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A | Yeah. And it, it solves a problem. That's a different problem, which is, like, when I go on to optimism or arbitrum or, like, I look at my wallet and I'm like, eth, but like, the optimism logo and then eth, but the arbitrum logo and, like, so, so, like, what you, if you there can't be, like, lido eth on blast, it just ... |
B | It's table stakes for all layer twos. I actually think you just hit on a super important point. This is not my observation. This was John Sharp's observation, which I'll give him the credit for the initial observation, and then I want to abstain from any incorrect conclusions that I draw from it, but basically, basical... |
A | Yeah, I agree with that. And that's why I have staked. I have lido staked eth on optimism inside aave. And so I have aave wrapped staked eth. Optimism wrapped aave staked eth. That's the derivative set that I have. |
B | That just feels a little bit more complicated than just as soon as I. As soon as I get up there, I'm immediately earning yield, and it just feels like. I don't even know. I think we'll see. I just. I don't know. But it was a novel strategy that other protocols weren't doing at the time that clearly allowed him to attra... |
A | I'm just skeptical as to how, because a ton of eth went into blast, and blast had the. We have native eth yielding eth on our layer two, which doesn't exist. Uh, and then also the. The point farms, right? Also the token air drops. And, like, everyone is ascribing a ton of legitimacy to, like, blast new, innovative stra... |
B | David, let me ask you a question. Uh, all of this interest in Eigen Lair, how much of it do you think is the demand is coming from yield from Abs's versus farming Eigen layer points. |
A | Okay. Eigen Lair had hype before the point farm. |
B | I agree. I agree. |
A | But then the point farm amplify. |
B | I think a lot of people are in there for the point, so. Yeah, and that's the hope of this whole thing, right? It's like you the value proposition to someone that is yoloing into Eigen Lair. Because, look, Eigen layer, the team is phenomenal, but there is eventually going to be slashing risks. There is smart contract ri... |
A | Yeah, I judge ecosystems by their ability to nerds night people into crypto. So, like, bitcoin won because it nerdsniped, like, the digital gold bugs, and, like, gave them a banner to, like, rally under. And then Ethereum nerd sniped a certain set of people, and that was sufficiently large to create the ethereum ecosys... |
B | Yeah, I'm with you on that, too. One maybe dimension that I would add to what's driving a lot of the Eigen lair buzz. And this flywheel that's kicking in for them is as much as it is an economic security play, where if you're either a cosmos chain or an AV's, and you do not want to pay an enormous amount of emissions t... |
A | Interesting. A growth story, right? |
B | That's what I mean, yeah, I think that's the meta that. That a lot of these AVss are you. That these abs are playing. It's like I could either launch this weird, obscure middleware thing that no one's going to care about, or I can catapult myself into this narrative spotlight and $7 billion worth of each eth, which is ... |
A | Yeah. Yeah. Well, that's kind of like the bullish element of shared security is that it actually costs very little to get a lot of security. Right? |
B | Yeah. |
A | And there's, like, economies of scale here. The more avss that are providing, like, some minor amount of yield to the entire system, more like a leveraged amount of capital comes into that because of how free that yield is. It's free yield. Free yield, baby. |
B | It is real. Yeah. You're just opting in to this incremental additional yield, which is. Feels like a win win, right? |
A | Yeah. And so is what you're saying is like, there's like a. Just a lot of pent up potential energy here between like the massive amount of ETH that's in Eigen layer that has nowhere to go except for these LRT projects who are also filling to the brim with ETH right now. And then all these AVss is like, there's no suppl... |
B | Attractive ton of capital to, you know, the hope is that some of those people end up being. They're trying to acquire some of the users from the people who have this ETH and they're also trying to put themselves in this kind of sexy spotlight and narrative. You know, I think that's. I think that's all a big part of it.... |
A | Can I, can I actually share something, Josh? I'm going to share my screen. Are you ready for me to share my screen? Josh is the operator. Bankless nation. All right, all right, all right. I'm going to share my screen a second. Here we go. Share screen. Here we go. Ready for this mic? |
B | I'm ready. |
A | Yuga Labs just acquired proof. |
B | Wow. Oh, no way. |
A | I did not see that coming. |
B | Wow. |
A | This is in the YouTube comments. |
B | Can you give us the background of that? I'm actually not as familiar with. That's Kevin Rose's. |
A | That's Kevin Roses. It's the moon birds thing, the proof collective. And so, yeah, apparently yuga Labs just acquired all of them. So I guess, yeah, the moonbirds collection is now part of Yuga Labs. Who owns bored apes, mutant apes, cryptopunks, me bits, all of these. All right, cool. |
