Unchained - How Hyperliquid Came to ‘Threaten the Very Existence’ of CEXs Like Binance - Ep. 915

Episode Date: October 2, 2025

Perp DEXs are on fire, with volumes topping $1 trillion a month for the first time.  Aster, backed by YZi Labs (formerly Binance Labs), has suddenly vaulted to the top of volume charts, but is its rise organic, or manufactured?  But while everyone frames the battle as Aster vs. Hyperliquid, Syncracy’s Ryan Watkins and Sunny Shi argue the real fight is much bigger: decentralized exchanges versus centralized giants like Binance.  Plus: what role Solana will play in the next chapter in the perps DEX wars? And won’t Ethereum even compete?  Thank you to our sponsors! ⁠Binance⁠ Token2049 Guests: Ryan Watkins, Co-Founder of Syncracy Capital Sunny Shi, Investor at Syncracy Capital Links: Unchained:  Nearly $12 Billion in HYPE Token Unlocks Loom Ahead: Maelstrom Why Hyperliquid Should Cut Its Total Token Supply Nearly in Half Learn more about your ad choices. Visit megaphone.fm/adchoices

Centralized exchanges are the most threatened they've ever been in their existence. And these centralized exchanges across all fronts, both spot and perps, just continuing market share. Hi, everyone. Welcome to Unchained, your no-hap resource for all things crypto. I'm your host, Laura Shin. I'm here with Ryan Watkins, co-founder of Synchristy Capital, and Sunny-Shee, investor at Sequency Capital. But before we dive into this discussion, we are going to give a little love to. to our sponsors, Token 2049 and Finance. The crypto world is buzzing. On October 1st and 2nd, 25,000 people will be at Token 2049, Singapore, the largest

crypto event in the world, featuring headline speakers like Eric Trump, Vlad Tenev, Tom Lee, Bologi Sreeny-Bosin, and Arthur Hayes. Visit asia.tokin249.com now to get 15% off tickets with the code unchained. Finance is the world's number one crypto exchange. trusted by over 290 million users. With industry leading liquidity, security, and a wide range of digital asset products, finance is the place to buy, sell, trade, and earn crypto. Download finance today to get started.

Welcome, Ryan and Sunny. So everyone's been buzzing about Hyper Liquid versus Aster. And I feel like we're doing the show a little bit late. Like, there's been a lot of discussion, but as Ryan especially knows, We were trying to get a show with different perspectives. Like somebody who was kind of more on the hyperliquid side and somebody more on the Astor side, honestly, we had a bit of a difficult time finding someone who had a strong conviction that Astor was going to win. So we decided to have Ryan and Sunny.

They're both, you know, hyperliquid bull secrecy, I think has a big position there. So just, just, you know, take what they say with the knowledge that, you know, they have their hyperliquid back. bags. But to give some context, Hyperliquid obviously has been this darling of the industry for this past year. There was a lot of talk about whether or not it could take on Binance, which is kind of funny because I just realized that they're one of the sponsors of the show. But anyway, so CZ, the founder of Binance and Jeff Yan, the founder of Heparliquid, kind of pointed to these like little mini tweet debates about, you know, the merits of having this perplex with, you know, information. that was transparent to everyone. But in the last 10 days, Aster, which is backed by YZ Labs, formerly Binance Labs, it's actually jumped to the top of the list of perp-dex volume. You know, some of the reasons might be like it just launched a token, but also CZ, you know, has been promoting it to his 10 million followers.

And so like when you look at Defi Lama now, it's at the top of the volume rankings for 30 days, seven days, 24 hours. And Hyperliquid is like generally around. third for I think most of them lighter is what's in second place. I don't know about all of them, but definitely for a 24 hour. So, you know, if we also look at the tokens, the Astor price has gone from 56 cents to $1.58 as of like an hour ago when I wrote that. And across the same time span, the high price dropped from its all-time high of $58 down to about 45 now. So Ryan and Sunny, Why don't you go ahead and explain, you know, why you think we're seeing this flip-flopping of the Aster and hyper-liquid volumes?

I know, you know, you guys are bullish long-term, but just explain kind of what we're currently seeing. And either one of you can go first. Yeah, sure. So I think in a snapshot, it can look like anything is true. And if you look like at a snapshot today, you will see Aster doing a type of volume. light you're doing some of volume and even surpassing hyperliquid. But I think what's really important here is just to zoom out on what is like the big thing that is happening underneath the surface.

And what's really happening is that centralized exchanges are the most threatened they've ever been in their existence. And these centralized exchanges across all fronts, both spot and perps, just continually market share. So if you look at it just statistically, uh, decentralized exchanges account for 30% of all spot volumes right now. Most of that was led by early on to Solana and its mean quint rating. And then now even some of the more

like majors are starting to capture on. Units been doing a good drop for hyperliquid. And then for the perps, that's usually around like 5% to 10% as well and growing. And mind you, both of these numbers were I mean, barely like a rounding error like even like two years ago. So it's just been up into the right

and it's been a big threat. And why did these centralize changes care in the first place? It's because like perps just has one example are like the single largest source of revenue for these exchanges. And we're not talking about, you know, this like being a single digit billion. This is like a double digit billion dollar opportunity many times over. This is like the largest source of profit pool for them. And finally, they're being threatened. And when you think about during 2021 during that cycle, uh, with the rise of defy, a lot of these exchanges that didn't really care. They're like, all right, people can trade all the little defy tokens on their AMMs. It's not going to compete with this. But now they're actually starting to. step up to the plate and really play ball here. So, you know, when we look at Aster versus hyperliquid, I think that's almost like not even like the right framing. To me, it's just decentralized exchanges for essential exchanges

and not even just like hyperlipid versus the field. And it's no surprise that like you see not only Binance backing Aster, but you even see Bibit building its own kind of like decentralized purpose exchange. because they realized that, okay, if trading is going to move on chain, if perps are single largest source of revenue going to move on chain, then we need to play here too so we can capture this. And I think that's really what's happening right now.

Sunny, how about you? Really quickly. I think Ryan put it really well. Before I joined secrecy, I was at Masari where I wrote two pieces in this series called The Claw Wars, where I was highlighting the rise of these on-chain order books. So on-chain order books, I thought, was a better distinction than, let's say, Dex versus Sex for this specific scenario, because a lot of these next-generation perp-dexes are launching as on-chain order books. And the opportunity is huge as Hyperliquid has painted. Like, there is still 80% left market share to capture from decentralized exchange pie of perp volumes, derivatives volumes overall, trillions of dollars of volume a year.

And I think it was a matter of time before this meta would emerge is kind of what I thought, because you never have a leader like Hyper Liquid come out, take a 90% share in this on-chain vertical, and then hold that into perpetuity. It always gets more competitive at some point. Like we saw this with Spot Dexes, with AMMs like Uniswap and Sushi Swap, DYDX, getting disrupted by Hyper Liquid after holding like a monster market share. or for perps in 2023. And so this is just something that we've seen occur.

