Winners & Losers From PUMP’S ICO With Santi, Yano & Rob Hadick | Weekly Roundup

Every liquid fund I talk to tells me this is an easy, uh, you know, 4x, right? Or it's going to trade up to 10, it's going to trade up to 12, and then we're going to dump it, we're going to trade out of it. All of them are saying that. And if every single one of them saying that, all $740 million worth, and that represents, you know, call it 20% of the supply, right? What actually happens in that case?

This episode is brought to you by Geodnet, the world's largest decentralized RTK network delivering real-time, centimeter-accurate positioning around the globe. You'll hear more about them later in the episode. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.

All right, everyone, welcome back to the Roundup. We have Santi, and I heard that This guy Rob was trying to replace me last week, so we had to include you this week.

You know, this is a hostile takeover.

Yeah, seriously, you guys are sitting on this side of the table.

The barbarians at the gate are just—

I know, honestly, honestly. I would like to note that, Santi, you have two coffees.

Well, we're trying to get for a sponsor. Times are tough, ladies and gentlemen.

No free ads unless it's—

No free ads.

We like cologne. There's others.

Maybe I'm not doxing the location of the office, but Blank Street's pretty good.

But why do you have two coffees?

Because, you know, optionality.

But why does one have milk and one's black?

Because I want to sip, and as you'll see me through this episode—

You're actually sipping both of them at the exact same time.

I woke up at 5 in the morning.

I woke up at—

I like having milk in the afternoon, but since I woke up at 5 in the morning because I'm a jet lag—

That's such like a child thing.

I mean, I've been doing this for—

how long have I been doing this podcast? I like warm milk in the mornings.

It took you not only 6 years we've been doing this, 5 years, to understand that I'm a child?

Yeah, that's true.

I think, you know, truth's coming out.

Yeah, it's coming out.

All right, shit.

Rob, is your Starbucks name Thicky?

Uh, um, I—

it might be.

I think this is Eunice, honestly.

Oh, Eunice.

Yeah, so, but—

oh, nice, nice.

It is a— it's a quad, so as you can tell, I also was up at 5.

Yeah, I know. I, uh, it's been a big— I've— I rarely drink. You can tell like how tired I am by how many Celsius I'm drinking. Usually I have no Celsius, but—

how many have you had today?

No, I just ripped one yesterday. It's my like 2 iced coffees in Celsius. Been a big week. What are we talking about today? Big week.

Big week for coffee.

Big week for coffee.

Let's—

so here are the things that were on my list. Polymarket, UMA debacle. There's like a million—

Zelensky suit debacle, $200 million on the line.

Yeah, exactly. More— a bunch of prediction markets are raising, so we could talk about that. A bunch of Treasury vehicles that keep coming out. Bunch of acquisitions this week. Rally, Vertex, Portal, Monat acquired. Yeah. Portal, Pumped Up Fund ICO.

Yeah.

Rob, where are we starting? Because this is your show now.

All right, let's start on the— let's start with the Pump ICO. I think that's what people want to talk about.

Yeah, right.

Yeah. Listen, so doing it on Saturday is a little bit interesting. I actually think that's very—

zoom out. Give the context for Pump.

So, I mean, the context for Pump, right? I mean, everyone knows what Pump does.

Are you guys investors?

No, no.

Full disclosure, I am.

You are?

I am an investor. I mean, there's not actually that many VCs in Pump, right?

So, Six Man is the biggest one.

Yeah.

So Six Man did it. Alliance DAO did it. There's, you know, a bunch of angels like yourself. They actually looked at raising a round called a year and a half ago and almost did from a couple of VCs. There are some—

like the good investor I am, I passed on the $20 million, the $20 million round.

Yeah, well, that's why, that's why Santi's the investor and you run the media company behind the podcast. Yeah, I am. No, but, but so, so, so they haven't raised a ton of capital. And then, you know, essentially, I mean, I think as everybody knows, right, they last April, last, last March just blew up. Right. And now it's, you know, the biggest protocol and the biggest application on Solana by, you know, magnitudes. It's done, I think, $700 million of revenue.

Yeah, shy of $700. But yeah, so it's a, it's a most profitable protocol in crypto. How much is Hyperliquid cranking these days?

It's the fastest company in history to $700 million in revenue, crypto or non-crypto, in the history of—

and they have like a fraction of the workforce of any other normal company. How much does Hyperliquid run right now?

$200 billion?

I think it's a little bit higher than that now. Yeah, but depends on the week. But market share just continues to—

so Pumped Up Funds ripping, first company in history to $700 million revenue. A couple of months ago, start doing this fundraise, right? Out of $4 billion, they said we're raising $1 billion at $4 billion. What did that look like in the private markets?

I mean, they talked to every single VC. There was a lot of interest. And I think as you saw yesterday, they went through the token economics. If you back into the numbers, they weren't explicit about it, but it's about $740 million worth that VCs and institutional allocators bought. And then the other, call it $260 million, is going to retail through these, these launchpads.

And you guys, why didn't you guys do it?

We don't really see it as like that. We're the right pool of capital for that. So we talked about this a little bit earlier offline, but there's things that are, you know, long-term games for long-term people, short-term games for short-term people. And our perspective is when you do, you know, these kind of like unlong to like launchpad type deals, most of what is happening is people are trading in it. They're hedging pretty, pretty quickly. And so, you know, we try to make, you know, really multi-year and, you know, maybe decade-long Bets. And we, we do that also. We try to do that relatively early stages. And so we don't typically participate in these things that are, call it, you know, multibillion dollar valuations. I actually think if you look out over the last 3 or 4 years, the worst venture deals in crypto, especially the token deals, have been the ones that have been done at, you know, $1 billion, $2 billion, $3 billion, even for the most hyped protocols that have raised a ton of capital. And so we try to take a very strict view of how we invest.

And it tries—

we try to really be, you know, call it that. C through Series B, but that also means, you know, call it, you know, $0 to like $300, $400, $500 million valuation, not these multibillion-dollar valuations. But listen, I think it will do well.

Yeah, I mean, like Hyperligo, it's trading at what, $30 billion?

It's up to $41 billion this morning.

$41 billion?

Yeah.

Why can't Pomp 10x?

Well, listen, the trajectories are a little bit different, right? So like you saw it last week, the Bonq launchpad, at least for a period of time, actually took the leading spot. I think back this morning, Pump took the leading spot again, but it's like 45-ish percent market share right now.

You know, they have—

they're raising a ton of capital. They're going to have this war chest. They have a story around just like democratizing access to, you know, raising capital and the story around, you know, all types of media, all types of entertainment creators can raise capital. And I think that's like super interesting. And it remains to be seen what they can do.

But it is a—

it is on a different trajectory and it is a business that is going to have a lot. It's the moats aren't as deep and it's going to have a lot harder time competing or it's going to be a more competitive market than I think Hyperliquid is probably going to be.

I guess like if I were to like remove myself from obviously my bias, both are very financial products. Like the user base is marginally like I think like Hyperliquid skews a bit more whale. Like, like larger ticket sizes.

That's typical for trading.

Yeah, typical for trading. Pump is more retail. They are launching their own chain. So we should talk about like the implications for Solana because at one point— pull up the dashboard for Blockworks Solana— Pump contributed at the peak like two-thirds of the revenue for Solana, which is the— we've talked about this at length in podcasts, which is how do you value these at once? Like how do you then re-underwrite your thesis on Solana? Does that mean that someone else takes a slot like, like Bonq? Does anyone else come in? And what are the true moats for these chains, right? Whether it be hyper liquid or pump. I mean, this is something that I, I mean, I tweeted about this the other day, which is like moats I think are generally overrated and as is first mover advantages. But like what happens in a world where, you know, if you're a protocol that is sitting on top of Ethereum or an L2 or, you know, You see Pump and you see them launch their own chain and they're widely successful because they own the user, they have the brand, and then they expand in other verticals. What is like the— how do you like then form a view around which tokens to allocate, where to buy?

