Animal Spirits Podcast - Starting a Crypto Hedge Fund

Episode Date: February 19, 2022

On today's show we spoke with Leigh Drogen from Starkiller Capital about starting a crypto hedge fund. Find complete shownotes on our blogs...  Ben Carlson’s A Wealth of Common Sense  Michael Batnick’s The Irrelevant Investor  Like us on Facebook  And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.    Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain position, and the securities discussed in this podcast.

We're joined today by Lee Drogan. Lee is the founding GP and CIO at Star Killer Capital. Lee, thank you for joining us today. Thanks for having me, guys. There's like that stat that there's more hedge funds and Taco Bells. How many crypto hedge funds are there? It's got to be fairly small but growing. I mean, are you counting basically all of the kids who just got lucky holding Bitcoin

from like 12 to 15 and then raised 100 million bucks because well, who knows why. I mean, if you're counting them, there's a lot. If you're not counting them, there's not too many. So you've worked with traditional hedge funds in the past and seen that, and I guess mainly long, short funds. What was it about this space that you said, all right, I've taken this traditional public equity knowledge and I'm going to apply it to this space? What decided for you to make that jump in? Why was the time rate for this now? I started investing in Bitcoin back in 13, more so in 15. And the original thesis was that this stuff was just religious prostitization as a financial asset.

Like if you could own a digital religion, would you want to? Yes, absolutely. But that kind of changed in early 17 for two reasons. One, Ethereum really got going. So it seemed like there was going to be very real utility in this space, very real technology and economic disruption. But the other probably more important thing was I had sat down with a friend who runs a pretty large quantitative asset manager in the equity space. And we looked at applying the classic CTA style trend following and momentum models to crypto, basically to see if we could limit the drawdowns in this market, which can be incredibly significant given the whole market's basically just a series of bubbles one after another. And then if you knew nothing about these assets fundamentally,

could you do asset selection with a cross-sectional momentum model? And both of those worked incredibly well, way better than we even expected. I actually wanted to start Star Killer Capital back in 2017, but obviously my commitment to Estimized wouldn't allow me to do that. Fast forward, those models all worked incredibly well from 17 through now out of sample. And when Estimized was acquired, I got the opportunity to finally go do this. And I guess the basic premise here is that Until the overall growth rate of this asset class slows below some number, we're not quite sure exactly what it is, but we're growing at a 200% Kager right now. That can't last forever.

But maybe until it slows below 80% or 70% per year, those momentum models are just going to continue to crush it and produce a ton of alpha. And so we think there's like a five to seven year really fat pitch window here where a strategic beta crypto long bias strategy is going to be incredibly efficient. So before we get into the strategy and we're definitely going to get into it, I'm curious to know what the process was like. What was the appetite from LPs going out to them? Were they waiting for this or are they still skeptical? What was that reception like? I think most LPs, whether it's large institutions, family offices or even high net worth,

I think they're still focused somewhat on the crypto venture space. And the reason is because they don't want to look at the vol. There's a lot of vol in this market. And going back to my kind of intellectual professional hero, Cliff Asniss from AQR, I don't know if you guys remember that paper that he wrote on private equity alpha and whether it's behavioral alpha because you can't touch the wall. And I think they're still thinking about this market in that way, where if we give somebody money for seven or ten years, we just don't look at it, then we don't

have to deal with looking at the VAL and everything's peachy. Well, I mean, at some level that is true, as Cliff has kind of written. I think they're getting more comfortable with the concept of liquidly traded, risk managed, strategic beta, or even long short, straight alpha. But we're still early there. So was raising money harder than you thought it would be? And we were talking about bet and I about putting some money in here and we felt just slightly short of your minimums and Ben and I were laughing after we hung up with you when we spoke about like there was a big gap of what we were thinking about in fasting it was like I wish the curb your enthusiasm music came on it was fucking perfect I'd say there's a set of individuals who have become crypto rich

who definitely want some level of risk management and asset selection beyond what they're doing themselves. And then there are definitely family offices who want exposure, want more exposure, already have exposure. On those two fronts, I think it was exactly as we kind of expected. On the institutional front, I think we were probably reasonable enough in our expectations of setting them low. But they're coming. Those conversations are being had now after we've been running since early October, and it may take another couple of quarters, but they'll get there. When you talk about the trend momentum stuff working here, is that more because these markets

are so new or because of the opportunity set or both? Like, why is it so exciting to you and using those models in this space? So here's the basic thesis. There is no intrinsic value to any of these assets, and I don't mean that in a pejorative sense. I mean it like, in every other asset class, we've basically come to some reasonable agreement on how to value things within some reasonable range. Apple's not going to trade it five times earnings. It's also not going to trade it 100 times earnings.

