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CRYPTO 101
Ep. 658 How TradFi will Invest in DeFi: Mantle's Innovative Approach to Fundraising
00:36:58
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- [00:00]
Tim Chen
Foreign.
- [00:09]
Bryce
Everybody. Welcome back to another high caliber, action packed episode of the Crypto 101 podcast. Man, I am so excited. The markets are going crazy. We're recording this on, on a great day. And Brendan, I mean, I'm jazzed up. How are you feeling? Raining from the, the other side of the country, the east coast.
- [00:31]
Brendan
I'm just as hyped up over here. I mean, how can you not be? There is positive information everywhere you look about the crypto space. In fact, I think it would be a difficult time right now, Bryce, to go and find some negative catalysts, some negative news, because everything is just on fire. You look at the technicals, the fundamentals, you look at adoption on a global or domestic scale, everywhere we are firing over here. So we're hyped up and as per usual, we're bringing in the biggest and the best in the space to talk about everything. Crypto.
- [01:03]
Bryce
Absolutely. Yeah. No, you're totally right. I mean, the stars are aligning not only for a bitcoin season, as everybody knows. It's like we can get questions all the time. Oh, it seems like it's a bitcoin season. Bitcoin dominance is, you know, riding higher. Is there any slowdown when altcoin season. I think we're feeling it. I could feel it in my gut. You know, we've been here, you know, trading these markets for, for the better part of almost 10 years now and it feels like there's finally, you know, some, some really good substance. There's some really interesting projects out there that are generating a lot of value. And so we brought on today Tim Chen, who is the global head of strategy at Mantle. And so, Tim, we are so excited to have you. Come on, talk to us all about what you're guys, what you guys are building. But first, how are you doing and are you sharing the same level of excitement as us?
- [01:57]
Tim Chen
I'm pumped. I mean, if you told me. I mean, a year ago we saw the corporate treasury play start manifesting in the US post ETFs, right? We saw microstrategy get more volume behind it. We saw Meta Planet Japan. Today is a phenomenal day because to your point about altcoin season, you need altcoin season. It happens when bitcoin dominance comes down, which usually happens when ETH has more wind in its sails. And today there was announced that Joseph Lubin, founder of Consensus, is building the microstrategy for Ethereum. I mean, who better to be the head of that type of product and lead the charge there, right? For institutional tradfi, Wall street adoption. So we're pretty pumped.
- [02:32]
Bryce
Yeah, that's, it's, it's great for us. It's, it's great for everything you guys are building. But let's take a quick step back. We always like to ask just a personal sort of question here to get things kicked off, get you acquainted with our audience and vice versa. And it's really just. We want to know a touch about your journey into crypto. You obviously were working in the investment world long before crypto was really a twinkle in your eye. And so tell us what that transition was. How did you get pulled in over here into the crypto world?
- [03:00]
Tim Chen
Yeah, so my background is pretty eclectic. I'd work both in the Wall street side of things, across banking, hedge fund, then to Silicon Valley. I was at Uber a number of years building out the Uber pool product. And then I was poached to build out micro mobility out in China. I mean we invented the concept of bicycle and scooter sharing. So you know, that company I guess was to blame for littering your sidewalks in your downtown. If you see the lineman bird scooters that copied us. And then I was in venture capital for the last half decade, investing globally in Web2 mostly consumer fintech, logistics tech type companies. But off the back of the last cycle, I started our proprietary bitcoin mining shop out there and slowly edged into looking more in crypto. Really by virtue of when you saw interest rates skyrocket to 5%.
- [03:46]
Bryce
Right.
- [03:47]
Tim Chen
Emerging markets and other economies went down, you really only had two options to invest in. Right. Either you were long MAG7 or you were long bitcoin and or Ethereum. And so that really just pushed me further into the crypto world.
- [04:02]
Brendan
What kind of similarities did you see between incubating those early stage company? I mean you've worked with some behemoths. I saw Animoca, Mobike, Uber, I mean a handful of other names. Did you ever see any similarities between incubating those and the growing crypto market?