Yeah, yeah.

I mean, like, because to me that's like the thinking ahead of like what other teams want to do this and basically rage quit Solana.

I have thoughts on maybe Solana, but before going too deep into what it means to the chains, what do you guys think? So this Pump ICO. So the Pump ICO is on Saturday, right? So we're recording this on Thursday, episode goes out Friday, ICO on Saturday. What is this? What actually happens?

So if you look at—

and importantly, to understand that we have to think about how— what's the, what's the vesting and the— and like, who's locked up and who's not locked up and what is— who can actually sell, basically?

So, uh, everyone who is participating in this round, uh, I think can sell immediately, right? And so, you know, you can—

you could invest 2 months ago and then you could sell immediately. You can sell immediately on TGE, right?

You would have been invested at? No, I mean, people— yeah, people just, um, I think they just funded like recently, so it wasn't even 2 months ago that people—

and I'm looking at pump on Hyperliquid right now, so there's pre-markets on Hyperliquid.

Yeah, it's like $5.5 billion, right?

$5.5 billion.

Yeah.

Is this going to be another Circle scenario where people are overthinking it?

And that's my, that's my take.

I, I will say this, every liquid fund I talk to tells me this is an easy, uh, you know, 4x, right? Or it's going to trade up to 10, it's going to trade up to 12. And then we're going to dump it, we're going to trade out of it. All of them are saying that. And if every single one of them saying that, all $740 million worth, and that represents, you know, call it 20% of the supply, right? What actually happens in that case?

How much, uh, you, you start wanting to front run the other funds because you're saying everyone's talking about everyone's selling at $10, we should just take chips off the table at $8.

Yep. I mean, it's good. And so I think there's a real question around the dynamics here. So my guess, and I don't know, I'm not a trader, this is not financial advice, is it actually does stagnate a little bit at, you know, somewhere above the $4 billion, but that it doesn't have this, you know, huge run that people, you know, people might think.

I just looked up the short interest on this. Wait a minute, hold on.

Rob just told he's not a trader. Like, okay, we'll close shop now.

Like, you can get paid 1,800% APR to short $5.5 billion FDV right now on Pump, on Hyperliquid.

But like, okay, objectively, statistic— like, so let's look at the stats, right? It's, uh, assuming that the revenue matters all the rage now these days. So like, if Pump is doing $700 million of revenue. Now you've got to assume, okay, what's a forward-looking stuff? Is it $700? Is it $200? I don't know. But on an LTM basis, if it's at $4 billion and it cranked out $700, the revenue share is actually quite interesting here because what made Hyperliquid Hyperliquid, right? A lot of it is like their, like the buy and burn mechanism, which is pretty substantial.

Yeah.

So Pump has that as well. And so this is like, if the market is objectively looking at hype, because to me that's the comp, different set of like users, but like hype and pump, the scenario for me is, yeah, there's like a lot of this like volume that is gonna, people gonna want to try to trade in and out of it, and there might be noise in the first, you know, couple weeks, but could this be at $40 billion, $30 billion? And where's the liquidity come from?

So I think the fundamental story is like clearly there, right? And this is the story that you're, you're talking about. I think maybe what Jason Yanowitz was asking, that's what I was responding to, is more around, you know, what happens in the short-term trading. I heard from a couple funds yesterday that they were surprised that so much of the $1 billion was going to funds, as they had been at least told, or they thought that some— that it was going to be significantly less than that. Call it like $200-300 million bucks was going to go to the, to the trading funds. And that was true. There was an expectation that there was going to be a lot of buying at open from people who just didn't— who got crammed down in terms of their allocation. Now I think there's like some concern that you know, pretty much everybody is allocated in some way. But the fundamental story is clearly there if they continue to keep market share. The— I mean, they are competing on now with Bonk on the share with the creators. So Bonk actually gives more back to the creators, and if that competition heats up, like, there is necessarily going to be less revenue for like the buy and burn mechanism. But, um, you know, it's going to be, I think, a very profitable company. They're going to continue to do well, and I think there's a real fundamental story to your point.

Who did they acquire? Do you know?

I don't know.

Yeah, I don't know. Yeah, I will say like Noah, I mean, we haven't had him on the pod, but they're just— I've met a lot of founders in crypto and outside of crypto, and he's just one of those like, just like a true savage. And he's, you know, like, he's like 21.

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So it's in— it's in— what do you think of that? You compared them to Hyperliquid. The difference is, um, they have a very different— so I was talking to the CIO of a big financial institution the other day, and they are, they are studying Hyperliquid. They're studying perps. They're studying Hyperliquid. They are not taking Pump seriously. And it was interesting, Pump is, uh, in their tweet announcing the ICO, they said, our airdrop coming soon. Our plan is to kill Facebook, TikTok, and Twitch on Solana. What do you think of this, like, kind of the creator strategy? Because it's not a capital market. Hyperliquid is dedicated to capital markets, perps, expanding perps, bring stocks on chain.

We— I mean, do you remember that episode we recorded when they launched video and it kind of backfired because it was like—

yeah, but now they have video again, actually. They have video.

And Noah would tell you, look, we, we just have to hire a bunch of people to like curate the stuff. Um, I mean, the hyper bullish case for crypto is like, if you look at objectively TikTok, all these platforms, the user-generated content, clearly creators are not getting enough share. And so can someone displace them? And of course, distribution is king. Like, at the end of the day, if you're a creator, you're going to go to YouTube because that's where the eyeballs are. And it's really, really hard to displace. But you have like ByteDance that, you know, in 4 years, like, has really built distribution and clearly caught Yeah, but of course you don't talk about the other 100 type of TikTok, you know, things that didn't work out. Uh, they're raising a lot of money. Um, I think they're really good builders. Um, they clearly hit a nerve in crypto. Question is, is that going to resonate with creators? The bull case here is they'll share more of the economics to a creator.

You're—

what you're saying, I think the biggest challenge for them is the perception thing, right?

Well, I think there's another point here though, which is simply that the financialization of everything continues to happen. Especially continues to happen in Gen Z, right? Like, if you go and talk to, you know, this is even an outside crypto point, you talk to, to, you know, the Zoomers— and now I sound old by using the word Zoomers— but, um, they, you know, there's this perception that you either have to do one of two things, which is like you have to gamble if you're gonna make it, or there's like a lot of just opting out altogether and saying like, I'm gonna be a plumber, and like, I'm gonna just not be part of, you know, typical, like, you know, the, the grind, right?

You know, trade school applications are at like a 40-year high.

Yeah, exactly right. And so this is, this is the point. And the way— and people are doing more content generation because they— people are actually making a lot of money doing content generation in a way today that you couldn't in, you know, 10 years ago, right? And that kind of financialization of content generation, financialization of our lives, like, that continues to just like go into every part of the way we live. And I think that that is the bet on Pump as well, and you're going to see that bet on other platforms. And I, I think there's probably going to be— to your point around, okay, well, this, this fund wasn't taking Pump seriously— I think some of it is generational, right? Like, there is just like the, the older fund managers don't understand how the younger investors are thinking about the world. But the also the point is, is that the younger investors have less money than the older fund managers do. And so there is a that dynamic as well.

I mean, Jason, you're a media company. Um, how do you think about like, can they actually, what is a hyper bullish case probabilistically like to displace and become like the next TikTok?

