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- [00:02]
David Hoffman
Bankless Nation. I'm here with Lucas Bruder. He is from JITO and he's building something pretty cool. Lucas, welcome back to Bankless, my man. How you doing?
- [00:09]
Lucas Bruder
Pretty good. Thanks for having me. It's been a while.
- [00:13]
David Hoffman
It has been a while. It has been a while. We're going to dive into what you're doing over at jtx, but I first kind of wanted to just ask what's going on in the Solana neck of the woods, like, what's going on over there? Because I'm not really too tapped in. So what's it like being in Solana right now?
- [00:27]
Lucas Bruder
It's pretty crazy. There's a lot going on. I think the. There's kind of this, like, weird mismatch between like, the crypto sentiment and the market. I feel like people are still kind of leaning a little bearish, but I feel like on Solana, it's full steam ahead. And so I would say the top two things going on right now, obviously the anom and what he's doing has been very popular recently on Twitter. But the other thing that's really cool that we're excited about is all of these tokenized stocks that are coming out and what Backpack and X stocks and Ando and some of these other guys are doing. It's super cool. So, yeah, like Getting SpaceX day one, some of the memory stocks, and then today the. The new memory stock IPO is happening and that should be listed pretty shortly. So I feel like that's. There's a lot of cool stuff going on in that kind of area right now.
- [01:18]
David Hoffman
Has there been just a market winner or market leader in the tokenized stock stock camp on Solana yet, or is it still pretty much a pretty fierce competition?
- [01:26]
Lucas Bruder
I think it's. If you look at volume, I believe Backpack is winning, but I would say the. The number of assets that they have, I think it's like probably it's like around five assets where if you look at some of the other providers, it's like tens or hundreds. I think there'll be some changes there pretty soon and expect to see a lot more assets listed. So I would say it's still pretty early on in the tokenized stocks, but I would say that's one thing Solana is really exceeding at right now. There's a few days where tokenized stock volume was higher than Meme Coins, and it's cool to see that flip. Like, we've been talking about it for a while. Like, Solana is this Meme coin chain, and when you see all these tokenized stocks. Come on. It's like, okay, the thing that we've been preaching this whole time is finally coming true.
- [02:16]
David Hoffman
Yeah, yeah, yeah, yeah. That is pretty exciting. Let's get into what you're building at jtx. So you're the founder CEO of jito, which is if we're people who speak Ethereum, that's if Lido and Flashbots had a baby. So a liquid staking token plus transaction ordering and MEV management all in one product. Now you're going vertical. You're verticalizing into jtx. Let's talk about jtx. What's JTX and why are you building it?
- [02:45]
Lucas Bruder
JTX is a prosumer trading terminal. And so we feel like there's piece of the market that's missing where Solana execution has gotten really good. But a lot of the tools that exist today are kind of more on the meme coin side of things. And so we're really targeting this prosumer audience. We think there's going to be a ton of assets that come onto Solana. Not only like other L1 assets, but tokenized equities. And we feel like there's kind of a lack of good user experience for those, those types of traders on Solana today. And so, yeah, we really want to build something that gets more people on chain. There's only so much that you can do at the infrastructure layer to make that happen. And so we spent several months ideating and decided this is the best way that we can get people on chain. And so yeah, we've been building this since like the end of March and be rolling out pretty shortly here.
- [03:39]
David Hoffman
So JITO is known to be just extremely technically competent at the block level of Solana, like down in the basement, where like the microstructure of Solana really matters. And you have to be just super intimately familiar with just the pipes of Solana, just like the actual like architecture and foundation. You guys are verticalizing into a consumer application, which makes sense because you guys have the knowledge and the integration about transaction ordering. But it is a new domain for you guys. Like now you're in the world of like user product and user experience. What makes you think that you can go up there and get out of the basement and into like the front door of and become the front door of Solana?
- [04:21]
Lucas Bruder
I think that we have the top team on Solana for shipping. And I think if you've looked at our past, like, we're the number one validator, client block builder on Solana since like 2022. Largest and like deepest liquidity on JITO Soul. And so I think this is just a natural extension of what we've done. It's going to be way different in the way that we're thinking about. This is way different. And we brought on some more people to help us with this. So like thinking a lot about retention and user growth and like dedicated customer support and like all this stuff that we haven't really done before. And so everyone at JITO is super hungry and we're excited for this challenge and been talking to a lot of people and kind of learning common mistakes and lessons and things like that. And yeah, we're really looking forward to the challenge. I think it's going to be fun. And yeah, we're going to kind of start with this like Solana native audience that knows this super well. But that's definitely not the end goal. We got to grow the pie and so we got to expand out from crypto Twitter and find other audiences to. To come trade.
- [05:27]
David Hoffman
So maybe just simulate for myself and the listeners what GTX like is from a. If I just like go on, it's opening up pretty damn soon here. It's got the weightless opening and so I'm a user, I'm going up to JTX and what, what do I see? What, how, how would you explain it to me?
