Unchained - Pump.fun’s $1 Billion ICO Has Caused Controversy. Can It Succeed? - Ep. 847

Episode Date: June 6, 2025

On Tuesday, a pseudonymous X account claimed that Pump.fun, Solana’s breakout memecoin launchpad, would raise $1 billion via an ICO at a $4 billion valuation. The potential deal? Multiple CEX listings, a 10% community airdrop, and maybe even a launch by the end of the month. The community reaction? Not great. In this episode, Syncracy Capital’s Ryan Watkins joins to break down the backlash, whether the raise makes sense, and what this kind of fundraising says about the current state of crypto. He discusses: Whether Pump needs $1 billion and what they’d even do with it Why some people are furious, even as Pump prints revenue If this is bullish or bearish for Solana Why an airdrop was not pursued Whether the $4 billion valuation makes sense Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Ledn FalconX Human Rights Foundation Ryan Watkins, Co-founder of Syncracy Capital Unchained: Pump.fun Mulls $1B Token Sale Nextfckingthing’s tweet breaking the news  Ansem’s tweet on “pump fun raising $1B at $4B after Trumpcoin launch is like the second plane hitting the towers” Ansem’s poll Ryan’s tweet on “Pump anger”  Solojay tweet on Pump’s top 25 wallets Mosi’s tweet on why “Pump's ICO seems like an asymmetric bet (skewed to the downside)” Timestamps: 👋 0:00 Intro 🤔 4:03 Why skepticism around Pump.fun’s $1B raise is valid 💰 7:06 What Pump would even do with $1 billion 📈 21:17 Whether a $4B valuation actually holds up 🔥 24:08 Will this ICO hurt SOL? 🎁 27:05 Why Pump chose not to do a big airdrop 📱 28:56 Whether Pump.fun can hold its ground as SocialFi competition heats up Learn more about your ad choices. Visit megaphone.fm/adchoices

About 40 to 50% of all volume on pump is routed through third-party interfaces or robots. So what that means is that pump, the front end, is no longer the point of discovery for the pump ecosystem of assets. And the risk here is that the more this trend continues, potentially the less control pump over its own destiny because if everyone starts trading on pump through dirt party interfaces and let's say one of the interfaces gets very large but what's stopping that interface from launching their own launch pad and just directing all their users there. Hi everyone, welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Do you want to hear your comments on an episode of Unchained? Every episode we feature a few.

Alex L. Witt had this to say on X and response to my recent interview with Bitwise's Jeff Park. Without government spending and printing, US would be in a recurring recession, e.g. multiple quarters, negative GDP growth. S&P 500 is just an inflation hedge for all the money printing and the absence of actual growth. If you have thoughts on a recent episode or on the podcast overall, leave a comment on Apple Podcasts or in our video on YouTube, Farcaster, or X. This is the June 6th, 2025 episode of Unchained. Lutton is a leading platform for Bitcoin-backed loans, offering a secure and transparent way to unlock liquidity without selling your Bitcoin. Issuing loans since 2018 and earning over 1,000 trust-pilot reviews. Learn more at leaden.io.

In many countries, governments freeze accounts, surveil transactions, and seize assets, not just from activists, but from everyday people. That's why the Human Rights Foundation created the Financial Freedom Report. Sign up to receive it weekly at financial freedom report.org. Imagine an AI that speaks crypto and does the work of a team of analysts. Introducing Focal by Falcon X, bringing clarity to a world of noise. Visit askfocal.com. Today's guest is Ryan Watkins, co-founder of Syncracy Capital. Welcome, Ryan.

Hey, nice to see you again. On Tuesday, a next account called Next Fucking Thing broke the news that Pump Fund will be raising $1 billion via ICO at a $4 billion fully diluted valuation. They added some detail later saying this will happen across multiple centralized exchanges. There will also potentially be a 10% air drop to the community. And they thought it would happen by the end of the month, maybe even in the next two weeks. The community seemed to have what I perceive to be a largely negative reaction. for instance, Ansel tweeted pump fund raising $1 billion at a $4 billion evaluation after Trump

coin launch is like the second plane hitting the towers. He also did a poll. Pump fund is. And then the two choices were good for crypto and bad for crypto. And 70% voted bad for crypto. So I was wondering what your reaction was and also what your reaction to the reaction was. Yeah. I think meme coins have always been a lightning rock within this community.

as far as like the past two years. And I think Pomp specifically has been a very polarizing topic as far as is it positive or negative for crypto. And I remember even in 2024, people are wondering, okay, is it sealing flows away from valuable projects? Is it positive if there are new people that are being onboarded to these blockchain rails that could maybe eventually go and pivot and try out new applications? because they now have a phantom wallet, they have money on the phantom wallet, and they can go from there. And, you know, I don't think anyone has really found the right answer. It's unclear if it's good or bad. And I think with this ICO, what really got people so mad is Pump has made a lot of money since inception.