I mean, that we were actively considering moving street. I mean, so like podcast, podcasts, we think are an interest. We love the channel of podcasts. It's all going to streaming. Streaming is like the clear next evolution of this. Like if you talk to like The folks who I consider to be the best media companies, like the Barstools of the world, it's all streaming. People have probably, you guys have probably seen like TVPN. Have you seen this tech show? It's like that, that's the model. The model is like, uh, on one end, like very long live streams that are like, cause what live streams have is authenticity. You kind of just jump on, like you're kind of shooting the shit. Yeah.

It's real.

It's like, it's just very casual. And then on the other end, it's like hyper-optimized for social short clips and that, that's the model. So actually this is like Blockworks's H2, like podcasting. More livestream, more short clips, um, less like these hour-long podcasts. Is like, this, this model is a little outdated, I think. So it's all going streaming. If Pump can be the plat— we're not thinking about Twitch. Twitch is not the— we will— we don't even talk about Twitch in our, in our like, uh, streaming conversations. We don't really even talk about YouTube that much. It's all Twitter because Twitter is where the audience— our audience is. So if more people move on-chain, the audience is on Twitter, but could— is the audience also on Pump? So we, like, we were actively thinking about doing livestream.

I guess, like, from, from your genius brain in media, what does the product look like for Pump? Like, when they say they want to displace these platforms, like, what does that format look like?

Yeah, I, I don't know. They— you need to get people doing something on the platform that's not just trading. That's the, that's the, that's the problem. It's, it's both a pro and a con because I don't want our streams to be hyper-financialized. But this might just be the—

So you had permis for Permissionless. Right. And what was the learning there? Because that was quasi venturing into financialization territory, right?

Yeah. And that was not— I mean, those were nuts, right? Rob, you ever heard our permis story?

I didn't know.

Yeah.

This is the first I'm hearing it.

I'm sorry. You're going to have to buy a permis if you want to be invited back.

Permis.

Permis were 2022 at Permissionless. We launched these things called permis as our VIP ticket for Permissionless.

Okay.

We launched them, 555 of these at $0.11 ETH each. Um, so, you know, a couple of— I forget what ETH was that. Let's call it $300, uh, $3,000. So let's call it $300. They ran up to $30K.

Oh wow.

$30K per me.

And, um, which by the way, like that got access to you to permissionless. Permissionless tickets, $1,000.

Yeah. I mean, it got you at $30,000. It wasn't a good, you know, thing to buy, to buy, to get access to permissionless. Now they're trading it. Like it's actually a good— or you can buy it for cheaper than permissionless ticket, but I'm gonna go buy one after this. It's good. Yeah, exactly. But it's, it was, it was not an enjoyable experience having a bunch of people just like hounding you saying, why isn't the token going up, basically? So that was, I mean, that was our mini experience of having a token. So I was talking to one of the Six Man guys, Carl, who runs, I think he launched the first stream on PumpFun. And it's like everyone's in the chat just being like, when token go up, when token go up, when token go up, and you actually want people to be addicted to your content, not addicted to your number-go-up ability.

But I think there's a— there's also a point here. If you look at, um, like online casinos, and I mean, we talked about Twitch a little bit, you said I'm not Twitch, but people are sitting in like on Twitch and they are just watching people play slots all day long, right? There are thousands of people doing this, right? And then they're playing slots alongside of them, and then they're doing this in poker, and now they're doing this in video games. And like, there's like streaming has become in almost every form a financial platform, right? And this is why I think like it makes so, so much sense for Pumped Up Fund is because they'll have the streams and it will be financialization alongside of it. And I think that is now the expectation of people who are a decade younger than the three of us, right? That there is an expectation that we can do something else. We can do something else.

Okay, so this is interesting is that people treat— so I was talking to a bunch of Uh, you know, we have a bunch of like 23 and 24 and 25-year-olds at Blockworks, and I was talking to a lot of them at Permissionless. They don't— and they, they trade and stuff like that. They don't treat it as like invest. They don't treat it as investing. They don't even treat it as like the money-making. It's entertain— it's entertainment and it's a game.

Yeah.

And they all just see themselves on a leaderboard against their friends where they're like, yeah, you know, I made a 30x. Oh, this guy made a 40x. Oh, he's on top of me right now. But like, and there's like— pump is kind of combining a couple different things. One is Nobody want— everybody has a second screen right now and everyone's scared of being lonely. So that's why streaming is lonely. Streaming is booming right now because you just want this second screen up where you've just like, you've got someone in the background like alongside you, right?

To this point, I had, um, like a 25-year-old like founder has only ever worked in crypto, uh, went to Stan— actually went to Harvard. I had this person in the office yesterday and, and they asked me What is the best game in crypto, do you think? I was like, you know, I didn't know what they're talking about, so I was like thinking actual video games. Is it hyper liquid?

Meme, right? And like everyone else, just— yeah, he was the first one I heard talk about this on that episode with the VTroll where he's like, he's like, there's always been— we, we were, we were— because this was when gaming was really big. Gaming is a narrative. He's like, he's like, the thing was hell of fun.

I mean, my God, the best time of my life.

DeFi Summer was the best game crypto's ever produced. Actually, memes. I mean, I haven't really played the meme game as much, but like Memes for who— those who played it. That's, that's the game. Yeah, that's the entertainment.

Yeah, I think like my learning from— because of course at ParaFi we were super early in yield farming and that was super fun. I mean, yams, I mean, it was very, very fun. Um, and then you had the Axies of the world. And I think where I draw the line is as long as people know the rules of the game, it's fine. The problem with gaming as in the format that we saw, Axies of the world, is that You try to call it a game and it wasn't a game. And so at the end of the day, like, that just didn't— it's almost better to just be super transparent about why people are coming into the platform. It's very clear you're walking into the casino, whereas Axie was like trying to— it's like a disguise as a game, but it's not fun. And if you're gonna punt and you want to speculate, you'd rather go to Hyperliquid or Pump and not so much Axie.

Um, a couple other things I want to cover, um, but the last thing on Pump is What do you think about this? The thing that I think a lot of people are frustrated about is how much revenue is going back to token holders and why aren't they talking about it and why isn't it really clear? What do you think should be the standard and the requirement? Should they be required to say— I know there's legal reasons to why they can't say, like I saw Hasib tweeted out that 25% of the revenue and like, I think if you're pumped, you're like, you need other people saying it. But yeah, what do you think about this idea?

I mean, let's just— let's take this from first principles, right? So if you are a company and you make revenue and that drops to free cash flow and you return that to, you know, your shareholders essentially, or your token holders, right? You do that in a couple different ways. You do that in dividends, you do that in share buybacks, right? What's happening in crypto is because of the concern around securities laws, people are doing these like token buybacks essentially, right? But I think it's very tough to— and this is part of the reason that they're not talking about it as much— it's very tough to kind of walk this line that, hey, like, this is a token that, you know, is not a security but will accrue value to the potential holders. And people want to be able to operate, and they want to be able to reach US customers. And the Pump Guys are actually in the US, right? And so if that's happening, people are going to be thoughtful, and they're going to try to be, I think, uh, at least a little bit defensive about how they think about their regulatory structure. Right? And so I think that's probably why they're not talking about it as much. But to the point, if we get more clarity on securities laws and we get more clarity on, you know, what is happening with tokens, I don't think it will be able to just, you know, quack like a security and then like, but say it's a token and have that regarb. I think you're going to have to have disclosures, right? But I think if we get more clarity on what that looks like and what those disclosures are, you'll see people be more explicit about, okay, well, now you can actually utilize this, or you can return capital to the token holder in some manner. And so I think that's a lot of it.

I think the pump guys are not in the US, right? They're like mostly in the UK and like the team. Well, you know, TBD. But importantly on buying the, like they have like a bunch of partners, right? If you can buy this over the weekend, it's like all the major exchanges. It's non-US. Continues to be only non-US.

Why did they go live with Gate.io?

They're trying to go live with everybody.

