[
  {
    "speaker": "Speaker 1",
    "text": "So that everything exchange, everyone is going after this idea and it's a very crowded, very well-funded space with many competent teams that are pursuing this vision. And it's just crowded. I"
  },
  {
    "speaker": "Speaker 1",
    "text": "think the Hyperliquid team is incredible, but the competition is extremely fierce. This episode is sponsored by Canton, the only public permissionless blockchain built for institutional finance. We'll hear more"
  },
  {
    "speaker": "Speaker 1",
    "text": "from Canton later in the episode."
  },
  {
    "speaker": "Speaker 1",
    "text": "Blockworks Digital Asset Summit is back in New York March 24th through 26th."
  },
  {
    "speaker": "Speaker 1",
    "text": "We'll have top speakers from leading asset managers, financial institutions, DeFi protocols, crypto companies, and policy makers all under one roof. Think BlackRock, Coinbase, Robinhood, and"
  },
  {
    "speaker": "Speaker 1",
    "text": "more. Follow the link in today's show notes to buy tickets and make sure to use code Bell 200 for $200 off at checkout. See you there. Hey everyone, quick disclaimer before we get into"
  },
  {
    "speaker": "Speaker 1",
    "text": "today's episode. Nothing said on Bell Curve is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only and the views expressed by anyone on the show"
  },
  {
    "speaker": "Speaker 1",
    "text": "are solely our opinions, not financial advice. Our guest and I may hold positions in the companies, funds, or projects discussed."
  },
  {
    "speaker": "Speaker 1",
    "text": "All right, guys."
  },
  {
    "speaker": "Speaker 1",
    "text": "Welcome back to another episode of Bell Curve. Got Miles and Zaven me. Miles, how we doing?"
  },
  {
    "speaker": "Speaker 2",
    "text": "Doing great. One week countdown."
  },
  {
    "speaker": "Speaker 1",
    "text": ">> Yeah."
  },
  {
    "speaker": "Speaker 1",
    "text": "One week countdown, baby, to the most institutional conference ever. We actually do have I will say we got a This was a interesting first for us. We got our first I guess two bank CEOs."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um and I can tell you these are they're not really sales cycles in the sense that we're not selling anything, but sometimes these conversations, you know, they take a very, very long time and for"
  },
  {
    "speaker": "Speaker 1",
    "text": "the first time ever we have banks being like, I know DAS, I would like our CEO to speak at DAS, which is It's fantastic. Pretty cool. Pretty cool."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> I can plug in something as well that might make you happy, uh Mike. Um so one of my >> Please do that."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> A guy I know from my hometown in traditional finance actually reached out saying to me I was going to Digital Asset Summit and you know, will I be there and you know, it's the first time"
  },
  {
    "speaker": "Speaker 3",
    "text": "that his TradFi firm in South Australia is like, you know, branching out into digital assets and all the way to New York just to the conference. So you're making a splash worldwide, mate. Wow."
  },
  {
    "speaker": "Speaker 1",
    "text": "Wow. Well, we love to see that. Um thank you for that. That actually brought a big smile to my face. And actually some alpha I guess for uh for Bell Curve listeners, which is if you are a procrastinator like me and"
  },
  {
    "speaker": "Speaker 1",
    "text": "you're sitting there waiting looking at tickets, we uh we got a massive So we got a sailor up there this week. We got the CEO of BNY Mellon."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um we max out uh like there's a fire marshal code and we are now knocking at the door. So actually we're going to do a We're absolutely going to max out on the space. So if you're listening now, we're"
  },
  {
    "speaker": "Speaker 1",
    "text": "going to start doing basically price hikes until um but probably you probably have until like Monday, Tuesday to buy and then it's going to max out. So Good You know what though? It really is it's it's crazy"
  },
  {
    "speaker": "Speaker 1",
    "text": "because um and I you know, I've I've talked to some um honestly been getting back to Bell Curve roots and talking to a bunch of the infrastructure kind of like staking providers."
  },
  {
    "speaker": "Speaker 1",
    "text": "Uh call it like the L2 uh you know, framework supporting infrastructure, you know, helping enterprises build on chain. And it is really like it continues to be um there's the most dispersion in the"
  },
  {
    "speaker": "Speaker 1",
    "text": "space that I've ever seen. Um we're absolutely in a bear market, but not if you're in prediction markets, stablecoins, and actually even like, you know, some of the pretty old-school um"
  },
  {
    "speaker": "Speaker 1",
    "text": "infrastructure guys are seeing a lot of traction on kind of the banking and financial services side of things. But all their traditional the traditional businesses you know, really,"
  },
  {
    "speaker": "Speaker 1",
    "text": "really struggling um in many cases, but yeah, I it's a really interesting time. And when we kicked off DAS last year, I said I've never seen it's so diverge, but it's gotten far wider even in the last year."
  },
  {
    "speaker": "Speaker 1",
    "text": "And it's gotten to the point where I kind of think that in good and bad ways like that old um I was talking to one of our investors this week and he's like, you know, that old like when Lambo I I think that that"
  },
  {
    "speaker": "Speaker 1",
    "text": "culture is just I think it's dying in crypto. And I mean 80% of these coins are just gone down and they're never going to get back up. And you know, I was just tweeting before we got on here."
  },
  {
    "speaker": "Speaker 1",
    "text": "So Larry Fink talking about tokenizing every asset and I fully agree that that's going to happen, but that also doesn't mean a single coin has to go up because of it."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um so yeah, it's like a very interesting time where uh the industry is changing a lot and the institutional segment of it is just doing really well. Um But yeah, I don't know if I have"
  },
  {
    "speaker": "Speaker 2",
    "text": "much much more sophisticated thoughts than that, but Yeah, so the institutional conference will definitely be the highest uh you know, best sentiment I would say."
  },
  {
    "speaker": "Speaker 1",
    "text": "People there are stoked. People there are really stoked. I mean, I know Miles you've got the the strong background of Fidelity, but like they're they're just all like they're building a ton of"
  },
  {
    "speaker": "Speaker 1",
    "text": "stuff. Um Exactly, no token."
  },
  {
    "speaker": "Speaker 1",
    "text": "Well, did you guys see um uh Across?"
  },
  {
    "speaker": "Speaker 1",
    "text": "Um I think this is the first of these sorts of ideas that I've seen so far, which is they allowed a We're going to be talking about Hyperliquid. I should have talked about that at the This is a"
  },
  {
    "speaker": "Speaker 1",
    "text": "Hyperliquid bull bear episode. We haven't talked about that at all, but um before we get there, I'm curious, did you guys see the uh Across? It's a token equity swap and they're allowing uh"
  },
  {
    "speaker": "Speaker 1",
    "text": "token holders to swap into being equity holders. To catch being you have to be a US accredited investor. Um and or you can swap out at a certain uh a certain rate you could essentially"
  },
  {
    "speaker": "Speaker 1",
    "text": "redeem for cash, which at the time was something like a 25% premium. Now it's I don't know. It shot up like 100% today."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um and so now it's actually a little bit of a discount, but yeah, curious what you guys thought about that. Like I've been thinking a lot about uh token holder rights and things like that. And I This is a really"
  },
  {
    "speaker": "Speaker 1",
    "text": "interesting I haven't seen anything like this before. It's pretty cool."
  },
  {
    "speaker": "Speaker 2",
    "text": "Super fascinating. Um >> [clears throat] >> and like it's working about the history of Across. So they launched uh they launched a token in a bear market."
  },
  {
    "speaker": "Speaker 2",
    "text": "So this was like 2021 post-FTX."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um and then and the product was has always been great. It's always made revenue. So it's kind of one of those like good tokens. Like it was fit for the revenue like fundamentals, you know,"
  },
  {
    "speaker": "Speaker 2",
    "text": "era."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um and I remember like shortly after they were launched, Wormhole and LayerZero launched at like a insanely high TVL, really low float."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um and like Across kind of launched in the bear market, so they were they were lower. And I remember the team was just like not like they felt like they'd left value on the table. Um and yeah, they like the"
  },
  {
    "speaker": "Speaker 2",
    "text": "fundamentals have continued to go like up into the right. They've brought on more like really high-quality liquid investors. Like I'm pretty sure Paradigm did a liquid round a while ago. Um they"
  },
  {
    "speaker": "Speaker 2",
    "text": "did. Yeah. Yeah, it's not like they've gotten over really caught up in the DAO stuff, so that wasn't the problem. It's just like a very sober sort of like reflection on, you know, there used to"
  },
  {
    "speaker": "Speaker 2",
    "text": "be a premium to token prices and now there's arguably a discount token prices because um it it takes away flexibility. Like if they are likely trying to go for an acquisition um and that's really complicated or a"
  },
  {
    "speaker": "Speaker 1",
    "text": "non-starter and you have a token, so um yeah, I think I'd be interested to see more of these, but um this is definitely high signal. I think it's great. I wonder if Paradigm had any say"
  },
  {
    "speaker": "Speaker 1",
    "text": "in this um as well. I can't remember what valuation they bought in at, but you know, it's it's also interesting cuz you you're [clears throat] really just seeing I think this is a This is a"
  },
  {
    "speaker": "Speaker 1",
    "text": "really interesting move. It's one way of taking care of token holders. You know, at the same time you're also seeing Ripple do a buyback of their private equity, which is kind of funded by selling tokens. I"
  },
  {
    "speaker": "Speaker 1",
    "text": "mean, that's What?"
  },
  {
    "speaker": "Speaker 1",
    "text": "It's not That's not expressly funded by selling tokens. It's not like they announced it at the same time, but it's a huge part of uh you know, how they generate revenue. It's a very"
  },
  {
    "speaker": "Speaker 1",
    "text": "interesting to see um I think that there's going to be much more scrutiny on these um on the relationship just increasingly in between token and uh tokens and Or just got to pick one,"
  },
  {
    "speaker": "Speaker 2",
    "text": "right? Um or it's just clearly better to pick one."
  },
  {
    "speaker": "Speaker 2",
    "text": "It's clearly better to pick one. And and by the And that's a strategic decision."
  },
  {
    "speaker": "Speaker 2",
    "text": "That's not just like what will be, you know, what will go higher, right? Or like what is currently in vogue. It it is about like um I think the long-term like play of the project and keeping optionality open if"
  },
  {
    "speaker": "Speaker 2",
    "text": "an exit, you know, if an acquisition exit is probably the most likely exit."
  },
  {
    "speaker": "Speaker 1",
    "text": "You know what You know what though? The challenge with this is I mean, at the same time Stani wrote a piece this week."
