The Wolf Of All Streets - Early Solana Investor Scores 614,000% Profit | Kyle Samani, Multicoin Capital

Episode Date: December 14, 2021

Multicoin Capital is arguably the most successful hedge fund of all time. After leading the first three investment rounds for Solana, the Multicoin Capital team was faced with the tough decision of whether to sell. The simple choice to hold was proven correct. Kyle’s thesis-driven approach makes for an episode filled with balanced and well-considered takes on the future of the crypto space - a must listen for anyone looking to dive deeper into what is coming. -- Amber Group: Amber Group is an integrated digital asset platform serving retail and institutional clients by providing deep liquidity, attractive yields, and sophisticated portfolio management tools. With 12 offices on three continents, and nearly a trillion dollars in volume traded, Amber Group offers clients personalized, compliant, and secure service across dozens of digital assets. Find out more at https://thewolfofallstreets.link/ambergroup  -- HBAR Foundation: Fund your project quickly and easily with the HBAR Foundation. Apply for a grant and be put on the fast track to success at https://thewolfofallstreets.link/hbar  -- Horizen: Horizen is the zero-knowledge enabled network of blockchains powered by the largest node system with scalability and flexibility unmatched by others. Blockchains built on Horizen are enhanced by zk-SNARK privacy tech and provide massive throughput without compromising decentralization. Horizen can support up to 10,000 independent blockchains running in parallel and issue an unlimited amount of tokens.  More at https://thewolfofallstreets.link/horizen -- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co ーーー Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members

This episode is sponsored by Amber Group, Horizon, and HBAR Foundation. Please stay tuned for more information on all three of them later in this episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of Wall Street's podcast, where two times every week I talk to your favorite personalities from the worlds of Bitcoin, finance, music, art, sports, politics, basically anyone with a good story to tell. Now, there have been a lot of narratives in 2021 from DeFi, NFTs, metaverse to institutional adoption. Well, there have been some funds out there that have seemingly captured a bit of all of that. And one of the most successful has been Multicoin Capital. Luckily, I have their co-founder today, Kyle Samani, to talk to us about what happened in 2021 and what

they're looking for in 2022 and beyond. Kyle, thank you so much for joining me. Scott, pleasure to be on the show. Long time fan. Thank you, man. So listen, I spoke with Mark Yusko the other day. We keep in touch. And he said to me, yeah, I talked to Kyle Samani because Mult-coin is probably the most successful hedge fund in the history of the world to quote him probably their last fund was the most successful in the history of the world can you talk about your last fund and why that is the case um so not allowed to talk about performance or financials or whatever unfortunately there's a bunch of rules around marketing of funds.

Other than I can say we invested a meaningful position in Solana and have held it. And how early were you in Solana? When were you actually investing in that? So Solana raised three private rounds of financing over the course of 2018 and 2019 before the token launched in 2020 uh those rounds were four cents 20 cents and 22 and a half cents if i'm not mistaken uh we were fortunate to lead all three of those rounds so you've done done well on solana and i guess it's fair to say then that the performance has

not surprised you at all yeah correct and um mean, the most important thing we did in 2021 was not sell. A lot of people were very tempted to sell along the way. We certainly were, but had the conviction to hold it. That turns out to have been the best decision we ever made was to do nothing. We like to joke at Multicoin, our priority is to do as little as possible. That is also a sentiment echoed by Mark Yusko very often. Do less, make more, right? And it seems to work exceptionally well, but diamond hands are hard to come by sort of as you acknowledge. As I said in the intro,

there were a lot of trends, obviously, in 2021. You led in with Solana. Layer ones have been sort of the talk of the town all year, Solana not being the only one that's obviously had great success. That leads to the notion of the Ethereum killer, which I personally think is nonsense. I believe we'll live in a multi-chain world. Do you believe that Ethereum will continue to be the leader? Do you think it will be replaced? Do you think that they will all sort of find their niche? Do you think it will be replaced? Do you think that they will all sort of find their niche? What's your vision for layer ones?

