The Untold Story of Delphi Digital's Rise | Jose, Yan, Anil

Seeing a dying German bank, you know, really kind of gets you pessimistic about, like, you know, the traditional banking system and made us really kind of excited about what's going on in crypto and kind of like the opportunity to build this, like, parallel financial system. This is probably, like, in a weird way, the most bullish I've been in a while, maybe ever for crypto. There's going to be a scenario where governments are actually helping us, you know, push crypto forward.

This episode is brought to you by Anoma, the universal intent machine introducing a new era of applications where you define the outcomes you want. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Special thanks to Anoma for sponsoring today's episode. Real is a permissionless L2 designed for tokenized real-world assets. They've just launched their rewards program. So get started at re.al/rewards and be sure to use the code in the show notes below. Special thanks to Reel for sponsoring today's episode. Everyone knows there's a massive shortage of top senior marketers in crypto, and teams are constantly struggling to get their go-to-market done right. That's why we're excited to have partnered up with Renault Partners, the premier go-to-market advisory firm for early-stage crypto teams. Get in touch with their team by heading on over to renaudpartners.com or giving the co-founder Jeff a follow on X. Check out the links in the description below. What's up everyone? Welcome back to Empire. Uh, the other day we dropped a new podcast in the feed and gave absolutely zero context. Um, So that podcast is from the Delphi folks. I've known their crew for a very long time. I feel like we— Delphi and Blockworks kind of grew up together in a sense. And so yeah, I wanted to bring 3 of the co-founders, José, Jan, and Anil, on the pod, talk about the Delphi story, talk about what they're seeing in the market. They've got a big research arm, venture arm, whole bunch of fun stuff we can talk about. So, gents, welcome to the show.

Thanks, man.

Thanks for having us.

It's been a long time.

Yeah, yeah, yeah. Neil, how was the show the other day?

It's fun. Um, yeah, always fun to have like get all the people together in New York. Um, been here for a few weeks now and it's like the energy here is like, you know, best crypto hub for sure.

You guys think New York is the, is the best crypto city in the world right now?

Yeah, I think so. Some people, someone was arguing Lisbon, which Jose, you're, you're based there, so you tell us.

So someone was arguing Jose is like me with a mustache.

No, I think in spite of itself, New York's probably still the best. Lisbon is pretty good. Lisbon has more— actually, that's not true. I think New York has a lot of builders too, but Lisbon has a lot of top people. Maker, Gnosis, a lot of OGs here as well. I think pretty much if you're not— yeah, most, I think Europeans or people that aren't American end up here. Also a lot of Americans, actually, but especially like if you're European or not American, tend to end up in Lisbon. Yeah, it's pretty good.

PIV guys, right? Athena.

Yeah, a guy from— yeah, a guy from Athena is here. The PIV guys are up north actually, but they come here quite often. Yeah, a bunch of people.

Nice. So I want to talk about just like just this cycle. And Anil and I were having drinks the other night and just talking about like, are there any narratives that are going to pop up? And like, how are people making money these days in crypto? And I want to talk about all that, but I thought it'd be an interesting place to start just talking about like the Delphi story. Um, and you guys have these like different arms of the business. I've always found it very impressive. You have 5 or 6 or 7 co-founders, which is like, always seems crazy to me and is very like, uh, atypical for how startups are built. So maybe Anil, if I could throw it to you to just like share how Delphi went from this like little, I remember when you guys had just like, you were just doing some like research reports. And then now you're this large company. So yeah, tell me the Delphi story.

Yeah, for sure. So originally it was 4 co-founders, but we do definitely consider it 7, and I'll kind of talk about how each one is kind of like joined along the way. Basically, Jan, MJ, Kevin, and I, we all started in TradFi, worked at Bloomberg, worked at Deutsche Bank. Basically, my whole professional life has been with these guys by my side. And yeah, honestly, We, you know, at Deutsche Bank, Jan and I were actually on the same team there. We fell down the crypto rabbit hole and, you know, seeing a dying German bank, you know, really kind of gets you pessimistic about like, you know, the traditional banking system and made us really kind of excited about what's going on in crypto and kind of like the opportunity to build this like parallel financial system. So essentially in 2018, we left our jobs, you know, looked crazy to our whole team. You know, our MD actually told Jan and I that like, you know, it's okay if you leave and try this Bitcoin stuff, but because like if it fails, you can just come back here. And I think Jan and I were both in agreement that we were never going to end up back at Deutsche Bank, but essentially started Delphi as a research firm because we thought, you know, if we could get paid to learn about this industry that we were super excited about, it'd feel like cheating. And obviously, given our backgrounds, we thought we were, you know, best fit to kind of like bring that value to the space.

Um, essentially first year, and you know, you probably noticed I have an amazing picture that I found from the early days.

Oh my God. Yeah.

Wow.

Yeah. I mean, literally, I mean, you guys were the only ones really holding like any, you know, good events and always around the city. So yeah, we came a lot.

I mean, Anil, the—

Crypto really ages you.

What did you say, Jan?

Crypto really ages you. Holy shit.

This is when you were still Jan Lieberman's CFA Kaya.

I mean, Anil, I could barely tell that was you. Like the glasses, the like dapper haircut.

That might have been the last time we ever wore suits.

Yeah, it's pretty incredible.

Yeah.

Wow. Anyways, go ahead, Anil. Go ahead.

Yeah. Damn. Wow. That's a flashback. Yeah. So basically in 2018, yeah, like right around when we were going to these events and stuff, like we were writing a lot of research, but no one was paying us for it. There were like no real fundamental investors in the space. Like we had like 2 clients, like, you know, shout out Hash and like Multicoin. Um, and basically like the way that we started, um, making a name for ourselves was writing these really deep dive reports where we, we were trying to like propose certain things. So Jan kind of pioneered a lot of this. Um, the HODL waves analysis. Um, he, he kind of built on top of some of the work that other people did, but used it to call the Bitcoin for, uh, the bottom for Bitcoin back in 2018. That report is still out by the way. So I think it's like always worth checking cuz like he was actually right to to like literally the week. So that was always impressive. And then we wrote this big report on Ethereum. And actually what we were trying to walk through on that report in Ethereum was why the economics of ETH 2.0 didn't make sense from like a security perspective. And again, we had just published a deep dive on Bitcoin calling like the bottom. And on ETH we were saying, hey, this is like a risk. And so a lot of the ETH maxis back then were kind of very upset with us. I don't know, Jan, if you remember that, but like, Literally, it was the first time we ever got like hate, and we're like, we're just trying to help.

When is this? Give me like a timestamp on this.

