The Breakdown - Crypto VC Is Not The Problem | The Breakdown

Episode Date: March 3, 2026

Are retail investors just exit liquidity? We unpack the token premium, forced price discovery, and what Ethereum and Tron data reveals about when fundamentals actually matter. Featuring insights from Haseeb Qureshi of Dragonfly. As always, remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely their opinions, not financial advice. – Follow Blockworks Research: https://x.com/blockworksres Follow Haseeb: https://x.com/hosseeb Follow David: https://x.com/dcanellis — Nexo is the premier digital wealth platform. Receive interest on your crypto, borrow against it without selling, and trade a range of assets. Now available in the U.S with 30 days of exclusive privileges. Get started at nexo.com/breakdown __ Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/ —-- Timestamps: (00:00) Introduction (01:26) Premium Economy (03:21) Same, But Different (04:59) Nexo Ad (05:27) DAS Promo (06:20) Price Is Like An Onion (11:18) Nexo Ad (12:07) Interview with Haseeb Qureshi - - Disclaimer: Nothing said on The Breakdown is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Host and guests may hold positions in the companies, funds, or projects discussed.

Crypto Venture is complicated. OpenX and you'll find two different stories being told at the same time. One paints CryptoVCs as the primary beneficiaries of everything that's wrong with the token economy. Buying early, buying cheap, and then dumping on retail at the first real liquidity event. The other says Venture is the only reason this industry exists in anything close to its current forms, as and all the rest. And both stories are in their own ways directionally correct. Early capital usually debts better prices. Many tokens did draw down hard after TGE's and, without

venture funding a lot of the rails people say that they want stable coin infrastructure custody compliance and payments plumbing gets much harder to build all of this we could stomach if crypto markets reliably priced coins based on fundamentals they don't at least not consistently and if this bear market really is a great repricing towards distribution and value capture that matters a lot for everyone's bags i'm your host david canellis this is the breakdown let's get to it this episode is brought to you by nexo step into a new era of digital wealth, earn interest on your digital assets, borrow against them without selling and trade all in one platform. Get started at necto.com slash breakdown. Nothing said on the breakdown is a recommendation

to buy or sell securities or tokens. This podcast is for informational purposes only and any views expressed by anyone on the show are opinions, not financial advice. Host and guests may haught positions in the company's funds or projects discussed. From the outside, the most common criticism on venture capital and crypto bore is down to the token premium. The token premium is the wedge between two markets that are forced to coexist inside the same asset. Crypto has a private token market, early sales with vesting, lockups and negotiated terms, and a public market where buyers enter later through TGE's, major listings or launch pad sales, often with less information than private investors. When those two markets are aligned, venture capital returns don't really

feel controversial. If a token launches at a sane valuation, unlocks a gradual and the product has real usage and economic activity, venture making money just looks like investing. The controversy starts when that alignment breaks. Say a private round implies a hundred million dollar valuation and the token launches at a two billion dollar FDV. That gap is the premium and it creates incentives to optimize for the launch rather than long-term price discovery. The market has increasingly pushed back on that model which helps explain poor post-TGE performance and why projects have delayed launches and unlocked citing market conditions. But VCs are still funding new projects and many of those could eventually result in tokens. Galaxy's latest venture report shows

deployment is still alive even if fundraising is cooler. Allocators put almost two billion dollars into 11 new crypto venture funds in Q425 and funds raised 8.3 quarter billion dollars across the full year. That sounds large in absolute terms, but in crypto venture terms, it still looks like a cool down, roughly half of what the sector raised in a single peak quarter in 2022. Galaxy says that's the result of macro conditions, competition from AI and spot ETPs plus digital asset treasury companies offering institutions a simpler way to get crypto exposure without taking early stage venture risk. That has pushed capital towards later stage businesses with more legible models, trading, exchanges, payments, custody and compliance and infrastructure.