I mean, this thing is not even that old. It launched in Q1, 2024. It is generated $700 million in revenue cumulatively. And that is the most of any application in the crypto economy from just flipping the 1% fee on its trading piece in its bonding curve. So while this is happening too, a lot of pump users are losing money. And they're losing money increasingly, not because they're making bad bets on Buccoins, because there is so much more exploitive behavior on pump. where there are snipers that are taking up the supply to the bonding curve, there's these

kind of weird like insider dealings for some meme coins. It has become a game that is not as fair as it once was when before Pump existed and it was just this fun thing that people did. It's like, oh, cool, the dog has a hat. Let me go by and it's this community thing. And it's just now there's this whole like meme coin industrial complex that the retail investor now has to deal with. And I think that's why people are angry because, you know,

they've lost a lot of money. Pump has made a lot of money. And now they're going back out to the community and saying, give me a billion dollars more without really putting out a reason why they need this capital. So I think people are right to be a little bit, a right to be skeptical. But I do think that the sentiment so far I've seen is universally bearish. And I do question if that is actually the right read on what's going on here. Because at the end of the day, regardless of whether or not you are a believer that pump is valuable for society or not valuable for society in the same way, I think people would have the same debate over whether casinos are net good for society or not.

It is a valuable business that people willingly pay to use, and it is making a ton of money. And it is also the most, it's like the defining project of the cycle for Solana. I mean, meme coins literally defined the past few years. And now it's launching a token. And you know what? One thing that people really want today is our tokens that have real value cruel. And here is one where it's actually priced somewhat reasonably, if you believe that this mean coin trend can continue, that's the topic of conversation.

And does it have real value cruel? So yeah, I think that's one thing that I'm kind of working through on my own is, you know, is this as bad as people think on the initial reaction that the most successful application of Solana that's generating a ton of money is now offering people the ability to buy into it. Yeah, I did see that you had tweeted something about like casino users getting mad at the casino for making money and then trying to raise more money to build a bigger casino. But as you pointed out, like people were saying, no, no, no, this is worse than a casino.

Some of their responses one was they are not a casino. They are the people who are robbing people in a casino while they're playing. You guys are smoking crack if you think the way pump fun allowed insane farming, bottling, scamming is anywhere close to the level of what casinos do. And someone else tweeted, casinos have take rates that you can understand. What is the true take rate of the problem?

pump fund casino when you have snipers, bundlers, exorbitant fees, and no gambling addiction protections. And then, like, you probably saw this other person, Solo J tweeted the top 25 wallets with the highest volume on pump fund. And it's all like bots and MVV bots and the jupe aggregator. I mean, I think there were a couple that were like real people. But so, yeah, I guess like to mention, you know, what you said about how they raised the most money last year,

or sorry, made the most money, you, you know, mentioned like, oh, they're going to do more with this, but they haven't mentioned what. Yeah, I saw like another person, Mosey, aka Vanna Charmer, tweeted. I'd argue that if with $700 million, they haven't been able to ship anything interesting besides their initial product, more capital isn't going to change this. And he pointed out, they basically just shipped a streaming product in an AMF. So I wondered, you know, what do you think they could do with this? money.

Yeah. So I just say there's a couple things I'll answer there. The first one is on the ICO. So just put this in context. This will be the third largest ICO in history if they successfully complete it. EOS was about $4.2 billion. I was done over course a year in 2018. There was a telegram ICO.

I think that was like $1.7 billion. And, you know, next up would just be, I mean, after that, there's a very steep drop-off. I think maybe the third behind that is, might be like Tezos at 233 million. So this is a huge, a huge raise. I mean, in fact, they're raising as much as Circle did today. And it's a meme coin launch pad just to put it in perspective.

So yeah, I mean, you know, what could they do with the money? I have ideas. So I think that the points that the Vanna Charmer was making are fair. Right. I don't think it's that difficult to basically spin up a new AM. that is not really that differentiated. Now, the AMM actually is making good money. I think about, you know, it's a, it makes about a million dollars a week for pumped-up on

those about $52 million a year. So it is a revenue-regenerating product. But yeah, beyond that, there's not really much to show as far as what that capital that they've investing back into product has led to. And that could either be because there are going to be products that they're going to roll out in the coming months after they launch a token, or they're just having allocated the capital well. So when you go out to the community and ask for, once again, like the third largest ICO ever, I do think it would be helpful to have more answers on what you're doing

with the capital. So some things that I'm thinking they could do, and this is just me guessing, is if they really want to make this big push into streaming and create this TikTok of consumer finance, which seemed like direction of billing it, then what they would probably want to do is go get a ton of high-quality streamers on the platform. And these streamers are very expensive. So, for example, you know, I mean, these streaming deals can get up to, I mean, hundreds of millions. Aidan Ross, one of the biggest streamers in the world, has a $200 million deal with Kick. Ninja, the streamer that played Fortnite, and he's a $50 million deal with Twitch. I mean, these things are, they get really, really, really, really pricey for the top,

top level streamers to stream on your platform exclusively. I do think with like a huge war chest, then maybe you can just go in, acquire some of those streamers to go on to pump, and that could be good for getting the viral loop in motion. So that's one way they could do it. It'd be a pretty crude way of growing the platform, but I think it's possible. And then who knows, right? Maybe they could launch some other adjacent products, right? Maybe they go and build a chain.