And I think some nuances is probably warranted here in that there is very, very much plenty of white space left to capture against centralized exchanges. But what Hyperliquid has done is remarkable in terms of what they've built and the amount of retail flow they've been able to aggregate. And I think that's the key distinction here is how much of the volumes we're seeing are real organic flows coming from retail users who are willing to put on a position for a certain period of time and either lose money or make money.

And I think in that regard, hyperliquid is still undisputed. I don't think it's even a discussion for now. But I think as we look into what might come out of these points programs and what might come out of this competitive landscape between these different on-chain clubs kind of fighting for market share, I think we'll start to see the waters get a little bit more contested. But I think for now, it should be, it should be, I think the nuance should be addressed when it comes to what is organic and what is inorganic and what types of innovations are driving this on-chain clob meta forward. What are real innovations? What are just paper narratives being touted by members of

CT. And so that's, I think, kind of where we'll get into the meat of this discussion today, where it will be pretty interesting. But in general, I agree with Ryan. This is the mega trend of on-chain clubs and on-chain order books and on-chain dexes taking share from centralized exchanges. Yeah, before we get into kind of that, all that stuff, because I agree that that's, like, the more significant bigger trend. Let's just talk about like some of the kind of like recent news to just put all that in a context. And then we can. get into what it all means. So when you talk about like organic versus inorganic, I'm assuming your time about the Astor AirDrop that's coming up. You know, they have this points campaign.

They're saying this air drop will happen in Q4. So, you know, maybe just like explain like what effect you think that that's having on this temporary or like I'm assuming you're saying that you think it's temporary like what we're seeing in the in the volume. So just like talk about, you know, why we're seeing this action like, you know, what you meant when you were referring to like organic and inorganic. Yeah, I think when you look at the early stages of hyperliquid point seasons, it was a little bit under the radar, I think because people did not understand the true opportunity at hand. So people were farming hyperliquid back in 2023 and 2024, and they thought that hyperliquid

would just be maybe like another iteration of the UIDX, maybe a two to four billion dollar protocol. I think if you made it very clear from the beginning that hyperliquid would be. a $50 billion FDV opportunity. You would have seen much higher levels of inorganic volumes coming in and farming that point season. And so the cat's kind of out of the bag. This is an exciting meta.

Everyone wants to be involved. Ashter already from like an FDV perspective, I think is north of $10 billion. And so that is a massive token opportunity if you're planning anirdrop. And obviously the response from people who might want a slice of that action is going to be larger relatively to what we saw with hyperliquid. And you can kind of parse through the data and see some of the differences in what early hyperliquid usage looked like relative to Aster usage. So some of the things that people have talked about on CT are volume versus OI. And so it's incredibly easy to put on short time frame positions and close them to farm notional volumes without actually holding a

position for a long period of time, paying funding, risking P&L. I think it's just more complex if you're farming a protocol to hold positions for longer. And so the volume of I ratio is something that people are referenced for hyperliquid versus Aster versus lighter. I think something else we look at is the percentage of longtail activity relative to majors activity in terms of what pairs are being traded. And the reason why this is the case is because if you're farming volumes, paper volumes on a platform, it's much easier to farm Bitcoin, Ethereum. These are going to get you better fills. Ryan, why don't you pick up on, you know, on whatever it was that he said that you want to pick up on. Yeah, sure. So I think what Sonny's getting at just put some numbers on it,

hyperliquid open interest is in order of magnitude larger than lighter and aster. And I think that's like a really good sense check to balance out with the volume numbers you're seeing. Because the volume numbers, as Sunny mentioned, when there is a clear market opportunity that everyone is playing for. and they can make these big predictions on what theirdrop will be, it just attracts a lot of farming activity. So I think what Sunday was getting at is how for a lot of the volumes for Aster and Light are concentrated in the majors, because these are really easy positions,

should just trade in and out of positions and just like farm those protocols. Whereas I think for some of the long tail stuff, it's a little bit less easy to do. And that's also one of the areas where I think hyperliquid has done very well And a reason why I think some of the central exchanges are so concerned about its growth anyways, and this can actually be a leading indicator in some places, in some cases. If you look at like the last, I don't know, maybe three big TGEs, like token generation events over the past three months, to think about like pump, you think about a plasma and you think about Aster, right?

Like it's like the big three. Hyperliquid had more open interest for those markets than Binance. That's why they're concerned. That's why they're so concerned about hyperliquid because they're like, all right, well, if all the hottest new markets, like, Hyperliquid is winning that. And not only is it winning it in purse, but it's also winning it in terms of spot as well. Like Hyperliquid was like one of the dominant venues to trade spot pump out the gate. Then, I mean, you can kind of see the writing on the wall, too, that like, we really need to play a ball here because if hyperliquid has a structural advantage and that anyone in the world can access it. And you have all of these third-party distribution platforms like Phantom that are plugging into hyperliquid and giving it to their, you know, 10 million plus users, then this might just end up running away with it if we don't do anything.

So, yeah, that's how to say central agents. Ryan, I just wanted to ask you. So just to, can you just make clear, like, what you think this relationship is between CZ or Binance and Aster? Like, obviously, YZ Labs, or I don't know how to pronounce that, but the former Binance. Labs has invested in Aster, but, you know, if, if you feel like it's that finance is worried about, you know, this competitor hyperliquid, then like, is it that, you know, sort of like Astor is almost like the base to, you know, instead of BSC or BNB or whatever it's called. So many names that it's, you know, kind of like creating its own on-chain perp decks and that that will be like the new, like the new version of that for Binance or something to take on hyperliquid or something.

I'm just extrapolating, but like, yeah, talk a little bit about what you think their strategy is there. So you want to take this one? Yeah, I think if you look at the way that Aster is constructed, it is an off-chain matching engine with multiple on-chain front-ends to different chain. And so it is not a B&B exclusive preptext. You can onboard from any number of chains. The activity itself is not actually happening on B&B. And I think, you know, CZ, without like assuming what his intentions are, I think he very much sees the writing on the wall that the future of trading

might actually occur on decentralized venues rather than centralized venues. He's actually talked about this in the early days of hyperliquids rise to dominance and even predating hyperliquid. He's talked about his interest in replicating their business on chain and a decentralized venue. So I do believe he genuinely thinks this is the path forward. Whether or not he's going to throw all of his resources behind Aster and spend all of his time building Aster, as he's saying right now, I think that's something that I'm unsure of today. Like, will he have multiple different iterations or products or teams working on this?

And he's going to monitor the situation and kind of get an assessment. of what is going to be his best probability to build a winning on-chain product. Like, I think that that could still happen. As I've talked about on Twitter, the Aster product itself is relatively new. It is not as fleshed out as even some of the more serious hyperliquid competitors like lighter, like Fogo, like Bollett, that we're seeing come down the line. And so I think for now he's definitely genuinely interested in this, in this sort of mega trend that we talked about, whether or not,

all of his eggs are behind this astir basket, I'm not sure. Okay. Yeah, I think I was just say, because I think Sonny made a good point that, you know, CZ has been talking about this trend for a long time. And I just think that the exchange founders have been aware of this trend for many years. I mean, even dating back to like last cycle.