But if more tokens launch when market conditions improve, they'll still face the same core problem. Price discovery is happening before the market has a reliable framework for valuation. Okay, so TGEs aren't IPOs, coins aren't shares and blockchains aren't companies, but markets still treat them the same in one crucial sense. They assign a market cap and FDV and those numbers immediately become the anchor for valuation. In equities, that anchor usually comes after years of operating history, revenue and a more mature cap table. In crypto, it often comes much earlier, which means early stage protocols can be priced like late stage public companies before there are stable fundamentals to justify it. And at that point, not just retail investors, but more sophisticated

liquid funds start asking the simplest question, am I only here as exit liquidity? And if enough people ask that question, the public market stops being a reliable exit because it refuses to pay the token premium. Once that happens, private markets have to adapt, not just for VCs, but for founders, employees and good faith teams building something real. That's also why the biggest checks are clustering around businesses that don't need a token launch to generate returns. Stablecoin infrastructure, custody, compliance and real-world asset tokenization. Not new alt-l-1s and definitely not another L2. So the real concern is how do you structure launches so that the public market can participate in upside without being set up as exit liquidity?

There's one obvious answer. Stop launching tokens for early stage projects with no publicly verifiable revenues. That's never going to happen completely and nor should it. Some part of crypto will always be speculative. But token launches do need to change and maybe they will once the Clarity Act actually makes it through Congress. In the meantime, if the market structure is broken, is there anything retail can actually use to understand whether a coin is cheap or not? Step into a new era of digital wealth with Nexo, the Premier Digital Assets Wealth Platform. Earn interest on your digital assets, borrow against them without selling, trade a wide range of cryptocurrencies, all in one place. Nexo is now available again in the US with an evolved product suite tailored to today's market. For a limited time, new US clients can unlock 30 days of exclusive wealth club premier benefits, including enhanced interest rates, reduce borrowing costs and up to 0.5% crypto cashback on trades.

Get started today at nexo.com slash breakdown. Quick break before we continue. Blockworks's flagship institutional conference Digital Asset Summit is back in New York City this March 20. DASP brings together allocators, asset managers, policymakers and the builders actually shaping crypto's next phase, not the hype cycle, but the infrastructure and capital behind it. This year's summit represents over $4 trillion in assets under management, with more than 150 speakers and 750 institutions in attendance. Speakers include leaders from firms like BlackRock and Franklin Templeton, senior policy makers

and regulators. Don Wilson of DRW will be there, alongside core crypto infrastructure teams across Bitcoin, Ethereum and stable coins. If you're looking for a serious institutional grade view of where digital assets are headed in 2026, this is where that conversation happens. Use code breakdown 200 for $200 off. Learn more at blockwurst.co slash events. Now back to the show. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. We often hear that fundamentals don't matter in crypto and that prices are totally independent of them. That's not exactly true. Fundamentals like on-chain revenue and increasingly stable coin supply and usage do

matter. They just only matter when the market is actually pricing on fundamentals, which is rare. So I wanted to do a test. Do crypto markets really ignore fundamentals altogether? I pulled network REV data, revenue from users paying for block space, for about a dozen major chains from the BlockWest research platform and mapped it to the market caps and prices of their native coins. It's a rough price-to-sales analog or a PS ratio for blockchains. Market cap divided by trailing 365 day fee revenue. Chain fees aren't company revenue, but it can still be useful. What I've found is that an L1 or L2 coin can look attractive on this basis only when two conditions are true at the same time. The first condition is valuation. The chain's PS ratio has to be in the

bottom quartile of its own history, meaning cheap relative to itself. Condition two is the market regime, not just that price and fees are correlated, but that the price-free relationship has recovered after a significant breakdown. Why? Well, in risk-off conditions, prices and fees can fall together simply because everyone is derisking. High correlation alone does not mean the market is pricing on fundamentals. The signal gets interesting when price and fees separate and then re-establish while the chain still looks cheap on a PS basis. That looks like the market re-anchoring price to revenue after fear or narrative overwhelmed the market. Across the set I tested, there were three clear historical examples where that happened, and each one proceeded a major rally. The first

