Unchained - Two VCs on Why the 4-Year Cycle Is Dead, DATs & Hyperliquid vs. Binance - Ep. 892

Episode Date: August 27, 2025

Subscribe to the new Bits + Bips channels! 📺 YouTube  🎧 Podcast → Apple Podcasts, Spotify, Pocket Casts, Fountain 🐦 X / Twitter  Is crypto no longer moving in predictable four-year waves?  From the rise of DATs and stablecoin-specific chains, to Hyperliquid challenging Binance itself, the industry is fracturing into segments with  winners and losers.  In this episode, Hack VC’s Peter Hans and DBA’s Jon Charbonneau debate whether Solana is next in line for a TradFi pump, why ETH suddenly flipped from dead to indispensable, and how onchain exchanges could finally free projects from Binance’s grip. Thank you to our sponsors! Re Mantle Guests: Peter Hans, Partner and Global Head of Business Development at Hack VC Jon Charbonneau, co-founder and general partner of DBA Links: Rob Hadick’s tweet on the DAT trend  Vinny Lingham’s tweet on the locked SOL in DATs Unchained:  Hyperliquid Surpasses Robinhood in Trading Volume for Three Months Straight Circle to Launch Layer 1 Blockchain ‘Arc’ Stripe Is Building Its Own Layer 1 Blockchain Timestamps: 🎬 0:00 Intro 🎯 2:44 Whether the DAT trend is peaking or just getting started 🧾 10:57 Whether SOL DATs include locked funds from the FTX estate 🙅‍♂️ 11:52 Why Jon hasn’t touched any of these products 📈 16:28 Why Peter still sees long-term value in these vehicles 🔥 20:24 Why ETH is suddenly hot in TradFi and how SOL could follow 🏦 28:49 What makes a stablecoin-specific chain attractive 😶‍🌫️ 32:42 How crypto overlooked privacy for far too long 🔗 38:48 What it’ll take for stablecoin chains to win the payments game ⚠️ 45:39 Whether stablechains could hurt Ethereum, Tron, or Solana 🔍 47:46 Which stablechain has the best shot at success 💸 52:07 Why Hyperliquid beat Robinhood in trading volume 🧨 56:00 How Hyperliquid could break Binance’s listing chokehold 🕵️‍♂️ 59:23 What makes anonymous, no-KYC products appealing 📉 1:01:30 Whether the 4-year crypto cycle is officially dead Learn more about your ad choices. Visit megaphone.fm/adchoices

I don't think there's a lot of edge to be had in predicting when this kind of like dat mania or whatever we want to call it will like start to lose steam. Because most of it is inherently rooted on just like strictly irrational behavior of people, you know, having this conception of I could put a dollar in a box and like it will be worth $1.20 and then like I'm just going to keep doing that. And then like eventually it's going to be worth 90 cents at some. People like to put things in boxes and it makes them, you know, comfortable. But in reality, like that's not the way any financial market works. There's, like, very clearly different segments that act, like, very, very differently, which is why you've seen for the past, like, two years in a row, Bitcoin just, like, keeps going to all-time highs,

and, like, most of crypto-Twitter is, like, depressed most of the time. Because, like, they don't own the Bitcoin. Hi, everyone. Welcome to Unchained, your no-hyper resource for all things crypto. I'm your host, Laura Shin. Earning yield on stable coins just got smarter with Reh Protocol. Get up to 16% APR. plus points through regulated insurance backing and ETH thesis strategies with no lockups required.

Deposit USC, USDT, or die to start earning stable yield and points today at re.xyZ, RE.orgh, R.E.XYZ. Mantle is pioneering blockchain for banking of revolutionary new category at the intersection of Tradfi and Web3. Follow Mantle underscore official to learn more. up, everyone, we've got exciting news. Bits and Bips, our Macro Meets Crypto Show, is officially spinning off into its own podcast feed, YouTube channel, and X account. If you've been enjoying the deep dives into interest rates, monetary policy, and how they intersect with the crypto

markets, make sure to follow Bits and Bips wherever you get your podcasts on YouTube and on X. You'll find the links to YouTube, X, and other podcast platforms in the show notes. If you're watching this, there's a QR code on screen. We'll be posting here for a few more weeks, but starting in September, Bits and Bips will launch on its own feed. For now, we will publish longer clips from the show on those accounts. Remember, go to the show notes now and subscribe to Bits and Bips, that's Bits, plus sign Bips spelled BIPS on YouTube X and wherever you get your podcasts. I'm here with Peter Hans, partner at HackVC, and John Sharbonneau, co-founder and journal partner of DBA. Welcome Peter and John.

Thank you, Laura. Great to be here. That's up, everyone. I can't be on screen again today, and I'm so sorry about this. We will get this sorted in due time. All right, let's first start our discussion with dads. Everybody keeps saying this trend is overdone. It's over. And yet, because I think all trends in crypto must go on until they're truly dead, the trend appears to still be going. On Monday, Sharp's technology said it's raised. $400 million of salt to create a salonad debt with investment from Pantera and Parify. So we're definitely not in the last endings yet. I mean, those are big names. I also saw Rob Haddock

of Dragonfly Capital retweeted a screenshot of the aggregated MNAVs of all of the DATs of all the DATs by crypto. So it's like kind of like what the MNAV is for all of the ETH DATs and all of the Bitcoin deaths. If you look at the screenshot, it shows that the General turn it is downward, but then he wrote all these pitches about getting to market quickly, trading in a high premium, diluting shareholders massively, etc., are essentially all dead on arrival at this point. If you want one of these to be successful, you need a differentiated story that's aligned with the ecosystem of your asset and can it create value over time that's beyond just capital markets alchemy. So just wanted to hear from both of you what your perspective

was on what's happening in the debt market. And Peter, why don't we start with you? Sure, absolutely. And before I start, I just need to read a quick disclaimer that's in addition to my large and sometimes noisy dog, so apologies about that. But as an important disclaimer, the views shared are my own. All such views are for informational purposes only and do not constitute and should not be construed or relied upon as legal business investment or tax advice. So yeah, so look, in terms of where we are and I guess the DAT site, Michael. Clearly, we're not at the end, I guess, at least as evidenced by the announcements, I mean, we'll ultimately see where everything gets done. But the one thing I will also say, Laura, is like, I don't think this is necessarily unique to crypto. Like, I've been in financial markets for a long time now. And, and, you know, you see this constantly. Like, Wall Street loves to, you know, rinse and repeat for any type of vehicle that it feels like it can make money on, right, from mortgage reits to now, you know, digital asset treasuries.