- [05:43]
Lucas Bruder
The experience that equivalent to would be like a centralized exchange and so I would say very clean user experience. You can see all the assets that are available to trade. Very simple order box. We kind of abstract away a lot of like the token specific stuff that yeah, like if you, if you go on a centralized exchange the, the UI is really clean where if you go into products on Solana it's like oh is the. They go super in deep on the weeds on all this stuff. Like is the token frozen and what is the distribution in the top holders and all this stuff that you really care about if you're trading meme coins and so very clean ux, very good order types that basically only the pros have access to. So we're giving everyday users access to really cool orders like twops and we have this thing called smart fill that we can dive into a little bit. And yeah, just a really, really clean user experience. Someone that is not familiar with crypto can just jump in. We're using Privy for key pair management so you can sign in through email, you can set up passkeys and all that. So it's super secure markets.
- [06:53]
David Hoffman
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- [07:41]
Lucas Bruder
Some exciting news. We are launching a new podcast to help people figure out the crypto cycle. How to navigate it. The best crypto cycle investor I know,
- [07:48]
David Hoffman
his name is Michael Naito.
- [07:50]
Lucas Bruder
He runs the Defi Report.
- [07:51]
David Hoffman
This is the guy that sent me
- [07:52]
Lucas Bruder
a sell alert before the 10:10 price drop happened. His cycle analysis has been absolutely on point.
- [07:58]
David Hoffman
I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry
- [08:07]
Lucas Bruder
targets, fair market value of Bitcoin and
- [08:09]
David Hoffman
E and where we are in the cycle.
- [08:11]
Lucas Bruder
There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder
- [08:17]
David Hoffman
to navigate than most. So let's do it together.
- [08:20]
Lucas Bruder
Go subscribe to this podcast, search the Defi Report wherever you get your podcasts, YouTube, Apple, Spotify or find a link
- [08:26]
David Hoffman
in the show notes. There's a new episode waiting for you now. Exchanges of old, the Dexes of old would always be pointed towards the people who are pretty like informed about how a blockchain works. And so therefore they've been designed to be pretty unopinionated. Like don't make choices for me. Like I know what a contract address is. Like I would, I need to know the nature of like what this contract address does. So please inform me. And then it gives all of the like kind of the hardcore trenchers all the tools they need to know to make you know, an informed purchase of a brand new token. But then it's just so scary to like the retail audience, the people who don't know what they're doing. And so it sounds like you are taking the, you're taking JTX and being more opinionated about what is shown and how it's shown and even, even what assets are shown. Like talk about the opinionated choices that you guys are making.
- [09:17]
Lucas Bruder
I would say not showing a ton of token information is some one of the opinionated choices that we're making. We are not building this for people in the trenches that are holding. If you look at some of the platforms where people trade meme coins, the average hold time is like less than a minute and like at the upper end of it it's like less than 10 minutes. So we are not building for those people. We're not building for the token that launched five seconds ago where you need to know the distribution. We're building for I would say maybe like the, you know, $1 million market cap and up tokens and tokenized equities and majors and things like that. And so I would say that's one thing we will, this won't be available at launch, but we're going to do some pretty cool things around equities that no one's done before. So I think the equities experience on Solana leaves a lot to be desired. If you pull, if you go to any tokenized equity on Solana, there's like what. There's probably three or four versions of Nvidia at this point. Like there's three or four versions of Nvidia. Each one has a different chart and they reference the on chain chart chart. So like if you look at the price charts, there's like a ton of like wicks if there's like low liquidity. And so we'll be doing some, some interesting stuff around that. And yeah, I'm trying to think what else is opinionated. I would say P and L and like portfolio management is like the key thing. So people when they're trading, they're not just looking at like what is their current bounces. They want to know what has their P and L been over time. What was my entry on this token? Like what is my unrealized P and L, they kind of think in like terms of risk. So that would be a very important piece of this.
- [11:05]
David Hoffman
So since Jito and you said that, you know, Jito is perhaps the best engineering team on Solana and you guys are like I alluded to earlier is like just intimately familiar with transaction ordering and not even in familiar but just like in charge of transaction ordering because of Jito's positioning, How are you leveraging that ability and knowledge inside of jtx? And I'm assuming those things are kind of wired together. So when somebody makes a trade on jtx, Jito's transaction ordering ability provides a better execution price for jtx. I could only assume. Talk about that.
- [11:40]
Lucas Bruder
Yeah, there's, there's no like preferential treatment in BAM or anything else for like, oh, this is a JTX transaction, we're going to like treat it differently. But there's a ton of stuff that we've learned over time. So like routing transactions, landing them quickly and then like how do the prop mms work? And you know, maybe there's specific validators that are doing stuff that we don't want to send those trans these transactions to because they might get sandwiched and just like a ton of different edge cases in the network that we've learned over time.
- [12:12]
David Hoffman
So that's, that's an opinionated choice.
- [12:14]
Lucas Bruder
So.
- [12:14]
David Hoffman
So you guys choose validators or exclude validators based off of their behavior?