was Ethereum in September 2020 toward the end of Defy Summer. ETH's market cap relative to trailing fee revenue was near the 11th percentile of its own history, meaning Ethereum was generating unusually high revenue relative to the size of Eth's market cap. At the same time, the rolling 180-day correlation between price and fee revenue was extremely high. Defy activity, especially liquidity farming, had pulled real economic demand on-chain, bringing in a lot of network revenue while the price had not fully caught up. Because on-chain revenues rose faster than the price of ETH,

ETH briefly looked more reasonably valued, and then the 2021 bull run lay at hyper-narrative on top and sent it roughly 10x in about a year. The second was Ethereum, again in March 2020, a few months after the FDX collapse in November 22. The relationship between the price of ETH and network revenue had been scrambled through late 22. The trailing 180-day correlation fell to near zero. By March 23, the market had settled enough for that correlation to rebuild back above 0.5 while the PS ratio was still cheap. It was brief but it still looked like a re-anchoring. Price realigning with what the network had been earning throughout all the noise. Eiff then rallied about 170% over the following year as broader market narrative improved.

The third example was Tron in November 23. This one is a little less dramatic. Fees mostly driven by USDT transfer activity weren't surging and TRX wasn't at some obvious local bottom but it had drifted out of step with that revenue for months. Price had ground higher through mid-203 while fees stayed relatively stable, generating roughly half a billion dollars annualized. With price higher and fees flat, Tron's PS ratio compressed, and by early November, when correlation rebuilt back above 0.5, TRX was still trading around the 11th percentile on PS relative to its own history. Once the market reconnected price to that revenue base, TRX shot up, about 16% in 90 days,

25% at 180 days, and 74% at 365 days, after the rubble. hit the road. Now to be clear, I'm not claiming this is some universal valuation model for all chains. It isn't. We don't have enough history for them and each network mostly has to be compared to itself. The point is narrower, but I think more useful. Cheap PS ratios alone are not signals. Those show up all the time.

What matters is the transition when the market moves from pricing on fear or hype towards pricing on fundamentals instead. In other words, this framework is not detecting fair value. It seems to detect the moment when the market is pricing chains closer to what on-chain fundamentals would suggest before hyper-narrative take over again. And these three examples are just the cleanest ones. There were other periods where both conditions appeared and outcomes were mixed. As for right now, I'm not seeing many similar setups.

Some chains look cheap but aren't being priced on fundamentals at all. Others show strong correlation, but no valuation discount. Which only reinforces the point. If it's already rare for the market to value even the most established coins on anything close to on-chain activity. What chance do we really have with brand new tokens that have no history at all? And that's really the core issue here. That we keep forcing price discovery before the market has a reliable way to value what it's buying and then complain on the other side. Resolve all this and we might just deserve another bull market. But it may turn out to be impossible given early

stage ventures by definition highly speculative. I put all of this to my guest, Hesib Koreshi, managing partner at Dragonfly Capital and here's some of what he had to say. Let's take a moment to talk about NXO. NXO delivers a premier digital assets wealth platform designed to help clients build, manage, and preserve their wealth, earn interests on your digital assets, access, access access crypto-back credit without selling your holdings, trade with advanced tools, all supported by 24-7 client care. Now back in the US, NXO offers new clients 30 days of exclusive Wealth Club Premier Access.