  },
  {
    "speaker": "Speaker 1",
    "text": "I don't know if you guys saw that and he criticized He's like, the first instantiation of DAOs wasn't necessarily correct. And you know, he called out we want to keep the best parts of DAOs."
  },
  {
    "speaker": "Speaker 1",
    "text": "But you know, I guess like another unsaid thing here is that a lot of the at one point investors and projects were just trying to get the token out the door as fast as possible. Um and now I"
  },
  {
    "speaker": "Speaker 1",
    "text": "think what you're seeing is because the mar because there's an oversupply of tokens in the market and investors need to see traction, you kind of are getting all of the neg It's there's a market I"
  },
  {
    "speaker": "Speaker 1",
    "text": "think token projects are waiting longer and longer to launch the token because that's what the market is demanding."
  },
  {
    "speaker": "Speaker 1",
    "text": "It's a you know, there's no regulation that's forcing that. That just makes sense from the standpoint of the entrepreneur. And so you have a lot of projects though that have launched"
  },
  {
    "speaker": "Speaker 1",
    "text": "before they had the requisite traction to support a positive valuation for their token and so they're like, \"Now what?\" And you've seen uh you know, at different stages of maturity like"
  },
  {
    "speaker": "Speaker 1",
    "text": "Morpheus had kind of a really baller move pretty early like they moved to they only have a token. There's no equity structure back there. They did that very early. Um you know, Ave is"
  },
  {
    "speaker": "Speaker 1",
    "text": "cleaning up but it's kind of like uniting the incentives of the DAO and the labs entity. Um this is the first instantiation that we see in Hart came out and said, you know, I'm paraphrasing"
  },
  {
    "speaker": "Speaker 1",
    "text": "here. I don't remember exactly what he said but like as much as I'd like for this not to be the case, it just doesn't make sense for us to have a token. It's the the cons outweigh the pros. And so"
  },
  {
    "speaker": "Speaker 1",
    "text": "actually this is them saying, \"Hey, I know we launched this token but I think I'd like to uh we're we're we're referencing the equity and we're an equity play here. I mean so you're starting to see all different"
  },
  {
    "speaker": "Speaker 1",
    "text": "Everyone kind of started from the same place which is we're going to launch a token and get it out get it out there and and be early and now um now that the market is rejecting that in many cases,"
  },
  {
    "speaker": "Speaker 1",
    "text": "you kind of have a couple options. You can do both and align with you know, only token, find a way to align incentives or go only equity. And it seems like this is Across referencing"
  },
  {
    "speaker": "Speaker 3",
    "text": "the equity which is a totally rational thing to do."
  },
  {
    "speaker": "Speaker 3",
    "text": "Yeah, maybe also worth mentioning um a lot of teams right now on the token side. I think you know, they're still going to want to launch tokens at some stage but as you guys probably know"
  },
  {
    "speaker": "Speaker 3",
    "text": "already it costs a lot of money to list a token on various centralized exchanges, you know, 1 million plus at times and you know, if you're a pre-seed seed team and you only have a few"
  },
  {
    "speaker": "Speaker 3",
    "text": "million and a quarter of that minimum is going into exchange listing, well, it's just sort of like, you know, you're running out of runway. It's can be difficult to launch the token and so"
  },
  {
    "speaker": "Speaker 3",
    "text": "they're sort of stuck with that equity."
  },
  {
    "speaker": "Speaker 3",
    "text": "And I'm also seeing the other way recently but a team launching a token uh but then they're dealing with enterprise now and now they want to spin off equity. So I think right now it's"
  },
  {
    "speaker": "Speaker 3",
    "text": "still very unclear if teams are going to go the equity or the token path. I could see a future of both. If crypto markets come back, I think teams still like the early liquidity of tokens. I just think in a"
  },
  {
    "speaker": "Speaker 3",
    "text": "bear market you see a lot less tokens launch because A, obviously there's less traction, there's less hype and interest from exchanges and investors. Therefore, these teams have less money. Therefore,"
  },
  {
    "speaker": "Speaker 3",
    "text": "they don't have the money to cover the costs on exchanges. But I could also see it going the other way around too."
  },
  {
    "speaker": "Speaker 3",
    "text": "Mature teams like Morpheus etc. with the token already live, it's much easier for those teams to move everything into one entity. Whereas I think as a start uh but still very very challenging to know"
  },
  {
    "speaker": "Speaker 3",
    "text": "if you should go the token or the equity path. And so it'll be interesting to see how that pendulum sort of swings in the bear versus bull market. Right. And if you stay equity, you always have the"
  },
  {
    "speaker": "Speaker 2",
    "text": "option to launch a token later. It's much harder to put the the token back in the box but that's exactly what Across is doing right now. So I'm very curious to see how it plays out."
  },
  {
    "speaker": "Speaker 2",
    "text": "My hot take prediction I guess is that Stripe is going to acquire them um and this Across token then turns into Stripe equity which I no idea how that would work."
  },
  {
    "speaker": "Speaker 2",
    "text": "But they did say, you know, this is all about like this is part of a strategic pivot to basically have Stripe stablecoin liquidity frag- fragmentation and the issues around it, right? We have"
  },
  {
    "speaker": "Speaker 2",
    "text": "an alpha- alphabet soup of stablecoins in the world. How do you think that Stripe is going to acquire Bridge here?"
  },
  {
    "speaker": "Speaker 2",
    "text": "Um think that they want to support a world where there's lots and lots of stablecoins, especially like a diverse of stablecoins on Tempo itself. Um and I think there's like non-trivial"
  },
  {
    "speaker": "Speaker 2",
    "text": "like pieces that need to be in place such that um let's say it's it always looks like USD to the user but when you withdraw, then it gets converted from like, you know, let's say white-labeled"
  },
  {
    "speaker": "Speaker 2",
    "text": "platforms stablecoin to, you know, branded highly liquid public stablecoin and then back into another one. This was like the original Bridge thesis from a few years ago. Um But I could be totally wrong. I could be"
  },
  {
    "speaker": "Speaker 2",
    "text": "reading the tea leaves very wrong here."
  },
  {
    "speaker": "Speaker 2",
    "text": "But it would be funny cuz I've held those Across tokens for a long time."
  },
  {
    "speaker": "Speaker 2",
    "text": "They've gone up. They've come all the way back down and maybe the play along was just to get some Stripe."
  },
  {
    "speaker": "Speaker 1",
    "text": "Before we get back into the episode, here's a quick word from our sponsor Canton, the only public permissionless blockchain built for institutional finance."
  },
  {
    "speaker": "Speaker 4",
    "text": "TradFi wasn't built for 24/7 [music] markets. DeFi wasn't built for regulated institutions. But Canton is where the power of finance meets the promise of blockchain. [music] The only public blockchain with"
  },
  {
    "speaker": "Speaker 4",
    "text": "institutional grade privacy true composability real [music] assets real markets."
  },
  {
    "speaker": "Speaker 4",
    "text": "Why reinvent finance when Canton [music] makes it work the way it should?"
  },
  {
    "speaker": "Speaker 1",
    "text": "Canton where finance flows."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um All right, we started this episode to talk about Hyperliquid. This is a uh bull bear Hyperliquid episode. This will be This is actually inspired by uh I'm going to get to some of the statistics"
  },
  {
    "speaker": "Speaker 1",
    "text": "on this but uh you know what real So obviously the entire world is fixated on this uh conflict in between the United States and Israel and Iran uh with especially the price of oil being in the"
  },
  {
    "speaker": "Speaker 1",
    "text": "crosshairs here. Um time for everyone on CT to dust off their uh geopolitical straight-up war moves uh expertise caps and and pretend to be experts here. But what was really interesting was the"
  },
  {
    "speaker": "Speaker 1",
    "text": "success of Hyperliquid CL USD C um oil contract. Uh and this was kind of a sleepy contract like an oil perp um that they launched on January 9th. Um so not that long ago under the HIP 3 um you"
  },
  {
    "speaker": "Speaker 1",
    "text": "know, under the HIP 3 like the builder code uh upgrade that they launched and you know, it did okay but it really really blew up um recently. So the actual stats on this are pretty wild. So"
  },
  {
    "speaker": "Speaker 1",
    "text": "for the first couple weeks it was more of a niche product than anything else."
  },
  {
    "speaker": "Speaker 1",
    "text": "Uh it averaged about 21 million uh per day in daily trading volume. Um and accumulated roughly about like 400 million in cumulative volume uh during like the month or so after its launch. But after um"
  },
  {
    "speaker": "Speaker 1",
    "text": "but after the Iran situation blew up, it went completely parabolic and during a two-day stretch uh generated daily trading fees exceeding $5 billion dollars. Uh which actually briefly"
  },
  {
    "speaker": "Speaker 1",
    "text": "overtook Ethereum's uh perp markets. Um so basically uh if you looked at that at its peak trading as a as a percentage of the um oil contracts that were trading on the CME, it's about 1 to 2% of CME's"
  },
  {
    "speaker": "Speaker 1",
    "text": "uh peak day and maybe 2% 2 to 5% of a normal day. That is crazy. Uh that is absolutely nuts. And a huge part of this as well, which is what got people talking about Hyperliquid, is that these"
  },
  {
    "speaker": "Speaker 1",
    "text": "trades were happening on the weekend because the US and Israel um launched their like early Saturday morning Friday night US time. So oil spiked to like $111 originally over the weekend before"
  },
  {
    "speaker": "Speaker 1",
    "text": "going back down. And Hyperliquid, you know, as this kind of 24/7 venue captured an enormous amount of this volume. And I think this excited a lot of people because this was kind of the"
  },
  {
    "speaker": "Speaker 1",
    "text": "first clear indication of the 24/7 nature of these exchanges being a massive value prop for even more traditional traders. Like Hyperliquid was getting cited on Bloomberg and bunch"
  },
  {
    "speaker": "Speaker 1",
    "text": "of the Bloomberg analysts were like, \"What is this Hyperliquid thing?\" And it was just it's pretty interesting. Uh kind of crazy. Um But I thought maybe even before we get into uh some of what Hyperliquid is like"
  },
  {
    "speaker": "Speaker 1",
    "text": "we're just having like a fun kind of banter episode here around like bull and bear cases. Um can we go back in time and look at I think one of the things that's at least been hard for me around Hyperliquid is"
  },
  {
    "speaker": "Speaker 1",
    "text": "I've just seen so many perp dexes run up especially during bear markets and uh maybe historically pattern match that a little bit and um just maybe there's an analogy here between Hyperliquid and Google where it"
  },
  {
    "speaker": "Speaker 1",
    "text": "seems like Hyperliquid has just fully won this category but it was not the first or the second or the fifth. It was like the 15th, right? I mean you can list you know, Gains, you know, GMX, dYdX,"
  },
  {
    "speaker": "Speaker 1",
    "text": "Vertex, all all of these exchange they know, these perp dexes that at one point had a lot of hype around them. And I'm curious um you know, if we were to go through kind of the lessons of what"
  },
  {
    "speaker": "Speaker 3",
    "text": "Hyperliquid has done right. Um what do you guys think is part of the reason why they were so much more successful than their peers? Yeah, happy to kick it off. Um So yeah, I think all"
  },
  {
    "speaker": "Speaker 3",
    "text": "of us in this podcast uh we're somewhat around Hyperliquid, maybe not as in the weeds as like the typical trader etc."