Literally, it's Kraken, it's Bybit. It's okay. Yeah.

I think they have basically everyone but Binance and they might still have Binance, but I haven't seen it yet. and not Coinbase, because they can't go after the US customers.

Yeah. But you can use Coinbase X.

Let's talk about acquisitions.

Can we just one minute on like what happens to— Oh, the chain. Like what is the case for Solana now?

Yeah, let's talk about that. I think Solana is going to go through a tough period right now. I think, um, if you look at actually what— I think every cycle there's— if you take the majors, it's like last cycle, the Bitcoin maxis were super loud, right? Bitcoin didn't go up that much and they got really annoying. And ETH folks had their time in the sun and the Solana people were like the new participants. And they were really, you know, they got noisy, but like, they weren't like egotistical because they were kind of like scrappy and stuff like that. ETH people were like really loud, like we're winning and all that, you know, L2 summer and stuff like that. And then the Bitcoin maxis were like intolerable. Now, if you fast forward a cycle, it's kind of shifted one. So the Bitcoin people are having a lot of fun. ETH people have become completely intolerable, and Solana people think that they're winning. But I actually think it's— you're going to— I think there are a lot of lessons to learn from last, last cycle. And I think actually Solana might be entering their season of what ETH went through the last couple of years, which is like some struggles and some trials and tribulations. I think ETH people are about to re-have their time in the sun, just like what happened to the Bitcoin maxis. I think Solana folks are going to have some struggles as people, I don't know, the pumps of the world maybe try to get their own chain or something like that. And then there'll be a new ecosystem that pops up and becomes the new Solana.

I could tell you from my conversations, I think the core team of Solana is very much paying attention to Hyperliquid. And I think Pump is also a part of that, I think now, which is like clearly Hyperliquid is just lean into what Solana has always been. Again, if you look at where revenue is coming from and why these chains are being used, it's financialization. It's trading as the main use case. And Hyperliquid just comes in and, you know, again, when we talk about Hyperliquid, why couldn't it trade like a—

Have you talked to people, teams, founders of teams who are building on Solana or folks at Solana? The thing they're most— I haven't heard them worried about something like I have about Hyperliquid.

Exactly.

I would say that I think there's a distinction to be made, which is that Hyperliquid, the Perp DEX and the Spot DEX, and but really the Perp DEX is absolutely crushing, right? And like we continue to talk about Hyperliquid kind of in that context. And then, you know, the point you're making is more about HyperEVM, right? And HyperEVM is, is, you know, pretty dead these days, right? Like I think we can all maybe feel bullish about what it might be in the future, and there's obviously some good builders there, but like there's not the the ecosystem of builders that there is on Solana today. Um, there's not the ecosystem of builders.

There is, there is. But I mean, you see the same—

there's not. I mean, we see all the deals.

So, like, there's so many people building on Hyperliquid right now.

There are people building there, right? I would say the quality of team is significantly below what we see on more established chains.

How would you rank, uh, so Mega, who are both investors, I think they, to their credit, they've been building like the, the, um, ETH, like it was a mega mafia and the quality teams there was like actually pretty, pretty, pretty good for a pre-launch train.

It's pre-launch.

I mean, I was, I was very, very impressed. How would you rank, I guess, like going through a list of teams that are building on Ethereum L1, Ethereum L2s, Hyperliquidity VM, Solana, Monads of the world, like, yeah, object, like, I know it's very qualitative, but like, if you were to stack rank, like, where are the best, where are the best builders? I give you my perspective, but like, you see, Rob, what do you think?

Yeah, so I would say broadly, like, you know, the ETH L2 ecosystem, uh, is— but it also depends on like what part of crypto we're talking about. If we're talking about DeFi, then we're talking about something different than we're talking about, you know, uh, DePIN or something like that. I, I will say to this broader point, um, I actually— I was talking to a very Solana-aligned venture capitalist yesterday, uh, and that he— this person was telling me that they've actually been very underwhelmed by the DeFi founders that they've seen building on Solana recently. And this person actually said to me, and this is a person who's as bullish Solana as anybody, they said, I've seen better teams building on Monad and MegaETH pre-launch chains the last 6 months than I've seen building on Solana. And they were asking me why I thought that was. And I don't know if that statement is actually true, right?

I would say so.

You know, so, but what I, what I do think is true is that there is something to be said about the network effects of, you know, just being on EVM, right? Like there are just less engineers who are building an SVM, but there's clearly a lot of reasons to build on Solana. There's a great core team, to your point, like there's, you know, very good tech there that has been battle-tested in the way that some of these other ecosystems haven't been. But it just seems like the, the whole ecosystem has gotten taken over by sort of this barbell strategy, which is, okay, well, you have the pumps of the world and you have memes, and like, that's where actually almost all the economic activity is coming from. And then there's a lot of conversation around the institutional side, and, you know, the foundation seems to be really focused there. There's a lot of focus around bringing institutions onto Solana, and the pitch has always been, don't you want to be like on a, you know, monolithic chain where all this liquidity is, right? And we have this, this great tech stack. And what has happened is that the institutions have said, actually, we want to control our own execution environments. Right? And Robinhood is one of many that is happening. And we've heard a lot of this come up recently. There's a lot more announcements coming. And that theory around— don't— these, these institutions will want to be at the place with the, the best liquidity, um, actually maybe is true, but you can say that Ethereum has the best liquidity. But it's really around people wanting to control their own environments. And that, I think, is actually the kind of the reckoning, at least from the seat that I sit in, that is happening right now. Because there is this trading activity that's clearly happening. But, but you would combine that with, with the institutional side and then Fantom going and using Hyperliquid instead of, you know, Drifter or whoever.

Isn't that the argument for Hyperliquid though, which is any of these people can just one shot integrate with HyperEVM at this point?

Yeah.

Like the— you remember Jeff used to like a year ago, Jeff from Hyperliquid would say like, we're the AWS for liquidity and it didn't really make sense. I didn't understand what that meant at all. But now that I see like Fantom just one-shotting perps to 10 million users, like you could imagine. I mean, so I don't know, I don't look at, I look at 1/100th of the deals you do, but like I've seen a lot of these guys building on Hyperliquid. They're building mobile apps and they're kind of Robinhood copycats and stuff like that. It's all just on top of, what is it, HLP3 or whatever.

Yeah.

So they use their vault infrastructure and they use the liquidity of the order book there.

You're basically giving any front end in the world the ability to embed beautiful trading markets, right?

Yeah, and I think they will, uh, I think it's very clear like Hyperliquid is going to continue to grow market share in terms of the DEX. I think the question that, you know, I was talking about a little bit more before is like, how does it go from, you know, winning that, that market, right, which is, you know, perpetual trading and maybe eventually spot trading, to winning like a broader ecosystem? It's not clear to me that like they are going to be able to do that, but it's also not clear they need to do that to be worth a ton of money. To your point, it's only worth $40 billion.

Yeah. But objectively, again, I go back to user aggregation theory will continue to be a thing. That's where the moat is and probably persists. Probabilistically, can Hyperliquid just become bigger than Ethereum? Because most of the users in crypto today are trading. And if Hyperliquid delivers on the EVM and apps move there, it's kind of like the flywheel, right? They have the liquidity, they have the users, And builders come, they'll build good products, it's EVM compatible.

And so, you know, but I think, I mean, this gets back to a little bit what we just talked about, which is what is the incentive for the best apps? The incentive for the best apps continues not to be to go build in someone else's environment, right? And so this is why you talked about Pump, like, launching their own chain. This is why Uniswap created Unichain, right? And I think, and I think Hyperlook would actually prove this out, which is that if you own the user experience, you own the full stack, you're able to go and meet the customers where they are, you're probably going to build a better product. And then it continues to be proved.