Yeah. So I think the question asked is why did the layer ones all outperform so much this year? And I think the answer to that is demand for block space increased dramatically and none of the Ethereum solutions or Ethereum, either layer one or ETH layer twos, were even remotely ready to handle that influx of demand. As a result of that, gas fees went up and that drove users elsewhere. So the first kind of instantiation of that was BSC. The second was Phantom. The third probably was Solana.

And arguably the fourth now is Phantom, excuse me, is Avalanche over the course of the year and so just like demand for block space keeps growing and that's why you keep seeing this type of thing happen the question is how does that kind of continue to play

forward into 2022 and obviously the answer is demand for block space How does that continue to play forward into 2022? And obviously, the answer is demand for block space will continue to increase, but not all block space is created equal. My kind of operating theory is that as time goes on, the next, the new kinds of applications will be built that leverage composable crypto primitives. And the more of those primitives you have, and then the more liquidity you have, the more data you have, the more state that there is in the network, the more that the next generation kinds of applications will be built on a smaller number of chains. So let me describe what that means. DeFi took off because you could trade tokens primarily with it. For Uniswap to work, you need a few things. You need to have exchange on ramps from all the major exchanges.

You probably need stable coins, although ETH pairs were the first pairs. But like, there's got to be two, you know, USDC pairs are the prominent pairs. You need to have a lot of tokens to trade. And like, if there's only four tokens to trade, then like, what's the point of Uniswap, you know? Right? Like, you want to have hundreds or thousands of tokens. And so there's a kind of a base level of stuff you needed to have in place for Uniswap to be sufficiently useful. Same is true for Combat and Aave. And you obviously need to add oracles on top of that.

So you have price feeds to manage liquidations. As DeFi applications become more sophisticated and as you have more and more consumer-facing applications, I think, and as people deliver experiences that happen to more of these things, you're going to have to have more and more assumptions of, or I should say, expectations will grow of what sophisticated applications can and can't do. Today, I would argue that most of the sophisticated applications on chains like Avalanche and Solana and Phantom Ethereum feel like leveraged yield farming kind of things, or maybe some futures contracts and perpetual contracts. And I feel like those are probably the most sophisticated things we have. In 12 months, I think we're going to have a lot

more sophisticated things. And they're going to be sophisticated because they incorporate more and more of these base primitives. As people come to expect an increasing degree of sophistication, I don't think demand for block space will continue to proliferate across more and more chains as the base level of what people assume the chain can do, right, that will keep going up. So does that mean that each chain will find a specific niche or a thing that people basically program on that chain it's best for, like a metaverse chain, a gaming chain, a DeFi chain? And does it mean that some of the existing ones will perhaps fall out of favor and cease to be popular? So there's been a notion of application-specific chains has been around for quite some time, probably four or five years now. It certainly has never, I'd say, taken off in a meaningful way, but that doesn't mean it can't tomorrow. I've always been pretty skeptical about the idea of application-specific chains.

The more you subscribe to the composability theory, which is that the more next-generation apps leverage more and more building blocks, and those building blocks aren't necessarily even remotely related to each other, you can imagine things that take advantage of Audius and DeFi and social tokens and a messaging thing um it's not very hard to put those things together the more that those things live on separate chains the more cross chain stuff you need again the cross chain stuff doesn't really work yet today in a super great way it doesn't mean it can't tomorrow but but it definitely doesn't today. And so it gets harder and harder to build best-in-class user experiences the more cross-chain-y you go. Right.

So I've been pretty skeptical of that. So I do think you will start to see some degree of chain consolidation. Will that happen in 2022 or 2023? I have no idea. But either right about now or at some point in the next 12 months, I think we'll probably hit peak of chain heterogeneity. I mean, you just talked about, obviously, interoperability, the idea that these chains can work together. Anyone who's tried it obviously knows that these bridges are in their infancy. It's difficult. Your average person is probably never going to figure it out. But don't we need that to become sophisticated? I understand you're saying the argument is composability and it'll work another

way, but do we need those interoperability protocols to start working for this environment to really reach its potential? Do these chains need to talk to each other? So yeah, the answer is maybe, right? So like the more stuff you have on one chain let's say solana which we're kind of the big public bulls on um you don't have to worry think about any bridge stuff at all it all just works which is that's kind of the beauty of it right um the the question is is let's even assume um some of the bridge things are very very fluid and and magical uh whether it's layer zero or the avalanche bridge or polygon bridge or whatever. Even if you assume that it works as best as advertised, what do you lose in that environment?