So I think there are a lot of potential deals in the market for, you know, varying assets. And obviously we're seeing, I guess, objectively speaking, successful ones across Bitcoin and ETHs. Solana is kind of the logical third in tow. But, you know, ultimately, it's very tough to say, like, how it'll end. because personally, and again, this is my opinion, like, I just don't necessarily know that there's a massive need for a vehicle like this when you have alternatives of owning spot, owning futures, owning ETFs. Ultimately, I think the back-end kind of infrastructure of financial rails will all congrue into, you know, chain-based custody and rail. So I just don't necessarily know,

what the ultimate objective is, and that's usually not a great sign, but I get it. I get why people want to issue them. John, what about you? Yeah. Yeah, I've, like, I've been joking about it lately of I thought I was done kind of spending time on a lot of financial engineering instructor products when I left banking a few years ago, but that has come back lately, so that is what I'm spending time on the last few days looking at. Like, you kind of kind of just have to at this point to understand the market, at least to some degree. We haven't participated in any of them, but it is driving most of the flows in the market. So you just need to have some high-level understanding of what's going on here. My general view on them is, I mean,

I think most of them are like kind of as you alluded to the in the intro, like most of them kind of are dumb. They're a little bit cash-grabby. This is just a way of, you know, we're going to put in our assets, see if we can sell this thing at a premium to people. A lot of the froth around that is starting to go away, at least on the margin. It's much harder to just raise a new vehicle like that. People just aren't receptive to that anymore. That being said, for at least the medium term, I would say, there is a genuine use case for these, which at the end of the day really is just mostly regulatory arbitrage that I think will close over time. So, I mean, the simplest examples are, you know, if you're a trad-fi investor and, you know, I'm not going on chain to go buy this asset,

or I don't even want to go get an exchange account, you know, you're normally buying ETF. Practical reality is like most of these assets, they just simply don't have ETF. So even just for getting vanilla exposure to a lot of them, it's just like actually difficult to do that for a lot of people. I think that gap is going to close over time as it becomes easier. We're going to get, you know, better ETF frameworks. More assets will get ETFs out of crypto. Similar of just a regulatory just kind of issue there is a lot of the current ETS,

they're still pretty hamstrung on what they can actually do with the underlying assets. And so to the extent that you have an asset that generates a meaningful amount of yield or you would be diluted away, which, you know, proof of stake assets like particularly Ethan Sol and down the list will have. If the ETFs can't stake, that that is a like actually. meaningful competitive advantage for some of these vehicles. If you're basically just treating them like an asset manager at that point of, you know, you're telling this manager like, hey, I trust you to go generate yield in a way

that I'm not able to and to balance this portfolio and just manage your risks. Some portion of this should be staked, maybe some portion of this you put into defy and you're using different strategies and you know, you get some risk-adjusted yield that like I'm comfortable with. EGF currently, they just simply can't do that. And so the extent of some of these are well run and you have a good manager and there's still just like these are on the best available vehicles for that at the moment. They still make sense. A lot of the micro strategy stuff has really just been, I mean, the business is selling

structured products to people who just want a certain type of exposure to the underlying. They want to like make certain bets on volatility of like, you know, where Bitcoin is going to go. So they're, you know, selling converts and just like different ways to get exposure to it. But even that is a lot of that is again, it's like it's a structural regulatory arbitrage, which, I mean, has even reduced once, like, I bet went live and, like, you have options and stuff like that on there. Like, you just don't need micro strategy to get a lot of these exposures anymore. So for better or for worse, I, like, it's a game that you kind of like need to play as a major crypto asset is what it seems like right now. And I think that's, like, kind of the vibe that it seems like out of the Salon aside right now is they were kind of very slow to it in general from the top.

And they saw how much traction it got on the east side. And a lot of people started to realize, like, okay, like, this is just. this is the thing that we need to do now. And so there's a little bit of a catch up there. And they are the next natural asset. So that's why you're starting to see some of the big ones coming out. Next for Seoul. The main thing that people on Twitter have been talking about the past couple days,

I guess probably worth going into is just like some of the structure of these that looks different and like what is actually going into the vehicle. Generally, if you are, if you're just like as an outside investor looking at, you know, what is the most positive thing for the underlying spot asset is you would like to see all of these vehicles just be all cash contributions of, you know, simple example, investors put a billion dollars into a box and the box says, I'm going to go buy a billion dollars of ETH or Solt or whatever. You're going to see some more like that. In practice, a lot of them, particularly the earlier ones, have been much more heavily in-kind contributions.

Or like generally, it's generally been a mix of them where it's a lot of in-kind contributions and then some portion of cash where for these big ETH ones or sole ones or whatever, like you see the, you know, the big investors and then they're putting in half a billion dollars of ETH or whatever. asset to go in there along with some cash. So the in-kind contributions are like they're effectively just neutral from the outside that this is no new buy pressure. They're just putting the money that they currently have in a box and like doing stuff with it. And then the part with that in particular that people have been talking about with Salon is at least some of these stats, definitely not all of them. And some of the bigger, I think more interesting ones are some of them have been putting

the lockshole in there that was particularly from like the FTX estate sale. So people have wanted to contribute that into these vehicles in kind as well. And which ones are those? Because I was going to ask this question. I saw Vinnie Linkum tweeted this morning. I hope investors realize that most of these Salana DATs include FTX locked SAFs, which are being contributed into the deaths with little to no discount to give those holders earlier exit liquidity in the form of debt stock. So can you name names? I actually don't genuinely remember or know the names of the current ones that are doing this. I I will say the ones that are, I just like, I would definitely not assume that all of them are going to be like that, the ones that are more reputable and more interesting. And like we'll have a lot of good backers and I think are likely to be more sustainable or just like, you're just not going to be doing that.

It's going to be a lot more cash contributions and running strategies that like actually makes sense to generate yield and manage the funds efficiently. Like I think that you all see good ones. I genuinely just like, I don't know the names of the ones that we're doing the locked ones because we just like never seriously looked at any of those deals. Yeah, like I heard you say that on the Thread Guy episode and you said that you, you guys haven't invested in a single one. And is it literally just because you don't find this kind of financial engineering interesting or like, yeah, what is the reason? Because, you know, I've seen other investors say like, oh, like this is the only one I did for this or that reason. But like, yeah, why? Part of it is like probably realistically just a time spend

and where can I produce an edge kind of perspective of, I don't think there's a lot of edge to be had here as an investor in guessing where these are going to go. And frankly, I just don't want to spend my time on kind of random financial engineering anymore. And also realistically, I think most of what people are contributing to is like they're just putting in kind of assets that they have into a box and kind of hoping that like people could bid this box up

to be worth more than it is. That's just like not a very interesting game for me to play. I, even from a just selfish financial perspective, my guess is that once you start to get these things to like actually unlock, I don't think that you're going to be able to see people like actually exiting most of these in size at meaningful premiums, where they're just like they're not actually going to be profitable. And it's just like a game that I don't want to play. The ones that I would like, that I've somewhat more seriously considered actually interestingly is some of the ones that put locked in for the same reasons that as investors, we looked at locked token deals at any point, which is just very often the way that we decide is the best way to get exposure to an asset is, you know, if this is the thing that we're convicted and we want to hold for a long time, buying the asset locked and at a discount like can make

sense. And so that is actually the upside of these vehicles that are putting in the locked tokens into them is I understand why people have a very negative perception of them of like, this is just the investors getting early liquidity and they just want to dump and get out, which like in many cases is true, I'm sure. But at the same time, it is actually just opening up access to these deals that like normally, like a lot of people just don't see. I mean, on the locked sold one, like, I mean, we saw this deals at the time. We just chose not to do them. But there are other data that maybe you wanted to get exposure to this asset and they're contributed locked tokens to it.

