Unchained - Could BTC Outperform Gold? Plus, Ethereum's Big Advantage: Bits + Bips - Ep. 928

Episode Date: October 21, 2025

In this episode of Bits + Bips, hosts Austin Campbell, Ram Ahluwalia, and Chris Perkins tackle a packed agenda: from the fairness of Binance’s listing fees to the ways in which DeFi didn’t perform well during the “Black Friday” crash, why Tempo’s $500 million raise might have been a political ploy, and the growing war over stablecoin dominance. The trio debates whether Bitcoin is undervalued compared to gold, why Ethereum’s 10-year track record gives it an edge, and whether today’s Digital Asset Treasuries (DATs) are just froth, or the permanent backbone of institutional crypto. Plus: Austin makes a bold prediction about the stablecoin that will dominate by 2040. Sponsors: Mantle Hosts: Ram Ahluwalia, CFA, CEO and Founder of Lumida Austin Campbell, NYU Stern professor and founder and managing partner of Zero Knowledge Consulting Christopher Perkins, Managing Partner and President of CoinFund Links: Binance Listing Fee Drama Unchained:  Binance Listing Fee Fight: What’s a Fair Price to List on the Top Crypto Exchange? Binance Claims It Does Not Profit From Token Listings Jesse Pollak (Base) chimes in Tempo & Dankrad Fortune: Exclusive: Stripe-backed blockchain startup Tempo raises $500 million round led by Joshua Kushner’s Thrive Capital and Greenoaks Ethereum core dev Dankrad Feist joins Tempo Reactions: Ryan Adams (Bankless): Tempo will optimize for itself, not ETH. Nick Almond: Not a death sentence for ETH Breadguy: Big loss. Dankrad was a major L1 scaling advocate. Black Friday Dan Wilson: 3 big lessons post-crash Gold vs. BTC GOLD/BTC up ‎23.5% in past month Bitcoin Is Undervalued vs. Gold DATs Bloomberg: Huobi Founder Li Lin Set To Launch $1 Billion Ether Accumulator - Bloomberg CoinDesk: Ripple Set to Enter Corporate Treasury Business With $1B Acquisition of GTreasury Timestamps: 🎬 0:00 Intro 💸 3:39 Binance listing fees — fair price for distribution or pay-to-play? 🏛️ 10:19 What is the best way to go public? ⚔️ 11:57 How exchanges really compete behind the scenes 💥 15:00 “Black Friday”: why Chris calls it catastrophic — but with a silver lining 🧱 24:52 What the industry must fix to prevent another meltdown 💵 30:15 How Tempo’s $500M raise represents peak frothiness 🚨 39:12 Is Dankrad’s exit from the Ethereum Foundation a red alarm for ETH? 🔮 43:07 Austin’s bold prediction: which stablecoin wins by 2040 🥇 46:17 Is Bitcoin undervalued compared to gold? 🏗️ 52:21 Why DATs are here to stay despite the market carnage Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, all, you might have noticed in recent months that our original crew of co-hosts has not been appearing regularly. All around the same time, different co-hosts suddenly could no longer do the show for different reasons. We've kept it going with great guests and having our executive editor, Steve Erlick, fill in as moderator while we searched for a new set of co-hosts. Today, we're happy to announce that Rom Alamalia, one of the original crew, will now be joined by Chris Perkins, the Golden Hand of Coin Fund,

and Austin Campbell, high scholar of zero knowledge consulting. Austin will also replace James Seyford as moderator. We're so excited to have both Austin and Chris. All three of the co-hosts have solid tradfi and crypto chops, and they all manage or have managed money. Plus, this is the real reason we pick them, they all have sharp, spicy takes on all things crypto and macro. We hope that you enjoy the outfit that they drop in the show

as they continue to explore how crypto and macro collide one basis point at a time. We're super grateful to James Seyfert, Alex Krueger, Noel Atchison, and Joe McCann, who are the original co-hosts, and you may see them pop up every once in a while as guests. One last note, we will now also be streaming other interviews that fall under the crypto and macro umbrella and under the Bits and Bips brand. These will be conducted by Steve, who you all have come to know now since he filled in his moderator so frequently. That series will kick off tomorrow when he interviews Preck and CEO, Arjun Seythi. And with that, I'll hand it over to Austin. Is Bitcoin undervalued versus gold right now? Yes.

It depends. Look, everything depends on time rise and all the rest. But I think tactically, to the day where we stand, yes. I'm pretty sure the stable coin that we'll have the largest AUM and transaction volume in 2014, probably hasn't been created yet. Ethereum has some things going for that others don't. And putting my old TradFi hat on is 10 years, right? How many risk?

models, Austin, did you look at, that you require 10 years of historic risk or the regulators wouldn't let you do anything, right? It has 10 year history never going down. And that's very meaningful. Mantle is pioneering blockchain for banking, a revolutionary new category at the intersection of Tradfai and Web3. Follow Mantle underscore official to learn more. Hello, everyone. Welcome to Bits and Bips, exploring how crypto and macro collide one base is pointed at time. I'm Austin Campbell, a self-described and recovering grouchy fixed-income trader, adjunct professor at NYU Stern. And as Laura said, thanks to the inscrutable puzzle that is corporate politics,

I have been able to wrestle the moderator spot for my friend James. So sorry, James. I am not doing this alone. Joining me first is longtime stalwart of the show, Tradfai veteran, founder of Lumina wealth, and my friend, Rob Alawaliah. and also joining us is now Chris Perkins, part of the city Crypto Mafia, president of Coin Fund, and somebody who I can assure you has the personality to bring some pretty interesting takes on macro investing.

So going forward, we're going to have a rotating set of guests who will be joining us as both topics and schedules per bit. But for this first episode of Season 2 of Bits and Bips, it's going to be the three of us steering the ship today, thanks to the vagaries of scheduling, time zones, and, well, telegrams. So hopefully we won't steer into the rocks. We may fire a few cannons, which Chris would be thrilled about. So on today's show, we have a couple of topics we're going to be diving into, and let's just get started with the first of them, which is Binance Listings.