And there's a buyer of last resort and kind of a seller of last resort at the ends of a reasonable spectrum. In crypto, this doesn't exist. And the reason it doesn't exist is because this is the first global asset class that is investable by the entire world permissionlessly. And what's happening is we're basically pulling forward massive assumptions of future growth from the future many, many, many years out into the present. And in a lot of ways, that's a very rational perspective because there's never been a technology

that is as disruptive as this on a global scale. And so people don't know how fast it's going to go, how broad it'll be, which one of these protocols or chains is going to win, whether any of them will win long term. And so what you basically get is something can go from being worth $400 million to being worth $7 billion and then back to $200 million in a year. And that's a totally rational perspective from the market because our discounting of future growth and whatever else is changing every day. And the reason the momentum models work so well here is because it's all just a bunch of bubble.

and I don't think that's going to stop even with the entrant of more institutions into the market because it's really about the assets. It's not about the capital. Before we talk about the momentum and the time frame and like the security selection and getting rid of the frauds because we're definitely interested in that, what sort of risk management are you taught? Like ideally, you won't have more than a what percent drawdown if you could control it. 30 percent.

So we're a strategic beta book. So we're a long biased book. We want to be invested long. term, we believe in the growth of the asset class. The typical drawdown cycle in this market is about 75%, if you take into consideration all the big ones and smaller ones. I don't think that's going to moderate. You can't have the type of growth that this market is exhibiting without the associated vault. It's not mathematically impossible, but it would break every norm, every mold that we've ever seen in finance, in financial markets historically.

So if we can limit this to a 30% drawdown using a mix of these mid and long horizon, momentum and trend models and shorter term mean reversion models, what we're able to do is preserve capital during these big drawdowns, preserve emotional capital so that we don't get chopped up in these big bare markets. And then we can take stabs at the bottom or we can wait for those momentum models to kind of flip over and be a part of it. So that 30% drawdown for any normal book is massive. But for crypto, given the upside and the amount of volume you have to deal with, we think it's a pretty good risk reward versus the potential gains. I'll go on record and say that I think that a 75% drawdown in Bitcoin is less likely today than it was in the past,

maybe 75% for the entire crypto universe is still possible because some of the shit coins could disappear. I don't know where I'm at in terms of levels. Like I definitely think 50% will never get off the table for any asset class that's risky. Like you can never eliminate the 50%. But I feel like the 75% is less likely only because we still have so much institutional money only begun to come in. So I think that'll put a floor and the floor might be 55 or 60%.

And maybe we're splitting hairs here. But what do you think about the big money coming in and limiting the floor to say 55 or 60 versus 75 because the difference between 60 and 75, it's not 15%. It's big. I generally agree. I think Bitcoin will become less volatile than the overall crypto market over time. It already has become less volatile. It used to be a like 130 vol asset. Now it's an 80 vol asset. So it's starting. And the length of these bear markets will also probably compress. The length of the bull markets will also probably compress as well as the overall growth comes down. The overall crypto market, though, I don't think so. I think we're still

going to have these 80, 90% drawdowns in the rest of the long tail of coins. Even though I don't necessarily believe that the full long tail of those coins are shit coins, I think there's a lot of value in some of them. The problem is there's a lot of not value in a lot of them too. I want to get into all the stuff of how you run the fund in terms of risk management position sizing. But I just want to hear your take because you're not one of these crazy Bitcoin libertarian people or something that think this is going to change the world and solve world hunger. But we've been following you for a while. You're bullish on this space. And what are you so bullish about? Is it the defy stuff? Is it just that because it's all digital and its technology that's going to

take over? What has you so excited about this space? I'm a little bit of a redheaded stepchild for the crypto community here because I just don't believe in the core of what a lot of these people do. I think the Fed does a great job. I think you have to deal with two or three percent inflation and put your money in risk assets or else it deserves to be inflated away. Like that's the society we live in. That's the social contract that we built that says you can't have your money sitting in a mattress. It's not fair.

