Why Crypto's Capital Allocation is Broken | Jordi Alexander

the IQ of the space is still like very low because like the narratives might be like, this ticker is good. Like I talked to VCs and they're like, oh, I like the ticker. Like this is going to be a good ticker. Serious VCs, very successful VCs like Safemoon.

I'm not kidding. Hey everyone, welcome back to Empire. I just finished recording with Jordy. It was an amazing episode. Really excited for you guys to listen to it. But before you listen, I want to give a plug for Permissionless. We are officially 7 days out from the event. The industry is going to descend on Salt Lake City, Utah. Yeah, gorgeous Salt Lake City, Utah. It is the craziest speaker lineup we have ever had in the history of Blockworks. Politicians ranging from Tom Emmer to Richie Torres to likely the incoming senator of Utah, John Curtis. We also have the standing senator of Utah, Mike Lee. We have founders from, I think, every L1 and every L2 out there. Other CEOs and founders who rarely speak, folks like Devin Finzer of OpenSea and Pacman from Blast, Ben Jones from Optimism, right? Harry, co-founder of Arbitrum, Luca from Pudgy Penguins, Nick White of Celestia. The list goes on. The team has given me a 30% off discount code. I think it's good for maybe the first 3 or 4 or 5 people who use it. The code is YANO30, Y-A-N-O-30. Pause the episode, go to the website. It's just blockworks.com/permissionless. Code YANO30 gets you 30% off. Anyways, that's all for me, folks. Go enjoy the episode with Jordy Alexander and hope to see you all next week in sunny Salt Lake City. Hey everyone, excited to share with you that Cronos zkEVM has launched its Pioneer Program, offering early adopters a chance to earn not only loyalty points but also potentially win part of a $30,000 ZK CRO giveaway. If you're interested in being an early adopter, visit zkEVM.kronos.org/bridge. Big thanks to Kronos for sponsoring today's episode. Let's face it, building on crowded L1s or expensive L2s is just not going to unlock the next generation of applications. Supercontainers offers dedicated customizable app spaces running on Supras 500K TPS Layer 1 blockchain, giving you complete control over gas tokens and fees. Get notified when Supercontainers are ready for builders at super.com/containers. Hey everyone, Jason Yanowitz here. Before we dive into today's episode, I wanted to tell you about your wallet's new best friend, Harpy. Harpy guards your digital assets 24/7, blocking sketchy transactions before they even happen. But that's not the best part. It's totally free. Secure your wallet for free at harpy.io/empire. Link in the description. Now let's get into today's episode. All right, everyone, you know him as Game Theorizing. I know him as Jordy. Jordy Alexander, welcome to the pod.

Good to be here again, man. It's been a while.

Good to be back. Yeah, yeah. Good, good time in Asia. Good. I guess you live in Asia, don't you?

I live in Asia, so it's always a good time.

Yeah, always a good time. When, uh, what's the backstory there? You, you're, you're from Europe, but then you— did you ever spend time in the States, or—

so, uh, actually, like, you know, I grew up in the US. Um, my parents were in the US. I was born in the US. Um, originally kind of like European, I guess, like background. And so I've lived in Europe as well, in London, like for 10 years. Um, and just looking at the world, I just thought that Singapore might be the best place for me. So I packed my bags from London and moved over about 5 years ago. Nice. And yeah, one of the best decisions of my life. I mean, I love it out here.

Why? Why so good?

Well, Singapore specifically has its unique strengths. I guess you can really rely on the safety, which is huge, especially if you have children and stuff like that. Things just work. And so, yeah, it's hard to explain. But also like the quality of people in Singapore is super high. And the government has a very like logical structure to doing business. They're very business friendly, even if they're like not always crypto friendly because they try to be and then they invest in FTX or something and then they're like, okay, We're gonna stop this for a while, and then they dabble back in. Yeah.

Well, Jordy, I want to have you on. And so for people who don't know Jordy, he sits at a— you sit at a really interesting place in the industry. You have a builder hat with your work at Mantle, obviously, which I do want to talk about. You have like kind of the podcast media, like Twitter personality, with like, you know, just, I mean, your Twitter, but also host of the SteadyLads podcast, which is a great show. And then you're the founder of Salini Capital, right? So you've got kind of the trader hat on with Salini. I don't know if you do angel deals through the fund or personally, but you see a lot of the angel stuff. And so you've got kind of the venture, the venture hat on, you've got the builder hat on with Mantle, you've got the like media person hat on with SteadyLads. So there's all these things happening in the industry that like I think I'm trying to work through, but I think a lot of people are trying to work through. It's like the ETH-Solana stuff. There's like macro stuff, election stuff, uh, what's starting to feel a little bit like kind of grifty deal type of stuff. There's the meme coins. So anyways, I just want to have you on to— maybe we can work through some of these big things together.

Yeah, absolutely. And as you can imagine, you know, my entire career in crypto has just been one big bet that everything is— everything's related. So all those things you mentioned, just looking at the space 5 years ago, I thought that, you know, if you see the VC deals, then that'll let you, you know, make better trading decisions, which will make you, you know, be able to philosophically understand and talk about things better. So it all kind of like loops together and it's an exhausting work week, but I love it.

Yeah. Yeah. Is the idea that it's all tied together, is that like Is that the same idea as like it's all one big trade, it's all one big liquidity trade, or it's, uh, not— or something different?

It's something different. I mean, I, I'm optimizing for, um, instead of like, you know, short-term profit, let's say like, you know, when I used to play poker professionally, you have this moment where you solve a game and you can make, let's say, $1,000 a day by just playing like this one specific variant or table. and you can just keep grinding that over and over again and just kind of like printing some money. Or you can say, okay, I'm gonna like challenge myself with something new and then maybe I'll get better at like this metagame. So the metagame of like understanding the space and understanding, actually it's not about crypto, it's about sort of currency and money and like the world economy and also just like what is the role in society of, of currency and, you know, this like community money, as I've started to like realize it all is, and these like memes that we share. I really want to get to the bottom of that. And it's so complex. And there's no book you can read. Like, it's kind of— we're at the avant-garde, right?

Yeah, we— Mike and I struggle with this because we, you know, you want to hire crypto-native people at, you know, at your company, because like 9 times out of 10, those are the people who are going to work out better than the non-crypto-native people. At least we— I think we found that. But it's really hard to define what it means to be crypto native. It's like it doesn't mean like go read the book on blockchain or like go watch the YouTube video that's like how Bitcoin works. It's like the— my working thesis of like what it means to be crypto native actually has nothing to do with understanding how the technology works. It's about understanding like the cultural side of the industry and the community aspect of the industry and like knowing that this person's kind of grifty, this person's actually considered legitimate. When CZ gets out of jail, everyone replies for, like, what is that? Like, why is everyone saying for? Like, okay, like saying like GM is kind of like cringy now, but it used to be kind of cool in 2021. Like, it's, it's, it's like that kind of stuff is the most important stuff. And it's, I actually find it very tough to, to like teach or like tell someone how to go learn it.