And you still lose a few things. You break atomicity in these systems. So you can't just lock the entire Polygon system and say, hey, while you wait for the transaction to propagate over on ETH layer one, just don't let anyone update the state of Polygon while you wait for something to happen over there and then come back. That's obviously not acceptable. Now, what types of applications require atomicity between chains? I don't know. But again, as people do more and more sophisticated stuff, especially more and more of which both taps into DeFi

and is consumer-facing, the more challenging it becomes to do with atomicity, the more challenging it becomes to do with latency. By waiting for the wheel to spin on the UI just pisses people off. And so those things are all just hard to deal with. It's not clear to me in any of the bridging solutions that have been proposed by

anybody that you can make all of that stuff just like magical butter disappear in the background. And so I'm optimistic interoperability will be better tomorrow than it is today. I am quite skeptical interoperability will be absolute magic butter in the way that you can just do a flash loan on Ethereum. So it might not ever work at scale with the speed of growth in this space. Yeah. It's definitely optimistic to assume so. It's not impossible, but it definitely requires a fair bit of optimism to get there. That makes sense. So no chain as of yet has been perfect, right? So Ethereum obviously has had its problems over the year. Anyone who's interacted with it at this point knows how high the gas fees are, how slow

the transactions can be. Even Solana was down for almost a day. At present, if we reached this sort of hockey stick level of adoption that we all dream is possible now, can any of them operate at the scale necessary in their current iteration? I mean, look, if you froze all their code bases today and said you can't update them ever, then the answer is no. That's not a reasonable assumption. There's a few things that will change that you can kind of assume will change. One is you can assume generally hardware gets faster and bandwidth increases because that's been true for the last 50 years

and will continue to be true. And I think the other thing you can at least assume in the case of Solana into a lesser extent Ethereum is just like optimize the system where like just memory allocations in the system, usage of data on bandwidth, how you read and write from the database, just like all of these things you can do to keep optimizing will keep happening. My general sense is something like Solana has a reason to clear path to a million transactions per second from 50,000,

which is where it's at today, over, I call it a three to five year period. The question is, how do you get from 1 million to 100 million? And like that is not clear. The very hand weight, the hand weight answer that everyone says, myself included, is zero knowledge roll ups. And I think that is certainly part of the future, but there's enough unknowns around how that stuff works today, how it will work tomorrow, how it interfaces with layer ones, how you bridge between layer twos. Just all of these things are still unanswered questions. And so I am optimistic it will come about, but I can't sit here with precision and say, here's my grand plan for the future of crypto. Right. Interestingly, I've probably heard the term zero knowledge roll our DeFi summit, our NFT summer and the metaverse

boom and the gaming boom. Is EK Starks the next one that we should be looking at? Because just anecdotally, the amount of times I've heard people starting to talk about it is pretty aggressive. Yeah. I mean, it's an important technology. It's going to do some amazing stuff. Maybe right now is the right time and the stuff's about to go vertical. Maybe it's still three years too early. I have no idea. Will there be a ZK token boom next year? I don't know.

