, there's these walls in traditional finance and they're there because we've gone through the motions in history of seeing what happens when it cross-pollinates. And in the same vein, I'll throw it— I already threw the dig at that part, so I'll throw a little dig at Bitcoin too. But, you know, just the idea of moving to, you know, there's these notions of like moving towards a deflationary economy or basically a fixed money supply. And we've seen many—

Right now we're inflationary.

We're in inflation and there's some issues there too. But, you know, on the other side of the thing, like there was some very terrible depressions when we were on a gold standard.

Yeah.

And so there's— I just think overall the crypto industry just needs to read some financial history a bit more. There's a lot of examples of us just recreating it in a digital format.

And I would ask, like, you know, you ask the question, is it a failure? And I would just say failure for who, right? If, if it's Coinbase or if it's Robinhood or if it's banks come out and they can create new products that are maybe a little bit more efficient or are convenient for customers because they can, you know, settle transactions 24/7 and there's no latency there, uh, and it's better for users and maybe there's savings for the business, then it's clearly not a failure for them, but maybe it's a failure for, you know, some small protocol that launched on-chain and, you know, didn't quite pan out. Uh, I do think, I think it hinges at that that point that there's maybe an ethos that's getting lost of people thought for a long time, like, yes, fully decentralized, this is everything for everyone, for every use case. And I think a lot of people and, and teams and developers are realizing that's not always the case. I'm seeing more, you know, CeFi/DeFi blended products. We're realizing that, you know, having some centralized components, but other cases where some trustlessness to the product provides a better experience. Experience to the customer. But there's cases where you want a little bit of both. There are cases where, you know, maybe you do want it, you know, to be as decentralized as possible, as maybe the Bitcoiners would say.

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One thing I did want to ask all of us, you know, all podcasters, we say a lot of words. In our, in our day jobs. And, um, I just want to like ask if you guys have things you feel like you really missed on, like not everything you say is, is, uh, going to prove to be correct. Like if your coworker asks you on Slack, if, if you should buy Circle and you say no, like sometimes you have to eat crow. But, um, I, I, yeah, I'm just curious, like reflect on some predictions, things that influenced your thinking on your podcast. The past 6 months, a year, like what? Or, or there could be something you hit on, like, I don't wanna make you guys, uh, you know, um, play, play your, your worst hits here. I'll, I'll say for myself, I thought that AI agents were gonna be something and they've turned out to really be nothing. Uh, it seems like so far that, that whole trend really just came and went very quickly. I felt like there was gonna be a lot of funding, a lot of more interesting ideas to come out, but I, that I, I missed on that one. Big time.

Yeah, I think I've been a bit overoptimistic on the Bitcoin L2 movements and just kind of the movement of crypto apps over to Bitcoin. I think there's probably some reasons why the ecosystems kind of remain separate. I mean, I still long-term, I think that, you know, anything that can and will be built in this industry will likely come back to Bitcoin at some point or otherwise be kind of co-opted by a centralized service. But yeah, I think, you know, obviously there's some stuff that we're expecting to deploy deploy this year that maybe changes that and maybe accelerates that again. But, um, and, uh, yeah, I think that I was, I was probably a little overoptimistic on that.

Yeah, we, uh, Bach and I talked about it earlier in the week, but we really missed as a podcast on prediction markets. You know, we thought the election was the forever top. You know, they still have some traction in a lot of the recent, you know, geopolitical events, elections, like sports. It's continued to grow. So that was a big miss, uh, I think for myself though, like looking back a year, everyone was saying meme coins are this ephemeral thing that are, you know, they're doomed to die forever. And PumpFun is—

They're still around, yeah.

They are certainly still around. PumpFun is doing more activity. It's worth more than it was a year ago. So I think that was a win for us as well.

Yeah, I guess I'll take the macro route here. And the one that's always difficult is, it feels like in the last 4 years, we've, every 6 months, it's people screaming about imminent recession. I mean, in 2022, I think 100% of economists were— their consensus was recession, and that did not happen. So I feel like my evolution in how I think about it— and, you know, there's been a couple of times where I've— it seems like everything's like— I mean, as recently as April, right? You know, it seemed like the writing was on the wall for a recession being imminent. And, you know, a lot of that reason was because so much of the the tariff impact was reversed. But I think it's just a big lesson for me is to just always look at the first principle drivers, which is those fiscal deficits that I talked about. Like in this regime that we're in now, growth is at like 3.5% real GDP. That is absurdly— that is above trend. We can see a slowdown. But I think it's just— it's really important. This is something I harp on a lot on my pod is just It's very tempting to get into the doomerism. I've fallen prey to it all the time. And so I think it's just really important to, to not get too doomer hold and to just always reevaluate these, these baselines and if they're present or not, because, yeah, there's been a lot of false starts on the recession thing the last few years.

Yeah, I think on each of these pieces, there are very plausible reasons to believe these things and all of them could come true just on a longer time horizon. Uh, but, uh, but, but now that we've proved our humility, um, I, I'm, I'm being yelled at by the, by the red light here that we're, we're over time. Um, thank you guys for, for doing this with me.

Where's lunch?

Yeah, you're supposed to press a button.

Well, let me, let me do like a little, you know, I'm sorry.

I'm sorry.

This, this concludes actually our, our main stage content here at Permissionless. So, uh, please give it up for my panelists. Give it up for all the panelists. That have come up here. It's been a lot of fun. It's been great. It's the first one we've— the first permissionless we've done in New York. It's been awesome. Thank you all so much for coming out. Felix, my good friend, asked me where lunch is, and I have good news for you. I know where lunch is. It's right out these doors. Do not go out the back. I was told in very strong terms, don't go out the back. Go over here. It's in the Aptos and Core room.

Rooms.

Very good.

There will be lunch. Uh, you can head over there and then we got more content for you in the afternoon. Thanks everyone.

Thank you.

Thank you.

Thank you, Jack.