They have to love it and just like spend their free time on, you know, Twitter and just like in the chats and in the, you know, uh, be out in the streets. And you can tell like if someone knows about, you know, some unlaunched protocol that's like getting buzz underground, um, that, that's kind of what you want.

Yeah. All right, so let's talk, uh, let's get into some of these topics you mentioned, uh, like community money. So let's maybe talk about obviously ETH first if we're talking community money. Um, you had this blog post from September 2022 called Was the ETH Merge Overhyped? And then you recently tweeted, ETH is community money. Its value is purely derived from the bonding strength of its community. So I actually— there's all these conversations happening on Twitter about, you know, did ETH give up its most valuable thing? And are the L2s extractive or valuable for ETH? And there's— is Solana eating ETH's lunch? And there's these big conversations happening. But I actually think a lot of people don't even frame the conversation in the right way because they kind of forget what we're— what ETH is trying to do. And I think a lot of that goes back to the decisions that were made like 2017 to maybe 2022, but really this thing that happened in 2022. So maybe you can tee up the conversation. Can you kind of give us a, a 24-month history of like what has happened over— like how did we get to this place, would you say?

Yeah, 24 months ago, the reason I wrote that piece was the merge was just happening. It was literally 2 years ago. And I would say it was a time of celebration for the ETH community. They were feeling like, this is amazing. We are moving to proof of stake. We've already implemented burning of fees, which was honestly a really good idea, I think. It kind of gave the benefit of transactions to everybody equally. Just by holding the asset. So I thought that was great, but I, I could foresee that there were some problems in the horizon with regards to the, um, the narrative. Like, it was kind of like it was trying to be two things at the same time, and they were contradictory with each other. So either it's a great user experience, very cheap, or it's like, you know, it's a great internet bond and it has revenue and you're spending money and it's kind of creating like a you know, like a financial instrument out of it. And those are quite separate. And what we've seen is that Bitcoin since then has done really well at the financial one, and something like Solana has done quite well at the user experience one, arguably. Um, and ETH is in this sort of predictable spot, I guess, where it's, it's finding its footing. Um, and if you look on crypto Twitter, even the core people are like disagreeing with each other. Like, is this money? Is it— it's not meant to be money. And like Vitalik is just like, oh, this is about charity and we want to do good for the world. And all the DeFi founders are like at him. So, um, I think it's very healthy. It's important that we have these conversations. And, um, I guess my frustration 2 years ago was that nobody was talking about it. Like when the price is fine, nobody like even talks about it. And then everyone starts soul searching when, when price is showing something's wrong.

So Tell me more about the decisions that were made and like what you think ETH got right and what you think ETH got wrong.

Um, decisions made, you know, there's two layers of decision. There's a technology layers and then there's the what are we talking about as a like community, as bankless, as like not to say that they're, you know, the only ones that matter in terms of narrative, but as a general like Ethereum echo chamber, like what is being talked about. On the technology side, look, I'm not like an incredible technologist where I can pinpoint what is good and what's not good. I think we know from a user experience standpoint that bridging to all these L2s has kind of sucked and it's created like a bit of fragmentation. I don't think that the L2 decision of focusing the roadmap was a problem. I think it can work. And ultimately you can have these sub DAOs, sub communities, and every L2 has its own unique culture and take and risk tolerances and centralization tolerances, everything else. And what I've said is Ethereum could be sort of like the NBA and each L2 can be a team. And you're kind of like above all the teams. You're not the Bulls or the Lakers, but you're, you're the league, and you just keep like neutrality, common standards, referee standards, and that works out well for everybody, and everybody loves basketball, and you're the basketball token, right? Like, it's, it's a good outcome. I don't think that, um, is bad. They've been a bit slow, like, that's true. Like, things have been moved slowly, um, you know, tech takes longer, and, and I guess like we're maybe in the in-between phase between where the user experience is going to get better and the decisions got made a long time ago. So not too much to say on the tech decision. I think it can work. But on the echo chamber narrative, I think that's kind of where it's obviously failed. And people, like you said, are confused and everyone's confused, like, what is going on? And I think Vitalik is an incredible person. I've never met him, but I have to say that comparing to, let's say, Satoshi, who just doesn't— maybe doesn't exist anymore or doesn't talk. I don't know what the situation is with Satoshi, but that's brought Bitcoin a level of neutrality and peace that actually kind of works in its favor. Ethereum still has that, like, where people are looking for— there's still like some leader, right? Like, you associate Vitalik as still a leader, even though code should speak for itself. And it might even be better if he just disassociated or just, you know, retired, or I don't know, because right now I think people are still— the roadmap is still sort of, um, uncomfortable. And yeah, for some answers.

Yeah. Okay. So what was the main— I mean, back in the piece you talked about like, you know, anyone who's around in 2022 will remember like the triple halvening, right? I feel like every Bankless episode back then was like reduced issuance. Oh, I don't— lockstake ETH that you can never sell again, right? ETH goes into Lido, you can never sell it again. And then it was the burn, right? 1559 burn.

Yeah.

And that was like the— that was like the triple halvening basically. What went wrong with that idea?

I mean, I mean, I, I like two of those things. I had like those three dragons where like two are like serious.

Yeah, yeah, yeah, that's right. The silly one is that the idea that like staking ETH, you can never sell your ETH again once it—

yeah, it has no effect. Like we see like, you know, people unstake and they sell, or they just sell the staked version, or the staked one gets liquidated or whatever. It doesn't reduce, um, like liquidity. There's no supply squeeze based on like staking. So it's still liquid, right? Like it, it still exists. I thought the, the supply burn is, is, is great idea. And the issuance also fine. Although I pointed out back then that, you know, um, as more and more people stake, uh, it increases issuance. Like it just like naturally has more and also like yield goes down. Um, and so it makes it less attractive as a treasury asset. And so many people, like even sophisticated people like Arthur Hayes, even to this day, he gets on stage, you know, at Token, and talks about how like ETH yield can be higher than treasury yield, and so like this is bullish. Having this level of like fundamental misconception is prevalent in the industry, and it's just completely like— like you can't compare the yield on the yen versus the dollar. Like they're, they're just completely different currencies. And like it's even worse when you're talking about like a fiat currency versus a digital currency. The yield is completely irrelevant.

Say more about that, actually.

Yeah, so basically, like, when you're, when you're holding dollars, um, or holding Bitcoin, um, the decision on, like, whether to hold Bitcoin is not based on the yield of Bitcoin. It's just, right, like, what is the supply? Okay, I'm getting diluted, like, 1%, but, like, what do I expect the demand to be? When you're holding dollars um, the, the yield like fluctuating obviously matters when you're earning a wage in that currency and you're trying to like pay a mortgage or, you know, have like a monthly interest that you have to pay for, uh, for a loan. Um, Ethereum yield or Solana yield, what's the easiest way I can say it? Okay, Clayton. There's a, there's a chain called Clayton, right? There's a Korean, Korean blockchain. The yield is 25%. Does that make you really want to buy Clayton and get that 25% yield? Like Does, does that plain yield like make it more attractive of an asset? I, I think whether the yield goes up to 50% or 80%, um, is sort of irrelevant, right? Like it's just, it's denominated in a different asset.

