Loading summary
Transcript93 lines
- [00:00]
Bryce
Foreign, everybody. Welcome back to another episode of the Crypto 101 podcast. I'm your co host, Bryce. Unfortunately not joined by Mr. Brendan Veeman today. He is out sick. But we're gonna carry on. I'm gonna carry the flag here. I am just so stoked for this one. I'm really, really excited. I don't say that about everyone, but I really mean it for this one because there's a lot of buzz going on around Soul Strategies. So we actually have the CEO, Leah Wald, and the cto Max Kaplan joining us today. We're so excited. Leah, Max, thank you for joining us here at the Crypto1on1 podcast. And how are you guys doing?
- [00:49]
Max Kaplan
Thank. Thanks so much for having us. Really excited to be here, doing well, excited to talk.
- [00:54]
Leah Wald
Yeah, thanks so much for having us. This is going to be fun. Lot going on, but ready to break it down.
- [01:00]
Bryce
Crypto 101, there we go. Exactly. That's exactly what we do. We kind of take those, you know, big heady concepts and try and boil them down so that the everyday person who's trying to learn about this market could really digest it. And, you know, Solana has obviously been one of the things we've gotten some of the most questions about. It kind of burst onto the scene, kind of ate Ethereum's lunch, it feels like. Um, and so we're going to talk about your guys's view on Ethereum, because that's another thing people always ask is, well, is Solana going to be the number one? Is Ethereum ever going to, you know, return? So we'll talk about that and why you guys chose Solana, but let's just get quickly acquainted, you know, our audience with you guys as individuals. Leah, you used to run a large investment firm called Valkyrie, and can you tell us a little bit about your, your background and how you came to found Soul Strategies?
- [01:47]
Leah Wald
Sure. So world banker by trade is kind of foray into my career. So when I learned about bitcoin pretty early, it was the decentralization, not confiscatable, all the pillars that really excited me. And it's proved to date how that's worked out in the developing world. After that, joined bitcoin full time, if you will, in about 2017 with Lucid. And we specialize in investing in GBTC. So kind of the only way to invest in bitcoin at, at the time. And then, yeah, co founded and ran Valkyrie Investments. So we launched some of the first crypto ETFs in the states. You know, tried to Work with and worked with the SEC to finally get out spot, you know. And that was last year's.
- [02:34]
Bryce
Yeah, you had a. Quite a relationship there with Gary, I guess, because that was. Must have been quite difficult, man.
- [02:41]
Leah Wald
That took a bit. It took a bit. But we finally got it out. So that was fun. And that firm was. Was acquired last year and then. Yeah, and then I joined as the CEO in July. So I've actually been on the board of the firm SID for about four years. It was originally called cypherpunk holdings, we became Soul Strategies, but. So we'll get into that. But publicly listed since 2018, so it's, it's been a fun ride since I joined in last summer.
- [03:11]
Bryce
Awesome, awesome. So I misspoke. I didn't mean to say founder, CEO. And then Max, tell us a little bit about your. Your background. Well, and what, what brought you on here as the CTO for Soul Strategies?
- [03:22]
Max Kaplan
Yeah, absolutely. So, you know, I really started. I got deep into Crypto in early 2017. I discovered Bitcoin in 2014, but I really didn't fully go down the rabbit hole until 2017. And I started making some like really small open source contributions like Bitcoin Core and some of these things that were pretty small. And I made some like, you know, like open source stuff that got shared on Reddit pretty widely. And then this really small company at the time reached out to me called Kraken. And they were like, hey, so humble. At the time, like we were. The Kraken was really tiny, right? So it was like 100 people. And just for, for context, like my first job ever out of school, you know, I worked at like another small company that was 120 people. You know, cracking at the time was 100. So it was like smaller than a local company that I worked for before then. And I was like, oh my God, you know, like, I didn't even think that I could, you know, work in crypto full time because back then there weren't really many full crypto job. So I just knew I had to take it. And I joined Kraken as one of the. As like really the 10th engineer. And we grew all the way up from 10 engineers to 800, where I ultimately led DevOps and data engineering as senior director. We grew from 100 people to 3,000, which was quite the journey. And you know, really, you know, when I joined Kraken, the idea of trading on chain was kind of this like really foreign concept, right? Like, you know, like I really.
- [04:52]
Bryce
Pipe dream.
- [04:53]
Max Kaplan
It was a pipe dream. Right. You know, and I was like, all right, well listen, you know, exchanges are going to be centralized and you know, like, listen, that, that can be okay. But then around like 2020, 2021, like 2022, I started using, you know, like I started experimenting with Solana and it was really like when I first made my first real trade on a Solana Dex, I was like, oh my God, this is crazy. Like, this is the future. So, you know, I started getting deeper in Solana. Spun up my own validator after leaving Kraken. I worked at Kraken for six years. It was called Origin Ventures. It grew pretty significantly. And then long story short, you know, Leah and her awesome team at the time reached out saying they wanted to acquire it. And I just jumped at the opportunity because I was such a big fan of Leah and Soul Strategies and I'm just like such a huge believer in Solana. I can't wait to talk about today. So now I join Sol Strategies as cto.