Like, what was the original motivation for spinning up buying smart chain or B&B chain that actually preceded that, which was like a Cosmos chain? What is motivation for Coinbase spinning up base or any of the other Asian exchanges spinning up their own blockchains? It's because they can see that their business is inevitably going to be done on chain. And it's actually better to be doing it on chain.

Like if you can swap, you know, say like Seoul, for example, and you can do it on chain, then in its non-custodial, that is a better product. If it's, if you can get the performance, and the latency down and everything, that's a better product because you don't have to worry about sending your money to some opaque offshore exchange and then some guy just runs off and steals it or North Korea hacks you, right?

So they've kind of seen this for a long time, and they've been experimenting with different ways of playing ball here, right? Whether it be spinning up their own chains or like maybe spinning up their own AMM, right? There's just all these different ways that've been trying to experiment here. So, yeah, I think, you know,

Sonny's right to kind of situate this within the, you know, the kind of larger and long-running story, of central exchanges, in a way, like disrupting themselves. Yeah. Honestly, everything you were saying there reminds me of how, you know, for so long, even though like in the wider world, people thought of Coinbase as a crypto exchange, you know, we in the industry thought of it more like FinTech, right? Because like their main product for so long was just like they had a very smooth and easy

way to just buy crypto from your bank account. So that, you know, that's more of a, like a fintech thing. It's just like, how do you connect bank accounts to a place where you can buy crypto? And like, of course, I understand the U.S. to buying crypto. Like, that's, you know, another challenge. But still. And then now, you know, there's this moment where it's almost like late 90s internet or something where everybody knows there is going to be a Google that comes out of this.

But which one will it be? you know, in Google, of course, spawned like Gmail and Google Calendar and, you know, Google meets. And literally, you know, so much of our lives now runs on Google. And so, yeah, whoever brings more people on chain, they have a shot at that. So kind of like last little recent news event that I want to just cover because meet a lot of headlines. And I'm curious also, as I'm sure you saw, Arthur Hayes, he talked about how he thought that hyperliquid was going to, that, you know, he called it that he said it had a potential upside of 126x of where it was trading. This was in late August when he read the essay about it. Less than a month later, he sold his hype position because as he put it, he needed to put down a deposit on a new Ferrari.

So his team also kind of wrote something about like the token unlocks for hyperliquid that are going to start coming up in November. You know, Maelstrom, his family office tweeted, starting November 29th, 237.8 million hype tokens will begin investing linearly over 24 months and $50 a token. That's $11.8 billion in team unlocks, nearly $500 million notional hitting the market, every month and they said that leaves a $410 million month supply over per month supply overhang post buybacks so i wonder you know i like obviously you guys are bullish on hyperliquid as we discussed the beginning of the show but you know when you look at the token unlocks like what are your thoughts about um what the price action would be over the next few years yeah i can take this one real quick hopefully i don't cut out anymore i swapped over

that's my mobile device. Okay. So we'll see, we'll see, hoping for the best. But I think, you know, I just actually went to a hyperliquid event yesterday at Tokyo, and I'm rocking weapons, a hyperliquid shirt. That's a hyperliquid plushy over here. Hopefully this is going to be worth a little bit of money. But I think, I think, um, I think a lot of this does come down to

the familiarity that we have with the team. And, you know, typically this is not, this is kind of an opaque thesis where like, look, like some people are going to have questions about this team. You know, some people might not know them with the level of understanding that we have following them over the past year plus and how they've executed. But, you know, I think it is, we are confident that the Jeff will figure out how Jeff and the team will figure out a way to go about these unlocked that will minimize market impact on. on hype the asset. And I think that right now there's a lot of thud surrounding what might happen post the unlocks. And we're taking a directional bet here

that the team is going to make the best decision for token holders, make the best decision for the platform, as they've continuously done over the past two, three years that they've been building this project. And whether that means relocking their token, whether it means selling a bit in a transparent manner, and then committing to, holding the rest, whatever it is.

We're not sure what it's going to look like, but we think this is a decision that they're going to, they're going to act methodically. They're going to act in a well, thought out, and rational manner. And I think that they're going to prioritize the health of the token and the health of the platform, as they've continued to them, as well as the health of the community.

And are you saying that based on conversations with them, that they're thinking about like different ways to kind of cushion the blow? Is that what you're saying? Or are you just like speculating or like, where is this coming from? If you have had any interactions with this team, you'll know that they tell you nothing. There is no information leakage from the hyperliquate team.

Trust me, like when I was at Masari and I was trying to write these reports, it was very difficult to get, like, long-winded answers about anything. And so I think, I think, no, we have no, the short answer is no. We have no unique information or insight into what the team has been telling us. This is just sort of a kind of a pattern matching. decision that we're making based off of the, you know, stellar track record of this entire hyperliquid labs team for the last two and a half year. Yeah, I think one thing I'll all this bring up to is there's a ton of anxiety about unlocks. And I think people used to, I remember back in 2020 or 2021, no one cared about unlocks. It was like bullish unlocks was a meme. All the investors,

I remember like Solana in 2021. This is like January 1st, 2021. There's this huge unlock. And I remember everyone sharing on Twitter that it was going to nuke because 90% supply was coming online. And you know, so Alana was at on me like one dollar heading to the year and the rest of history, right? It went up to like 250 by the end of the year. So no one cared about it back then. And it's only over the past couple years that this has become a huge overhang on on projects, right? And everyone's concerned about investor unlocks and team unlocks. And what is the reason why? Well, I think it's because well, a lot of these coins are being unlocked at higher valuation. that many these projects can't sustain.

So yeah, if you're some new L1 or L2 when you're trading at a 5 to 10 billion dollar valuation and no one's using the platform, then fine. Like, if it's unlocking at $10 billion evaluation, I mean, it's going to go down. I mean, you'd be stupid if you were gotten to the seed route, like $50 million or something like that, and you're up a crazy amount to not take any profits, right?

So I think that's like one key distinction here is that I do think that, you know, you can actually justify the hyperlocution evaluation fundamentally. And I think that provides a good support. But another key factor here is there are no investor unlocks. And I think the investor unlocks, to me, tend to be more dangerous than the team unlocks because many funds actually have obligations to return money back to investors over a different period of time. Right. So, you know, maybe your venture fund, this is like one of your biggest wins. And you haven't sent any money back to investors. Well, here's a big win. Take them off the

table, send it back to investors, you can go raise your next fund, right? The team doesn't really have the same set of obligations, right? They just can sell if they want to. So then what are you making a bet on here? You're making a bet on the team. It's always a founder bet at the end the day. And you have to ask yourself, are these people that created this project to exit one year after the TGE or these people who want to actually build one of the largest projects or largest blockchains in the world. And I think that's really the bet that we're making here with the team unlocks that these people have the right, they have the right, they have the right set of values here. Okay. So in a moment, we're going to talk more about, you know, kind of like the greater

significance of like what this trend means and what is going to be. be happening in that space. But first, we're going to take a quick word from this to make this issue possible. Finance is the world's number one crypto exchange, trusted by over 290 million users globally. With world-class liquidity, security, and a wide portfolio of digital asset products, finance makes crypto easy for everyone. Whether you're new to crypto or a professional, finance offers a simple user experience. Learn with Finance Academy, browse hundreds of tokens, and track your portfolio on an easy-to-use dashboard. For experienced users, Binance Pro provides industry-leading services and bespoke trading products.