Yeah.

So you can't compare them.

Yeah. So you had this tweet, uh, the other day you said some interesting thoughts on ETH here, but I disagree that it is. So I think you were quote tweeting someone, uh, can't be defined in one line, but here it is. ETH is community money and its value is purely derived from the bonding strength of its community. And you go on to share some notes. Maybe you could share those notes on, like, we can have a conversation around that here because I'd love to hear you. I think it's around, look, are L2s value extractive or do they actually drive value back to Ethereum? I'd love to hear you maybe expand on those thoughts right here.

So there is this like meme coin mania going around and a lot of discussion is around Bitcoin's a meme coin as well. And it is, like, it literally is the OG world meme coin of this can store value. Like, this is a way where you can work hard, buy this thing, and just like leave it, and it will let you pay off your work that you once did. So that's a great meme, and it's something that I think Ethereum wants to go towards and be this like community sort of way of money. In my head, it's a little bit different. Bitcoin being, um, the first one, the cleanest one, like this is where it all got created, and the fairest one, um, in essence, like you had years to mine this thing and it sort of gradually got distributed. In the minds of the financial industry and the world, it's a macro asset, in my opinion. Like it's becoming increasingly a macro asset.

It's a hedge on global chaos in a sense.

It's a hedge on, like, not chaos necessarily, but definitely, like, money printing. Yeah. And people are used to gold. It's a digital gold. It's a macro asset. Like, literally, like, Stanley Druckenmiller and Paul Tudor will, will have the charts up, and they, they're not going to have, like, you know, Solana and, like, XRP. They're going to just have gold, dollar, and then maybe Bitcoin and see, like, when's a good time to buy it. So it's a macro asset in that sense. Um, then you get to like the next level of money, which I consider community money. And community money basically means like, um, there's like an internet state, an internet nation state that is around the world distributed. They're not all in the same country, and their currency is like this coin because they're all building there, they're using there, like they're denominating some of their assets in ETH, let's say. Um, so this is where having a very strong community, that's a lot of people that collectively like, um, have like a large GDP as in terms of like their, the power of their workforce. That's a very strong reason to, uh, have like a shared asset. And it's all like in people's brains, you know, why do people want the dollar? It's just we just kind of assume it's, it's a good thing to hold on. So ETH during the bear market was literally the only L1 that had a lot of activity going and, and was in people's heads, and it managed to have this impression of community money. Would you, would you agree? Like, during the bear market, did you feel like there was any other L1 that was actually like—

no, it was ETH. ETH is money. It was like, ETH is money, and there's nothing else.

It was just ETH. Yeah. Um, it seems that there's a couple things going wrong. One is, during the bull market, people always inevitably want the larger returns. So you kind of get off on the, um, on the, on the spectrum of like tail assets. That's fragmented the community. So like there's less of a, you know, this is the calculation, um, that goes on in people's heads. They look at Ethereum less as the only game in town. There's other games in town and there's other communities that still have enough strength. And you see this with exchanges as well. During the bear market, all the liquidity is just on Binance and maybe that's it. In the bull market, you get Gate and MEXC and all these random exchanges start popping off again because there's just this tail users that come back in and they target those exchanges. So there's a similar thing going on with digital economies, I would say.

Yeah, MEXC is like peak bull market, like, yeah, need it, need a token before it's listed anywhere. Like, yeah, you know, I'm not smart enough to like fight with Max Resnick and debate Togrul and Anatoly on Twitter. But so my, my kind of like smooth brain take of what's happened with ETH is I think there's 3 things. One is when a new person comes into crypto, and I've talked about this on the Empire before, when a new person comes into crypto, it used to be like, I want to buy ETH. I want to buy some Bitcoin, I want to buy ETH, maybe I have $10,000 to buy ETH. Until fairly recently, it was okay, I'll just put that $10,000 into ETH. And now it's become okay, should I put $3,000 into ETH and then maybe $2,000 into Optimism, $2,000 into Arbitrum, $2,000 into Polygon? Okay, zkSync has a token now, maybe I should buy the zkSync token. Okay, it's basically fragmented like investment attention, I would say, away from ETH. Alright, so that's the first thing. The second thing is, I don't think they ever— this isn't a crypto problem, it is a brand and marketing problem, where if you sit in the messy middle, you— they haven't defined who they're not for. And so if you sit in the messy middle, like Bitcoin is macro, like they've, like, not internet bond, because ETH is trying to do that. But like, they've optimized for like, scarce asset. Solana is optimized for like the user experience and ETH is kind of sitting in the middle saying like we're trying to be both in a sense. So there's like a big branding problem and messaging problem. And then the third is I'll just pull up this chart from the Blockworks research platform that I was looking at before this. It's— so for anyone not watching on YouTube, I'm looking at the base, like Coinbase's base. So the base L2 financials, I'm looking at fees and costs. So if you look at, let's take August, for example, Base made $2.5 million and they spent $11,000. Right. So ETH hasn't figured out— again, this is the part where I'm not smart enough to debate Togrul and Resnick and all these people about like what is the optimal solution. But what I do know is that's $2.5 million that's going to Base and only $11,000 that's going to Ethereum. So those are like the three, those are the three problems with Ethereum as I see it today. I'm curious how you think about that.

Yeah. I mean, you know, the second one in terms of like trying to be two things at once, this is kind of what I wrote about. So anybody wants to dive in.

I think this was your, I think this was your, yeah. Confucius say, be a great Batman or a great Buddha. Maybe don't try to be both at once.

Yeah. They're just like, yep. This, this guy. Um, yeah, so this one is, I think, is clear. The, um, the L2, like, paying fees and trying to get some multiple that makes sense— the multiple never really made sense. I mean, even, even last cycle it was, it was like 100p. Um, yeah, you could say like I was a little bit wrong. People do kind of care about some P/E ratio, even if it's 100, they do want to see some, um, some revenue. Um, like some people are buying Bonk because like there's a little bit of like BonkBot revenue. So even if it's a pure meme, they like the idea of in the back of their heads like there's some floor revenue coming in. And you could say that Ethereum had more floor revenue back when it was, you know, charging us $100 to mint an NFT.

Though I guess you, you actually could take the other side and say like having revenue is a net negative because it allows allows you to put a multiple on something, whereas if something doesn't have a multiple, you can— it's, uh, it's like a pie in the sky, how do you value this thing, you know?

Yeah, but I'm definitely for, uh, for non-monetary assets, I think you're right. Like, it's the usual Silicon Valley theme of like, you want to be like pre-revenue. But for assets that are meant to be memetic and have a community money or like some base money aspect, um, people are not looking to do a multiple. But in their heads, they want to feel comfortable and they want to feel like calm that this is the right asset. It's a safe asset. And for some people, having some semblance of revenue can create that, even if the P ratio doesn't make sense. So with Ethereum, arguably some people were preferring that having this 100x P multiple, at least having something to point to rather than just the memetic the memetic side, right?