- [05:48]
Unknown
Have you ever wanted to trade bitcoin but haven't Dared tried? With Plus500 futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity. You'll be able to trade in just two clicks. Feel ready? You can move to real money with as little as $100 once your account is approved. And the great thing is that in addition to crypto, Plus500 gives you access to a wide range of instruments like the S&P 500, NASDAQ, gas and much more. Explore equity indices like energy, Metals, Forex and beyond. With a simple and intuitive platform, you can trade anytime, anywhere. Experience the fast accessible futures trading you've been waiting for with +500. With over 20 years of experience, +500 is your gateway to the markets. Visit us. +500.com to learn more. Trading in futures involves risk of loss and is not suitable for everyone. Not all applicants will qualify. And this is not personal financial advice. Plus 500, it's trading with a plus. Attention cigar enthusiasts. Today we're thrilled to introduce to you Cigar Bid, America's number one online cigar auction site. If you're looking for unbeatable deals on every type of cigar, listen up. At Cigar Bid, you have the power to set your own price, often scoring top quality cigars and accessories at prices much lower than retail. Others want you to believe they are always giving you their best deal. But at Cigar Bid, you get to decide the deal. It's the cigar site the rest of the industry does not want you to know about Score deals at the best prices every single day. The live auctions are fast paced pace and exciting, making every bit a thrilling experience. Check out Freefall to watch the prices drop in real time or the power hour for our fastest pace auctions. Cigar Bid has a text update so you get notified when you're outbid and get exclusive deals right to you. And if bidding is not your thing, then no problem at all because you can buy the cigars straight up at awesome low prices as well. So no matter what you're looking for, you'll find it at Cigar Bid. So if you're ready to enjoy the fun and the convenient way to purchase fine cigars at great prices online, visit cigarbid.com crypto101 that's cigarbid.com crypto101 Happy bidding.
- [07:54]
Leah Wald
Shopify is a global commerce platform that helps you sell at every stage of your business and sell more with less effort. Thanks to the Shopify Magic, your AI powered all star. Sign up for a $1 per month trial period at shopify.comredcircle all lowercase go to shopify.comredcircle now to grow your business no matter what stage you're in. Shopify.com RedCircle that's awesome.
- [08:22]
Bryce
No, I love it. Just casually making bitcoin core developments and building the greatest exchange ever.
- [08:29]
Max Kaplan
Very, very small ones. But yeah, I was just learning at the time there weren't documentation fixes but there were real code fixes that were small.
- [08:36]
Bryce
No, that's awesome. And it's great to hear both your backgrounds. It seems like you guys are both uniquely suited for the roles that you guys are in and for really us and in this next phase of a finance. Right. Because we don't want it to be called, you know, tradfi and defi. It's just going to be finance, right? And it's going to all be blended together. It's all going to be on chain. And just a point on the experience between Kraken and Solana. I was on Kraken yesterday. I manage a fund and withdrew some Solana from Kraken to a cold storage wallet. And it was instant. It was literally instant. It went like by the time I opened up the wallet like four seconds later, I was like oh my God, it's already in here. Typically like whenever you withdraw Bitcoin, Ethereum or any other coin, it takes a few minutes to confirm and so on and so forth. So yeah, the experience that they is developed over there. Really incredible. But I want to talk about before we get into, you know, Soul Strategies and what you guys are doing, because it's really, really a unique company that really the only regulated sort of entity, I guess, to get direct exposure to Salana and, and even more than that. So we'll talk about that. But. But Max, I want to, I want to actually stick on you real quick because you just got really hyped up on Salana and, and a lot of people want to know, of all the different coins you could have chose to build a company around, why was it Solana?
- [09:57]
Max Kaplan
Yeah, great, great question. Right. So, you know, I think if you look at crypto as an industry overall, you know, like you have bitcoin and then you kind of have others, right? But bitcoin solves one specific problem and Solana and other networks solve a different one, right? So I'm just going to start high level and I'll work my way down, right? So bitcoin is really a store of value. And then you have other assets, right? And really other networks, you have Ethereum, Solana, you have other ones like Cosmos, Avalanche, whatever, and they're really solving different things. So to start with Bitcoin, for example, I don't view Solana as a competitor to bitcoin. Like Leah, her background speaks for itself in the bitcoin world. Hardcore bitcoiner, and I started in bitcoin and like, bitcoin and Solana can coexist. But let me talk about specifically what excites me about Solana is that Solana is the fastest network out there. Right. You know, and I personally really believe in this idea that you are kind of alluding to Bryce of decentralized nasdaq. So, you know, listen, like, I worked at a centralized exchange, and I want to preface this by saying that, you know, like, I think that, you know, Kraken is probably one of the most fair. And this has nothing to do with like, cracking at all. And if anything, like, crypto exchanges are better than, like, equities exchanges, right? But yeah, you know, there are really unfair things that happen, you know, in trading, you know, where some of these, you know, people will pay millions of dollars to go from a cable that's this long to a cable that's this long, just because the speed, it's. It's faster for the speed of light to travel through it, right? And you know, you got to have millions of dollars to do that, right? So there's many different things about it. So, like, that's one is it makes it more fair. But also too, if you look at trading today, I really don't think centralized exchanges are going to be able to compete with decentralized exchanges, especially in the retail space. And one of the things, you know, that really excites me about Solana is you know, like I want to, I want to say this, that like without qualification, like you know, I don't support like meme coin launches, like you know, extractive ones at all. But if you look at you know, like some of the meme coin activity that happened and like, you know, I think there will be like bigger use cases for this. Most of the volume in those meme coins came within the first 15 minutes right of you know, like when those meme coin launches happened. And it takes a Centralized Exchange like 7 to like 48 hours to list a new token, which is extremely fast to them and like kudos to them for doing it that quickly. But in this new world we're going to move to centralized exchanges are just not going to be able to compete with certain things. And then also too, I know I'm rambling this last thing, I'll say no, it's good. All of it. Just the UX too. So if you look at this cycle's data in terms of where people onboarded, let me start with last cycle, you know, like last cycle, you know, like a lot of the newbies to crypto, you know, they onboarded, you know, via Coinbase, Kraken, you know, like all these different centralized exchanges because that was like the best ux. People want to go with dollars and they want to buy crypto, but you don't need to do that anymore. If you actually look at this cycle's data, a lot of people onboarded directly via Phantom. And what's really interesting about that is that, you know, you could just download a wallet, you don't need to KYC or anything. They have integrations with moonpay and Venmo where like if you're asking yourself like in terms of like what Gen Z or like whatever generation comes after that, like what are they going to prefer? All those, all those people are using Venmo today, right? They don't necessarily want to sign up for a centralized exchange. The UX and the onboarding experience is just so much smoother with Solana based Dexs. There's so many more things that I could talk about between Solana and Ethereum and maybe we can dive into that, but like at a high level. That's kind of my thesis for decentralized exchanges and then happy to dive into like Solana versus everything else later on.