- [04:21]
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- [06:27]
Tim Chen
Yeah. So for some of those I was part of the early journey, some of those I was mid and some of those were just investors in. So but to your point, right, the question is what are the core layers? And I think we're at a point on how do you translate the benefits of what we see on tech side and provide them to the masses. And I think the easiest is to think about what the work we did at Mobike. So I was head of international product there and expansion. How do we build, how do we bring a very unique Asian product which is bicycle sharing. Right? And the way you scan and ride the bicycle is you scan it with a mobile phone and it's digital payment. How do you translate that to a western audience? Which 10 years ago actually Apple pay was really not a thing. Right. And so it's, we're at the same chasm now, which is how do you bring a unique product that has unique sets of skills, understanding and logistics and tech behind it and simplify it for the mass audience?
- [07:18]
Bryce
Totally.
- [07:18]
Tim Chen
Yeah.
- [07:19]
Bryce
No, it seems like, you know, crypto is just one of those, you know, to me it's like, you know, crypto and AI, these are the two fastest growing sectors in the world. I think, you know, it's, it's all also evident. You know, we had the President come in and say, hey, we need a czar or like a new head of crypto and AI. And so I think everybody who's listening right now, we are. We're just in such a Goldilocks period. Because now we have kind of the vindication of a lot of these, you know, nascent crypto business models that for a little while there it's like, you know, things are so early stage and there's high risk and all that kind of stuff, but now I think people are starting to get compensated for that early risk taking sort of behavior. And I kind of wanted to like ask, you know, you've got like, you know, great experience in, in, you know, all sorts of different markets. What do you kind of think is like the advantage of launching a token or having a token? Because, you know, sometimes people are like, you know, well, why don't you just go raise equity money? And it's like Mantle Group decided, hey, we're not going to go, you know, raise a bunch of equity. We're going to. Or maybe you did, maybe you didn't, I don't know, maybe we could talk about that. But primarily a lot of the fundraising was done via a token. And so could you kind of talk about that dynamic there?
- [08:31]
Tim Chen
Yeah, so actually, so our genesis and our background is we started out actually as a investment dao and we have strategic partnerships with the likes of, I mean, at the time, anyone from some of the biggest names in Web2 in terms of investment funds, as well as in Web3 sectors such as Bybit. And so that's how we started. We started as a massive committee owned DAO looking to make investment decisions. Right. And then we realized, okay, well, you know, we can't scale those investments fast enough. The process is broken. From a DAO perspective, why don't we build something? And so we built Mantle as an L2 when the whole L2 narrative came to focus a couple of years back and mantle as an L2, I mean we're sitting at 3 or 4 billion FTV. We build out a suite of products, we build out a suite of features and attracted a lot of great names to our ecosystem. And then we realized okay, well after the Shanghai upgrade proof of stake, we're sitting there and we saw likes of Lido do well. We thought okay, well we should get in that business. And so we built meath, which is our version of staked eth. We also have a resting protocol baked into it and it yields a bit higher than what you would otherwise get on Lido and that's sitting at close to a billion dollars tvl. And I want to specifically know, it was just announced recently that a publicly listed company in Canada was wants to build a strategic ETH treasury reserve using meth. So we're the first to market on that regard. We're super pumped, super excited.
- [09:48]
Bryce
That's awesome.
- [09:49]
Tim Chen
Yeah. And thank you, thank you. And so, okay, so about 18 months ago we're like okay, well Emi did pretty well. What else do we like? Well, we like this thing called Bitcoin. What's interesting out there, right, we see the biggest product in bitcoin is wrapped bitcoin outside of obviously bitcoin itself and we want to take a bite of the business. So we co built function BTC with the likes of Ant, Alpha and Galaxy to be that rack bitcoin instrument for yield and that's sitting at about 1.2 billion TVL as well. So we were successful and we realized we're good at shipping these products and going to market. And that was at the end of last year, near the end of last year. And so we took a step back and we said okay, well what still exists to be solved in the crypto market? What are some, some of the biggest problems we are facing and we feel that the biggest ones are driving mass adoption. Right. If we think about crypto and technologies adoption on an S curve, I think we solved the first piece of that S curve which is through trading brokerage accounts, getting people excited about trading tokens. But to onboard the masses, let's say the next 50% of people around the world, you really need to simplify the user experience, right? You need to have people adopted through a form factor that they trust. It's easy to understand and it's convenient. And so that's what we're focusing now. How do we build products using our tech stack, our liquidity stack to Onboard the next billion users, onboard the next trillion dollars of institutional capital.