So Binance, the largest global crypto exchange, recently had something of a controversy over the listings policy and to lay the table on what was going on here, C.J. Heatherington of Tri-Limitless blew the whistle on Binance for charging, in his opinion, extremely high fees for listing, alleging 8% of total token supply and a 2 million security deposited B&B. Binance's founder, CZ, responded directly on Twitter saying, and I quote, Wow, this guy is really clout chasing, but what a loser. I didn't even know who he was until he posted this fake image saying, I blocked him.

I could make it real, but I will choose mute instead, ignore is the best. rejection. And then there's a laughing emoji. So Binance also threatened legal action over this reveal, though this appears to have been retracted. And it is suspected this is around confusion in whether an NDA was offered and an NDA was signed. Others piled in on this debate. A lot of founders have said that they were also asked for listing fees in various amounts or had projects they invest in also asked for these fees, like Dutus and Sixth Man Ventures spoke up on this. Coinbase had some staff pile in. Jesse Pollock of Base was using it as advertising, saying if you were TGEing, we want to help you do it on base with distribution through Coinbase.

Stop paying listing fees and start building aligned holders from day one. Victor Bunit of Coinbase also asked finance if they really wanted their listing policies dissected in court. But a lot of us come from TradFi. So, Chris, I'll start with you. How does this work there? What's going on in that space? What's going on here and what should people think? First off, if you're just on audio, make sure you tune into the video to see for the professor's hair. It's a very important part of the new program going forward. We're going to monitor it every week. Yeah, this was pretty spicy over the weekend. You know, you had a founder

who didn't sign an NDA. And he's like, you know what? I didn't sign an NDA. So I'm going to tell everyone what's going on. It confirmed what a lot of people knew that distribution is very expensive. And, you know, for many of us, I don't think we signed up for, you know, this environment that we now live in, which is these massive centralized organizations have so much power and control. But distribution matters. I mean, just as circle and Coinbase and it's expensive. You know, I think the founder took a big bet and he took a lot of risk by saying, you know what, because he just lost, you know, for the foreseeable future, any kind of liquidity you can expect on Binance.

Not sure that's the best way to do business. Maybe it'd be better to kick that document back and forth. But I think he wanted to show everyone for the greater good how expensive it can be. For my seat, this is a supply, you know, this is very much a markets driven phenomenon, right? If you're in exchange, what do you want? You want a lot of liquidity. You want people to love that token and you want to, you know, you're going to put resources behind it to cultivate that liquidity.

And so if you're a very high profile, high momentum project, you know, generally there's a lot of wiggle room in the way that you can thread that needle. And again, I don't know how many turns. They took them not that familiar with CJ's project, but you're going to pay for distribution one way or the other. And in Tradfly, as you know, it's the same, right? You can essentially have to go through the investment bankers. They take a cut. You got to pay exchange fees.

Honestly, I believe that this world is going to be converging, tokens, equities. I mean, look what Robert Leshner just did over at Superstand. He issued canonical equities on chain on Salana, direct listing, which is already fine from regulatory perspective. And so now that we're in this like regulatory period of normalization, I will tell you something. These legacy players are about to, and I think this extends. We're going to talk about perks later. You're going to see some of the big boys from Tradfi coming in. And I think there's going to be a lot of pressure because if you're an end user, do you want to go regulated or unregulated?

And, you know, and are there ways that we can optimally? the space. So look, it's not, it's probably not the way I would do business, but I think it's shining a light on an issue that people are dealing with. I think the market is going to address it in time. I'll be brief here. You saw me not in my head there. You know, in the U.S., there's this concept of segregation of duties, where you have different roles and responsibilities. Binance, which is one of the most successful private businesses, the world has ever seen, that's a dominant international player and, you know, CZ, who should be on the Forbes 10 list, the incredible business.

He's a broker dealer. He's charging 8% for capital raising. He's in exchange, the venue where these transactions take place. He's the custodian. And also he's got kind of a non-bank bank with issuing these stable coins where we can deposit new lending on. So in the U.S., you know, that's not permitted in international markets. you can do that. He's built an extraordinary business. I'm more of a libertarian type,

but there are reasons why you have segregation of duties. That's good regulation. And that's what's not here. And you're kind of seeing these market forces play out. That's not his fault, right? Because he had no choice. There was nothing else that was available as we built. And by the way, Guy Gensler pushed everything offshore. So, you know, you can't fault Binance for having, you know, that vertical? I'd like to own finance to be clear. So I'd love to owe to a slice of Binance. Yeah, 100% fault them.

Can you fault the Apple store for charging 30% take rate on revenue? It's egregious. It's high. Stifles off for the insurance. Can you, they're acting in their incentive. But same thing. Yeah. Right.

No, and again, I'm talking about faulting them for building out that vertical custody, you know, exchange everything. I'm just saying there were no options. And I think, look, if they're charging egregious fees, the market's going to figure it out. I think it will. Because now I think the U.S. is coming roaring back. And I think the options are going to, I think we're going to see new options come out. I think Sam even launched it, is launching a spot exchange.

And so, like, these legacy players are now going to come in. And I think it's going to be really interesting. How are they going to partner with the natives? How are they going to buy them, partner with them or compete with them? I mean, are we also seeing an element of the, call it traditional listing model versus direct IPO model from Tradfai conflict now is showing up here in crypto but the folks on base are pitching against finance. Totally. So there are three models to go public in the United States, really. Maybe four if you count RTOs, but you have traditional intermediate IPOs,

right? That's where you pay the bankers, they go out and they build the syndicate, blah, blah, well. Intermediated, very expensive. You have things like SPACs where you go public and then you buy something, poor man, I, poor man, PE. And then you have direct listings. Direct listings are where you let the market set the price. You don't go through the bankers. It's just, and like to me, that's the market that's really interesting. I talked about Leshner earlier in Superstate what they're doing. But think about it, the meme coin market cap in 2024 was $140 billion. Okay. Why do I say that? Because these things were unregulated.

You can access global markets and you can tap into that global demand for something that was worthless. The IPO market in 2024 was $30 billion. What's going to happen when we bring value into direct listings? That is the future. That is the future that we signed up for. And that's what this technology makes possible in my humble day. I agree. I agree.

Look, I think that's what excites me about the whole internet capital market's thesis. Several people are talking about that. Kyle from Multi-Coin and Tully on the Salonic ecosystem, NASDAQ and black marketing around this, but I agree. You know, Google was introduced to public markets via direct listing. We need to see more of that. And it also ties back to community and capital themes too. So we need to keep advancing in this direction.