I think February 2019, um, so early Q1 2019, um, and it was, it was like, I remember, you know, the Bitcoin Report grew us from like 0 to 1,000 followers. This was like 1 to 10,000 followers, whatever. But I just remember that was the first day we were getting hate. We were like, man, like, what did we do wrong? But then within 24 hours of that report releasing actually Vitalik and the whole ETH 2.0 core team reached out to us, asked us for our models, and we ended up hopping on a call, sharing like kind of like how we walk through, you know, the report and how we were thinking about things. And then like a month later, Vitalik ended up, you know, pushing through a proposal and then, um, shouting us out on some podcasts like Lushen and stuff. Um, and that's really when the floodgates of, uh, DeFi like consulting really, uh, uh, started kind of like opening. We started working with a lot of the protocols that we were really— we helped work on a lot of DeFi with Synthetix, Compound, Aave. We helped transition from ETH land to there. And yeah, honestly, it made us— I think that was one of the biggest inflection points of Delphi early on because transparently, when we joined, we were really excited about the space. We thought they were some of the smartest people we had ever met in the space. And in some ways, we thought by building this picks and shovels business, we were just going to ride the coattails of this industry that we thought was going to be up only. Obviously, that was not the case. And basically, I think when we were on that phone call with Vitalik and thinking about sharing our models and everything like that, I think that was the first real inflection point for Delphi where we were like, hey, we're going to be part of making this whole industry happen. And I think after that, we kind of gained a lot of confidence in working with a lot of these projects. And I think it was And maybe, Jan, you might remember better, but I think it was either Kane or Stani. We were doing some consulting for them. And back then, we were just like, we just want to provide as much value as possible. I think we were hopping on this call. We're like, oh, man, we think we're providing value, but just in case they have any pushback, we're going to give them maybe an extra month of consulting or something like that. Before we could even get started, I think it was Kane. He was like, hey, man, you guys don't have— back then, we were actually designing Axie at that point. and we were talking to him about what we're doing with Axie, all this gaming stuff. I think it was him who was like, hey, listen, you guys have no idea how valuable it is to have a team like yours that we're so heads down focused on building Synthetix that we can't look up and see what our competitors are doing, let alone what's happening in the sector gaming that no one else is talking about or thinking about. So that really informed us on, I think, building out kind of subject matter expertise across not just every kind of like sector that we thought was gonna exist in crypto, but also every different perspective. So that's kind of how you got to the Delphi that, you know, everyone knows of today, which is, you know, Delphi Research, Delphi Ventures, and Delphi Labs where we build projects. And then this is, you know, I know the podcast is called the Hive Mind. That's where we kind of like coined the term a lot is any decision that we have that is like, you know, a big, like we always trying to get these different perspectives. So you get this, you know, analytical perspective via research, this builder's mindset via Labs, and then this investor's mindset via Ventures. And I think gives us this really unique seat in the market that you can only get by having people super deep from all angles.

And then when did— so it was MJ, and then MJ left, obviously went to start the fund, and then it was Jan and Kevin and you. And then when did José and Tommy and is it Pierce? Like tech?

I mean, yeah.

He came with me.

Yeah.

Chris came with you. So what's that story?

Yeah, you wanna tell the Tommy one or?

Yeah, yeah, yeah.

So I remember meeting Tommy, he was doing, I think 51% Research.

51% Research. Yeah, exactly. So obviously back then there weren't many research shops in this space, right? Actually, like basically the month that we started, I believe The Block, you know, Messari, actually you guys too, right? And us all at some point.

It was that like Q1, Q2 2018.

Yeah, exactly.

Decrypt launched, Messari launched, The Block launched.

Yeah, we were in August of 2018. Actually, we're about to be, yeah, 6 years, like literally this week. So this is actually really timely. But basically after that Bitcoin report, so Pomp was like an advisor to Tom, And basically he saw the Bitcoin Report and was like, and, you know, hey Tom, as an advisor, you should work with these guys, they're really good. He connected us and, you know, Jan, MJ, Kevin, and I, obviously we were like, you know, best friends and everything like that, but we basically all had the same network, right? And I think one thing that we immediately saw with Tom was obviously loved his energy, he was putting in the grind, and he was like a one-man, you know, shop at that point. And we were kind of like impressed by how hard he was grinding and how much time he was putting in. And yeah, we had like one meeting, was supposed to be 30 minutes. I think we sat there in that room for like 3 hours just chatting and getting to know each other. And then within a month or two, we ended up doing kind of like this merger where he kind of joined Delphi and brought his old network and everything like that. And then yeah, we never like looked back since. Jose and Pierre's story is pretty funny.

It was the Ethereum Report as well, right? Like you guys cited, that's how we first got to—

Yeah, yeah, true. Jose always loves to tell this part because my part of the story is a little bit more funnier.

Jose, go for it.

Well, yeah, you guys came to me. Yeah, you guys cited—

That's a generous way to put it.

Yeah, that is. Maybe I can tell the true story and then—

I'll tell the true story.

Okay.

So these guys, I was like doing my own token econ stuff and working at a place called Amazix, which was like, it's a funny story from back in the day. People who were around in 2017 will remember that name. Doing like research and token econ, wrote a report on Ethereum close to the, well, I say close to the bottom, then it dropped another like 70% or something or 60% since that report. But it was like when everyone was basically really bearish ETH, I wrote a report about why I was bullish ETH and like the fat protocol thesis basically, which cited like a bunch of stuff including the burn, which eventually happened like 3 years later and stuff like this. And these guys basically cited that in that report. And then Tommy invited me on the podcast to basically debate an ETH bear. I don't even remember the name of the ETH bear I debated on the Delphi podcast. But anyway, we started like working together more closely, like started working together on a lot of consulting gigs because we had a lot of deal flow that we couldn't take up as well. Ended up, and then also the fund actually came from this interaction too, right? I had an anchor investor for a fund that we were going to do with my previous company, but ended up like, I just knew that like, I really respected Delphi. They were like the best research shop in the space. And then I met them in New York. Some might say stoked in New York. And then realized like, we also got along really well. And so I was like, why don't we just do this fund together? Like I have this anchor investor, you guys are like on it. You know, they like found Synthetix really early. We were discussing plays all the time. And so the idea was I just bring this anchor investor and we do Delphi Ventures together and we're all as equal partners kind of thing. And that's kind of how, like, we came together. And then there's a long story with the anchor investor that we can get into. He like, it was initially, it was like a $25 million commitment. Then it went down to like 20, then 10, then 5. Then two, like through the bear market, it was like the commitments kept going down. And then eventually he like rugged us entirely and was like, hey, I'm not going to invest. When we were already, we had already like, we were just producing more and more documents for this guy. Like, yeah, like never produced so much documentation, traveled around the world. I literally never worked so hard for anything in my entire life.

Yeah, exactly. Did the guy have the money looking back?

No.

No, I didn't. I'm like, because like once, so basically we had the, we negotiated our first investment with the fund, which was Thorchain, which was basically all the money we had, we put into Thorchain. And at this point we still thought the guy might have the money. And so we let him invest. And at that point the investment was already up like 8x. So he was like arbing into an 8x like fund and he still couldn't find the money. Like he couldn't find $50,000. Oh yeah, he didn't.

This guy didn't have the money.