It's not the way that we do this. And so I think the Fed does a great job. I think you have to have inflation. And I think the American dollar is the best export of our country that we've ever had. It's the thing that allows us to do all of these. things that we do. You're going to get blackball from every crypto conference. I know. I guarantee you Michael Saylor will never talk to me and I'm fine with that. So I just don't believe in all that stuff. I also, I'm not a privacy freak. I don't think that the government is, I don't think any of

that is the real thing here. I also don't think that we're ever going to have one world reserve currency. It's not possible. You have to denominate your currency for the local price of goods. It's just, it's not possible. It's a pipe dream. What I do believe in is the fact that a bank is basically taking 300 bips for sitting in the middle of your transaction, basically just simply to be a regulated entity at this point. That's it. That's the only thing that they're there for. They're not there to manage risk. They're not there to like the pipes are terrible.

The pipes are what, 60, 70 years old at this point. Crypto and specifically defy, allows us to cut out. middlemen and if you can cut out 300 bips from every borrow and lend transaction here's what happens the whole economy gets more efficient more money goes to where it needs to go more money goes to the average person it doesn't go to jp morgan the other thing is more broadly if you step up a couple thousand feet the history of economic growth is the history of leverage it's the history of debt The more debt you can put into an economy, the faster you can grow. And what crypto allows us to do is make everything transparent, every transaction transparent, all the debt transparent.

If you make everything transparent, you can lever up more. You can spread that risk out. You can use more interesting derivatives to spread that risk out. It's going to take a while, obviously. These things are not scalable yet. There's a lot of trust to be built. But I think we're on the precipice of the next step in being able to lever up the economy. And that should produce just massive future economic growth globally.

That was awesome. Thank you for that. I heard you on Meb's podcast a few months back. And you said, eliminate fraud, investment momentum. Let's talk about that first part. How do we know that we're not investing in things that are about to get rugged? So there's a couple of different ways. We actually read the code of these things.

We read the audits of the code. as well. If you look at most of the rugs, they were actually pretty obvious. Now, most of the rugs are smaller in nature, but they were pretty obvious. There are specific things that you can put into these protocols, into the code, that just allowed people to rug you. And there are several different services that will audit the code and look at these things as well. There's one called rugdoc, rugdoc.io. So we look at all of these different resources. And then, we read the code. And so when we're liquidity mining or farming, basically providing liquidity to one of these protocols, if we're putting a bunch of money into it, we better know what's in that code

because that's basically your counterparty risk. That's one way. The other way is, and this comes up with what happened a couple weeks ago with the ETH Solano wormhole hack, the owners of that protocol are jump capital. And they made somewhere between, based on who you talk to, six and eight billion dollars last year in their crypto book. So if you are providing liquidity to the East Salana Wormhole and you know that they are your counterparty, well, if the thing gets hacked, which it did, they're going to plug the hole. And they did. They plugged a $350 million hole. So just like any other major transaction that a financial institution is doing, you better know your counterparty. And in some cases, you better position size relative to the fact that they're not

reputable. And in other cases like this, you probably don't worry about the fact that if wormhole gets hacked, you're going to lose money. That's the big risk people see is that like this stuff is also new and if I get hacked, aren't more centralized places like Coinbase or BlockFi? If something happened to them ever, wouldn't they have to shore up the capital? Otherwise, they would just go out of business, wouldn't they? They would be run in the bank. So I was talking about DFI there. In terms of CFI, it's even more so. At this point, if FTX, Coinbase, Crackin, there's a couple others that I would trust to do this. If they got hacked, they're just immediately going to sell stock and plug that hole. They're going to make you whole or their business is gone. They have to, right?

They have to. Yeah. And so whereas in the earlier years of crypto, leaving money or coins on a CFI exchange was a terrible idea. And you paid dearly for it in many, many hacks. And they didn't reimburse you because they didn't have the capital or the ability to raise the capital to plug that hole. Today, if one of these guys get tacked, yeah, they're plugging it. In terms of building a portfolio, how does that work? How do you position size and then we can start talking about the signals timeframe? What does that all look like? We're actually having this conversation at our research meeting last night.