It seems plausible. Not really the kind of thing we do, but I can see a lot of people, you know, piling into that trade. Okay. Well, you describe yourselves as a thesis-driven investment firm, right? So Solana, we've talked about pretty much at length. If that's not part of your thesis, then how do you start looking at a project, decide that it's going to be the one that you obviously want to be concentrated in and proceed? Yeah. So, I mean, in the case of scaling specifically, we've taken a barbell approach really. Certainly Solana was our biggest position at entry and we've held it at some very well. We also have, you know, own a meaningful stake in Starkware. We

started investing as far back as September of 2018. Back then, the word roll-up didn't exist. Optimistic, zero-knowledge roll-ups weren't a thing. We understood that zero-knowledge systems were going to be important in these crypto systems, although we didn't appreciate how. So we got lucky that zero-knowledge roll-ups ended up kind of becoming the, I think, assumed scaling path for Ethereum. So certainly we got a little bit lucky there. But we generally have kind of taken the barbell view of like, Solana is, I should say, the boring way to scale, which is just optimize it,

use every ounce of hardware and bandwidth as effectively as possible, make it go fast, and try not to solve any unsolved computer science problems. And then the other stream is Starkware, which is invent new math and cryptography that like magically makes the system scale. And so we've kind of leaned into both extremes and then we've tried to ignore everything else in the middle. I generally like that kind of approach to most of these types of problems where there's just a lot of unknowns and risk and uncertainty in them. When we approach other types

of problems and kind of do thesis formation, we have to approach them differently. You can't approach them all in the same way. I'd say the thing we generally look for is just clarity of thought and uniqueness. So we really like to invest in what I'll call blue oceans more than red, although we do invest in some red oceans, just meaning like the more red ocean, meaning the more competitors are directly involved in a market. So something like Arwe, for example, stuck out to us several years ago.

We started investing in May or June of 2019. And back then, you know, we learned where Arwe was and we said, this is a fundamentally new primitive that never existed in Web2. The idea of pay once, store forever, it was just never around. And it seemed uniquely enabled by decentralization and leveraged decentralized systems in a new way to achieve a new kind of property that just wasn't possible before. My light bulb went off and I said, this is a technical primitive. And we generally like technical primitives and invested in quite a few of those and got excited because it was

differentiated, it was unique, and it was building a new market. So we've historically done well with those kinds of things. Helium is another example where it was just totally blue ocean. Hey, can we put a decentralized system together in a different way and unlock unique properties of that system that are useful? I think we're going to see more and more things that look like helium, specifically where basically you use a token as an incentive system to cause people to build physical world infrastructure. So we actually had our summit, the Multicoin Summit pretty recently. We actually had a panel discussion with the founder of Helium Mir and the founder of a thing called Hivemapper, his name is Ariel. And they were talking about how they're using basically incentivizing people to install dash cams in their windshield

of their car um to build a new global map instead of google having 2 000 cars driving around the street view can we actually just um you know source this from the crowds from the masses i think we're going to see more and more stuff that looks like that and when we see those kinds of things that are really unique we get very very excited. That's like Waze, right? I know where the cops are because somebody else in their car tells me. It's not, it exists, right? So I'm not saying the exact same thing, but conceptually, that's brilliant. A brilliant way to piggyback off that idea. Yeah, I mean, Waze, just imagine if Waze had tokens, right? Like, it would be, like, that's what Hive Mapper is.

Yeah, you got paid to tell people where the police were waiting. And when there was a car on the side of the road and when there was traffic, I mean, I hope Waze is listening because this is their opportunity for a great business, right? I have a friend actually in my hometown who loves helium and is actually, you know, he like pays people to put the things on their roofs and he's buying extra houses to put them. He's been a believer and it's paid off massively for him. Yeah. I mean, I've heard a lot of stories like that. We know that one of the groups that's the largest owners of helium hotspots in the world, they own over a thousand hotspots. And like,

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So from your approach, obviously you have massive exposure to Solana and sort of the, you can almost call that the umbrella for all the things that are happening on that network. Do you guys look more granularly at smaller things like the actual metaverses or the actual play to earn tokens? Or are you focused more on the infrastructure underlying them? So we invest in all layers of the stack. We do go all the way from infrastructure, so things like Solana and Starkware and Graph,

and Arweave all the way through consumer-facing applications, so things like Audius and some others that we haven't disclosed yet. We, in the case of, I would say we have generally four years ago, we're almost exclusively infrastructure and are increasingly moving up the stack today. Uh, in the case of like virtual world, I'm not going to call them metaverses. I'm going to call them virtual world things. So things like sandbox, things like the central land, Somnium, those kinds of things. Um, we haven't yet invested in any of those um my biggest concern

