Making Nuclear Markets Work Onchain | Alex Dolesky, Uranium Digital

Yeah, about 3.5 years ago I started getting super bullish on uranium, tried to express a trade like I would through any other metal or commodity on the futures or spot market and quickly came to learn it didn't exist. The option set for exposing a directional view on spot was either trade broken closed trust vehicles or trade the junior miners, and that was pretty much it.

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All right, everyone, welcome back to Empire. I have lost my voice a little bit, so excuse the, the nasallyness here. But we're— something I'm really excited for this episode. We've got Alex Dileski, the founder of Uranium Digital, on the pod with us. So, Alex, welcome to the show, man.

Always a pleasure, guys. Nice to see you.

Yeah, nice to see you. Okay, so here's the context. You guys probably haven't heard of Uranium Digital yet. One of the earlier companies that we've had on the show, Santi and I both invested in them. We're really excited about it. I don't want to just turn this into like, oh, Santi and Janno invested in this thing, so they're trying to shill this. It is a really one of the more interesting companies I think that I've invested in over the last couple of years. Here's— I'm going to give my 20-second context and then I'll hand it over to Alex to actually do the, the wonders here. Basically, my take on this is that Uranium is a super weird market. It's one of the most— world's most important natural resources. It fuels like 10% of the nuclear reactors, right? Global electricity through nuclear reactors. And this is going to accelerate rapidly. But the market is super, super, super archaic for uranium price. I didn't actually know this until meeting Alex, but price discovery happens through these like weird private bilateral deals. Procurement is like long tenure contracts, super antiquated market, but it's about to go parabolic because of the miners, the utilities, hyperscalers, nuclear plants, all of that. But it's really hard for retail to get exposure. So Uranium Digital is trying to fix that. So, Alex, I would love to hear first off, I think your background, because I don't think just anybody could get into uranium. And then I would love to hear just about the uranium markets. I've got a million questions there. But yeah, first I think tell us about your background.

Yeah, so I got involved in, um, the DeFi and crypto space back in 2014, and I was doing my economics degree. I was trading a lot of traditional equities at the same time, and I grew up in Canada where I went to school. The reality of the Canadian market, um, is it's primarily resource-focused for financial markets. So if you wanted to figure those markets out, you're gonna have to de facto learn a ton about resources. So Right out of school, I joined an asset manager and then moved on to another traditional asset manager focusing on discretionary asset trading, commodities trading, investment banking, things of this nature, where I always had an affinity for trading more niche metals. So relative to gold or copper that are pretty widely covered, things like tin is a good example of it. You know, over 50% of tin is used as solder in semiconductors, and it's a relatively niche market. Doesn't really get followed widely. Lends itself to supply disruptions just from how it's geologically structured and geographically structured throughout the world. And yeah, about 3.5 years ago, I started getting super bullish on uranium, tried to express a trade like I would through any other metal or commodity on the futures or spot market, and quickly came to learn it didn't exist. The option set for exposing a directional view on spot was either trade broken closed trust vehicles or trade the junior miners. And that was pretty much it. So that led to me talking to the initial mentors I had, the commodities trading world, figuring out why that was the case, how that market actually operates. And then about a year and a half ago or so, putting a team together to build our own spot market.

Tell me about uranium as a market. What is uranium used for? Where is it mined? Who mines it? Who owns the market? How is it traded? Let's walk through all of that.

Yeah. So funny enough, uranium historically, before nuclear energy, was actually used way back for different medical practices, like far, far into the past. The way uranium really works as a market structure is you have mining that is pretty much concentrated to a few main jurisdictions, the largest of which is Kazakhstan. Behind that you've got Canada, Australia, Namibia, and uranium is interesting in that the way it's usually mined these days is called in situ mining. So it's relatively undisrupted to the ground relative to large-scale open pit mining like you would think with copper, things of this nature. But in any case, uranium is extremely unique in its energy density. And by that I mean a usual measure for that as it relates to electricity generation is called the capacity factor, which basically measures the power output relative to the maximum capacity. For nuclear, that's about 93%. For comparison, wind's about 35%. The way to sort of think about that is that, you know, for 100 megawatt hours of installed solar on, you know, basically 25% of the time on average, it'll be live. The backup power needs to be created by natural gas batteries, things of this nature. So its reliability and efficiency is massive. At the same time, you know, post-Fukushima in 2011, what you had was obviously that natural disaster, a huge underinvestment cycle in nuclear, a lack of investor interest. As any niche commodity trades, you know, volatility is a two-edged sword. The price got absolutely destroyed and Japan was winding down reactors, the rest of the world, etc. However, since then, you've had massive improvements both in safety, efficiency, and I think right now you're in a position where it's pretty widely covered, the degree of correlation access to electricity has with economic well-being and GDP of a country or on a per capita basis. And the world's kind of turned the page in a positive sense on nuclear the last sort of 8, 10 years. The reality is to meet any sort of climate goals, the IEA itself has said that the world needs to double capacity by 2050. The reality is that already 31 countries have agreed to actually triple capacity for nuclear by 2050. There's just, I mean, unbelievable numbers coming out for what the electrical demands of the world are going to be over the next few decades, especially when you think about AI data centers. One of the reports also from the IEA says that potentially by the end of 2026, just data centers are going to require more electricity than the entirety of Japan. So you think about these numbers, it's kind of astounding. But from a market structure perspective, the way uranium's kind of operated since Fukushima and even before that is sort of what the oil market was like in the '50s, '60s, and '70s. You know, the first NYMEX contract for oil wasn't until 1983, and that was after about 10 years of an OTC spot market developing. So today, the majority of the uranium market is traded OTC style, directly between long-term contracts of mining companies and the actual utilities that are using the uranium to feed reactors and enriching it. With the price action of spot since, you know, the mid-2010s or so, we've had as well as the expansion of a lot of traditional commodity hedge funds and trading firms more interested in getting outright spot price exposure. However, today the way that market works is if you want to be long uranium, you own uranium in a converter account. A converter you can think about as analogous to an LME or CME warehouse. However, they're specialized for uranium in that they also do enrichment. Up the fuel cycle from spot yellowcake to UF6, uranium hexafluoride, to EUP, enriched uranium product. So that's a quick background on sort of what's happening today.