The whole reason why we, I mean, we're building on Avalanche, but it's EVM compatible and we're very focused on acquiring users that are going to be sticky and creating our own sovereign block space for this reason. I think you extend that over and over and over and the incentives will always be for builders that have a good moat and have own the user experience, just launch your chain.

And this is why Ethereum is now— I think it was David Hoffman who put out a piece yesterday about, okay, well, how does— what's the bull story for ETH? And it's like, okay, well, what if we do— we have, you know, native and base rollups that, you know, have more value accrual and are more natively integrated into Ethereum, and then you have easier shared liquidity across the whole, you know, ecosystem. Like, that is the bull case, right? And some of the things we are saying is everyone wants to own their, their own environment, but like, if they can share liquidity and they can, you know, share security like maybe that they will— like, that is how ETH wins, right? And it actually, to the, to this point about Avalanche, like, it was the sort of the original Cosmos vision in the, in the Avalanche vision, right? Um, and so it does seem like there's momentum behind that story right now in a way that there wasn't a year ago to when we started this. Um, and it's flipped a little bit on its head to a year ago, uh, when everyone was just talking about a monolithic chain.

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Let's talk acquisitions because, Rob, you're— I'm sure you see a lot of these. So let me just run through the list of recent acquisitions. Thesis bought Lolli. Coinbase bought Liquify. Uh, Ink just bought Vertex. So Ink, Kraken's L2, bought Vertex, which was interesting, kind of like protocol-to-protocol acquisition. OpenSea bought Rally, which used to be Floor. Monad bought Portal, stablecoin infrastructure. Take us behind the scenes of what's actually happening here.

Yeah, so I mean, M&A has just been exploding this year, as you know. All of these deals that we talked about, I think, were relatively small. They're not the big billion-dollar-plus deals. But what are, or what do they all have in common? They all have in common some sort of like core infrastructure use case to make using the other protocol or the acquirer easier to use and getting them closer to the customer. So like Monad and Portal, like what's happening here is now you can more easily natively onboard into the Monad ecosystem. And they also acquired a very good wallet and an incredible team. And Raj, Raj is now the head of stablecoin and payments at Monad. He's now, um, and no offense to anybody listening to this who has the job as well, but I think he's by far and away the most experienced person in payments running payments at a chain. I think the infrastructure at Moned is—

Were you guys investors in both?

Not in Portal. We're investors in Moned.

Got it.

Yes, sir. And then you look at the OpenSea—

He ran crypto product at Visa, I think, before.

I don't know if that was his exact job at Visa, but he had a long history of Visa and it might have been true. I'm actually not quite sure, but he's incredibly well-connected. He's incredibly smart if you talk to him. And, you know, they think that payments is going to be a big part of their story. And so, um, uh, you know, they get that core piece of infrastructure, and then they also get, you know, a great team. But you talk about the OpenSea deal, right? Like, you know, this is— they're wanting to get closer to the customer. They're trying to get this wallet in place, right? You talk about, you know, Coinbase, they're trying to add another capability to their institutional clients with Liquify, right? And so what you're seeing is you're seeing like capability bolt-ons. And I think what you're— that help people serve their, their core clients better and, or either get, and get closer to those clients. And then, um, I think the, the reality is, is there just were too many funded startups in crypto over the last cycle. There was too much venture capital. And so the winners are, you know, building up these capabilities and they're saying buying versus building is actually better.

So let's go there. What are the terms?

How much, how much of the M&A activity is, is a result of like tokens are if you're a project that hasn't launched a token, you likely don't want to launch a token in this environment. And maybe you're running out of money. And so how much of it, like the buyer universe is, it's good to be a well-capitalized player.

It's good to be a buyer. It's a buyer.

Or you have like an overpriced token.

Like a lot of these teams raised, the last fundraise they did is 2022. So what does that tell you? They're running out of money. So they had a decision to make. Do we go raise a Series B slash Series C or do we go sell? So like Liquify, right? Liquify 2022, Liquify raises $5 million to build the card for Web3. 3 years later, sell to Coinbase. Why are— first of all, are these up rounds, down rounds? I guess you guys, I don't know how much you can say about Liquify because you guys—

Yeah, so we can talk about Liquify specifically. We're investors there.

So a different one of these then.

What I would say more broadly about the M&A environment right now is it is actually really a bore bill as well, right? So there's these big, you know, billion-dollar-plus deals that are happening that are really strategic, right? Ripple buying Hidden Road, Kraken buying NinjaTrader. These are really, really strategic deals for what people see as the next phase of growth. And we're seeing a lot of continued interest in those types of deals among, you know, the crypto unicorns, the Coinbases of the world, et cetera. And then we're seeing a lot of deals that are, you know, in this, call it like sub-$200 million range evaluation, where there are these teams who have built, you know, really good products, they're really good teams, and, but they maybe, you know, it's not a business, it's a product, not a business, right? And they need to go and to really increase distribution, They need to go and be part of somebody who already has that distribution. And what we're seeing in a lot of these deals is there's actually big earnouts involved in them. And so they're saying, okay, well, here's some amount of money. And it's usually, especially for the good teams, it's not down rounds to you, or it's not below the last round of valuation, and some multiple of that, but maybe not a huge one. But then it's saying, if you can actually take this product, plug into our distribution, and then you can go and add X amount of revenue, X amount of growth, will actually pay you a lot more, right? So you're seeing a lot of these earnout structures in these deals.

Mostly earnout structures.

Yeah.

Got it. Uh, cash or equity?

Oh, both. I mean, it depends on the acquirer, right? Um, but, um, we're actually seeing a— I think you would be surprised at the amount of cash that we're seeing. Interesting.

I heard, uh, two things. One, like, uh, like Stripe, for instance, obviously acquired Bridge and then Privy. Um, their position now is a $100 billion, you know, company. Uh, they don't— like, they'd rather buy. So like, for instance, there's like been a fair amount of turnover now in the Stripe team. Like, so there's a bunch of people leaving and whatnot, and their position is like, look, go build it, we'll acquire you. And for something like that, if you have cash and you have all the distribution, like, that you'll— you're also seeing people like outside of crypto saying, okay, if we need to be relevant in the space, who do we go buy? And I think you have really well-capitalized fintechs, right, that, you know, might look at and say, okay, do we want to build it ourselves or do we acquire someone like a Bridge or like a Privy. And I think there's just a really good universe of companies that you could buy.

Let's, uh, there's a rumor this week that Stripe is coming out with an L1.

Oh, really?

Yeah. I don't know if you can comment on that.

I won't comment too deeply. Um, I would say it's a rumor that a lot of people believe is true. So, um, and a lot of people that, you know, should know, uh, believe it is true.

It's a well-substantiated rumor.

Yeah, right.

So what I would say, um, and if you think about that, the fact that they bought Privy And stable— you don't just— you don't, you don't do two massive acquisitions and then just stop.

Yeah, so I wrote a— I wrote an article, uh, not to show my own article, but I wrote an article 2-3 weeks ago, uh, called The First Trillion Dollar FinTech, and I talked about, uh, Stripe. I was talking more broadly there about how payments on blockchains, when you own the account, when you own the end user, when you own, you know, you're able to be the issuer as well, how you can basically be the whole network, right? And you don't— and you can disaggregate the potentially even the Visas of the world, maybe not if you need them for auth and stuff. And but you can also disaggregate the, the banks. And, and I use Stripe as an example, and I said, you know, what's really clear here is you take their whole infrastructure that they have now, they can own the end-to-end user experience from business banking through payments through, you know, all their value-added services that they do. And so they could settle to a public blockchain, uh, and own everything on top of that. Or they could also just, like we talked about before, own their own execution environments that are their own chain, right? And it continues to be, I think, clear to me that that's likely what most people are going to be doing. And so far, the evidence is there.