The thing about crypto is the coins are not all correlated to the things that you think they might be. in equity markets, if you look at correlations amongst Gix industry groups, they're pretty high. And the Gix industry groups are pretty good for the most part there. So wait, Lee, what do you mean? Like Exxon and Chevron move together, that type of thing? Yeah, like Exxon and Chevron will move together. The arc names that are all basically gross SaaS names are going to move together, etc. So in crypto, if you kind of looked at it like that at face value, you would assume that you would go kind of on a thematic basis.

all the level ones, all the level twos, all the metaverse stuff, all the gaming stuff, all the infrastructure stuff would all move together. They don't, that's not the way it works. The way it actually works more so is underneath each level one token, there's an ecosystem of tokens. And those ecosystem of tokens tend to be more correlated to the L1 than they tend to be correlated to like,

this is a lending protocol and it's correlated to all the other lending protocols on ETH, avalanche, Solana, and whatever else. So at the first step, you just have to understand how the market moves. It tends to move in these kind of adoption cycles of a chain, and the stuff that's on that chain will be highly correlated to it. So we don't want to misjudge the type of beta that we're holding at any given time. And even though it might look like we've got a metaverse play, a lending protocol, an L1,

an infrastructure thing, and a bunch of other stuff, and that were diversified. We may not be because it's all on ETH or it's all on Avalanche. So that's the first thing is we don't want to be, let's say, 70 or 80% exposed to one specific beta. We want some level of diversification here. So we look at that. The second thing that we do is we run these cross-sectional momentum models and we run them in these groups. And we try and understand what's working over a specific horizon and what's not. specifically for us, we're looking back for asset selection, not risk management, but asset selection.

We're looking back at kind of a one-month cross-sectional momentum horizon, and we're looking out to predict somewhere in the like three-month range. And that tends to work pretty well. And so we're looking for the right tails of these adoption cycles for the individual protocols or coins or whatever the hell you want to call them, securities, which they are. Let's not mistake that. And we're trying to ride these adoption cycles because they don't go up 30, 40, 50 percent. When these things are adopted, they go up 5, 6, 7, 8, 9, 10x.

And that's where on the risk management side, we end up on a position level using these trend following models, classic kind of don't chain channel type models, which keep us in these trades until the momentum wanes. And those position sizes can go from being two, three, four percent positions to be. being 10, 12, 15% positions. And we don't cut them back until that momentum really wanes. And then you want to be out of there because these things can revert. They can give back half in a blink of an eye. So, Lee, this is more momentum and less trend because if something I'm drawn with my

hand, if something is going up like this and then it sort of starts to plateau and lose the momentum, you will bail potentially before it breaks trend. On an individual position level, yes, the macro market cycle, no. We operate very differently between those two things. So you're doing like relative and absolute, basically. Yes. How much of this is automated versus discretionary? We run it as a quantum mental book.

So the factor models come into a dashboard and then the humans. I'm the CIO and the PM for our kind of beta exposed book. And then we have a defy yield portfolio manager. But the humans have to listen to the models. And if they don't listen to the models, both on the broad beta exposure that we're supposed to have it in any given time or the asset selection, then the models are useless. Is that yield stuff more for when you're in a downtrend and you get out of this stuff? Because you had that interview with Fortune and you talked about when stuff goes down and

we get out, it's not like you're going to cash. You're also going into some stable coins and maybe doing some staking. Is that what you're trying to do when nothing's going on in an uptrend? So here's an interesting thing about crypto. So classic kind of risk parity. In order to want to be long equities, your models have to signal that the expected return is above X. In crypto, that expected return from sitting in cash is not 2%.

It's 20% because you can farm stable coins. And so what happens is for us to want to be long, we have to believe that over the next whatever time horizon, we're going to make more money by being long than we're going to be in stable coins. So when the macro trend of the market, and it's basically a blending of the eaves, and Bitcoin overall momentum, when that wanes and our models say you need to take the beta exposure of the book down, yeah, we basically first will hedge and then when those models

really roll over, we will go to cash completely. And when I say cash, yeah, I mean stablecoin farming where we're earning anywhere between 20 and 35 percent. I think today our APR on our book right now is about 36 percent. So there's a lot of yield and stable coins right now. And that allows us to do two things. One is be a little bit looser with the risk management on the way up so that we can stay in that primary market trend. And two, I think this is more important. It allows us to preserve emotional capital during these bare markets so that we can be patient and not have to chase each really high ball rally, which is why they say if bare markets don't scare you out, they'll wear you out, we just really don't want to get worn out because we have no idea how long

this could last. Lee, can we talk about stable coins? I'm curious to get your view. Most people aren't doing what you're doing, whether they're in Ave are one of these protocols and they're doing all their due diligence. They just don't have the time or expertise. So I have money in GUSD. I guess I'm earning 8.5% whatever. Ben's got money at BlockFi. I can't.

