On The Brink with Castle Island - Huf Haus (Pear Protocol) on Trading Strategies Across Crypto Cycles (EP.655)

Episode Date: August 13, 2025

We sit down with Huf Haus, founder of Pear Protocol. In this episode:  What pair trading is, the benefits of Pear trading, and different strategies How to approach different market regimes from a trader's perspective Applying trading strategies to other asset classes

Today, I sat down with Huff House, the founder of Pair Protocol. Pair is a DFI product that allows users to pair trade crypto assets, that is to simultaneously take a long position on one asset and a short position on another, with the option to use leverage. In an industry where market-wide valuations still tend towards periodic, drastic swings, pair lets users take views on assets on a relative basis, a powerful tool when the broader market can fluctuate. Huff comes from a background in traditional financial markets with a focus on trading in equity markets

and is exceptionally thoughtful when it comes to financial systems. Over recent months, I've had the privilege of getting to know Huff and the paired team better and July 28th marked the public announcement of their strategic financing, which are firm led. Without further ado, it's my pleasure to share my conversation with Huff. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guest and host may maintain positions in the assets discussed in this podcast.

You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group,

AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. Huff, thanks for coming on the podcast. It's a pleasure to chat with you.

To kick off, congratulations on a huge week between the fundraise announcement and you guys. being more public with the hyperliquid direction now. Thank you. It's definitely been an exciting week, and I found that I tried to go to bed and my brain is just firing with thousands of different thoughts that are going on. But it's been an exciting week.

The launch was smooth, and we're very glad to be out in the public domain and anybody to use the product. Can you speak to the product and why you decided to build this at first and what it does? So maybe starting with a little bit of my background. I'm a trader by background.

I worked on the trading floor at Deutsche after I graduated when I was 21 years old, and I did that for a good eight, nine years of my life. I was on the derivatives trading desk, equity derivatives in particular, and got a real deep insight into how financial markets work from that perspective. I then stumbled into crypto and ended up managing money for some people. And when I was doing that, we were doing two strategies. So we were selling vol, which was my bread and butter, and I was delta hedging it. And we were pair trading. So pair trading is this concept where you long one asset and short another. against it at the same time. And the reason why you'd want to do that is so you have some pseudo-market

neutral exposure. So to think of the equities world, you might see someone be long Tesla and short Ford. They don't care what the NASDAQ does, whether the NASDA goes up, down or sideways. They just care that Tesla outperforms Ford on the way up or the way down. In traditional markets are most of those trades between somewhat correlated or localized positions to your point? Or will you see ones that are a little bit more exotic in pairing as well. You see a wide spectrum. So typically intersects with high correlation and looking for some relative value play. That's the domain of thematic long short funds, I would say, and then long short hedge funds. But you also see people do statistical arbitrage and they'll see two assets which are deviating from some long term mean and they don't necessarily

have to be in the same sector as well. And then you get pure narrative plays. I want to be long health care and short defense or something or vice versa. Are these done via contracts mostly, or what is the vehicle in traditional markets? So in traditional finance, the way I understood it a few years ago is typically it's all done largely through funds and hedge funds. They would come to the prime brokerage desk at a bank like Deutsche. There would be an ISDA or CSA in place, and everything will be done on margin. So typically some degree of leverage, and it would all be futures based or with some degree

of capital being borrowed against it. Obviously, you have a borrow leg, so you're sourcing a short from the repo desk. and then you have a long leg as well. So very gated, if you will. It was very much a hedge fund strategy. Your average retail guy couldn't access pair trading if they tried because finding the short leg is tough.

So that was my experience of that. I also, when I was on the desk, was part of this wave towards even the pension schemes and things allocating to long short strategies. So factor based investing, value, quality, et cetera, and having a basket of longs and shorts, which systematically rebalance. Makes sense.