And then you like, you just decide that this is the best way to get exposure to that asset because you can't buy the locked deal anymore. This is a lock deal that happened previously. And this was really just a way for them to kind of broaden access to those kind of deals to other people. And then you're like, you get a more, you get a better free market. rate of what should the discount be actually on these? Because the ones that are putting in discount locked tokens into the box, they should trade at a discount to NAV. We'll see if they do that, like how closely people actually look at these, at least early on. I'm sure that they will get there. But to the extent that they are like trading at like reasonable discounts, like those

actually are potentially attractive vehicles where we're happy to take the liquidity risk over time. You think the actual liquid dat should or that the in-kind should be contributed at a discount to any, to Both. But yeah, we'll see what happens for them. But I mean, like the simple kind of example would be, I mean, like a foundation or whatever that like has locked tokens or investors or whatever. Like normally those deals are just like they're syndicated to a handful of VCs. And maybe the VCs priced that at like it should be at a 25% discount to the market for this duration or 40% or whatever. And when you broadly syndicated to the market, like that premium probably should. should compress as you give access to more investors, but it should still be a discount. So maybe instead of 25% the market, as you brought an access, I like should even out at 20% over time. In practice, I like people, I'm sure are going to like shove a bunch of stuff in here, like, not really talk that much about the fact that this is locked up for a long time and just like treat

it like it like it's the same. And then people will buy it at one time snap and then realized later on like, oh, this should be trading their discount. So I definitely think a lot of the games in practice are going to have negative effects. but there is like at least some theoretical use case for these. The positive thing is a holder too is at least potentially is this does like potentially remove cell pressure if you are a liquid holder for these. Like I mean, this is a point of concern for whether it's VC tokens in general that have like

a lot of investors or sold. Like people were concerned of oh, everyone who bought the FTX estate still, they're going to unlock and they're just going to keep selling. This is potentially if you're putting them into a box that is going to be a stickier capital base and now those VCs just like are not overhead cell pressure that that you're going to get for the next few years, that is actually potentially positive if you are liquid token holder, even if you're just like not participating in this, you're just removing the one dynamic of these vehicles of why they potentially make sense longer term is, is analogous

to like mortgage reads or any other like actively managed vehicle whose underlying businesses to hold assets. And the entire business there is predicated on those, you know, the underlying stocks selling at a premium to nav or trading at a premium to NAV or trading at a premium to nav. They have to because if they trade at a premium to nav, then when you go out and raise additional capital, right, you're raising that capital at a premium to book value, and you're taking that capital and going and buying assets at par, right, if it's bonds or spot prices, right? So you're immediately buying in a way that's accretive to the book value of the business, right? So to the extent that these can trade at a premium to book value and consistently tap secondary markets to

raise more capital and then purchase whatever token, right? Ultimately, that benefits the underlying asset because it's accretive to the book value, right? And these would trade, I would imagine, like NAV book value. There's somewhat synonymous in this case, but it would be accretive to the book value, right? To the extent that they trade below NAV, now all of a sudden you get in a situation where you can't raise additional capital because it's dilutive to book values. Every time you would raise money, it actually hurts your book value more and more and more, right? So it's the, it's these cycles. Now with like mortgage rates, it tends to follow independent of credit risk. It tends to follow interest rate cycles, right? Of like nym compression or expansion.

In this, that's not really the case because, you know, at least like Bitcoin, like you're not really earning yield. I would imagine on most of this stuff. Maybe you are if you're doing, you know, something. I don't know. I read in one of the Salana ones and I don't know a lot about, you know, like, you know, participating in them. But, you know, to the extent you can buy some, you know, from the Salon of Treasury at, you know, 85% a par or something along those lines. And like, yeah, technically that's accretive to the book value. But like, how long will that continue to last? That's a tough. That's tough.

And Peter, I believe, correct me if I'm wrong, that HackVC has not invested in any of these stats. Is that correct? I can't comment on like our investments or anything like that, but we haven't announced anything to my knowledge. Okay, yeah. We're an early stage infrastructure fund, so read into managers. So reading to that what you want. Oh, okay. And I'm sorry.

So like if I, so if if I were to ask you like why you haven't can't, well, okay, you're just saying it's because that's not what you do. I mean, we invest in, you know, seed and an early stage, you know, venture and Web3 infrastructure. Got it. Okay. Well, so let's just talk about how these Ethereum dads have been doing you because like, Generally, it's sort of like Ethan Tradfai overall is doing really well. It's like not only that the dat trend was going strong for a while.

I think like now it's just there's a little bit more, shall we say, yeah, of a measured response or maybe like a more knowledgeable response. But even like on Monday, the Ethereum ETFs had greater inflows into in them than the Bitcoin ETF. did. And I saw actually also on the Blockworks debt, you know, pages that trading volume of Bitcoin and Ether debts are roughly equal at about $3.7 or $3.8 billion, whereas like sole debts or the trading volume was about $44 million. So I wondered, like, you know, what's your take on why Tradfai seems so interested in Ethereum right now? You want to kick it off, John, or you want me to give me my thoughts? Yeah, go for. I know, John, you're not.

You don't think that this is smart, but anyway. Well, I think it's a reasonable trade. I, like, I've tweeted that for a couple months that, like, I think this is a very simple to understand momentum trade. And that's why, I mean, you're seeing a lot of trad fight type, like momentum hedge funds come into this trade because, like, it just makes a lot of sense. You have an established asset that was oversold, has a lot of positive flows. And frankly, has, like, a good narrative right now, particularly with stable coins.

There's, like, a lot of phomo, particularly after seeing Circle. investors just want areas where there's a lot of growth, stable coins are the simple one right now. And people look at the simple pie chart of, for example, like, all this, you know, most of the stable coins are on Ethereum right now. And so you can make like a simple growth bet and like, there's just a lot of flows going into these things and it's a catch-up trade to Bitcoin. And to the extent that that goes further out like it goes to Seoul, it's going to be the same point of it's going to be momentum trade and they're going to be trad-fi speed running the same kind of arguments that like all the crypto people made over the last few years is like,

yeah, it's great. But then like once it's had its run, then you start getting excited by like, oh, yeah, the other one's like the fast, cheap one. And then people start making the exact same margins that all the crypto people made. And realistically, if it gets there, it's just based on, like, how far does this kind of flows game that, like, the Dats keep having flows come in and you can raise good ones, keep going. Because if it keeps going, my assumption is it will roll out to Seoul, to the extent that, like, the market keeps going up, ETH is staying at a high value. Seoul is the next obvious candidate. If you get good debt backers behind this, that have a lot

of capital, have good reputations, like, are actually going to run these well. for the same reason that, you know, crypto natives are buying slow for the last year. It's like you probably start to see the same trend happen. The difficult part is just like it. It's just so hard to predict. I don't think there's a lot of edge to be had in predicting when this kind of like dat mania or whatever we want to call it will like start

to lose steam because most of it is inherently rooted on just like strictly irrational behavior of people, you know, having this conception of I could put a dollar in a box and like it will be worth, you know, $1.20 and then like I'm just going to keep doing that. And then like eventually it's going to be worth 90 cents at some point. The fact that you use that actual language reminds me of SBF. Yes. I mean, yes, because that is exactly what it is. Like I've made that joke before. Like literally this like is what that sounds like because that is the game that's being played in large

part right now. And it is reliant on that. And to the extent that people keep buying it in a premium, they can keep issuing new shares, they can keep raising more capital and keep buying the underlying. but when that unwinds, it unwinds. And, like, it's purely speculative-driven and, like, most of it's irrational. So it's pretty inherently, like, very difficult to predict when exactly is that going to lose steam. A lot of people thought it was about to be dead, like, a week or two ago. And then it wasn't. And then we're cutting rates.