I'm in the state of New York. And yeah, I know it's ridiculous. I'm comfortable with the risks associated with what's going on. Can you maybe explain to the layman, A, how these deals are generated. And B, I want to hear your view on regulation. My two sense is that regulators are rightfully worried that this is like, a gateway into crypto, if more money leaves money market funds. Not that this could be a one on money market funds, but that these stable coins earning 8 and a half percent or a gateway

into crypto. What are your thoughts on those two things? It absolutely is a gateway into crypto. Frankly, again, my libertarian peers would disagree with this. But I think stable coins might be the ultimate feature of crypto at the end of the day. What's better than giving everybody around the world the ability to hold U.S. dollars. Everybody wants to hold U.S. dollars. I think it might be the ultimate feature. So where does the yield come from? So the yield mostly comes from people who want leverage or that want to borrow. And even though this market is much more efficient in that there is no middleman, everybody knows that the risk is still relatively high. And so think about all those people around the world that can't go to a bank and just take out a loan at 4% from JPM.

and they don't have the kind of capital that would allow you to do that, anybody can go and get this now. And so those yields are going to continue to be relatively high. The other reason that the yields on stable coin farming are high, and it's not just the lending, now I'm talking about like the stable coin pair farming is if you want to move from one stable coin to another, you've got to pay a tiny fee. but those fees in aggregate are massive because there's tens of billions of dollars being moved across these stable coins from one into another all the time right now alameda is trying to get the hell out of magic internet money which was part of this i'm not going to go into the whole

thing but they're trying to get out of magic internet money which is a algorithmic stable coin and they're trying to move into other stable coins and they're trying to move billions of dollars out of this thing, and they're going to have to pay a little fee. And if you provide the liquidity for that pair, you get a little piece of it. So you had a quote in Jason Zweig's piece about creating an index of this stuff. And obviously, it's kind of a similar position that you're in as far as position sizing goes, because you have to make some decisions. We did this. We tried to create our own index. And it's not easy. You mentioned it. You have the stable coins. If you just took the top 10, you have stable coins, you have ripple, you have the shit coins. Yeah, the meme coin. Like,

it's hard to know what to do. So there have to be decisions made. How do you think about that process of people trying to get beta here? How hard is that really to do? I don't think there's any great solution here. And the main reason, let's put aside the user experience of defy index coins, which will melt your brain if you attempt to actually go and grab one or how they're created. Put aside all that. The actual index creation is really hard because we're not dealing with a of assets that has limited turnover. The turnover here is huge. The top 10 coins, there's only two of them left from 2017.

So I think the difficult part is if you're going to actually put some effort and brains into the construction of one of these indices, you have to get really active with it. And if you have to get really active with it, then you have to consistently be very active with it. You can't just be active with it one time. And the more active you are with an index creation, the more you are basically just running a momentum book. And at that point, is your index provider really doing a good job. Where are you custodying? Technically, our custodian is Coinbase.

But as everybody knows, there is no such thing as custody in Defi. It's an antithetical concept to everything. So whereas we may trade on CFI exchanges like FTX and Coinbase. And we may do 60, 70% of our trading there. At the end of the day, we move everything back onto the chain to mine and farm it once we hold that beta. And so at any given time, 90 to 100% of our assets are being held on chain. And we obviously use a mix of hardware wallets and UBKs and like our OPSEC is very sophisticated and significant. But at the end of the day, there's no such thing as a custodian.