He was just a middleman. Like he was, and we have a, Piers and I spent a lot of time doing the fundraising. Maybe for a year we were just traveling around meeting all sorts of unsavory characters all over the world. Craziest stories, like people trying to hand us briefcases of cash and stuff. And yeah, we met a lot of— there's a lot of middlemen.

And this is when I took up martial arts is the briefcase of cash.

There's a lot of middlemen LARPing as principals in finance, but in crypto especially. You know, and you get to the end and you're like, let me just call my friend or whatever. And, you know, so that was what this guy was. Yeah. So many stories from that time, like from just the investors that we met.

So when did you guys realize that? When did you guys realize that the way that you would actually make money was from investing, not from research? Because the way that I understand your guys's— like the way that I understand your business model is You have research, like consulting/services, and then the venture arm. And like research and consulting makes money, which is awesome. And it's— and I'm sure it's profitable and makes a lot of money, but really it's there to serve as like kicking off for the like trying to find the 100x on the venture side, which you guys were able to do in the last cycle. So like, when did you guys have that realization? And tell me if I'm wrong or not.

No, not wrong. I mean, I think the end goal was always to invest in a structured way, right, through a fund. We were always investing with PAs. And so, when we first started, we didn't really have a background in crypto, and our backgrounds were on the sell side, right? So, we didn't really have an investing background either. It was writing research and making calls, but there wasn't any direct fund management experience. So for us, we thought the best path to getting there was through research initially and building a history of good calls, building a deeper understanding while continuing to invest personally, and then eventually launching a fund. And so we thought that the end goal was certainly a fund and a research business, but we we thought that the best path to getting there and/or the highest probability path of getting there was going with research first, particularly with the positions we were in when we first started research there. We just realistically couldn't have launched a fund at the time. It wouldn't have really taken off. We didn't have any network to even raise money.

Even when you already, like, you already had the brand, right? And it was still hard to raise a fund in 2019. Like, for those who don't know, ended up just having to put in our own money. Like Delphi Ventures Fund 1 had no external investors.

We ended up just using APR cards and just levering up, which we don't recommend, not financial advice, but at that point it was like months. Yeah. We Venmo'd each other. Yeah.

Yeah. Because we, even then, and you had a really strong brand, right? Like a lot of really good coals, synthetics. And I think that also helps understand once you have like funds that are subscribers, that end up making way more money off your calls than you actually do, it kind of like sinks in pretty fast. But even then it was hard to raise money. So we ended up just having to put in our own money, which is obviously ended up working out really well for us. Because, you know, kept 100 rather than 20% carry or whatever. And it was also a lot of fun. Like, I think it's one of the— I always say like managing your own money with your friends, like the setup that we have is like the best job ever because you don't have clients and you don't have bosses either, which are two like awkward sort of like professional relationships, right? You just literally like live and die by the quality of your own decisions and you're just doing it, trying to do it the best way possible with people you really love and have gone through a lot.

So what's the structure, right? So what's the structure of ventures? Or maybe I'm sure it's changed over the years and I don't know if you let employees invest and stuff like that, but was it just like an even split amongst you guys? Did you all put in the same amount of money?

Yeah, the first one. Yeah, we basically, you know, give or take 5-10% here or there based on, you know, what people were able to scrap together. But directionally, everyone was in the same place.

Do you remember like the percent? Because I'm assuming— I mean, you guys were pretty young and like, I'm assuming not like very cash rich. So do you like— do you remember how much people actually put in that first one? And do you remember it being like a large percentage of your liquid net worth at the time?

I mean, I think technically it was over 100% of our—

it feels like I put in everything in my bank account and got 3 credit cards from Discovery.

Yeah, yeah, no, we were levered.

Yeah, exactly. The first investment was Rune, and then we were all holding Rune in PA and expecting it to pump so we could make our capital calls for the next— you know, if we defaulted on the capital calls, we'd be defaulting on ourselves. So like, it wasn't a huge issue, but we I think the money we committed for all of us was probably like more than or about 100% of our liquid net worth.

So like, it was really thinking about what else we could have Delphi do to contribute to the space. Because, you know, the overall vision and mission for Delphi is to make crypto happen sooner and better than it would without us. And basically every decision we do across these three divisions is really thinking about, you know, what are we contributing at the end of the day? And like Jose said, the biggest benefit I think is we don't have other investors or LPs or anything like that in really any of the businesses, right? Research too has never raised.

So, you have no investors in Delphi, you have no outside investor LPs in the fund, you have none of that?

No. Yeah. Labs did a small raise for an accelerator that they did, right? But Research has no investors too. So, for us, I think it comes with trade-offs for sure, but I think one of the biggest benefits is it allows us to think in crazy ideas in ways that if you bring this to an investor that came to you and said, hey, build this scalable research business out or something like that, we can go and do things that no other firm can really think about or do because we are just working for ourselves at this, at the end of the day. So I think that's really what was so exciting as well as now we're still managing mid-nine figures. So yeah, it still allows us this opportunity, but yeah, nothing really changed that much. I think it was just a number on the screen, I think, at least for me. Yeah, I don't know what you guys think.

Jan, I'll throw that one over to you. Yeah, because you had a— I mean, like, just Axie itself, like, must have been a crazy ride, both on the up and the down.

Yeah, and it happened so quickly, so it definitely felt surreal. No one really went crazy with any kind of expenditures, right, or anything like that. So, it felt mostly like a number on a screen, right? It was just—

Other than retreats, which we can get into too, but that's another story. Yeah.

Yeah.

That was niche. And the cloud couch, right? Of course. But yeah. So, in reality could have been a very different number in terms of, you know, how that impacted lifestyle or anything like that, like a much smaller number. And it just felt like something, something kind of crazy on the screen. And, and, um, yeah, because it happened so fast, it was still just kind of— you're staring at it like, okay, uh, this is what's happening now. And, um, naturally, you know, it— best part of crypto, as it comes up quickly, it kind of comes down quickly. And so you kind of get numb to the volatility in both directions.

Yeah, I think that's it. Just like the volatility, because think about it, like we had a million bucks maybe like a year and a bit before then, right? We put in a million bucks and then it went up to like, I remember went up to like 6 or something. You're already super excited. And then the swings, obviously, like even DeFi summer swings for us, you feel, you really feel them because it's like 100% of our net worth is in this fund. and it's like more money than any of us have ever seen. And we were basically holding through the entirety of all of that. So there's definitely a lot of— definitely I feel like a broken rubber band or something. It just doesn't react anymore to market volatility. But yeah, the number, I echo what these guys said, didn't matter that much. Like that was way beyond my number for sort of what I needed to—

The only thing that changed was we paid off our credit cards, right? Yeah, I remember when we hit that number, I was like, I should probably pay off my credit card.