with games generally is like what is your competition and your competition in abstract terms with games is all of the internet meaning just like a person is bored and they want to pass the time so they can watch netflix they can listen to music they can call their mom you know they can play games uh i just like going into markets where you're competing with everything else on the internet it's just like a very difficult proposition uh and i i don't feel terribly well positioned to render judgment on that um not to say that we won't invest in some gaming things we have invested in one that's not yet disclosed um but we are uh i say we're not converting multi-coin into a gaming fund uh some of our peers appear to be turning into gaming funds yeah it's it's pretty popular

uh so you're gonna get when gaming fun pretty soon on your twitter all the time so people yeah yeah a lot of game pitches game five, I guess is the new term for it, which I waited. We, yeah. So it's, we continue to follow it along.

We have not been the most aggressive there that may change in the future, but for now it's not true. The play to earn stuff is interesting. I was initially quite skeptical of Axie and then got interested and then have returned to my skepticism. I think play to earn is a misnomer in the same way that cryptocurrency is a misnomer. Like you're in crypto full time or close to full time. You don't call them currencies because they're not currencies. They're assets.

They do things. They have unique them currencies because they're not currencies they're assets um they do things they have unique properties like they're not currencies uh play to earn to me is a similar construct there are two kinds of people in axi there are people who are playing axi um they're playing it because they think it's fun because it's some sort of status symbol whatever and those people are spending money in axi and then there are people who are working in axi who are uh breeding axes and farming them and battling them or whatever uh and uh those two segments of players have almost no overlap right and because they have no overlap that basically means you have people who are playing and people who are working the people who are earning an axi are not playing they are working um they are grinding they're not having fun because it's just you're clicking the same buttons every single day it's a job that is called capitalism it's called having a job right uh and uh so the optimistic case for what axi represents the pessimistic case is it's a job and it's not interesting.

That's unfair. The optimistic case for what Axie represents is a vision that there will be lots of economies for lots of games. There will be large-scale multiplayer games. Those systems will have economies. And you will have some people who spend a lot of money in those economies and a lot of people who work in those economies. And I can totally see a world five years from now in which there are tens of millions of people

who work in those environments. Sure. And that's why all these guilds have become so popular now is kind of a recognition of that eventual outcome. So your skepticism is based in the fact that it's either play or earn, but that there's no crossover really in the play to earn. What I find interesting on the earn side is that I think we have all heard the story of Axie, obviously, that great adoption in the

Philippines. You have people even who you would never expect to be into it, middle-aged women and men earning a better living than they did. But interestingly, it's on a game that's like 1990s level of graphics and interest, right? So I guess you can take either approach either. This is in its infancy. It's already being proven that people can make a living doing it. Imagine what will happen when it looks like, I don't know, Call of Duty or Fortnite. But I guess the other approach is maybe it just doesn't go beyond that and people get bored because they look like video games from the 1990s i don't know which one that is yeah yeah so i i think i see what you're trying to get at um so my basic mental model i played a lot of video games

as a kid um so i like to think I have at least some ability to touch these things although I'm not an expert I've been asking the question what types of games are best suited for crypto and I'd say the framework that I've come up with that I like the most

is does the game reset time so what does that mean if you play Call of Duty, if you play Rocket League is does the game reset time? So what does that mean? If you play Call of Duty, if you play Rocket League, if you play Halo, in any of these systems, you have a match, there's a winner and a loser,

the match ends, and then you go into a new match. And after every new match, time resets to time zero. There's another very different class of game, World of Warcraft, EVE Online, those kinds of things where there's a permanent notion of time and there's Diablo even, and you have a universe. And in those universes,

you can have an economy, right? Like now there's money, there's resources, there's status, all of those things. Crypto very clearly maps better to the latter than the former. It's not actually clear to me that you can use crypto in a particularly compelling way in the former type at all, other than like, oh, you bought a skin and you can like resell your skin later. That's not interesting.