  },
  {
    "speaker": "Speaker 3",
    "text": "but of course even Miles and I have worked pretty closely with teams like dYdX in the past which you know, was and still is targeting a very very similar market. However, the outcome has been"
  },
  {
    "speaker": "Speaker 3",
    "text": "completely different. So I think it's worth talking about especially dYdX which used to be the frontrunner for this category and then also like Hyperliquid as the now winner and and"
  },
  {
    "speaker": "Speaker 3",
    "text": "why Hyperliquid is the winner at this stage. So I think really Hyperliquid for me if I look back on uh and their success is like a game of timing on like multiple different fronts, regulations,"
  },
  {
    "speaker": "Speaker 3",
    "text": "social, technology, legal, economic, like everything. Um so I want to start with kind of regulation first and I think Mike, you tweeted recently uh which you might pull up at some point"
  },
  {
    "speaker": "Speaker 3",
    "text": "around why uh Hyperliquid was so successful. And one of the reasons given I think maybe by Alex Pack uh at Hack VC was because they internalized their market makers in with and got the"
  },
  {
    "speaker": "Speaker 3",
    "text": "product to a point where they had really great liquidity on the supply side which obviously made a better experience for everyone on the sort of demand trading side to use."
  },
  {
    "speaker": "Speaker 3",
    "text": "However the timing of this was very unique versus something like dYdX uh back when I used to work at Chorus One. Can I flag Can I flag something about that though because I I know Miles is going to tag"
  },
  {
    "speaker": "Speaker 1",
    "text": "in here with uh the FTX the hole that FTX left behind. Like the you know, the HLP vault um is essentially them internalizing their own market maker to provide tighter, you know, liquidity and"
  },
  {
    "speaker": "Speaker 1",
    "text": "spreads. There's an analogy here in between this is what Alameda essentially was to FTX, um, which I think is a really interesting point where you guys remember at one there was this idea that"
  },
  {
    "speaker": "Speaker 1",
    "text": "FTX, you know, managed risk unbelievably well and they just had these unbelievably sophisticated algorithms and it's just like, \"Oh, there was just a hedge fund on the back end that's"
  },
  {
    "speaker": "Speaker 1",
    "text": "internalizing all of this.\" And as soon as there was a massive, you know, like three standard deviation, you know, price move on a big asset that they had exposure to like Luna, they just got"
  },
  {
    "speaker": "Speaker 1",
    "text": "smoked. Um, and the maybe the improved version of this was, I wonder if Jeff was looking at that thinking, \"Man, they really messed the execution up, but actually they didn't have a bad idea"
  },
  {
    "speaker": "Speaker 1",
    "text": "here.\" And there was something very similar where it was very interesting to watch if people remember this, um, the HLP vault with the jelly jelly."
  },
  {
    "speaker": "Speaker 1",
    "text": "And I guess like two differences here, um, you know, in between the way that HLP was set up versus Alameda is one, they weren't doing anything nearly as crazy."
  },
  {
    "speaker": "Speaker 1",
    "text": "Two, uh, they had a bunch of people that were staking there and taking on knowingly taking on risk, um, instead of F- SBF moving, uh, customer deposits from the FTX exchange. I don't want to"
  },
  {
    "speaker": "Speaker 1",
    "text": "compare them, but you know how you can see like a really bad version of something and be like, \"Ooh, you really messed the like the execution up, but you had something.\" I wonder if Jeff did"
  },
  {
    "speaker": "Speaker 3",
    "text": "look at that setup and think not not bad, actually. Um."
  },
  {
    "speaker": "Speaker 3",
    "text": ">> I I think like, yes, yes and no. I obviously there are somewhat similar products. They're both exchanges, trading derivatives, etc. Obviously FTX was completely centralized and therefore"
  },
  {
    "speaker": "Speaker 3",
    "text": "there was a huge governance risk on the team itself. And obviously SBF, as we've seen, uh, didn't take that seriously and, you know, now in prison. Whereas Hyperliquid had a very interesting"
  },
  {
    "speaker": "Speaker 3",
    "text": "ethos, which I think is also worth talking about around the decentralization versus decentralization. And this in my opinion this is technological in terms of timing. So, pre-Hyperliquid"
  },
  {
    "speaker": "Speaker 3",
    "text": "it wasn't clear to anyone in the blockchain space that the market would accept a team coming out with four or five nodes, you know, many of them run by the internal team building the"
  },
  {
    "speaker": "Speaker 3",
    "text": "product itself. And then releasing that to market and then getting a bunch of adoption and attention and demand to the product. So, you know, going back to dYdX, dYdX had several versions of their"
  },
  {
    "speaker": "Speaker 3",
    "text": "product and there was probably errors throughout each version. You know, error number one for me in version three, we, uh, mentioned it earlier in this podcast that, you know, dYdX V3 had an issue"
  },
  {
    "speaker": "Speaker 3",
    "text": "with token versus equity value accrual and I think that kind of turned a lot of dYdX token holders off. At the same time, they had a lot of VC funding dYdX and, you know, these VCs were sort of"
  },
  {
    "speaker": "Speaker 3",
    "text": "like mercilessly dumping these tokens into the market at all costs and so the dYdX price was going down and down and down even though adoption was actually going up pre-Hyperliquid. And I think"
  },
  {
    "speaker": "Speaker 3",
    "text": "that really hurt dYdX long-term."
  },
  {
    "speaker": "Speaker 3",
    "text": "Eventually dYdX V4 came out and they tried righting the wrongs of actually delivering value back to token holders, but at that time again Hyperliquid had just come out in the early innings of"
  },
  {
    "speaker": "Speaker 3",
    "text": "getting started, building liquidity, getting that internal market making system going, you know, in a good way plus the order matching, etc. And so I think by the time dYdX kind of worked it"
  },
  {
    "speaker": "Speaker 3",
    "text": "out, Hyperliquid found this social moment in terms of timing in crypto of like very, very anti-VC. And so you can imagine, you know, dYdX was a great product. People did buy into dYdX."
  },
  {
    "speaker": "Speaker 3",
    "text": "People bought into the vision. People thought you could compete with Binance."
  },
  {
    "speaker": "Speaker 3",
    "text": "Then it came out that actually like all these investors were just being dumped on by VCs that made all the money and even though the product was great, they got nothing for it. And so there was a"
  },
  {
    "speaker": "Speaker 3",
    "text": "lot of negative sentiment towards that happening, but that was also beyond dYdX. That was in the entire space."
  },
  {
    "speaker": "Speaker 3",
    "text": "Hyperliquid came out with a great product, built a great community, a lot of DeFi natives, a lot of people who were fed up with that dYdX kind of history and then launched the product"
  },
  {
    "speaker": "Speaker 3",
    "text": "and into a kind of semi-bull market, if you think about it. So, already the valuation was quite high. And then airdropped to a bunch of their power users. And you can imagine socially how"
  },
  {
    "speaker": "Speaker 3",
    "text": "much of a great achievement that was at the time and probably the best social achievement almost in crypto. And I'd also make the argument in crypto it can be a very, very social game. So,"
  },
  {
    "speaker": "Speaker 3",
    "text": "although Hyperliquid is earning a bunch of revenues to the point where they earned more revenues than Ethereum last year, which is an amazing achievement, they also have an amazing narrative"
  },
  {
    "speaker": "Speaker 3",
    "text": "because they have so many people bought into like the success of Hyperliquid."
  },
  {
    "speaker": "Speaker 3",
    "text": "And so you see teams like Lyra now, which is a new competitor to Hyperliquid, trying to come out to compete, but there's not enough people almost in crypto on the social side to like care about Lyra. You know, they can"
  },
  {
    "speaker": "Speaker 3",
    "text": "get two or three funds, but they're going to have the exact same issue as dYdX where they're going to dump on all the people. I don't know I think Lyra has no fees, Hyperliquid obviously has"
  },
  {
    "speaker": "Speaker 3",
    "text": "fees and they're buying back the token."
  },
  {
    "speaker": "Speaker 3",
    "text": "So, like there's a lot more alignment I think in Hyperliquid than any other dY- any other perp, uh, sort of exchange before and also in the future. So, like I'm under the impression that"
  },
  {
    "speaker": "Speaker 3",
    "text": "Hyperliquid is actually here to stay, which I'm sure we're going to touch on reasons why. And I think it's here to stay and I think that tailwinds like regulatory, uh, technology, everything"
  },
  {
    "speaker": "Speaker 3",
    "text": "is actually in their favor. I think they're going to build bigger moats over time. So, I guess if this is a bull versus bear episode, I'm definitely in the bull camp for Hyperliquid like I was"
  },
  {
    "speaker": "Speaker 3",
    "text": "three or four months ago when we first started this bell curve round up. But it is fascinating to see like the timing of everything they got right. Also they they even launched the exchange, if you"
  },
  {
    "speaker": "Speaker 3",
    "text": "think about it, like right as Trump was elected. You know, they they decided to bring the exchange back on shore as soon as he was elected. Last point I'll make here, I was speaking with major kind of"
  },
  {
    "speaker": "Speaker 3",
    "text": "HFT firms and market makers when dYdX V4 was coming out and they couldn't market make a dYdX V4 pre-regulation and this really, really hurt liquidity on dYdX V4 and therefore the product itself kind of"
  },
  {
    "speaker": "Speaker 3",
    "text": "fell apart. Hyperliquid timing-wise was like, \"All right, do it offshore, bang, onshore as soon as regulations are more favorable.\" And obviously you've seen how much more successful they are. So, I"
  },
  {
    "speaker": "Speaker 3",
    "text": "just think they got so many things right on the timing side and I think you're never going to repeat, uh, that level of, you know, ingredients lined up and stars lining up, again, for any perp"
  },
  {
    "speaker": "Speaker 2",
    "text": "exchange."