- [12:19]
Lucas Bruder
Yeah, yeah, that's pretty cool. And yeah, so, so yeah, that's one thing that we do. And then the other thing is one thing. I mean we do this for basically every prop AMM on Solana is using something that we call a maker priority plugin inside bam. And so that means that all the makers for these prop AMMs across all these different assets on Solana, they basically get put at the top of the block on Solana inside the BAM blocks. And so this allows them to quote tighter because they don't have to get worried about, they don't have to worry about getting picked off. And so essentially quotes are really tight. And so you will see that inside BAM where like, you know, the quotes are going to be really tight. You'll be able to see the transactions getting routed through JTX and landing on chain. And we will. I guess one opinionated thing that I just remembered is we have this thing called Good Trade. I don't know if you've used jtx, I think we give you access to it. But we have this thing called Good Trade. And so when you swap a token, let's say I want to buy a thousand dollars of SOL via USDC on jtx. When you make that trade, we will look at the output amount and we will run that same trade on the best centralized exchanges at the same time and show you how much money you saved on chain compared to Solana. And so we've already, we're already seeing really good Results, it's much cheaper to trade majors on Solana. And so, yeah, I think some of that's from BAM and some of that's just from like prop mms and all the really good teams working at the infrastructure there.
- [13:58]
David Hoffman
So if I'm, if I'm like buying Bitcoin on Solana or something or Sol on Solana or something, you will go and look at Kraken and Coinbase and wherever Binance or whatever and then simulate those trades and then also provide a quote on Solana and user will be able to see that difference.
- [14:17]
Lucas Bruder
Yeah, exactly. Cause yeah, we, we think Solana execution has really advanced in the past 12 or 18 months and there's a ton of innovation happening at the prop AMM layer. Bunch of stuff on Twitter and like Blockworks is putting out a bunch of good stuff around that too. But execution's gotten really good. But I feel like it's kind of stuck in this like Twitter sphere where like when you say the best place to buy Solana is on Solana, that kind of like, I feel like people don't believe that and it's like stuck in this Twitter sphere. So in jtx, every time you make a trade, we will rerun that and show you how much money you saved. And so we're really bringing that really good execution quality front and center and show that Solana can beat centralized exchanges when it comes to trading.
- [15:05]
David Hoffman
And I'm assuming if I asked you, is this feature that a centralized exchange has in jtx, is that feature that a centralized exchange has, is it in jtx? The answer is yes. Like, like that's kind of the, the point of it. So like, you know, limit orders, T wops, like all that kind of stuff is in jtx. What about perps are perps in jtx? Because you guys aren't building an exchange. You guys are building a front end, a consumer experience, transaction ordering technology, but you guys aren't building the exchange. So what about just a perp Dex? Is that integrated in jtx?
- [15:35]
Lucas Bruder
It won't be at launch, but shortly after launch we are looking at Phoenix perps and we'll be integrating that. And so they have some really cool technology. They're quickly listing more and more markets. And so we're super excited about that. We have a lot of wood to chop on like the best spot experience. We don't want to bite off too much. Once that's in good state, we want to go into perps and then prediction markets. And I think a big driver is going to be like what people, what the feedback is and like what people want to trade.
- [16:07]
David Hoffman
So who's your competition then? Are you trying to compete with like the Jupiters or like the pump funds or like who do you consider yourself to be the competition? Like where do you want to take market share from?
- [16:17]
Lucas Bruder
I would say the centralized exchanges are our main competition. So you know there's, you can, you can look at the pie as like I want to take market share from others or I want to grow it. And I think we have been in the business and one of the reasons why we're so successful is like we are trying to take market share from everyone else. You know, centralized exchanges and like NASDAQ and New York Stock Exchange and things like that. And so that's the multi year vision is that's who we're going after. Of course like a lot of the way that we talk about JTX right now is just focused on Solana native people and that's what we're going to go with. That's our wedge. But I think over time we will continue to go more and more after centralized exchanges and start to get into the equities as well.
- [17:09]
David Hoffman
Are you going to put an on ramp into jtx?
- [17:12]
Lucas Bruder
Yeah, yeah we will. There's a few options we're looking at right now. But yeah, I think most of the people on Solana they have, they have Sol on their wallet already. But so yeah, they're, they're kind of onboarded already. But yeah, there's a man, I don't know if you use an on ramp recently but some of the fees that those things charge are just insane.
- [17:32]
David Hoffman
Yeah, yeah, the, the direct on ramps, like the on ramps onto centralized exchanges are cheap because centralized exchanges have that control. And so if there's like fraud they, they can lock up your funds so you can't withdraw from the centralized exchanges. But I would imagine JTX doesn't have that because you guys are non custodial. And so that's why the direct on ramps on chain have to add fraud into their charges. I would imagine if you're trying to compete to be feature parity with centralized exchanges in the longest of time horizons, JTX would actually be have like custodial arm to it so that it can onboard retail or users who don't yet have assets on Solana. Have you thought about that?
- [18:15]
Lucas Bruder
I haven't, no. It's an interesting idea. Yeah. Obviously you want, you want the onboarding experience to be super fast and easy. So like debit card, credit card, bank account. And yeah, hopefully there's a good option that we can find that's cheap on fees. But yeah, rolling it in house could be interesting. There's definitely. That would be something completely new for us, but I think we could, we could pull it off with our team. And we have Rebecca too, who's just a super badass CLO for us.