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You're making a bet on the team. It's always a founder bet at the end of day. And you have to ask yourself, are these people that created this project? That's my conversation with Ryan and Sunny. So I see in September that Hyperliquid actually had almost 14% of finances monthly professionals volume. And we're literally streaming here in the last hours of September. Sorry, that was, sorry, August. And in September, it's looking like it'll be more like 12%.

So obviously, you know, this, this is a figure that has just kind of been climbing and, you know, I understand it's like down slightly. I didn't, I didn't look at, you know, kind of what the aggregate is of all these different perp dexes. But Sunny, I know you kind of did like a big analysis of a bunch of these perp dexes. So I was wondering if you could kind of like walk us through the analysis and, you know, through that lens of like how likely is it that these would take on these centralized exchanges? Yeah, so my, uh, basically my thesis for how this might play out in the long run is if we can get performance parity with centralized exchanges and by that I mean roughly, you know, comparable levels of latency, roughly comparable levels of order book liquidity depth, um,

roughly comparable levels of ux, then the decentralized platforms will win because there'll be able to aggregate global users easier. I think a permissionless venue is going to have a larger TAM than in permission to KYC one. And so I think what you're seeing now is some of these new exchanges that are being built on chain, whether it's hyperliquid or some of the new iterations, you're getting pretty close in terms of performance. You're not there yet. I mean, obviously running a private, you know, private server is going to be more performance than trying to run like a fully transparent on-chain L1, like, like hyperliquist trying to do. But, you know, there's been some clever market structure design

choices that Jeff has made to kind of level the playing field. And the performance is getting close. Now, there is a big difference and a big nuance that we should kind of account for, which is that what we're seeing today on the hyperliquid platform when we talk to market makers is there is a plethora and an abundance of profitable retail flow. So these are people who are genuinely trading because they either love trading, because they think they're going to make money. But they don't have an edge. They don't have, you know, they're not toxic takers.

They're kind of just vanilla traders who you might like into like the average retail user on Robin Hood. And these people are not going to be putting in, you know, billions and billions of dollars of annual trading volumes alone. But they are going to be putting in very, very valuable, desirable flow to a market. maker. And it's also going to generate higher levels of profit for the platform down the line. If you look at something like Binance, there is a large percentage. We don't know what the true percentage is, but on certain days, over 50% of volumes could be driven by HFT to HFT volumes. So these are high-frequency trading firms, whether they're market makers or toxic takers or people like jump trading who are basically running high-frequency trading strategies on Binance. And this probably

will not exist on an on-chain venue for some time. And so when you account for that difference, I think there will come a point where you kind of see this growth shared chart trends start to slow down a bit because there's just a lack of that, like, serious, serious contributor of just daily volumes from these institutional players that we're not going to see on-chain for quite some time. But with that in mind, I think the growth trends that we're seeing today are usually from net new, PURPT traders, net new retail takers, people who are genuinely trading, people who are offering profitable, nondirectional flow. And I think that that's going to be probably more valuable down the line, because the institutional players are going to come when they come. And when they come,

it'll probably be fast. It'll be kind of a, whether it's a compliance hurdle, they need to get through, whether it's just getting more comfortable with the idea of operating on hyperliquid or any of these other venues. I think that switch will flip fast. And when it does, you'll see a migration of those volumes. But for now, it is going to be difficult to get to 60, 70, 80% of Binance's volumes without that institutional presence. And a couple of questions.

So wait, for institutions, don't they need to, like for compliance reasons? Like, how can they use a no KYC decks? Like, I don't know how that works. Well, that's the problem they can't, or most of them cannot. The market makers can. A lot of market makers have been underwriting a business on hyperliquid. I think basically every large crypto market maker, except for a few, are on hyperliquid at this point. And that's just a decision of going to your team and saying, we're missing out.

Our competitor X is making a killing market making hyperliquid. We need to be on there. And then they'll get it done. But there are certainly some other players that are slower to move on that compliance front. Yeah. I think one other thing I'll say, too, just as far as like how we continue to grow the volumes is, There's a huge opportunity, and we talk about this all the time with HIP3, where you will introduce new markets to hyperliquid that don't exist on the centralized exchanges. So when people can trade U.S. equities or pre-IPO companies or even build prediction markets on hyperliquid, those are markets that, like I said, they just don't exist on BINITs.

So then if any of those start to catch any kind of traction, then you can see those. volume numbers as a percentage continue to rise and even surpass some of these centralized exchanges just because of like this expansionary potential that hyperliquid has. Yeah. And just for listeners who aren't familiar, it's builder deployed perpetual. So in a way, it's almost like you could think of it as like, you know, kind of creating like a liquidity pool that for like unusual assets or something on uniswap. But it's, it's, you know, your own unique perpetuals offering. So now walk through, now I am so curious because like there, I mean,

there's just so many competitors. You know, if I, I have like defile Lama up over here and I can just see like so many different, you know, perp dexes are competing in this space. So, you know, I think you guys have kind of like analyzed all them. And I just be curious to hear how, you know, you're evaluating them. and like which ones you think are kind of like stronger, stronger competitors. You know, obviously it looks like, you know, your conviction is behind hyperliquid, but I'm sure you probably have other ones where you're like,

those might put up a good fight. So, yeah, I'd be curious to hear your analysis. Yeah, I think this is one that I've been mulling over because something that you've seen with Solana, for example, is, you know, Salana at this point is not the most performant chain out there it when it comes to raw power. Like whether it's speed, I think there are chains coming out that are faster, whether it's bandwidth, there are chains coming out with higher throughput. But Solana today still has continued to aggregate most of the liquidity, most of the users, most of the activity. And it's because

it's performant enough and it will continue to become more performant, but it's sufficiently performant to the extent that any incremental like X percent increase in latency or decrease in latency or increases mathematics is not going to matter as much as, being able to aggregate that set of user. And I think we're at a point today where that's happening for hyperliquid, where if you want to see a competitor to come out and really drive a change in how the market share split up today, you're going to either need something just far more performance than hyperliquid, which is something that we haven't seen today.

Like certainly it's not an Aster or some of these older protocols, but some of the newer ones even are not offering marginal tech improvements that we think is, is not. noteworthy enough. But really, I think what's interesting is trying to compose with a wider set of user. And so one of the criticisms that Hyperliquid has had is it's a little bit too isolated. And there's nothing they can't they can do about that. They're their own separate L1. You know, they have the hyper EVM to compose with. But as a whole, the Hyper Liquid Order book is separated from the rest of the crypto economy. And so what we're seeing today are some interesting options being built on Solana, like whether that's bulk or whether that's Bullet with a network extension or whether that's

Fogo chain, which is a different L1, but it has an SBM client. We think that's probably the interesting next thing to explore, which is what happens when you give Solana users an option of something that is as potent or as performant as hyperliquid to trade perps. What happens when you introduced pump fund traders or meme coin traders to perpetuals and 25x 50x leverage? I think that will be a fun experiment. But that's probably what I'm excited about most is what is going to happen on Solana. Because right now, I think the team has taken a direct initiative to get something like a hyperliquid, at least in close proximity to or directly on the Solana blockchain or Salana network.