That's just a tweak on the current system. What's more interesting is having notions of property rights that are enforceable, where the property rights are either expressed as fungible or non-fungible tokens in the game. And that means that asset can also have utility both in the game and in a third-party context. That, to me, is fundamentally the right, interesting new mental model for these systems. So I'm most interested in games that look like Star Atlas, for example, where like Star Atlas appears to be this kind of next generation EVE Online where you have property rights and ownership. Right. And like that makes sense to me. I have no ability to say if the Star Atlas team will or will not execute. I don't know. We're not involved in that

one. But like that model to me makes a fair bit of sense for crypto. And so then where does the centralized corporate metaverse come into the picture? Obviously, we know that Zuckerberg, the Zuckerverse has, you know, rebranded Facebook to meta and seems to be going all in on that side. I mean, I know that I would rather live in a, or interact in a decentralized metaverse than a Zuckerberg driven one, but do you think that that's a grand vision and what we are going to see, or do you think that it's more like what we've been describing before? So I think it's quite unlikely that there is a metaverse that I think there'll be lots of, lots of them. There will be some that are fantastical getaways. So things like Star Atlas, Neve Online certainly fit that bucket. Matrix Online, Knights of the Old Republic. I mean, them there will be some that are fantastical getaways so things like um star atlas neve

online certainly fit that bucket matrix online nights the old republic i mean a lot of the video games over the last 20 years very much fit that mold um more interesting question will be what type of metaverses will exist um that are just like i don't know will there be a cnn sponsored metaverse or a Nike sponsored metaverse, right? Or will there just be Apple and Google sponsored? You know, I don't know. And Facebook. I think there will definitely be multiple. I think the key thing is going to need to be common notions of property rights. I think that's going to be extremely important in these systems. And it's hard to reason about how it's going to come about. But I'm optimistic that crypto will be used as the common standard for enforcing

property rights. And if that is, in fact, the case, then that's extremely bullish for crypto over the next 10 years. Yeah, I still can't mentally yet, but maybe I just don't quite get it yet, get to spending $2.5 million on a plot of land in a still, like I said, sort of 90s graphical metaverse. Luke Gromen, Yeah, no, that stuff is probably ahead of its time. You probably need to have utility before you have land speculation um there's actually been quite a fair bit of history of developers doing uh land auctions in games over the last 20 years that were not on crypto rails uh and their overwhelming history suggests that land

speculators ruin the game um in meaningful ways so to to the extent you have notions of like, I think there's different notions of property rights. One is like the clothes you wear and the stuff in your house. That's a very different type of property rights than, hey, there's a fixed amount of real estate and people bid over it. So the best things that evolve

into full fledged link, digital economies and metaverses are going to need to, a have a very good sense of history of like what has and hasn't worked over the last 20 years. Look at second life, um, look at all these online games and then be, be able to,

to craft utility, find a cohort of users that's tight, and then slowly expand from there. Much in the same way that Facebook started for college students and started at Harvard only, then other colleges and so on and so forth. You're going to need, I think, a similar type of growth and expansion plan. But I have no real conviction on where to start.

Earlier in the conversation, we were obviously talking about whether any chain could handle the future load and what it looks like at the moment. You talked a bit about composability. That led to you sort of saying that we're very much in the infancy of what's possible in DeFi and a lot of these structures. I mean, we obviously, as much as we like to think, some like to think in DeFi and a lot of these structures? I mean, we obviously, as much as we like to think, some like to think that DeFi could replace banks and legacy systems also very

much in its infancy. So what do you think will be the next big developments in DeFi that will start to give us insurance and complicated derivatives and all the things that exist in other markets that make them efficient? Yeah, I mean, I think the reason you have more sophisticated derivatives, the reason you have even options, the reason you have credit default swaps in traditional markets is because there's two things. One, collateral management is much more efficient than it is in DeFi. And two, is you have players who are interfacing with those rails who want to trade that form of risk. Right now, in credit default swaps, the kind of people who write credit default swaps for large-scale insurance or even for bonds and equities are unwilling to touch crypto rails. And so like all of these markets are one sided markets. You just don't have people who want to trade risk in both directions. You need to have players who want to trade risk in both directions using the same set of rails. And once you do, then you can have a market. But until then,