Not to derail you. So you'd seen that, market structure. So I'd seen that market structure before and we were doing this in the crypto fund, so selling vol and doing some pair trading. So pair trading, this concept of long short, how it looked in crypto was at the time, if you remember, the Ethereum merge was happening. And there was this huge reprice of Ethereum Classic, which didn't make that much sense,

and a huge deviation from any long-term mean between ETH and ETH Classic. So we didn't want to outright short ETC because it could keep going up. So we did a pair trade where we longed ETH and we shorted Ethereum Classic and we we balanced the trade periodically. And we did really well out of that. We also had another trade when all the FTX stuff was happening. We shorted Solana and then we just longed another layer one against it. So we picked Atom at the time. We just thought somebody is going to win market share from Salana in the midst of all of this. So we did an Atom sole trade. And if you cast your mind back to this and this may answer your question as to why did we decide to build pair, which is

a dedicated platform for pair trading crypto. It's back then four or five years ago. I had to go on to Binance, open an individual long, then open another chart, open an individual short. I'd then go to Trading View and type ETH USDT over ETCUSDT and go chart it elsewhere. I'd have a separate spreadsheet on which I was looking at my net funding. And you can appreciate that this was a very clunky and manual process. And the same with regards to closing the trades, I'd go and I'd close one leg, put the size in and close it, and then the same. So much operational slippage in doing it this way. So the idea came to me, which is, I've been a trade all my life. I really would like to build something. So why don't I dog food this product? So together with a couple of people that

I'd worked with in crypto before, the genesis of Pair was built, which was let's build something where we're the users first. And I'm sure other people will want to use something like this. Yeah, I love the premise because I think in many ways, especially in crypto markets, it can be easier to potentially tell something to relatively mispriced than generally mispriced. And this simple example I used for this is I was having a dinner conversation last night where we were saying, I'd love to do something like this in sports, where if you think two teams, one has a 71% probability, the other is a 75% you think that's mispriced, you would take yes on both and just lever the difference there. And it feels similar in crypto terms. You're just deciding something

is relatively mispriced, particularly in a given category. I think so. And obviously, mispricing has a real-time probability attached to it, which is the market price. And the price is essentially a probability of where people think it's going to go. So I think you're right. There's some real parallels between Tradfai, some real parallels between sports betting. And I think where I'd like to go with that point is we get both types of users from pure narrative-based thematic traders, some of which are just pure retail. So we had people long trump and short millennia, or they were long thawl and short pump, or long bong and short pump, through to the more sophisticated trader who looks at fundamental valuations and says,

okay, I want to be long AVA and short compound, or I want to be long curve and short something else against it. And what does your user base look like today? Good question. So to date, we've been live just over a year. We initially deployed on Arbitrum, and we were integrated with GMX, Vertex and an intent-based solver. That user base was predominantly retail with a couple of professional retail users.

We see that in the average ticket size that people were trading and the degree of leverage that they were using, and also the assets that they were largely trading new listings and things in a relative value way. Now we have most recently integrated with Hyper Liquid and we've seen a slight mix in user profile. So a lot more professional retail traders taking views on things like Long Hype and Short Cardano or Long Hype, Short Soul, those kind of narrative trades. And if I look again at the size and the profile of those users, they're utilising some of the new features. So they're using limit orders. They're T-wopping into a pair trade. They're setting TPSL. So a little bit more.

more sophisticated. That said, one of our highest volume days was on the Pumpsall launch, so clearly leaves retail and narrative traders are there. And PIRPs seem like just the perfect vehicle for this sort of trading. So if I go back to the TadFai parallel, why does a hedge fund come to a prime broker to do this? It's because they might have 10 million of capital, but they want 300 million of exposure to this long short. And that's where the ISDAC comes in and this whole credit team, risk team, needing to have some initial margin and variation margin that they post against these trades. Ultimately, what does the investment bank and the prime broker do? They provide you capital and some degree of leverage. So when it comes to pair trading, somebody's not doing long,

hype, short, sole because they think they can make the 1% difference between the two. They're doing it so that they can lever that 10x, 20x, whatever it is. And so perps are really useful because of that embedded leverage. Also, the other thing with perps is when you're trading that hype soul, you might be paying funding to be long hype, but some of that funding cost is offset by being short-soul. And if the market is overall long, then you receive the funding on the short-soul leg. So net-net, what happens is you can use leverage, but your funding cost comes down a bit. And are you seeing an institutionalization of this strategy in crypto yet, or is it still Mason for that? I think so. I think the institutional mindset has been that

there's increasing dispersion in crypto, and that crypto-marking market. market structure has changed. So to give you an idea two years ago when I went around with a pitch deck and said, I want to do this fruit-themed pair trading platform, I had the door shut in my face by a lot of people just saying the market's too small, the tam is too small, nice niche product, maybe you'll get some users. So today where we have users flooding discord, wanting certain asset listings, wanting certain features, et cetera. And the extension of the professional retail users that we have is the liquid token funds that we speak to. So a handful of them trade on the platform. The feedback overwhelmingly from them is they want some of these more complex features,