- [13:38]
Bryce
No, that's awesome. And, you know, it's. It starts us with a good high level primer of why you guys are building Soul Strategies. And Lee, I want to turn to you because I really want to understand, you know, Soul, you know, stole strategies at a high level. You know, what is it? Why are you guys, you know, building this company that, you know, treasury management focused on Solana? How are you guys going to, you know, provide shareholder value in this vehicle?
- [14:04]
Leah Wald
That's a question I love. And, and Max, I, I love those explainers. It gets me excited. So in its core, we are a Salana tech company and that's something we pride ourselves in. So it's not just a Treasury indirect exposure, it's actual direct exposure exposure into a company that's building in the Solana ecosystem. But we put our treasury into Soul to boot to make sure that the strongest potential investment you can make in the ecosystem. Right, the strongest, the most valuable, actually has real value behind it. So what happened is the company was originally Cypherpunk holdings, as mentioned, listed on the CSE back in 2018.
- [14:47]
Bryce
The Canada Stock Exchange for those American listeners.
- [14:50]
Leah Wald
Yeah, exactly. And interesting history. It was the first company publicly listed to put bitcoin on balance sheet and actually make my investments. Yes. Back in 2018. So in July when I joined, you know, writing was on the wall. Let's do Solana. There was no exposure, there was no public companies, There was no ETFs. There was nothing for investors yet. Investors wanted it.
- [15:14]
Max Kaplan
Right.
- [15:14]
Leah Wald
This is summer last year. Right. So like the unlocks were happening, everything. So we did our material strategy and name change in September and we were off to the races. But what's important to Max's point, you know, and he joined January 1st, I think we got like, we did not like take a break for the holidays there, but it was important to us to run a real business. So at that time, you know, we converted our treasury into Solana. We also were running a validator already. And then after that, off to the races. So inorganic growth. So we acquired Cogent, we acquired Orangefin and got Max. Then we acquired Lane and got michael and stakewiz.com and just, you know, and the Cogent calculators. And then we launched the app last week that I hope Max talks about, and we launched dashboards on Dune and all this tech. And so it's very core to our thesis of the company to keep running that tech business, keep running the Tech business and also be avant garde for that tech business. So always, you know, the first one that's innovating and growing our validators. But also like all that Max is doing with geotips and everything, like, like consistently helping the network. So much more than just a Treasury play. It's more like we're here to stay, we're building tech in the ecosystem. You want to invest in Solana, the blockchain, like a company that's building, that's what we built.
- [16:44]
Bryce
I love it. That that's super thorough and I know there was a lot of, you know, different, I would say industry phrases there with GYTO tips and you know, validators and all that stuff. So Max, we're going to come back to you in just a bit to kind of unpack some of that stuff that you guys are really, you know, enacting and working on in order to enhance the, the entire ecosystem from the ground up. And but Lee, I want to stick with you on, on this next question because when I hear Mike or when I hear Soul Strategies, I think Micro strategy, right? Just, and again it's just the name and it's a Treasury business in a sense, but it's also a software business. But I want to know was there, is there any sort of, is it in homage to which now microstrate now called Strategy. Is it just a coincidence? Is there any level of similar, you know, treasury open market, treasury operations where you're, you know, issuing equity to, to buy Solana and using convertible debt and all that kind of stuff so.
- [17:46]
Leah Wald
That's exactly right. And I appreciate the leading question. I know this is airing a little later, but last week we announced that we got a credit facility up to 500 million to keep buying Soul. And as you'll see in the press release and the documents, use of proceeds is clear. Buy Soul stake. So on the validators, it's a unique structure because we actually structured it to share staking yield so that in effect is an interest payment. So very interesting. But we have two other credit facilities and we, you know, raised with Parafi, an amazing partner earlier this year. I think it closed in January 6th, but don't quote me, we can get you that date, but that was, it was 30 million Canadian of same exact thing, use of proceeds. Buy Soul Stake Soul and the Validator. So that's exactly right. We believe that, you know, walking the walk is important. We are not just talking. So we do put our treasury into Soul. We stake it on our validators. That's reoccurring revenue for us, but, you know, you're getting a complete Solana business with us.
- [18:58]
Bryce
That's awesome. And why do you think nobody else has done it before? And you know, you guys are really the first. And like I. Whenever you're a first mover, it's always interesting to kind hear from them. Like, you know, why, why, why are you guys the first mover? Why has nobody done it? Is it hard?
- [19:15]
Leah Wald
You know, and, and maybe my, my bias or learning from my background. Everyone was really focused on the ETFs. And so there was already filings in, you know, on both sides of the border. There was already ETFs that had launched in other jurisdictions like Brazil with hashdacks and a lot of other, you know, players and famous asset managers. So no one was focused on that thesis of a company. And with my background with ETFs, I think that they're. What's interesting to me is it's accretive to have both investors have different preferences. A lot of investors want to picks and shovels. That's why you see so much flow into the bitcoin miners. Even with so many options for bitcoin, you have leveraged, you have inverse, you have microstrategy, you have inverse and leverage microstrategy, you have. Right. Like you have, you have futures, you have spot, you have all these things. Miners keep seeing flows and those launches are always accretive. So for me, it was really interesting. Obviously the ETFs were bound to come out at some point, and I wanted to be able to have that other product in the market that provided another option for investors, especially investors that like fundamental analysis. Right. There's the success of an ETF is tracking it. Right. It's. It's just an exposure product. But being able to say, all right, like, what is their financials, here's their financial statements. Like, how are we building our models around it? Is it a good business? That's. That I think is cool.