How did you guys make decisions? So like, let's say, okay, okay, let's use Axie as an example. Axie went up like 100x in like a month or two or something, which was just— I remember it was like one of the craziest. I mean, you guys and many other friends who made like life-changing amounts of money, like simply off Axie. Did any of you guys say, let's sell, let's sell at some point? Or like, yeah, how do you It's really a question about decision-making. Like, when you have 7 people making decisions, these are—

yeah, this is like a 2-part answer. I'd say like, this is where the hive mind really comes in. Axie was, you know, we work really closely with that team. We're like still, you know, very bullish on those guys. I think like Ronan is like going to be, you know, a big sleeper in this cycle as well. But yeah, I mean, literally, you know, every other fund who was invested in Axie sold, I think, before $10. We did not sell any before that. And by the way, like it wasn't because we didn't want to. Some of us in the fund, like, you know, MJ and myself were like, yo, Jan, we should probably take some off the table. And usually it is kind of like, you know, by committee, but Jan was definitely closest to this and, you know, diamond-handed us. Yeah, I think at that point, like Jan, I don't remember what was the first price. Was it like the $37 or like the $75 or something? We diamond-handed it a lot, mostly because of Jan's conviction. And we were all really bullish, but at some point we were just like, this is way, this is kind of insane. Like, we gotta take something off the table. And remember, like, at that point we only had maybe like 5 to 6 investments, right? Axie was our second investment. Rune was our first one. And then yeah, like, it was kind of insane. But basically, you know, how we make decisions is really based off this hive mind approach. Where everyone kind of has a different perspective. Usually if you don't have some specific knowledge on that topic, you're going to kind of sit back and listen because within Delphi, we're going to have at least 4 to 5 people who have really good subject matter expertise and thoughts on that specific topic. Now I'd say we have a much better process because we have a much bigger team, right? We have around 100 people across the 3 divisions. So that really allows for, you know, we can talk to our macro markets team about what they're thinking from a macro level, and then kind of dig deep into, hey, the gaming analyst or something like that. And then obviously talk to, you know, the ventures team and figure out who's closest to the deal and what they're thinking is happening and everything like that.

Yeah. So, so, yeah, early on it was, you know, by committee with increased weights towards people who, who had either some additional understanding, a higher level of conviction because they're doing more research or have historically been kind of better at judging certain things. And I think everyone was pretty good at understanding who excelled where.

Long investment committee sometimes, like 7 people trying to debate MJ on— there was some long investment committees with the committee.

Oh, yeah. They would get aggressive too because we're all like best friends, right? And I think one of the best parts about us having this relationship is we really leave ego at the door. At the end of the day, all we care about is coming to the best decision for all of us, right? Yeah. So yeah, it definitely got very heated. It was a lot of fun. Yeah, for sure.

Sorry, Jan, I interrupted you.

No worries. And then basically I was going to say over time, now the operation exists as 3 separate companies and so there's people that are heading up each division and they effectively kind of have decision-making power in that specific area. But there's still, you know, broader conversations that we all have and catch-ups and discussing what's kind of going on and gathering feedback and information. But ultimately now, rather than, you know, rule by committee, which made sense when we were a lot smaller and that wasn't a roadblock, but rather kind of a, you know, a source of strength. Now there's a bit more separation that allows kind of the businesses to run smoothly. And same way, I can't imagine running just like a large entity with that many people making decisions because there's just no way everyone's going to have the necessary info.

So everyone told us it wouldn't work, actually, right, initially. But actually, I think it worked really well for us, the committee thing, because we just had to debate things. We had very little money, so we couldn't really afford to make mistakes. And we had to debate things to death to where we understood every failure scenario to the nth degree. And could kind of really prepare well for it. And then I think over the years, kind of figured out who was better at it, who was better at other things, and like optimized and had people focus on what they were good at.

Who runs each team?

Yeah, so basically myself and Kevin run research, Jose and Luke run labs, then Jan and Tommy run ventures. So you kind of have like an even split. And then obviously we you know, catch up quite often, basically every day.

Nice. Do employees get to invest in the venture fund?

Yeah.

Yeah. So, basically, what we've kind of done is since then, we're on our third fund now. And the idea is, you know, what we wanted to do early on was always invest early stage. That's where we saw the best returns. That's where we thought we had the best ability to kind of distinguish winners from losers and where you got paid the most to be early and right on trends and ideas. And so, you know, we still think that that's where the best edge is. And that's where the best opportunity is. So what we do is we kind of— once with that first fund, you know, we, in theory, could have continued to operate that indefinitely, but it made sense to as we grew, create a way for everyone or high performers within the businesses to kind of participate in the fund as well. And so we kind of do these smaller funds that we deploy, and then we launch a new one. And the idea is, you know, there's turnover, some people get some additional liquidity. And so now it gives them kind of periodic opportunities to invest how much they want into these funds. And and it kind of allows everything to stay current and up to date and kind of keeps us investing in those smaller areas. We still do a couple of large deals. I'd say 80% of our checks are probably in the $500,000 to $1.5 million range, but we've done checks that are much larger and then we'll also do checks that are smaller when there's just not really the opportunity to put in additional money.

Hmm. You guys ever think about selling the research business and/or selling the consulting business and just doing ventures? Like I'm sure you could have, like, did you get any offers for research or consulting over the years?

Yeah, we definitely got into offers over the years. I think it is really good signal for where we are in the cycle, to be honest.

I need the real story, Neil, 'cause when I said that, the three of you all just got big smiles on your face.

Yeah, yeah, no, we've gotten some insane offers.

There's mixed opinions on this internally, on this plan internally.

Mm. We've gotten some insane offers in the past.

What's the biggest offer you got?

Well, honestly, the number, like, I don't think the numbers were real because it was mostly in another company's stock, which I don't want to reveal or anything like that. But it was, yeah, honestly—

It was right before Axie too, right? If it's the one I'm thinking about.

Yeah, yeah, yeah. And at the end of the day, we were just way more bullish.

By the end of it, we're like, maybe we buy you.

Yeah, I think at the end of the day, we realized that we were way more bullish on Delphi equity than another company's equity. And I think, like, you know, the way that I think about selling the research business is, like, we're always open to conversations and stuff like that too. But I think the one thing that we all do agree on is, like, at the end of the day, like, just having, you know, even from the venture standpoint, right, like, having this research business that has, like, this objective to go find alpha and has, you know, the two kind of ways that we think about our research and what we tell our research team is, like, one, if it's on crypto Twitter, it's already too late. So what that means is it allows them to look past the echo bubble. So this is how they're always looking for the narratives that they think will emerge in the next 6, 9, 12 months, whatever. And then two, no matter what you write about, it has to be the deepest possible dive on that topic. And happy if anyone wants to challenge us on that and read a specific report, we can send one on Athena, Celestia, whatever have you. But I think those two things allow our our research team to go deeper than, you know, a fund research team would go just for a quick due diligence. And I think that allows them to build a lot of expertise that can help us make much better decisions on any of the divisions, right?

Yeah. And that's the— Sorry, go ahead.

No, go ahead, Jose.