Maybe they go and build an exchange. Maybe they go and launch a stable coin. I mean, I just think about what are the most profitable businesses in the crypto economy. Those are it, right? And I think that now if you are at a $4 billion value, and the founders want to grow this into something that is bigger than that, then, I mean, those are probably the things that they have to do. You either create this really viral social app, which doesn't exist in crypto,

or you go out and you go and build out these known to be profitable products, which are the exchanges and the, you know, stable coins and, you know, maybe even a blockchain. So those are things I could think they could do. Now, I don't know if all those things need, you know, 1.7 billion dollars of capital. to go build. But we'll see. They could also make some acquisitions as well. I know it's something that the Jupiter team has done quite well. And that definitely takes some real money to do. And do you have kind of like what you think would be the best strategy? For what I would do

with the money? Well, I mean, I'd be a little bit biased. But I think if I were them and I really want to go, have you on social, I would, I would try to hire as many people as possible from these big social media companies to help me build this. So like TikTok, you know, meta, I'd lay some people with backgrounds in AI to help design the feed. Because I think that there isn't challenge with discovery on the pump app. It just feels very like schizo. I have no idea what I'm looking at half the time. And it's just pretty pretty chaotic. I also probably would. go out and try to get some big streamers on the platform, some crypto-native streamers, maybe some web-2 streamers, and that could be costly.

There's also a world where, you know, I think, you know, if you want to build an exchange, you know, is thinking about, you know, hyperliquid, it has this new primitive call, HIP3, where you can go spin up new markets on hyperliquid and split the fees 50-50 with hyperliquid. And I think that's like a very symbiotic relationship I could see working out as well. if Pomp ever want to launch perpetual swaps for its meme coins that graduate off a spotting curve or they hit like a certain mark capitalization or they might even just want to go build an exchange on their own because they have so much money, why not just swing at the fences? So those are some things I think they can do.

But once again, it's anyone's guess what they want to do with all that money. It would be ideal if they also just launch some big buybacks, to be honest. I mean, to drive some value accrual to its token. And wait, I'm sorry, like launch the token and then do buybacks of the token itself, you mean? Or what do you? Yes, as in, like, with the revenue. Okay. Yeah, I guess like, I think you're right that since we don't know, it's like, what could you need all that money for?

And, yeah, if I just, I remember just thinking, like, okay, that that's, that's, It's like so many engineers and like that like this is like it was just like make the math, make math. But some of what you described there, I feel like makes sense if they try to show this is just my personal opinion. I could be totally wrong. I'm not a business person. But but like somehow the notion of like shifting it more toward content and not because like all

these points about it being like so extractive and like all the anger that we saw. Like I think it's because it's like so far on that end of the spectrum. But if it were to be able to kind of shift more towards some kind of mashup of like true memes, meaning like culture and money, then I feel like that is like a more sustainable path. Because otherwise there's just going to continually be, I think, people being unhappy with them. Agreed. And I think another thing they could do as well is they don't necessarily have to double down on the whole meme quinting. I think what is great, they're in a great position right now as the dominant launch pad. They have 95% market share.

As we just discussed, they have a big war chest. They also have one of the most popular front ends on Solano right now. And a mobile application that's growing in popularity. What they can also do is just expand the product offering horizontally and just become a more general purpose launch pad. So recently we saw, not that it's really dented any market share, but believe come out with this whole thesis of we're going to allow entrepreneurs to issue internet capital markets coins like startup tokens on the platform. And of course, like what is one of the

issues is that you know, you've no idea what you're buying. Like is this is just like equity in the company or is it just some random thing that someone uses to make themselves rich. What is good about the platform is that it curates the assets that are available for the purchase. So there is more fair. I think the idea is that you create a, you almost like create better odds for the people on your platform to invest in a legitimate project, whereas with pop, it's just anarchy, right? So I think maybe expanding the tool set so that you can, maybe there's like better curation, maybe you're actually attracting more real projects to do that. Maybe you need some new features to be able to track those new projects, like adding vesting for founder allocations,

maybe even add like some kind of fundraising mechanism so that people can actually raise money in the platform. Obviously, you need to be like right to write-tory compliant, of course. But yeah, those are also ways that this can expand horizontally as well so that it's not just meme coins. It's just a general purpose. It's this general purpose kind of capital markets infrastructure that use meme coins to bootstrap the adoption of it. So that could be very cool as well. It's like it just kind of pivoted into just being like a, I don't know, like just another big trading app and capital markets platform. And that just happened to start more speculative.

And maybe the one last thing I will say, too, is because you kind of touched in it in one of the prior questions where people are, you know, angry about the kind of like the wealth extraction that's happened in the ecosystem. And, you know, a lot of this wealth that's being extractive is not even, it's not even pump. Like pump is just brought in a service, training revenue. There's all these third party actors that are, you know, building these snipers and just like kind of milking the ecosystem. And it kind of touches on like a core tension. I think that's always been here when thinking through what it means to build like a truly permissionless system is, you know, what, what is, what is a, where is the Overton window end? Like, what are we actually fine with happening on blockchains, right?

Like, do we want people to go and, you know, finance terrorists or, you know, do crazy things that are like anarchic on a blockchain? Or do we want some, some boundaries? I think it's the same thing with pump.fun, where it's like, you know, is this a product that people are fine with supporting in the ecosystem? Or do people actually think that this is something that is just like, I don't know, like brain rot for people's money? And it's just really unfair. And I don't have an answer for that. And that's just something that I think, you know, everyone is coming to terms with as they confront a system that is, you know, raises some kind of,

interesting questions of what should be built on a blockchain and what should not. So in a moment, we're going to talk a little bit more about various aspects of this potential ICU, but first a quick word from the sponsors to make this show possible. Wish you could access cash without selling your Bitcoin? Lennon makes that possible. The global leader in Bitcoin-backed lending, Luton has issued over $9 billion in loans since 2018 and never lost a single Satoshi of client assets. Why is a leaden loan different?