- [18:45]
David Hoffman
Oh, the Rebecca? The Rebecca. Rebecca Redding. Yeah. Okay. Yes. Yes, you do. Let's talk about a JTO value accrual from jtx. So JITO has a token. It's jto, jtx. No new token. JTO is the token. Talk about how JTX benefits the jito token.
- [19:03]
Lucas Bruder
So 80% of the revenue from JTX will go to the DAO. And I think we're trying to figure out what to do with that. You know, you could do, you could burn it. You could just have it sit in the Dow. We'll figure out what happens there pretty soon. But 80% of all the fees from JTX will go to the DAO. The other 20% will go to Reinvestment. And so as we see more and more people go on to JTX and trade, that will, you know, in turn buy more JTO and send it to the dao. And all the fees on JTO or on JTX will be used to buy JTO and return it to the dao. So we're not giving the dao, USDC or any of these like meme coins that might go down 99% that we collect fees in. It's essentially just continually swapped to JTO and sent to the dao.
- [20:00]
David Hoffman
So Solana has vastly improved its execution is what you've been saying. So the value, your claim, your idea is that Solana execution is just really, really good. And so what you're doing is you're creating JTX to kind of like wrap up Solana and all of the assets on Solana and all of the very strong execution on Solana. And you're really just wrapping Solana into a prosumer trading experience. And I don't know what the market cap of JTO is, but it's compared to Seoul. Seoul is like what, 40 billion right now? 50 billion? 60, something like that? Multiple tens of billions. And JTO is, is valued how much? 1 billion?
- [20:41]
Lucas Bruder
The FTV right now is probably like 600 or 700 million.
- [20:46]
David Hoffman
700 million. Okay, so if you're taking 80% of the trading fees of this trading experience and you're buying jto and, and not burning it, but buying it and giving it back to the Dow. Why would I ever buy Soul? If JTX is successful at what it wants to do, why would I ever buy Soul instead of jtx?
- [21:08]
Lucas Bruder
Well, I think there, there's going to be, I mean obviously I hope we capture a huge amount of the market share that exists in trading, but there's going to be a bunch of other stuff happening on Solana that will not be going through jtx. So like arbitrage and things like that are going to be going on. People trading meme coins. I think there's been a lot of like even just unrelated to jtx, there's been a lot of cool and there's been a lot of cool proposals that I think we're going to go to vote soon on Solana tokenomics. So there's one, I can't even remember the name, the numbers of the simds right now, but there's one that will double disinflation. So it'll basically cut the inflation. The rate that inflation decreases in, it'll like double the speed of that. So basically yield will go down and the amount of tokens being emitted by the protocol will go down. Less sell pressure should help number go up. And then there's another burn one as well that is basically suggesting that, that there's a increase in burn based on the number of transactions that the network processes and how many resources they use. Right now the burn in Solana it's just flat. And so there's a, basically a flat fee per transaction. There's no resource based fee. Like if there's you know, computationally heavy transactions or super cheap transactions, the amount of burn that changes on the network, it doesn't exist. And so I would say those two proposals, there's other stuff coming too that should really help, you know, in make Solana deflationary.
- [22:52]
David Hoffman
So the, the idea of like so in Ethereum, which is the economic system that I'm familiar with, if there's just like enough slack in the system, the fees are zero. That's not true with Solana.
- [23:02]
Lucas Bruder
There's a base fee, there's some priority fees as well. Blocks are not full right now. There'll be some spikes where they're full, but I think they're probably around 50 to 60% full right now. There's still a lot of priority fees being paid though. A lot of traders and arbitrageurs and things like that have a need for speed and they're willing to pay for it.
- [23:23]
David Hoffman
So the bulk of Soul Burn comes from the priority fees. The contestion?
- [23:27]
Lucas Bruder
No, the bulk. The bulk of priority fees is basically just a function of how many transactions are being processed a day.
- [23:34]
David Hoffman
So just straight volume. Straight volume, yeah.
- [23:37]
Lucas Bruder
Yes, Straight transaction volume. Those could be like a lot of. Yeah, it's just based on the transaction count essentially. And so, yeah, if we can get the rate of inflation down and then charge based on the essentially on the block size, then that would be super helpful for Sol tokenomics, especially as we start to see basically every new asset that comes on chain that people want to trade, there's a prop AMM spun up for it. And you know, there's like probably 10 or 20 prop mms. So like you take every prop MM they need to send an oracle on chain. There's, you know, every new equity that comes on chain is going to have a prop amm and so the amount of transactions that are going to be generated as and more and more assets come on, change. It's going to be insane.
- [24:25]
David Hoffman
When you say execution on Solana has gotten drastically better over the last like 18 months, is that because of the prop amms? Like how much of that is due to prop amms?