And that will probably be the most interesting thing to see for me. Because that isn't about marginal tech. It's about, you know, moving your product closer to this large set of user. So basically, like, let me make sure that I understand. because like the way that I'm interpreting what you're saying is that in a way hyperliquid kind of became the next competitor for Solana. And so now the question is will Solana have its own perp decks that could just compete directly with hyperliquid and not have people leaving Salana to hyperliquid? Is that what you're okay? Or at least more contained within the like the broader Salana network.

Okay. Brian. Yeah. Yeah, obviously I agree with Sunny, although we don't always agree. That's what makes it for a good investment team. So I think block-block chains are network effects businesses. And I think one of the reasons why I think we called out Salana as being the next place where we'd be of most interest in identifying like a winning PURPS exchange is

Salana has very powerful network effects. And what do I mean by this, like when I talk about network effects for Hyperliquid or Salada? Well, let's just look at Hyperliquist example. Hyperliquid is supported by a number of the leading custodians. There's a number of leading stable coins that are now issued on top of it, leading front ends and wallets that support it, right? Exchanges that you can trade hype on.

And projects that are building on hyperhood, hyperliquid. And over time, these, all these integrations and all these assets are issued on it, all of these people that are using it, it becomes like a superstructure. And if you're starting from scratch, it is really hard to replicate that over time. Like the actual code is all, for many of these blockchains is open sourced and it's extremely easy to replicate. What's not easy to deprecate is like the ecosystem that forms around it. That is what actually makes this stuff really sticky, uh, long term.

So then when you look at hyperliquic compared to the field, you can see why like there's not as much concern and why it will take a long time for any of those become competitive. We look at it for Solana, that's where I actually can be like really interesting because a lot of has, uh, a ton of assets that are issued on top of it, more than hyperliquid. There's more stable coins in Salon. There's more, uh, just normal spot.

tokens on Solana. More wallets to support it, more exchanges that support it, more on ramps, like all these different things on Solana. So if you can tap into that ecosystem, then that's actually like a really exciting opportunity. That's also one of the big DCs behind, you know, many of the early Solana dexes are perps exchanges, whether it be like Drift or any other ones is that, like, imagine if you could, you know, take your collateral that's being on this on a Camino and use it as, you know, collateral for like a trade. Like that would be like really interesting use case of composability, right? Okay.

Yeah, that is interesting. But of those ones that are on Solana, which do you feel are some of the more competitive ones? It's far too early. I think a lot of the newer perp-dexes are not even in main net. Some are barely in test net. But I think what we're seeing with these conversations that we're having with these, you know, teams that are building prep dexes on or are.

around or close to Solana is they are trying to come out with a better product than Hyperliquid on day one. And I think when you look at some of these other competitors, whether it's Aster or any of these other, I guess, staler like perp-dexes, is they do not have the luxury to kind of wait around and try to get better to match the performance of a Hyperliquid overtime or the user experience of a hyperliquid over time. Because Hyperliquid exists today and it's going to continue to aggregate liquidity. It's going to continue to aggregate users and what we're excited about is this next generation of orderbook based slash like perp decks exchanges on salana that are offering what we think are real like ux improvements

and i think that uh that will be one to watch those will be the ones to watch out for but it's far too early today to tell you like what i'm excited about like i think most of these players are still i mean just to name a few like bulk pacifica bullet like they're they're basically still in test net phase, if not even earlier. Okay. And why is Ethereum or any of the L2s, like not part of this conversation since so much of DeFi is on Ethereum and it has even more stable coins than Solana?

Well, I think the amount of people that use the, the confluence between the Ethereum layer one and users who are likely going to be PowerPoDex users, probably low. But I think for some of these layer twos, like there's Avantus, which has gotten a bit of attention on base, Meghithe is going to launch with an incredibly fast chain. And there's going to be a couple of perp-dexes on there. So some of the ones include the mega-eath ones are like GTE, Valhalla, among some others that I'm forgetting. But anyway, like I think there's just going to be a lot of these things.

It's going to be very hard to track all of them. And so, yeah, if you're a perp-dex points farmer, it's probably going to be a great a great few months slash great year for you. Okay. But you didn't really answer my question about Ethereum. Like, you basically said there are competitors there, but your thesis, I guess, of synchrocy is more like if there's going to be a competitor to hyperliquid, it'll pop up on Solana. So, like, why?

Why is the Ethereum bit not part of your thesis? Because we think that the power user for a perp-Dex product, there's probably a higher percentage of Solana users today who are willing to try a product like that or who, like their trading activity today on the blockchain aligns more closely with that of a hyper-liquid power user than people on Ethereum who are depositing into ABE, et cetera, et cetera. I think it's just kind of like a different customer cohort slash demographic that makes more. more sense for the perpetual use case. Yeah, I think we're open-minded to one. I mean, first, I guess you can't build a perpstex on Ethereum Mainnet. Like, you just can't run an order book on it. So it'd have to be an L2, like a lighter or mega-eathe.

And we are like monitoring all of those and I think remain open-minded to it. But yeah, you know, I think in both those cases, you know, these exchanges are much earlier in their life cycle than a hyperliquid is. liquid is and I guess in our eyes like don't meaningfully differentiate themselves from the field. Okay. So I'm sure you've heard this before. Everyone always talks about how hyperliquids mean advantage is just that there's no KYC. And I wondered like I mean obviously things have changed a lot in the US under President Trump for for crypto. But you know, issues around KYC cause problems for BitMex in the past, which I know it's a centralized exchange. So I Obviously, like, potentially the rules are a little bit different.

But I just don't know if you ever think, like, potentially that, quote, unquote, advantage that they have now would ever go away in any respect or, like, yeah, just, yeah, I'm not sure what the future is for them. Like, do you feel like there'll always be no KYC or, yeah, what are your thoughts on that? Yeah, I mean, listen, that's an open question for every decentralized exchange, including ones that even on Savannah, right? Like, should people be able to trade any asset in the world without having to KYC? And that's just a question that I don't think we'll have the answer to any time soon. That being said, I do not think that. And maybe one thing I'll add to is, you know, I think we're in a really accommodative regulatory regime in America, which is, by the way, one of the reasons why so many of these central exchanges even feel confident launching these like,

frankensigned versions of hyperliquid is, right? Because they're like, all right, we can just launch a no KYC exchange, too. And we don't have to give like the pretense that this is actually decentralized or like, this is on chain at all. It's just it's just not what it, what those are. That being said, I think it's more than just no K YC that makes hyperliquid special. Right. So I think it has, you know, one of the things I really started to appreciate about hyperliquid recently, and this is not necessarily versus essential exchanges, but maybe

just even versus like other blockchains is that it has. has a very opinionated approach to building an ecosystem, but it's not the core team that is doing everything. So what does that mean? So when it comes to building spot markets, the core team did not decide to go and build out the necessary infrastructure to themselves. They outsource it to the unit team.