you don't have a market. So what is it going to take for that to happen? I don't know. There's a few paths you can see to that happening. One is you could see a firm like Paxos or a firm like Provenance start to move over traditional assets, equities, bonds into crypto rails. And as that happens and as they move, the fund administrators, the hedge funds, the prime brokerages, all interface with these systems, and you can start to see traditional asset classes with their more sophisticated derivatives contracts, clearing and selling on crypto rails. That seems, I'd say, probable over the next five years, but maybe I'm being optimistic in the timing there. But certainly, there's some very sophisticated, well-funded folks who are well on their way to doing that.

The other theory is just like DeFi itself continues to grow as just global speculation, global awareness increases, and those people want to trade more and more sophisticated ways. I'm reasonably skeptical of that theory. Retail seems like to trade perpetual contracts. They don't even seem to like dated futures. They don't seem to like options very much. And as the next marginal retail person discovers crypto and gets into crypto, they're less and less likely to be financially sophisticated enough to want to trade more sophisticated financial contracts. So it's not clear to me that like DeFi growing is good for DeFi options.

Those two things don't, I don't think there's a meaningful degree of overlap between those things. So the answer is, I don't know, other than just like you have more sophisticated players on these rails who want to trade more sophisticated contracts. And I think that will naturally happen. It's just been a little bit slower than people would have liked. So that just comes with tokenize everything, right? I mean, you just start tokenizing all these assets and they land on crypto rails and it sort of naturally happens without having to build any unique infrastructure or re-basically

invent the wheel with these products on blockchains. Totally. Yeah, that actually makes a lot of sense as the most logical way to get there. But a lot of people just interact with DeFi, obviously, because yield, right? I mean, you can't get it generally in the real world. So for your average person, what's the best way for them to approach DeFi? And do you think that it will become easier to use, better UX, more like a Venmo, PayPal, or bank that they're used to interacting with? Do you think that they'll get there? Or do you think

that it's still going to be somewhat difficult for people to safely go seek yield? It's definitely, I mean, it's becoming easier in the last 18 months and it will definitely continue to become easier. Will it ever become a Venmo-like experience is mostly a function of Apple and Google's controls over the app stores and then the ability to interface with banking systems. I'd say I'm actually more optimistic

on ability to interface with banking systems at least in the United States and Western Europe. I can't really speak for the rest of the world. I just don't know their systems. Apple and Google seem to be the biggest problem. They just are very averse to crypto and apps. And that certainly is probably the largest bottleneck for the ecosystem today.

What about regulation? I don't really think it's a bottleneck. I think today. What about regulation? I don't really think it's a bottleneck. I think it's a source of uncertainty. I'm not really worried about regulation in the sense of I'm not expecting meaningful adverse outcomes. Will

US regulators ask of teams that issue tokens to increase disclosure requirements, probably. That actually seems quite likely to me. Does that mean they're going to be filing 10Qs and 10Ks? Probably not, because those don't map to crypto correctly. I think there's a very interesting set of questions of what do you ask teams to disclose and on what cadence and frequency. But I'm not worried that like the regulators are going to end the party.

I think they'll come up with some series of regulations for issuing teams that will be okay for some teams, probably okay for DeFi and kind of weird for non-defi teams like if your audience or your helium yeah i just don't graph it doesn't yeah yeah and so it's going to be wonky but i'm not really worried about like very adverse outcomes i mean at the very worst case they just move offshore right i mean they just do what a lot of exchanges have done and a lot of companies have been doing worst case, they just move offshore, right? I mean, they just do what a lot of exchanges have done and a lot of companies have been doing for years, and they just say, we're just not going to operate in the U.S.

Yeah, that will be very common. I mean, that's already happened and happening and will continue to happen. Yeah. So what are you looking for into 2022? Obviously, your thesis-driven. What's your thesis for the next year and the coming years? I mean, the thing I'm most excited about is to see the next generation of applications that leverage composability.