And so, like, party keeps going. Like, it's anyone's guess, you know, how far this goes. Yeah. Here's a funny story, which is I have a good friend from Vienna. And we met at grad school. in New York. And at some point, he was like, oh, cupcakes came to Vienna, like six years after they were all the rage in New York. So I feel like what you're saying is like, Tradfai is like Vienna. And, you know, what happens in crypto is like New York or something like that.

He was like all the major trends that happened in New York come to Vienna six years later. But anyway, yeah, Peter, what do you look? You know, what are you thinking when you see all this interest in Ethereum? Oh, well, I guess first, it could be the opposite, right, in terms of, you know, like Vienna could be crypto in this case. Because I think like financial engineering, new structures, like I've seen this story so many times in so many different markets, right, from, you know, junk to mortgage bonds, right? You know, CDO, structured finance, right? That's what this is, right? So it's just, I think it's entering new markets with new assets and new players who maybe haven't read this book before.

So I mean, that's, you know, it's a remake. It's like remaking Karate Kid. But in terms of ETH, look, I think markets are narrative-driven. All markets nowadays are narrative-driven. It impresses me how the narrative on ETH like changed on a dime, right, this year. right it was from it's it's a dinosaur it's dead you know it's going to zero to you know i think you know people like tom lee and and i think there's an understandable there's an understandable narrative around eth that makes sense that you know people have been saying off and on for for years

right about it being kind of like and i think it's very understandable to a lot of traditional investors who maybe aren't like global macro by nature like you know bitcoin is a global macro asset most traditional investors are not global macro investors they look at fundamentals and earnings power and models right things that like bitcoin you can't you can't do that for there probably some people would disagree with me but like i certainly don't know how to do that um you know eth you can to an extent, then you can at least convince yourself of a narrative where it is the, you know, the world settlement layer in some capacity. And if that is the case, then what's it worth? And, you know, the valuation of ETH is also extremely reflexive, right? So it's like as it, as more

value ascribes to ETH, the underlying enterprise value of the chain goes higher. So, So that's why it moves large, I think, in both directions because of its reflexivity. Yeah. All right. So in a moment, we're going to talk more about stable coins, by the way. Not more. We're going to talk about them because there's a lot we want to cover in this episode. But first, we're going to take a really quick word from the sponsors to make this show possible.

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markets, make sure to follow Bits and Bips wherever you get your podcasts on YouTube on on X. You'll find the links to YouTube, X, and other podcast platforms in the show notes. If you're watching this, there's a QR code on screen. We'll be posting here for a few more weeks, but starting in September, Bits and Bips will launch on its own feed. For now, we will publish longer clips from the show on those accounts. Remember, go to the show notes now and subscribe to bits and bips. That's bits, plus sign bips, spelled BIPS on YouTube X and wherever you get your podcasts. Back to my conversation with Peter and John. So let's talk about all the stable coin stuff. There's so much. Obviously, we have Stripe launching tempo, circle launching arc,

tether launching stable, which is exclusively for USDT on its own EVN compatible chain, but also plasma, which is a Bitcoin side chain that will be more stablecoin issue. agnostic. There's a whole slew of other stable chains, Codex for USDC, one money. There's, I'm sure there's more than I missed. But like, let's just talk about this concept of, you know, a stable coin focused chain, a stable chain. Why is that necessary? Like, what is it that can't be done on a general purpose blockchain that, you know, requires a chain devoted to stable coin transactions? And either one of you can go first. I mean, you know, look, I think, simplistically, the way I personally would think about it is, if I'm dealing in dollars,

let's just say, it can be any, any, any, like, sovereign currency, right? You know, just like I swipe a credit card and I pay interchange fees in dollars to the Visa and MasterCard, if I'm sending, you know, dollars to some other wallet address, right, I want to pay gas, which is the equivalent of an interchange fee in that same asset, not ETH or Tron or something else, right? So I think simplistically, that makes a lot of sense to me. I'll run through the list because it's something I've been spending more time thinking about lately. I'd broadly put them into a few buckets.

One is I would put into the bucket of to that point of like a specific stable coin, the like loosely affiliated with a particular issuer ones. So for USDC, I would say like Noble and Codex. I've generally like pretty like circle aligned. And then for USDT, it's been like plasma and stable are the ones that are more like tether aligned. For those, I'd be curious to hear your take on them. I believe you guys had invested in stable or plasma, I believe stable. I just like haven't seen any meaningful differentiation from these of like they're basically just all EVM chains.

And like you can do stuff like gas abstraction on existing general purpose chains. The probably like direct thing on that is like, I mean, it's still like not. at least the standard that it's being adopted ever, but like you can do it at a technical level. The one that is like very directly, it's not even like affiliated with the issuers. It's literally the issuer is obviously circle is doing arc. My guess is they could pull some interesting levers

from being the issuer and like trying to drive business there. But even them, it's like I haven't seen any technical unlocks on the chain. It's like it's another EVM chain, which is like fast and cheap. And they don't actually own distribution with end customers like the, their partners like Coinbase really own the distribution. which I mean, crypto Twitter has seen a lot of when they ripped circle apart over their like IPO filings, like, Coinbase is making all the money. But Coinbase does have the distribution that like that matters for being able to drive activity to the chains. And that's not the other thing I've seen from those.

Stripe is the one that is like of the big corporate ones and in this group, like the one that is at least intuitively the most interesting to me. We don't like have many details. It's a pretty like rumored they're going to do it thing. But on that point of distribution, like Stripe is obviously just a very large organization. with very good product and things that like really does own the end customers right now. And so to the extent that like they want to push their own blockchain instead of, you know, using base or Solana or whatever on the back end and like their customers are using it like it will be successful if they want it to be.

Question is like how much value do they get out of that? You know, do you actually earn a lot of money from pushing it there instead of base? Do they potentially value, derive value from like just being able to control the stack better and being able to give a better product than they would otherwise be able to TBD? The main things that I think that you probably need for these are it's distribution. Does your chain actually have like meaningful end customer distribution like and or technical unlocks? I just like haven't seen a lot of particular the latter on them. Like the last one, I mean like bias on this one where investors in them, it's called pay.