No, I think the other big thing is just that the sum of the whole is way more valuable than the sum of its parts in my mind. Like each business benefits from these flywheels from each other really strongly. So I think the research is much better and more actionable because it has, A, the venture's lens where we're really looking for alpha, looking for stuff that's investable, looking for the next trend and like that, and having the team there to kind of help guide that and refine that process. Because a lot of the research in this space is really good, but a lot of it is quite academic, right? Like it's maybe explaining how something works to you, what data availability is and stuff like this. but it's not really like alpha focused in the same way. And then also having access to labs, like actual builders who can go look at code, look at, read audit reports, like understand how this stuff works, have deployed protocols with billions of dollars of TVL in them. Like that's sort of priceless. And then the same thing obviously goes for ventures, like having access to the research side, to some of the best thinkers in the space, people that are deep in rabbit holes across all the different sectors of crypto. Having access to the builders. So I guess it's hard for me to see how this, any one of the businesses could be more valuable to someone else than to us. You know, like how any, like separating one of the businesses, how that could create more, like how someone would be willing to pay what it's worth to us, I think is like a tough thing for me to see. Yeah.

One tricky thing could be like that we've been thinking about is if you do a services or consulting engagement, how do you think about selling the token? Like, let's use Axie, for example. Like, if you are really close with the Axie founders and you almost like help build the thing, yeah, then at some point you, at some point you need to sell the token to realize some sort of gains. But then it's almost like a, the personal element of that is like the founders like, hey, why did you sell my tokens? Yeah. And I think that happens with a a lot of protocols for— and that's not just with Delphi, it's with every venture firm. If you're super close with someone, you seeded them, like eventually you have to sell it. How do you guys think about that?

Yeah, maybe I can talk about it from the consulting angle, then Jan, you can talk about ventures, but I feel like the answers are pretty similar. Um, we're very like long only. Um, we, we, uh, diamond hand most of our bags for sure, but obviously if they go up by, you know, 50, 100x, um, it's just like you just reasonable to kind of take some money off the table. Basically always on either side, consulting or ventures, we'll be talking to the team and kind of give them a heads up, et cetera. Obviously do it very slowly if we are doing. And basically every, I can't remember the last thing that we have sold 100% of anything. We still have exposure to Axie, still have, to this day, right? And that was our second investment. you still have exposure to Rune. That was our first ever investment. So yeah, honestly, I think we've sometimes maybe done, been too friendly about this because sometimes it's definitely helped block some sales, right? Where they're like, oh, can you just not do it now? We're like, fuck, you should have just done it. But yeah, I think at the end of the day, the space is much smaller than people realize. And the main thing that you got to kind of make sure you have is your reputation and trust, right? I think these are teams that like we, especially for us, we work with really closely on both the consulting side and the venture side. So these aren't just like investment number 38 to us. These are like, hey, we actually hopefully helped to make this happen, right? So yeah, I think it's like a little bit different where we were much closer to these guys than usual.

Yeah, it's also understanding what the correct environment to do it in is. And, you know, making sure that you aren't creating negative impacts on price and waiting until there's the liquidity to do so, and also doing it very slowly. It is inevitable and is kind of just part of the business. But I'd say we do hold more than most, especially just kind of chatting with peers and hearing, you know—

Yeah.

In general, it's like when the thesis has changed materially, from the initial one. And it's almost like an opportunity cost decision, right? With like what other opportunities you have available. But yeah, I think that's also pretty important. Like, have they stuck to the thesis that we laid out? Has it played out? What's changed? And being really like being able to react to that.

Yeah, yeah. I just imagine it could, and maybe I'm overthinking, but some, like, let's say Ventures. Ventures is like, it's time to sell. It's time to sell. And Anil's like, wait, wait, or I don't know who runs, whoever runs the services business or consulting business is like, whoa, we have like a $3 million engagement with them. Like, it's done at the end of the year. We can't sell. Like, I just, I imagine it could be tricky.

To be fair, like, I don't, I can't even think there might be one or two of those opportunities. We've been pretty separate between, you know, what we've invested in and what we consult in. Based on, you know, so our team is lean from a venture side, but we're able to, I think, deliver a lot more on the portco side because of how much we're able to kind of tap into the other resources. So what I'm basically saying is we do a decent amount on the portco side that I think typically you can charge for as consulting. And so Oftentimes there won't really be overlapping between protocols and what happens on the consulting side for research.

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Yeah, it's a good question. Honestly, the way that I think about it is like having a 5, 10-year plan in crypto is like you're not going to make it. So like, don't spend too much time thinking about that. I think what we've been really good at is being able to adapt and be resilient. You know, from a few of the stories that we've already told today, but like there's many, many countless more. Every single time that we thought something had to happen for Delphi to be successful, that thing ended up not happening and it ended up making us better for it. So we do have north stars, right? For us, again, the whole vision is just to make crypto happen sooner and better than it would without us. And I think on the research side, some of our members have already started seeing a lot of these community features. I know the Blockworks team was just talking to us about it a few months ago, like we had these things like inline comments and like alpha feed and things like this. And you can kind of see this start turning in this community portal where it's not just, you know, the research team is just one of the many members adding value through all these features and things that we're having, right? And I think my dream on the research side at least is, you know, kind of like eating our own dog food as far as like integrating and working with a lot of crypto components and bringing that on into the portal too. Because that would really mean that crypto has made it to a stage where it makes sense to integrate into our Web2 business, right? So that's the way I think about that. Ventures, I think, Jan, happy for you to jump in too, but I think we want to do this forever. We're super bullish. I think people always say that crypto is early, but the way that I think about it is the internet is really early, right? It's like 20 years old at this point. So what I'm most excited about is the next 100 years of crypto and what that looks like. And we're going to be around there. And yeah, Jose, I'm curious. Labs is an interesting one too. We've already built a lot of projects there. And basically how Labs works is we come up with an idea, we find a team, we give them a lot of our resources, right? Both from the token design to regular regulatory, like legal, etc., design. And then we spin out these teams eventually. And right now, um, we have a bunch of, um, this year is going to be a big year for us because we have a bunch of those kind of coming to market. Um, and I think, you know, for the first time in a while, we're kind of like, hey, we don't want to, you know, we take on more incubations right now and kind of focus on those projects. So yeah, it's kind of like, you know, playing it by ear for sure.

Nice. Yeah, no, not to— I think on the venture side, certainly want to continue investing. And I think, yeah, the decision-making will mostly be around strategy, which I think kind of rolls into what you wanted to go into next, which is how to make money in the space right now in the market. We've deviated a bit, but because it's prop and our mandate is very flexible in the sense that it's not really a mandate per se, it's just how we're thinking about the space and our thesis can change over time. And so, I think our investments will reflect that, which shuffles between liquid venture, sometimes late, sometimes early stage. And yeah, it really varies, but I think mostly we'll just kind of continue investing and just adjust how we do it over time. Directionally. Yeah, I want to continue doing the same thing.