in this space. How difficult was like the legal work? Like when you're getting this star killer capital set up, how hard was it finding a lawyer that was like well versed in these things? Because it's still relatively new. There's actually a couple of really good law firms that have done this multiple times. They understand all of the things that need to go into these docs to make it kosher. The LPs that are used to investing in certain funds, they are familiar with these law firms, mostly they're familiar with a couple, and there's really only two fund admins that do this stuff. But even so, we have had to basically teach our admin how to account for rewards, tokens, and yield and all the stuff on chain, because we're fortunately

and unfortunately at the bleeding edge of this stuff. We have to teach some of our providers how to do that. You talked about how you brought in some family office clients, and then you that to crypto people. Those people are probably more forward to thinking about this stuff. Did you talk to any big institutions like endowments or foundations? And where do they stand in this? Because my experience with that group is they're not going to make a move here until all the other foundations and endowments do. And I don't know how those places wrap their head around that self-custody thing in Defi. And from a risk aversion perspective, how are those places thinking about this? I think the most difficult part for them is deciding where these things

fit in terms of what bucket they're in. Venture fits in the venture bucket. And it just happens to be crypto asset class. Okay, great, that's easy. Long short crypto fits in the long short equity bucket. And that's fine, although it might have more vol. And returns are going to be higher for sure. So that's great. Classic arbitrage stuff is going to have arb-like characteristics in return. So, okay, that's not that hard either. The more difficult one for them is the beta. I don't think they yet quite know where to put that kind of strategic beta, because while the returns are significantly more convex than equity markets, I don't know how comfortable they are with the amount of all and the drawdown levels that you have to be able to take.

And I don't think that they're bought in yet to the fundamental long-term thesis. I think that's still yet to come. But that said, we are aware that some of them that we're talking to, they've already from a committee level decided that they're going to put 3, 4% of their whole book into crypto in one way or the other. That doesn't mean they're going to put it into crypto beta. It just means it's going to go into crypto. And right now, that means more high, sharp, low vol stuff. But I think it's coming that they will come around to being like, okay, we need access to the beta. Lee, I don't know if you could answer this. Is Star Killer Capital, like this is not a venture fund where you raise

money, you close? Is it a Star Killer Capital still open for business from new investors? I can answer that legally, yeah. Okay, blink twice. All right, we can't answer that. Sorry, but we can't answer it. In one of your pieces, you mentioned, and you have a blog on your website, that this is still like a seed or series A investment in a lot of ways, and it's liquid. And it's so early, and this is still an experiment.

And everyone keeps looking like, let's fast forward and see the real world application. Do you think that real world application is literally just making the finance system run better and smoother, like making the exchanges better and easier to use and cheaper? Is that just going to be the real application that it's the financial system and not an app or something, like a new Facebook or something people are looking for on their phone? No, I think it's everything. I think this is going to rewrite the value transfer framework for basically everything that we do. Here's kind of the thesis.

We're basically investing in experiments at this point. None of these chains is scalable. None of them have proven that they can be scalable. Solana goes down all the time. Even the biggest ones, ETH is fundamentally broken right now, for sure. nobody knew is going to pay a $200 gas fee. It's just broken. So what we're basically investing in is, yeah, Series A to Series C venture experiments.

It just happens that they're liquid. The other really interesting thing about this market that you really have to take into consideration is that unlike a venture-backed company, this stuff is liquid for the founders when the token goes up onto even a defy exchange. And so they can just dump tokens. Now, there's some game theory associated with the fact that they may not want to do that, but you have to take into consideration that if the valuation of these things goes through the roof immediately, like looks rare did versus opency, kind of the defy Dow equivalent of opency,

if that thing is going to be worth $3 billion, of course I'm going to be dumping on the market if I'm a founder. I would be an idiot not to. And as an investor, you have to take that into consideration, which is why I think the momentum models work really well. The other thing that's going on is it's not just defy. When you look at basically anything that needs the incentive structure to bootstrap a network effect, I think it's much better to hand out equity, which is what this stuff is, to the users of your network to incent them to grow the network, than it is to raise a ton of money from these.

and then blow it all on advertising or subsidization of like Uber did for a decade. I think this is just a better model. And I think it's going to rewrite basically everything. If you look at, I think helium is an incredible project. Verizon is what, $100 billion company, maybe $200 billion, something like that. Helium's worth $5 billion right now. And it's totally possible that helium ends up with this incentive structure of owning equity in the network in return for participating.

dissipating in it, that they blow the doors off of this and end up being even more massive than Verizon. This is so much fun. We could talk to you for another eight hours. I know the market moves fast. I know you got to get back to your screen. Thank you so much for coming on today. This is awesome. Thanks, guys. Thank you.