People probably saw them like last week of like they released like this, you know, private stable coin credit card where like you could spend stable coins and you know, even the issue where like pay and visa like they can't see your on chain balance. that obviously still see your Web2 payments as with any card. But like it's a private chain. You can 10 payment transfers like the app looks like a Venmo. So trying to like build distribution in that way. And then obviously just like actually being a privacy first chain. Because that is the thing, like privacy has a broader trend. But like particularly for stable coins, my gut is like that's going to be a like pretty

meaningful differentiation point of how did these chains approach privacy going forward. Because this is the thing which I think like the entire industry has overlooked. over the past few years because I think it was like easy to kind of brush away all the privacy stuff when like we just have a bunch of early DGN on chain users like whatever it's fine I have su don't know it's wallet's like you're just like you actually can't get normal users and institutions on like fully public blockchains and so the question of like what is the right level of privacy abstraction of is it doing confidential transfers which chains like salon and stuff are like trying to experiment more with right now we just haven't seen a lot of adoption is it more full privacy is it like select disclosure like what what is the right level of privacy, I think there's like actually going to matter a lot when you try to like actually just get normal consumers and businesses on chain. So that will like probably be a meaningful differentiation point. That's the main thing that's like I just haven't seen people like really pushing on a lot. But that would be my guess of that is the main unique factor that like actually could differentiate some of these stable coin chains. Like you would never use a like a credit card or whatever

your normal finances or as a business, but all of your stuff like your real operations on chain, it was fully transparent. Like you obviously can't do that. Like, it's just like a very obvious thing when you like say this to anyone outside of crypto. It's just like, oh, yeah, of course. And if you like look at the surveys of, you know, why is your tradfai institution like not doing more stuff on chain? Very consistently. Like you see privacy and transparency like as like near top of the list of like this is a reason we just like literally can't do this very obviously. I think this is finally going to come back now. Yeah.

This is exactly why I was always, always confused about the Venmo thing with the payments. Like I, I don't know. I probably changed it from public to private at a certain point. But like that was probably, obviously it was when I got into crypto. But like I don't even think before then I had that many that were because I just wasn't using it very much. So I think I didn't think about it. But like, yeah, it's now seems so obvious. So how does pay do this while also I'm being compliant?

Like what's their way of handling that bit? Yeah. So the way that it like is basically going to work there. So it's a UTXO chain. It works pretty similar to something like Zcash or how like transfers work on like Aztec at a pretty high level. The way that like when you're sending a transfer on your phone like from like one person to another is you're actually generating a ZK proof on your phone. So when I'm like creating a transaction link to like send you a dollar, I'm creating the ZK proof on my phone. And so what I'm submitting to the network is just hashes.

Like the sequencer in the network doesn't see who the addresses are. What's the amount? What's the asset? Like you don't see any of that. To keep a minimum level of compliance, the tweak that you can do is enabling what they call transaction lineage, which is you still keep all the transactions fully private. So when you submit a transaction, you still never see the addresses, the amounts, the assets or anything. But you will see the path a note being like it's a private UTXO.

You'll see the path that it takes through the network. So you will see a hash of like this note led to that note, led to that note, led to that note. So as an outside observer, you'll just like see this linked list. of hashes, but you won't know who those individual transactions were. But that gives you enough for when you identify a poisonous route of like, let's say, like, someone, like North Korea hacked funds on ETH and they bridge it into pay network and they send it, you know, a few different people, a few different transfers, and then you code to try to off-pore that to Coinbase or whatever.

They'll be able to vary directly just like see on-chain. Oh, this UTXO, this note that you sent me like, this traces back to that hack. Like, I'm not going to accept that. They won't see any of the details of those transactions along the way of like, where the counterparty is in here, the amounts that they sent. But you'll be able to very directly tell, like, oh, this note descended from here. Like, I won't accept this. These are claimed funds from someone else and they would accept them. So this is like a Bitcoin style chain.

It's UTIXO based, effectively, pretty much all the privacy chains use UTXOs, whether it's Zcash, Pernumbra, Aztec, like all of them use UTXO derivative. styles in at least some form to generally do private transfers. Like the account-based model is like generally just kind of difficult to work with for privacy and hence to the leaked data. So most of them like incorporate UTXOs to like to some extent, varying extends. It's like harder to do smart contracting and stuff. But yeah. Okay.

And then just to understand like how decentralized is it? It's a typical like L2 model of they currently run a sequencer. Currently the DA is centralized and then they'll start posting it. to Celestea DA, I think in like a couple weeks pretty soon. Okay. And wait, I'm so sorry. So it's a UTXO chain that's on Ethereum? The bridge is actually on Polygon.

Oh, got it. Basically the same reason that like hyperliquid, I mean, people argued it was like an L3 or not. They click a bridge on arbitram because, I mean, like, you just need a place for people to deposit USDC. That's the only function of what this is an L2 of is it's a bridge contract. And so for pay, it's all USC. And so it's just like, where can we put? like a deposit contract on an EVM chain that all the sexes support with a USDA.

And whether it's arbitrary or polygon or optimism or base or whatever, it doesn't really matter. It's just a place for people to deposit USDC. But the contract is actually on Polygon for that reason. It's just cheaper than at the room. Got it. Okay. That's really interesting.

Yeah, I saw that news last week. So we kind of talked about some of the different features of like a stable chain. But then, you know, as you mentioned, distribution is going to matter a lot. So, you know, Stripe obviously has an advantage in that regard, but also they're like, you know, they're, they're kind of an incumbent in certain ways. So they'll have to, like, disrupt themselves in some fashion. And on top of that, they're not like crypto native, whereas like, you know, coin bases, you have tether entering the U.S. market. You know, by the way, I like, it just feels to. me at least at this moment, that tether will be pretty dominant, I think, in anywhere that's not U.S. essentially or something. But anyway, point is, so however you want to divvy up the market, talk to me about what go-to-market strategies you think will kind of make or break these different chains or coins, staple coins. It's really going to depend on. I mean, just like,

I don't think there's going to be one chain. I do think that they are intuitively going to go after different segments. I mean, the chain that Stripe is building, I am assuming it would seem highly unlikely that this is not the chain in practice that, like, people in South America are going to be using for everyday payments between each other and, like, saving. That's just, like, probably not their target market or various, like, other Eastern countries. That is a very strong target market for Tether. That's probably going to continue to be the case. And so different people are going to take different distribution strategies in there. Stripe is going to be probably, like, very, very effective at taking a lot of the more institutional and B to B type payments,

which is very much just like, these are the customers that they're already serving, that like they're going to be very good, I assume it like winning a lot of those use cases. And so then the question is how much do they want to actually branch out from there? And we actually like, it's not entirely clear. Like what is their strategy for this chain going to be? How much of it is it going to be? This is just a simple back end for us to control, you know, all of the stuff that we're already doing. And just instead of doing these transfers that we were doing for like stable coin financial accounts for like base and slana,

you know, we just use our chain instead. Maybe it's that. Or maybe they do decide to broaden this out as part of like their broader criteria strategy and they want to expand into more consumer use cases. They want to get defy stuff on there. Very TBD. I mean, you can see it going either direction. My guess is certainly at least early on, it's like probably going to be pretty more like focused at what are their core use cases and kind of like catering to those types of customers. And then other people will go after different customer segments, whether it's like crypto natives who want to their consumer finances on chain or who want to like do defy stable with stable coins or people who want to save in you know uh non-us countries in dollars and just like get better access to that globally

around the world so my guess is just different chains you're going to take different strategies of like the different types of distribution so you'll probably see a wide range of outcomes and different ones will be successful probably in different work yeah i think like if i think about stripe it's sort of like if they play their cards right they'll onboard users into to the behaviors needed to that they need to learn to use stable coins. And then they could branch out into more like a Venmo type space if they play their cards right. But like if a Coinbase plays its cards right, then it's going to take its kind of like lead in the fact that they already have a chain going to, you know, foster, you know, some of, I mean, they're, they're trying to go

after so many different behaviors. So it's hard to say. It's like the Shopify thing is like they're, you know, they're peeling off a piece of the stripe area. And then they are obviously also trying to do this everything up, which would be more of like a social payments type thing. But Peter, how do you think about all of these different segments? So we've got, you know, payments to businesses, payments between people. We've got U.S., non-U.S., like how do you think about all these different segments and what will be the make or break for the different chains and going after each of them?