I mean, if I recall, I think Coinbase was a direct listing as well in terms of putting their money where their mouth is on this one. But, you know, another interesting point of this one is exchanges are actually not completely cheap to run. And this will relate to something we're going to talk about later. But like, you need to have like servers with good up time and surge demand capacity. You need personnel. And especially if you've broken all these things up in the U.S. way, you have a lot of different moving parts that you're accounting for. Somebody's got to pay for that.

So like one question that I want to throw to the two of you before we move on is, is it better to be charging listing fees of the projects, to be charging your users in the form of higher trading fees or fees for custody or something like that? Or where would you think from the balance point here? Because so to speak, the money's got to come out somewhere. I don't have a strong view. I think in all marketplaces, you have to choose who your primary customer is. In the case of Amazon, they have a choice between help suppliers or help consumers.

They have a choice on consumers. They drive down prices and beat suppliers against each other. And exchanges have to make a decision of who their primary customer target is and deliver value for that. And there are a lot of different ways you can approach it. You're going to pay. You're going to pay somewhere. You may pay in custody. You may pay in some kind of joint marketing.

You may pay in listing fees, whatever. Distribution is expensive and it's very valuable. And so that's something that is absolutely going to happen forever and ever. I think with defy allows you to do is maybe to get access to capital, markets in a more efficient, direct way. But I don't think CFI is going anywhere. You know, you provide, they provide a lot of client service as well for people that need their hands held. Defi is just not there yet. So yeah, you're always going to pay. I think the other part, and Chris, you touched on this earlier, is if you want to reduce the

market power of somebody like finance, the best way to do that is compete, right? Like, we need American competitors entering into this space and able to fight them, you know, essentially on equal terms because if anybody thinks the past four-ish years under the Biden administration were a fair fight between Coinbase and Biden's, you have no idea what was going on onshore in the United States. And short of using the extremely heavy and often, I would say, complicated bat of antitrust, which would be even harder with an offshore entity, you need to fix this problem through competition. And one of the reasons that listing fees are a reasonable number in traditional finance and that exchange trading prices have gone down, down, down, down is competition.

Right. Like even now, we're still seeing more proliferation with BlackRock starting in exchange with partners in Texas, right? And so, you know, I would as a final thought on this topic, say the ultimate solution here is always going to be more competition at markets in order to drive value for the consumers and at users. All right. On to what I think Chris has been excited for, which is Black Friday.

So in case you were living under a rock, Black Friday was recently one of the largest liquidation events in the history of crypto. We wiped out about 20 billion in counting of leverage positions spread across many venues, hyperliquid, finance, and more. This was one of the largest de-leveraging events in the history of the ecosystem, probably on par adjusting for market size with some of the catastrophes of 2022. And for those unfamiliar with what was going on here, a de-leveraging event is essentially a stress test for the system that you're living in. And in crypto, which is a 24-7 always-on system, you get auto liquidations. And then if those are not sufficient, you end up in the realm of call it backstops. So first of all, this is all well and good locally, right? Like we've seen automated liquiditions for borrowing positions.

We've seen small perpetual positions being wiped out. But what happens when it's not local? When the entire market is moving in size, large liquidations need to happen all at once. And there may not be, quite frankly, enough they're there to absorb it all. Well, the thing that happened here is called automatically leveraging. And there have been a lot of takes about this and what happened. But I'm going to start by reading one from Don Wilson, the founder of the founder of DRW and then I want to kick it over to Chris and then ROM. But Don had this to say,

and this is a threat on it. If Defi is the future of TradFi, what did Friday teach us? Friday's crypto sell-off was a stress test for market infrastructure. It didn't pass. Here are the three big lessons the market needs to learn from the tuition it just paid. Real-time margining keeps things real, but needs a check. Real-time margining is one of Defi's core innovations, but in a market that moves 24-7, it also creates new risks to manage. Defi needs infrastructure that lets you sleep, without worrying you're going to wake up to mass liquidation. Enter FCMs. Traditional markets work on badge margining. Your FCM calls, you've got a few days to send more money. We've all seen that go horribly wrong, but in a real-time market, they become the credit buffer, the liquidity shock absorber,

and the human judgment to smooth the system's response to volatility. ADL is at risk management. It's a last resort kill switch. Friday showed what happened without these buffers, FCMs provide. When exchanges froze deposits on Friday, there was nowhere for the pressure to go. Result, ADL kicked in, forcing other participants to take losses. That's a design flaw, not a market failure. Even worse, rumors circulated that some large participants were exempted from ADL. This mechanism is problematic enough. When deployed in ways that aren't uniform or transparent, it undermines trust in the market.

exchanges can't be all the things. In fact, they shouldn't be anything other than a neutral venue for trading. The minute they are providing liquidity or generating revenue from liquidation events, we've passed what should be a bright line. And a bonus lesson from decades and markets. On Friday, liquidity providers did what they should be expected to do and what mature markets anticipate they'll do. They reduce the size to reflect higher realized volatility and then increase their size when markets norm. analyze. That's rational market behavior. Stress tests reveal where systems are resilient and where they're not. The right takeaway from Friday is to review what happened and identify places where together we can strengthen infrastructure and resilience. If defy is the future of finance, it needs to meet the same standard as

Tradfai, transparency, continuity, and trust that it works, especially in heightened volatility. So there's one set of comments. Chris, what do you think you like to joke with it? I thought there are a ton of terrible takes over the weekend as like you go through your podcast feed. Oh, the purpose of the product is awful that's not ready for prime time. I don't agree with that. Oh, Defi held up great. I don't agree with that either. You know, how many takes?

Defi did great. It did exactly what it was told to do. Yeah, of course it did. But that doesn't mean it was designed correctly. And then CFI was also pretty much a disaster in my mind. What's the take? The take is that perps are. here to stay and that field was wide open because I don't think it's been figured out yet.

You had an entire industry that ignored, you know, you want to talk about liquidations? I was in the biggest liquidations called Lehman Brothers. I was on the floor when that happened. And like, we learned a lot of lessons and it's easy for crypto people, you know, to say, oh, you know, stratify guys don't know what they're talking about. Like we went through agonizing week after week of trying to fix like all the things that were broken in derivatives. Do we come out perfect?