  },
  {
    "speaker": "Speaker 2",
    "text": "Yeah. And, uh, maybe just to like double click on the the timing standpoint and like maybe get a little bit more concrete. Like um, dYdX is a good example of the wrong timing. That's not"
  },
  {
    "speaker": "Speaker 2",
    "text": "the only problem they had. Um, but their assumption was that dYdX V3, the single sequencer roll-up, um, could not return, um, value to token holders because it was a centralized sequencer, right? Um,"
  },
  {
    "speaker": "Speaker 2",
    "text": "and that just turned out not to be the case at all. Like if they had just done that and waited till the next administration, I think they would have been totally fine. Like V3 had other"
  },
  {
    "speaker": "Speaker 2",
    "text": "issues, but that was, you know, Yeah."
  },
  {
    "speaker": "Speaker 2",
    "text": "Like I I don't I don't think anybody would have stopped using V3 because the sequencer was centralized. Like look at look at base right now. Um, right? So, that was the original impetus"
  },
  {
    "speaker": "Speaker 2",
    "text": "for like dYdX being like, let's move over to an app chain along with the fact, yeah, StarkWare was like we're talking about like one of the earliest iterations of a ZK roll-up with like"
  },
  {
    "speaker": "Speaker 2",
    "text": "tons of custom ZK circuits that only the StarkWare team could like actually implement and upgrade. So, like they needed to move anyways, but, um, they could have just run a centralized"
  },
  {
    "speaker": "Speaker 2",
    "text": "Cosmos chain and all of this would have been like at least a lot more competitive. Um, but yeah, I would say like, uh, so okay, why didn't Hyperliquid Hyperliquid win?"
  },
  {
    "speaker": "Speaker 2",
    "text": "I think it's like org structure and operating model. They just don't like let things leave the organization. They don't outsource development of like core features to other people. Um, that makes"
  },
  {
    "speaker": "Speaker 2",
    "text": "you able to move fast and like, you know, they trust each other. They have that expertise. Um, they chose the right features to pay attention to. So, like permissionless listings, no other, you know, perp decks has been"
  },
  {
    "speaker": "Speaker 2",
    "text": "able to actually crack that until them."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um, and then I'd say like and and speed bumps for cancellations. All these things that you get on only TXs of the world, right? And then yeah, the competitive landscape around them"
  },
  {
    "speaker": "Speaker 2",
    "text": "and the like just collapsed."
  },
  {
    "speaker": "Speaker 2",
    "text": "TX fell apart. You know, they can siphon up some liquidity from from Binance if it's if it's attractive and especially if there's like points in an airdrop coming."
  },
  {
    "speaker": "Speaker 2",
    "text": "And dYdX focused on all the wrong things, unfortunately, and at the wrong timing and just had negative sentiment."
  },
  {
    "speaker": "Speaker 2",
    "text": "And that brings me to the last piece, which is brand. And I think this is this like sense of belonging and a sense of like when we talk about Hyperliquid, it nobody dislikes Hyperliquid in our"
  },
  {
    "speaker": "Speaker 2",
    "text": "space, right? Like it kind of is the poster child for everything that we, you know, can do well, right? So, yeah, it's a lot of things, but, um, the story is pretty clear up to date."
  },
  {
    "speaker": "Speaker 2",
    "text": "It's a lot less clear like going forward, you know, if they do make that another leap."
  },
  {
    "speaker": "Speaker 3",
    "text": "I, uh, I want to mention something that we've spoken a bit about on the podcast before around distribution. Um, interestingly enough, Mike, I totally agree with your point around Hyperliquid"
  },
  {
    "speaker": "Speaker 3",
    "text": "now making it into mainstream media in, you know, news places like Bloomberg, for example. So, the fact that Hyperliquid now has expanded beyond crypto and it's now in Bloomberg, it's"
  },
  {
    "speaker": "Speaker 3",
    "text": "kind of similar to like Polymarket and Kalshi where like they can get actual attention outside of crypto. How?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Because people were trading on macro events outside of crypto. And you're seeing a formula now, in my opinion, of events that are traded from a macroeconomic perspective, for example,"
  },
  {
    "speaker": "Speaker 3",
    "text": "prediction markets, maybe oil markets on Hyperliquid, that managed to break into mainstream media. That is another form of distribution, which is like an actual moat, if you ask me right now in terms"
  },
  {
    "speaker": "Speaker 3",
    "text": "of like it's really hard for any crypto project to tap into mainstream media attention. And the fact that you can have people trading on these markets that are macroeconomic news, for"
  },
  {
    "speaker": "Speaker 3",
    "text": "example, I think it's still a very very underrated distribution method. Uh, So yeah, hats off to Hyperliquid for opening these markets. Also worth mentioning at the start that from what I"
  },
  {
    "speaker": "Speaker 3",
    "text": "understand out of the top sort of 30 markets, only seven are crypto and 23 are non-crypto markets in equities or anywhere else, any other kinds of markets, oil, commodities, etc. So I"
  },
  {
    "speaker": "Speaker 3",
    "text": "think Hyperliquid is already positioning itself for the future phase of growth realizing that crypto is a limited market and it's a good frontrunner and they're pioneering what it looks like to"
  },
  {
    "speaker": "Speaker 3",
    "text": "go from crypto native, playing that social game we just talked about a Miles just touched on, to then moving beyond that social game and playing that more kind of yeah, pure macro game to get"
  },
  {
    "speaker": "Speaker 3",
    "text": "even further people interested in the product including larger traders outside of crypto. So yeah, very interesting distribution sort of they've got right now."
  },
  {
    "speaker": "Speaker 1",
    "text": "You know what?"
  },
  {
    "speaker": "Speaker 1",
    "text": "Um I mean that maybe is like a little bit of a controversial take here and uh and I don't mean this in a negative way, but in many cases, many ways I think Hyperliquid stepped into"
  },
  {
    "speaker": "Speaker 1",
    "text": "Hyperliquid is kind of the best version of what FTX could have been in my opinion in so many ways and the connections are for me uh so outside of the construction, right? Like in many"
  },
  {
    "speaker": "Speaker 1",
    "text": "ways like the some of the core um infrastructure around like I think that SBF and Jeff maybe look at uh things architecturally from a pretty similar in a pretty similar way cuz uh um"
  },
  {
    "speaker": "Speaker 1",
    "text": "Serum, people forget, was something that SBF was really excited about and kind of instantly saw the potential um of like high throughput blockchains."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um he also had, you know, we talked about the similarities in between HLP and Alameda, but there was a branding thing. I think part of the reason why FTX had such a strong brand and people"
  },
  {
    "speaker": "Speaker 1",
    "text": "can't even remember this because of how much it's been tarnished."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um But you know what they did really well?"
  },
  {
    "speaker": "Speaker 1",
    "text": "They had a very keen sense of product."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um traders loved FTX and there was a lot of genuine product innovation like, you know, pre um you know, pre-token launch like pre-launch markets would trade on FTX."
  },
  {
    "speaker": "Speaker 1",
    "text": "They had those like kind of binary kind of like anticipating the the the the the Trump uh markets kind of simultaneously anticipating prediction markets and um meme coins like there there was a lot of"
  },
  {
    "speaker": "Speaker 1",
    "text": "product innovation and they they got to new assets and markets really quickly in the same way that Hyperliquid did uh or Hyperliquid currently does. And it feels like that same brand, it's kind of the"
  },
  {
    "speaker": "Speaker 1",
    "text": "traders exchange. And even if you look at the biggest proponents of Hyperliquid, they're all traders, right?"
  },
  {
    "speaker": "Speaker 1",
    "text": "Um And the I know you guys I get that the VCs didn't get any allocations, so they're not going to be evangelists, but kind of like that guy flood, right? Who loves Hyperliquid. And so in many ways I"
  },
  {
    "speaker": "Speaker 1",
    "text": "think it's the spiritual ancestor has a negative connotation. I guess the way that I would frame it is it feels to me like Hyperliquid is the best version of what FTX could have been at one point. It"
  },
  {
    "speaker": "Speaker 2",
    "text": "also reflects how well they identified the like one of the most valuable customer types in the world."
  },
  {
    "speaker": "Speaker 2",
    "text": "Cuz I I Correct me if I'm wrong, I think they only have like 50,000 active daily traders or something like that. Like it looks like just going to Gemini's 600,000 total traders like and it's"
  },
  {
    "speaker": "Speaker 2",
    "text": "usually like 50,000 active traders."
  },
  {
    "speaker": "Speaker 2",
    "text": "That means if if if they're running like if their annual run rate revenue is a billion dollars a year or like, you know, I think it's like 850 million per year."
  },
  {
    "speaker": "Speaker 1",
    "text": "That means every user is spending 16 grand on the platform per year. Yeah, you know, there's another uh I guess like another connection here. Do you guys remember the debates that used"
  },
  {
    "speaker": "Speaker 1",
    "text": "to happen in between OpenSea and shoot, I'm blanking on the um on-chain Blur? Blur, thank you. Okay, there's a there's a there's connection here with Blur where people used to debate"
  },
  {
    "speaker": "Speaker 1",
    "text": "um you know, Blur kind of won against OpenSea this market of very few kind of whale professional NFT traders. And FTX had that as well and there is a there's a debate to be had here. It feels like"
  },
  {
    "speaker": "Speaker 1",
    "text": "that's the market that FTX or that Hyperliquid really dominated and you know, as we get into the bull versus bear cases, I think the success of Hyperliquid is really predicated on expanding out of that customer set"
  },
  {
    "speaker": "Speaker 1",
    "text": "because when you look like I think you you need like even if you look at the way that an exchange gets valued, I remember talking to an investor about this back when FTX was big comparing it"
  },
  {
    "speaker": "Speaker 1",
    "text": "to Bybit and Bybit at that time was doing like similar revenue and similar you know, volumes and things like that, but the thing was Bybit was almost entirely retail in its flow which is far more valuable from a flow"
  },
  {
    "speaker": "Speaker 1",
    "text": "standpoint than like expert traders. So I think you know, as we start to go into the bull versus bear cases here Hyperliquid and it seems like this is their plan, but part of the success will"
  },
  {
    "speaker": "Speaker 1",
    "text": "be predicated on their ability to onboard either a combination of retail or more institutional traders as well cuz I think that the crypto whale active trader segment's a great way to"
  },
  {
    "speaker": "Speaker 1",
    "text": "bootstrap, but then it seems like many of those exchanges that dominate that segment, they run into a ceiling um which is kind of my interpretation of uh Kraken as well. Um you know, like Kraken feels like they're"
  },
  {
    "speaker": "Speaker 1",
    "text": "breaking into the US market here. They got their that banking license which was a huge win. They're bringing tokenized equities."