they want baskets, they want covalation analysis, they want to look at beaters. And you can just tell the same liquid token funds and even a handful of VC funds that I spoke to two years ago where it's almost the same people. They're now coming to us being like, oh, it's really interesting you're doing this. Maybe I want to do some pair trades ourselves and how can we support you? It seems like in comparison to traditional markets, there should be more opportunity here because I was on the hedge fund side traditionally. There's a lot of efficiency in traditional markets, and mostly actors are institutional. Whereas in crypto markets, you have funny market maker behavior, you have a lot of retail

participation in the listing. So I would think there's actually a real gap. You look at some of these tokens are out 400% on centralized exchange listings. 100%. Crypto is great because it's not as efficient a market as traditional. financial finance and you have to really search quite hard to find true alpha in longshore in equities. And it's why so many swathes of people all across the East Coast, West Coast, London, Asia, etc. are focused on longshore thematic investing. In crypto, those mispricings can persist

for a long time. And you see it with certain alt coins which have elevated valuations. At some point, it would make sense and these things do mean revert to be long Bitcoin and short a basket of these alts. So those mispricings give you these opportunities to really phase and scale into those trades. The other thing is statistical arbitrage, this idea of looking at two assets and studying their long term, whether they're cointegrated, whether they're mean reverting from their long term spread, and finding opportunities to play that. There's just not as many sophisticated participants in crypto. So what we're focusing on next is to provide some of those signals to our users because the market is really rich with these inefficiencies to fill.

Are most of the participants on the platform putting on six hour, 24 hour, one week, one month trades, or what does most of it look like? And putting your pair trading hat on what videosyncrasies do you look like on what's look for on what timelines? The honest answer is our open interest is somewhat sticky. Average users tend to do swing trades. So they'll do things like ETHBTC or HypeSole and they'll have a three day plus horizon on how to trade that. But then what we do see is when the market dislocates and there are these opportunities to get into,

let's say there was a huge liquidation event on something like a fart coin. We do see people being like, okay, I'm going to go long fart coin here. Obviously being outright long memes is scary and I'm going to short doge or something against it. So we do see these shorter dated scalp trades, which are a bit more opportunistic in nature. And so really it varies. I'd say by nature pair trading is, and my own pair trading is designed for catching some kind of swing from it. daily to a weekly timeframe. But on any given day, there's so many opportunities and the narratives change every day as well, which is exciting, whether it's earlier this year with the whole AI

agent movement or whether it's with decentralized science or whether it's deep in. The capital rotation is real in crypto, and so the need to pick your long, short strategy is constantly evolving. And I imagine as a platform user, what you might want at a certain point is a notification there have been this many liquidations on Fartcoin or notification that there's an exchange listing on a given asset. Is that in the roadmap for you guys? Is that something that people ask for? Or maybe all these traders presumably have those setups already? Where does that factor into your guy's vision? So if you cast your mind back to January this year where we had the whole AI agent meta, there was a lot of generalized vapeware, or generalized agents rather. And they were just giving

really generic commentary. Like, oh, funding rates have done this, open interest who's doing this, Twitter mentions at X. And that had limited use case. But pair trading, there's a real use case for a specialized agent because you're right. You're having to constantly process information about liquidations, about token unlocks, about changes in funding situations. And then you have this statistical arbitrage thing, which is signaling when a mean reversion opportunity might exist like Pepe Doge or something. So we're building something called Agent Pear. Agent Pear is going to be a specialized agent just for pair trading. solve a real problem for existing users. We're going to start by solving the hardest problem, which is statistical arbitrage. So we've built an entire library that now maps the correlations,

the betas, the volatility of different assets to each other. And then it will send a signal to the front end whenever a trade idea comes up. So imagine your day-to-day trading on pair and you see a little pop-up coming the bottom right saying a mean reversion opportunity is available. That would then pop up and you could from the UI execute that trade. And we'll also have telegram alerts and Twitter alerts. So even if you're not on the app, you can get alerted to that. And then the extension of agent pair by solving the hardest problem first, the stat-up piece and getting the signals for that, is then adding all the more generic stuff from Coinglass APIs or Coin Geckos API or places like that. And also Tocononomist have an API so when token unlocks