The unit team now handles majority of spot markets. And then they're thinking, okay, how do we actually launch new markets on Hyperliquid? Well, let's actually put that responsibility to hands of the community with HIP3. So not anyone can spend up a new a new perps market. And then you have independent teams doing that. In a way, like, hip three, it is in a way like restaking, which was like introduced on the theorem except it's just like opinionated of like, you know, this is not some like open

canvas of you just restaking for everything. We have no idea what to build. It's like, let's just do restaking for this one use case right now and channel all the the builder energy towards this, right? And then also like builder codes, I think it was like a really big one where hyperliquid doesn't need to go build out its own mobile application. And it doesn't need to get that mobile application

distributed in every single country. You can leave that to all these third parties. You can have Phantom Duo. You can have, you know, one in Japan and one in Korea and like all this space in the world that are all working like a swarm to onboard new users to Hyper Liquid. And maybe the last thing too is that, you know, even before HIP3 goes live,

hyperliquid is listing new assets faster than all these exchanges. Like, one of the reasons why so much of the open interests for all these new assets, would they be plasma, Aster, pump isn't hyperliquid. It's because there's the first ones to have it. Like, no one else has it, and you want to go long or short pump before it comes out, you just go to hyperliquid. And you kind of built up that habit amongst the user is that, okay, anytime there's a new hot market, I'm just going to go to Hyperliquid. That's going to be it. So, yeah, I think

like no KIC is definitely a key advantage that has over the essential exchanges, like undeniably. But I wouldn't say that's like the only thing and the only reason why it's actually winning. To double click on that point really quickly, um, unit, Hyper Unit today has like a revenue share with, with Hyper Liquid Labs. I don't think there's any scenario where Binance would give up a portion of their real estate to a third party and share 50% plus. revenue with them and what is the result of that well I think already hyper unit has announced that the double zero token is going to be live on the hyper liquid platform tomorrow Thursday Thursday 1 pm utc i'm in singapore i have no idea what day is what but but i mean on

day one the double zero tg is going to be tradable on on hyper liquid spot and that's the kind of pace and execution quality that you get when you start opening up your platform to others wow yeah yeah i think that's like a really good point to is, you know, one thing I always wondered is at what point would we start to get some, like, extremely high quality founders coming into this space because I do think that there were high quality founders in the previous generations, but they're more sparse. And, you know, what usually attracts these people, it's opportunity to make money, it's maybe a change in the regulatory environment. It's like maybe the technology improving to the point where you can build a

product that people want to use. Yeah, now some of these people are here. And I think that's one thing that, I mean, even as a hyperbolic bull, I've been surprised about, you know, when we bought this thing first day, and I was not expecting them to ship all these products as fast as they did. Because I'm just so used to like these super long product cycles in crypto where the devs just take like, you know, two years to ship something. And they say they're going to ship it in two years. It actually comes out in three years. And it's just like super slow. And it's just clearly not like, there's not product minded people.

And that's just not what's happening here. This kind of feels almost like what you'd expect in like AI. Like this is where this is like a cutting edge field. And there's like a race to actually win the vertical. That's what it seems like these guys are competing for. They realize that Binance is this huge opportunity. We see a line of sight to be able to disrupt them and let's go after it. We have to move fast as hell because if you don't, someone else is going to come and take it from us.

Yeah. I just was having another. conversation with another crypto founder and they were making jokes about how like, you know, in crypto, there was a time when you could be sort of this like mad scientist and you show up and you're like, you know, kind of make people go, gee whiz with your fancy math and whatever. And nowadays, no, you know, like product is really important. Like, you know, I'm sure everybody saw the Robin Hood chain announcement like and just knowing like how Robin Hood is with product. Like, that's the kind of mindset that people are, you know, is sort of leaning toward now in crypto. So, okay, I don't know if you

guys heard this, but on the shopping block the other day, they were talking about this Astor hyperliquithing. And has Steve had this really interesting point? And I was so curious what you, what your thoughts are on this. But he basically said, and I know, I know these are like huge generalizations. He also admitted these are huge generalizations. But he was like, well, the West kind of innovates and then Asia like executes. So he had this like kind of theory. about how, yeah, like hyperliquid. And he didn't say this explicitly, but from the context, I thought he was saying,

like hyperliquid being from the West has innovated, but then potentially Aster or like any other, you know, he, I mean, he kind of called out, like just like a number of, like, you know, previous times in history there, been a number of exchanges that did quite well. So I don't know, what do you think of that? Like, do you think there could be competitors that come from,

Asia or from the East and yeah, sort of like adopt what hyperliquid is done, but maybe do it better. I don't know. Yeah, absolutely. Well, one, I would say that hyperliquid is kind of, there's a global builder base. And the team, I mean, Jeff is, I'm not sure what is citizenship situation is these days, but like he, he, I'm not sure it's fair to blindly characterize this as an East first vest, West situation. And even if it were, I think, look, you can, you can mention that sort of broad strokes and they are they are generalizations. I think the truth is, there is no competitor that we've seen that even seems like it's on track to be able to replicate what hyperliquid has done, creating like this custom fit L1 to house all of these different financial applications. And it's certainly so far not, not Aster.

I mean, it's interesting that these comments, and no shot to Haseed, but a lot of these talking points seem to come from people who are not actually using the perptexes. And I think if we want to talk about the Aster token and the hype token in sort of this relative style and kind of debate which one is more exciting, that's a conversation. I think that's an interesting conversation. But if we want to talk about the products themselves, I don't think it's even close, to be fair. I don't think it's even close. And I think the people who actually use these products will tell you then as well. Yeah. I think another thing I will, just to pull on that thread a little bit, you know,

I think what it is is that the offshore exchanges, most of which happen to be based in Asia, just have historically moved much faster and are more like loose, right, than some of the U.S. exchanges. And I get it because if you're Coinbase, what is your advantage is that you're building this regulated exchange that, you know, at this point, can custody Bitcoin and ETH for all these ETFs. Like that's just something that the offshore exchanges would never do. And that's why Coinbase will always be more conservative. So even if they do see like an opportunity to copy something and replicate it, they'll be like a last mover. Example of this is all these exchanges launched their own blockchains at some point.

But when did the ones in Asia do it? Like, Binus Smart Chain, that was 2020. That was late 2020. OKX will be like all these people launched their chains in that kind of 2020-21 period. But when it Coinbase launch base, that was in 2023, right? And when are they going to launch their base token? Because that was also something that was rumored recently.

I mean, like Binus just had their tokens in 2017 during the ICO boom. Same thing with other ones. I mean, you're talking about like at this point eight years later, Coinbase is finally contemplating launching a coin. So I think that's maybe like probably what he's getting at. I think it's like less to do with East and West. It's more just like offshore and onshore. Huh. Okay.