- [24:33]
Lucas Bruder
Yeah, I would say there's two main things. One I would say is just core protocol work. So the work that Anza and Fire Dancer and us and other core client teams are doing to make the network faster, I don't know if you use. I think last time we chatted it was like right around the JITO airdrop, maybe shortly after. If you use the chain back then it was just like a nightmare to use. Like transactions wouldn't land. Basically everyone was landing transactions through Jito because like the, the normal pipeline was just super. It was just buggy and like not good. And so there's been a ton of really good work at the core protocol layer. Blocks are going up and they're like getting bigger and bigger. The core client teams that we should get, we should almost double block size within the next like month I would say. And so that's gonna help a lot too. So yeah, one is all the, the work going on there. And then I would say the other thing that led to execution improvements would definitely be the prop AMMs. And so, yeah, those are just really efficient at expressing the like what the market maker wants to do. And they're kind of putting the market maker logic on chain. It's really, really cheap to update the pricing for that asset just because of the way it works. And yeah, I guess like the explain like I'm five is like if you're, if you're running an order book and you want to shift your orders around, you have to go to every tick and like cancel it. So you have to cancel all these orders and then like move your mid over and like replace all the orders where these prop amms, they kind of just, they have this curve and then they can basically just shift this point around and so shifting that, that midpoint price. It's super cheap. It's like I think the cheapest Prop AMM Oracle update is like sub 100 cost units where if you want to make a trade on an order book, it's like 40,000. So.
- [26:36]
David Hoffman
Right. So just like a engineering efficiency innovation in terms of just like putting market maker logic on chain is just like a way better way to do it.
- [26:47]
Lucas Bruder
Yeah, it's been really cool to see too. Like so yeah, I think there's like the super OG one called Lifinity, they shut down recently but the next main one was Soul Fi from the Ellipsis team, the team that's building perps. So they were like the first team that created this like next generation of prop mms. And you know, now we have like Humidify and Bisonfi who's run by Jump Trading or Jump Crypto and you know, Scorch and Tessera and all these prop amms and then you start seeing prop amms pop up on base and other L2s and now we're seeing Prop MMS go on to Ethereum and they're doing, on Ethereum they're doing similar stuff to like Bam's maker Priority plugin where they have top of bat the block builders like Titan and others can receive prop AMM updates and get all these super tight spreads that are tighter than the tightest centralized exchange onto all these chains. And so that's been something really cool to see that that's born on Solana and then now we're seeing it on L2S and Ethereum and I think there's some people doing it on Robinhood chain as well. And that's just been really cool to see that innovation being born on Solana and taking that to other chains. And I think hopefully all these other chains can offer spreads that are tighter than the tightest centralized exchange pretty soon.
- [28:13]
David Hoffman
What's the AMM word doing in a prop amm? Is that accurate? Can you explain that to me?
- [28:21]
Lucas Bruder
Let's say it's accurate enough to get the point across.
- [28:24]
David Hoffman
Okay, so like an AMM is like what Uniswap invented X times Y equals K or whatever that exchange is. It's been a while since I've thought about that equation. And then the idea of a prop AMM is like with Uniswap V3, something that we saw, maybe this was even happening in Uniswap V2 was that you would see just in time liquidity come in on the Uniswap V3 Curve. And the Uniswap V3 curve had concentrated liquidity. So you could well, X times Y equals K was a constant slope. The slope didn't change. What Uniswap V3 brought to the table is you could add liquidity just in a particular band on that slope. And so parts of that slope would have very high liquidity and it would be around the mid market price of an asset. And then like the tails of the slope would have no liquidity. Because why would you ever provide liquidity for like $10 eth? Like it's just don't do that or, or a million dollar eth also don't do that. You know, hopefully one day. But no. And so like what we saw is we saw like kind of in the MEV world we would see people come in and provide very high liquidity when they saw in the mempool somebody coming and slapping a $1 million ETH USD buy. And so they would, they would provide liquidity to capture the majority of those fees just in time inside of the concentrated liquidity. It sounds like that's what Prop AMMs are doing. But rather than viewing the mempool, the logic for that is on chain. Is that the kind of the core innovation?
- [29:52]
Lucas Bruder
Kind of. Yeah, they every prop AMM has its own curve and they will change the curves over time. So there's a really cool.
- [30:02]
David Hoffman
That's why we call it an amm because it's a curve.
- [30:05]
Lucas Bruder
Yeah. And there's, there's some logic on chain where every prop AMM is different but they can like widen their spreads and change the way the curve works. So if you go, there's a really cool website people can view if you go to Sand Sandwich Me. If you go on the left side there's a prop AMM section and so you can see the curves from all these different market makers and the spreads on chain. And so yeah, you can click through some of these like if you like go to Bison Phi, you can look to see their spreads are pretty tight right now, like half a bip and they have a really steep curve. And then if you go to some of the other ones, you know Their curves are a little wider and maybe not as steep. So, yeah, this is the, this is a unified sole USDC view of all the curves. And then you can click into the
- [30:59]
David Hoffman
aggregate curves of all the prop amms of this sole USDC market.
- [31:05]
Lucas Bruder
Correct? Yeah.
- [31:06]
David Hoffman
Right. And so if I click on one of these, this was like one of the, one of the curves and when you add them all together, they come. You. You see the, the net curve. And this is just an order book.