To be fair, the Mertz of the world, love you Mertz, or the Ethereum folks of the world say they're not going to do that because running a chain is a Herculean effort and you have to manage validators. And what about, is it permissionless or permissioned? You see these arguments mostly from crypto-native people that are focused on one vector, whether it's security, decentralization, or it's really hard to manage a chain. What would you say to that? A, is that true? Because I think if you were to talk to— launching a chain 5 years ago, very different than I think launching a chain now, just because my view is that a lot of this tech is commoditized.

It really depends on what you want out of this tech. Right. So building a new Solana today, building a new Monad today, building a new Meggy today is not easy. It's very hard. Right. And doing that from, from the ground up and recreating the way consensus is done. Right. Like that's really, really tough. Um, and you know, Monad was one of the first to try to do this like parallelization and et cetera. Right. But, uh, there are also ways to launch an L2 out of the box or an Avalanche L1, or, you know, use a Cosmos SDK. That is pretty simple these days. And so if you believe that, you know, one of those use— those, those kind of infrastructure providers can give you an environment that works for your use case, you can do this with, you know, a team that's not that deep into crypto, or, you know, you can hire a team that's like pretty decent to be able to do that.

What do you think about Stripe launching an L1 instead of doing the Robinhood strategy of an L2?

I don't have the full detail, so I don't know what it will look like. Um, I mean, I think the And I don't know for sure what's happening, so to even to say that, um, but I will have to see what it looks like, right? And so I, I, um, my expectation is that everybody will want some interoperability with, you know, other liquidity and, you know, uh, permissionless, uh, chains. So, you know, depending on, on how that looks, there's a lot of, a lot of ways they could build. But, um, I think that would be surprising to see them go in a completely isolated like L1 environment that they didn't have to build their own bridging infrastructure for, you know, etc.

Although you could say most of these are just— the amount of users on-chain today is nothing compared to what Stripe sees, which is like, how much does Stripe care about the current existing liquidity and user base with crypto versus what they could bring on-chain? Like, it's, it's like, it's, it's a rounding error for them. So if they, if they are really bought in to your point around becoming this like trillion-dollar, like, um, you know, fintech and owning end-to-end, then if you are in for the long game, you kind of say we'll invest and we'll launch our own L1 today. And interoperability is not necessarily like that, like in the matrix of things where we've seen projects prioritize. Like interoperability, I think, is more of let's tap into the liquidity of the existing user base in crypto. But you know, there's only 30 to 60 million actives in crypto, so I don't care about that. They, they care about the rest of the world that's not on-chain.

Yeah, and I think for payments, like, that's a completely valid point. And I've talked a lot about this publicly, about, you know, my perspective that, like, payments was always supposed to exist kind of in their own isolated environments. Um, even— and I've been in, like, you know, a lot of the people like Merton and others have responded to my posts on Twitter, like, being, uh, telling me that I'm wrong about that. I think we're starting to see that play out a little bit. Obviously, that this hasn't fully played out, but, um For— so I agree with you for payments, but it really depends on what you want to do over time, right? So for Robinhood, I think very clearly better interoperability makes sense because they do want to do a lot of things around DeFi, right? And like, that makes sense for them. If Stripe is simply just, you know, saying, hey, like, we're gonna do some sort of settlement here for, um, you know, our broad, you know, SMB, you know, customer base, and we don't want to like offer like, you know, different types of on-chain yield-bearing products, and we don't want to incentivize other, other founders to come build there, like, that could definitely make sense.

Yeah, is that co-opting the vision of crypto in some way, shape, or form? Like, are these just— are we just going back to databases and just like running them as such?

I, you know, I don't know. There's no crying in financial markets, so.

Hey everyone, Jason Yanowitz here. Wanted to, uh, just take a quick break and highlight everything that's been going on in the Mantle ecosystem. In just one year, Mantle has seen its TVL surge by over 1,100%, now reaching $1.69 billion. That's just such a crazy amount to think about. More than 225 protocols have made Mantle their home, while the platform's Eco Fund has invested $38.5 million in 51 pioneering projects through strategic partnerships with Bybit, including MNT as collateral, supporting Athena to scale and the first Ethereum L2 to integrate Ondo Finance. They just continue to be on the bleeding edge of L2s. Be sure to stay up to date with what's going on by giving them a follow on X @0xmantle. Special thanks to the incredible Mantle team for sponsoring today's episode. I wanted to take a moment to tell you about today's sponsor, ZenRock, the permissionless decentralized custody network backed by one roundtable notable partners, 10T, Maven 11, and Spartan. Now available on Jupyter, ROCK is the native token for transactions within the ZenRock ecosystem and secures ZenRock's decentralized custody network. The first application launching on ZenRock is ZenBTC, yield-bearing Bitcoin on Solana. ZenBTC will be live in April 2025. To find out more, you can follow ZenRock on X or click the link in the show notes. I wanted to take a moment to tell you about Citria, the ZK rollup expanding Bitcoin's utility without sacrificing its security. Using ZK technology, Citria enables Bitcoin to function as a fully programmable financial platform. Citria is optimistically verified by Bitcoin, offering the most secure and native way to extend Bitcoin's utility to DeFi. With Citria, developers can build scalable payment systems, tap into Bitcoin's liquidity with financial applications and build privacy systems. Citria is currently on testnet and approaching mainnet. To follow their progress, click the link in the show notes or follow them on X @citria_xyz. As always, investments in blockchain technology involve risk. Terms and conditions apply.

Speaking of crying financial markets, Polymarket and UMA had some drama. So the TL;DR, I don't know how closely you guys follow it. Are you guys an investor in Polymarket or no?

We're pretty large investors in Polymarket. Yeah.

Okay. So we'll have some biased takes only here, but that's okay. So Polymarket has these— has basically come under the gun recently for a couple of markets, the Fordow nuclear facility. But I mean, the main one was Zelensky's suit. So there's a market that's like, will Zelensky wear a suit before July? And he wore this thing that looked like a suit.

It didn't look like a suit to me. I'm going to be fully honest.

It did not look like a suit to me.

But I know people called it a suit.

I actually didn't think it looked like a suit.

I mean, if you have a million bucks on the line, definitely look like a suit. Yeah. Yeah. But are you telling us you got a million bucks on the line?

There's a market and it traded, you know, a month ago was trading at like 30% chance to wear a suit, 25% chance. So he wears this thing that looks kind of like a military suit, I guess we could call it. And international media, like the CNNs and AP and Reuters of the world, said Zelensky wore a suit and the market is now trading at zero, right? So the 1%, 2% chance that he wears a suit or something like that. And so everyone's basically— I forget how much money's on the line. It's like $50 million.

I think it was close to $200 million.

$200 million was on the line.

$200 million on the line that Zelensky will wear a suit. And the big frustration, I mean, there's a lot of details here, but the one-liner is that people think that Uma So, UMA is how they—

It's like the Oracle protocol and that basically resolves the market.

Is the resolver here. And there are UMA whales who were also trading on Polymarket and said no, that Zelensky won't wear a suit. And those people are also big UMA whales who basically colluded to say that this should resolve to no instead of yes. What do you do?

You can contest the market, which is what happened, I believe. Yes, that's what happened.

You have to have 2 hours after it resolves. So it resolved, I believe, to yes, and then it was, uh, it has to be contested within 2 hours, and it was contested within 2 hours, then it resolved to no. Then there was another contestant, they did a second vote, and it resolved to no again.

So that's gonna be our $40 million market.

I mean, I think this is like the criticism that you see in prediction markets.

The official resolution criteria— sorry to interrupt— is the outcome will be determined by a consensus of credible reporting, right? That's what the official resolution criteria— so there's the official resolution criteria gets written way before, you know, obviously the due date. And it says the outcome will be determined by consensus of credible reporting. So they're saying it's based on reporting and then AP and CNN. Yeah.