That means enhanced interest rates, reduce borrowing costs, and up to 0.5% crypto cashback on trades. Benefits typically reserved for wealth club members and private clients. Nexto is also expanding its global presence, becoming the official crypto partner of Tennis Australia, the organisation behind the Australian Open, and the digital asset partner of the Audi Revolut Formula One team. If you're ready to approach digital assets with a more structured wealth strategy, visit nexo.com slash breakdown to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. With me is my very special guest,

Haseeb Qureshi, managing partner at Dragonfly Capital. Welcome. Thanks for joining us. Thanks for having me, David. Cool. So, yeah, I mean, the top. topic that we're kind of unpacking is tokens and valuations and how to value these things as they roll out and as kind of clarity is moving through Congress and kind of at the other side. And basically where I get stuck is that there are tokens going to be rolling out. We know that as much. Like we can't stop projects from launching tokens, and it's inevitable that those tokens are going to be tied to not even only, pre-revenue networks or protocols or what have you, but also it would be very low revenue

tokens that are moving into attract more revenue in the future. At what point do we start to think that, you know, there is an overlap here between investing in early stage companies and early stage protocols because it does rely on a team executing, but you're not directly investing in that team. You're investing in the network that they're building. And then you have to go and understand how user modes work and how user retention works in these protocols. So I feel like that there's two things happening at once. So how do you square that when you're looking at a project to invest in and whether they should launch a token or they shouldn't? Before I answer that question, I feel like maybe it's worth taking a step back. And just asking the

question of for early stage startups, right? Very common for early stage startups to not have revenue, to have very unclear business models, to, you know, sort of be wandering through the dark forest of, hey, do I have a product that's worth selling or not? Normally, it's not allowed for retail investors to invest into private startups, right? And the question worth asking is like, why? Why do we have the system that, you know, I'm a venture capitalist. Venture capitalists like me are allowed to invest into these early stage startups, but normal retail investors are not. The answer is obviously investor protection, right? We want to protect these investors.

But when a company goes public, that's when private investors are allowed to touch it, right? Retail investors can invest in anything that's public. And so the question is like, what is the boundary? What is the reason that we have society have said, these companies you can't invest in these companies you can't? It's actually not because they're good companies. It's not because they're old companies,

not because they've been around for a while. It's not because they, you know, have gotten all this, because they have revenue. You don't have to be profitable to go public. You don't have to have revenue to go public. You don't have to have any of those things, right? The SEC has always said we are a quality neutral regulator, meaning we do not make judgments about the quality of an investment.

The thing that projects have, or sorry, the companies have, when they go public is they have disclosures. That's what they have. So in order to go public, you must have two years of gap audited financials, and you must be able to submit all these disclosures about risks and the nature of your business and blah, blah, blah, blah. There's no requirement about how old your company is. In principle, if your company is two years old, you can go public.

Now, nobody does that. It's very expensive to go public. There's all these, like, it's just kind of annoying. But the way that the regulations were designed has nothing to do with how old you are, has nothing to do with having revenue, has nothing to do with being a good investment. And obviously, most companies that go public go down.

Most companies that go public don't go up from their IPO price. It's not that different from tokens in that sense. most companies fail. That's true, even at the point of IPO, most companies fail. The average tenure of a company in the S&P 500 is 20 years. That means that within 20 years, the company is dead. The company gets delisted. Most companies don't exist forever. There's creative destruction in the economy going on all the time. The reason why I say all of that is that the reason why we have always felt in crypto that it's appropriate for these assets to be immediately tradable and absorbable by retail investors is because of the fact that the normal asymmetry of information

that exists in an early stage company that doesn't have these disclosures, doesn't have gap audited financials, that asymmetry of information doesn't necessarily exist if the product is open source, if the metrics are all in public, if everything you need to know about this protocol, this startup, this decks, if it's all out there and you can just go look it up on Dune. And there's no question, there's no like, oh, do I trust this guy? Do I need a, you know, a big four auditing firm to come in and audit this defy protocol? No, you just go, you go on Dune, you run the query and you can see how much volume are they doing. You don't need to ask anybody else to make this thing trustworthy.