Just to summarize, I think like the way I see it is research is sort of unearthing the alpha, like identifying where the alpha is in the industry, the interesting things that are happening. Ventures is deploying like financial capital against that. And then Labs is deploying like intellectual capital against that and like plugging the holes. So it's like Ventures is investing. And then from everything we see in the industry, from all the working with teams, from from seeing what's happening, we identify holes and then we try and go and find teams and incubate teams to build that. So one easy example is a project that's going to be announcing soon. It actually might have done its first tweet by the time this goes out called Legion, which is like helping bring back ICOs, which for us, obviously we've benefited a lot from the status quo being venture investors, but we really think ICOs were actually much more like made a lot of sense. They're much more egalitarian. And like a lot of the stuff, a lot of the regulations actually ended up making it much worse for retail investors. So there's that. With Metal X, Gabe Shapiro's new project that we incubated, that's again trying to make like governance way more agile, way more seamless. It's a problem we've run into over and over again, different ways. We don't think that the current decentralized governance scales, but we do think decentralized governance can be better than corporate governance because corporate governance isn't that good. That's, I think, the thing people don't realize when you have to sign these board resolutions, do all this stuff. And I think Gabe's the perfect person to build that. And Almanac, AI agents platform, they've been building for 2.5 years before AI was even a thing. So it's just trying to find where we think the opportunities are and find teams to build that. And I hope we're still doing all of that in 10 years. Hmm.

Jason Yanowitz, maybe you can take us into this next part. Like, how are you guys thinking about just I don't know, we're making money in this cycle? Like, it's a really broad question, but like liquid venture, what areas, what narratives are overhyped? What's underhyped? Like, just, yeah, take us into this.

Yeah, no, it's a great question. I guess so. On the liquid side, I think the tricky thing relative to previous cycles was, you know, the just the, the fact that not everything goes up now, whereas before it would, you just have to kind of be right and bet on the fastest horse and that was it. I, I think, you know, that's happened, that's not as much of a thing for a combination of reasons. One, you know, there's increasing the amount of tokens. I think there's a bit less retail. And then the big one is, you know, people have wised up a bit and, you know, for a handful of reasons. One, you have kind of historical data to look at. And then there's also an element of survivorship bias, right, where naturally you can't continue with that strategy and survive. And so those that have helped that play out in the sense that all tokens go up have gotten burned. And so now you kind of have, you know, individual stuff going up periodically. And you also have this kind of hot ball of money dynamic that forces you to really see rotations rather than kind of everything going up consistently. So, I think that's one of the things. And then, the other is value accrual has been difficult for a couple of reasons. One is the regulatory element, right? And then, the other is business like apps that are successful enough to make a lot of money, enough money to sustain valuations, right? And so, because we haven't seen too much of that. Um, you've— you haven't seen a lot of individual kind of tokens do well on fundamentals. It's been, you know, more narrative, hot ball of money type of price action. I think the growth of memes has also contributed to that a bit in the sense that, you know, there's only a finite amount of money that's going to get deployed and when, when there's the casino element of memes becomes a bit more appealing. It's very reflexive, right? As more people pile into memes, it becomes more compelling to do so because there's a lot more attention there. And so I think, you know, the fact that you saw memes run up late last cycle, that kind of got front-run, combined with— I think they've also absorbed a lot of the NFT money because of the ease around speculating around something fungible and the fact they have perps around it. That's cannibalized a lot of the demand for tokens that would be otherwise deployed into. So, you know, you've had this barbell of kind of majors and memes, and then big washouts on rallies and dips on everything in between. And so it's been tricky, right? You can— it boils down to, you know, does it make more sense to almost take a smaller leverage long on majors? Or if you're— I mean, so purely on the liquid side, right? Or does it make more sense to try and, you know, dive bomb into memes? I think it really depends on portfolio size and perceived edge, I guess, in those relative sectors. Some people are really good at memes, but I think for the most part they aren't. Like you saw it, even the pump fund stats, right? Like, when in terms of the profitability of the percentage of participants in profit is insanely small. And that's as in the trenches as it gets, right? So it's just another kind of example of how I think difficult and cutthroat it's been where people are cheating earlier, there's, there's less kind of longer-term holding, everything's kind of felt like a bit more of a trade rather than a longer-term play. And I think, you know, that feeds on itself and has made the liquid component, uh, in terms of buy and hold really difficult. I think you've seen traders excel more than buy and hold. You have, you know, you'll have a handful of the buy and hold guys who not get lucky but are early into a meme and are able to hold it through these ridiculous returns. But most of the times, um, that those profits are given back. And so, uh, I think on the liquid side, it's been a much more of a trader environment than an investor one, you know, and then couple that with the fact that you just have the unlocks on low-flow, high-FD meme tokens really kind of pushing people away from projects, which I think, you know, for some of them makes sense because they're just coming out at kind of silly valuations and you're basically just exit liquidity to some extent.

Yeah, traders got— I mean, like, hodlers got killed, right? Which kind of contributes to the overall culture. That we see in crypto now. Like, the survivorship bias just means anyone who is super high conviction hodler just got wrecked, whether it was Luna or FTX, you know.

Like, there's like a lot of just, just a lot of like anger on the timeline.

Yeah, a lot of anger.

I think Sederis said it on the, um, on the Hive Mind podcast, like, the market right now is just driving everyone crazy. Like, it's—

yeah, I mean, if you missed SOL and you— and like, most people didn't make money with memes, I think. And if you missed SOL you kind of like didn't really make that much money this cycle.

I think a good, good example of, of, of that anger is, you know, people constantly saying, oh, I can't wait for the bull market, but, you know, Bitcoin's near all-time highs and, and all like so many things have ripped and everyone's—

no, I, I just think crypto's lost its way a little bit this, this, this market, and kind of like all the stuff people used to harp about, um, like censorship-resistant money or like decentralized trust, I think all this stuff still matters and it's still the USP. And if this stuff is going to, is going to do anything in the world, it's, it's by sticking to, to like those, those principles.

Yeah, maybe just before getting into these specific narratives, where do you think we are in the market like this, this cycle and the whole, the whole cycle conversations is a tough one, is a tough one, I think. But what is your best like analysis of where we're at in this cycle?

I think we're still fairly early, uh, or like, you know, approaching halfway, uh, but it, but it ultimately kind of depends on, uh, how a few things from here play out, you know, election being one of them. I think, you know, if you get a Harris presidency, that probably means, um, you get more of a barbell type growth in, in, in a lot of these names in the sense that you'll have Bitcoin do well because there's just going to be kind of massive spending and kind of it'll accelerate the currency debasement element. So I think you'll see, you know, gold and Bitcoin to do well. And at the same time, you know, that regulatory framework will push more people into memes because there's just no risk that they're securities, right? So that's the kind of the barbell that I was describing. And then I think if you get a Trump presidency, I still think you'll have Bitcoin do well. Even if, you know, they go and, and spend less, they're still going to spend, right? That's just what's going to happen. And so, um, you'll still have spending, and then you'll have regulatory frameworks hopefully that will give builders a lot of comfort in, in kind of building in the US or serving US customers, which I think is, is a pretty big headwind that we've seen, you know, just on the venture side in terms of builder risk appetite to, you know, build something that kind of can accrue value or does engage with US users. And so I do see more of a broad-based rally if you get a kind of a Trump presidency.