So it seems like it's a very— I think the summary of that is uranium powers nuclear. Nuclear is going parabolic right now. The world needs nuclear. People are trying to long this market or just get access to uranium as a commodity. But the market is incredibly complicated.

What's incredibly complicated and opaque. So today, if you want to own spot uranium, you need to open up a converter account. What that means is that you need to go through KYC processes that are obviously extremely rigorous considering, you know, the radioactive nature of uranium. And then basically you can be long uranium or you can sell some and be less long. There's no way to express directional views with leverage, hedge effectively, things of this nature like you could do with any commodity on any other spot market. So when you think about uranium from a demand side of the world, the world today turns over about 190 million pounds of spot per year. It only produces about 140 to 145 million pounds. The rest of that supply-demand imbalance is actually made up right now of decommissioning of old warheads and things of this nature. Those stockpiles are dwindling massively, and that turnover is without factoring in the expansion of nuclear from, frankly, the entire world right now. I think as that market develops, similar to any other commodity markets that develops through higher demand, higher price action, more investor interest, they become financialized. So when you think about something like natural gas, that's, you know, good to compare to uranium in its energy-producing, you know, basics. The natural gas cash settled market is about 23 to 25 times the volume of its physically settled market. So when you think about actually financializing a market like this, What it does is increases price efficiency for individuals actually trading the market. They actually know what the market depth is. They can put through and settle transactions immediately. And at the same time, if you think about it from the utility perspective, relative to structuring bespoke long-term contracts with miners, similar to what a battery producer might do on the copper market, you can hit a futures market or spot market, lock in your delivery and your pricing of an underlying asset for a set amount of time. And really, I think that sort of price stability, liquidity, and trade efficiency is what's necessary to help expand nuclear energy and overall markets surrounding, frankly, the entire nuclear fuel cycle. So that's what we are— what have been building and what we've built.

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Alex, let me ask you a question. You know, and to reiterate for people, like, why hasn't there been a spot market for uranium? And what are— what have been the challenges that you've had to overcome as you think about, you know, building all of that? And I guess maybe even stepping back a bit, when people want to get exposure to the industry, for whatever narrative, you know, AI, data centers, nuclear renaissance, Ukraine war, all this stuff, what are they actually buying and how do they get exposure? Is it the miners? Is it something else? Like what, what has been historically the preferred route for the market to long this entire category?