- [20:49]
Bryce
That's what gets you more excited. And it sounds like it was a, you know, a classic example. Maybe they'll write a book about it one day about really skating to where the puck is going. And you know, everybody was wrapped up in the bitcoin etf. And you're like, they're all fighting over this over here. But very clearly the, the market's gonna move this way, so I'm gonna kind of shortcut it there. And obviously, you know, massive kudos to you guys for, for taking that risk when everybody was focused on something. You could have kind of dogpiled on, but you guys built a unique company and a unique product. So Max, kind of back to you when we talk about all the amazing stuff that Soul Strategies is doing to, you know, grow the ecosystem of Solana. Just, just riff on it, you know, what gets you excited about what you're working on that you could see, you know, five, ten, really, you know, growing the entire pie for, you know, Salana holders and stakers and ultimately, you know, shareholders.
- [21:39]
Max Kaplan
Absolutely. Right. So, you know, if you break down Soul Strategies as a company, we kind of have like two angles that we're doing. You know, it's like we have the treasury side that, that Leah talked about and then we have the, the like, you know, the tech side, right, which is mostly staking right now. But the way, the way we look at things really is this, is that Solana's dominance is inevitable. Right? It's just like Solana is going to crush it and like we build tech to, to go and ensure that Solana succeeds. I'm going to break that down further. We're also willing to like double down on our thesis by buying more Soul as well. Right. So like, we are like, we are like, you know, a thesis driven company where we think Solana is going to win. We want to have like a big stake of the network and we also want to double down on that thesis and buy sold. So let me break down that other piece I just talked about, which is like, you know, the, the tech side of it, right? You know, Solana is, is really the fastest network out there. And so like, let me put some concrete data on things just so the listeners can understand a little bit more. So, you know, I would say Solana's biggest competitor is really Ethereum, right? Ethereum's block times, which you can very high level. Think of it in terms of how long it will take a transaction to go from someone clicking a button in their wallet to being put in a block. Ethereum's is 12 seconds. Solanas is 400 milliseconds. Okay, so that is like a very, very, you know, that's a very big jump. And the use cases there that you can build with such a jump, you know, like there's use cases that you could do on a Solana that you could just not do on Ethereum. And I think one of the most obvious ones is really trading, right? So to talk about, you know, like sole strategies and you know, kind of combining like the tech side and you know, like our thesis for Solana is that you know, the validators run the network, right? And the more activity that happens on the network right now, the more money a validator is going to bring in. Right. So you know, some people might look at it and say like, you know, you might want to break it down like okay, what vertical is going to, you know, be the most successful in Salon? Is it going to be Dexs? Is it going to be deepen? Is it going to be whatever right. Of running a validator is, you know, like you basically reap the benefits of.
- [24:00]
Bryce
All of it regardless of all of it, right?
- [24:02]
Max Kaplan
Because you are betting by running a validator in a staking company, you're taking a bet on that the fastest network out there with the best UX is going to continuously get more activity. And that's a bet we are willing to take. So what do we do? Right now we are really focused on building like you know, the best possible staking experience that there is. How do we do that really, you know, a few different things. You know, one of them which we just announced was this is like on the retail side we target both retail institutions. On the retail side we really do two things. Number one, we just launched a mobile app which has been doing pretty well, which I'm really excited about. It's the first mobile app dedicated to Solana's native staking which is pretty cool, you can stick in some other apps. But really the reason we built it was we really wanted to build like a first, like make staking a first class citizen inside of an application.
- [24:51]
Bryce
And this instead of like delegating to somebody else is what you're saying?
- [24:54]
Max Kaplan
Yeah, well you know, it even abstracts that for you. So just to be completely honest, you know, like if you download the Orange Fin app, which that's what it's called, I encourage everyone to go and check it out. It's going to delegate to Orange Fin Ventures, right? So we, we abstract that out, make it really simple. You could buy Soul right within the app. App also too there's like some more advanced features you can do like merging stake and things like that, which you can't really do in any other mobile app. I don't really want to get into that just yet. But the second thing is we have one of the highest APYs out there. You can look this up on public available dashboards. Like we charge no inflation commission, like 0%, 0% commission on, on, on two of our validators that like so 0% commission. And we have super strong technical optimizations to make the APY higher, which you can verify yourself on like a lot of public dashboards. That's on the retail side. I know I'm rambling again. On the institutional side, we're doing a lot more. So first of all, to start, we have like all the compliance and certifications, you know, you can imagine like some like the boring stuff, but ISO 2701, we're going through SOC 2 right now, things like that. Second, you know, most exciting thing is, you know, we just announced that we partnered with Bitgo where we're going to be able to meet institutions where they are. So, you know, through Bitgo, which is really one of the biggest custodians in the entire world, if not like the biggest, you know, we partnered up with Bitco, where all those institutional stickers are going to be able to stake with us. Right. And then third, and lastly, what I think is really cool and Leah alluded to as well is, you know, like for public companies, you know, you typically get like an earnings call and we obviously do that. But what's really cool about how we operate is all of our revenue is public actually on the blockchain and we actually have dashboards where you can go and view like daily revenue. Like name another public company where you can see like their daily revenue. So that's pretty cool. So really, in general, we are trying to build the best possible staking experience and you know, attract stake and you know, like, you know, just return the, you know, the highest amount of rewards and also build like the best UX ui. You're going to see us get into more, more vertical soon. But that's it at a high level.
- [27:03]
Bryce
Wow, that is a lot. I wanted to say. What else? What else? But it's like, you know, you guys are already doing so much and it just seems like, you know, it's, it's going to be a really profitable sort of venture. So long as, you know, Solana continues to, to grow. Like you said, Solana dominance is inevitable. I might have you touch a little bit on that statement. But so long as, as Solana continues to grow and one of the big drivers of growth for Solana as, as I think you alluded to earlier was like Meme coins and all of these other coins that aren't really Meme coins, but just different, you know, sort of tradable assets, NFTs and stuff like that that really came to launch on Solana for all the reasons you described, like speed scale, UX people just feeling comfortable and secure with their transactions. And so will, Will, will. You guys kind of also invest resources or energy in like infrastructure that supports other sort of, you know, cryptocurrencies outside of just Solana or you know, like, like meme coins and NFTs and all that kind of stuff, or are you really just focused on Solana staking and then. And maybe even like tokenizing some other kind of assets or anything like that?