  },
  {
    "speaker": "Speaker 1",
    "text": "But they they haven't really fully from my from a brand perspective really identified who their audience is outside of that and it just seems like that's a limited I don't know, man. If I were"
  },
  {
    "speaker": "Speaker 2",
    "text": "them, I would just like double down on the really high value like um trading types that that they've won on to date, right? Um especially when it comes to prediction markets which do"
  },
  {
    "speaker": "Speaker 2",
    "text": "today have like a longer tail think of like small volume traders."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um And I think they're likely like the the power users are like frankly like pretty pretty underserved just, you know, like if they're like a Kalshi or Polymarket user that's trying to field their like a"
  },
  {
    "speaker": "Speaker 2",
    "text": "broader swath."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um and then the like facilitating strategies that um combine, you know, perps and prediction markets for something like, you know, oils hedging would be super interesting."
  },
  {
    "speaker": "Speaker 2",
    "text": "Um But I don't know, Z if you've been talking to like more teams in the Hyperliquid ecosystem, do you have a sense of if they're focused more on that like you know, super like concentrated but"
  },
  {
    "speaker": "Speaker 2",
    "text": "high value sophisticated users or if they're trying to, you know, expand the pie and let users grow into that."
  },
  {
    "speaker": "Speaker 3",
    "text": "I think it's both really. I speak with some teams. I mean, for me Hyperliquid is trying to become that kind of Robinhood and they do want to access those kinds of retail traders as well"
  },
  {
    "speaker": "Speaker 3",
    "text": "which is also as we're saying a massive market. At the same time you come across some teams obviously trying to build their own HLP3 markets and you know, capture some of those fees and value"
  },
  {
    "speaker": "Speaker 3",
    "text": "capture from the front end and building an app on top of the market they're trying to open. Another thing we haven't mentioned which I think is also a great economic tool by Hyperliquid as to why"
  },
  {
    "speaker": "Speaker 3",
    "text": "they're so successful right now is the actual economic alignment between how much you have to stake in hype uh to actually open up a new market for people to trade on on the platform and"
  },
  {
    "speaker": "Speaker 3",
    "text": "to like get that amount of capital and I can't remember the exact number right now. Maybe Miles or Mike you you might know it, but it's in the millions and millions of dollars to open up a 500,000"
  },
  {
    "speaker": "Speaker 3",
    "text": "hype. 500,000 hype. Yeah, which exactly is in the millions of dollars to open up any market and the fact that you need that capital just to get started, it kind of gives you the skin in the game"
  },
  {
    "speaker": "Speaker 3",
    "text": "to be a part of Hyperliquid even further. So on top of the airdrop you have further skin in the game opening up markets. So yeah, many teams I speak to in Hyperliquid are actually just trying"
  },
  {
    "speaker": "Speaker 3",
    "text": "to build like kind of consumer apps and be that everything trading app uh you know, using different HLP3 markets, uh using novel distribution strategies, getting in front of these users and I"
  },
  {
    "speaker": "Speaker 3",
    "text": "think it's a really interesting time we haven't really touched on yet very much, but a lot of teams I speak with now in Hyperliquid are actually really focused on HLP4 which is more about sort of how"
  },
  {
    "speaker": "Speaker 3",
    "text": "markets are settled, different outcomes, uh etc. which is the next evolution of of Hyperliquid and at this stage I do think that Hyperliquid can actually start eating into some of Polymarket and"
  },
  {
    "speaker": "Speaker 3",
    "text": "Kalshi's market share. Ultimately, I think Polymarket, Kalshi and Hyperliquid are playing in very similar markets. I think, you know, prediction markets trading short-term, long-term, I think"
  },
  {
    "speaker": "Speaker 3",
    "text": "it's all going to look very similar. I mean, you're already seeing Polymarket on the other side sort of moving shorter and shorter prediction markets to like 15-minute markets on the Bitcoin price."
  },
  {
    "speaker": "Speaker 3",
    "text": "Maybe at some stage they add perps like probably they're going to. I think Mike, you were saying earlier it's a bit of a race to become the everything app. I do think that Hyperliquid is very well"
  },
  {
    "speaker": "Speaker 3",
    "text": "placed here. If you think about like who uses prediction markets, you know, a lot of macro traders, etc. If you can use a prediction markets and perps at the same time to hedge and create new instruments"
  },
  {
    "speaker": "Speaker 3",
    "text": "in various ways, I think this is a very bullish reason for why Hyperliquid might actually win long-term."
  },
  {
    "speaker": "Speaker 3",
    "text": "Um and so yeah, I think in general it's a very very interesting time. It also might be worth mentioning because as you guys have mentioned several times, Hyperliquid is quite centralized like"
  },
  {
    "speaker": "Speaker 3",
    "text": "top-down as well, not just centralized on the blockchain itself."
  },
  {
    "speaker": "Speaker 3",
    "text": "Uh I do think they have a major say in what teams win. It's a little bit like Solana if you think about it cuz Solana also is a bit more top-down than something like Ethereum. And so I have"
  },
  {
    "speaker": "Speaker 3",
    "text": "spoken with some like really great stablecoin products for example on Hyperliquid, but they kind of you know, allowed USDH to be the predominant stablecoin on Hyperliquid and good luck"
  },
  {
    "speaker": "Speaker 3",
    "text": "competing after that. So like it does make a market and ecosystem that is hard to bootstrap bottom-up and become like a major outcome as a startup. So much more bullish on Hyperliquid as like an asset"
  },
  {
    "speaker": "Speaker 3",
    "text": "and a chain as I am on like maybe Hyperliquid apps and teams building there. In saying that, there are some really incredible teams. I also want to actually shout them all out because"
  },
  {
    "speaker": "Speaker 3",
    "text": "anytime you speak to any Hyperliquid team building an app on top of the blockchain, they're very very focused on products and business models and like generating revenue. You don't actually"
  },
  {
    "speaker": "Speaker 3",
    "text": "see that across any other ecosystem which actually makes me very very bullish on even though it's harder to break in because you need top-down kind of authority to be able to do that. Um"
  },
  {
    "speaker": "Speaker 3",
    "text": "at the same time they realize that to create a great app and to be a truly great outcome, you need to actually have a problem business on chain. They all have that Hyperliquid themselves of"
  },
  {
    "speaker": "Speaker 3",
    "text": "like they want to generate revenues, they want to buy back the token, they want to like give back the value to the token holders. So yeah, I think it's a really phenomenal ecosystem and we"
  },
  {
    "speaker": "Speaker 3",
    "text": "haven't even touched on the bull case for it and actually to be honest doing my research for this this episode like I've always admired Hyperliquid and I've always spoken with builders in the"
  },
  {
    "speaker": "Speaker 3",
    "text": "ecosystem, but I think even still even though there's a lot of traders longing air and socially it's massive like I think it actually deserves a and you know, it's actually countercyclical"
  },
  {
    "speaker": "Speaker 3",
    "text": "anyway because the more volatility there is, the more macro scaries there are, you know, the better Hyperliquid does."
  },
  {
    "speaker": "Speaker 3",
    "text": "So that's also very very unique in crypto which is never we've never really seen before. So yeah, looking forward to going on to the bull versus bear cases."
  },
  {
    "speaker": "Speaker 1",
    "text": "Everyone in crypto loves to talk about transparency, but would any serious business publish its payroll for [music] the world to see or hand competitors its contracts? That's not a feature, that's"
  },
  {
    "speaker": "Speaker 1",
    "text": "a bug and it's why most financial institutions can't operate on today's public rails. Canton Network is different. It's the only public permissionless layer one blockchain built with privacy at its core sharing"
  },
  {
    "speaker": "Speaker 1",
    "text": "data only on a need-to-know basis."
  },
  {
    "speaker": "Speaker 1",
    "text": "[music] That's why Goldman Sachs, Nasdaq, and Broadridge are already building on the network. Only Canton delivers the network effects of a public chain with the privacy and control real finance"
  },
  {
    "speaker": "Speaker 1",
    "text": "demands. Learn more about Canton by following the link in today's show notes."
  },
  {
    "speaker": "Speaker 1",
    "text": "Okay, let's let's do it. Let's go to the let's go to the bull case here and I I here's here's my number one point and I'm it's actually what the one of the big bull cases from my perspective and I"
  },
  {
    "speaker": "Speaker 1",
    "text": "think something that Hyperliquid what has benefited from is it's not just an exchange as a platform and um I mean it gets more of I think Hyperliquid gets more of an L1 you know, style valuation uh almost than"
  },
  {
    "speaker": "Speaker 1",
    "text": "anything else. Um and I'm curious like a bull case from my perspective for Hyperliquid is you know, it find it makes the transition from being a perp decks towards uh you know, something which is more of"
  },
  {
    "speaker": "Speaker 1",
    "text": "an actual genuine platform. And to your point Dave, I think there are really great uh like Blockwork, we work with Hyperliquid and um you know, who's a great team building on uh Hyperliquid I"
  },
  {
    "speaker": "Speaker 1",
    "text": "think. Um and they're definitely I think you are starting to see the beginnings of a real ecosystem, but I think in the same way that you know, even if you were to decompose uh you know, Coinbase's earnings like"
  },
  {
    "speaker": "Speaker 1",
    "text": "they're they get a heavy discount on their very transactional on their um transactions-based revenue, but they've built this um it's kind of it's they they bundle everything into services and"
  },
  {
    "speaker": "Speaker 1",
    "text": "subscription which is kind of their you know, blockchain reward like their staking their share of USDC, uh their subscription Coinbase One, that type of stuff. So I feel like if the part of the"
  },
  {
    "speaker": "Speaker 1",
    "text": "bull case for Hyperliquid is if you can grow um some of the steadier, less sick cyclical, more recurring platform-based revenue. Um that would be a big bull case for me."
  },
  {
    "speaker": "Speaker 3",
    "text": "I have a list >> [laughter] >> for my bull case for Hyperliquid. Um so just just briefly. So yeah, I think as mentioned before, the fact that now, you know, the majority of the major pairs"
  },
  {
    "speaker": "Speaker 3",
    "text": "are actually outside of crypto pairs themselves in commodities and equities etc. For me they're already expanding the TAM in real time and it's really exciting. They're now at 309 pairs. This"
  },
  {
    "speaker": "Speaker 3",
    "text": "could be off uh you know, give or take, but that's a lot of pairs they have now that have been actively traded and you know, if the majority of these pairs aren't in crypto, I think this is very"
  },
  {
    "speaker": "Speaker 3",
    "text": "exciting and in that case, I do think they're actually able to compete with something like CME or ICE etc. And the valuations of those exchanges are at kind of 80 or 90 billion. And so if"
  },
  {
    "speaker": "Speaker 3",
    "text": "Hyperliquid keeps growing, expanding the TAM, the regulatory window is also opening, you know, the CFTC is maybe allowing perps in the US and like sort of fostering that sort of innovation now"
  },
  {
    "speaker": "Speaker 3",
    "text": "which they haven't really been doing before. And of course, Hyperliquid has hired Jake who's very well known in the space for talking with regulators etc."