- [11:13]
Bryce
And it sounds like, you know, it's like, I think mantle is maybe misunderstood by people because people just think, oh, it's just another layer too. Or it's just another, you know, sort of. It's got this just another, you know, what's called liquid staking token. But, like, it's so many things. So, like, at a high level, how do you kind of distill, like, what mantle really is? Because it's not just a layer two, it's not just a liquid staking platform.
- [11:40]
Tim Chen
Yeah, great, Great question. So I get that's the common misperception, and that is because we did start out first as an L2, right? So it's not, it's not misappropriated by any means. So the mantle, I want to draw a very clear distinction. Mantle Network is the L2. So the network, we are building an onchain liquidity hub, right? With the likes of Emmett, fbdc, et cetera, for capital to come in, get the best yields, get the best experience on Defi. And so that's the network and that's what we're looking to sell for Mantle. In terms of what we're doing, our ethos is how do we bring TRADFI and DEFI closer together, both on the retail, institutional side. How do we make a sustainable ecosystem for these projects?
- [12:21]
Bryce
Right.
- [12:22]
Tim Chen
How do we, in our words, like, bring crypto to your everyday.
- [12:25]
Bryce
Absolutely. And when you kind of position all the incredible things y' all are doing against the MNT token, where do you see the interplay?
- [12:36]
Tim Chen
Yeah. So the MNT token is just a governance token, Right? Not too dissimilar than every other token out there for a lot of projects like Uniswap, et cetera. So I think the big question here is what are we doing differently as an L2 or protocol ecosystem versus other ones? The easiest way I like to explain is that you look at other protocols and tokens, sorry, protocols, ecosystem, they are building very. Horizontally, they are building very, hey, I'm going to build this platform, build this protocol, maybe have an ecosystem fund, maybe have some grants come build on me, right? I will give you grants. You get a grant, you get a grant, you get a grant. Today we're doing DeFi, tomorrow doing games. The next day we're doing Deepin, right? Or they. Now we're starting to see a convergence towards specific niches, right? You see folks specifically focused on rdba, like the likes of Ando. You see folks specifically focused on gaming or deep in which I think is the world we are going now. That is one way to build. And I akin that more to like an open source kind of network. Everyone comes in and sings Kumbaya and people build together. But in reality what gets done is you need a strong centralizing force to really carve out the use case, the users, the transactions for people to come. Right. And that's not a ding on decentralization, but it's just two different ethos on building things. So that's the approach we take. We like to it more like a Apple approach where backed by our community owned treasury, which is about three and a half billion dollars depending on where ETH is trading, is now the largest onchain treasury, right. It's completely community owned, Dow governed. We then look at our ecosystem and say okay, what's missing in this tech stack? What's missing in the value chain? Should we go build it ourselves or should we partner with another player and help them build for that? And so those are the two approaches we're taking. It's a bit more surgical, right? So what that means for builders is that yes, we are still supporting them, but we're a bit more choosy. But if we're choosy, it means we really want them to win. So I'll give you an example. Right? Let me first talk about the ecosystem partners and then talk about kind of the, the ones we are building ourselves. So on the ecosystem partner side, we were instrumental in anchoring the initial TVL industrial successes of the likes of Ondo and Athena and we were also investors there. So we're tight in regard to that relationship. Right. So who else can start a new project and get an anchoring investment of like 100, 200 million TVL? That's like unheard of, right? So from our perspective we, we wield that committee owned treasury very responsibly in terms of where we want to focus and invest. So then back to the point on what are we building and where we differentiate. We have these products that we've carved out in house, right? So meath the network function BDC and that comprises three of the six pillars we're focusing on. There are three new ones for this year. One is AI and it's early stages and we're angling a bit more towards integrating Web2 Dynamics. So less native Web3, but more integrating how crypto sets the interplay on AI for Web2. So that's one pillar. The second one is a crypto NEO banking product. We want to bring the neo Banking product and experience to users to onboard that next billion users.