So that's always been the reason and principle why we have felt and why also the regulators have felt that actually tokens are different. There's something fundamentally self-disclosing and fundamentally this kind of information equalization that happens in these decentralized. open source networks compared to things that are not. Now, look, if you're not open source, different story. If you're launching a token for like some off-chain business that, you know, is not really a decentralized network, that's a different story. But if these things are fully on-chain, they're fully discoverable and they're fully equalized with respect to information, then the intuition is that, well, you have the

information that you need. Like if you decide it's a good investment, great. If you don't even want to look at the investment or look at the information about what makes it a good investment or not, you can do that in stock market too. we're not going to stop you. We're not going to force you to do your research and be a smart investor. It's not how markets work. It's not how they've ever worked. So with that as the philosophical backdrop, right, the philosophical motivation. My claim would be that the thing that you want to make sure is there in the crypto market structure is information, is disclosure.

If you look, for example, at the AVE drama. So AVE drama has been going on for a while now where there's AVE Labs, which is the company that, you know, the Devco that actually built a lot of this stuff, not all of it. There's other vendors that also work with the Dow to build AVE, but they're one of the key companies and Stani, the founder of AVE, is part of AVE Labs. And then you have the Dow. And the Dow is fully open. It's owned by the token holders. The problem is that there's some stuff that's owned by the Devco, including the IP, but also the Devco is trying to make money. And they're doing all the stuff trying to make money. The problem with the story is not that, oh, there's a private company out there and they're doing

stuff and they're trying to advocate for themselves and they're trying to make money. There's always, companies are always trying to make money. Every single vendor to the Dow is trying to make money. There's nothing surprising about that. That's what, that's how vendors are. They're businesses. They vendors always try to make money. The reason why this situation has become such a cluster fuck is because people didn't know that. They did not know that AVE Labs owned the IP. They did not know that AVE Labs had the ability to change this thing for that thing. They didn't know it ran the website. They didn't know any of these things. Now, if they knew, then, you know, if you invest in AVE anyway, that's on you.

You should have known. It's right there. It's all disclosed. This is, you know, caveat emptor. This is your fault. But if you don't know, then, okay, we've got a market problem. So I tend to take the view. And I think, to be clear, this is the view that's also come out from the, you know, the SEC and the CFTC is that their view has been.

It's not that, it's not that, oh, well, these things are down only. Therefore, you know, nobody should be allowed to invest in them. The theory from them has been the problem is disclosures. The problem is awareness. As long as people know what they're buying and they are enjoined from lying about the reality of what these tokens are or what they represent,

then in principle, market should be able to figure it out. And that's my philosophy as well. Yeah, that's very interesting because I have this theory, and maybe it's not an original thought, but it's just that, you know, as digital commodities,

a lot of these tokens are apparently not that attractive. at least in the current market conditions, and that would be why the tokens are coming down. So the obvious answer then, or the easy fix is there, well, assigned cash flow rights or equity rights or something like that to the tokens. And then all of a sudden, maybe they're not digital commodities anymore. But with your theory there, it would be more about the transparency of information and the disclosures that that is what would bridge the gap and actually make the digital commodities more attractive without having to add

securities like things in order to make them more attractive. I want to be careful what I'm... The point I'm making here is more of a normative one than it is a... Well, here's what would make tokens go up. I'm not telling you that if you add

these disclosures, the token goes up. I'm telling you that the market... Here's the problem with the market structure today. Right? Somebody's saying the problem with the market structure is that tokens don't have enough revenue. I'm like, well, yeah, I mean, that's not going to, nobody's going to solve that except demand.

You know, if the demand materializes, okay, or you built the right product, great, the demand materialized and that's all good. The problem of prices going down is something that there is no market structure that will remedy that in principle, right? I mean, like, you've seen software stocks in the stock market just get absolutely decimated over the last six months. A lot of software stocks are down like 75, 80%. You know, it's like token level carnage out there in SaaS land.

You see the same thing happening with fintech companies. You know, like PayPal very famously was that 90-something billion. They're now talking about getting acquired sub-40 billion. And it hasn't been that long since they were, you know, a high-flying company. So there's nothing that's going to protect you from just people don't believe that the future is going to be brighter than the present. If people don't believe that about crypto, they will not buy your token. Your token will not go up. It will go down.