B | Do you think, do you think without looking or cheating, do you think moonbirds goes up or down? The price of moon birds? Birds go up or down? |
A | Definitely up. Definitely up. A, it's a bull market. B, there's, it can't go down anymore. |
B | Yeah. God, you're right. You're right. All right. |
A | What were you gonna bring up? Unless you wanna keep going with that. |
B | Oh no. |
A | Where do you wanna go? |
B | I want to just get your thought on. Its such a cliche question, but just like where are we in this cycle here? Your mental framework for it? Do you wake up a lot of mornings feeling particularly euphoric and bulled up and excited? Maybe especially if you havent been in the space for a particularly long time and this is... |
A | I think we are further along in this bull market than what the typical newer entrants will give credit for. Yeah, I think I was reflecting upon my experience last bull market and last bull market. I thought I came in with a reference. It started in January of 2021 when ether pumped and hit new all time highs or hit 11,... |
B | Yeah, I was going to say about probably time wise, about. Yeah, halfway through. I was going to say fourth inning, but I think fourth inning is almost halfway through. Yeah. |
A | Because, you know, the forest, you know, we got the fourth. We're in the middle of the fourth. |
B | Yeah. You know, it's just funny because my experience was exactly yours. I have this really vivid memory of. Because Covid happened. That was the big thing that happened last time. Right. So it actually, at the end of 20, if you go back and look at the price action of 2019, you'd be, it looks good. It looks paper up on... |
A | Not until the very end. |
B | Yeah, not until very end. And. But then Covid happened and you were like, oh, my God, is this industry? I mean, bitcoin went down to 4000, and then it started to creep up. And I remember I didn't even really start paying attention to it until I went until it was at like 13 or 14. It was like, whoa, I have not seen bitc... |
A | Funds are deploying bigly. Valuations of startups have crept up a pretty meaningful amount, but nothing over the top, nothing like sloshy. |
B | Yeah. |
A | I haven't heard of funds raising, but I'm also just not tapped into that world because, like, we're done raising, so we're not, we're not doing that. We were like, one of the only funds to raise in. What year was that? 2022. 2023. |
B | You guys crushed it. |
A | Yeah, like, we were the only ones who could really, like, get away with it. I haven't heard of funds raising, so. No, but I wouldn't be the one. Cause, like, I'm not paying attention to funds. Like, I'm paying attention. Portfolio companies and funds are definitely deploying right now. Like, cash is being spit out and ... |
B | So you don't think the, the private markets and public, like, public market just being liquid tokens, I guess in crypto you think they're still walking relatively similarly, or is one crept up in front of the other? |
A | I think so. I've heard other people, I think I've heard Chris Berniski say that, like, private markets are starting to get, like, kind of crazy. And I've seen, I know what I see. What he's talking about, but I don't, wouldn't call it crazy person. It definitely knows more than me, but everything seems okay to me. Like ... |
B | Yeah, there I've heard. One way of thinking about it is you're a price taker, not a maker. You just got to find the best prices that exist out into the market, will tell you what the valuation is, and you just got to decide whether or not you want to take it. But you guys raised at a really opportune time because it's ... |
A | Totally. |
B | I don't know when. |
A | I think FTX actually painted an exemplar model of how everyone fails in a bull market, which is they started off conservative. They started doing like arbitrage, like free arbitrage trades between bitcoin and stable coins. And then over the bull market, they started to become more and more risk on with their trading st... |
B | I know. I mean, the other thing too, a couple other dynamics about this is there were a lot of funds last cycle, good funds that are still around, that went from $10 million in Aum to a billion dollars in Aum. And your universe of investable assets or opportunities is so much smaller when you have that size. And I watc... |
A | But I think there's like a lot of just like, ancient wisdom that people in Wall street know that, like, people in crypto definitely don't know. And just buying the fact that, like, sometimes we're in a bubble and so are they, and our bubbles don't mix. But it's not going to be me to bring that over here because I don't... |
B | No, I don't know it either, actually. You know, it's funny you. |
A | I mean, I feel like of all people, you do know it the most because you interview all the macro people. |