Yeah. So I think, you know, again, like the oil market's an interesting analogy for uranium, but the way it developed was financialized from the '60s, '70s to the '80s. And its massive expansion since then. I think with uranium, you know, post-Fukushima, what we were talking about a minute ago, that you had the price implode, a huge lack of investor interest. And you think about uranium as a commodity and warehousing for other commodities. You can't store uranium next to copper, next to iron, next to steel like you could at other warehouses for other metals. There really was an incentive for this storage mechanism to exist. For any commodity spot or futures market to operate healthy and function properly, you need both cash and physical settlement. It allows the cash side of the market trading to directly align with what the spot market is doing on the physical settlement side, i.e., individuals, institutions, companies actually using the underlying commodity for whatever they're doing in their in their cycle. So with that, you didn't really have an incentive economically for these warehouses to pay a premium and deal with all the security risks, all the other challenges that come with storing commodities when they already had a pseudo-monopoly on all the other commodities in the world. Additionally, you really didn't have investor interest. I mean, when a commodity gets whacked 70% and everybody is decommissioning plants, it's really difficult to come up with a bull case for the underlying asset's price. So all that said and done, what you had was, you know, the expansion of the 3 main converters today that service the West, which is Cameco in Canada, Orano Cycle in France, and Converdime in Illinois. And again, these guys don't just do warehousing and storage. They actually deal with enrichment up the fuel cycle. So they're a little bit more integrated than how you think about a traditional commodity storage warehouse. So I think that structurally, it was— it led to these guys having a grip on the actual storage and enrichment market. And that lack of investor interest and institutional investor interest for the most part led to this market emerging where only over the last sort of 5, 10 years have you had a lot of more expanding interest in nuclear and uranium. I think a kind of funny thing I look at was I think it was probably 3 or 4 years ago only, but The band U2 went from being super anti-nuclear and protesting against it to flipping bullish nuclear, which is, you know, just kind of a hilarious indicator. The traditional market today, like, to invest as retail and trade spot uranium relative to gold that has multiple different ETFs, different wrappers, structures for expressing a spot exposure outside of just trading the spot market directly, you really have one in North America. That's the Sprott Uranium Trust. Europe, you have Yellow Cake PLC. These trade as closed-end trusts, similar to what GBTC was for Bitcoin. The issue with this obviously is that without a redemption function, you don't have that physical settlement which allows a market to align on what the true price is. So what that means is that most of the time they'll actually trade at a discount to NAV. I think Sprott's probably 6.5% right now. Yellow Cake's about 11-12%. So it becomes difficult because as retail, you're paying $60 for the privilege to underperform the NAV of the actual commodity you want exposure to. For institutions, it's difficult because how do you underwrite a discount to NAV that will kind of blow with the wind? And there doesn't seem to be any roadmap for that physical settlement function. On the other side of the hand, you have the junior miners, which in trading theory will give you levered exposure to the underlying commodity. In practicality, it doesn't usually work out that way. So, you know, you kind of have a very concentrated amount of options through which to express an investment thesis on spot uranium today. And more importantly, you don't actually have a spot market which needs to exist to underlie the emergence of more interesting traditional investment instruments built on top of that. So that's really what we're trying to accomplish, is that one, build that actual spot market for uranium trading, which is catered primarily to institutions. For us as a platform, I think the biggest, the biggest hurdle we had the last year and a half, 2 years, is actually working with the institutions who operate in the uranium trading space traditionally and building for them exactly what they're telling us they want. So it's kind of like we acknowledged a problem and the solution for who we're building it is telling us exactly what they want. And see, these are some of the largest uranium trading firms globally by spot volume. So I think what was interesting for us is sort of living between two worlds and that these traditional firms, you know, they don't necessarily have the most glowing opinion of crypto as an industry. To work with us is purely underwritten risk for them. And they need a lot of the experience of what crypto offers them abstracted away from their experience. So they don't really want to exist on-chain. They don't want to trade on-chain. They don't want to learn what liquidity pools are. They don't want to deal with a bunch of different wallets. They need everything from an account management system, a user interface, a backend indexer for that management, that they can trade this commodity similar to the experience they would have trading other commodities through other systems, very inspired by the actual structure of traditional trading systems. However, all that trade and all that expression is on-chain. So for them, when they, when they deal with the experience, it's one thing to build for them what they want. But what's been actually really amazing is to see, like building on Solana, for example, them understanding the actual speed of transactions, the cost, and how much efficiency they gain from their current operations to do so. So to illustrate it, for example, today, if Santi wanted to buy a round lot of uranium, the market typically trades in round lots of 100,000 pounds. At current spot, that's about $7.4 million a ticket. So Santi would call a few brokers, get some price quotes, decide where he wants it settled, go through the transaction, the paperwork, and then a few days later to a week later, the trade will sell. That carries with it a huge amount of time sunk, of sunk time costs and actually dealing with that. The whole time Santi's doing that transaction, he doesn't really know what the market depth is, so he's not sure how much things are going to move. If he wants to buy more, he's got to kind of dip his foot in the water and test things. which is all laughably archaic relative to hitting any market for any other commodity or energy resource today. So when they're kind of understanding, and I think giving these institutions an experience of crypto, of what its promise initially was in a lot of cases, you know, when they're doing orders of this size and they're paying, laughably small fees on-chain to settle on Solana, it's been super cool to see how their mind kind of melts relative to what they're used to in that space. So I think that's been the coolest thing about building this.

There's a lot there, but I guess structurally, like on the KYC side, you're still going to have to do it, right? And can you just walk through all of it? Like, does that flow?

Yeah. So anybody wanting to do physical settlement or issuance has to KYC because we need to know that they actually have a converter account through which we can settle to. So the way that works is that Santi would do traditional KYC. He would provide his converter account name, number, a few other details the converter needs, and we need to actually execute a settlement. So if Santi wanted to— and again, the whole platform allows you to basically trade, physically settle, and issue tokens against your uranium all in one interface. So if Santi wanted to physically settle, all he would do is let us know after his account is open Hey, I want to take physical settlements to my account here. Here are my tokens. You have all the information. All that happens in the background is we confirm with the converter facility that Santi does in fact have an account number. They do the settlement on their side in the real world that's expressed on-chain through the burning of the tokens. And throughout that process, we're working with actually Chainlink and their auditors to update consistently the proof of reserve. And, um, the audit of what's sitting in the converter account statement of our firm.

Yeah, yeah, I'm looking at like historical spot prices. So like, I don't want to get too much into like futures and spot and like backwardation and contango, but like I am curious about your view on like storage prices because it feels like relative to any other commodity that can be quite high because of added physical security and whatnot. Do you have a sense for what that might compare relative to oil?