Yeah.

And I think Kyle Samani kind of, you know, he's been attacking Ethereum and he's been like a one-man kind of wrecking ball there. I disagree with a lot of his takes and we just had him on the show, so managed to clash with him a little bit on it. But nice. One of the main things that he's correct about is that there is a little bit of a confusion, one with the L2 assets, like you said, the people are using Optimism, they're using Arbitrum, they're using Base, they're using Mantle. That's the chain that they're using. And there is a little bit of a leap between, okay, this settles on the L1 and I can therefore use the L1's asset as money because it settles on the L1. It's not the same. Maybe for Base, kind of, because there is no Base token. So you could argue that Base right now without a token is the most Ethereum-aligned, um, but the other chains do create this feeling for the user where I'm not actually on Ethereum right now. And therefore, like, my— this is maybe where it all went wrong. Like, now that I think about it, emotional attachment of people to Ethereum reduces when that's not what they're clicking every day. Like, they're clicking on the L2s, and it just reduces the emotional attachment, and everything flows from there.

It all flows from the click. Yeah, from the wallet connect.

Yeah, it flows from the wallet connect. The thing I'll push back, like, I don't think, um, you know, buying Arbitrum or buying OP is necessarily a calculation that someone is actually doing. Like, no one's like, oh, I was gonna put $5K in Ethereum, now I'm gonna divide it between like all these.

Oh, I just— I think so.

I mean, they're just such bad assets. Like, all these, like, VC unlock assets are gonna happen.

But you don't know that if you're— well, maybe the people who are in crypto today, but if you are a new retail person coming in, you don't, you don't know that.

I don't know.

I think maybe you're not even thinking about the L2s if you're a retail person.

Yeah, you're just like, okay, I've heard of Bitcoin, I've heard of Ethereum. Yeah, I'm gonna, like, put money into these two.

Yeah. Okay, so, uh, to close out the ETH conversation, if you ETH has just been like a beated-down asset this cycle. What are your thoughts on like what ETH does over the next 12 months?

Um, I, I really think that they need to improve just the, the image of it. And, um, you know, we—

yeah, but who's the they? There's like the, the EF's not gonna do that, Vitalik's not gonna do that, Bankless has been trying hard to do that. Who's the— there's no they.

Yeah, so the bullish, the bullish side is that we've we've hit like peak— yeah, peak FUD, like peak desperation, right, right, right.

This is obviously the bull case. Everyone hates ETH, like, like the most hated asset.

Yeah, it's a rounding, like a month, multi-month rounding bottom. Yeah, uh, and I think that's possible. Like, um, these things will not go away. And I always thought that— it's funny, like, I first came into crypto and I didn't have all these like misconceptions that from like the echo chamber. I looked at everything from first principles and I said back then, like in 2020, ETH should look to unlock Bitcoin's potential because Bitcoin is just like such a pure digital asset. Ethereum is the place where it can be unleashed into DeFi and lending and all this stuff. And instead of like focusing on its own monetary properties, it could try to get Bitcoin bridged in and then just like use that like, you know, trillion of value to unleash it. I do think that ETH has a chance at some monetary premium though, and I think that Western countries that are more woke, like environmentally friendly, like they don't want the mining. You remember like Elon kind of like just dumped all his Bitcoin because of the mining stuff, like the environmental stuff. So there could be a, a large contingent that wants Ethereum to be like a, a safer, cleaner form of, you know, digital native money. So that's the bull case, and, and maybe it happens. The bear case is like, you know, there's just more dispersion. We, we just keep rotating, like it's say, so like it just kind of keeps going down, and then everything's a meme coin, and, and everyone's just kind of randomly doing stuff.

Murad was right. Murad was right. Yeah. Um, okay, let's, let's move on from ETH. Uh, what are—

I will—

so I would say you were vindicated in this piece. Like, I would say this was— you wrote— I remember when you wrote this. I remember when you released this, and everyone's like, ah, Jordy, I don't know about this piece. And I would say you were right, like, you're, you're right on a lot of the things that you said. What else do you— when you look out at the whole industry, like, what else do you see where you're like, wow, like, guys, I, I really think about it like this, and you're all thinking this way? Um, what, what else are you looking at that others are missing?

So I think the biggest problem we have in crypto is a dollar comes in the space, and it's either going to, you know, some trashy meme coin, because the reason it's coming in is somebody you know, heard about Mudang or some, some hot thing, um, or it's coming in through like a venture route and it's being put towards building the wrong stuff. The reason we have capital misallocation is because it's such a new industry, nobody really knows how to value things, and everything is relative. So people will only give answers, and even like your co-host Santiago, uh, I think he's like extremely— he's like one of my favorite people to talk to But even he will answer questions with a relative sense of, well, if Solana is worth $80 billion, then this thing should be worth $50 billion. Or Ethereum is $300 billion, then this should be $100 billion. It's all relative and not really grounded in a framework. We don't have a framework. So there is a confusion as to how to value things, and that causes misallocation of capital. Which, um, you know, doesn't work out in the long run. Um, so we have to fix that. And then the other thing is like the FDV market cap stuff. Nobody understands it. Um, people are slowly putting together some of the pieces on it. I feel like I've put a few more pieces and I want to like write an extensive kind of piece around that, but all I hear is like either complaining about, uh, low market cap, high FDV, which is like been one of the narratives of the year, um, or, you know, like fair distributions, but like fair is like in, in quotes because it's never really fair, right? Um, and, uh, there was a great panel at Token where the, the VC guys were discussing like what's the solution and I know Kyle wants to just unlock everything day one. Uh, I think regulatory, like in the US, there's a bit of a problem with, uh, with day one unlocks.

He, he wants to unlock all— he wants to do no vesting.

No vesting. VC is just like everybody unlocks day one. Um, and I— you, you look like you think it's crazy. I think, I think it has like some huge benefits to, to do that. Um, mainly that it will smooth out the bias that exists with retail investors who— it's an attention game, right? Think about it this way. Day 1 is when like all the people are tweeting and the exchange is like headlining, you know, EigenLayer just launching. You get the maximum amount of buy pressure on that single day. If your vesting is like going to happen a year later for like the next 3 years, you're inevitably going to get like a spike and then just like a decay. Like, it's just inevitable.

Basically, what are you optimizing for in a scenario— you're— oh man, yeah, I really disagree with that. What are you optimizing for in a world of zero vesting? You're optimizing for retail having a fair market.

You're optimizing for the, um, the supply-demand to like not have more supply coming later.

Mm-hmm.

Which is just that it's, it's a huge problem because, um, you, you have all these VCs that are sitting on 100x's.

Like, actually, Jordy, can you explain, can you explain supply unlocks for, for the listeners? Like, what, what does it mean that like there's a big unlock coming in October, for example, for, for someone?