  },
  {
    "speaker": "Speaker 3",
    "text": "And so I think the timing and positioning on the regulatory side of Hyperliquid they could be getting very very right. Again, they've already had one amazing period of timing and I think"
  },
  {
    "speaker": "Speaker 3",
    "text": "they could be entering another amazing period of timing with macro uncertainty, more markets, more trading, regulatory windows opening, you know, commodities now being allowed to be traded on in the"
  },
  {
    "speaker": "Speaker 3",
    "text": "US etc. I think again really great timing for for Hyperliquid. The other side I do think as a bull case for Hyperliquid is also like HIP-4 as a new uh economic sort of model or business"
  },
  {
    "speaker": "Speaker 3",
    "text": "model for Hyperliquid itself expanding their business lines, you know, not just having HIP-3 markets, but also HIP-4 uh different outcome markets, you know, expanding into prediction markets etc. I"
  },
  {
    "speaker": "Speaker 3",
    "text": "think having multiple revenue lines is super smart. Um I also think in general, you know, as we go in an era of AI agents and AI and being able to replicate these exchanges, anyone now"
  },
  {
    "speaker": "Speaker 3",
    "text": "can use AI to like build an exchange, but what Hyperliquid has now is you know, the structural moats I think around traders, liquidity, pairs, regulators, compliance probably in future as well. Like I think they're"
  },
  {
    "speaker": "Speaker 3",
    "text": "going to be very very hard to displace as as the number one sort of player in this field and and I just think in general they've got so much right and I think that that it will continue going"
  },
  {
    "speaker": "Speaker 3",
    "text": "right for them. I have a bear case as well of course that we can crack into after."
  },
  {
    "speaker": "Speaker 3",
    "text": "I don't know if you want to finish the bull cases, but I think they're set up right now really well and I'm actually quite excited for the ecosystem in the next few years."
  },
  {
    "speaker": "Speaker 1",
    "text": "I'm going to add so I agree with all of that. Um and I would maybe add to some of the uh you know, you brought up the regulation and timing and you know, I think one thing you know, to go back to what Hyperliquid"
  },
  {
    "speaker": "Speaker 1",
    "text": "got right, I think it's you know, not to beat up on dYdX here, but I think they it's very interesting they kind of took the inverse, right? I mean they had some of the same thinking."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um but it's funny it like remember you guys remember when Hyperliquid launched and there was a debate is it an L1 or an L3?"
  },
  {
    "speaker": "Speaker 1",
    "text": "I don't like wow, crazy era of crypto."
  },
  {
    "speaker": "Speaker 1",
    "text": "Remember that debate? Um but it is funny they did they did ask you to bridge, you know, from Arbitrum and actually part of the benefit there is it you know, you got to siphon off a lot of the liquidity"
  },
  {
    "speaker": "Speaker 1",
    "text": "on ETH main chain, right? Um through the Arbitrum bridge. Um which is very different from how Antonio was thinking about it. Um and he was totally fine with centralization. Um and I think actually every every founder"
  },
  {
    "speaker": "Speaker 1",
    "text": "every exchange founder has to take some degree of real risk um and Jeff has done that here. Like CZ obviously did that."
  },
  {
    "speaker": "Speaker 1",
    "text": "Uh Jeff did that. Um and there's some amount of that that's required to be successful. But it seems like we're entering an era where I mean you see Mike Selig uh of the CFTC and Paul Atkins of the SEC saying, \"We are"
  },
  {
    "speaker": "Speaker 1",
    "text": "going to reform our you know, regulatory bodies here.\" We're First of all, they're they're coming coming closer together. There's talks of them working in the same building and I think the the"
  },
  {
    "speaker": "Speaker 1",
    "text": "the message that they're clearly sending to markets is like \"This is a different regime. We are not going to punish you for innovation. We need innovation in finance.\" and Hyperliquid is just far"
  },
  {
    "speaker": "Speaker 1",
    "text": "better set up to deliver on that, you know, based on their where they are in their company life cycle, the size of their team, like the time has never been better for a company that's set up to"
  },
  {
    "speaker": "Speaker 1",
    "text": "push the bounds. I also would say you know, we've talked about this is going to get into like a bear case argument as well, but you know, I caught up with Jake Chervinsky who's now leading the"
  },
  {
    "speaker": "Speaker 1",
    "text": "Hyperliquid Policy Center. What a great what a great play from I think it's recognition of if you want to seat at the big boy table, you have to be advocating yourself in for in DC and"
  },
  {
    "speaker": "Speaker 1",
    "text": "there's just no one better to do that than Jake Chervinsky. Um so really baller move I think from both Jeff and Jake um and I think that's a big um tick in the pro category. I also think"
  },
  {
    "speaker": "Speaker 1",
    "text": "um you know, it's very interesting. I know that these are technically different and some you know, our analysts would yell at me if they were on this podcast, but you know, when I look at the architecture of how"
  },
  {
    "speaker": "Speaker 1",
    "text": "Hyperliquid is developing in Solana like if you look at um prop AMMs on Solana and the combination of HIP-3 and HIP-4 on Hyperliquid, it's kind of actually going towards the same thing which is actually in a sense these"
  },
  {
    "speaker": "Speaker 1",
    "text": "platforms look more like I mean in in traditional finance, right? You have the very discrete separation of the exchange and the broker and the brokerage. And it feels like a Hyperliquid is actually"
  },
  {
    "speaker": "Speaker 1",
    "text": "moving towards that, right? With builder codes and allowing anyone to deploy um and trying to increase, you know, the overall revenue and um and fees that they're generating at the"
  },
  {
    "speaker": "Speaker 1",
    "text": "detriment of their margin. Um but it seems like that's happening at the same time kind of something similar is happening on Solana with ACE plus prop AMMs, right? It's the same thing. It's"
  },
  {
    "speaker": "Speaker 1",
    "text": "kind of like a bring your own exchange type thing with you know, the underlying layer being the internalizer."
  },
  {
    "speaker": "Speaker 2",
    "text": "Yeah. That that's kind of what I was going to add too. Like my bull case for them is that they're um there are three potential outcomes that are massive. Uh one is like the ICE play"
  },
  {
    "speaker": "Speaker 2",
    "text": "where you're you're you may even have like a collection of order books that um many different brokerages all tap into for different asset classes, right?"
  },
  {
    "speaker": "Speaker 2",
    "text": "Second is that there's more like just trying to replace Binance which I do think could happen which is like an alt exchange plus brokerage plus sort of you know, mini apps or And then the last is"
  },
  {
    "speaker": "Speaker 2",
    "text": "like Solana just head on, right?"
  },
  {
    "speaker": "Speaker 2",
    "text": "Developer platform general purpose."
  },
  {
    "speaker": "Speaker 2",
    "text": "I lean towards the first two for them as like more likely and what I would be betting on. Um but I don't know if they want to own the interface forever and if that really matters. My sense is that"
  },
  {
    "speaker": "Speaker 2",
    "text": "the interface that they built is a big part of their success. Um that they likely don't want to lose that, but you know, meaning like they there there is a world where you can trade on Hyperliquid from"
  },
  {
    "speaker": "Speaker 2",
    "text": "Robinhood, right?"
  },
  {
    "speaker": "Speaker 2",
    "text": "Um, in the next 2 to 3 years, very very easily."
  },
  {
    "speaker": "Speaker 2",
    "text": "And that may not, you know, seem like realistic today cuz it we almost like implying that they're heading towards a collision course and they're competitive, but if they do decide to"
  },
  {
    "speaker": "Speaker 2",
    "text": "be, you know, ice, then yeah, like that Robinhood routes trades to nicey, right?"
  },
  {
    "speaker": "Speaker 2",
    "text": "Robinhood is not an exchange. Um, so yeah, so the bull case is that there's a bunch of different very bullish outcomes for them and I do think that they're like probably heading on the right path"
  },
  {
    "speaker": "Speaker 3",
    "text": "towards one of the first two. Yeah. Um, I am keen to move onto the bear case as well because I think um, the bear case isn't talked about enough. Uh, yeah, so I think in general when I think about"
  },
  {
    "speaker": "Speaker 3",
    "text": "the bear case for Hyperliquid, they're mainly around risks which I think are like very prevalent still. We've spoken about a bit on this podcast already, but like because Hyperliquid is still centralized"
  },
  {
    "speaker": "Speaker 3",
    "text": "to the most part, there is still some governance risk there which we saw with FTX of course having centralized control and making the wrong decisions at the wrong time and we've talked about it in this"
  },
  {
    "speaker": "Speaker 3",
    "text": "podcast already, you know, kind of internal market making in different markets and how you make people whole and stuff like that. They're all decisions that need to be made at the top. Hyperliquid is a small team as"
  },
  {
    "speaker": "Speaker 3",
    "text": "well, so like you just have to hope that they're all aligned on the decisions being made and you know, they have great bureaucracy within the company, but that for me is like a risk at some stage if"
  },
  {
    "speaker": "Speaker 3",
    "text": "something did happen to that regard that could be a you know, a major downfall for Hyperliquid. The other risk I see is also sort of even just smart contract risk. Uh, again, a lot of Hyperliquid is"
  },
  {
    "speaker": "Speaker 3",
    "text": "closed source which we we haven't actually spoken about in this podcast yet, but something could go wrong with the exchange and people might not know how to solve it or fix it. I just mentioned"
  },
  {
    "speaker": "Speaker 3",
    "text": "the Hyperliquid team is is very small and maybe they don't know how to fix it themselves and this could be like pretty catastrophic. So I think you have to take this risk into consideration as"
  },
  {
    "speaker": "Speaker 3",
    "text": "well. The next risk is actually on the other side of regulatory is that the regulatory goes the other way and we go into another election and they want to regulate all this stuff and Hyperliquid"
  },
  {
    "speaker": "Speaker 3",
    "text": "starts doing really well and they're like, well actually we want to bring this back to centralized players that we can regulate in a way that we understand and take it back to the old school. So I"
  },
  {
    "speaker": "Speaker 3",
    "text": "think that risk still exists today and probably the crypto space doesn't talk about it enough."