Well, what's interesting— well, it's higher. However, that pricing is on a per-barrel unit, so it's not a percentage, but it's a dollar cost. So effectively, as the price increases, the relative cost of that storage declines. You know, a year or so ago, it was about $0.25 per, you know, per. What that meant was basically when you're dealing with £100 spot or £110 spot like you were in January, you're paying about 20 to 25 bps. There is certain economies of scale with that. Institutions who deal with, you know, storage in the scale of billions are probably paying between 50 to 20 bps. So you do have a storage cost. But again, that's purely a necessity of what kind of resource you're dealing with. And the reality that these institutions, the converters, deal with not just storage, but also the enrichment and other fuel cycle actions that they need to do.

Yeah, I guess also the— what I hadn't thought about was you were saying is the density of it, right? Because it's like storing uranium is like more efficient from a space standpoint. So like if you have a big warehouse and there's just— you can just fit more uranium than like oil, right? Like barrels of oil. So it— well, they're just—

yeah. Yeah. So like one nuclear fuel pellet has the equivalent amount of energy density as about 149 gallons of oil, um, and 17,000 cubic feet of nat gas, um, 1 ton of coal as well. So from an energy density perspective, um, it's incomparable to pretty much any, any energy metal today. But, um, you know, I think as well as the world— as the world expands nuclear uranium interest, you're just going to have increasing economies of scale on the storage side of the market. But again, until you really operate at a scale like Sprott or some of the the massive institutions in the space do. You don't really have much leverage. Um, that's just, you know, natural course of business.

When we first met, Alex, I wanted to get your take on what does this actually mean and unlock for the market. Um, and you alluded to earlier, like, all the different derivatives and other products that once you have a robust spot market, you know, other things can begin to happen. and, you know, comparing like, hey, how much, how much does volume actually grow here? What do you actually anticipate? So can you walk us through like your hypothesis around like once you have this operationally live and going, what does that do to the market and what type of other products do you see becoming available, either enabled by, by you guys or other financial institutions?

Yeah. So when you think about a commodity or an asset market becoming financialized, and by financialized, I mean you have a functioning spot market, you have futures, you have derivatives, you have places people can express views or trade the asset outside of just doing pure physical settlements. Volume increases, liquidity increases, volatility increases. So again, that gas is a comparable— that market trades 23 to 25 times its size paper settled, not physically settled. The gold market's about 200 times, but obviously gold's not necessarily a great comparison in this case. So for building something like this, what a lot of institutions expressed to us in the early days were basically, Alex, like, if we didn't need to physically settle, we would love that. You know, physical settlement for trading this thing is a headache. It takes time, it's costly, it's annoying. However, it's impossible to build futures derivatives, an entire suite of financial products, if you don't have a spot market to inform what the price actually is and what it's clearing at. So basically our roadmap consists of taking our spot market data, using that to feed our own derivative suite, which is pretty much the only liquid place for what the spot price of uranium is doing. Um, more stuff's going to be released in the next few weeks as our website comes out, etc. But the goal of the spot market is the first step in a roadmap that consists of building an entire suite of derivatives fed by the data of our actual spot market. So, um, building a spot market's a lot of work, and it's super frustrating, and it takes a lot of time. However, the rest of a functioning financialized commodity market's impossible without that. So that's what we decided to do. Um, and in hindsight, you know, it's probably the most work I've ever done to put a bloody trade on, because I still just want to be long spot uranium. But, uh, here we are.

And in terms of like drawing an analogy like the oil or I guess what is like the— is oil the other commodity that maybe wind or something that just— what is the latest spot in terms of a commodity that came online?

I think there's— I think one of the most recent ones was carbon credit futures, actually. So carbon credit spot markets through Euronext. Those are just like an interesting market because again, super opaque. There was no uniform pricing geographically between jurisdictions. You had all sorts of market inefficiency, etc. I think oil's a very interesting comparison because again, it provides a ton of energy. Oil in the '60s and '70s, when, you know, the company that became Glencore was actually building a spot market that was really dealing with an interesting market structure similar to uranium. And that it was primarily long-term contracts between the actual producers and governments and the companies actually using the spot uranium. It didn't really have a way to express directional views trading the price action and effect of the commodity itself. And like I said, like not up until 1983 did you have the first NYMEX contract for crude. And that led to a huge expansion in both the oil market investor interest products one could trade on this. And I think increasing that liquidity, developing that market is also what precipitated the ease of access to oil, which is obviously a critical energy resource, which flows down through more oil for people, more economic expansion, more overall well-being, things like this. So I think oil is a good comparison for it. Yeah. You know, the, uranium market today, you know, it's more efficient than what the carbon credits market was. That market's crazy, but super interesting as well. So yeah, I think like a lot of those energy metals are interesting. Coal, coal as well. You know, coal went through a similar financialization like oil did, like we believe uranium will. And the coal market cash settled is usually between like 6 to 10 times the size of the spot. But coal markets very volatile, especially in sort of post-COVID times or during COVID So I think another interesting point is the amount of volatility that is increased as volume increases and price transparency increases. And by that, I mean, if one looks at the historical realized vol of spot uranium, it looks relatively low comparatively speaking to all other commodities. But the reality with that is the current market structure is that once a day you have a spot price quote provided by UEC. See on Numerico, that quote isn't always where an actual bid and ask meet and a trade is executed. It's pretty much indicative pricing. So you don't really know what the actual spot price is, and also it's quoted once a day. So if that's the structure, obviously your realized historical vol is going to be lower than what it otherwise probably would be in a liquid and actively traded market.