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Bitcoin might be the only life vote in this sea of broken financial theories. Short and sweet. Tell us what you think. Leave a comment on an episode on Farcaster, YouTube, or X, and I just might read it on a future episode. Back to my conversation with Ryan. Right now, Pump Fund's daily revenue is down since the typical day in January. So what did what you thought of the timing of this race?

Let's all put on our investor caps for a second. And then we're looking at, we're valuing this ICO. People say, okay, this is $4 billion. They're making about $500 billion in revenue. It trades at eight times. The revenue. And you think that's fair or overvalued or undervalued. And that's depending on whether you think the meme coins are sustainable.

Like the volume is sustainable. I have my personal skepticism, but I've also always been a skeptic of meme coins. I think most people are skeptical of meme coins. That being said, the volumes over the past three months, well after the inauguration, well after the Trump MuneCoin launch are still significantly higher than they were a year ago. And in fact, they've kind of stabilized at that level. And over the past month, it's actually increased. And even within the past 30 days, pump has generated in about like $40, $45 million in revenue,

which is $500 million annulized. And this is, you know, well after we had like that big peak. So I do wonder how resilient this is. I do wonder how big the TAM actually is for this. this, right? It is just not clear to me whether that's the case. But yeah, that's just something that I think that people have to think through evaluating this. You know, one thing that I think is also, you know, since we think about is how could meme coins get bigger than Trump launching it? So I think that's also a lot of people are thinking, like maybe that was the peak. I just don't

know, like maybe an alien launching a meme coin would be bigger. But I'm not sure how you get bigger than Trump launching a meme coin. So maybe it is kind of like pointing towards how, you know, people need to find a new driver of growth or this new ways to actually increase this mean coin volume because just getting a big name to go launch a meme coin is probably not it. Yeah. And just to be clear, I would imagine that like five years from now that will look like a blip, you know, because the whole category will have grown. But I also imagine it'll look super different from how it is now. But yeah, so we kind of talked about like different ways they could grow. One thing that I did hear, though, this is just from a little birdie who said that they're currently offering

multi-million dollar deals for buying at this $4 billion FTV with no vesting. And I thought that sounded like interesting term. So I wondered if that turns out to be true, what would that say to you? I don't think that would be surprising because I think the original spirit of ICOs was that you would just buy a token and then the second starts trading, it's fully liquid. So I wouldn't think that's the biggest deal

so long as I guess whoever's being offered those terms are buying at the same valuation as everyone else. Okay. Okay. So I also wanted to ask. So D's tweeted a poll showing that 64% of respondents think the ICO is bearish for Solana and Solana memes in the short term. Only 16% said bullish.

The other 20% said, show me the results. So I just wondered, out of curiosity, what do you think the impact will be on Solana and Solana memes? Yeah. So I think people are predictably. jaded about Pump. Like I said, I think just asking for a billion dollars after the users launched or lost money and they already made $7 million. I think people are just naturally going to be very skeptical and angry. And that makes sense. That being said, I struggle to see how, at least over the intermediate term, that this is not, that this is actually bearish for Solano.

So I can see how, you know, maybe leading up to ICO, people do want to participate. And mind you, they also might not even raise a billion dollars. I mean, that's just a target. But let's just assume that they get somewhere close. People will probably sell some of their salon exposure, would that be meme coins or some indirect exposure to the meme coin trend? Like people would buy all the Dex tokens and everything to get exposure. People might sell those assets. People might sell soul to fund their investment in the pump ICO. So that could be, you know, some headwinds just for like a little bit while this ICO is going. But that's like short term.

I just think that if you start to zoom out beyond that, the largest application on Solana raising hundreds of millions, if not a billion dollars to go and expand its business is probably a good thing for the ecosystem. I think for one, it is a good outcome for investors in PUMP, which I think will lead to more investment coming into the ecosystem now that it's kind of been validated with a big venture outcome. There will be more high quality assets on Solana that are revenue generating that people would want to buy, which is good,

so that it's not just meme coins that are only things that people trade. I think people want to trade assets that are high quality and rev generating. And then, yeah, also I think that if people see that Palm raised a ton of money that might encourage more people to want to go do, ICOs as well. Like if Pumpkin raise a billion dollars, why can't I go raise 50 million or 10 or whatever amount? And that could also be very, very positive as well. So yeah, I don't think it's actually as bad as people as people think it is. And, you know, I saw some commentary about the fact that they are choosing to do this fundraising mostly through an ICU and only a portion through the

Airdrop, do you have an opinion on, you know, why they chose that or what you think the pros and cons of each method are? So I think with the exception of hyperliquid, most Airdrops have actually not, they actually haven't really been much of benefit to projects. I think you just give away a bunch of free money to people that may not actually care about your products or may have only been using your product because they expect an air drop. And they second that they get their money, they just leave. And it's like, well, why do we do that?