For, for like Celestia, let's say, right? Let's say Celestia launched a year ago and all the investors that got in like super early. They made an incredible investment, you know, 50 million FTD, and now it's trading at like 5 billion. So they're up 100x. They have not been able to sell for the last year. We don't really know like where the fair value of this thing is. These people are desperate to sell because they're up so much, and they're just like, just like, give me my 100x, I'm happy, like great, you know. Um, If there's no ability for them to sell and it all gets unlocked contractually, right? They sign an agreement, they buy equity or SAF, and it says after 12 months, then you get an unlock. And sometimes it's a cliff. Like in this case with Celestia, it's literally the entire year's worth of tokens. You get them in one day. So it all happens at once. Or you get these like monthly like unlocks, which are a bit of like a what Arbitrum had where it's, you know, death by a thousand cuts where you don't really feel it, but then like it starts to just like keep coming. So that, you know, and then eventually they run out. That's when the unlocks end. So I think it's a huge problem and it creates artificial supply demand imprints in people's heads. And because everything is relative in their heads, some founders purposely like do it because they want to trick people into thinking that my asset is worth a lot more than it is by constricting supply initially.

Yeah, low float, high FDV, like that's the—

yeah, I mean, like you, you think something is cheap because, you know, it's down like 80% because it launched at $10 billion and now it's at $2 billion. Um, maybe if you just let it happen organically, it would, it would have you know, very different profile.

And how do you think about this being the same or different than what happens in Web2? Like, people might hear like unlocks and all this stuff and it feels very confusing. It's very similar to how Web2 works where like if you are an employee, let's say you're an employee of Blockworks, like, and you get equity for your, for your vest, one year cliff, like that's like the state we do the very standard things like for your vest, one year cliff, and you get liquidity on it. When, when there's like an IPO or an acquisition one day. It's, which is like in this case for Celestia, like all these, all these people invested $50 million valuation, $200 million valuation, all this kind of good stuff. And then the vesting starts the day there's the token. So then the first clip, the first like big supply cliff is actually no different than just like a cliff at Blockworks, like you have a 4-year vest with a 1-year cliff. Uh, I guess, I guess the difference is you can't sell if you're like a Blockworks employee because there's no liquid token of Blockworks. Maybe that's the—

yeah, it's a huge difference because like, uh, you could say Web2, you could compare it to like listings on NASDAQ or like NYSE where, you know, um, Peloton or something lists on the exchange. You have much less retail participation. That's the difference. Like the retail participation is completely different. So retailers are buying S&P 500, and you're not going to be in the S&P— I mean, if you launch super high, you'll be in the S&P 500, and they'll just start passively buying your token without realizing it. Um, so like, you know, MicroStrategy now I think is S&P 500, so it just gets these like passive bulls, which is interesting. Um, but, um, in crypto, it's retail buying, so it's just a completely different dynamic. You're not dealing with sophisticated investors or doing a DCF, you're dealing with retail that you can trick them. You know, they just like look at the price, they don't look at anything else. It's just like, okay, $4, $4 is the price, and if it's $6, then it means it went well, and if it's $2, then maybe it's cheap, I should buy it.

Hmm. So your solution would be— so you think, you think Kyle's solution is the right one, which is like just have no vesting out of the gate?

Introduces like other problems. It would solve, um, it would solve the, the fake supply, like the fake supply dynamics. It would solve that. Um, the problems are like, one, you get to market so quickly in crypto. Like, you know, you sign a term sheet and then like 6 months later they have a token because it's so easy. Like, the capitalization is so easy. So like, what are venture funds doing? Like, if they're unlocked, um, they have to start building a reputation for like being aligned longer term, like, you know, Polychain sells like this kind of stuff.

Yeah.

So it's tricky. I understand like your hesitation and you're like, well, my, my main concern with it is they want—

yeah, my main concern is that it, uh, it's optimizing for the wrong thing, which is fairness of markets for retail. And I think you should be optimizing for great, great things being built. And great things don't get built in 1 year or 2 years, they get built in like 10 years. And so I actually like— I love vesting. I think people should vest for— I think the standard vest should be longer than 4 years, like at least in Web2, like I think it should be like 8 years or something. And I think people who stay at a place for a really long time should be rewarded because it takes a really long time to build anything great. Like you look at the great companies in crypto, like at least by size and value, which I'll attribute to being like value contributed back to the space. It's like Circle, Coinbase, BitGo. Like these companies have been around for a really long time, right? And it just takes a long time to build anything great. And then you contrast that with like quick vesting and it's like Friend.Tech, for example. Like I think Friend.Tech could have been great. I really think Friend.Tech could have been great, but those founders took from— I mean, this is rumors. I don't really know anything, but like they just cashed out. They just cashed out and they have no incentive to build anything anymore.

But it wasn't like a token. There was no token vesting. They just cashed out the fees. They just cut the fees, put them in their, you know, in their pocket. Like it wasn't related to token vesting. So like, don't, don't like mix like those like equity, like things. The, we're talking about tokenomics, like purely tokenomics. Broken. My solution is not clearly formed, but I'm starting to reach— I was talking to Jeff from Hyperliquid and just trying to think through what makes sense. I like releasing everything but having a high inflation rate and then using that inflation for doing things like you're talking about, like incentivizing people who are still working on something, or even the investors that are still helping. So imagine it this way, like, instead of what we have, like, fixed supply— this is like fixed supply bullshit, which we all got from Bitcoin, right? Bitcoin is great for fixed supply, okay, like, whatever.

I still don't— fixed supply is idiotic. I can— I agree with that.

Idiotic. So, like, you know, you, you look at, like, a token like, uh, Celestia, they say, okay, like, 10 billion tokens, and, um, there's never going to be any more tokens. And so we have to like gradually like unlock them or whatever. No, no, no. Day one, everything's unlocked, but you have like a large inflation. Let's say it's like 10-15%, whatever you think is reasonable for the amount of, um, you know, people you want to remain incentivized. And those people get the, get the inflation. So it's not a fixed supply, and you're still aligning people, you know, like, you know, for the long run. Like if one of your employees had a Blockworks token even if all the supply was out, if they know that every year you guys as a firm are making like another 10% of tokens and they get to claim some percentage of that, they're still going to be hoping that this thing does well. So I'm starting to go in that direction. Obviously it's a huge change from where we are now with like fixed supply and like multi-year stuff, but I think it's interesting. Right now you're having the worst of both. We've seen all these VCs that have been vesting tokens that are earning them more, like liquid tokens. I think Flood had a nice tweet. He was asking, if a token is earning interest while it's locked, is it really locked? And it's not really locked if it's earning you a lot of yield, right?

Right. What do you— I heard you say on a podcast that, uh, VC games are the biggest grift of all the games right now. Can you just tell me what you mean by that, or did I get that quote right?

I don't think VC games are the biggest grift. I think the biggest grift is, um, the builders that are building things purely for the, uh, the token game and to extract money. So I think those are worse. VCs.