Oh, yeah, but I don't know. It seemed like from the way he was describing it's like stuff happens in the US first, but then like Asia kind of copies and but executes better. But anyway, okay, okay, last question. So, you know, as I said at the beginning of the show, I know you guys have heavy hype bags. And I was wondering, like, as investors in hype, what do you feel is hyper, like what's main weakness

or like what's the main thing that you worry about, you know, that like if this bet ever goes wrong, like you'll look back and be like, oh, that was the thing. That was, you know, the reason why this didn't pan out the way we thought. Ryan, do you have any ones you want to share real quick? I should try. You can go ahead. Yeah, I think there are some obvious ones that everyone has considered, and they're mostly in that black swan camp of what happens if the exchange gets hacked. Like, what happens if these co-located validators go down? What happens if Jeff is malicious? And I think these are all real concerns.

And I think that they are, they're hard to kind of forecast the probability of, but you kind of have to take, this investment with that in mind, which is that, okay, there are a bunch of different ways that this can dramatically upend and go wrong. But currently, given the environment that we're in, this has the potential to be one of the highest ceiling protocols in crypto. And so it's, it's, I think it's almost something that you just have to take into account with a bunch of these different crypto investments, which is that, man, the downside, the potential downside is just so huge. But like there are very few protocols like hyperliquid that have this incredible ceiling of being able to become a potential everything exchange. So yeah, I'll toss it over to you, Ryan.

I don't know if you've thought of anything else. Yeah, I guess there's really, yeah, beyond like the obvious, like the son you said, just like regulatory Black Swan or anything like that, there's really two areas that I think are long-term concerns to me. One is, do exchanges have moats, right? So in the traditional world of finance, what gives an exchange a moat? In many cases, like, yeah, it's like, you know, liquidity network effects and things like that,

but it's actually just regulation. It's like, all right, you're like the only person that can actually do like trade, like to do regulated trading in Shanghai. And that's the reason why like you're the number one exchange. Like there is no competition. No one else has the license to do it. What is the difference here?

There are no licenses. everyone can run an exchange. So that just means it's like much more competitive. And at a certain point, a certain level of just like liquidity, the experience of training exchanges can actually become similar. So what makes the difference for our industry or just like these essential exchanges from first principles perspective? For me, it's, you know, the same way that we evaluate the differences

of seeing smart contract platforms. If you were to have like a exchange where the validator set is sufficiently distributed, it's been running for a long time without any history of hacks, it has all of these integrations with custodians and wallets and assets that have been issued on the platform. Over time, it starts to build a network effect that is really hard to break into over time. time and that's how potentially you can build a network effect long term without regulation. But that's an open question. And that's one I do a question. It's not about hyperliquid.

It's just about this entire exchange opportunity within a crypto economy. Like is it just something where there's always going to be fluctuating market share long term? Because it kind of has been the history of like these central exchanges, like the market share changes all the time. The second one is around, I guess like the co-located value. So, you know, I think there has been great progress we've made as an industry from having all of these blockchains experiment with like the limits of, all right, I'm basically questioning the assumptions that the prior generation had. So for Ethereum, they're like, all right, you know what? What if they actually did have like smart contracts and you actually had more expressivity? And the Bikar is like, oh, no, we can't do that because that increases the tax surface. And then the Ethereum's like, oh, no, like, let's actually do that. And then you know, we actually do that. And then you know, you actually do that. And then you. we actually get defy. That's a great innovation. And then Salana comes along. They're like,

you know what? What if we actually just didn't care if like some random user ran a server, like on their computer and they actually were all in random data centers. And if they're like, oh, no, you can't do that because self sovereignty and all this stuff. They're like, no, no, it doesn't matter. We're going to get more performance. And then you get Salana. And great. Like that's where all the spot trading on chain happens now is both Ethereum. And then hyperliquid similarly comes along. They're like, you know what if we actually don't even to globally distribute the debt valider set? What if we just all co-locate them in one place? And then we'd have super low latency and potentially be competitive with centralized exchanges.

And then we can build, like, for the first time, an on-chain order book. And that's what they did. And I think that's been a great innovation. But I do wonder long term is if the fact that the valider set is co-located ultimately will limit the TAM. And in a sense of, you know, what makes Bitcoin special is that, you know, it doesn't matter if I'm, you know, the United States or China, I can reliably hold Bitcoin and not have to worry that it's going to be seized from me or that someone is going to censor my transaction. It is truly like a global and neutral platform. And that's one of the reasons why this is a $2 trillion asset today. I would think that the exchange of the future would need to be a neutral platform as well.

And that's what would give people the confidence, whether they're, you know, adversaries like U.S. or China, that if I do an exchange here, I will get my money or I'll get the other asset on the end of the trade. And I just wonder if that out of set is co-located if it makes it harder to trust because, you know, maybe, that co-located valor set in a specific city. I don't know, it was like a tsunami. The servers go down or maybe like the government that shuts it down and they have to like switch where the validator set is running. That would just be a concern I have long term.

And that's one is hard to question, but I also think that, you know, there might be some solutions long term about how to maintain the benefits of co-location but even have some level of geographic distribution. I think like the FOGO team is kind of like an example of this potentially. Oh, okay. Yeah, I mean, like what you're talking about there, it just goes like, you know, all the way back to Bitcoin.

And I know like everybody talks about decentralization and like sometimes people talk about it in this very idealized way. But like another way of like using that word is to say like resilience, you know? So that's that's what you're talking about. Yeah, because like, you know, back in that like sometimes I feel like newer bitcoins don't understand things like jurisdictional. decentralization and anyway like i don't know just like even stupid things like when um i forget was it trump who was like all of the bickwines are going to be mined in the u.s and i was like that is not a good idea but anyway um okay well yeah that that makes a lot of sense all right well you guys this was super fun breaking this down i'm glad we finally made it work and sunny thank you for doing this from singapore um where yeah i i know like you're probably jet lagged or something anyway

We will catch you all later. Thanks for tuning in to the weekly news recap. Let's begin. Trump administration pulls Quintens nomination for CFTC chair. The Trump administration has withdrawn its nomination of Brian Quintens to lead the Commodity Futures Trading Commission, leaving the agency to continue operating under acting chair, Caroline FAMM. Quintends, a former commissioner and head of crypto policy at Andresen Horowitz, confirmed to coin-telegraph the decision and said he plans to return to the private sector.

His withdrawal follows opposition from Gemini co-founders, Tyler and Cameron Winklevoss, who publicly lobbied against the nomination. Quintens released text messages, suggesting the brothers sought commitments on how the CFTC would handle Gemini's regulatory disputes, requests he said he declined. Quote, I believe these texts make it clear what they were after from me, and what I refuse to promise, he said.

the CFTC remains without a permanent chair as Congress debates new crypto legislation. Swift partners with consensus on blockchain settlement system. Global Payments Network Swift has announced a partnership with consensus and more than 30 major financial institutions, including J.P. Morgan, HSBC, Bank of America, and Deutsche Bank to build a blockchain-based settlement platform. The initiative aims to support, quote, real-time 24-7 cross-border payments. end quote, and facilitate transactions involving stable coins and other tokenized assets.