- [28:12]
Max Kaplan
Yeah, I think that you are. You're definitely going to see us in some of those areas in the near future for sure. You know, I think there. Some. I think we're. We're more excited about than. Than others but, but you know, really in general, like, where we think about is like, what we think about is this. Is that like, clearly we're very heavily invested in Solana and the more, the more Solana succeeds, the more Soul Strategies is going to succeed. Right. You know, we really want to, to help the network grow. You know, listen, like the meme coin craze as like a few months ago, that really did help Solana grow. Like, I don't think that's best for the long term. I can talk about some really good things that can came out of it, but you know, I think some of the use cases that I'm really excited about personally are, you know, like RWAs and deepin to. Just to talk about those acronyms, real world assets and decentralized physical infrastructure. On the Deepin piece, which is like pretty cool if the audience hasn't heard of it. There's a company called Helium out there, which is actually a cell phone provider. They just partnered up with AT&T. They're partnering with Movie Star in Latin America. I mean, like, you know, they're growing like crazy and there's things that you could just, you just can't do in other networks that you can do on Solana and on the trading side. I just want to like throw out one more stat that I find super cool, is that during the Trump launch, right, which was like, you know, like a pretty. I don't want to, I don't want to get into that was good or bad, right.
- [29:32]
Bryce
But like I heard there was a million Solana users onboarded in like a day on the moonshot, like something like that. One of the guys came on and was like, yeah, it was a million people. We ran out of money and had to borrow like a bunch of money or something over the weekend to like, like make people whole. It was a wild story.
- [29:47]
Max Kaplan
Yeah, well, yeah, exactly. And one of my favorite stats is that Solana decentralized exchanges did double the volume of both Coinbase and Kraken combined during that day, which is the two biggest US Exchanges combined. Kraken, sorry. Solana did double the volume of those, which proves like, forget about the Trump thing. Which proves that Solana can actually handle that type of volume. We're being honest. I think if, if some of those centralized exchanges had that, that type of volume, they probably would have gone down. Solana is like the first, like there's like Solana blew past the all time high record for Dex volume on any chain. And if you really think about like, okay, cool, we just like Solana proved all this out, then think about like RWAs and tokenization and things like that. Like we've proven out that the tech works. Now we just got to go and bring more stuff on chain, which I'm really excited about. You will see us invest in some of these areas soon.
- [30:43]
Bryce
Awesome. Oh yeah, go for it.
- [30:45]
Leah Wald
Maybe throwing another one. I think bridging both worlds that Max could talk to is Pudgy Penguins.
- [30:51]
Bryce
I was just gonna bring that up.
- [30:53]
Leah Wald
Yeah, so maybe talk about that because I think that's bridging NFTs as well as Solana and I think pretty unique.
- [31:02]
Bryce
Totally.
- [31:03]
Max Kaplan
Yeah. Yeah. Listen, so, you know, we partnered with Pudgy Penguins, which is pretty cool. You know, obviously one of the most well respected brands in crypto. And funny story, you know, I have a girlfriend and she just like, you know, she gets so tired of me talking about crypto. But the only thing that like gets her excited is Pudgy Penguins. So, you know, like, I was actually able to talk to her about that, which is kind of cool.
- [31:26]
Bryce
But that's a good market read right there. There, you know.
- [31:28]
Max Kaplan
Yeah. Long.
- [31:29]
Bryce
I'm Long Pengu. Full disclosure.
- [31:31]
Max Kaplan
There you go. There you go. So, you know, listen, like, and here's the thing. I talked about all these different things. Pudgy Penguins, you know, they were, you know, a company that was on Ethereum. They saw what's. What's happened with Salana and Luca. Like the CEO there is quoted by saying that, you know, it's. It's like pretty obvious retail is moving to Salana and Pudgy Penguins wants to be there. They launched a meme coin called Pangu. And you know, they, they're also like, I believe, launched an ETF for it as well or that, you know, an application for.
- [31:56]
Bryce
Yeah, yeah, I saw that.
- [31:57]
Max Kaplan
And you know, they wanted to run a validator because, you know, you know, staking can be a really profitable thing, but also they really want to like, do good for the network as well. So we were super excited to partner with them, you know, just due to their brand and just like how awesome it was to work together. And you know, now we're running a validator for them as a joint venture. It's going really well. Super excited for it. And you know, I, you know, I think they're going to keep pushing in the Solana ecosystem and you know, we're happy we did our part to, to bring like one of the biggest web 3 brands in crypto into Solana, which we think is for the best.
- [32:31]
Bryce
Yeah, I love it. So, so run running a validator with them when you kind of think if we like just zoom out high level. The validator business, it's obviously a big part of of your guys's business and the cash flows associated with that. Like walk us through the value flow of like how a validator gets paid. Because I know that a, a transaction on Solana is like notoriously cheap, right? It's like.0002 cents. So everybody initially like, you know, entry level people are like oh nobody, you know, the economic security is not there because nobody's paying these fees and all that kind of stuff. But there's tips and you could kind of, you know, say hey, you know, here's the base level fee. But we're also going to maybe pay for the toll road or a priority pass or something. And that's where, that's my understanding of where most of the value comes from for validators. But I feel like that's just like a surface level understand. So I'd love to kind of stick with you Max, and kind of have you unpack the economics of validating.
- [33:27]
Max Kaplan
Absolutely. So let me start from like the transaction full like let's just start from like a user's perspective. You have Phantom open or whatever your favorite Solana wallet is and you're going to click send on a transaction. There's a few different types of fees that can happen there. There's one called a base fee, but there's two interesting ones. One of them is called a priority fee. What a priority fee is, is basically this is that you can pay more to get your transaction included in a, in a block faster. Now what's really interesting about Solana is just this is that like Ethereum, like a lot of people moved away from Ethereum because they had these like this concept of global fee markets, right. Where you know, if you remember from the NFT markets, you know, like there would be some crazy NFT mint and then like, you know, you and I, Bryce, might just be trying to send ETH back and forth to each other. Like even though there's this ETH mint over here and we're not a part of it, like our fees get jacked up, bro.