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I want to double-click on something you said earlier and how you're building this and however much you want to share, but who stands to benefit from this? Like, obviously, you know, this is for more like institutions, but, um, yeah, like maybe a little bit more on the process by which you built it and the partners that got really excited. Maybe a little bit more of that because I think it's quite important to the story.

Yeah, I think, you know, for us to build an RWA, right, or a commodity market like we're doing, I think when you think about tokenizing real-world assets, specifically commodities, you know, you have the retail side, then the institutional side. The reality is for DeFi and crypto-native commodities don't usually offer you the amount of volatility that you want in an asset. And by that, I mean, if copper moves 10% in a week, everybody in the TradFi space will be super excited. For crypto-natives, you know, your net worth can move 10% while you're taking a bathroom break. So you don't necessarily have the same amount of upside despite the fact they're interesting assets. You might want exposure, you might have a thesis, etc. Then the other side of the hand is you have the institutional side. These are the guys in the market that traded at size, at scale, high volume, high turnover, etc. So we went about it initially talking with the institutional guys, understanding what they actually wanted, how it needed to be built, how they had to interact with it. How they get involved in this space, because for the majority of them, it's their first time, like, actually, you know, taking crypto seriously. And again, with a $100,000 minimum lot order, which is sort of what they're anchored to, you're not trading small size. So the thesis here was basically to build, like, again, any other COMEX CME or LME spot market for an asset. An avenue through which both retail volume and institutional volume can converge. I think the most important way to do that was to first build exactly what the institutions want to spec before you actually take it public and go to market. You know, I didn't see any point nor the team in building a product, turning around and being like, you know, hey, you guys should use this. This is why you should use this. The reality is, for a lot of these folks, they need a place with deep volume, deep liquidity, and tight spreads to actually trade the size they're, you know, trying to trade. So for us, it was building institutional focus first. However, that being said, this is still a product that retail can interact with, but a lot of the crypto-native world and retail, they're way more familiar and comfortable trading through their Phantom wallet directly on-chain. Like, this is something where we have no restrictions for them to do that. However, the institutional guys needed everything in one place with that experience on-chain abstracted away that they could both manage their account, do physical settlements, do issuance, actually trade all from one place. And at the same time, those liquidity pools all converge in one, one place. So building institutional first was, I mean, a strategic decision because again, they're who move the market. They're also who is the most interested. And the reality is they are your largest proponent as you actually scale, because eventually the goal here is to build a platform with enough momentum pre-launch such that not using us as an institutional trader becomes a competitive disadvantage. You know, you either KYC, um, click your mouse a few times to execute trades, settle transactions, or you spend a week on the phone negotiating and then signing paperwork. Um, so that's kind of the philosophy there.

Uh, question on who stands to benefit and maybe not benefit as much. Would you say that if you are a Glencore and you have bargaining power, because historically it's been, as I understand, very negotiated process to buy, would they, um, marginally not like this as much because it's sort of a— the lack of transparency in a market sometimes if you have a lot of buying power, like someone like Glencore can just extract very lucrative terms. But if you have a spot market, people just reference that. Like what you want is people say, hey, no, listen, like the spot's at $82, you want $75. No, it's just we're going to take spot in the contract.

So, so most of those long-term contracts will actually deal with floors and ceilings. So it's not like they'll be set at a certain price. What they will have is a floor basically in effect the minimum price they will pay relative to whatever spot is. That's kind of to protect the economics of the supplier, but then a ceiling. So whoever's taking it isn't going to deal with, um, well, they basically know the max they're going to pay. So I think to your point, like, there are certain benefits. And again, the same way the oil market evolves, um, there are certain factors where at a certain size for long-term contracts, market opacity is a benefit. However, I think the counterpoint to that is what you're doing is expanding interest in the actual market accessibility to it, therefore liquidity for the first time. And at the same time, you know, when price goes up, everybody is happy. And I think with the current supply-demand backdrop, the fundamental thesis for spot uranium, an avenue through which that can be expressed directly in a liquid form benefits of that counteract any benefits derived by opacity that some institutions currently have in the market.

Yeah, I know we've been spending a lot of time on, on what you're building. Is it worth transitioning a bit more to just your overall take on uranium, everything that's happening, you know, just that backdrop and kind of how you anticipate this market evolving over the next couple of years? Or is there anything else that you want to double-click on as it relates to Uranium Digital?