- [31:16]
Lucas Bruder
It's kind of an order book. Yeah, it's like a.
- [31:18]
David Hoffman
It looks like. It looks like an order book. It looks, it's a, it's a, it's a implied order book. It's an implied order book.
- [31:23]
Lucas Bruder
Yeah. So, yeah, you can see here that for 100 SOL depth on Solana right now you can get less than a BIP spread. That's just like insane. And so I don't think that's going to stop with Sol. We're seeing it on Bitcoin, Zcash, Hype, SpaceX, uh, we'll probably see it on that South Korean memory stock that gets listed today. And so basically, like, I think that this is not a trend that's gonna slow down. And like when we started looking at building jtx, we're like, okay, things are definitely trending in the right direction. And like, prices are getting good. There's more asset issuance coming onto Solana. And so it's like, this is gonna be really big and it's already beating. It's already being centralized exchanges. I think it's going to start beating if it hasn't already. Some of these more like New York Stock Exchange and NASDAQS on prices. And you run it 24 7. Totally permissionless. So, yeah, things are, things are happening.
- [32:21]
David Hoffman
Me and Mike and Polito have been pounding this drum for a while where crypto, you know, defi dexs blockchains are never going to surpass centralized exchanges unless we can get price discovery to happen natively on chain. Like who determines the price of something? Like what the Oracle is right now? It's Binance. It's been Binance for a while. Second place is Coinbase, but we need it to happen on Ethereum or Solana or make it happen on the blockchain. And if we don't have native price discovery, if we are not the place where price is determined, then you're kind of just, excuse my language, cucked by whoever is doing price discovery. And so having price discovery happen natively on chain is such a golden goose. It's such a trophy. And it's like the last time I talked to him about this was like a number of years ago. But we just seem to have stalled out in getting native price discovery on chain. This is why meme coins are always on Ethereum, they're always denominated in eth on Uniswap is because that's just like meme coins launched on Ethereum and also on Solana. And in Solana the meme coin is paired with Sol and that's you know the meme coin price discovery happens on chain and that's why it's actually kind of like cypherpunk. But then as soon as like with volume dominates on like Binance or Solana then we kind of like lose that chain dominance. So what I'm seeing here with prop amms is like we have a new venue for getting price discovery on bigger pairs, usdc, sol, uscc, Bitcoin to happen on chain and like, and so like there's been just this forever arms race between order books on centralized exchanges and you know, amms on blockchains and amms have been really constrained but now we have prop amms which is starting to look like an order book. And so this is actually kind of giving me some renewed hope that we can get price discovery for the world's biggest assets to happen on chain. Do you think we can get that done?
- [34:19]
Lucas Bruder
Oh, a thousand percent. I think we'll be seeing that. I mean you there kind of already is starting to be price discovery. There's definitely price discovery on hyperliquid. I think Solana will be there very shortly just in like the off venue hours. So you know, stocks don't trade 247 so there'd be some price discovery there. And yeah, I think this is, I think that Solana is not the right environment to run order books. I think it's gonna be prop amms for the future. Not only on Solana but basically essentially every chain. Unless you're like a hundred percent dedicated to order books and more of like an app chain. And yeah, I think this is super bearish on just like traditional amms because those, those can never do price discovery because they rely on people arbitraging the price to bring it in line. Where if you look at prop mms there's actually like people that are making these markets and they're moving them around without getting arbitrage where like the, if you make like a SpaceX USDC pair on Uniswap that's not going to be constantly discovering the correct price, it's just going to be people, other people that are going to arbitrage against it. And so this, I think Prop AMMs on Solana are just going to be massive for making price discovery happen on there.
- [35:49]
David Hoffman
One thing that was that is nice about AMMs, like vanilla AMMs is you can see all the liquidity. Like you can see how much USDC is in the eth, USDC pair and ETH and like you just have that information. With prop amms we don't have that because a lot of logic is held off chain by the prop amm. Is that true?
- [36:08]
Lucas Bruder
Well, I mean we were just looking at the curves. It's like you can see the curves, right?
- [36:12]
David Hoffman
But couldn't the liquidity just like disappear inside of like a couple blocks?
- [36:16]
Lucas Bruder
Yeah, I mean that can happen on like a normal AMM too. Like if someone is the main. Okay, I guess that the prop AMMs are, you know, it's just one market maker running it where you know, hopefully in the, the AMMs on like Ethereum, there's multiple liquidity providers. And the thing is on Solana everyone is using an aggregator. So everyone's using Jupiter or D Flow or Titan or any of these other aggregators. And so they are constantly looking at the curves of all these prop MMs and trying to route to the best venue for prices. And so if a market maker goes down they need to, you know, it's a bug or they need to upgrade their program or whatever like that AMM will just get pulled from the route and like they'll route to other market makers. And so you have a lot of, there's a lot of like robustness at the aggregation layer which is what most people are doing. People aren't going to like bisonfi.com and only swapping against that. They, they want to get all the venues hooked together. So there's a lot of like robustness going on there and it can handle like a market maker going down and then you. Yeah, you just get really good competition and like people want to get more flow so they're quoting tighter and these aggregators are like choosing which one to go to. So there's a lot of like really cool stuff and like kind of nerding out here a little bit. But like this is what I love and I feel like we know a lot about this and kind of just ties back into like what we're doing with JTX and like really understanding a lot of the nuance here.