B | So a golden rule of this that I found interviewing macro people is that, you know how when you hear old macro, people talk about crypto and you're just like, oh my God, that's the most cringe take ever. You do not know what you're talking about. It goes the other way, too. And when you hear crypto, people talk about ma... |
A | I had no frame of reference for this. I remember a Jim Bianco tweet saying, the times have changed. I think maybe he used a term like paradigm shift. And I remember this tweet because it burned into my brain. I'm like, Jim Bianco, what do you mean by that? I don't get it. Why is the new phase of markets I don't underst... |
B | Yeah, I feel like it's always going to be something. I sort of am in the camp that I'm in the Chris camp of everything that goes up must come down. Crypto goes up so fast that it must come down. Although I do think that there's good reason to believe that it's not different this time. But here's a trend that's been hap... |
A | But I learned this from, I can't remember how press and maybe I need to get a second opinion on this. But his big idea was that as soon as we have sustainable, dependable flows, you get less volatility. I think that's just true of any financial asset. If you have sustainable flows, volatility goes down. Which would be ... |
B | 100%. Those arguments never held that much water with me. You hear people talk about, you know, we're never going to inject $7 trillion into the market again. That was as crazy as it's ever going to get. I think 2017 was crazier than 2020 and 2021. |
A | I can't. Without confidence. I think that's true. |
B | It felt crazier. It was. I remember looking at the price. I mean, that was also our first bull market, though. |
A | We had no frame. |
B | I know, but I think that it was just smaller. And the prices, dude, I just remember these things would go up, like, you know, 60, 70% a day, I guess maybe if I missed the whole NFT thing last time, which is maybe why I'm doubling down on it, but, yeah, I just, I don't know, equally crazy. And there's going to be someth... |
A | The people are saying that. |
B | Yeah, yeah. It's not as attractive to institutional audience as. As a bitcoin ETF is. What do you think? |
A | So I asked Sandy from Franklin Templeton about, like, my. My perspective on ether is that, like, it's a more attractive asset for Wall street. Surprise. The bankless guy thinks that ether is a more attractive asset, um, just because it's like a tech platform. It's like a platform technology play. And that just resonate... |
B | I think you're probably right about that, David. Yeah. |
A | And so, like, it doesn't, maybe I'm only like, right a little bit on the fact that, like, okay, Wall street likes it a little bit more because of the tech play, the DCF play. But also ETh is one third of the size of bitcoin, so liking it a little bit more for that reason. Like, you multiply that by three, because just ... |
B | I think that's going to be the ultimate driving thing, people. The crypto natives will debate what is EtH story? Is it a money or a tech platform? Is it yield or is it ultrasound money? You know what tradfi thinks? They don't give a shit. Yeah. They just need a story. It's like bitcoin. It's the next bitcoin. It's smal... |
A | Like they're already building baskets with bonds, equities, and bitcoin in there. They're already building the baskets. |
B | There you go. That's. And so there'll be a crypto basket. And how many times have you heard David from maybe someone who's on the older side who I don't really understand this. I just want to give me broad exposure. Like, I just want exposure, you know, they don't. So I just, I, I've never bought into that idea that it... |
A | Probably that that's going to. |
B | Yeah. So that's, and also, this is the time Solana really messed everyone up. You and I have talked about this before. The, the typical thing that happens during this point of the cycle is everything sells off. Bitcoin sells off the least. ETH is the second least. And then everything else is this kind of bucket. And th... |
A | Yeah, thats probably right. Thats probably right. Yeah. Theres a lot of things like that. Like the whole interest rates were hiking faster than all time, but the bull market was ending. We were trading text jpegs were time now. |
B | Yeah. Like how much longer do you think we would have gone if, even if the interest rate thing hadn't happened? |
A | It couldn't. It couldn't. Have been that much longer. |
B | I agree. What goes up must eventually come down, so. Yeah. |
A | All right, man. Should we call here? |
B | We can call it. Yeah. This was a lot of fun, buddy. I like these unscripted things. Yeah. I really like them raw, unvarnished. David. I think people want that, David, don't they? Am. |
A | I think Ryan's the more, like, varnish one. I'm always kind of, like, more unscripted and shooting from the hip, but maybe. Maybe that's my take. |
B | That is true. In the best way. In the best way. |
A | All right, man. This is great. Thanks so much. What's your Twitter handle? |
B | If people want to follow you, I am Mikelido. You can follow me there. |
A | We'll put those in the show notes. Thanks, Mike. I really appreciate it. |
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