  },
  {
    "speaker": "Speaker 3",
    "text": "The fourth risk I'm going to mention is economic risk. So again, we haven't spoken about it, but I think many in the Hyperliquid community do speak about it is the token unlock math and I've lost"
  },
  {
    "speaker": "Speaker 3",
    "text": "the numbers here, but it's something in the hundreds of millions in unlocks that will come out at some stage of Hyperliquid team and other people that are connected to the foundation etc."
  },
  {
    "speaker": "Speaker 3",
    "text": "That will be selling into the market and I think sell pressure of hype itself is something we haven't seen very much of yet or recently. There there was some sell pressure at some stage and they"
  },
  {
    "speaker": "Speaker 3",
    "text": "actually reduced the amount of tokens they were releasing into the market probably cuz they're still in a stage of growth and they want to continue having positive sentiment, but I think if the"
  },
  {
    "speaker": "Speaker 3",
    "text": "community starts becoming unhappy with these token unlocks and you know, being dumped on by the team as other perp exchanges have done in the past, I think that could be a a negative sort of thing"
  },
  {
    "speaker": "Speaker 3",
    "text": "that happens to the team and therefore the token. Uh, the next two I think are risks. One is competition risk. I actually think this is lower than the other risks I mentioned. I don't think"
  },
  {
    "speaker": "Speaker 3",
    "text": "that there's going to be a competitor that pops up that actually does very well against hype. You've seen lighter already try and drive fees to zero and still not be able to compete and they're"
  },
  {
    "speaker": "Speaker 3",
    "text": "backed by some major players. I think that's a really good signal showing you that like Hyperliquid is here to stay."
  },
  {
    "speaker": "Speaker 3",
    "text": "However, I do think Hyperliquid has this matching engine which is just the best in the space right now and it's been the best for like a long time. And there's a question of like does that matching"
  },
  {
    "speaker": "Speaker 3",
    "text": "engine become a commodity at some stage even if it's closed source and you can't really work out right now how it works."
  },
  {
    "speaker": "Speaker 3",
    "text": "Like with any era of AI, can another team do it even faster and even better and get even more traders involved? And I think that's still something that's very possible to happen in the long"
  },
  {
    "speaker": "Speaker 3",
    "text": "term. I don't think it's going to happen in the short term, but I could see it potentially commoditizing in the long term. So that's my counter. But I would say just to finish, right now I'm"
  },
  {
    "speaker": "Speaker 3",
    "text": "leaning much more bullish in the short to mid term and in the long term obviously anything can happen, so who knows."
  },
  {
    "speaker": "Speaker 2",
    "text": "Yeah, and if you had to like pick in the bear case if they'd be disrupted from like an incumbent or like or discarded by incumbents versus like an upstart, do you lean one way or the"
  },
  {
    "speaker": "Speaker 3",
    "text": "other there?"
  },
  {
    "speaker": "Speaker 3",
    "text": "I think it's going to be really hard for an incumbent to disrupt Hyperliquid. I could see a startup, you know, someone like Jeff who's like an amazing trader with a small lean team in the era of AI"
  },
  {
    "speaker": "Speaker 3",
    "text": "just come out and pump out a product that's like somehow even better at matching, even better UX, maybe agentic facing. I think that's not out of the question. I it's obviously cool to see"
  },
  {
    "speaker": "Speaker 3",
    "text": "incumbents moving in the space like Kraken etc., but I think it's still it's it still feels very crypto native to me this this kind of product and I feel like for a while that's going to be"
  },
  {
    "speaker": "Speaker 3",
    "text": "the case. So maybe long term they could come in, but short I think it's more solid risk to Hyperliquid. I have um, I actually forgot one of the I think most interesting bull cases, but"
  },
  {
    "speaker": "Speaker 1",
    "text": "we'll leave it we'll leave it towards the end. Um, on the bear case side of things, I actually I mean one, this isn't a long-term bear case. It's a short-term bear case. We're talking about this"
  },
  {
    "speaker": "Speaker 1",
    "text": "before the episode. I think the danger for Hyperliquid the token at the moment is just how overlaid all overweight all the liquid funds are. So retail is completely dried up in terms of flows in crypto. There's"
  },
  {
    "speaker": "Speaker 1",
    "text": "just no retail action at all and what's driving price action right now is the ETFs for the majors and then the liquid funds. And [clears throat] the problem is the liquid funds already own all own"
  },
  {
    "speaker": "Speaker 1",
    "text": "Hyperliquid. So there's no one left to buy is kind of the the feeling that at least They were going to launch a DAT if you remember."
  },
  {
    "speaker": "Speaker 1",
    "text": "There was uh Bob Diamond, did that actually happen?"
  },
  {
    "speaker": "Speaker 1",
    "text": "There is a there is a Hyperliquid DAT."
  },
  {
    "speaker": "Speaker 1",
    "text": "At least one. At least one, yeah. Um, so yeah, I mean it's possible."
  },
  {
    "speaker": "Speaker 1",
    "text": "Right? Like I mean I could see a DAT with an asset that people actually want to own driving net flows. I mean that's definitely happened with Bitcoin and Michael Saylor and strategy."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, but for the most part from a positioning standpoint, it just feels like everything's overweight and then that positive reinforcement loop uh, Zay that you talked about at the start of the episode which I very much"
  },
  {
    "speaker": "Speaker 1",
    "text": "buy into, you know, that could go into negative for at least a little bit um, I think. Um, there's also a I mean this is something where I know Zay you and I end up debating this a good"
  },
  {
    "speaker": "Speaker 1",
    "text": "amount, but I am you know, the the other thing about the I I tend to think so that everything exchange, everyone is going after this idea and it's a very crowded, very well-funded space with"
  },
  {
    "speaker": "Speaker 1",
    "text": "many competent teams that are pursuing this vision."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, and it's just crowded."
  },
  {
    "speaker": "Speaker 1",
    "text": "I think the Hyperliquid team is incredible, but the competition is extremely fierce."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, and I don't know, same like similar thing with Netflix, right? When you had a bunch of streamers like Netflix has continued to do well, but you know, it's tough to continue to grow market share"
  },
  {
    "speaker": "Speaker 1",
    "text": "when Disney and Paramount and Amazon and Apple and everyone are launching really great content, really great shows."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, so I think it's just going to be a very crowded space."
  },
  {
    "speaker": "Speaker 1",
    "text": "One thing that I sometimes struggle with in my own mind is, you know, I imagine the I also don't know the Hyperliquid team that well, but I just imagine what does that founding team of around 11 people"
  },
  {
    "speaker": "Speaker 1",
    "text": "look like? And I know people have the example of Tether here. Um, and in some senses, man, you you you love to just root for and there's so many advantages to being a small and scrappy startup. There are"
  },
  {
    "speaker": "Speaker 1",
    "text": "also lots of advantages to I imagine the executive team at Coinbase or Robinhood and you know, you've gone through many more ups and downs and you also have a one big advantage which is you have a"
  },
  {
    "speaker": "Speaker 1",
    "text": "really great understanding of that you should, right? To have gotten there. You have a good understanding of how to allocate capital."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, and at the end of the day, I think this is going to come down to like like yes, the technology is important. I think it this is especially at the at the where exchanges are, I think it"
  },
  {
    "speaker": "Speaker 1",
    "text": "really comes down to your ability to um, onboard new customers and distribution."
  },
  {
    "speaker": "Speaker 1",
    "text": "So that's I think the the the real advantage here that like the Coinbases and the Robinhoods have over the hyperliquids is what it seems to me."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, so I think that would be the uh, I agree with Zay your list of bear cases. Like the honestly, it's a big risk for kind of all of crypto. People aren't really talking about this that"
  },
  {
    "speaker": "Speaker 1",
    "text": "much, but you know, the house is going to go back to the Dems, the Senate."
  },
  {
    "speaker": "Speaker 1",
    "text": "Now it looks like it's neck and neck."
  },
  {
    "speaker": "Speaker 1",
    "text": "It's about 50/50 the odds on Polymarket."
  },
  {
    "speaker": "Speaker 1",
    "text": "So yeah, that could be um, that could be challenging as well, but I I tend to my prediction for hyper I think Hyperliquid has firmly made it."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, they're they're in the echelon of projects that I think are just going to be around and serious and very successful for a long time. Um, but I also I I think between unlocks from, you"
  },
  {
    "speaker": "Speaker 1",
    "text": "know, existing employees and overweight position of liquid fund managers, I think it has the potential to be a a tougher year for them."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, that would just be my that'd be my guess. But I but I'm 100% in the long-term bull camp as well."
  },
  {
    "speaker": "Speaker 2",
    "text": ">> Or you do what we talked about last week which is like going and finding the Blackrocks and the, you know, the big the big guys of the world just to take like buy secondaries essentially. Well,"
  },
  {
    "speaker": "Speaker 1",
    "text": "one of the interesting things too, I mean in HIP 4, right? Like one of the things that wasn't really possible is these binary contracts, but that will be possible in HIP 4. So they could"
  },
  {
    "speaker": "Speaker 1",
    "text": "actually start to win some of the underlying like they could start to catch a piece of the prediction market stuff as well."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um, I think they will. I think it's pretty clear they actually will a big chance of doing that. I have um, one bull case maybe to end on that we didn't talk about, but you know, it's really"
  },
  {
    "speaker": "Speaker 1",
    "text": "funny to see. I mean, if you watch you listen to all of the um, you know, the kind of arguments that have come out of the Ethereum ecosystem for why financial institutions are going to choose ETH,"
  },
  {
    "speaker": "Speaker 1",
    "text": "it's validator count, it's credible neutrality, all this stuff. You know what they really like? Is that it's 24/7. And you know, it occurs to me. I think this will look really obvious in"
  },
  {
    "speaker": "Speaker 1",
    "text": "hindsight that Hyperliquid is just 24/7 and you can easily there's going to be some guy with gray hair saying, you can already trade FX 24/7. It's like, yeah, but not not everyone and it's not as easy"
  },
  {
    "speaker": "Speaker 1",
    "text": "and Hyperliquid being 24/7 from the get-go. I mean, if you literally just think about it, there's 7 days a week to generate trading revenue. If you're open on the weekends, I mean,"
  },
  {
    "speaker": "Speaker 1",
    "text": "that's a you know, 20 30% increase, right? Like in your in your it's not it's not a small thing. So, I think that is um I think that's actually is going to end up as small and simple as that is. I"
  },
  {
    "speaker": "Speaker 2",
    "text": "think the 24/7 nature from day one is going to take the incumbents forever to unlock compete with that. And just getting like the HFT like power users of CME on the weekdays to trade out trade"
  },
  {
    "speaker": "Speaker 1",
    "text": "on Hyperliquid on the weekends like some massive chunk of revenue and that itself could be like what it all it needs for the next year. I think that could be all it needs."