No, but we haven't had like these types of issues. And what we did was we came up with, you know, obviously back then we didn't have decentralized technologies, which frankly probably would have worked better because we could send the risk out. We decided to just super centralized everything into call CCPs. We just didn't have the tech, right? But what we did was we came up with principles that would protect that system. And it's called Risk Waterfall. And Risk Waterfall has a few different items.

The first is good pricing, which obviously. broke down in its last crisis. Second is initial margin. And what you want to do is if people put on trades, they should pay their own risk. They should collateralize their own risk. That's the North Star principle when it comes to derivatives markets.

Okay. And then the exchange of the clearinghouse is something called skin in the game. This is their own capital. And why do they put their own money in, skin in the game? Because they calibrate the whole thing. They program the whole thing.

If they screw it up, they should pay. Okay. And then it goes into what we call guarantee funds, insurance funds, whatever. That's a mutualized pool. Traditionally, it comes from members. I think you can probably do something really cool with token incentives, with token incentivizations, et cetera, to have third party capital. That's a socialized pool.

Hey, we broke through these lines of defense. Now someone who wasn't putting on the risk is going to pay. Okay, you need to make sure you get paid for that. And then, you know, you go into what's known as recovery and resolution. So you try to do some things where your haircut margin and then you end up with that ADL. So ADL is like kind of at the end. And what these guys did was they ignored every aspect of risk management. And we jumped right to the end and we said it worked.

You know, in certain cases, no, no. So what I'm kind of excited because now I think the light's been shining. And by the way, derivatives are everything in markets. You want to know why, you know, ice bought nisie and not the other way. around because derivatives are much more lucrative. You know, we can maybe talk about, you know, I talked the last time I was on the show about futures, how futures are holding this industry back because you can't hedge. But long and very short, this is shining a bright light.

And I'm excited because I think this opens, this opens a fairway now for people to jump in and do things right and differentiate with risk management. Now, you can do it regulated onshore or you can do it on regulated. I don't care. If you do it on regulated, go for it, you know, but, you know, at least have to, transparency and know what you're up for. But yeah, to me, it was a catastrophic breakdown. But I think the good news is that the industry can now move forward. Yeah, no, I agree. So in this case, CCP means central clarion power, not Chinese Communist Party. So there's ICE,

there's CME, DTCC, for example, and Chris just walked through the five levels of defense around that. You know, digital assets just B runs history and a lot of what's been understood and learned. So in 2021, VisionAoss, let's learn where rehypification was and why you can't have a Celsius and Mex, and all these other players lending out customer collateral, rehypicating. You just can't do that unless you have a lender lost resort and something like FDIC insurance. So now on the derivative side, we learned what central clearing is and how clearinghouse's work. So, yeah, the category will learn and update. From a market's perspective, I think it's bullish.

You know, derivatives are zero sum by design. and the margin is in cash. So for those losers, it's a matching winner. Now, there are some forced liquidations to the automated de-leveraging process. So, you know, I'll leave the concept of fairness out of it, but some of the mechanics aren't perfectly symmetrical. But there's cash out there. And so they're prepared to lean in and, you know, buy the dip on this, which they did.

All right. Huge opportunities for stable coins, though. I mean, awesome collateral for derivatives. And I think that's one of the biggest use cases that are overlooked. All right. So on that note before, I have a lot of things to say about what you guys just said. But first, we do need to hear from an ad. So I'm going to do that.

Then I'm going to come back and start a fight. Mantle leads the establishment of blockchain for banking as the next frontier. UR is the access layer that transforms Mantle Network into a purpose-built vertical platform, the blockchain for banking, that enables financial services on chain. UR unifies and vertically aligns, Mantle's focus on payments, trading, and assets. MI4, METH Protocol, Functions FBTC, supported by developer grants, ecosystem incentives, and the industry-leading distribution platform through the UR app, reward station, and by-bit launch pool. All economic activity within UR will be captured by Mantle Network to further drive value to token holders

and establish its significance in blockchain for banking. Follow Mantle underscore official to learn more. All right. So welcome back. Now let's talk some more about this problem. So one, I would say, and I've said it before on this show as a guest, one of my persistent critiques of the crypto space is that they don't pay enough attention to craftsmanship on things that as Rom was alluding to, traditional finances spent a lot

more time on. And we kind of have this habit of saying, oh, we're going to rebuild the car. We're going to re-engineer the car. and you get like an engine and a steering wheel and then you're like, cool, I'm done. Right? Like nobody puts wheels on it. Nobody puts brakes on it. God knows there definitely no seat belts.

And so if anything happens, people just go flying through the windshield at 120 miles per hour. And so in this case, what I would point out is a couple of things that I think were exacerbating factors for how, as Chris stated, we kind of race to the bottom of the stack. One is there's a real problem in this space with price feed, like stability. redundancy and design, which is to say, is somebody who's like managed a 40-act fund at public markets, I can't close my book by just taking prices from one broker and being like, eh, good enough, right, and moving on. I'm taking like averages of quotes. I need multiple redundancy. I need a process to value things. If like, I don't know, my broker's sick. It doesn't send a quote sheet. And here we had a lot of people relying on the Binance price feeds,

which during this drawdown basically just bricked for a while. And so, one of the things you've got to have happen is that the price activity that you're observing actually needs to be the real price activity. And I think for a lot of this, we honestly probably couldn't say it was. Number two, I would say, as you're designing these systems to go back to the collateral point, you need to pick the right collateral. Because one of the other things we saw here was essentially a temporary DPEG in some ways of USDA, which is Athena's synthetic dollar. And I want to be clear, there was no problem with Athena that caused them to pause redemptions, but somebody wiped down an order book, probably searching for collateral. And as a result of that, this thing traded down by like

many tens of sets. Well, when you've allowed that to be a tool to collateralize derivatives, and again, you also screwed up your price feed, we're back to sort of one of the 2008 era problems, which is not only am I having problems with the leverage and derivatives positions that I may have created, but I'm having problems with the collateral that I posted back those derivatives positions. Because if anybody remembers like asset backed commercial paper, there have been totally things that we thought were worth par and everything is good. And actually, JK, worth like 70 cents. Well, look, I think digital assets always iterating and learned. Like Trotify has learned from screwups and then it learns and adapts and it's still screwing up.