I think on the Uranium Digital front, obviously, we haven't put the site fully live yet or the platform fully live yet. We're going to be live in Q2. So we've got some things being released slowly over the next few weeks. However, on the broader market, I think what's going to be extremely interesting to see is I guess when, when one zooms out a little bit, right, like a core thesis that underlies what we're doing, what the institutional partners we have believe is that the uranium market will undergo financialization inevitably one way or another, like any other energy metal commodity, agricultural commodity does over time. Our goal is to do that on-chain and have that entire evolution occur on-chain. So that being said, I think what's the most interesting part of this market is to see how volatility, liquidity, how that will increase when you actually have a live quoted spot market. You know, it's pretty difficult and in theory kind of easy to build products when you have a low volatility asset that isn't really quoted. The counterpoint is, again, it's almost impossible to build reliable derivatives. I think on the broader uranium market, right, the feedback we've gotten from a lot of institutions that aren't commodities-based institutions is that they want spot uranium exposure. They want to trade this commodity, but they don't have a means to do it. So I think what's going to be great is to see the onboarding of those institutions through a platform that they can interact with very simply to put on that exposure directly.

For—

I mean, uranium itself as an asset, I think what I'm really looking forward to is the expansion of SMRs, small modular reactors, because basically in effect what those create is a dynamic in which you can use, you know, less uranium, much smaller scale. And I think with the new administration coming in, the time to completion for a lot of these projects will be much shorter. You know, to take a new mine online can take between 10 to 20 years from discovery to actual production. Right now, a huge part of the actual building a reactor process is on the regulatory side. Back in kind of the '70s and '80s when you had the first big nuclear renaissance going on, regulations were conducive to quicker build time. So you could throw reactors up between sort of, you know, 5 to 10 years. Some of the shortest ones took 4 years. Today it's probably around 15. With an SMR, you can build one from a construction perspective in about 1 to 3 years. And I think with a reduced regulatory red tape situation, that's going to become much easier. And I think that expansion is going to be, I mean, extremely valuable for the industry as a whole, electricity generation, you know, broadly speaking. But I think with that reduced red tape, you're going to see a massive expansion of SMRs in all sorts of different jurisdictions. One of the more important sort of bellwethers, I think, has been over the last 10 years or so to see Japan restarting reactors and things like this because they obviously You know, Fukushima happened there. So to see them also regain the confidence in that asset, that technology where they're restarting reactors, I think is, you know, hugely powerful. And at the end of the day, if one wants, you know, easier, affordable, higher uptime, cleaner access to electricity, like I think an expanding world, both in terms of humans on it and technology, something like nuclear is an inevitability in terms of its expansion. So reduce red tape, easier access to the inputs into actual reactors, things of this nature are all hugely important for that space to develop. That, that data center electricity requirement being greater than Japan's electricity requirements by the end of 2026 is— I mean, that's a huge number. But also that's like we're only in 2026. When you think about AI, AGI, data centers going out the next 5, 10, 15, 20 years, I think the world is going to experience an electricity demand the likes of which it's never seen before. And ideally, the technology to provide cleaner sources of that expands along with it, which means creating more efficient markets to actually access the inputs.

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I would like to spend like a couple minutes on just the, like, the criticisms that one hears about nuclear, not, not the safety side, but more so like building, right? Which is per megawatt hour is actually more expensive because there's huge overruns. And then the counter to that as well, A, there hasn't been enough investment in small modular reactors. SMRs are much cheaper than like the massive, like, you know, most people's view of a nuclear reactor is like this huge, like, like, what do you call it? Like, like huge structure which takes years and years. But like, for instance, a lot of the reactors China is building, Japan's building, or developing countries are building, like, can you just walk us a little bit more into that criticism you constantly hear, which is it's actually very expensive per megawatt hour.

So the generation of like the building of a reactor is a lot of that again falls down to like regulatory permitting costs because Obviously, you have cost overruns when all of a sudden the permitting you thought was going to take 2 years takes 5. I think right now, kind of an opinion I hear in the industry is that America's planned nuclear renaissance is sort of an idea and a plan right now. China's been pedal to the floor on it for the last several years. I think that becomes a great example of what happens when you have government alignment with an energy strategy for domestic production with industry that can actually meet that. So that means, you know, again, less regulatory red tape, more clear permitting guidelines, more unified permitting guidelines. Like the US today doesn't have one commercially running SMR. There's quite a few that are sort of being tested, being built, but commercially feeding the grid, not— China is a whole different case. So I think when you think about that cost per megawatt hour, you think about the philosophy of the incoming administration for domestic energy production and the actual expansion of SMR technology. I think that cost comes way down. And as it relates to uranium, what's funny is that the price of spot uranium and uranium itself is actually very low proportionally to the cost of a reactor because that build cost is so expensive right now. So I think that leads to, you know, an interesting price elasticity situation for spot uranium where spot can increase massively before it becomes a marginally important cost in building a reactor. Additionally, it's completely unsubstitutable, right? Reactors take uranium, that's it. You can't put any other commodity in place of that. But I mean, the SMR space and Josh Wolfe, I know just from my own reading and listening to him, he's got a very interesting, I think, perspective and portfolio in the SMR space. And at the same time, I think SMRs are an inevitability. A lot of what makes that expand more quickly is, I think, a removal of of red tape hurdles, unified regulations, basically just smoother processes to get from point, you know, A to B, which is initial financing, design to construction, and actual commercial contribution to an electricity grid.

Yeah. The, the other criticism you hear is like around nuclear waste. And just for the— I know kind of the answer to that, but like, just for the sake of listeners, would you mind just walking through, like, for instance, what is like 10, 20 years of nuclear waste look like relative to like other energy sources?