- [15:57]
Bryce
Right?
- [15:57]
Tim Chen
They have to have a product they understand and they trust and it's convenient. Right? Like your parents or your grandparents or they're not going to onboard into crypto via a Coinbase or Kraken account. Right? You log in, numbers are flying everywhere. They have no idea what these token pairs mean. Right. It's just not good. Right? But a NEO banking app, okay, there's been at least a couple decades worth of people understanding that user experience now. So the ethos there is building a product that's easy to understand. And the last one, in terms of how do we think about onboarding the next trillion dollars of capital from institutions into defi. Well, it was announced that mantle index 4, this product launched on Mantle, it's an index fund product and it's targeting just that. So I can talk about each of these in a bit more in depth. But back over to you guys in terms of where you want to focus.
- [16:49]
Brendan
You know, I recently talked to Preston Van Loom and he's an Ethereum main chain developer. He's worked with the Petra upgrade and then the proof of work to proof of stake upgrade. And I was asking him because my thought is, you know, are L2 is going to get to such a place where they compete or take away from the Ethereum main chain or the Ethereum L1. And when I asked him that question, he very firmly believed that that was not going to be the case. He said L1s and L2s serve two different purposes. He says the L1 or the main chain is meant to be like very broad in what it's supposed to do. And the L2 or all of the L2s are supposed to be a much more like niche focused where they are focused on solving a specific problem. And he had this firm belief that there's not going to be a competitive aspect where the L2s get so good that people won't have a reason to use the L1 anymore. Is that something that you would agree with?
- [17:48]
Tim Chen
I think in theory and ethos, yes. But it really. The devil's in the details, right? It really comes down to. Okay, well think of it this way. Ethereum is the wholesaler of block space and the L2s are the retailers of block space. Right? They just package what's on Eth Main net, focus on niche and sell it to someone else who needs that specific use case now. Okay, but if you're selling for example jeans, your reseller jeans on the L2 and your margins are not that, not that high because of how it's sourced on the wholesale level, then you're going to have a challenge. So what I'm trying to say is like the devil's in details, in ultimately where the economics unit, economics shake out on the relationship between L2 data costs and L1 as well as that specific use case. Right. Because if there is no specific use case and you can't find one thing as an L2, you're kind of just bleeding.
- [18:37]
Brendan
I think that's a fair point and it kind of raises the question, like, is that. Or do you think that that's even the correct approach?
- [18:46]
Bryce
Like, like for the L2s versus like the monolithic approach is what you're saying?
- [18:49]
Brendan
Yeah, exactly. Like, are we going about this the right way right now for Ethereum? Or like, do things need to change? And I guess that's kind of where Mantle comes in and that you do have a little bit of a, of a different approach here, but we're solving these issues and it seems like a lot of different groups are trying to go about it in different ways. But like, are we on the right path right now?
- [19:09]
Tim Chen
Yeah, I think broadly the pie is big enough for multiple types of products and services to exist. Right. Solana exists with all its benefits and caters towards a specific crowd and use case and Ethereum does the second. I think Solana has done a fantastic job in recent history of coming back from the FTX implosion and everything to where it is today and being a top chain for transactions, whether it's meme coins or otherwise. But if you zoom out and you look at where all the RWAs and institutional capital is flowing into, and if you talk to them, their comments are oftentimes it's still Ethereum because that's safest, most secure, more importantly, has enough depth of liquidity for us to transact on it. And so I think it really depends on who you're speaking to. But there is a world where different wholesalers exist serving different purposes. And I think the key is like, can the EF Ethereum foundation work with all the L2s and be nimble enough to adjust and grow over time? Right. It's not, it's not set in stone like a Bitcoin is.
- [20:10]
Bryce
Yeah, totally. No, so I want to go back actually to the Mantle index that you were talking about and I want to unpack kind of what's going on because this is something that I've been looking for just as a personal investor in crypto, trying to, you know, you just play the field by getting index exposure and there's not a lot of great on chain indexes. You know, I've kind of been following the index cooperative for a while and there's just no liquidity behind there. Bitwise has some good index products, but they're all on a brokerage account. Tell us a little bit about what you guys are doing with the mantle index.