Speaking of asset backed, in the last three months, we've had frauds from Canton, tricolor, first brands, where you've got borrowers that are alleging that they have good collateral that meets certain covenants, and that's not the case, and it's fraudulent. By the other, all that needs to be on chain. It's absurd that it's not today. You still don't have a loan-level transparency in securitization. So markets learn by taking these hits than private market actors adapt and respond. And sometimes, you know, this heavy-handed regulation that comes in, just finding that

right balance. The technology in our space and the crypto space is so much better and we can build such a better system. Real-time collateralization is awesome. I wish I had it when I was running in the largest FCM in the world, right? And the issue is that it's not a technology issue. It's a design issue. It's things that people didn't put thought into for whatever reason. They ignored risk. management and stuff that could be calibrated just so much better. I mean, how cool would it be to reconstitute a risk waterfall, decentralized risk waterfall, right? Where the code is going through the liquidations, it gets to this guarantee pool from LPs that are contributing and getting paid in incentives, you know, and they're putting the money at risk and they're getting paid

for it in a decentralized manner. This is so exciting. No, I agree with that one completely. Chris, let me take actually this and yes and you. Do you think we should be bringing the FCM model on chain? Because to channel another one of our former colleagues at City, how do you balance the interests of individual retail traders who have to do things like eat and sleep against institutions at a 24-7 arena? Or do you think there's another model you're thinking up there? Yeah, so FCM model means that it's an intermediated model

where the broker like Donna is saying is like meeting all the margin calls and taking care of everything, I think there's going to be continued demand for that service. This is something I know very well because some institutions will want it and they'll want to pay for it. I don't think they've paid enough for it in the past, to be honest with you, from personal opinion. And I wish down would pay more, but that's another story back in the day. But that's fine. That doesn't mean that there shouldn't be a decentralized alternative as well. So I think these are just different strokes for different folks. And I think it's very, yes, there's going to be an FCM model. Yes, there's going to be a DFI model. And, you know, there's benefits to different

types of players. Let's move on then to building some other stuff. So another little news item that, you know, small detail for the world is that Tempo, a blockchain for payments backed by Stripe, recently raised a funding round. What we know, $500 million series A to $5 billion valuation. Backers included Stripe and Paradigm. Thrive Capital was in there, Green Oaks, Sequoia, Ribbid, SV Angel, and the goal is obviously making U.S. dollar-backed stable coins core infrastructure for global payments. So before we get to some of the joiners who came to that project, I just want to pause there and ask Chris and Ram, what do you guys think of those terms? What do you think of this launching into what is becoming an increasingly crowded and competitive? Like the cynical take,

which I think is accurate, is this is an internalized version of a round-trip trade. Right. So in the backdrop, public markets have been storing. You've seen deals like NVIDIA invests in Open AI, open AI turns around buys GPUs from NVIDIA, right? That's the critique of the market, along NVIDIA, et cetera. But you've seen that here. Like, Stripe and Paradine didn't need to actually raise equity. They can self-fund this whole thing. But the valuations are so high, they're funding their OPEX, the invests, actually in this case, KAPX and OPEX, with external investor money because they can. And then the valuation goes higher, so it pays for itself and then some.

So that's my, from a financing perspective, that's what I see this. That's what this looks like. I mean, this is part of a bigger trend around stable coin and stable coin distribution, right? You're seeing plasma, you know, who's very close to the tether codex out there. you're seeing, you know, now Stripe and Tempo. I think stable coins are, you know, you're the stable coin expert, Austin. We could have three trillion of these things. Like, how big is it going to be?

They need to move and then they need Rails to move upon. I think what Temple did was it's, you know, they attracted some amazing talent in Dankrad, but they're optimizing for stable coin and payments, right? And I think that customization may be the end game in certain places. interesting design choice, EVM. So maybe that's good for the Ethereum ecosystem, but not a layer two. Maybe that's bad for the Ethereum ecosystem.

So it's really interesting from a design choice perspective, but it's part of this larger trend. I'd love to do what your take, Austin. You're the stable coin guy. I mean, obviously these stable coins are coming. I think there's going to be trillions of them. They need to move on something. Are these going to be competing ecosystems?

How are the rails going to work? So if we're zooming out and thinking about what is everybody trying to do here just to scope the size of the opportunity and give a sense of why everybody cares, there's round numbers $1.25 quadrillion dollars of wire business annually around the world. And that's a number so large, it sounds like my daughter made it up. Right. This is a stupendously large market that is out there for transfers. And so one, I want people in crypto to know when you hear number. numbers and payments like, oh, we moved billions, that payments people look at that and go, oh, cute experiment, let me know when you get to something that's scalable, right?

Like the market is tremendously large and we're only just starting. So I would say if you're drawing lessons from that space, Chris, one of them is that the ultimate winner tends to be liquidity, right? Like you want money to be able to move. You want to be able to use it. You want to be able to use it fungibly for a lot of things. So this was something that like J.P. Morgan has been learning the hard way for now roughly the past almost 10 years with Onyx. Right. If you're a behemate the size of J.P. Morgan, because if you think Binance is big, go look at them.

And you can't get people to unilaterally adopt your own private blockchain, right, that they were attempting to push out into the world. I have a lot of questions about whether any of these single company affiliated efforts have a chance to be successful. Because like put on your hat for a moment and imagine that you're the CEO of PayPal or that you're the CEO of like Block or Visa or MasterCard or really anybody. And Stripe comes to you and says, hey, we want you to start doing payments on tempo. Yeah. So what's the end game? What are you to see, you know, obviously for certain apps, there's going to be accumulation of stable coins. Maybe their own stable coin.