Oh, there's— there's a good graphic I should have sent to, you know, or something before this, but it shows you X amount of years of nuclear waste production and it's laughably small, like the size of a football field. I think it's the amount of nuclear waste generated from the start of like time until today.

It's like a football field, right?

Yeah, exactly. But the other thing is, it's— I think it's not very holistic of the waste generation process to just think about what's generated post-energy production. One needs to think about what it takes to get from mining an asset to milling it, to refining it, to enriching it, to reforming it, to actually building either a windmill, a solar panel, and then actually generating electricity from it. So when you think about uranium, it's one of the lowest environmental impact mining sources or mining, mining means out there. Again, a lot of that is in situ leaching, which means you inject a solution into the ground, you pop the uranium to the surface, and then you deal with the actual milling process to get to yellowcake. If you think about open pit mining for copper, for example, or cobalt, That's when you have the sort of, you know, the pictures you probably know from mining of like the huge roads going down a massive open pit mine, for example. You have obviously throughout history a bunch of different mining disasters because what you have is huge amount of tailings generated by this kind of mining. You're dealing with a lot of explosives and blasting, for example. So from the outset, uranium as an asset is very low environmental impact relative to other commodities. Or energy metals. And the actual waste produced by it, again, is contained in extremely small amounts in terms of both volume and surface area. So I think when you think about other commodities and metals, the waste thing has been very, you know, it's very easy from a hyperbole standpoint to get freaked out about radioactive waste and things of this nature. But The reality is today how dense it is and what a small surface area that covers and how well it's contained in, you know, where we're at today in terms of technology in the world relative to the 1950s or '60s, it's not really comparable. And when you think about the overall process of mining to enrichment to fuel pellets to fueling a reactor to then being offline, it's one of the most efficient energy sources end to end that, you know, the world has.

What have been the greatest unlocks from an innovation standpoint in terms of just nuclear as a whole over the last like 50 years? And if you had a venture fund today or just an investment fund that you said, hey, listen, I want to invest, not just have exposure to spot uranium, say I want to invest $100 million, $200 million, $1 billion into improving this technology. Or getting— where would you invest it?

I think two parts. One of it is the overall nuclear fuel cycle. So to go from spot yellowcake to what actually goes in reactor is a multilevel enrichment process before you get further up the curve to, you know, weapons-grade uranium. There's massive inefficiency in that enrichment cycle as well as it relates to enrichment schedules, things of this nature. So I think markets evolving off of the back of a yellow cake spot market are in a very interesting place to be. Secondarily is SMRs. I mean, I think for the first time in the world, really commercially viable is the creation and construction of these SMRs. And that's something that I think is going to become a like a no-brainer over the next several years. The reality is when you're dealing with way lower input costs, a more efficient market for acquiring the underlying assets to feed your reactors versus the actual electricity generation it can contribute as a proportion of your grid, it becomes an extraordinarily interesting, you know, pond to be investing in because the reality is the economic incentives you can structure with that are extremely diverse. So I think there's going to be some very unique structures popping up for financing SMRs. And I think at the same time, if one takes the perspective that the world is going to have a net increasing demand for electricity, um, there's going to be some very interesting, I think, financing structures around that.

Yeah, like SMRs already exist, right? You have like multiple universities in the US that actually have like these SMRs the size of a classroom empower the entire university. And I'm curious, like, on the investment side, are you saying let's, um, let's actually develop more technology, um, maybe combined with AI, that makes it truly like foolproof, like, like in terms of like a, um, from a risk perspective or the design itself? Or, uh, is there anything more specific that you can share around like what about SMRs would you invest? Are they very efficient today to build? Uh, are there stuff that you would just say, look, it's been grossly underinvested relative to wind, solar, all this stuff, and if you put more money to that and fund more startups, you could probably see more like disinflationary phenomenon on building SMRs?

I think you'll see that disinflationary phenomenon, but I think what's very interesting is when you think about, um, natural gas, solar, wind energy capacity factors relative to the 93% nuclear offers, that creates very interesting economics when you think jurisdiction to jurisdiction, state by state, the way natural gas pricing works when you have surges and things like this. So I think that's one interesting side of it. I think secondarily, I think it's difficult to say like right now with any degree of confidence worth sharing because of the environment politically that's changing in the US and is likely going to very aggressively over the next several months. So I think when the dust settles there, you're going to have a way clearer regulatory landscape that's probably going to be unified for SMR creation. I wouldn't be surprised to see some sort of federal incentive program for that in line with increasing domestic energy. But I think effectively when you have times of massive change, you have massive opportunities. So I think right now is going to be specifically be one of those times the nuclear and uranium space, especially as it relates to domestic production and what the US is doing for its own energy policy.

Alex, who, who ends up being the biggest buyers of, of nuclear and uranium here? Is it the corporates who are buying it for the data centers, or is it the governments who are buying it to fix the electric, like basically to to serve electricity to their citizens?