It was kind of like a waste. And I think hyperliquid is one of the rare examples where the airdrop did very well. But why the airdrop do well? It wasn't necessarily because, you know, people got theirdrop and held on and we're all excited. In fact, like, most people actually sold the hyperliquid air drop. I think the reason why it did well is because it was an amazing product that generated revenue. And that is what got people excited. And I think the air drop was just more to demonstrate.

demonstrate that, okay, we are aligned with our community and we're worrying them for that, that, that, you know, trading on on on the platform. And it just, it just, it just, it just fits the end of the egotarian vibes of, you know, building a decentralized project. But it's a rare example. So I don't think every project needs to do anirdrop. And I think that, in fact, if you are a new air drop, uh, you probably shouldn't do it once you already have like a product that people, you need to give people reason to hold the token. Otherwise, everyone's just going to sell it anyways. But yeah, I think the airdrop could be good for the ecosystem because, like I said, as we discussed earlier, there's a lot of people that lost a lot of money just trading all these memes on Solana. And if they get a little bit of a stimulus check from theirdrop, that could be good. Maybe reignites some interest in the mean points out there. All right.

So I did want to circle back to the competition aspect that you pointed out earlier, like about believe. You know, going back to Mosey Suite, he also mentioned Bonfund and virtuals. He was saying, like, the front ends could, like, axiom or photon could also. Oh, yeah. Yeah. So, like, I don't know just where you think pump fun needs to position itself to compete in this kind of growing field or how it can, like, fend off would be competitors. Yeah, yeah. So I think at this point about. 40 to 50% of all volume on pump is routed through third-party interfaces or bots.

So what that means is that pump, the front end is no longer the point of discovery for the pump ecosystem of assets. And the risk here is that the more this trend continues, potentially the less control pump has over its own destiny. Because if everyone starts trading on pump through dirt party interfaces, and let's say one of the interfaces gets very large, well, what's stopping that interface from launching their own launch pad and just directing all their users there? Right? Because the actual launch pad infrastructure is relatively a commodity.

There's not really much as different about the actual. bonding curve mechanism. Now, so far, we've seen a lot of teams attempt to do this, right? In fact, we've seen, you know, one of a, you know, Pumps partners or old partners, Radium. Radium used to be where all the meme coins are graduate to when they start trading. They rolled out their own launch pad. And, well, a lot of these launchpices haven't really made a dent into Pumps market share. So there definitely is some network effects for Pump. I think it's basically just in exchange and exchanges have network effects at the very least is from, you know, the liquidity that's on the system. But yeah, if you just extend this out over time,

then they would likely need to solidify that relationship with the end user to protect themselves from competition. And I do think that's one of the reasons why there is this push into social as a way of kind of creating a more sticky product. Because if you can build a social graph, And it's kind of like the classic, you know, Chris Dixon quote, like come for the network or come for the tool, stay for the network, right? And if you have this big social graph where, you know, you really like watching the streams and your friends are on there, then it makes you harder to switch over to like a new competitor that just doesn't have that. So I think that's one of the key ways that they can spend those competition. And maybe the other way it would just be, like I said before, expanding more generally so that. that you turn all these new competitors into features. Out of curiosity, to either you or Synchristy capital plans to invest in this ICA? No, we have no plans to invest in the ACO. And are there any other comments that you want to make about Pump Fund that I didn't ask you?

No, I just think it's a once every once in a while, there are very polarizing events in the industry. and these tend to be exciting times. So I'm humble looking forward to seeing how this plays out. Can they raise a billion dollars? How the market will react? What they plan to do with the money? For better or worse, Pump is one of the most well-capitalized

and most relevant and most used products in the industry. So I think it's important to watch what they're doing because it could have some pretty important implications for, you know, not just Solana, but this ecosystem at large. Yeah, actually, I just realized that, you know, I don't think we know which platform they're using. And so it'll just be interesting to see what a 2025 version of an ICO looks like rather than like a 2016, 2017, 2018 version.

So. Yeah, for sure. Anyway, all right, well, thank you so much for coming on Unchained. Yeah, thank you. Coming up, we have some insight into how the CEOs at these Bitcoin and Crypto Treasury companies are going to be paid. Stick around. I'm here with executive editor Steve Erlich about an article that he wrote this week. Steve, you covered the crypto treasury company's trend with an interesting angle. And it was about how the executives are being compensated. So, you know, one of the first points that you mentioned is just what a significant premium, some of these crypto treasury. companies, stocks are trading at compared to their crypto holdings. So what factors beyond just executive influence you think are driving these elevated valuations? I think it really just comes down to FOMO type excitement.

Crypto, I mean, as we both know, Laura and we've both covered, crypto loves a good fad, a new trend. It used to be like Dowel tokens, could be defy, NFTs, meme coins. And it really seems like today it is the crypto treasury companies. Frankly, I'm a little surprised it took so long for so many people, for this many people to start following the Michael Saylor playbook. But that's really what's happening here. And these companies are launching with sometimes like nine or 10 figure bankrolls to pretty

much buy Bitcoin and sit on it. I mean, granted, there are some differences between the companies and their strategies. I mean, they're promising to use capital markets. efficiently to acquire Bitcoin or Crip or Solana or Ethereum or XRP faster than some of the other competitors. But it really just comes down to a lot of excitement over these particular companies. And I think it also just kind of, it's probably a little bit of a warning sign for investors that we're getting perhaps a little too frothy in all of us. Yeah. So one of the things that you talked about was how these companies are compensating

executives. And you had an example of one that follows kind of a more conventional model. And then you had another example of one that tries to be, or is trying to be different and more innovative in how it's compensating its executives. Can you talk us through those two examples? Yeah, I was thinking about this question because it kind of follows along with an earlier story that I wrote that kind of explored potentially the risks that these types of companies composed to the entire crypto ecosystem. There are naturally going to be incentives for companies, these companies to leverage the balance sheets, try to be creative in how they use the crypto that they hold to generate profits and value. And it got me wondering, well, how are they sort of incentivizing