I could see a world where, you know, I'm polymarket or something like that. that. I'm like, hey, you want to come into my ecosystem or using my token? I don't know. I don't have information around that. I'm just speculating. But what's the endgame for payments? Are you going to see like one global public rail? What do you, what are these these feftoms? So one, on the tokens themselves, I think the question as to whether we see one or many ultimately comes down to how fungible they are. If they're relatively fungible with each other, I do think we're going to see many because it makes sense for people to want people transitioning into their type of money if you can easily get between them. So like, let's instead of traveling forward in time, travel back in time and think about

check clearing, right? Like, checks cleared pretty liquidly between banks. Consumers kind of didn't care. The money just showed up. They didn't have to like think about that whole thing. And meanwhile, yeah, there's a small army of human beings like literally exchanging checks back and forth and back rooms and clearing everything. But like, fine, it worked. So if we moved to, a world, let's massively oversimplify this, Chris, since you mentioned them earlier, where everybody's stable coin is just a wrapper on super states government money market fund, then there's going to be a huge proliferation of stable coins, because you can move between all of them seamlessly with a wrap and unwrap item. However, if there's way more fragmentation on the back end of stable coins,

I think you move towards something that looks like winner take all. So it creates this weird, like, geopolitical push pull of if you have like Mika writing their own like requirements that are very divergent from genius, which might be very divergent from what's going on in Asia, ironically, we're increasing the probability of a winner take all outcome. And that's probably a bad thing for everybody other than the United States. So I'm not sure we're against it here. But like if I'm Europe, I'd be terrified of telling everybody, hey, why don't you use genius stable coins they're the most liquid ones. You probably see both proliferation and a power law distribution in terms of the dollars

back in it, just like you've seen digital assets, right? You have five to 15, maybe 20 digital assets that matter, but the barrier to entry to issuing is so low and other players are coming into the market and they're easy to issue. So we'll see that. But here's the other kind of angle on this is Thrive Capital co-led this investment. Thrive is run by Josh Kushner. linked in the Trump orbit. I think that's another reason why they did this, because the political orbit of the White House confers value in the next three years. So maybe that's why they did this

financing. I mean, I was going to say, I can't say that hasn't been the case in markets. No doubt that's what I have. Look, Ribbitt didn't lead it. Now, they were participating. Now, Ribbett's ecosystem of fintechs probably will be motivated to adopt tempo. Sequoia was involved and Drisson Horowitz wasn't. That's kind of interesting. But the main player is like it's Kushmer. That's you don't see that. You don't see that.

Right. Chris, you're the VC in the room. Like they're not like the leading crypto VC. They're very skillful, very thoughtful, have had an amazing sets of wins, right? Very thoughtful. He got a profile in a magazine the other day. to their credit, they got this deal done. This would have been a highly coveted deal to have Stripe and their muscle behind this.

What do you, what do you think about the political angle here? Well, it's not the only political stable coin, right? We have a Royal Liberty one as well. So where do you draw the line? Right. I mean, going back to a previous topic, do we think World Liberty paid a listing fee on finance, right? Like, clearly there's some value, you know, to be associated with the Trump brand there, as Rom said at least for the next three years in the United States. So, all right, I want to get to the

other angle of this story, which Chris, you already alluded to, which is Dankrad Fice left the Ethereum Foundation to join Tempo. And this definitely provoked some reactions. So Ryan Adams of Bankless said tempo will optimize for itself, not Heath. Nick Allman said not a death sentence for ETH, but Tempo will ship faster, better UX via Stripe, Ethereum can't compete directly. And others have said this is a big loss. So, Rom, I want to start with you on this one. Like, what does this say about Ethereum and what does this say about some of the attempts of permissionless blockchains if people from that world are now leaving for things like

Temelope? Overall, I think Ethereum as an asset is a good relative strength. Like I own Ethereum, I think it's well positioned, beneficiary of stable coin. stratified chain, which is actually a good thing, even though it sounds not good. That's one, header statement, right? Like, I think people are moving to where the capital is going and tempo is the next phomo thing. And if you're an engineer and you're not being compensated well at Ethereum, which is also

the allegation, then you're going to do that. The third piece is that we talked a little about this earlier. One of the main hangups around Ethereum is a lack of leadership around. around focus and opportunity set and what pain points you're trying to solve. Like the tallax is doing the merge, the purge, the splurge, and the version. Then we stopped writing out things that rhyme with those words. And it's very theoretical as opposed to like what Salon is doing around internet capital markets.

We're solving these problems. And it's easier to engage with that ecosystem. So, I mean, in theory of what's been accomplished is obviously extraordinary. it's phenomenal what's been bill but the ability to commercialize it's been difficult like if you enter the ecosystem like where you go it's difficult to navigate so I can appreciate someone who's in the ecosystem they've seen the maturity of it and they're trying to jump on the next train from I think that Ethereum is making some changes to address some of the shortfalls that you cited I agree with Solana and other you know labs organizations they're very focused on

BD, they're driving it every day, and I get it, and they're very successful. And that's an edge. And if, you know, they can in certain cases move quicker and they've got a great story on internet capital markets. The salon aside, they need to solve derivatives. That's been something that I've been looking for. You know, if you're the decentralized, NASDAQ, you've got to figure out derivatives. And so, like, I want to see, you know, looking for that.

On Ethereum, look, you've got to theorize now, Vivek over there, you know, he is pushing every day. He's business development, right? You got Thomas New Blood in the EF as well. And it feels much different than the past. There's a pretty deep bench there. To your point, the theorem has some things going for that others don't. And putting my old Tradfai hat on has 10 years, right?

How many risk models, Austin, did you look at that you required 10 years of historic risk or the regulators wouldn't let you do anything, right? It has 10-year history never going down. And that's very meaningful. and it's something that you can't you can't coach size you know like it's it's a thing you got and it's an edge and it's shown a lot of resiliency even with this AWS outage you saw a little bit of noise you know maybe around some of the layer twos that are still working with decentralization etc but he's just moved on and I think there's value so you know at the end of the day I think these ecosystems all have promise and can be successful in their own ways by optimizing I'm not

so sure how the stable coin play ends up. You know, right now Ethereum dominates the space. Are you going to see it migrate to some of these high-performance payments change? For sure, but like there's a lot of different use cases. What about this? What about that? What about Salana and others? So I'm not sure how this plays out. We'll see. Well, I'll say something provocative on that front. I'm pretty sure the stable coin that will have the largest AUM and transaction volume in 2040 probably hasn't been created yet. Right. And I say, that because in crypto, we have this belief that there's like a unitary form of money that can be used for everything. And that is simply not true. Like Chris, you and I know one of the biggest

use cases for stable coins is clearing derivatives trades on chain. And once you start moving there and you want to build something robust that institutions will use, that means bank deposits can't be involved. You're probably doing something that is created and redeemed in kind with T-bills. Like, Oh, I don't know how it's actually currently done in derivatives markets in many cases, right? So please, whatever you can take from like our stream, don't go read a CSA, but just know the number one form of collateral you can pose for derivatives is T-bills. Right. And so I think it's very possible that people are going to start bifurcating or trifurcating or whatever number it is among uses of stable coins of like retail payments that might look more like check-queering, derivative settlement that might look more like institutional-grade collateral.