- [37:50]
David Hoffman
Hey Bankless Nation, it's David. If you're hearing this. That's because you are listening to the free Bankless podcast feed. Did you know that there is a premium Bankless RSS feed? The premium feed has extra interviews, reviews that I do for my own personal research, and just deeper questions that I want answered about the crypto industry. Questions that I want to answer so I can be more informed as an investor both at Bankless Ventures and also just in my own personal portfolio too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So if you're interested in getting extra content all while skipping the ads or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for Bankless Premium and there is a link in the show notes to get started. Cheers to a good 2026. Yeah, yeah. I mean what I'm seeing is just like a growing richness of onchain capital markets. Like this is what on chain capital markets would look like. There's a little bit more on this subject, so I can understand it more. Like one of the conversations that's happening right now is the Cash Cat token on Robinhood chain that recently just like pumped because Robinhood's all about beams now. And people are like looking at the liquidity of Cash Cat versus their liquidity of the Ansem token on Solana and we kind of have just like a control study or like an a B test of like look at the liquidity of Cash Cat and look at the liquidity of Ansem the Ansem coin. And people are like pointing at the Ansem coin and saying like look at Cash Cat has three times the liquidity on Robinhood chain than an has in the Ansem coin on Solana. Is that a fair comparison or are the prop amms there's also liquidity inside of the prop amms that aren't being measured there. What's how does the prop amm conversation fit there?
- [39:29]
Lucas Bruder
I don't know if the prop amms are quoting an right now. I mean it's definitely a comparison you can make. I'm not really sure what you can like do with that information, but all the liquidity dashboards like Bird Eye and Helios and those guys and jtx, we use Birdeye on the back end. They should track the liquidity the on the the prop amms. And so yeah, if there's Liquidity on prop mms. It'll show up. But yeah, I think the, the Robinhood stuff's really interesting. It's just like I had a tweet the other day about it. It's like you might make things for like real world use cases, but you don't really get to decide what people
- [40:12]
David Hoffman
trade, what happens on your trade. Yeah, yeah, yeah.
- [40:14]
Lucas Bruder
There's people just want to. There's a subset of people that just want to degen and that's fine. And like, for Solana, that was the best thing because it really stressed the network and it's why it's so far ahead and able to handle like the SpaceX IPO and what's going to happen later today.
- [40:33]
David Hoffman
What if a lot of assets happen land on Robinhood chain that people want to trade and they're not going to be available in JTX because JTX just hooks into Solana. Would you integrate something like any other chain other than Solana?
- [40:44]
Lucas Bruder
Yeah, we're open to it. I would say it's not the highest priority, but definitely open to it. I think the Robinhood obviously has insane, incredible distribution and it's going to be really good for them helping bootstrap that chain. But there's also Solana has really good distribution too, so I think it'll be interesting to see what happens. I think you know who I'm rooting for. But yeah, I'm definitely monitoring the situation. Mm.
- [41:15]
David Hoffman
When I remember listening to will Warren from 0x Matcha, listening to his talk at East Denver, and it was kind of an indictment of prop amms on Solana. Like some of them have good behavior, but he was specifically calling out the bad behavior of a few prop amms that would just like leave in bait transactions. And so they would set the price with a bait transaction, but then they would yoink the bait transaction and somebody would try and like, you know, sell a token into that transaction and it was just toxic behavior to just, you know, max extract. And it's just, you know, it's Darwinism. Survival of the fittest definitely fits into that camp. And then like a few toxic prop amendments would kind of spoil it for the rest of them. So the rest of them were kind of dragged down into the, into the market and kind of just really made execution toxic for. For retail. What's going on with that? And does JTX protect users in any particular way from toxic prop AMM quoting?
- [42:10]
Lucas Bruder
So, yeah, I think some of those games were going on on Solana several months ago. There was, I think A lot of, there was a lot of public data on what was going on. So you could see some prop MMs playing these games. I think a lot of like social shaming happened not only on Solana, but I've seen bits and pieces of that talk and you know, there's some social, social shaming going on there too. I think there's, there's a few things that you can do to mitigate this and that people on solana and likely 0x team are doing too. So one is you can just watch what these prop MMs are doing over time and if they are starting to play games, if you own the distribution like Jupiter or D Flow and these, this is like the top of funnel where people are coming in. You can just be like stop it, I'm gonna like disconnect you and or I'm going to like route less flow to you. And I'm sure there's some of that going on. You know, I don't. There's probably some of that going on. The other thing that's really cool that we've started to see more recently and I think every aggregator does this now is some forms of like on chain routing. So this matters a lot more for high performance networks with low slot times like Solana. But if you want to buy sole usdc, that aggregator will look at the chain state and they'll be like, okay, like I'm going to go to these two prop AMMs and this AMM because that's the best price right now. And then you know, they'll build the quote for you. You send your transaction, it lands. That can be like a second or two. On Solana a lot can happen in that second or two. Like the prop AMMs can widen out or like maybe liquidity on the AMM gets pulled or something like that. And so we're seeing more AMMs or more of these aggregators put their actual routing logic onto Solana. And so they'll be like, okay, this, these AMMs have shown that they can quote tight. And so here's like some, some information that the program can use on chain. Like here's the AMMs to look at and I will route the transaction and like build the flow and like how much gets pulled from what dex on chain. So I can actually look at the live price as opposed to you know, having this like snapshot that's stale. So that's definitely helped a lot. Those two things have helped a lot. And then like, you know, I'm sure aggregators do like some statistics and all this stuff on like who's quoting the best. So they'll, they'll kind of buy slow there, but I think that's a solved problem at this point. And we use G flow, they have some on chain routing so, you know, don't really have to worry about that.