are about to happen, et cetera. And that's really going to be the evolution of agent pair, which is it starts in a very specialized manner. And then we will have it not only signal-based, but conversational in nature as well. And I've said too much already, but this is going to be a large part of our rollout strategy over the next few weeks. And as this paradigm scales, if you take polymarket as an example, if you're looking at a market of Will Powell cut rates and there's $10,000 of interest, it's almost like the subscale nature that suggests there could be opportunity because you're like, who's betting on this, who has market intel? And I think that per trading some of these market idiosyncrasies is probably similar. You want to be. You want to

in before there's really mass participation, some of the traditional markets, that starts to iron out what you might call arbitrage or opportunity. Do you look at it that way? Do you think over time we arc towards, frankly, markets where it's less easy to profit here in a situation? I definitely think putting pair aside and just putting my trader hat on, the introduction of AI tooling is just going to make trading completely revolutionized trading. Because right now, the value out of trader is knowing context. So I can, as somebody who's traded crypto for a few years, I can go onto Toconomist and I can look at token unlock data and I can look at something like Velo and look how the market's positioned in terms of open interest and funding rates. And I can combine that

and say the story here is telling me that, yes, there's going to be unlocks, but the market is heavily positioned short into it. And I know from historical precedent that that can lead to a short squeeze, a bullish-unlocked scenario. But that reasoning I just went through, there's no reason why a model like an LLM can't be trained on that. Context A, context B, and some degree of reasoning, especially with historical precedent added in. So for me, I think markets are going to become incredibly more efficient over time, and you'll see something like a polymarket mispricing, be constant, not picked up by manual traders who are looking at it and sharing it in a telegram group or something, which is exactly what happened in this scenario. But rather, somebody's

AI assistant is just going to ping them and the rest of the time you can be in the car or in the park or something and be doing something else. That was part of the appeal of meme coins, I think, was the sheer chaos of a $10 million token or $5 million token with $50,000 of liquidity and the opportunity to make money fast or lose money quickly. And I think both exist. Everything I've talked about right now is a much more sophisticated way of trading, which is very informed and relies on some degree of analysis. But there is clear product. market fit for gambling. And people want to gamble. And the same generation of people, this Gen Z, 21 to 30 year old person, isn't going to go to a casino and spin a roulette machine.

They're not going to put themselves in that environment. What they are going to do is sit at home in their underpants and mess about on their phantom wallet or whatever. And so I do think you have to lean into that edge as well, which for us, what that looks like is you have to have at the point of these narratives form like Trump, Melania or Pompsoll or whatever, just be able to trade that with some degree of leverage and memeify it and gamify it. For example, we have custom backgrounds on our P&L cards, so you could go and trade ETHBCC and have a picture of Vitalik as your background, for example. This idea of gamifying gambling is definitely a huge thing.

Do you see your business as being highly cyclical? I make that point because I could see it doing quite well, particularly in market regimes where people feel highly uncertain about a potential broad market swing. So the worst market for me as a pair trader or someone trying to build a pair trading platform is when there's a raging bull market and everything's going up 20%. And obviously these days are few and far between, but on those days, it just makes sense to be long. I'm under no illusions. If that is what happens tomorrow and Bitcoin's at 200k and ether's at 5K, don't pair trade. Just be long and enjoy it. But I do think outside of that dynamic,

So environments where markets are consolidating, trading range bound, markets are going down or markets are going up in some traditional pattern. Pair trades exist. And so I wouldn't say it's countercyclical. I wouldn't say it's pro cyclical. Pair trading just works in most market scenarios. I'm under no illusion that the best market scenario is when people are wealthy and feel rich. So obviously, we want to be in a constructive market environment. You don't want a prolonged downturn because what's the fun in a whole bunch of people being long Bitcoin and short alts? Yeah, agreed. touched on funding rates, how do you look at the opportunities that you present to users?

Because it's quite expensive, as in particular to short, some of these assets that might have a lot of overhang, people have reason to believe that they're in the wrong direction. So do you steer users towards keeping that in mind? Or how do you think about it and how do you help users think about it? 100%. And I'd like to answer this question in the context of it is entirely possible for you to go to a centralized exchange or decentralized exchange, click one long and click one short. you are pair trading, no doubt.

But where pair has built this dedicated UIUX for pair trading, one of the things outside of charting and having a take profit and stop loss on the ratio and a handful of other things is funding. Because not only do we show the funding on the chart and both the current countdown of funding on an hour or eight hour basis. And what is funding? Maybe we should do a quick dive while we're here. Funding rate is what you pay essentially for your leverage.