- [34:26]
Bryce
I have a screenshot somewhere on in my hard drive of a ten twenty four dollar transaction fee that of course I declined it, but I was like, all right, this is unsustained. This is a horrible network.
- [34:38]
Max Kaplan
Oh my God.
- [34:39]
Bryce
That was my moment.
- [34:40]
Max Kaplan
That's crazy. I think I paid, I paid the hundreds. I don't think I've ever done thousands, but any. Anyway, Salana has a concept called local fee markets, which is really cool, which is like, let's take that same example where there's like an NFT mint over here. Then now Bryce and Leah are trying to send Soul back and forth or usdc, whatever, because they're not interacting with that NFT mint. Just like really high level. You guys don't have to pay the crazy high fees. So priority fees are tied to like what you're trying to do on the network. Now there's a third component which is mev. And MEV I think has like a lot of negative context, like just like in the overall crypto world. But in Solana it's like, don't get me wrong, like there is some really bad MEV that happens and like there is sandwiching. And I'm not trying to take away from that because that is true, but like because of how fast the block times are, the amount of sandwiching, it just, it's just different to sandwich in, in Solana. And actually what's quite interesting. So anyway, JITO is the, the biggest MEV engine on Solana. And you could also pay a JITO tip. What happens is I talked about how Solana has 400 millisecond block times. Any validator that runs the JITO client, which we do on two of our validators, there's this auction that runs every 200 milliseconds that Jito runs itself for this thing called bundles. And basically if you send a transaction through jito, there's a few things that you can do to kind of guarantee that. I don't want to say guarantee, but make it less likely you're going to get sandwiched and more likely you might be included into a block that gets like really complex. However, those are the three things, like in terms of how fees work. The last thing I'll say is just that like validators can charge a commission based upon inflation. We do on two of our validators, we don't on others. But that's, that's kind of validator economics. But I guess, sorry, last thing I just want to say is this, is that validators right now, the more activity that's happening on the network and the more, like, fees that are being paid, the more a validator generates. Like, you know, when the Trump thing was happening, you know, fees were just like, outrageous. But what's interesting though is that, like, you didn't have any instance of like, you know, Bryce paying $1,000 for one transaction. You had thousands and thousands of people that collectively might have been paying 25 cents, 50 cents, which is like a lot. But, like, no one was like, priced out of the market per se. Obviously there might be a few, but way less people are priced out of the market. That's the Solana thesis that if you can just like, basically get all this activity to happen on chain, attract people to it, they each pay a little bit, but collectively that sum adds up to a lot. That's what Solana is trying to go for.
- [37:21]
Bryce
I love it. And yeah, there was a couple terms in there, MEV and sandwiching, that I'm sure some listeners at home might be like, hey, could we get the 101 sort of definition of that sort of activity?
- [37:32]
Max Kaplan
Yeah, absolutely. Sandwiching is a form of mev. I'll just start with this. MEV stands for, like. There's two definitions for it. Like, but like, high, High level. You can think of it as a concept called maximum extractable value. One of the forms of MEV is called sandwiching. Right. Where. Think of it like this, where, you know, like centralized exchanges. I'm trying to keep this high level, but yeah, yeah, they have, they have a trading engine. And that trading engine operates on, you know, usually like a single server, collection of servers, whatever, with a decentralized exchange that is happening across several different validators. As a validator, because you're building the blocks, you can decide the ordering in that block. Right.
- [38:18]
Bryce
Of all the different transactions.
- [38:20]
Max Kaplan
Bingo. Right. And like, the easiest way to kind of conceptualize what sandwiching is is let's say that like, okay, Bryce, I see you just put an order in a buy order for, I don't know, meme Coin, a usdc. Right. I could look at the, like the liquidity on the book and say, okay, Bryce's order is going to cause the price to go up. I'm going to insert an order myself to take advantage of that price movement. Maybe I try and sell it, whatever. But because, like, I Get order flow. I can go and see that. Like, that is like the most obvious form of MEV now. It's, like, more complicated. There's this other angle called searchers, where usually validators don't do that themselves. Like, they, you know, like. Like JITO connects searchers and MEV and makes it more like. Sorry. And validators and makes it more fair, but at a high level. Think of it in terms of, like, seeing the orders coming in on Dexes. And because you can build a block, you can kind of place an order to maximize. Yeah.
- [39:17]
Bryce
You could, like, use kind of your knowledge and your algorithms to, like, front run other people and buy it right before and sell it to them at a higher price. Like, and it happens just, you know, in milliseconds. And so there's not like a guy out there, like, looking at the transactions, I guess.
- [39:32]
Leah Wald
Bryce. Maybe it's helpful. I'm the one with the lizard brain here. The way that I always understood it was that MEV is when someone tries to make extra money by changing the order of transactions in a block. Does that make sense? Max? And then sandwiching is kind of when they put one trade before one another and someone else's trade is trying to take advantage of those price changes as well.
- [39:57]
Max Kaplan
Much more eloquently said, but great spot on, Leo.
- [40:03]
Bryce
And like, Leah, I got to imagine this kind of behavior happens in traditional markets. Like. But like, maybe. I mean, it sounds illegal, like front running.
- [40:12]
Max Kaplan
Right.
- [40:13]
Bryce
But I imagine, like, I don't know, I don't want to call out any market maker by name, but don't they kind of do that?
- [40:20]
Leah Wald
Yeah, no, that. I mean, that's exactly right. That's front running. Right. And that's where. And Max would know this in spades because centralized exchanges in crypto still do the same thing for the most part. It used to happen all the time, but. Yeah. So that's when traders do you. At least it. If we tried to equate it to TradFi. You know, front running is when traders use advanced knowledge of large orders to profit by trading ahead of them. Right. So it's illegal. It's, you know, in TradFi, it's heavily regulated, while in Solana. Right. It's legal, but debated.