their executives? Are they incentivizing them to be as risky as possible? to grow at all costs, or are they trying to be a bit more measured in looking for a sustainable long-term growth that aligns the interests of the shareholders and the executives? And when I started looking into this, because you can look up SEC filings and you can see these are all publicly traded companies, or at least the ones that have been traded for a little while, the newest ones, Nakamoto, 21, those haven't actually released this information yet, and those companies declined to provide it to us. But you can see that there's different ways of compensating executives. One firm, Apexie, that is focused on Solana, their CEO makes, I believe,

about $835,000 salary, but has an options grant that right now, I believe, we report is worth over $10 million in at least paper gains, because he was able to purchase, I believe it's 500,000 shares at a price of $2.28, which is where the stock was a day or two after they announced this Salana Treasury strategy. And as of yesterday, when we wrote the story, the stock was up with $10.95. So that's a huge gain in a very short period of time. And his stock, his stock compensation is heavily weighted towards options. Now, this can be good, but it's also risky because options are basically worthless until they're worth something. Some other companies like strategy, for instance, they compensate their executive in a different way. They have cash bonuses

for performance. They have performance bonuses for stock bonuses based on meaning certain performance goals. And then they also have restricted stock units, which are basically shares of equity that invest over time and then are given at the current market price. So those stocks, theoretically, you can lose money on those stocks as well. So there are these different options there. So I found that the Apexie strategy was actually very risky. But what the article sent, on and what I found most interesting was another salina company called the Defy Development Corporation. And they are issuing all of that. And instead, they structured their executive bonuses around whether or not they were able to increase the amount of salina they hold per share to meet certain thresholds by this time next year.

The bonuses are going to be paid in cash. And when I interviewed their CFO, John Hahn, for the story, he basically said that he felt that he felt that, we should not benefit financially as individuals from just the price of the token we're holding appreciating. There should be some measurable goal that investors can track and see how efficient we are as a marketing team. So I found that particularly interesting. And I wanted to then look at two things. Like, one, is this going to be a trend that other companies can follow? And two, how is this the best way to competent executives? Yeah. And there were some interesting numbers in there. So, you know, they kind of gave what the current salana per share amount is, and they wanted to double it.

But then there were even incentives for doing more than that. And it kind of looked a bit challenging. But who knows? Because they don't really know, you know, what this is going to look like. It's unclear. What did you think? It's a little, I think the goal that they have right now is to double, the current number, which I think is like 0.04 or something like that.

But by the time people watch this video, that number could certainly change. He told me that if they felt if they could not double that by this time next year, they did not deserve bonuses. And then there's two tiers above that where I think they can max out at about 200% of the bonus. I believe their CEO, Joseph Anirati, his salary is somewhere around in the bid 500,000s. and his bonus would be, I think, 65% of his annual salary. So he could get as much as two times that. So it was pretty interesting.

I mean, there's always ways for people to sort of massage the numbers and try to make them look where they need to be in order for, in order to reach certain goals. I mean, the company could, I don't know, theoretically try to borrow salon from someone else. And therefore, you don't know if the shareholders, if you have more salon, I mean, that's just a, for instance, I didn't ask them that.

There's certain things that can be done. But then at the same point, too, I mean, some of these executives that have either restricted stock units or options, I mean, they could also increase the share price through things like buybacks, even if that's perhaps not the best use of corporate treasury, et cetera, to shrink the circulating supply and accelerate the price. So there's lots of ways that all this stuff can be done. There's no foolproof way. but again, the assertion at least from the DFI Development Corporation executives is that this is at least more straightforward and transparent than just giving a ton of option bonuses to executives that are launching these companies in the middle of the Fed. Yeah. The one thing that I was thinking about was Jack Mullers of 21 also has been talking about different metrics, Bitcoin per share and stuff. but we don't know whether or not that's going to be tied to his compensation. So, yeah, some of these companies right now, 21 Nakamoto, that have this buzz, they haven't revealed what they're going to do.

And to be clear, we asked, and they either declined to respond or do not respond at all, because it's very easy and good to say, this is how we're going to grade ourselves. But that doesn't mean, we'll find out how they really grade themselves when their compensation deals are publicized. And last question, just, you know, when you look at TradFi, are there any comparisons there that you think would be helpful for how people should think about this? Yeah. So in reporting this article, which I found really fun to do, I spoke with a number of experts in executive compensation, which is a much bigger field than I even imagine it was before because there's so many things that go into it. And I mean, the best practices I saw we're usually finding like multiple different types of bonus structures tied sometimes to stop goals,

sometimes tied to certain performance goals, so on and so forth. I mean, one of the strategies that came out of my discussions mirrored what I said earlier about how strategy does it with their current CEO, Fong Li, basically having a diversified set of equity biases so that you can sort of manage the short or blend the short and long-term incentives. But really what kind of came out, once I explained how these companies worked to these individuals and they didn't really know anything about these companies before I brought it to their attention, they said the best thing you can do is try to figure out a metric that can judge or assess the effectiveness of the management team. And the metric that kept coming up over and over

again is premium to net. How much more is the company trading beyond just the value of the crypto on its balance sheet. And, and Lara, we looked at these numbers. They're all over the place right now, and especially for some of the new companies, because they are so new, they'll come down. But some companies are in the 80s. Some companies are in the one and a half. Some companies are in the twos. Strategies are at 1.7. The salina companies are around five or so. And the real, they're saying that they're going to be efficient at acquiring crypto. They're going to do it faster than people can do it themselves. And these executives say, that's worth a premium in the stock price. Well, how much? That seems to be the metric that matters most to these people.