Yeah, sure. And I would say there's many. different types of, you know, stable coin type transactions, like in addition to, you know, retailer front ends and then, you know, what happens behind and kind of like middleware and back ends, there's also just like financial transactions, right? Like if you think about the number of dollars that exchange between J.P. Morgan and City and Fidelity and Missou, right, like constantly, like that, that is a totally different type of rail and transaction and distribution network that, you know, that is needed. So, you know, and something, frankly, like, I'm not sure

Stripe would or would not touch. So I think how we think about it is, is that, you know, from a top-down level, you know, the trend of kind of like stable coin dominance is inevitable. But personally, I see stable coins as like, right now. now, probably like the killer crypto app more than, more than anything. I mean, already, you know, the markets, like, over doubled year over year. It's like almost, what, 280 plus billion. It's basically, you know, stable coin issuers hold the, you know, debt equivalent in U.S. Treasury bills of like a top 20 nations, you know, sovereign. So this is only, this is only growing. And I think, you know, John mentioned earlier in this conversation about kind of like,

why it hasn't happened yet and privacy. I definitely think there's like, you know, elements to that. And, you know, I'm not going to get into a technical discussion with John because he'll run circles around me in that respect. But, but I know markets and finance and I know regulation. And I think like a lot of it, frankly, just comes from like, what could you do or not do, right? And, you know, like when I was at Fidelity, we would constantly be having conversations with, you know, everything, the PayPal's and all like the traditional financial players. And like everyone's working on

this stuff, but no one, you know, feels comfortable enough like they have the green light to go out in, in the market, right? And I think Genius Act changed that, which was what, little over a month ago, you know, and I think it finally hit the U.S. that like, okay, stablecoins aren't a threat to the dollar as the global reserve currency. It's actually like significantly helps us maintain, you know, our stature is the global reserve currency. And not only that, like, because they're back one for one with U.S. treasuries, we have a natural buyer of our debt that could like eclipse Japan in the next five years, right? So it's like massively, massively beneficial to the U.S. So before we move on from stable coins, I just wanted to ask, like, if we're going to see,

you know, these new stable chains cropping up, what do you think that means for the existing general purpose chains that currently host the majority of stable coin activity, like Ethereum Troncelon our base? Like, do you think that matters? Does it not? You know, like, what does stable coin activity start looking like over there? Yeah, I'd be interested to hear what you think the impact of all these new stable chains will be on these existing chains. My general gut is, at least for the stuff that's there right now, it's probably not going to matter a ton. That would be my general guess, at least on the short to medium term. Like, I, I, I, I don't think that ARC is going to launch and then all the USDC is going to leave Ethereum and then go to Arc chain.

That like everyone's going to start using that right away. Like, sure some people will on the margin. People do it. But like I don't think you're just going to see this kind of overnight shift. My guess is what it matters much more for is just who is actually going to end up getting the future use cases that are coming. And I think that you have to like pretty reasonably shift your underwriting of where do you think that, you know, all of the consumer payments and B2B payments and user savings. whatever are they going to happen? Are they actually going to happen on Salon and Base, which you might have thought like a year ago? Or do you increasingly think a little more that like, oh, actually instead of, you know, base, maybe a lot more of it happens on the strike chain instead.

And instead of, you know, some of the stuff that was, you know, would have been tether payments, otherwise on, you know, if Tron kept expanding, like maybe those go to plasma or a staple or like some other chain. Like that, that would be my guess is that it matters a lot more for just kind of assessing who's going to. going to get the future use cases, but you're not going to see this like overnight exodus when these chains launch. The thing is, I think that the future use cases, I think most of us would probably agree are the much more interesting thing. Like this, we're going to grow orders of magnitude from here very obviously on stable coins. And so the future pie is the really big pie. And my gut is like some of these new ones are going to be very successful. And we'll have very, very large user bases and be able to lean into the distribution they have, the technical advantages they have, etc.,

to really drive a lot of growth. So you already mentioned pay and tempo, but like, are there any others that you feel like have, you know, good odds of succeeding? Arc is the one to me after those that like feels the most intuitive of like they probably have some more interesting lovers to be able to push as like they are the native issuer and like it will just feel natural of, you know, oh, you're sending a USDA transfer, you're saving a bunch of USDA or whatever as a sex. And, you know, where do you maintain that? Like, it probably just, you know, it just feels right to, like, keep it on arc chain. Because, like, you know, this is the native chain. And, like, it seems simple. And, like, if you screw up, they'll probably roll back the chain for you anyway in size. So, like, those things around the edge will, like, probably matter of just, like, honestly, just a branding and psychological thing. And then my guess is, like, they're clearly going to try to, like, make, I mean, one of the things they call that, for making on and off ramping really simple for, like, fiat to USC, like, trying to make.

make that really instant. So I think if they like really nail the infrastructure around it and get a of like really good on and offboarding and then also trying to really get a wedge into interoperability, which they're like very clearly trying to do, those are probably the wedges that like ARC can lean into. But my guess is they're not going to like go in there and win on like DGEN Defi and like start getting all the lending protocols to go there and like get all the hedge funds to move. Like that's probably not going to happen. It's really nailing a lot of infrastructure around it and the boring stuff. I could see ARC doing that if they execute very well, would be the most natural one. After that, I think it's like pretty normal BD, whether it's plasma,

stable, codex, noble. They're doing the same BD that like base is going to be doing and Tilan is going to be doing just in a very concentrated manner on specific use cases. And so frankly, just if you have the best BD team that's like focused on a specific stable coin use case, you have a good chance of winning out versus if this is one of the like 10 things that base is clearly focused on because they're also spending a bunch of time thinking on like creator coins and just like random defy and stuff like that. So if you're focused and if could go to market, like you could just win those things. But that'll be very much just who has a good team that executes is my guess. Yeah.