And this is the thing, like there is still a human element to like this mechanism because this is the vector of governance on chain, which is it can be colluded. Like you can, you know, you know, On-chain governance is a very funky area where—

But this is interesting. Zelensky's tailor confirmed it was a suit. Over 50 media outlets, BBC, Reuters, et cetera, said it was a suit. Wait, sorry, Zelensky's tailor?

Or do you just mean there was a—

Zelensky's tailor said it was a suit. He's definitely got that fit, that yes. That's what I'm saying.

I think you're now going to have to put into question, does he disclose if he has a position in this market? And this is the thing, like the token transparency thing, it's like you have to—

Do you think he's going to have to disclose?

I think everyone has to disclose. Like, can Zelensky have a position in this market? And say Zelensky puts his entire net worth on this market.

We talked about this a year ago, which was, or maybe several months ago, will Biden drop out of the race? And we said, should Biden be— we talked about this in the round— should Biden be allowed to bet on his own poly market?

Well, by the way, this has been the CFTC's concern this entire time, right? And so the, you know, event contracts are almost certainly going to be— and they have been cleared so far by the CFTC. There hasn't been kind of a final resolution on that. Like, uh, there's been event contracts are fine, but there's been conversation around the political ones, or, you know, it's—

as far as I know, sports betting, for instance, if you're a referee in a soccer match, you can't bet on the outcome.

Yeah, but those rules are made typically by like the leagues themselves. Yeah, the FIFAs of the world, right?

Tim Donaghy, NBA ref. Right.

So, um, but, but there's always been a lot of concern with the regulators that if you have these markets that are things like, you know, politics, or you have these markets that are things like, um, assassination markets— yeah, you know, to, to go there. Yeah, but correct. Yeah. That incentivizes people to do things that you otherwise don't want to incentivize them to do. I think for things like whether or not someone wears a suit, who cares? If you want to bet on that, you know that somebody can go and see that market and go and wear a suit. That is going to be every prediction market forever. So if you're against that, then you're just against prediction markets. Then you're against prediction markets.

Yeah. How should these things resolve? Because I'm looking at the comments of the thing. There's an UMA person who said, "It doesn't matter about the suit. We have more UMA tokens. I'm not losing my investment." I think this is where— That's a problem. Shouldn't you just have AI resolve these things?

No, I don't think you can just have AI resolve them. There's been a lot of debate about this. Should it be a centralized judiciary committee essentially that goes and resolves this? Could you have AI do it? Could you— should you be doing it in a decentralized manner with somebody like UMA? Clearly there are issues with UMA because the token is not trading particularly well. Doesn't take a lot of money to go and influence the resolution of a market that has actually more money on the line than the, that token itself. And there needs to be some sort of, of, of— there needs to be some sort of change in how you use these types of resolution or these oracle protocols. That said, I think it's also like we would have this type of drama essentially if it was just a centralized kind of judiciary committee who ruled against people that they thought was unfair as well. So you've seen a lot of debate around that, mostly coming from VCs who have different bags. Callsheet. Yeah.

Callsheet does it in a very centralized way though. Yeah.

So I mean, they do it entirely centralized way.

They have somebody internally who takes a look at it. I think the— if I actually take a first principles look at this, I think it's pretty clear that there— being entirely centralized is not the right way. Being entirely decentralized is not the right way. Some sort of hybrid solution makes the most sense. But you also, you need to be really, really thoughtful about how you define the resolution. That is the most important thing, is being thoughtful about how you define the resolution. That's a suit. I don't think that's a suit at all. I think that is like military.

You think that's a suit?

Have you ever worn a suit that looks like that?

Yes. It's like a jacket suit.

It's like a barber jacket though. Yeah. Okay.

But to the broader point, I think there's clearly a lot of innovation that still needs to be done on this side.

Dispute resolution is the heart of— and I do agree as much as, again, we have Parify is, I think, the largest holder of Polymarket, so there's bias on both sides. Dispute resolution is key. And the interesting thing, a lot of it has been dancing around like CFTC stuff, but if we get more— this is the benefit of why a clearer regulatory environment allows us to explore different possibilities as a hybrid situation, right? And I don't know, I think you could leverage AI. You could have an independent committee for each market and Um, and then, or maybe you set a precedent that that's a suit, and then going forward every tailor—

well, part of the reason, by the way, that this was deemed that way is there was precedent, right? And so there was another market, right, that where, um, something similar was worn that was deemed no, right? And it was a much smaller market, and so it didn't have, you know, all of this, you know, hoopla around it. Um, and so that is actually part of, part of what happened here. I think just what's very clear is this is an area that Prediction markets are now— they're not going away, right? Like, you know, Polymarket's doing over a billion dollars a month of trading volume. Kalshi is doing—

I agree, these things are going to 100x in the next time.

Yeah, Kalshi is doing $400 million a month or $500 million a month, right? It's, uh, and it's very clear that these are the way that— at least a way that consumers want to get information. They, they, they are taking information from that. We actually invested in a kind of a different point. We invested in another company where they run polls and you have to link like crypto wallets and your, your, your bank account to it. And so it tells you how much money you have. Yeah. And so, um, but, but there's this, this idea that like putting your money where your mouth is, is a way to parse information better. And we're going to continue to see that idea take off and continue to be a main part of the mainstream conversation. So these aren't going away. And I think we'll just continue to have more, more innovation and, um, and tweaks that will, will help get us to the, to the right place.

And you send that further, it's, it's, it's, it's, it's a feedback loop where you can also now incentivize and change behavior that you might want to see for political officials. It's like, you know, $200 million on the line, Zelensky now has an incentive to wear a suit if his family members have exposure to it. Is that a bad thing? Maybe not. So prediction markets, when I was talking to Shane in the very early days, the uber bull case of prediction markets says that they influence behavior, hopefully in a positive way, not in a— assassination markets is the ugly part of prediction markets. But anyways. Rob, I'm looking at Twitter.

You guys just led or co-led or participated in Agora?

So we led the seed.

Led the seed. Paradigm led the Series A.

Yeah, they led the Series A. We actually upped our ownership in this round. So we're super bullish. Why are you so bullish on this? I mean, have you met Nick? He's an incredible founder. I think there's, I mean, there's the macro point, which is that— What does Agora do? Okay. So going high level, Agora is They're a stablecoin issuer, um, but they are both stablecoin, uh, issuer for their own stablecoin called AUSD. They also, uh, do white label issuance, and then they provide basically the full stack of APIs you need to do alongside issuance, like other types of payments, on-ramps, off-ramps. You know, they'll— they're partnering with a wallet provider to basically make it extremely easy in a one-stop solution to offer stablecoin finance, right? Um, so That, you know, just that theme and that idea is something we're extremely bullish on. And then combine that with Nick and Drake, the founders, who we think are just best in class in the market. We, we continue to be extremely excited about what they're doing. We led the seed in what was a very kind of hot round a year and a half ago. And then we have been so impressed with how they've operated for the last year and a half that we upped our ownership in this round.

I agree with you. I mean, he's a fantastic guy. I've heard you also tweet about this rapidly evolving state of stablecoins and large players coming in, and you're at the Goldman conference and everyone's talking about stablecoins. How do you invest behind something? And we talk about distribution, how important that is. What is the defensibility of this business model? How much of it is going to be a function of them really just going fast and owning a category? And when you have competing factions, everyone's trying to get into the stablecoin market. How do you see that? Right.