And in the traditional world, they said that this has a lot of similarity to something known as Price the Book, which at least in terms of financial companies like banks, et cetera, that looks at how much investors value the company beyond just the company's assets, deposits, et cetera, et cetera. And I actually looked at at least one broad banking index, the KBW Banking Index, and the average price to book ratio for that, for entities in that index is 1.44. So I thought that was just an interesting benchmark. But that seemed to be the metric that resonated with all the experts that I spoke to for the story.

Yeah, that Nakamoto one is training at like 56 times. Yeah. Clearly, clearly there are some inefficiencies right now. All right, Steve, well, this has been super informative. Thank you so much. All right. Thanks, Laura. Don't forget.

Next up is the weekly news recap. Today, presented by Untain producer Pamajumdar. Stick around for this week in crypto after this short break. markets are ripping, but not every pump is created equal. You need to make sense of the action and what's coming next. But where do you start? Meet Focal by Falcon X, your AI-powered crypto analyst. It's like having a legion of experts at your fingertips,

ready to break down market-making events, chart protocol TVL, and track ETF flows. Get clarity in a world of noise with Focal. Learn more at askfocal.com. Welcome to this week's Crypto Roundup. In today's recap, Circle goes public with a billion-dollar IPO, Trump media pushes deeper into digital assets with a Bitcoin ETF filing, and the SEC raises questions over staking-based ETFs. We cover the Ethereum Foundation sweeping restructure and new Treasury strategy, a data breach disclosure controversy at Coinbase, and fresh partisan clashes over crypto legislation. Plus, CZ proposes a new kind of decks, Bitmex exposes rare lapses by North Korea's Lazarus Group, and China's Wii bus files plans for a $300 million XRP treasury.

Thanks for tuning in to the weekly news recap. Let's begin. Circle raises $1.1 billion shares soar in New York Stock Exchange trading debut. Circle, the issuer of USC, has completed an upsized initial public offering, raising nearly $1.1 billion through the sale of $34 million shares priced at $31 each. The offering, which exceeded initial targets, gives the USDC issuer an initial market capitalization of $6.9 billion. The IPO drew strong investor interest, with demand reportedly exceeding supply by more than 25 times. Major participants include ARC investment management in BlackRock, the latter of which manages a reserve fund backing USDC that holds 50,

$63.3 billion in assets. Circles U.S.D.C. currently holds a 29% share of the stable coin market, with $61.5 billion in circulation. The listing, led by J.P. Morgan, City and Goldman Sachs, comes as Congress weighs new stable coin regulations that could further legitimize the sector. On Thursday, Circle's shares began trading on the New York Stock Exchange under the ticker symbol, CRCL, opening at $69 and surging past $100 in early trading before ending the day just about $83 with a market capitalization close to $17 billion. The listing mark circles long-awaited market debut, following a previously fails back attempt in 2021.

In related news, stablecoin startup Atticus, still in stealth, is nearing a $2 billion valuation with a new raise led by Andoril CEO Palmer Lucky and backed by Han Ventures. Trump Media I's Bitcoin ETF as wallet controversy unfolds. Trump Media and Technology Group is expanding its footprint in the crypto space, with a new filing to launch a spot Bitcoin Exchange traded fund branded under the Truth's social name. Submitted by New York Stock Exchange ARCA, on behalf of Yorkville American Digital, the proposed ETF would track the price of Bitcoin, with asset custody provided by Forrest-Dax Trust, a crypto.com affiliated firm.

This initiative follows Trump media's earlier announcement of a $2.5 billion Bitcoin Treasury plan, part of a broader collaboration with crypto.com to roll out digital asset products. If approved, the Truth's social Bitcoin ETF would mark one of the most high-profile politically linked entries into the growing Bitcoin ETF market, which now manages over $130 billion in assets. Meanwhile, a separate project involving a, quote, Trump wallet stirred confusion after it promoted by NFT Marketplace Magic Eden. A Trump organization spokesperson denied any involvement telling CoinDesk, quote, the Trump organization knows nothing about this project. Donald Trump Jr. also denied official ties to the wallet. On Thursday afternoon, Bloomberg reported that the Trump family

issued cease and desist letters to Magic Eden and gettrump memes.com over the unauthorized use of their name in the Trump Wallet Project. SEC raises red flags over state. ETH and Sol ETIF filings. The U.S.S. SEC has voiced concern that two proposed staking-based ETFs from Rex Financial and Osprey funds may not qualify as legitimate exchange-traded funds under federal securities law. The funds, which aim to provide exposure to staked Ethereum and Solana assets, had recently received effective registration status but are now facing regulatory scrutiny. In a letter, SEC staff questioned whether the ETFs, structured as C. Corporate

operations, meet the legal definition of an investment company under the Investment Company Act. The agency warned that current disclosures could be, quote, potentially misleading, adding that the funds may have, quote, improperly filed their registration statement. In other more positive news, J.P. Morgan will soon allow clients to use crypto ETFs like BlackRock's I shares Bitcoin Trust as collateral for loans, expanding crypto's role in wealth evaluations alongside traditional assets like stocks and real estate. Ethereum Foundation restructures R&D outlines Treasury policy. The Ethereum Foundation announced a reorganization of its research and development division,

now rebranded as, quote, protocol, alongside a round of staff layoffs. While the foundation did not disclose the number of affected employees, it confirmed that several team members would not be continuing in their roles. The restructuring is part of a broader effort to streamline operations, and prioritized critical development goals, including scaling Ethereum's base layer, expanding blob space for data availability, and improving overall user experience. Quote, we field these set us on a more responsive and effective path. The Foundation stated in a blog post.