Consensus, led by Ethereum co-founder Joseph Lubin, will develop the first prototype. Quote, in conversation with these institutions, you clearly feel that the moment is now to bring the collaboration together, said Tieri Shilosi, Swift's chief business officer. Swift CEO Javier Perez Taso added that the project is part of its mission to, quote, create the infrastructure stack of the future. Also, there's been a ton of positive news this week in the intersection of tradfi and crypto. Here's a recap. Visa began testing stable coins for business payments across borders,

letting firms use USDC and EURC to pre-fund transfers via Visa Direct in a bid to speed up settlements and lower costs. Deutsche Berza teamed up with Circle to integrate Euro and dollar-backed stable coins into its trading, settlement and custody platforms under new EU crypto rules, marking the first tie-up between a major European exchange and a global stablecoin issuer. Chainlink and UBS ran a pilot that let banks use the Swift messaging system to subscribe to and redeem tokenized investment funds, a move aimed at bringing blockchain infrastructure to the $100 trillion fund industry without replacing existing tools.

Lastly, Societe General's Cryptoarm SG-Forge deployed its Euro and dollar stable coins on Ethereum-based DFI platform, Morpho and Uniswap, enabling clients to borrow, lend, and trade them around the clock using crypto and tokenized fund collateral. SEC advances plan to put U.S. stocks on blockchain. The Securities and Exchange Commission is moving forward with a proposal to let American investors trade tokenized stocks on blockchain platforms. According to the information, the plan would provide exemptions from certain trading rules, potentially allowing companies like Coinbase and Robin Hood to let customers buy shares of firms

such as Apple or Netflix directly through their crypto wallets. Tokenized stocks mirror traditional equities in offering ownership and dividends, but are issued as blockchain tokens that represent a claim on the underlying shares. Supporters argue the approach would speed up settlement times, which currently take at least a day. giants such as Citadel Securities have warned of risks to market stability and compliance, and legal challenges from Wall Street firms could delay the rollout. SEC Chair Paul Atkins has described tokenization as a, quote, innovation, and quote, the agency should

foster. Stripe opens door for companies to issue their own stable coins. Stripe has unveiled open issuance, a new platform designed to let businesses create and manage their own stable coins. quote, with just a few lines of code, end quote. The service, powered by Bridge, the crypto infrastructure firm Stripe acquired for $1.1 billion last year, allows companies to mint and burn tokens, customize reserve ratios between cash and treasuries, and select partners like BlackRock and Fidelity to manage those reserves.

To comply with U.S. rules, Stripe will apply for a federal banking charter and a New York trust license, according to the information. Zach Abrams, co-founder and CEO of Bridge, joined Unchained to explain the vision. Quote, If money movement is core to your business, you should build with stable coins, but don't build on top of someone else's coin, he added. We think this is going to become a core part of stable coin money movement that people are just going to want the money to be their own. Zero Stacks $401 million raise masks, just $13.7 million in cash. ZeroStack, the newly rebranded Flora Growth Corp, announced a $401 million raise to back the AI-focused Zero Gravity blockchain.

But reporting by Unchained shows that only $13.7 million came in as fresh cash, with the rest made up of recycled tokens, warrants, and in-kind contributions. SEC filings detail that Zero Gravity Labs supplied $150 million in ZeroG tokens and $215 million in warrants valued at $3. per token, while Defy Development Corporation added $22.9 million in Solana. The actual cash portion came from investors, including Dow 5 and Abstract Ventures. Analysts warned the structure created an early liquidity opportunity for insiders, bypassing typical vesting schedules. One industry investor described the deal as, quote, The Ultimate Grift.

Robin Hood Eyes Global Expansion of Prediction Markets. Robin Hood is exploring. ways to take its fast-growing prediction markets business outside the United States, beginning with talks with regulators such as the UK's Financial Conduct Authority. J.B. McKenzie, Vice President of Futures and International at Robin Hood, explain the challenge, quote, it's a swap here in the United States. So the question would be, where is swap oversight, let's say, in the UK? That's a question that we've been asking, the FCA, the company, which already operates equities in crypto trading in the UK and EU, says demand for prediction markets is

especially strong in Europe. CEO Vlad Tenev noted in an ex-post that Robin Hood has already facilitated more than 4 billion event contracts this year, calling the product a major growth driver. Zero launches fiber network to speed up blockchain transactions. Blockchain infrastructure startup, Double Zero, has launched its main net beta, introducing a private fiber network built to move blockchain data faster and more reliably than the public internet. At launch, 386 Solana validators, representing over 20% of the network's stake, have agreed to route traffic through Double Zero's backbone, which spans more than 70 fiber connections across 30 cities and five continents.

Quote, we are building a parallel internet for high-performance distributed systems like blockchains, said co-founder Austin Federer on Unchained. He explained that public. internet routing creates delays and inconsistent speeds, limiting blockchain's true capacity. The network is operated by independent contributors who are compensated in Double Zero's native 2Z token. Jump, an early investor and contributor, received 28% of tokens, sparking debate about its influence. Cronhay's Flying Tulip debuts with $200 million raise in investor protections. Andre Cronhay's new venture, Flying Tulip, has raised $200 million, and, and, and,

at a $1 billion token valuation, but the spotlight is on its novel fundraising model. The project introduces a quote, on-chain redemption right, end quote, giving investors the ability to burn FT tokens and redeem their original principle at any time. Cronhay described the design as a way to provide a financial, quote, floor, end quote, that eases pressure on teams to make short-term decisions. Unlike many crypto launches, the Flying Tulip team has no initial token allocation, with compensation instead tied to protocol revenue and token buybacks. Investor Dan Alitzer of nascent said the structure, quote,

forces teams to deliver, aligns incentives, and gives investors real protection, end quote, a shift some see as a new template for defy capital raising. In related news, Cracken secured $500 million from investors, including its co-CEO Arjun Sethi, valuing the crypto exchange at $15 billion, and setting it up for a long-anticipated publicly, listing next year, after a year of major acquisitions. Jump Crypto pushes Solana toward bigger blocks after Alpin Glow upgrade.

Jump Crypto's Firedancer team has put forward a proposal, S-I-M-D-0-370, to remove Solana's block compute unit limit following the network's upcoming Alpenglow upgrade. The change would eliminate the current 60 million compute unit cap, allowing block size to scale dynamically with validator performance. Supporters argue this flexibility could boost throughput during periods of high demand, such as token launches or spikes in decentralized finance activity. Validators unable to process larger blocks could skip them, incentivizing higher performance operators to expand hardware and software capacity.

Still, concerns over centralization have emerged. Solana co-founder Anatoly Yakovenko questioned whether validators would, quote, increase hardware to support some crazy leaders big block. End quote. Warning instead, they might, quote, fail it and steal all the MEV. End quote. The proposal remains under community discussion. Unchained is produced by Laura Shin with help from Matt Pilchard, Juan Aranovich, Margaret Curia, and Pam Majumdhar. The weekly recap was written by Juan Aranovich and edited by Stephen Erlich. Thanks for listening.