Yeah, maybe I can also add some crazy bullishness here. And by the way, I'm a permabull. So like, again, not financial advice. I've been wrong many times before. This is probably like in a weird way the most bullish I've been in a while, maybe ever for crypto, mostly because I think like, you know, obviously you have things like ETFs and stuff and rate cuts coming up. But I think like when we first got into the space, I think like even then ETF sounded crazy, but they were still on kind of like our map, right? Like still people were like, oh yeah, it'd be cool if we ever got a Bitcoin ETF or something like that, right? And now we're here. But I remember when we got in this space, it was— I always thought crypto was going to succeed despite government being against it, right? And I think this year what kind of started blowing my mind is there's going to be a scenario where governments are actually helping us push crypto forward, which I think all of us are really aware, like crypto at its core is kind of like anti-government technology. Right, in many ways. And so the fact that, you know, because of these short-term election cycles and their short-term incentives, like, you all of a sudden have people on both sides trying to kind of pander to our kind of like audience and our demographic and our industry kind of blows my mind. And I think it's like something that, you know, nowadays I think people just have a lot of catalyst like numbness. We're just always looking to sell the news or buy the rumor or something like that. And I think like, the end of the day, you got to realize that a lot of these things that are happening are actually big catalysts, like the ETFs being passed, like Trump, you know, going to Nashville and, and talking, uh, you know, about Bitcoin and everything like that. So yeah, I, I'm really bullish. And I think, you know, to what Yan was saying too, I think people are really underestimating how bullish it is for a regime change where you actually get a positive regulatory environment for crypto, because that would make it would kind of like bring in, I think, a new wave of builders who are a little bit more risk-averse beforehand, as well as give opportunities to current builders in ways other than just launching a token. Right. Like, Anna, you and I were talking about this just last week at drinks when I think the IPO market is something that people don't really give that much kind of like credit to or pay a lot of attention to. But that is a huge way of, for people to want to build companies and products that that maybe don't have a token in the middle of it on top of these protocols and things like that. So yeah, I'm super bullish. I think people on the timeline need to get off crypto Twitter, go touch grass and stuff. And yeah, and I think like Jose said it right, like, if you're spending too much time in overtrading right now, just buy the majors and enjoy the outsized returns and kind of like keep your mental health, I think is like the main thing that I tell people. Like a lot of the conversation I'm having, I'm like, you're overthinking this right now.

I'm with you. I'm like, Bitcoin's at $60K and interest rates are higher than they've been in years and we're about to go into— and they're going to start coming down. Like Bitcoin hit an all-time high with when we were jacking interest rates higher. Like now we're about to bring them down. Like don't, don't over— the dollar is rolling over. Like we're entering a dollar bear market. Like just don't, don't, uh, yeah, don't overthink this one. I'm with you.

Yeah.

And to be more macro-wise, I just feel like the world is becoming multipolar. The US is retreating inwards. These are all the conditions that crypto needs long term to succeed. And to me, to replace— because the US is basically the policeman of the world, right? Of the oceans, the dollar, global world currency. I think that's increasingly going to change. And that is the conditions that you need for crypto to kind of succeed. And to me, I still see a world where every asset, debt instrument, commodity is going to be traded on-chain. It's just the biggest market. It's like the global market, especially as markets become more and more siloed. Investing in Chinese markets is super hard. Investing in the US is hard for certain kinds of people now. I just think on-chain will become the global, the only global permissionless market. And right now it's memes, but I think there's going to be a lot of other stuff. And it's basically the way I think about it is what infrastructure do we need to build for that to happen? If you think about a world in 10 years from now where we've won, every asset's trading on chain. What infrastructure needs to be built for that to happen? That's kind of what we try and look for and back.

Jose, give me 3 hottest narratives in this upcoming cycle.

I still think gaming, like, we've been bullish gaming for a while. I still think gaming is going to be the one that brings in the most users. And we have a game, and I think there's a lot of alpha in being like watching the playtests and being early to see which games are actually good, especially if you're a gamer, which a lot of crypto people are. And we've recently invested in one. We actually missed all the rounds for this game. Like spoke to the team recently, watched a few of the demos and have just been like buying up in every way we can on secondaries and stuff called Godzilla. And to me, that's like an example of what a top sort of shooter with that's fully committed to crypto and an on-chain experience can look like. It's sort of a Warzone level in my mind shooter, or like more of an extraction shooter, I guess. Like Escape from Tarkov or something. And yeah, I've just been watching people play that, and I just think like something like that will really show the potential of what gaming can do and has like a really good chance to bring in like tens of millions of users to crypto, probably the best chance. Then other than that, I'm bullish. I don't know if Jan, you want to add anything there on the gaming side? Probably the best and most avid gamer among us other than Piers.

Yeah, no, it's I think, you know, the gaming element just takes a lot longer to build out. And so, you know, everyone was kind of used to the short feedback loops of DeFi forks and everything else. And so, I think that's part of why gaming has trended the way it did, along with some other stuff. And maybe it's a different, longer conversation, but happy to dive into that. And then, yeah, another one is Hytopia that we're super bullish on top. Which is basically taking Minecraft and creating— so Minecraft is, you know, you have your players and then everyone who's creating the worlds, which are the world's creators. And so that's what is continuing the massive user base that Minecraft currently has. So what Hytopia is doing is basically taking from the player side a game that's just like Minecraft is right now, but with improvements to UX and quality of life elements. And then at the same time, from the creator side, it's creating— it's allowing them to do what they do, but better monetized than they currently do. So we think, you know, there's a 9-figure amount of monthly active users on Minecraft. And so we think that that is going to be one of the biggest games to onboard a lot of people into the space where users can play from a browser and it's the exact same way they play now. And then creators have— can continue doing exactly what they do in Minecraft, but monetize it through the benefits of crypto rails and kind of what tokens can offer. And so we think the combination of the two will be a really compelling way to bring over a lot of users. And another one that we're very excited about.

Hmm. Jose, what's narrative number two? Or Jan, you can go ahead.

I guess there's kind of two worlds I saw with AI. One is the incumbents, the big tech companies, own all the models and like they own the AGI. Everyone interacts through them, right? These massive models, they have all the compute, they have the talent, they have the distribution to monetize the models, right? With WhatsApp and Office and stuff like this. And they just win. And I think recently what we've seen is, first of all, Meta, like the unlikely hero Mark Zuckerberg, is like keeping open source relevant. And that's like really bullish for crypto. And then also I think the other part of it is just that it's very hard for a generalized model to be like most cost efficient for everything, right? These models by their very nature are gonna be super expensive to train. And so they're gonna need to be expensive, like inference is gonna be expensive too on them. And so I think by necessity you're gonna end up, or I guess it's probabilistic, right? Like I think there's a greater chance that you end up with millions of models, millions of small specialized models, some of which are actually trained on the bigger models that serve specific use cases because people are always going to want the most cost efficient way to serve whatever use case they have. And I think a world with that world is much more bullish for CryptoXAI than the other world where the sort of big tech companies just dominate everything. And I think that's the world that we're headed towards. And then it's like, I just think that the thesis for censorship-resistant AI, it's sort of the same, like, it's the same exact thesis that for Bitcoin, right? If money was like one of the most important resources in the world, arguably the most important, and you needed this decentralized form of money that couldn't be controlled and manipulated by the state, intelligence, I think, and compute is now the most important resource in the world, like being able to produce and scale to produce intelligence at scale. And right now it's entirely dominated by a few centralized entities. And I think there needs to be and there will be demand for a decentralized form of intelligence and decentralized censorship-resistant run locally.