Peter, what about you? Agree, it's not overnight, right? Like, you know, this is not something that we're going to see immediately. I think, you know, longer term, you know, and whatever, whatever that means, right, is definitely the more, the more, I think, interesting play. And that's going to take, you know, time because you're talking. talking about, you know, kind of like back-end, you know, infrastructure. And I think there are going to be, you know, potentially many winners and like any other,

like, growing industry with a massive TAM, like you're going to see consolidation and you're going to see new entrants and, you know, those new entrants form partnerships. You know, I can't tell you exactly how it's going to, it's going to unfold. you know, but, but, you know, I think, I think there will be, you know, potentially many different, like, staples, some that are used in kind of like, you know, entity-to-entity transactions, some that are used kind of like natively on back-ends where you don't even necessarily know that you are in a different stable if you're in someone's environment, right? You know, so say asset manager, XYZ, you know, you're on their brokerage platform and you

put in, you know, you deposit USDC or USDT or any stable, right? They could convert you to a tokenized money market fund. And it's all the same thing. But to them, now their AUM is different. But as long as everything is like fungible, quick, cheap, I think that makes a lot of sense. You know, there's others, right? Like, you know, I think in my opinion, like, you know, like an entity like, I mean, I'm sure there's others that do this, but like one money is, is, you know, trying to think

self an interesting problem where they have, you know, like paying gas and like any native stable and you might have different, you know, different, different, different, different stables that you're using in different jurisdictions or different countries and just kind of, you know, going through that process of, you know, you know, creating a technology that can, you know, interact across different networks, I think is, is probably interesting. And, you know, a problem that's not, not new to solve, but perhaps new to think about in terms of, in terms of stables. But yeah, it's not, it's not going to happen overnight, but, but I think the go forward opportunity is, I mean, it's massive.

Yeah. Okay. Let's, we're going to switch topics because we wanted to talk about hyperliquid. And, you know, shortly before we started recording, it was revealed that hyper. So hyperliquid's July trading volume was 330.8 billion and exceeded those of Robin Hood the same month. And John, I saw you tweeted that this is the first time we're seeing an on-chain competitor to centralized exchanges. So I wondered if you could just both talk about like, you know, what? what it is that you think we're seeing right now, like what this inflection point means and where

things could go from here. Yeah. Like the summary of it for me of being the first credible sex competitor is like the, I feel like the meme that most exchanges have had over the last two years have been like, we're going to kill Binance. And that's always felt realistically to me like it's a little bit of a meme. It's a story that you tell. But like, all right, come on, guys.

Like this isn't going to happen. I would say after the pump launch was the first time that I sort of had the actual just kind of click of, I actually think this is just going to happen. It's just a matter of like when does it happen. What does it look like and who does it? And obviously, hyperliquids like the top competitor for that right now. Like it's very clear at this point. I mean, like they're just, I mean, they're very consistently growing, just doing serious size.

Obviously they've been doing it on purpose and now like now they're doing it on spot. But like it's kind of crazy to watch an on-chain product do. finally, they're fully handling in size the price discovery pre-launch of like multiple major tokens down in a row. They led all the price discovery for Pomp. They did it for World Liberty. They did it for plasma. These are tokens that like aren't even like launching on their chain. And they're doing like hundreds of millions of volume on the pre-market perps. And like that's actually what's doing the price discovery, not when the token actually launches. So perps, I mean, they're just like consistently growing. It's it's just a great product. I mean, like you use it.

And then you like sit down and you try to go like use perks on like most. to other even sexes. Like it's just like better from a user perspective. It's super liquid. Like it has a level of just like lindy and reliabilityness at this point. And then the one that's like super interesting for me to watch over time that I really want to see play out. Like I have more questions is on the spot side. The last week was the first time that they have done like really crazy stuff on spot where they were just like flipping Coinbase and Bybit on spot volume for the majors for Bitcoin and Heath, which is like pretty crazy. And most of that was driven. by like one entity. It was some whale who clearly just bridged over billions of dollars of Bitcoin

using units bridge to hyperliquid. And they were like mostly just like swapping Bitcoin to Eath in various forms. They were doing some spots and perks on, some on and off. But they're doing like billions of dollars a day of like actual spot volume. And so to the extent that like you start to see this keep happening and like you play this forward as they turn into particularly like clearly a more platform model where they're, you know, exposing to, you know, go build your other, go build a new front end on top of it, which like, obviously Phantom is doing with their perps of like, why would we go build all the back-end infrastructure? We're just going to like bring the users and plug into this on the back. And then like, great, we'll have like a nice mobile front end for this.

And then moving from that and then so like actual permissionless market deployment on perps, which they'll like have coming soon. That's where you get like a very clear edge and growth area again. They're just very clearly like they're going to be the first to list markets. We're going to be the most liquid markets on these things. And the permissionless listing is going to allow them to go. into a lot of areas that like most of the incumbents are not going to go. Like Coinbase is not going to go list S&P 500 perks tomorrow because like they don't even launch a regular purpose right now because like even that's still a regulatory grayer, like the

perps that they launched are their like five year dated futures. Like this is what on-chain global products are supposed to be. It was supposed to be first to market. They go launch the thing and then like we figure it out later and they're going to be the first to market to launch all of these kind of different products and like keep growing in that way. And so you're just like seeing this trend now over the past couple of months where they're doing crazy crazy volume on perps to the point where like they're just like they're great at it. Like you you don't have as much reason to go use a sex. And if they start to like really push into spot, that like that will be like very meaningful.

And a big part of the like impact to the industry part I think will end up being a lot of the sexes, particularly finance, frankly are like rather extractive, particularly for early teams. If you're like trying to get a token out there and like you want to get liquidity and people to be able to access this, the terms if you talk to like anyone who goes through that process of the neural stage team is like they come out of that process generally pretty jaded and like pretty unhappy. It's like not it's not a fun process and they will try to extract like as much of your token as possible and like teams will feel stuck to the extent that you actually have an on chain version, which is just go permissionlessly launch your token and like we have all the users and liquidity

anyway like screw this X's. That will like actually pretty radically change the market structure and the ability to launch good projects like on good terms. So that's the part just like at an industry level I think is like super super valuable and like I really just genuinely want that to happen. And like, I, like, I am hopeful that we are, like, finally getting to there because there hasn't been a on-chain product that has, like, credibly been able to kind of offer that previously. Yeah, that when you were talking about finance extracting, um, to list tokens, Peter had a wry

smile on his face. Yeah. I mean, anyone who's spoken to a founder who has gone through that process, um, like, no one's happy. They know what they're going. Yeah. Well, Peter, what is it? So what are your thoughts seeing Hyperliquid do these volumes?

I think it's great. It's a great product. It's great for the market. Creating competition is very healthy. And I think there's a lot that Hyperliquid is built and is continuing to do that is like very much to the Web3 ethos. You know, personally, like one of the things I really just love about this space is, you know, the thought process that can go behind structuring, you know, the economics of a token and

how that token, you know, fits into the business. And, you know, I think hype has done a really smart job there, you know, offering it as, you know, kind of incentives and buybacks and and then staking to earn additional rewards, right? It, you know, it's something that you can describe like fundamental value to, which is ultimately what I, you know, even though the market might not always do that. Like, I always tend to think about that and look at it. So I think it's great, like that you can combine that to it. I think, frankly, like, Binance's token was very smart in the way it launched much

much the same way, right? So I think it'll ultimately, it'll be interesting to see. I totally agree with John. Like, you know, perps is one thing. And it's big, but it's, I mean, it's very crypto. Like perps, you know, they don't exist in other markets like they exist in crypto. though. So getting into spot, truly competing with centralized exchanges, yeah, it's going to be fascinating to see. But ultimately, I think it's a great thing for the industry.