So right now it would be utilities who are actually feeding the reactors for electricity. I think as the data centers expand, that demand for electricity is obviously going to be expanding massively. So I think the AI centers, the data centers, like that's going to eat into the proportional demand of the utilities over the next couple of years. What's interesting about that, though, again, is the cost of mining uranium and the spot price relative to the cost of building an SMR or a nuclear plant is marginal. The reality is that when you have something like a nuclear reactor, you don't have any other commodity that's fungible with uranium, right? So again, like, they need uranium point blank. There's nothing they can substitute in for it. It doesn't work. The AI and data center demand, I think, is going to be aggressively eating into that, probably more so than anybody really thinks. My opinion is you're likely going to have some sort of, you know, head-to-head between China and the US for both domestic energy policy as well as data centers. And, you know, frankly speaking, data is gold. So my guess is that you're going to have that sort of competition, which is going to be very good for both the nuclear cycle space, broadly speaking, as well as for the expansion of data centers and AI in North America. So simply put, I think it's going to eat into the utility demand, but majority today is utilities.

Alex, how— say that you're a, you know, Microsoft, Amazon, Google, whatever you say, hey, listen, I want to, I want to finance this. What's the shortest time that you've seen from commitment to build of an SMR?

Well, again, there's no commercially operating ones, so it's difficult to say because in my mind, the end state is commercially running, i.e., plugged into the public grid, etc.

Right.

So financing and structuring something in like a closed-loop environment of like a university or something like that is one thing. But I think the first major thing is going to be commercially running in the US, and that hasn't happened yet. So it's difficult to say.

So, Alex, it's been a fascinating discussion. Very much agree with you. Nuclear is, is, is in a renaissance mode. Seeing you build this was a bit of a head-scratcher for me. It was like, why hasn't no one actually built this? And I always find that those are some of the best— definitely are the best investments that I've made. It's like once you drop a key insight, it's like, oh wow. And I think talking to you definitely sparked that. So there's a lot to cover. Maybe as a parting question, walk us through what's in store for you guys over the next couple of months. I think a live demo is coming soon. And also just your decision to where to build and that insight, because there's a lot of builders that listen to the podcast. And I think your experience as to which chain you select, why do it in this manner, is instructive.

Yeah. So to your point, well, yeah, maybe the next month or so we'll do a livestream and demo the actual platform. We will be live publicly Q2. But in terms of building an architecture, I think we got a lot of push from the world as we are building this. Like we decided to build on Solana for very simple reasons. You know, in my opinion, you don't have a chain that's as performant, as reliable, and as low cost as Solana is. The reality for me is that it really is a chain built for institutional purposes, despite the fact it's got this kind of, you know, different, different vibe right now. I think a lot of folks were like, why don't you build on ETH, for example? It's got way more RWA projects. It's got way more, you know, deeper lending pools, things of this nature. And I think for us really, it's been about, again, building a platform and a project that the institutional side of the market tells us they want and explains what they want, how they want it. And again, most of them are anchored to a £100,000 minimum lot. When you're doing a $7.3, $7.4 million at current spot price order, and market's ripping, ETH is congested, they don't want to learn what gas fees are. And at the same time, if they're, you know, if something like that happens, it takes, it's taking minutes for a transaction to settle, they'll call me. And if I tell them like, oh, just bridge to Arbitrum or something, they'll be like, what are you talking about? So abstracting that away and giving them the technology necessary to do what they want to do through a platform they understand, I think should be and is being done by us on Solana. I think you're also talking about one of the most highly regulated, most opaque institutional commodity markets in the world. And additionally, I mean, Solana's got an extraordinarily helpful and resourceful developer community. Additionally, you're seeing that through a few other projects coming out like Ore Supply, um, Oro Gold, Elements, things like this. So it's my expectation that over the next little while, you're going to see a huge shift in projects building on SOL for, I mean, very obvious performance-related reasons. Not to mention a, you know, clear roadmap and I think a developer community and overall community that's extraordinarily helpful. Um, so I think that's going to be a huge shift in overall Solana vibes over the next year or two.

Yeah, I think next on the menu is, uh, tokenizing stocks and moving in that direction. And I think, I think you're the The upside case is that you can actually pave the way more in that direction. I think memes are just stress testing the infra. And you just saw over the weekend, what was it, 100 billion traded over the span of 2 days. And that's not chump change. And you start seeing a path towards true institutional adoption and the frequency of trading that Tully's always emphasized since day one, which is now it's like on the blockchain. And I think that's, that's encouraging. I could see why you made that decision. So this has been great, Alex. Really appreciate you coming on and sharing your story. We'll definitely have to have you on for the demo and for people that are interested in learning more about just the market. You guys have a fantastic Twitter account. It's become my go-to source for news and all things nuclear. So we'll check it out. We'll link it on the show notes. Whoever is running comms for you, Fantastic. Really resourceful. And then where else can people other than Twitter— is there any, any other, you know, are you guys hiring or any other resources that people could follow?

So the website uraniumdigital.com and then the Twitter, obviously through the website you can contact the team. Everyone's receptive. Everybody on the team could talk about nuclear and uranium until you fall asleep. So never hesitate to reach out with any questions or Yeah, we are expanding, but like I said, everybody should feel free to reach out. But the Twitter and the website are the most effective means to do so.

Cool.

Appreciate you, Alex.

Likewise, Wes.

Thanks so much for coming on.

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