- [44:56]
David Hoffman
Good to hear. Good to hear. Let's talk about the rollout of jtx. So you guys are opening up the waitlist, a pretty big waitlist on the 14th, 14th or 15th. We're recording this the week before, but listeners are hearing it the week of. How does somebody get access to jtx and then what's the plan, the short term plan for like the next few months?
- [45:14]
Lucas Bruder
So we will be rolling out on the 14th. There's, we're going by the number of referrals that you have. So if you're in the top like 10% or something, you'll get access earlier than if you have less referrals. So we're going to roll that out gradually over time over the next week or so. And yeah, it's going to be really cool to see. This is like a total mvp. And so there's definitely a lot more that we have planned. This is not the final product. I would say. There's a lot of stuff that we're doing behind the scenes on like more data. So that will be. No one else will have a feature and no one else has. I think a lot of traders will really like on the data side and then roll into equities, perps and prediction markets after and just keep iterating, you know, discovering bugs, what do people want and try to ship those as fast as possible.
- [46:06]
David Hoffman
And what, what's, what did you have for over the like the longest term horizons? I know you guys are just focusing on the here and now, but like, I don't know, what do you want JTX to look like by the end of, into the future?
- [46:17]
Lucas Bruder
Yeah, I would say that you will be able to trade any asset in the world on jtx.
- [46:24]
David Hoffman
If somebody comes and issues it on
- [46:26]
Lucas Bruder
Solana, maybe we'll go off Solana, but I think that maybe not go off Salon a bit. You know, add, add these other chains. But there's a, if you've been paying any attention on Twitter, you can kind of see where things are heading definitely in the equities world. And I think within the next probably six to nine months you will be able to trade any stock in any country in the world on chain. And so, you know, that's the, that's the future that we're preparing for. There's a lot going on at the product level at different companies, and then hopefully we see clarity go through and this, the SEC exemption come through as well. And so that's definitely the direction things are heading, and that's where we're going.
- [47:10]
David Hoffman
Lucas, is soul undervalued?
- [47:13]
Lucas Bruder
Yeah.
- [47:14]
David Hoffman
Yeah.
- [47:15]
Lucas Bruder
I mean, if you want to be a good investor, you have to. There's a podcast with Tushara the other day. He's like, yeah, usually if I'm feeling like an idiot for being in the industry, that's when I should buy and. And when I'm feeling like a genius, that's when I should sell. So it's pretty clear from the inside where things are heading on Solana. It's going to take a bit to get there, but if you want to be a good investor, you have to get ahead of these things. And so I think it's. I think it's undervalued, for sure.
- [47:44]
David Hoffman
Well, I suppose there's being undervalued because crypto is potentially undervalued. You know, Bitcoin's at $64,000. Ether is at $1800. Solana's at $78. Do you think Solana is uniquely undervalued compared to the rest of the crypto industry? Yes, because of all the prop amm, the execution, tokenized stocks, all that kind of stuff.
- [48:07]
Lucas Bruder
Yeah, I think there's a few reasons. I would say a lot of the. The SIMD and protocol improvements that we were talking about earlier around inflation and burning, there's tokenized equities. I think there's a lot of stuff that we're going to bring via JTX to get people trading more and also get people that don't trade on chain to trade on Solana more. There's a ton of protocol improvements coming. So we're going to go from 60 million to a hundred million block size within the next month or so. And I would say the, like, the best teams win by iterating the fastest. And I would say no one is iterating faster than Solana across all the teams. Not only teams that exist today, but the new teams that are coming up to. And so, like, if you just look at the pace of iteration on Solana between the protocol and all the people working on it, and look, compare that to any other ecosystem, it's by far the best and the fastest iterating. And so, like, yeah, you can look at the current state of the world in crypto and like, be bearish, but it's hard to do that if you just look at the. The state of iteration on Solana.
- [49:19]
David Hoffman
Cool. Lucas, thanks for coming on the show.
- [49:21]
Lucas Bruder
Thanks for having me, Bankless Asian.
- [49:22]
David Hoffman
You guys know the deal. Crypto is risky. You can lose what you put it in. But nonetheless, this is frontier. It's not for everyone. But we are glad you're the Bakeless Journey. Thanks a lot.