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Some of them are like hiding it. Some of them are like self-delusional. They're like, oh, uh, uh, this, this is actually makes sense. Um, the amount of people, the amount of founders that I meet that will directly tell me like, yeah, I, I know the game. I know how the game plays. Like, I know I'm doing this, I'm gonna get my listing cuz I know the how to pay the guy to get my listing. And then like, I got my KOL Telegram chats, I'm gonna pay them. And this is the business model. There's not too many of those. Although I've said before, I kind of at least respect the honesty of knowing what game they're playing, even though it's very grifty. And I have them— they're not my worst tier. The worst tier for me is the ones that pretend as if they're building something that makes sense. So let's just like take one of like, like my bottom tier, which I dislike the most are the founders that are, they're spinning up like some buzzwords. It could be like, oh, like we're going to take the SVM and we're going to put it on Ethereum and we're going to get funding from all the founders because like, you know, Anatoly likes this and this type, this type of dynamic. So Eclipse is like one where they got a ton of angels, including myself, kind of saying— they come to us and they say, like, Anatoly is investing and he's supporting this. And Solana is obviously doing really well. So we're going to bring SVM to Ethereum. And Ethereum has a need to have this better virtual machine. Cool. Then when you dig deeper and you're like, okay, what does this actually mean? It sounds good. And then you look at like what's actually gonna deploy there. And it's generally like not the top tier Solana projects cuz they don't wanna move. They're like very aligned with their ecosystem. So you're getting some like B-tier Solana stuff that hasn't found traction on Solana. And you're gonna try to like create a narrative and put some TVL, you know, paid for TVL and like try to like do this. Now obviously the founders changed and like there's a better founder now. Like we, you know, we actually like and you'll try to like create a bit more of a sustainable structure to it. But given that Neil's gone, I think you kind of like understand that, you know, he was doing all these backroom deals, right? Like he— we have the Polychain story where, um, you know, he was giving out massive allocations in order to get somebody to invest. So this is like my worst tier, is like this, this like level of, uh, of founder.

Hmm. What are the other— I mean, you are so deeply involved in the, like, angel venture space. What are some other things where you're like, ooh, that the public market doesn't see what's going on behind the scenes? But like, yeah, there's, there's some stuff like for me, maybe it's OTC deals that are actually marketed as venture raises. That feels like a semi-grifty thing. Like, I'd love to hear you just talk about other, other things that like the public isn't fully aware of.

I never understood even last cycle why when there was like some Twitter announcement of a, of a round, the tokens were pumping. Like, that's a bearish thing to me. It's not a bullish thing. It means— it literally means that there are now bag holders that got in very cheap compared to the current price, and at some point they will unlock and sell. And so you have like future selling pressure in the system. For some reason, the market is still viewing these things as bullish. If those tokens were just kept, like, you know, in some foundation locked up, they would not be on the market. And now they're on the market, somebody's eventually going to have to, like, make a profit on them. And the more you pump up the price, the more you're, like, creating, uh, like, a large notional selling pressure. So it's probably an education problem.

Jordy, can you explain these rounds? Like when someone raised— because there's, I think what people don't get is there's a— people who haven't done like one of these deals is you're actually getting two valuations here and you're getting two— you're investing in like the equity structure, which everyone kind of says, yeah, like there's no value there. And then you're getting either token warrants or like a SAF or like 2 to 1 or 3 to 1, like token on the equity. Like, can you just explain how these deals work?

I mean, the, the token conversions, I would say I, I do agree that for most projects, the SAFE part, like the equity part, doesn't really come into play unless they tell you like, we are specifically trying to get money into the equity, right? Generally, it's just a token deal. You're getting discounted tokens and they have some lockups. So, you know, um, there might be like a 6-month lockup. It could be short. It's a, it's generally like not a bad thing if they're trying to raise runway in order to be able to keep operating. So we've had projects need to raise a couple more years of runway. They want to find the market price and instead of— they have two options, right? They can either OTC with market makers for liquid tokens and just sell tokens, or they can do these rounds where they lock them up for 6 months or a year. Sometimes it's a 1+1. It kind of delays the selling. So it keeps the project looking okay for another year, let's say, in terms of selling pressure. But it's just a way for foundations to raise capital. It doesn't have to be a bad thing. It can be a totally benign thing. I guess what you're referring to is the announcement where they say, like, we raised $100 million and then the price pumps, when in reality it's like, we sold tokens at 50% off. you know, with like some vesting, sometimes very short, um, and there were willing buyers, but they don't usually like tell you the price. Maybe, maybe like if they said the price, like it wouldn't pump. Like if people said like, oh, this is around $3, um, people wouldn't be like, oh, I need to like bid this up from 6 to 7, right?

Yeah, it just feels like— I mean, I don't know what the right level of transparency is, but it— I just see announcements, then price action. And I say retail doesn't understand what just happened in that deal. And it happens over and over and over again. And yeah, someone's gonna get caught on the other side of it.

So yeah, they always do. It's just, it's just a matter of time.

What do you— how do you think about how narratives get created?

Yeah, I mean, that's another one where I find fascinating and I don't have a full picture, although I have gone into places that I had decided early on in my crypto journey that I was going to go into the back alleys and the trenches because I just wanted to be— unless you're in there, you don't really know what's happening. So everything from doing shows that I was getting bashed for going on Crypto Banter, let's say, because it's like, oh, ZackXBT is exposing them and you're giving them airtime. I want to go to all the big kind of successful channels and understand what are they doing. If you're not in it and participating, how they're talking to you backstage and what do they want you to say or not say, you don't really get a full picture. And I wanted that full picture. So for me, going out there and talking to everyone that is creating narratives and understanding how they're doing it, um, is important. And even like some of these meme coin communities, like these cabal meme coins, let's say, I don't mind like talking to them, getting like— just I want to understand like what's going on.

Yeah, you want to know the game. You want to know the game. Yeah, yeah.

And like, I don't judge. Like, I literally don't have a moral judgment on people like others do. I don't make it my ego and my self-image to judge everybody. Everyone has a different hand they're playing. Some people are really good at technology and they can be just builders. Some people are just very good at storytelling and maybe they end up spinning stories and doing marketing and doing YouTube shows that are spinning stories. I don't, I don't, I don't have a value judgment against them. So I'm trying to put all the pieces together. How do narratives happen? It seems to be that, um, the IQ of the space is still like very low because it like— the narratives might be like, this, this ticker is good. Like, I talked to VCs and they were like, oh, I like the ticker. Like, this is going to be a good ticker. Serious VCs, very successful VCs like Jason Yanowitz.

I'm not kidding.

Like, I had a conversation 2 days ago, uh, why did you invest? Oh, the ticker is good. But they're not wrong. They're not wrong.

But they're not wrong is the thing.

Yeah, like the token and the ticker and the, the image that like is associated with the ticker, right? Like the little thumbnail. It matters so much because, like I said, it's all just like we're all figuring it out and there's just complete misallocation of capital. And if you want the misallocation to come into your team, the one that you're investing in, um, then you have to like evaluate those things. And I think going back to the soccer team or the basketball team analogy, like the team will do better if it has a nice name and a nice cheerleading squad, because then people will go, they'll buy tickets.