So I think now, I think building people's confidence in the market structure is, one of the ways you can get people to believe in the future as opposed to say, like, oh, you know, those token stuff's all fucked and there's no path to recovery. But at the end of the day, like, I don't think, I'm not naive. I don't think that adding disclosures and making everything a level playing field and giving information, you know, removing these information asymmetries is going to somehow make tokens pump. It's almost certainly not.

I think it's a long-term fix. You need to do it in the long run. but the only thing that's going to make tokens go up is optimism about the future and or more demand. That's it. Do you see a world where projects are actually assigning cash flow rights to tokens

in a real legitimate way? Yeah, I think they already are. I mean, so look, I mean, uniswap has turned on their fee switch. Ave's been making money since forever. You know, for most of these protocols, they burn fees. So, you know, if you look at Solana,

you look at Ethereum, right? Like Ethereum is, you know, obviously it's flipped back and forth in being deflationary. the net inflation for a lot of these protocols, like for Salon or something, it's still inflationary on net, but it's very possible for them to get to the point

where they can turn this inflation off. I think the reality is that there's not a lot of pressure at the moment to change your tokenomics in a fundamental way to actually be sort of net profitable. I think what people care more about is the trend line than they care about that a protocol is actually net profitable.

Like the reality is nobody's buying a token for cash flows. I think that's a little bit of a fantasy. I think that's kind of fake. That's like not a real story. Like people are not buying anything on chain, except for maybe, you know, some of these actual like yield type asset, like, you know, Athena or something.

Not Athena, but, you know, S-U-S-D-E. They're not buying any of these tokens. They're like, great, I will sit here and collect cash flows. That's not what people are doing. What people are doing is they want to see a story about an asset that makes them feel that it's worth buying and that it's going to become even more valuable in the future. But there's nobody, like, you know,

the amount of quote-to-quote value investing that's happening on chain or people DCFing this stuff is actually pretty small, right? Most of the story about crypto is still about the future. It's not really that much about the present and the present cash flows. The reason why the present cash flows matter is as an indication of the future, not because we actually care about getting that cash today.

And I just want to kind of bring it back to, VC and how you're looking at valuing crypto startups and all that kind of thing. Because, yeah, I saw, I mean, it was a big deal maybe a week ago. There was a lot of doom posting about VCs in the age of AI. And it was like, well, you know, if I can just go and look at why combinate a list of startups and ask an agent to just go build a competitor to this for way cheaper, then why couldn't I do that and why shouldn't I? And then it went, well, wouldn't that necessarily change the,

the value dynamics of venture investing overall because, you know, the cost of actually building out engineering teams is significantly less. So these startups are inherently significantly less valuable, at least to fund from a very early stage. And eventually if those startups do launch tokens, then that will also bring down the value of their tokens is what is what my line of logic would go. Are you factoring this in to the deals that you're looking to make that all this stuff is way cheaper to make now, you know? I think this is completely backwards. This is completely backwards, right?

So I think the best analogy to this is the advent of cloud. So before the advent of cloud, right, if you were trying to build a startup in, you know, 1998, you need it, if you just want to make a simple website, right, like a landing page. What people do today very often is they'll make a landing page before the products even bill, just like, collect email signups and see if there's interest. If you wanted to do that in 1998, you needed to buy a server. You needed to buy a server. You needed to rack and stack it.

You need to like get a server running in your apartment. And the servers were very expensive. You need to run a production grade server in your apartment and use that to put your website up into the world. Right. That is a huge fixed cost compared to what people have to do today. Right now, you just go on Amazon or you go on Netlify or you go on GitHub pages. It's literally free to. just have a website, you know, out there in the world.

All you do is pay, you know, five bucks for a domain and boom, you're up and running. So the question was like, okay, well, now that venture capitalists aren't paying for servers, like what are venture capital is going to do? You know, now it's so cheap to start a startup. And it's just like, no, no, no, no, that's good for it. No, no, that's good. Venture capital likes not paying for servers. I'd much rather pay for other stuff and not the server, right?