So everyone is going— this, this harkens back a little bit to the chain conversation we had, but everyone is going full stack, right? When you have a technology that makes it much easier to operate at, you know, call it, you know, bare metal for on the tech stack, but also operate directly and face the consumer, and the middle gets a lot easier, like you need to be able to offer a lot more, right? And so, you know, kind of what we've seen from Bridge, right? What has Bridge done? Bridge was an on-ramp off-ramp business, right? Now all of a sudden Bridge is a stablecoin issuer, They're a card issuer, they're a virtual account company, and they do like cross-border payments, right? So now they're doing basically everything, right? For— and they're continuing to offer new capabilities. And so what we're seeing from a lot of these stablecoin issuers is that— and a lot of the stablecoin companies generally is that they're offering a wedge product and they're saying, this is the first one, we do this thing really well. And then as they grow, as they make more money, as they raise more capital, they're doing everything else, right? And they're trying to own a certain part of the market. So it really becomes a— yeah, there's a, there's a, there's a tech game there. Like, reality is, and I was talking about, uh, talking to someone about this yesterday at one of the chains, most of the like stablecoin APIs in the space are actually really terrible. Like a lot of the, the call it, you know, uh, first wave of stablecoin companies have just built like really awful APIs for some reason. Um, and so there's a lot of opportunity to build, you know, call it better APIs and a better tech stack. Um, but, but beyond that, you now have to go and own the end customer as well, and you have to dogfood your own, your own stablecoin.

We've been pitched by pretty much everyone under the sun about like, which stablecoin are you going to use for inversion? It's something we actively think about. I mean, for us is speed of an execution. We are of the mind that a lot of values will be created by stitching together best-in-class products that exist in this space. So we don't pretend to do everything out of the gate because we're focused on acquiring companies where we feel that we can do it in the best way possible. De-risk that part of the equation. That's the hard part. Who we use on the backend, we are clearly relying on a number of infrastructure providers, Avalanche on the settlement layer and their stack. And then we can have, there's middle parts of that layer. And it all will come down to what we do initially, might not be the case as we scale and just will depend.

Who pays who in this game? Because I know if you're a chain and you want USDC, Yeah, that's changing a lot right now. And I think Agora is actually pushing that change because if you're a chain and you want USDC to come to your chain, oftentimes you have to give them a big grant. $20 million? $20 million. Yeah.

I mean, so all of the stablecoin issuers, all of them are being paid to deploy on chains.

Right. But a lot of money. A lot of money. $20, $30 million.

Yes. Codex, for instance, we're both investors. You guys shared me that deal. Yeah. Appreciate it. But they launched like USDC natively there, right?

So they launched USDC natively on day one, uh, and they're the only chain to on day one have USDC natively, which is a really big deal for that deep liquidity. Um, they're a little bit different because they have a deep partnership and relationship with, with Circle. And there's— this is the—

Tether has Plasma and a couple of—

and Circle has Codex. Um, and, and so there's, there's— so there's something happening there that's a little bit different than what's happening more broadly. But what's happening more broadly is that there is, you know, you're a new chain, you want to have USDC. USDC is asking for, you know, tens of millions of dollars for— to, um, to Jason's point. Or now, you know, USDT isn't really natively deploying anywhere else right now, but USDT Zero is natively deploying places. And same thing, they're cheaper than, uh, than Circle, but they're asking for money, right? Um, but, you know, you go down that list to, you know, like an Agora, um, or an M0, which are kind of the next two right? Like, they're also getting paid, they're just getting paid less money, right? But they'll share more yield. But yeah, and this is what's happening. So part of these agreements end up being that, like, so especially for Agora, a big part of their, their business model is that they share most of the, the NIM. Like, also, like, Paxos USDG serves most of the NIM with, uh, you know, the end user, the end customer, or the protocol. And so, yeah, so they get paid to come on, but part of that is incentives, and then they're all giving incentives to to, um, you know, the end user, the end— the retail customer.

I see Jason looking at his, um— I'm calling the Uber.

I gotta be in Midtown in about 20 minutes.

That's all right, man, we'll keep rolling.

I mean, you're basically going your way out anyways, right?

Yeah, thanks for the guest spot.

We'll make this a live stream.

We're gonna be here for the next 24 hours.

I gotta call. I— you know what I was just looking at is Revolut is raising at a $75 billion secondary. Is that $45? And, um, did you buy some?

I'm thinking about it. I think they've done some really good stuff.

Yeah. Great business. I don't know.

The $45 billion was last year. No, no, no, no, no. Oh, you're seeing it right now?

Secondary. Primary is at $75. Secondary, mostly employees are selling at $40. There's a, there's a big discount.

So the mark is $100, the important number is $150 billion. So their founder did the deal, a deal very similar to what Elon did, which is he like doesn't get paid that much or something like that until they hit $150 billion valuation. Very ballsy. I'd play them.

Shit. Maybe we should do that for, uh, for inversion.

Yeah. Until we're 100%. It's great. You get like an extra like 10%.

If we're the largest chain, then like, you know, you unlock like certain, that's a great structure actually.

Yeah.

I like that a lot. All right.

That's the pod. We're off the record here. All right. You guys can keep going.

I'm outta here. On background.

Uh, by the way, content recommend, recommend. Recommendation. I'm listening to, um, there's a guy Barry Diller.

Yeah.

Oh yeah, yeah, I'm reading, uh, I'm actually almost done with Barry Diller's book. Um, crazy. If you guys, if people are interested in— so Barry Diller was, he launched Fox, uh, TV network, he launched like ABC Movie of the Week, he was CEO of Paramount, he now runs IAC, which owns Expedia, basically owns all the dating apps, Tinder, Hinge, all those things, uh, Match Group. So anyways, good, good, just memoir, Barry Diller's book. But the thing was he was gay at a time when you can't, it was tough to be gay. So it was a very good memoir. It's called Who Knew? Who Knew? Yeah.

I have two. No surprise, Founders Podcast, I love. That's right. Two really recent episodes that are big, amazing. The Ferrero Rocher founder, Michele Ferrero. Amazing. Amazing story. The second one is the Michelin brothers. Like the Michelin tires.

Oh, interesting. Unreal story. Did it talk about how the tires became the restaurant guide of the world? Yeah, yeah.

Like the Michelin Guide and how they went about like the marketing genius behind it. Like the Tour de France going on right now. Like it was started by L'Auto, which is a newspaper. Guess who owned the newspaper? The Michelin brothers. Why'd they own it? Because, you know, for them it was like getting people to move because they wear out the tires and they sell more tires. Own the pipes, own the media, baby. And now I just recently just started listening to Shane Parrish. I mean, great newsletter. He has, there's a podcast on Anna, you know this, the Condé Nast. Anna Wintour? Yeah. Amazing, amazing. I mean, she's just an absolute savage.

Yeah. She's a savage. She's just like, yeah.

All right. I'll end with one since I really like fumbled this last time.

I was gonna say, yeah. Rob's getting better. He didn't have a good, I didn't listen to the—

He came prepared. He really wants a job. Rob, are you looking at an outfit?

Well, I like my Rob earlier in the episode was like, I read a really good piece on stablecoins. I wrote it. Content recommendation, my piece.

Yeah, no, uh, so I'm re-reading a book called House of Leaves, which is my favorite kind of sci-fi, like, horror book that I've ever read. Um, it is like a descent into madness. It's more lighthearted than, you know, all of this stuff that we've talked about, but if you want a weekend read, you know, you're on the Hamptons, right?

Like, this is the book.

Are you gonna have this weekend? Uh, next weekend.

Look at this shirt. I mean, he's ready.

He's ready. Capri or the Hamptons?

You're invited though.

Oh, thank you. You know, I'm flying out tomorrow.

Like, yeah, it's like, you know, the person's leaving, you're invited. You're invited. All right, folks, thanks for listening. Have a great rest of the Friday, great Saturday. We will see you next week.

All right, thanks, guys.

Cheers, everyone.