And then there are probably other preferences for things like treasury funds, yield generation, etc. I think this is nowhere near mature. Like I would say, Chris, if you want my right prediction, it's that we're still at like, call it the AOL where everybody's getting like stuff on CDs and there's that horrific noise that sounds like, you know, an electronic goat being tortured to death coming from the modem. And nobody has been like, aha, Facebook. or much less aha TikTok right in the stable coin space yet. Love it.

I agree briefly. So city CEO, Jane Frazier on the earnings call last week said essentially tokenized deposits are coming. She sees them as a better payment vehicle in the stable coin. So we could spend an hour on this stuff. I just want to highlight, I agree with your point. Don't take the current market leaders as the base case for where we are three years from now. I'm going to tee this one up for ROM.

and I think we're just going to jam, which is to say to talk about the other big crypto asset from gold versus Bitcoin, 23.5% win for gold over the past month. So let me just ask you the question in this way and then we'll roll. Is Bitcoin undervalued versus gold right now? Yes. It depends. Look, everything depends on time horizon, all the rest. But I think tactically to the day where we stand, yes, that's one. Two is, I'm going to show on my screen here real quick here. I'll pull up a gold on a chart.

You know, gold is really a dollar substitution play, folks. That's the way to think about it, right? It's a dollar substitution play, and it's been benefiting from this increased geopolitical uncertainty, which is starting to abate. It's obviously benefited from China, shifting from purchasing treasuries to augment the foreign reserves to gold. That's been the primary bid. Then there was a narrative and then debasement got in the narrative. And then momentum showed up. So that's what we are with the gold, right? But here is here's gold.

You can see 30% in the last three months, one year 60%. Here I'm showing the relative strength, kind of a basic technical indicator. It's a commodity. So you're dealing with the commodity. You know, the fundamentals we talked about, China bid. There's a dollar debasement narrative. On the technicals, I mean, if you're buying here, I don't think that's, a wise decision. It doesn't mean that it doesn't go up next week. I call this part of the movement.

It's called a, like it's a bargain with the devil. And I see it often when you have these parabolic moves, meaning the probability of the next day going up is very high and the probability the after that's going high, higher as well. But the probability of one month or three months later is actually negative. Markers do this all the time. Same thing happens at the bottom of a correction. It's neurosymmetrical. When you're having a cascade capitulation down, the probably doing down the next day's high as the Vick starts shooting up. But the probability three months later, that being lower is actually low. And so what the markets are now is just sucking up that marginal liquidity and that

phomo buyer and squeezing people that are trying to short on the way up, which you shouldn't be doing either. And so that's kind of where I see it. And I think, you know, Bitcoin and digital assets have room to rally where we are, at least looking out, you know, from a few. weeks. But this is such a dynamic market that you really have to reassess because time is one variable and prices the other variable. If Bitcoin shut up to 125 tomorrow, like my view might adjust, not might it would after we consider.

So what's the trade run from sell gold by Bitcoin? I think sell gold and buy QQQ into tech earnings and small cap value, which is still rallying and beating tech and beating all these things, being all these things, right? Even today. Right? Mortgage refinance names like Better was up 30% today. I mentioned better on this show like two months ago, I think, but that's rally. Mortgage refinance names are rally. Not just that one, but like Wells went up on earnings. Loan Depot went up 15% today. So mortgage refinance is a, you know, rates coming down is the is the trade or the trend. And the question is how to express it. Maybe home builders, consumer spending is going to go up. People are refine, more disposable income, consumer discretionary. stocks like the airlines are going up so uh sounds boring but i think like those ideas are good ideas going into q4 like i'm more of a risk adjusted return kind of person like i i think that's a better risk reward all things considered all right so let me ask the follow-on question that comes from that because clearly we're still on the stocks are the best investment really over gold though but

to go back to kind of Chris's point, at their current levels, if you had to hold without the ability to sell one of gold or Bitcoin for the next month, even knowing we're in like devil's bargain territory with gold, which one are you coming on? I don't know. I mean, that's hard. I mean, the thing is, the reality is markets don't actually present you with that choice. It's like, you know, I mean, look at your overall portfolio and what's the role where you're trying to accomplish. How does it fit together with other assets? and, you know, stick to your knitting and you'll do well. You know, there are actually a lot of ways to make money.

Try not to get into FOMO and get into Stylger, to do it okay. So I'll actually try to make part of the argument for gold here, which is that you had earlier said gold is a dollar substitution trade. I'm not sure that's the only thing it's a substitution trade for, right? Like, you know, again, thinking of past market regimes and rhyming, we're in this weird place where although we could, continue to spend money here in the U.S., we may still have, like, call it the least dirty apartment of all of the dirty apartments when you look at most other currencies. I wonder how much of the

gold demand is more, you know, like vibes from the late 90s and looking at Asian currencies and saying, do I really want to own anything denominated in that or would I rather just parking in gold? Yeah, good question. What are the retail investors doing? Look at the New York Times article. No, we're talking in New York Times. Awesome. Right? So like, like when you, this is almost the economist now. I'm waiting for the economist headline. This week, I'm telling him that's going to, right?

You know that's coming soon. But I can't get in the New York Times because I spend my money wise and I don't subscribe to the New York Times. But you can see the headline here is gold bars, gold nexus, gold earrings, the rush to cash in. So this sounds like retail buying. You've got CNN talking about it three days ago. The Wall Street Journal, they weren't talking about it three months ago.

This is late momentum. I think this is, it's an easy read that it's slight momentum to, high conviction, that it's light momentum. Chris, you looked like you were in pain when I brought up the Asian currency crisis. What do you think? Look, don't have strong thoughts on gold. I think what we're seeing is a hotball of money. And right now that hot ball of money is in the gold space. Not sure where it's going to go next, but it's definitely there now.