I feel like Ethereum kind of stalled primarily because of gas problems. You got like Uniswap and Compound, excuse me, Aave and Compound working very nicely. You got people trading primarily in Uniswap. So you get margin trading now and going to go long and short that way but it kind of stopped evolving after that and then the year to some extent which is really just like a farming thing

and I want to see people continue to leverage composability to do new things so like there's a new stablecoin launching on Solana right now called UXD. It just runs the basis trade. There's a version on Ethereum called Lemma. But I want to see stuff more like that. I want to see a DeFi native prime brokerage.

I want to see a social token app that is built into Discord that has crypto buy and sells button built into it that connects into Audius a nft drop distribution platform for a musician like i want to see people take these things that today are separate and then put them all together in some sort of unified experience to produce an experience that was not possible before and i think next year we will start to see that happen in a very real way.

So we've made zero to one, and now we're looking for the one to end, basically. Yeah, I think that's a good analogy. Do you have a bearish case? Is there anything that can go horribly wrong? Is the market still fragile and susceptible to a big Bitcoin drop, and would everything go with it? What's the downside? I have no view on market timing, no view on regulators causing prices to go down.

It's possible that we just achieve a cycle maximum now, two weeks ago, in three months. Those are all very much on the table. But it's also possible that we just grind up for another 12 months. I think people assign too low of a probability to that. As crypto, remember, the internet bubble went from 95 to 2000, I believe March of 2000. Just five years. And the reason it

sustained so long is the people who bought in 1995 were early. The people who bought in 1996 were early. The people who bought in 1999 had no idea what they were doing. But it's very possible we're in

1995 here. In the US today, it does feel like your Uber driver has crypto, which is true. I would say institutions are underexposed. And I would also say retail around the world is extremely underexposed. And so it's not obvious to me that the cycle has to end now and may very well continue. I mean, I think I saw you tweet a response to someone recently, flashed through my feed, where you were basically talking about interest in Solana

and somebody asked you, based on what, you were like, every billionaire in the world calling me and asking me about it, right? Something to that effect. Well, if that's happening, the cycle's not over. Yeah, and look, like Bitcoin is a very different asset than Sol, which is a very different asset than Serum or Uniswap. So you don't want to generalize too much across these various types of assets. But interest is picking up at crypto. A lot of people, for example, look at Helium or look at Solana,

and are like, this is really interesting. And they look for every 30% dip to buy. And I wouldn't be surprised if those people keep coming in for at a minimum, those two assets. And I'm sure there are others that people are eyeing in size. It's becoming much clearer. You can see when there's any significant market dip which ones get uh have our bid and get bought up very very quickly it's a it's much i think it's much more actually transparent and clear at this point what you just described than it has ever been in the past yeah yeah the market fell off from right like uh december 4th or whatever that was. Certainly made that very clear. Yeah, I mean, things like Solana, AVAX, Luna, Matic was back at the highs two days later, right?

So, I mean, there are a lot of these projects. Whether that means they'll be successful or not, I don't know, but there's clearly a hell of a lot of demand. Yeah, there's big bids for a lot of these. Yeah. So, where can everybody find you after this conversation? Check out Multicoin and everything that you're doing. Yeah. So where can everybody find you after this conversation? Check out Multicoin and everything that you're doing. Yeah. So I'm on Twitter at, there's my name. So at Kyle Samani, K-Y-L-E-S-A-M-A-N-I. You can tag me there. Sweet at me there. My DMs are open. So feel free to send me a message. I am around. DMs open.

Bold man. Bold, bold and adventurous. Brave. I'm open for years. It got to a certain point where they had to eventually be closed just because I couldn't find anything in there. Well, thank you so much for taking. Go ahead. Sorry.

I was going to say, most days I regret that decision. But from time to time, some gold comes through. Absolute gems in there well thank you so much for your time and for uh sharing your thoughts and your thesis on next year i mean gives a lot of clarity as to what is reasonably possible and what i think is unreasonable to expect you know in the coming months awesome scott thank you for having me on the show it was a pleasure thank you