Simultaneously, the Foundation published its first formal treasury policy, setting financial guardrails for managing its crypto and fiat assets. Key targets include maintaining an operating expense buffer of 2.5 years, and gradually reducing annual spending to 5% of total assets. Quote, this policy reflects our conviction that 2025 to 26 are pivotal for Ethereum, said co-executive director Shao Wei Wang, emphasizing long-term sustainability and support for privacy-focused defy protocols. Democrats challenge SEC over withheld analysis on crypto bill.

House Democrats are accusing the U.S. SEC of selectively withholding critical features feedback on the Clarity Act, a proposed crypto market structure bill set for markup on June 10. According to multiple Democratic staffers, the SEC has refused to provide standard written technical assistance, despite reportedly delivering the same information to Republican lawmakers. Quote, this is supposed to be completely apolitical, one staffer remarked, expressing concern that the SEC's lack of cooperation could impact the bill's evaluation and lead to unintended regulatory gaps. The Clarity Act seeks to redefine key securities laws and establish a formal framework for most digital assets,

potentially shifting major oversight powers away from the SEC. In response to the alleged lack of transparency, Representative Maxine Waters is preparing a letter urging SEC Chair Paul Atkins to deliver a bipartisan analysis. Coinbase faces scrutiny over delayed data breach disclosure. Coinbase is under fire for allegedly delaying disclosure of a customer data breach tied to a third party support contractor in India. According to a Reuters investigation, the breach occurred in January when an employee at Taskus, a U.S. outsourcing firm, was caught using her personal phone to photograph sensitive customer information on a work computer. Former TaskS employees and a source familiar

with the incident said Coinbase was informed of the breach immediately. Despite this, the company did not disclose the breach until Min May in a filing with the U.S. Securities and Exchange Commission. filing, Coinbase revealed it had received a $20 million extortion demand related to the breach and declined to pay. The incident contributed to a mass layoff of over 200 TASCUS employees and is part of a wider security issue that Coinbase estimates could cost up to $400 million. CZ calls for dark pool decks after win liquidation controversy. Finance founder Changpeng CZ Zhao has proposed a new type of decentralized exchange aimed at protecting traders from front-running and liquidation attacks. The idea emerged shortly after crypto-trader James Wynn

lost nearly $100 million in a high-leverage position on hyper-liquid, triggering accusations that his visible positions were deliberately targeted in a coordinated, quote, liquidation hunt. Quote, given recent events, I think now might be a good time for someone to launch a dark pool perp decks, Zhao posted on X, referring to the need for more private trading infrastructure. He criticized the full transparency of current exes, where user orders and liquidation points are publicly visible. Zhao suggested using technologies, such as zero-knowledge proofs and atomic swaps, to build a non-custodial, trustless platform that delays or hides order visibility. The proposal has sparked renewed industry debate on how to balance transparency with traitor protection

as institutional interest in defy continues to grow. Bitmex uncovers security flaws in Lazarus Hacker Operation. Researchers at Crypto Exchange Bitmex have identified major operational security failures within the Lazarus Group, a North Korean state-backed hacking network linked to billions in stolen digital assets. In a detailed report, Bitmex disclosed that one of the group's operatives appeared to have exposed their real IP address, which traced to Josh Xing, China, a rare slip for the notoriously secretive organization. Further investigation revealed access to a SUPA-based database used by the group, along with tracking strips that exposed internal tactics.

The findings suggest that Lazarus has fractured into specialized subgroups with differing technical capabilities. Lower-tier teams focus on fishing and social engineering, while more advanced cells develop and deploy sophisticated malware. Weebus Taps XRP for $300 million Treasury Initiative. China-based Weebus International has filed a Form 6K with the SEC, detailing plans to create a $300 million corporate treasury centered on XRP. The move, disclosed on Tuesday, signals that chauffeur and hospitality firms deepening involvement in blockchain-based payments.

According to the filing, Webus intends to fund the initiative through debt financing, including loans and credit facilities, rather than issuing new shares. The company also confirmed it is partnering with asset manager Samara Alpha to help structure its XRP reserve. Webus aims to integrate Ripple's payments network into its global operations to streamline cross-border settlements and improve booking transparency for its chauffeured services. It also plans to expand its partnership with Tongcheng Travel Holdings to utilize the XRP ledger for international ride settlements and driver compensation. This follows similar announcements by Vivo Power and Wellgistics, marking a broader trend of institutional interest in Ripple's ecosystem.

And that's all. so much for joining us today. If you enjoyed this recap, go to Unchangedcrypto.Behive.com, that is, unchangedcripto.bhive.com, and sign up for our free newsletter so that you can stay up to date with the latest in crypto. Unchained is produced by Laura Shin, with help from Matt Pilchard, Wanneranovich, Margaret Curia, and meet Pam Majumdar. The weekly recap was written by Wanneranovich and edited by Stephen Erlich. Thanks for listening. Thank you.