- [40:56]
Max Kaplan
Yeah.
- [40:56]
Bryce
And I know there's some. Some people that actually went to prison. I know Avi Eisenberg, I don't know what his last name is, but he was doing kind of some of this stuff and he was like. Like, it's on decentralized exchanges. So I'm Innocent. But it was like, no, you're still committing these, these heinous acts and stuff. And so I'm not sure if, if the case is resolved or whatever, but. Wild times. Leo, I want to ask you kind of if we, if we zoom out, I want to just talk about the nature of like running crypto businesses, because you've been running crypto businesses and it's very bubblicious in this market. We have big runs and then we have big busts and big runs. How do you. The ups and the downs. And then even, you know, if we kind of zoom into soul strategies, like how are you going to weather this volatile market?
- [41:43]
Leah Wald
Ups and downs, Emotional ups and downs. Yeah. I think anyone that's been in the market long enough realizes that bear markets come and they're tough. No and ifs or buts. And the last one where all of us had not just, you know, punched in the eyes, but bruised faces and bodies. You know, in 2022, it was especially tough because of how the regulators treated everyone in crypto, the way that the banks debanked all of us in crypto, you know, and it was, you know, the rest of the investors just ran away. They didn't stop investing. They, they sold and they ran away. So running a, you know, a fund business, that was really tough. So you're right, you know, in January, Seoul was 250 and our treasury was up and validators were making more money and it was a much easier time. But that's where, you know, we started building more tech. That's where Max, you know, built up his tech team. And we started trying to figure out, well, what's the next six months, the next year, the next three years. So no matter what, it's, it's tough. But I think that the way you do it, and I know that everyone says this, so sorry to sound corny, but, you know, bear markets are for builders. The luxury is that we have capital. The difficulty is when you don't and when you're a startup, you get knocked out. And that really sucks. That's really unfortunate. Some of the best companies I know during 2022, they were, you know, domiciled in the U.S. they were still startups and they just couldn't raise more capital. They got, you know, debanked and there was no way around it. I think they were building great things. So we're in a great position where we have a lot of liquidity. We have investors, we have public stock, we have all the things to, I think, be successful and Then to Max's point, Solana is successful, and Solana is building. So we think we're betting on the right horse as well. But, you know, that's, that's the way we're thinking about it. We're keeping our heads down, and I think the market's ranging, and I think it's going to figure itself out pretty soon, no matter what. These are nice prices, both to buy, but also not financial advice. But, you know, also there's still a very lucrative price to make money as a validator. So, you know, just, just building, making more partnerships.
- [44:14]
Bryce
I love it. And I, I kind of want to, you know, stick with Julia on this next question because it kind of, you know, we talked about January. You know, it was, it was a big high month and everybody was riding high after Trump got elected, right, because he came in with this pro bitcoin, pro crypto hell. He has his own defi project and stablecoin now. I mean, he's, he's pretty much all in. You see, his sons are all in, his cabinet is all in. And so people, you know, bought the rumor and sold the news pretty much the day he was elected. It ran up all the way until the day he was inaugurated, and it started to trend down. And here we are, you know, end of April, you know, beginning of May, and, you know, markets are still, you know, not above their, their peak. And so I think the market got ahead of itself, but fundamentally, it was sniffing out the right thing that the, the entire crypto landscape is going to change the regulations. Right. And so the question I have for you is what regulations are really most impactful to you that have changed or you want to see change, or that you hear, you know, Washington start to talk about, like, hey, this is going to be good for our business and industry.
- [45:24]
Leah Wald
Big questions.
- [45:25]
Bryce
Yep, I'm famous for those.
- [45:29]
Leah Wald
They're, they're really good. And also a student and also near and dear to my heart on what, you know, has been happening for the past few months, because I think for everybody that's, you know, cares about crypto and was in an earlier days, it's a relative statement. It was the wild West, I think, until like a year ago for the most, for sure. But to see the complete precipitous drop off when the tariffs were announced and to see that correlation with traditional finance was kind of upsetting in a way. You know, we, you know, I always was excited when it was decoupled. I think that bitcoin saw and therefore, you know, all other cryptocurrencies really saw the coupling in 2020 and especially you saw that, I believe it was March 12th when everything really sold off. And, and you saw that crypto sold off too. I mean bitcoin Even wicked to 1500 before it, you know, brought back up. So to see Solana as well as everybody, you know, all everybody, all other, you know, crypto in the space just be tracking the S and P kind of as a beta tech stock has been interesting and I think therefore just requires different strategies. So to your point, I think that the future is really, really bright. You know, I think that traditional finance is going to be figured out as well. I think it's a weird macro econ story at the moment and that that does get figured out. It's the uncertainty in the markets. And crypto and tradfi aren't unique that uncertainty. Well, actually crypto is really fun under uncertainty for a long time. But for the most part, you know, uncertainty doesn't bode well for investors. So once that gets figured out, I think, you know, it's time to fly your DC question. And then also in Canada with the osc, I think that, you know, we're very excited that JITO and Multicoin and a lot of other companies in the space have gone to the SEC already and have already put proposals forward for the Solana ecosystem and also to try to define if a liquid staking token is an under registered security offering. Right, right. Where does Sol and Solana fit into this picture? So for us validators in the US and with the SEC was completely unknown. They still don't have rules and regulations around the income for validators. You know, we're feeling comfortable where we're at. We have good legal counsel on both sides of the border. But we're excited for that to be solved for real rules and regulations both from the IRS and DC to come into place so that everything can grow. But definitely our eyes are on liquid staking tokens and how that gets solved.