So if you're leveraged long, then you are paying that funding rate to the other side. to the shorters to be in that position. So they have to be compensated for taking the other side and vice versa. So if the market is heavily shorted, you have to pay a huge funding rate to entice a long person to be on the other side. Now, we could get into a huge debate about what is a perpetual futures contract because that in itself is a big misleading thing, but I'll pause it there and just say, it's what you pay to borrow money. If tomorrow I was to go to my local loan shark and say, hey, I just got liquidazied on my whole portfolio, I need 100K, he's going to charge me some interest on that. And it's the same concept. If I go to a centralized exchange and it's users on the

other side and say, hey, I need to borrow $100,000 to get the exposure that I need, then there's going to be an interest rate attached to that. That interest rate, that borrow cost is the funding rate. Brilliant. Thank you. So how do you look at funding rates freezers? So funding rates are therefore very important when you're pair trading because you pay it typically on the long and you receive it typically on the short. So there's this concept of net funding and net funding is obviously one minus the other. So in some scenarios, the funding situation evens out to zero. In some scenarios, you actually get paid to be in that trade and in other scenarios you will be paying. So it's important to keep an eye on that. So on the UI in the charting module

itself, we have the net funding countdown where the next reset is and how much you'll be paying. We also show that as an annualized amount and then when your position is open, Nobody wants to be thinking in percentages and stuff. So we show you the dollar amount of net funding that you've paid or received on that position, just so you have a really clear overview of what's going on in that particular trade. And that's really important because you might think there are some trades which are just evergreen. I want to be long Bitcoin and I want to be short stark net. I want to keep this trade on forever.

The reality is you may end up eating hugely into your returns by paying for that short leg for any meaningful long period of time. And so having some way of having an overview of your funding situation at trade inception, having an overview of your funding on a periodic basis, and then the funding situation of that whole trade, that's basically one of the advantages we have. Made sense. Do you look at these becoming more complex in the sense of we've discussed longing one asset,

shorting one asset against the other. This could be a parlay structure too, where you have three and two, seven and seven. Where do you think this evolves? And do you guys want to get into, call it portfolio construction? Yes, is the short answer because there's user demand. And Pear is this fertile ground where we have loyal users that come to the platform and they tell us exactly what they want to use and see. So baskets has been overwhelmingly something that people want to do.

They want to, let's say, belong Bitcoin and then add a basket of three or four different things. Now, entering those basket trades is one thing. You can already do that on a hyperliquia. you can already do that on some of the order management systems. Where we really want to come in on the basket side of things is we want you to be able to monitor a chart of that basket trade. So a weighted chart of your Bitcoin alt's exposure and how is that going?

Some proxy P&L chart, but actually you could have different weightings and it could show you how that trade is going. We want you to be able to have a custom index price. So you entered it at 100 is now at 110 or whatever and recording that on the back end and bringing it to the front end when it comes. So for us, baskets isn't just about executing along and a whole bunch of shorts. It's about managing that trade throughout the life cycle of it and being able to really get an overview of what is performing well in this basket, what isn't performing so well, maybe even giving some suggestions together with agent pair on how to optimize that basket. There's a myriad of avenues you can go down, but yes, I think baskets in particular make total sense because the scariest thing with being long short is going to be on the short length.

You don't want to be long Bitcoin short something else, and then this meme coin pops 40%. If you can have a basket of shorts, you isolate yourself from that. So we always tell people with the platform today, if you're going to be long hype and short something else, then diversify your shortlegs. So do hype B&B, hype soul, hype Cardano, hype XRP, and just enter four or five different diversified short legs. Makes sense. And I've heard that as a feature of a lot of traditional hedge fund strategies as well. maybe more broadly beyond just pair trading, there's definitely been a trend understandably in crypto towards usage of EtherScan and Arkham

to look at what funds are doing, what with what holdings. And this really just goes to long spot, I would say, at the moment. In traditional markets you have reporting for these kind of things, hedge funds have to report the assets they hold. We start to get into a bit of a funny area when you have hedge funds that are putting on short positions on what could be a major layer one or a major token of another sort. do you think whether out of rules or out of expectation we should get to a point as an industry

where disclosures are made around that or it's readily apparent if a fund or if a large individual is, let's say, short a specific asset or a long specific asset in the context of perps or other vehicles or do you think that it makes sense where we're operating at the moment? So if I was running a large fund with a large position, let's say it was a large short, Obviously, you're quite vulnerable. Everybody has flashbacks to GameStop, but that's not the first time that somebody's public position has been somewhat hunted. And if I position myself in the boots of somebody like that, I would definitely rather obfuscate my position. I would much rather use the privacy layer or something to get into that trade or use a centralized exchange.