  },
  {
    "speaker": "Speaker 1",
    "text": "It's a huge part like weird like the 24/7 thing is just so I mean, even I was um you know, I was reading this thread over the weekend on you know, what's under the hood of you know, some I I think so"
  },
  {
    "speaker": "Speaker 1",
    "text": "these these crypto banks, Silvergate and Signature had these, you know, theoretically 24/7 then they're like, what was it really? Or is it kind of USDC? It was like a fancy wrapper on top"
  },
  {
    "speaker": "Speaker 1",
    "text": "of USDC and I think that's just a huge part of the killer feature of you know, I had an interesting conversation about a year ago with a really large delta neutral fund manager. It's kind of"
  },
  {
    "speaker": "Speaker 1",
    "text": "asking him, why do people keep money in you know, no shade on Ave, but Ave at this time is yielding like 3% and it's below treasuries. So, it's like, why why does anyone do that, right? Like, why do you"
  },
  {
    "speaker": "Speaker 1",
    "text": "lend on Ave if you could get to It's like, you're overthinking it."
  },
  {
    "speaker": "Speaker 1",
    "text": "You know, for them, you know, if they're moving a bunch of money around and they're trading 24/7 like having your money tied up in treasuries over the weekend where you can't move it is its"
  },
  {
    "speaker": "Speaker 1",
    "text": "own type of risk and actually the risk outweighs one, the revenue that you can generate over the weekend, but two, if your money's locked up on a bank and you need to top up your collateral, you"
  },
  {
    "speaker": "Speaker 1",
    "text": "can't do it."
  },
  {
    "speaker": "Speaker 1",
    "text": "That's its own type of risk. And so, I think this is one of those things maybe to conclude like yeah, Hyperliquid is the um first of all, the result of excellent decision-making, great timing,"
  },
  {
    "speaker": "Speaker 1",
    "text": "um kind of the definition of second or even third mover advantage and having seen what worked and what didn't work. Um and kind of the culmination of the stuff that the market has proven"
  },
  {
    "speaker": "Speaker 1",
    "text": "that it cares about and likes about crypto."
  },
  {
    "speaker": "Speaker 1",
    "text": "24/7 to in some areas more permissionless."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um but some areas are just permissioned and managed and that's what the market wants. Um and it just took us a while to figure that out. So, Yeah, they nailed like the revealed preferences of you know, the market that"
  },
  {
    "speaker": "Speaker 2",
    "text": "they went after basically. It hasn't changed. It's not like anybody's like, oh, can we get more validators in there or like, can they get some more sub dials to like decentralize operations? No. Who"
  },
  {
    "speaker": "Speaker 1",
    "text": "gives a [ __ ] So, unless what Xavier you said ends up being true. Can we at least do some kind of prediction here for like like, where do we think, you know, we're having this podcast a year from now, how"
  },
  {
    "speaker": "Speaker 1",
    "text": "are things going to fare with Hyperliquid from the standpoint of adoption?"
  },
  {
    "speaker": "Speaker 3",
    "text": "Um not financial advice, do your own research, you know, like if you had to guess where things end up. I mean, it's for me it's very clear it's going to keep growing in the next 12 months at"
  },
  {
    "speaker": "Speaker 3",
    "text": "least. I don't know about 36 48 months, but I'm also not a trader, but if I had to look at the macro of the setup, I think it's well set up to grow in the next 12 months and it's already been"
  },
  {
    "speaker": "Speaker 3",
    "text": "proven to be growing right now even in the face of more competition. So, I'm I'm quite bullish on growth there for the next 12 months."
  },
  {
    "speaker": "Speaker 3",
    "text": "Flat."
  },
  {
    "speaker": "Speaker 2",
    "text": ">> [laughter] >> That's really brave, Miles."
  },
  {
    "speaker": "Speaker 2",
    "text": "I mean, I don't know if it'll end up back up in this spot next year or it'll go up and it'll end up back. I I really have no idea. And like three or four years, I think you can probably"
  },
  {
    "speaker": "Speaker 2",
    "text": "like what will make or break you know, six sets here and what's what's important, but yeah, I think I think it's They are doing tons of buybacks, so it's not going to go down that much unless there's a black swan"
  },
  {
    "speaker": "Speaker 2",
    "text": "event like you said. Same."
  },
  {
    "speaker": "Speaker 1",
    "text": "I have a my prediction would be I think actually Hyperliquid does well for the first half of the year, continues to outperform and its fundamentals and metrics continue to do well in the last half of"
  },
  {
    "speaker": "Speaker 1",
    "text": "the year, but price will come under pressure. And this is literally just the inescapable dynamic of I think in bear markets, the liquid funds that set price hide out in assets that you can super"
  },
  {
    "speaker": "Speaker 1",
    "text": "easily justify, but then when risk comes back on, you know, maybe there's a little gaming token that's looking good and maybe there's a little like what and I think you just move out the curve."
  },
  {
    "speaker": "Speaker 2",
    "text": "And saying flat."
  },
  {
    "speaker": "Speaker 1",
    "text": ">> [laughter] >> I think No, I think it'll I think it'll be up, but I think I I would reverse your order. I don't think it goes down then up, but I think it goes up and then um flat and frustrates and confuses"
  },
  {
    "speaker": "Speaker 1",
    "text": "people."
  },
  {
    "speaker": "Speaker 1",
    "text": "Cuz that's the story of crypto, right?"
  },
  {
    "speaker": "Speaker 1",
    "text": "It's like the people are often confused at why is the price moving now and it tends to way precede fundamentals and like you look at there are many crypto businesses out there that the"
  },
  {
    "speaker": "Speaker 1",
    "text": "fundamentals are improving, but the prices aren't. And you have to remember like the token dynamics um and price are sometimes not related or loosely correlated or there are different"
  },
  {
    "speaker": "Speaker 1",
    "text": "dynamics acting on it than just like are the fundamentals improving."
  },
  {
    "speaker": "Speaker 3",
    "text": "I mean, my counter to that, Mike, would be if you're a liquid fund and Hyperliquid has been performing the best in your portfolio and then you liquidate that to move into meme coins or"
  },
  {
    "speaker": "Speaker 3",
    "text": "something, how do you reason about that to LPs? And then when you start performing badly on the more riskier assets, I think they're always going to want to hold they're always going to"
  },
  {
    "speaker": "Speaker 3",
    "text": "want hype in their portfolio because it's a kind of base case of like if they want to take more risk, Hyperliquid is that one asset they can rely on and count on even VC funds in the past used"
  },
  {
    "speaker": "Speaker 3",
    "text": "to have liquid sleeves and back in the day they might be buying Bitcoin or Solana. I think if a VC fund went live today like they'd be buying Hyperliquid as a like kind of very very uh solid"
  },
  {
    "speaker": "Speaker 3",
    "text": "asset they'll have in the portfolio that will keep going up and I think liquid funds are the same where like I just think it makes sense. Even if they take more risk like a VC does in startups"
  },
  {
    "speaker": "Speaker 3",
    "text": "like it's that one asset that everyone's going to hold. So, I take the counter. I think it's still going to be okay, but let's see. Could be proven wrong."
  },
  {
    "speaker": "Speaker 1",
    "text": "I'm not saying it won't be okay. I think I just pattern matching to you know, what I've I think it's you know, I mean, it's arguably the best performing protocol or like you know, kind of DEX DeFi type product"
  },
  {
    "speaker": "Speaker 3",
    "text": "out there, right?"
  },
  {
    "speaker": "Speaker 3",
    "text": ">> Another another point I'll actually make cuz I think it's actually interesting to talk about. If you look at like the universe of investable assets right now in crypto like for even mega VC funds,"
  },
  {
    "speaker": "Speaker 3",
    "text": "if you think about it, like what if you raise 400 million, where do you put that in startups right now? There's not enough projects to put the money. So like again, another bull for Hyperliquid"
  },
  {
    "speaker": "Speaker 3",
    "text": "this year would be mega VC funds even and or liquid funds continuing to plow money into this cuz it's already working and and the universe of investable assets is somewhat shrinking in in real"
  },
  {
    "speaker": "Speaker 3",
    "text": "time. So, maybe actually we're underestimating this happening in the space in the next 12-18 months if people look for a place to put it, but can't find anything."
  },
  {
    "speaker": "Speaker 1",
    "text": "You know, I was I was speaking to a growth equity investor this week who actually, you know, was mentioning that even though there's a bear phrase or bear phase that we're going through right now,"
  },
  {
    "speaker": "Speaker 1",
    "text": "valuations for some of the hot private markets haven't really come down or rationalized that much."
  },
  {
    "speaker": "Speaker 1",
    "text": "And it's a question of are they actually going to? And that fit I mean, I think there's been so much just like capital fracturing. I mean, even on the macro side like AI is mugging crypto at"
  },
  {
    "speaker": "Speaker 1",
    "text": "the moment, right? Like we're just not winning hearts and minds."
  },
  {
    "speaker": "Speaker 1",
    "text": "Um and I think crypto's absolutely going through going to go through a a period of consolidation here, right? Like you know, this like when people would say on the that side of things we have a capital access"
  },
  {
    "speaker": "Speaker 1",
    "text": "problem, we don't. We have an asset quality problem and I think that you just need a certain amount of time. So, yeah, actually, Zev, I'm externally processing, but I can see I think"
  },
  {
    "speaker": "Speaker 1",
    "text": "consolidation is going to happen and yeah, I could see hype um Hyperliquid attracting and winning a bunch of that those consolidating flows."
  },
  {
    "speaker": "Speaker 1",
    "text": "I could see it."
  },
  {
    "speaker": "Speaker 1",
    "text": "All right, guys. Well, audience, we'll leave it up to you. Maybe we'll talk about this live again. DAS a week and a half."
  },
  {
    "speaker": "Speaker 1",
    "text": "Hope to see you all there."
  },
  {
    "speaker": "Speaker 1",
    "text": "If you are a procrastinator like me, seriously, ticket prices are going up like 300 bucks on after Friday and we'll probably sell out by like Monday or Tuesday latest. So, get your tickets,"
  },
  {
    "speaker": "Speaker 1",
    "text": "come see the three of us and it'll be a ton of fun."
  },
  {
    "speaker": "Speaker 1",
    "text": "King guys."
  },
  {
    "speaker": "Speaker 1",
    "text": "Excited. Bye, guys."
  },
  {
    "speaker": "Speaker 1",
    "text": "Yeah."
  }
]