If the cost of building a startup go down, that's good. that's less wasted, that's less leakage, right, to the extent that building software was an enormously expensive part of running the company, if that's cheaper now, then great, the company's more capital efficient, the company can do more, the company can spend more on like product development or marketing or customer support or sales or whatever else it is that they need to do, that's what they're going to do. And that's great, that's less leakage. So the other thing to understand here is that, okay, these tools exist, right? You know, cloud code, and Codex and all these amazing tools

are all out there now. And so many people, I think, make this hand-wavy argument. They're like, well, now that these things are there, every single software company's going to get disrupted, everything's going to go to zero, there's going to be infinite competition. It's like, no, motherfucker, that's not how it works.

Somebody has to actually do the disrupting. Somebody actually has to do the competing. And who's going to do the competing? Is it legacy companies? Do you think PayPal is going to be spinning up a bunch of crazy vibe coders with 16 tabs and launching a bunch of products? No, of course they're not.

look at them. Do you think they're doing that? No, it's the startups that are going to be doing that. It's the people who are living on the frontier. It's the crazy kids who have four Claude Mac subscriptions, who are, you know, have 16 terminals up with all these agents running simultaneously. These are the guys who are doing it. Okay. It's important to remember. And just to get a sense of scale of how the technology shift is happening. Roughly 14% of people in the world, human beings in the world, have ever used any AI products, like any chatbots at all. That means 86% of the world

has never used anything. They've not used Chatsapit, they've not used Gemini, they've not used a single one of these products. Okay? Now, of that 14% only 1% have ever paid.

Only 1% of those people have ever paid for anything. That means 99% are on the free tier. They're using Chatshapit, they're using GBT5 Mini. They're using Haiku. They're using the really, like if you,

they don't even think it's worth paying for it. They don't, like, why would I pay for this? I already have it for free. You know, like, what, do you think my therapy is going to be that much better if I'm, you have a smarter model? Like, no, it's fine. Or my AI girlfriend needs, no, the most people are not using this for anything productive. And then of those, of that one percent that's paying, right, most of those are paying 20 bucks a month. They're paying the simple tier. They're not playing for quad macs. They're not using OpenClaught. They're not doing any of this crazy stuff that you're seeing in all these Twitter demos or these like viral AI influencers. So the reality is that

what you and I are thinking about, what you and I are talking about is the frontier of the frontier. It's the absolute vanguard, right? We are living in the future right now. And there's a famous line by Chris Dixon. What smart people are doing on the weekends and evenings is what everyone else can be doing in 10 years.

And that, now, is it 10 years? I don't know. It could well be. Very plausible that it will be. I thought when Chachapit launched that this was going to be the fastest dissemination of a technology in the history of mankind, and that we were going to see the entire world

and whole societies, the labor market, completely turn over and be unrecognized in a few years. Here we are three years later. You cannot find AI in the labor market. You cannot find it in the jobs and reports. You cannot find it in the GDP numbers. It is invisible. It is invisible.

And these stats are why it's invisible, because technology takes a longer time to disseminate than you think it does. Like it's still the fastest disseminating technology that we've ever seen. It's faster than television, faster than the radio, faster than the printing press, certainly faster than the internet. But still, three years later, you don't see it in the aggregate statistics. Yeah, I think we're going to leave it there on that note.

We are just, it's a common theme, but we are so early. And it's just because we do talk about this every day. We do live it every day. And it's easy to think that, you know, we are a lot further ahead than we are. But, yeah, again, we're just so early. but yeah the future is here it's just not equally distributed thank you so much for joining us to seeb i'd hope to have you on again soon thank you so much thanks for having me david a lot of fun and that's about all the time we have for today let me know what you think about the token premium

and if you think we can ever resolve all of this in the comments and i'll see you next time