And what's interesting for Pear is there are teams like Silhouette on Hyper Liquid, where if and when Pear gets big enough, and we have these institutional users coming, we will have the option at some very small cost to obfuscate your flow. Because as an industry, philosophically speaking, I love the idea that everything's on chain and you can see everyone's positions and things. You're just going to cap your growth

if that becomes something that you're really focused on. Some people just don't want their positions, public and for a very good reason. I'm not overly familiar with silhouette, but how does a workflow like that work and be compliant? So I don't know either the specifics of it. I only know what their intention is. We did have a call with them recently and I think they're responding to this whole need of hyperliquid users that want to use and utilize size on the platform, but don't necessarily want it to be visible on chain, especially their liquidation prices and things like that. We saw it with this quite memeable James Wynn character, but I think their product innovation was being built on even before that character surfaced. It seems like Hyperliquids obviously made a splash in the crypto community as at Perps. I think it makes a lot of sense because it gives you the opportunity with Perps, with leverage,

to try and take advantage of what could be a small market movement, but your high conviction on it. Do you think this goes outside of crypto into other markets? It seems like potentially a great fit for equity markets, for prediction markets, for anything where you want to express a strong view, potentially a small change. It's important to note Hyperliquid didn't do anything particularly new. They just did it very well. And I would say what Hyperliquid is doing next is yes, they have HyperCore, which is the order book Westport and Perps trading takes place. But they're really working with front ends like Pear or with the mobile app like Dexari or they're working with partners like PVP and TelegramBots. And obviously Phantom most recently in the wallet. And they're really just trying to become liquidity venue where all of this takes place.

So with that in mind, the job isn't actually on Hyper Liquid itself. They should facilitate this as much as possible. It's really on the builders that are seeing the success of Hyper Liquid thinking, how can I bring this to new audiences or net new users of HyperCore, without them even knowing that they're using Hyper Liquid or even knowing what Hyper Liquid is. And I do think today already we live in a world where there is somebody who has executed a trade in somewhat meaningful size and they didn't know it was on Hyper Liquid. They become like a clearinghouse eventually.

It feels like a rematch of traditional markets. Exactly. And all the major market makers are there. And Hyperliquid didn't need to get into the game that DYDX and other CLOBs did, which was create these complex reward programs to incentivize them to provide two-way BBO. And they just don't need to do it. People make money-making spreads there. And liquidity begets liquidity.

So I think what Hyperliquid is doing is they've really opened up through builder codes and later through HyperEVM, the ability for different use cases. to face off to their clearinghouse. I'll ask one final question, which I want to cap our conversation on. Given what seems like a really interesting position therein, that they built a product that people originally used and now they're becoming a liquidity layer,

do you think that we will get some sort of major financial player that says, hold on, if there's a way we can do it, we should try and become a similar type of perps trading engine to sit underneath what could be a lot of asset classes functioning in this fashion if it would be approved from a regulatory perspective? Or do you think Hyperliquid has an insurmountable advantage at this point? We're already there. So the likes of someone like Coinbase launching 5x, 10x, perpetual futures to the US,

they're responding to clearly demand that's coming. I think Hyperliquid's moats is twofold. Number one, the fact that it's non-KYC. There are a huge sway of global users of these platforms that do not want to be. to KYC or cannot KYC for whatever reason. And I think that becomes part of its competitive moat, obviously attack vector at the same time. And then the second thing they have is they made their users rich. And they have a huge customer loyalty for that.

There was a massive wealth effect. And they've become big product evangelists. And myself, I'll be very candid. I didn't even get an hyperdrop myself. I wasn't really farming or trading there before. But I've slowly become loyal to the ecosystem. system. I'm building there and I'm doing my personal trading there and I'm seeing the growth tree of this and I think there's a lot of people of my profile that were late but not too late

and they're happy to pivot and Blockworks did this whole research piece about Pairs hyperliquid pivot I think I've done a personal pivot as well. Yeah, there are products that can get you like that. A lot of people were late to the meme coin trading but got into it and they weren't too late. Exactly. Hoff, thank you for joining us and incredibly excited for everything ahead. excited to be partnering with you guys and the support and conviction that you have in what we're building. Likewise. Thanks for listening to another episode of On the Brink with Castle Island.

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