Yeah, Jose, I'll tell you my extremely left bell curve AI take from my beginning of the year prediction, which was AI is going to keep ripping as a narrative, as like a mainstream public narrative. Retail investors are going to want, want some allocation to AI. But the only like very obvious public market allocation to AI is NVIDIA. And then I think there's like Microsoft and Facebook, but like those aren't like pure play AI plays, at least not in the minds of retail. So retail's like, I want to buy some sort of AI coin or like I want exposure to AI. NVIDIA, the chart looks too expensive, so let me allocate to the only other way to get exposure right now is from crypto tokens. And I think like I have zero— I haven't done any due diligence. You know this world literally 100 times better than me. Some sort of like they're probably going to buy the basic ones. It's like Akash and Render and Bittensor and like, again, I have no— I don't, I don't know which one of those is better than the other and stuff like that. But I think that's the super left curve, like retail driven.

Yeah, I think if you want, I agree with that and I think that's all you need. Like right curve and left curve are the same. If you want the right curve take on it, I would definitely read the recent Delphi DAI reports. They were some of the best reading I've seen on the AI thesis, both the ideological reasons for it, the practical reasons for it, and then actually where to find alpha. What are the sectors within crypto AI that make most sense and are most interesting? And I think that one's been made free on the portal now as well.

Those are really, really good.

It really helped refine my thinking.

Yeah, it just went public last week. Yeah, that one was really good actually. Yeah, I think, you know, Jose's definitely gone way deeper and same with like Tom and, you know, Ken from our team, like shout out those guys. But yeah, reading those reports definitely helped me build conviction and like this wasn't just going to be buzzwords and it's going to be a sector that people are going to mid curve, to be honest. And yeah, I totally agree.

Jan, I'll throw a weird question to you. If it feels like there's starting to be more and more dispersion in crypto, like it all used to just move together and now it doesn't really move together. If they're related to like the L1, L2 trade, if there were only going to be like 3 or 4 chains that make it out of this bull market with like outsized, not just returns, but like activity, I'd say, what do you think that's going to be?

So, you know, you have your ETH and SOL are pretty consensus bets.

With ETH, like instead of ETH, would it be like pick maybe one or two of the L2s if you think the activity goes there?

Oh, the L2s. I mean, I think Base is probably the most obvious one just based on, you know, the access they have to users and the amount of additional incentives they can offer to, um, potential port codes, potential, uh, apps to build on them via access to the Coinbase user base. So we've kind of gone back and forth on this in terms of like, yeah, you know, RL2 is actually bearish for ETH. And, and, um, I do think what we need in order for the space to really move forward are successful apps. And I, I think what L2s offer are a lot of additional shots on goal to help find those successful apps. So, what, like, what they take away from ETH in terms of fees, I think they more than make up for in terms of additional users, viral apps, and also kind of moneyness of ETH to some extent where you have, you know, additional people that are holding it using this collateral or, you know, whatever it might be within the apps themselves. So, I do think Base is probably the best L2 to have breakout. And then, You know, I think if you do get a Trump presidency with a, you know, a reset in the SEC, there's the opportunity for a base token where they're not necessarily as kind of afraid about that either, which, you know, will be tricky because unless they kind of decentralize the sequencer, it's still going to be thought of similarly to Arbitrum and Optimism in terms of, you know, just being— I just think use for grants.

Yeah, I just think L1s and L2s are just sort of the generalized L2s and L1s are just like testing grounds for successful apps. And every actual successful app will end up on its own execution environment. Like we've already seen it with crypto, right? Like dYdX, Axie, like even USDC has its own issuance chain, right? Like I think every successful app in crypto is going to want granular control over its execution environment, over its consensus. And so I'm like, and you're seeing it with Solana already too, right? Like, it's a narrative violation, but there's already, I think, 6 L2s on Solana. Again, the recent Delphi reports covers this really well. There's like 6 specialized L2s on Solana that are each doing their own thing because they don't want to inherit. Like, when you launch on L1, you inherit every single design choice and trade-off that the L1 made. I think the thing is, even on Solana, you don't see that many apps which require synchronous atomic composability, right, where the state actually touches each other. And so I think the reason L2s suck right now is just that the interoperability experience between them sucks. But I think there's way less actual need for that than people talk about. But again, we have differing opinions on this internally. And I just think there you think about what does— because ETH already, like data availability rollups are using Celestia. It's like, what do you really want from an L1? If you're an app chain, if you're an L2 app chain, what do you really want from your settlement layer? Right. And it's like you want basically all the main native stablecoins, right? So you don't have to bridge. You use some bridge and inherit bridge risk. You want native assets with good liquidity. You want like wallet integrations and stuff to make it easy for people to use you, like make it very easily accessible. And then probably you want like some community and users, like initial users for your thing, right? Which is what Solana really gives you right now. If you launch on Solana and in general ecosystems give you, like if you launch on Solana or in an ecosystem, you get all the hype from people who are bullish on that ecosystem, people who are bullish SOL. Whereas if you launch on your own island, it's much more difficult. You have to bootstrap all that from scratch. And an issue for me is like thinking about that from first principles. What does it look like? What do you want from the settlement layer and really optimizing for that? And you're already seeing some really interesting builders choose to build like their rollups on there because of the tools they have. And I think you're going to see a lot of that this cycle. You're already seeing it, right? Like I think Athena has just recently announced Athena Chain, which is— I'm really bullish on sort of the idea of building a whole chain around around a stablecoin. We've heard that one before, but I think it still makes a lot of sense. It's the killer app. And I think stablecoins right now are crypto's killer app, for better or for worse. And I think building an entire chain UX around that and with all the apps serving that makes a lot of sense. But in general, I think every successful app is going to end up making this decision, honestly.

Gents, good pod. Anything else you guys wanted to, wanted to cover on Delphi, the markets, liquid versus venture, anything that we missed here?

No, man. I think, yeah, I think it was a lot of fun.

Cool.

Yeah, it's great.

Thanks, man.

Really appreciate it.

All right, Anil, Jose, Jan, always rooting for you guys. Appreciate the time. And yeah, excited to have the Hive Mind on the Empire Feed.

Let's go.

Same here.

Likewise. This is awesome. Really appreciate it.

Thanks for watching today's episode. Just wanted to quickly mention that the wait for crypto's killer app wave is nearly over thanks to today's sponsor, Anoma, the universal intent machine. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Thanks again to Anoma for sponsoring today's episode.