Look, I think, but if you're looking at a store of value, I mean, Bitcoin is a much pure store of value because it's programmable. Like, how much gold is there in the world? Somebody told me you can fill a Olympic swimming pool and that's it. But then maybe there's a rumor that they found some in China. Like the supply is less certain. And so I think it's time. But what do both have? They have social consensus as a store of value.

My money's on Bitcoin. just from a fundamentals perspective because it's more pure when it comes to its limitations. All right. Let's move on to what's probably our last topic, then, which is where the hot ball of money just was, Chris, which is the dat space. We still have more dads coming. And we saw Quobie's got a $1 billion, ETH dat. Ripple is coming with a $1 billion debt through the acquisition of, I believe, G, Treasury. Chris, what are we seeing in this space? I know you had some thoughts about them vis-a-vis what had been happening in crypto overall.

Yeah, I think the question is, is it a frothy space? Or is it going to be part of market structure for a very, very long time, maybe permanent? The answer is yes. I guess both of these things right now. And yes, MNAVs have come down. One of the biggest problems that you have with these assets is that it's very hard for institutional players to, enter them. Why? Because they're so damn volatile. And if you had futures or a more robust derivatives market that was suppressed for so long under the last administration, yeah, you have it now

for the big four or whatever, but we need comprehensive futures. So then like I'm working on an article now, it's kind of this new wrinkle on the basis trade because we don't have ETFs either, remember, we're still lacking a whole ton of tail ETFs. But maybe in the interim, once we have those futures and I think they're coming based on some conversations with with a number of folks, including regulators. Now you can finally give institutions the ability to hedge. That's what's lacking. That said, you know, I think these are going to be permanent, like, by the way, during Black Friday, if you were a debt investor, you woke up on Monday and nothing happened, right? You just kind of, maybe it was a little volatile, but you sailed through. I think there's something to learn through that

example. So yeah, they're definitely here to stay. We look at a number of different factors as we evaluate them. Those factors are really hard to put together. Do you have an asset matter? Does what they're doing? Do you have someone who can tell the story? What are the fundamentals of the underlying token? But done right, and you do your research. I think there's a lot of value here. Research on what, though? Aren't these all attention assets? Research on who's got the biggest attention turret? And then you buy that. These are momentum assets? No. No, there's fundamentals. Look, you're taking an asset.

You're wrapping it in something that is operationally accessible, something that you don't have to adjust your investment docs to trade. You're opening up pools of capital that can't access crypto. No operational complexity, right? So there's that abstraction that's very important, right? You have underlying token fundamentals. And if you have an asset manager knows what they're doing and you increase your crypto per share, you know like rom look you have you have uh strategy i think since since inception when i started

buying until september of 25 i think strategy was up 22x pick one is up like 11x right so done correctly and structurally i think you can drive real about i think it was fair there are fundamentals i don't think it's the primary driver of price so the primary drive micro strategy was michael sailor and he's evangelical abilities and you look at like the Ethereum debt space, what's got the most relative strength? What went up the most today? 100%.

It's Tom Lee and Bitcoin, right? Because you have someone who's able to translate to those institutional buyers a product that they can access. You think it's not institutional buyers. Institutional buyers should not be buying Tom Lee's product. They should be buying Ethereum machine, which has, I believe,

the right correct fundamental underwrite, the right structure, there are no games with the warrants to grade a short-term bid, et cetera. So it's not- I don't have an issue. I'm not going to get into that's like, like, or which ones I don't. I'm talking in general terms, right? But I think the point is, is that there is value. Like, as you just said, you like ether machines, so there's value, right? I would say, like, let's look at the top holders of S-bit, for example. The top, well, parify, they must have gone in on the pipe. You know, we should have been. Ben back from Parify. I think he's been very active here.

We should get Danny on from Orbs. I'll say, I'll pile in and say one thing that I think is also going on here is still some of the hangover from the previous SEC and some of the functional abilities that DATs have. Chris, to your point, like I wrote a paper recently with some of my friends over at Gito Foundation on liquid staking tokens should be allowed within ETFs because then you've used. capture the staking yield but still have liquidity to pay redemptions at the same time,

if truly necessary. And this is still like a cutting edge revolutionary idea, whereas a dad is going to have a whole internal functionality to like manage and measure that if they're doing a good job on those sorts of things. So I can see to your point, Chris, a structural argument for dads that are really doing something that has fundamental value. I agree with ROM. A lot of them are just attention plays. That doesn't have to be uniformly true. But Yeah. Some of these are probably going to die horribly. You're right, right?

Because we were deprived ETFs on purpose. And so we had to innovate through that. Now, UTFs are tough because of daily liquidity, right? And these instruments do, Ron, you've got to admit, man, they give you a lot more flexibility to drive yield and to increase your MNAV done correctly. Correct. But it's really freaking hard to do. It's a better product than an ETF, all things put together.

I agree. Yeah. Yeah. It's not easy to pull off. I mean, in some ways, one of the great things about various forms of term or interval or closed-end funds to your point, Chris, is burying the volatility for a lot of people. Like, look, whether we like it or not, human psychology of investors as they feel losses about twice as much as gains.

And so people panic at bailout in volatility. But it does seem like the IPO market is cooled off now. It needs a breather. There's just so much frenzy. You know, how many of these 5X-sellerat funds? have filed to launch. I've seen this. 5X levered bull bear,

like all the combinatorials around ETLFs that I don't conceive of is not filed. They're not listing yet because they've got run shut down. Probably a good thing for now. But we are seeing these discount to NAVs come back.

There's at least one closed end fund that has an 18% discount to NAV. I'm looking at it, for instance. And I think some of the answer for the Dats is going to be how easy is it at some point for somebody to take the thing over and essentially put it down if that discount gets too large. And the answer to that, by the way, is not uniform. That'll vary heavily on a case. Yeah, I agree. Now, some of these Dats carry unspoken

liabilities based on how they were brought into public markets and the legacy obligations that the companies had and any lawsuits. So those those things show up. you know, either when these things go way up in price and some say, okay, like, let me get a claim or they lose money, the losses show up. So, you know, there are cleaner stories out there and then kind of dirtier death stories too. All right. So on that note, we're going to leave it there. Next week, we'll come back and find out which that's where I'm likes most, right? No, I'm just giving you a hard time. All right. So everybody, thank you for joining us for this episode of Bits and Bips. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding.

Until then, take care.