Branding. Yeah.

And then once people buy tickets, then they end up, you know, like Real Madrid, like they just bought every single good football player, you know, in like 2010s and 2000s because they had so many fans and they could afford it. And then it just like leads to more success. And crypto has the same flywheel where like you raise a lot of money by being like a good salesman, and then you can kind of like keep parlaying that into like relationships. Partnerships.

I mean, how do you— maybe we can transition to talking about Mantle for a little bit. So you, you're, you're in this other seat at Mantle. I actually— maybe before we talk about Mantle, what is your story of getting involved with Mantle?

So Mantle used to be, uh, BitDAO, which came out of Bybit. Yeah, so Bybit wanted to, you know, fund a big DAO, and they, they took, you know, a billion dollars of their profit in, I think, 2022 Um, they were taking like a third of the fees or something of that cycle. That's no longer the case. There was no like association anymore, but that was like the inception. So you, you got this big treasury and people were really hot on DAOs, if you remember, like a few years ago, people thought like DAOs are gonna be, um, great like investment vehicles and like everyone's gonna use the, what is it like the, the knowledge of the crowd. To make really good decisions. And I think what we've figured out since then is that DAOs have a place, but you need some centralized committee in the DAO to get things properly done. You can't just have people voting on everything. It's just such a slow democracy process. So Switzerland is a better model, like the cantons rather than the full DAO model. In any case, so I think they realized that doing an investment DAO isn't a great idea and they wanted to become a product-focused entity. So Mantle came out of this idea of let's stop all this just purely investing and let's start building and building people's ideal products. Because, you know, Bybit is a great product. Like, if you look at it, has great product market fit. There's like, you know, millions of users. And, uh, taking that DNA and applying it to like blockchain.

Okay, so that, that's a good overview of like what, how Mantle came to be. Maybe let's get back to the point about like, how did you get involved in this? How did you go from the investor seat into this builder seat?

Yeah, so I, I've always been, um, criticizing projects, you know, like, uh, I came on when like Luna collapsed and I was talking about Olympus DAO and all these other things back then. And it's one thing to criticize something that exists and find the flaws, but I don't want to be hypocritical. I want to be a part of creating a better version. We can say, okay, I'm not just on the sofa and just armchair quarterbacking, whatever, how you do call it. So it was something where I was looking for a chance to get in the arena, as Chamath puts it. And the Mantle team were making this huge rebrand transition into a product DAO. And yeah, they reached out and just said, you seem to be thinking about this stuff a lot. And the thing that kind of got me attached to Mantle was there was a huge appetite for innovation and they want to try things and they're willing to take some risks and do things differently. I would say that they're the only, um, chain with any like exchange association that is not copy-pasting. Because people are used to like, uh, you know, Binance or like, you know, some of these other chains. They'll make an L2 or they'll make— they'll make a chain, they'll take Ethereum and they'll just try to do the same stuff. I think MANTLE is actually like innovating and has an appetite to innovate. So that's the key difference.

Can you just give the lay of the land of Mantle? What is Mantle doing? How have you guys been able to have so much success recently? Yeah, yeah.

So initially we just have one L2, then we have two. So it was Arbitrum and Optimism at the beginning, and then they're just like pop, pop, pop, pop, pop. They're all sprouting around because the first got like a $10 billion valuation. And so everyone wants to play that game. They're not all going to succeed. We're already seeing some of them starting to die out. Having a very large kind of commitment from a capital standpoint where the treasury is just stuck with Manta, this is part of the project. There's a multibillion-dollar treasury with a ton of ETH, a ton of stables. There's things we can do. That's a very solid ground to build on. So I think at this point, Mantle has become not just an L2, but it's both a product launchpad where we're thinking about what's the best way to hold ETH, what's the best way to hold Bitcoin, what's the best way to hold stablecoins. These are things that people actually want to do. They want to hold those things and they want to earn yield or they want to have them be productive. So a lot of the thinking is doing the best version of the things that people do want to do. And that's the ethos. That's kind of why it's been so robust and so successful. Like, there's a clear vision on that.

Yeah. So you guys, how do you guys do these deals? Like, you guys are an advertiser on Empire. So I got to actually learn, like, a lot about what you guys are working on. And then I had lunch with the team out in Singapore. And you guys have these, like, really interesting partnerships with different people. So you can go, you can get mETH. I don't know if you can still do this, but like, you can get mETH and you you get the yield, it's like 3 or 4%, and then you can actually earn Eigen via MEETH, right? Where you guys are restaking— I'm going to botch this, I'm sure— you guys are restaking a bunch of the MEETH and then that generates the Eigen points. It's like a, it's like a bunch of Eigen points per day. And then you guys are the— I think you guys are like, we're like second or third biggest person getting Eigen points. I'm sure I totally butchered that, but like, how does that thing come together?

You said everything correct. And like, here's the North Star. We want MEETH to be the best way for anyone to hold ETH. Like, they look at all their options. They can hold naked ETH, they can boost ETH, you know, I can name like 10 other ones. Um, with MEETH, we initially did a double dose drive. So like the yield, we just like incentivize the yield double dose. So everybody started coming in, okay, like I can earn 7% instead of 3.5%. And then this whole Eigen thing started and we sort of panicked. We're like, okay, everyone doesn't care about staking yield now. They just want Eigen points. So how do we still create the best product possible for users? And I came up with this idea of like, let's just put our treasury ETH into Eigen Layer and then just give the points out to everybody. So they end up still having the best of both worlds because they can they can earn everything at the same time. Having that North Star of what would I want to do? I'm a very sophisticated crypto user. I want to hold ETH. How would I decide? And legitimately, we created products for ourselves. The people on the Mantle BD team and on the Mantle product team, they're the most crypto native of any chain, and they're thinking about would I use this? And like, is this the best way that I would hold my ETH, for example? And that's kind of what we're trying to do, and I think that was successful.

Yeah. And then, and then what are the other products you guys have? It's CMEth, right, is the liquid restake token?

Yeah. So obviously, like, now, um, there's EigenLayer, there is, uh, Symbiotic, like, there's Croc, there's like other, other ways to like restake your ETH. What we, um, have done is like created our own version of a restaking token. So instead of just competing with, uh, Lido, uh, we want to compete against, you know, uh, EtherFi, let's say. So EtherFi can do like restaking into all these platforms. So CMEth, which is like the new one that we've been building and it's coming out very soon, uh, you, you could kind of like to remember it, you can say like, uh, CMEth is like crystal meth. So the crystal math, that's the thing.

That's what you came up with was crystal math. That's the—

it's memorable.

It is memorable. Yeah.

So if you want to get that extra, like, more degen yield and you want to go crystal, um, then it'll be like, like, ADSs, right? So that'll be earning, um, this, like, next wave of, like, restaking points as well.