Yeah. I mean, it's also interesting just because of like no KYC bit. So I think there's going to come a point where, yeah, the way they're competing with each other, I think is going to change. Oh, yeah. I was just going to say on the no KYC thing, I mean, this is one thing. I mean, like, We need to see, like, where, where do the bills end up? Where do regulators end up? But, I mean, this is something that, like, actually potentially is and, like, should actually be a sustainable mode for a truly decentralized protocol. And this is something that, like, people will obviously argue.

I mean, everyone said that salon is central. All the Ethereum people said the salon is centralized. And now much of the salon of people will say that hyperliquid is centralized and so on. Like, this will, it will end up mattering what is the exact definitions of these things. Because to the extent that something is considered a decentralized and mature, system, you're just like, you actually won't be able to KYC and you won't have any requirement or expectation of doing so, which makes sense because if this is a, like, there's no requirement for like Ethereum to KYC you because like that just like obviously doesn't make sense.

And so like where the language ends up on these protocols of like who is required to if anyone, like actually take your identification or anything, like the details of that will matter because that should be a durable advantage to decentralized systems over time is, hey, if this is actually a decentralized and non-custodial product, like, there isn't someone to KYC you at the end of this. There's no KYC process for me to send you ETH. And so it's the same thing for like doing a swap. You know, should Uniswap have to KYC you? Like this is obviously been an argument over like past couple years, like who's responsible for this? Is this the thing at the front end? Is it, is it what entity who's supposed to do this? So that may end up being a durable move.

But like it's going to very much depend on like what are the bounds on what these systems end up being defined us. I mean, that'll ultimately depend on like what you're doing there, right? Because there are certain types of assets that you need to be KYC in in order to transact in, right? So, you know, ultimately, yeah, it might not fall onto hyperliquid, but, you know, like if you're in SEC registered RIA and you're trading, you know, assets that you're not supposed to be, you know, that's going to come back to you.

Like the SEC is not going to be like, well, it can't go. after hyperliquid. So I guess there's nothing we could do. Yeah. All right. Okay. We're going to move on to the last question I just wanted to ask you guys, which is I've been seeing and also participating in some debates about, you know, what is going on right

now? Like, are we still in this four-year cycle kind of phase? Are we transitioning to something else? I literally, I can't remember who this was, but right before we were. recording. I saw somebody was like, it's not four-year cycles anymore. It's eight-year cycles now. It's like, okay, I don't know how you came up with that number. But, you know, I was just curious, like, yeah, what you think is going on in that, in that realm. And then whether or not we are in this cycle, we're at least in a phase. So it's a two-part question. So we're at least in a phase. And what do you

think this particular phase will end up being about? So anyway, two-part question. My, like, very blunt high level would be, yeah, it's dead and the answer is no. Like, I had a tweet along those lines yesterday of, I was like, CET keeps debating whether the cycle top is in. And my opinion is like, the premise is wrong. This isn't a cycle and there isn't the top. And like very literally, obviously there are cycles in the world. Like there's literally macro cycles to the economy. And so there's going to be speculative maintenance of crypto where stuff's going to go up a bunch.

It's going to go down, you know, fundamentals matter more and less at different times. like that is obviously going to happen. I mean, that literally happens in the real world. What I think the problem is is what people kind of like use that idea of a cycle to mean and like how they act on it. Like in particular, the way that you've generally invested and like has worked well in crypto in the past is you basically just bought a basket of everything. It didn't really matter that much what you bought. You waited four years and then you tried to sell everything as close to the top as possible. and then like you waited a couple years and then you bought everything again and then like you tried to sell everything at the top.

Like being very literal that like actually was roughly a way that you would like pretty repeatedly be able to make money a few times in a row. And so I think a lot of people just like over index on that too much of like when is the top going to be. I need to buy all the stuff. And then like I'm going to sell the top and then like I'm going to go away for two years. And then like we'll come back in a few years. And I think it's like very clearly just already dead. if for nothing else for the simple reason of like, crypto is just no longer at all one uniform thing.

There's like very clearly different segments that act like very, very differently, which is why you've seen for the past like two years in a row, Bitcoin just like keeps going to all time highs. And like most of crypto Twitter is like depressed most of the time. Because like they don't own the Bitcoin. Like a lot of the institutions increasingly on the Bitcoin and like people who are not on Twitter. And so yeah,

if you were buying like meme coins and L2 tokens for the last two years, it's been a bare market. Like, there was no cycle. There was not much of like any upswing. It's just been like everything just been going now. Versus if you own Bitcoin, like everything's been great. Like what, like what are you talking about? And so I think that is basically going to be the general trend going forward.

We're going to clearly just like have a lot more dispersion in returns of you're going to have these institutional macro assets that are just going to like act very differently. You're going to get increasingly projects that like actually have good fundamentals and real world utility. And those are going to act. more in line with like how do macro cycles work for the real economy? Like what are the cash flows on this project? Like what multiple am I ascribing to this? How much is this thing going to grow?

They're going to act more in that line. And then sure, you're going to obviously have like speculative bubbles along the way. And like mean coins will pop off. Then NFTs will pop off. Then some creator thing will pop off. And those will go through different little cycles. But applying this like one uniform framework of just like, we're going to try to buy all the stuff.

And then like we're going to time the top. And then like we're going to sell it. And then we're going to kind of go away. and like this is a simplistic model, it's just like very clear they're already dead in my mind at this point of like, this is just the market. You should just buy good assets. And like that's just like how you invest. Yeah.

Yeah, I agree with that. Peter. I mean, honestly, I think it's silly. Like as crypto becomes more like ubiquitous with traditional financial markets and they become bigger and more diverse, like it'll look more like traditional financial markets. Like no one talks about, you know, you know, everything is cyclical, right? So it does depend on your time horizon, right? You know, like, so do I really care that I, you know, owned Heath at 4,500, and 3,500 and 4,000? No, because like, it's going to move around. And, you know, if I like an asset, I think it's going to be higher in whatever my

personal time horizon is. There might be people who trade with very different time horizons. But like the whole nonsense of like, you know, four-year cycle, you could play this. Like, people like to put things in boxes and it makes them, you know, comfortable. But in reality, like, that's not the way any financial market works. So as crypto, you know, becomes more like real financial markets with large institutional players and more capital, like it's going to, you know, kind of more resemble that, which I think ultimately is a, is a very healthy thing. Yeah. Okay. Okay. Well, it's been so much fun talking to both of you. Where can people, learn about you.

Yeah, I mean, you can find me on Twitter, I guess. I don't tweet a lot. Maybe I'll start doing more. And then, yeah, we, you know, on our website at hack.comvc, we definitely put out, you know, content and educational pieces. And, you know, some of it tends to be much more technical and, you know, some of it, you know, more financial in nature. But, yeah, it's a good resource.

Can find me on Twitter too. Like, probably half the people listening find me on Twitter anyway, regardless of whether they want to see me on Twitter or not. or you could go to dva.x.I.C. where we have a little bit nicer content that we put there too. Yeah, John, for whatever reason, you are a divisive figure sometimes. I don't know. I do a lot.

Anyway, okay, you guys, it's been so much fun. Thank you so much for coming on Unchained. Likewise. Thanks, Laura. Unchained is produced by Laura Shin with help from Matt Pilchard, Juan Oranavich, Margaret Curia and Pam Majumdar. Thanks for listening.