- [48:19]
Bryce
That's awesome. That's a really unique piece of insight and an answer that I didn't expect. But I'm really glad I got. I saw that ledger just recently announced that you can not stake. You could essentially earn yield on your USDC usdt dai they're calling them covered Sable coins. And so there was this kind of statement that the SEC put out in early April that started to give clarity. Right. Which is awesome because now we have, you know, Paul Atkins, who's kind of in charge of the sec, who came out publicly, said my number One priority here is to get the digital asset framework just straightened out. Like, give these good people some freaking clarity and help them run their businesses and like, let's help grow GDP and let's stop, you know, you know, crapping around. And so it's really, really incredible to hear, you know, what, what initiatives you guys are working on and really excited about. And you know, we're, we're here kind of at the, at the top of the hour and I just wanted to ask, you know, Leah and Max, just one last question for the each of you. You know, Max, we'll start with you just in five years, you know, where do you see Solana? And then Leah, my question for you will be where do you see Solana Strategies?
- [49:31]
Max Kaplan
Yeah, absolutely. What I would, what where I see Solana in 5 years is I think that we're going to move away from this meme coin craze and I think we're going to start seeing real assets being traded on chain and we're going to start seeing things like stocks being traded on chain. Right. I think that's inevitable. I think it brings, like just being on chain is. Just brings so many advantages. Like even just the access to US equities, for example, it's really hard for people to get outside of the U.S. i think it's going to be the leader in terms of trading volume in terms of chains. I think it will also be the leader in terms of stable coins. And I think decentralized, like decentralized physical infrastructure deep in. I think that's going to take off and I think we're going to start seeing some really interesting use cases from that.
- [50:23]
Bryce
Love it, Leah.
- [50:26]
Leah Wald
I'm really excited about where we're going. I mean, that's what a CEO is supposed to say. But I actually am. We're all looking at the markets as mentioned. We're looking at what happens with Econ. We're looking at all the different elections. We're a Canadian company, so obviously, and I know this is getting published in the future, but what elections were yesterday and all that matters. And again, what excites me is Max and Michael and he knows it. And I'm, you know, I'll make sure he doesn't blush. But you know, the more tech we can build, the more powerful tech we could build. That's what gets me up. Definitely not taking investor relations calls. Sorry to our IR team. But definitely, you know, seeing us build in the Solana ecosystem, I think that what makes us special, you know, and kind of regurgitating from before is is is that we build in the Solana ecosystem, that we're actually building on the blockchain that we're actually trying to innovate, that we're looking into all the, you know, things you mentioned before and we want to be the first to them as well. And then, you know, Max publishes all these technical blogs of opening our kimono. He literally just published a blog of how to run multiple validators. So, you know, we're just, we believe that, you know, by being collaborative, it's going to work out. So I'm just excited about building more tech.
- [51:52]
Bryce
Absolutely. And yeah, that's the true ethos of crypto. I mean, that's how it all started. It's all about collaboration and, you know, there's enough to go around and it's having an abundance mindset, not a scarcity mindset. And I think you guys both embody that incredibly and really excited about what you guys are building. Last question. It just popped in my mind. I can't believe I didn't ask this, but I know a lot of people at home are probably wondering, is Salana etf, yes or no, Will we get one? Maybe this year, next year? What do you guys both think?
- [52:18]
Max Kaplan
I'm gonna go with Leah, whatever she says.
- [52:21]
Leah Wald
I think I'll probably take that one. So the sold ETFs, the stake soul ETFs were actually approved two weeks ago. Canada, you had volatility shares. Sole futures ETFs were approved when I was a DAS, so I guess that's about a month ago. But to your point, when, you know, Wen Sol ETF stayed in the United States, you know, I'm pretty excited under Atkins, to be honest. I think all of us, and especially folks in the, that are issuers in the ETF ecosystem, you know, they knew that until Atkins was actually approved that not too much forward progress could happen on that front. Now that he's approved and he has the crypto task force and he has very smart folks behind him, you know, and you also have the cme. So futures are trading with great price discovery and it's a very healthy market that I think that, you know, it's. Maybe we don't have to hold our breath. I think that at least I'm feeling pretty optimistic that. But, you know, maybe in the next two quarters.
- [53:27]
Bryce
Beautiful. Well, Leah, Max, thank you so much. I know our followers who are listening in today are going to want you guys back on. They're going to want to stay in touch. Where can people follow along with your Journey.
- [53:39]
Max Kaplan
Yeah, you can. You can follow the company at Soul Strategies at Soul Strategies. Underscore on Twitter. We're on LinkedIn too. My personal Twitter is Max E. Kaplan and then Leah's is Leah Wald. Right.
- [53:52]
Leah Wald
It nice and boring.
- [53:54]
Bryce
Easy.
- [53:55]
Leah Wald
Man, I still wish I didn't anon. Like, I really missed out on the early days. No, that's. That's exactly right. You know, follow along from the boring investor perspective. Everything's on our website and has a link, but if you want to just slide into the dms, all of us are there and we love chatting.
- [54:14]
Bryce
Awesome. Well, hey, I'm glad you're not anonymous. You. You've been a great contributor to the Space Max as well. Thank you guys so much for coming on. And truly, when you guys got more big announcements or just fun things you want to riff on or anything you're excited about, you guys have a home here and would love to talk about it with you. So thank you. Thank you very much.
- [54:32]
Leah Wald
Thanks so much, Bryce. Thanks for having us on.
- [54:34]
Bryce
You bet. All right, everybody at home listening. Hope you enjoyed. That was Max and Leah from Soul Strategies. Come back next time, same time, same place next week. We'll be here. More great guys. Guests.
- [54:54]
Leah Wald
What'S standing between you and your.
- [54:56]
Bryce
First sale on Shopify? Time, expertise, resources.
- [55:00]
Leah Wald
What if you could multiply all three product descriptions done. Store insights delivered 2am Customer questions handled instantly.
- [55:09]
Bryce
Entrepreneurs on Shopify are reaching their first sale faster with AI that works with you. Go to shopify.com firstsale to see how.
- [55:18]
Leah Wald
Entrepreneurs use AI to grow their businesses faster. That's shopify.com firstsale.