Nice. I would love to be in the— I don't know if you guys use Slack or whatever teams, like, you, you send something to the designer, like, hey, mock up some like crystal meth type things. They're like, Jordy, I'm sorry, did you send that right? Yeah. So maybe fast forward like a year from now, like, where does Mantle sit in the industry? Like, how big can this get? Like, what are the products that people are actually using? Like, who are you guys competing with? Who are you winning against? Like, who are your partners? Like, what is the vision for what the ecosystem looks like in a year?

Yeah, so the chain is part of it. And then the the financial products are another part of it, and then the ecosystem sort of growing is, is another one. I think the products don't need to be held to the L2. Like, if MEETH and CMEETH is held on L1 or on other L2s, that's a huge success. We're getting like a ton of requests from— I could say this like publicly, but like, you know, Arbitrum, Parachain, like they want MEETH and CMEETH to be there. It doesn't have to like, you know, stay in one place. So the products are going to take a life of their own. They're already doing like super well. Uh, there's one now called FBTC, which is like the Fire Bitcoin. It's a very new product, but obviously with WBTC sort of having some, um, some issues right now in terms of like the centralization or the safety of it, it does open up the potential for creating a Bitcoin product. And I think, um, you know, there's ways where there's an improvement to come over, uh, WBTC. Mantle is working on that. And then on the stablecoin front, that's a really interesting one. I think stablecoins, as we all know, are like a killer product-market fit for everybody. Mantle was the first to really kind of commit and put a lot of money behind USDE initially, and it's like one of the hubs for, for Athena and helped that launch off. I think there's other stablecoins as well that have a lot of promise that can offer like a diversified, um, yield and be like very good products. So I think we're seeing that like Mantle is becoming a like launchpad for good products really, and can really like support and bootstrap them.

Why would someone build on Mantle instead of all the myriad of other L2s, L1s?

Yeah, so I don't think you have to build only on Mantle. Like you can have a deployment on Mantle you can earn like all the benefits of that ecosystem. You can still like, you know, be on other chains as well. There's no, you don't have to like sign, you know, some exclusivity deal in blood and be like, I will never deploy anywhere else. You want to like do business and, you know, like it's a very friendly, like crypto-native place.

Yeah, yeah. Nice. I have to jump in a couple of minutes, but I wanted to round this conversation out with just like big ideas for 2025? I mean, there's all these— a whole host of things we didn't get to talk about. So I'd love to have you back on the show again soon. But maybe just like one or two thoughts around like any big ideas for what you think 2025 could look like?

I think macro is gonna start being relevant again, unfortunately. I know like everybody a couple years ago had no thought about macro. And then as as inflation started picking up. I mean, you guys would do that very well. Like, the crossover between crypto and macro just became like so relevant that all these like Anons had to educate themselves as to what was going on. I think we're going to see a sort of like a double spike into inflation. It's quite obvious to me that it's going to pick up again. You can see it in stock prices, you can see it in gold. Everything's at an all-time high, and eventually like this wealth effect kind of like filters through to inflation. So, um, I think Bitcoin becomes more and more of like a relevant asset in, in 2025, um, as like an alternative to, to like this like fiat system. So that as a narrative, you know, obviously there's a lot of L2s building on Bitcoin. You hear different things about the technology side of that, like, you know, how much of it is, uh, is actually like permissionless or not. And I think, um, like BTC L2 and BTCFi is, uh, is one of the narratives that seems to be at least playing out. Um, hopefully like a rebound in, uh, Ethereum sentiment. You know, I've always liked the idea of having both Bitcoin and ETH around because it creates like a little bit of a diversification in a portfolio, and that's alpha. Like, diversification is alpha. Like, you can size more aggressively if you know that your, um, your variance is reduced by diversification. So I think that allows like more deployment into the space. My one big hot take is that we're gonna hit the extremes on some of these things. So, um, I talked to the PumpFun guys and they want to go mainstream. I think we're going to see mainstream betting on videos, on random—

There's like 20 people building this right now. It's like, how many views will MrBeast get in his next video?

Is he going to say this word?

Is he going to say this word? Yeah, exactly. Exactly.

We're going to get extreme versions where I think it's good, you want to hit the extreme. Because that's kind of like where you start finding the limits and start like, you know, reflecting on like, where those limits should be drawn. But right now, we're still kind of pushing outwards on that, on that spectrum. Yeah, it's gonna be a wild ride.

If someone's listening in there, they're really feeling unsure of how to allocate in their portfolio right now. How do you think about just like how to position— I mean, we're recording this September 30th, so we've got all of Q4 ahead of us. We've got this election ahead of us. Then we've got like maybe what could be a crazy bull market in 2025 ahead of us. How do you think if someone's just a buy and hold person, how do you think about how to, how to set up that portfolio? Because it does feel trickier than it Maybe this is just hindsight bias, but like, it feels trickier this cycle than it did last cycle.

Yeah, um, I think buy and hold is very hard unless you're just, you know, doing like the Bitcoin, or unless you're willing to give up the big, uh, you know, 100x or 10x or something. Yeah, like doing, um, I see like there's some products that try to do a market-weighted index, like these index products, and I don't think it makes a lot of sense. Like to put like 0.3% in XRP and whatever. I would say like, uh, from a simple perspective, you know, put a bunch in Bitcoin, put some in ETH, choose like one or two ecosystems that you think are doing a lot of good things. Like TON, you could say like, okay, there's a lot of users there, I just like feel like this is going to do well. And, uh, and make a few like concentrated bets, like if you like what's, what's going on there. Um, I really think that unlocks are underappreciated, and you generally want to choose tokens that don't have a lot of unlocks coming. Think about it this way: if someone right now to invest and hold something for a year needs a 50% discount, why are you willing to do it for free? Why, Mr. Retail Dude, do you want to hold this thing for a year when if there was a forward curve and it was pricing like the expiry of like this, you know, 2025 expiry, it would be settling at like 50% discount. You're just literally giving away, you know, half of your money by, uh, by, by, by buy and hold. So only buy and hold things that, um, are basically like either going to be like very asymmetric outcomes where they can grow to 100x and then it doesn't matter, um, or things that have like fully vested. So Um, even if it's a dino coin, like some of the ones that have— like Pendle is one, like it, it existed for years and it's already like fully unlocked. I don't mind if somebody holds some Pendle, like you're not going to get dumped on.

What do you think about some of the DeFi tokens like the Makers and Aves and Uniswaps of the world that like don't— that aren't the— yeah, that don't have these like huge supply unlocks?

Um, some of them are good. You have to think about the moat, if they have a moat. Um, are they going to have some token utility or price? I mean, I like the Pendle token. I think, you know, Uniswap is still dealing with the US, like, regulation, obviously, and, and like how they can accrue value to that token or not is, is going to be dependent on Trump winning or not winning. Um, Aave seems to be having a good moment, but Yeah, it's all case by case. And I think allocating blindly to like all of them probably doesn't make sense.

Yeah. Jordan, man, I gotta jump. This has been awesome. A lot that we did not cover. A whole bunch of stuff we didn't cover. But this is great. Congrats on everything with Mantle. People should go listen to the SteadyLads pod. And congrats on everything with Selenicap. Doing great.

Thank you.