- [20:44]
Tim Chen
Yeah, you nailed it on its head. I'm friends with the index group guys. I think they were just too early. They were at a stage where people didn't need to aggregate because they're too focused on new token launches. Right? So that's where most of the value is. But in today's world, because there's so much noise, new capital coming in, it's easier for to say, you know what, just aggregate it for me, set it, forget it, charge me a fee. Right? That's not too dissimilar from what we saw how ETFs ate up the traditional finance world, was it 20, 30 years ago and predominantly passive ETFs. Right? These strategies that give people broad based exposure to whether it's thematics or otherwise and through more superior distribution channels are able to capture higher AUM. Whereas we call it TBL chain. So unpacking mantle index 4 a bit more. What's unique about this product is when you zoom out, right? You think of the matter today with respect to RWAs. Outside of these T bills coming on chain, everyone is trying to build more tradified assets, tokenize it, sell it to capital that's on chain. But that doesn't really make sense, right? If you think about it, who wants a 7 or 9% yielding REIT from the Midwest? That's illiquid. It doesn't really make sense. If you look at the capital on chain, we have about, Last I checked, $100 ish billion of TVL locked in DeFi 300 bill 400 of stablecoin market cap. Whereas if you look at tradfi, let's call it $100 billion of capital locked away in just Bitcoin ETFs alone. And whereas on chain it's a large majority of the capital in tradfi, this is just like a drop in the bucket right now. Tradfi is still not here yet. If you are any familiar with how RAS and wealth managers work. And I built ETF products in the past life. These have not been cleared to be sold through brokerages yet. Like the fidelities, Wells Fargo's, Merrill Lynch's Right. If you continue these conferences, they're still saying, hey ras, this is a generational moment where you can sell to your clients. So I think there's still more buy pressure coming. But you know, why am I mantle index 4 stands out is we are selling to that crowd, right? As in this product is selling that crowd. Instead of trying to capital capture on chain capital, it's saying, hey, there's a lot of capital that can today buy Bitcoin Spot V etf, they can buy Ethereum Spot via etf, they can buy Solana Spot via an ETP in Europe, right? But why isn't there a product that just aggregates all of these, right? Because these are the majors today. And one big trend in tradfi is if you can get income, well naturally ETH and Solon are proof of stake and so they do yield. So we're both providing them broad based exposure and income. So the way this product is set up is it's comprised of four assets. You have Bitcoin, you have meath, which is the mantle staked product, you have BB SOL as a Solana product and you have S usde which is a yield bearing stablecoin. Now the latter three yields income from being staked and that is rebased back to nav. Now here's the kicker because we are not targeting on chain funds or whales or crypto folks to get these to themselves. This product is structured as a trifier, it's in traffic wrapper is structured as a fund. So when you're a tradfi investor and you're looking at this, it looks like a duck, talks like a duck, walks like a duck, right? And so it's easy to understand, right? It's like, why did people buy Macro strategy before? Because it's the only way they can get broad based exposure to Bitcoin without going through all the hoops and hurdles of whatever checks they need to do internally to buy Bitcoin directly and hold it in some custodian account.
- [24:32]
Brendan
Yeah, man, I think you make a good point. And it seems to be that that is the direction that we're heading to, especially as more and more people want exposure. And we're not just talking about retail. I mean, I'd say in the last six months we have seen an institutional push like we never thought was possible. And I've seen you talk about this recently and you've talked about this idea that there is this tradfi defi bridge and latent demand and how 2025 is shaping up to be the year of that, crypto becomes a part of everyday finance. So I guess beyond some of the things that you just mentioned, I guess what else are you seeing behind the.
- [25:10]
Tim Chen
Scenes in terms of bringing crypto to every day? I think the craziest one I saw was Moonshot. Right?
- [25:19]
Bryce
Yeah.
- [25:19]
Tim Chen
You're telling me somehow these guys create an app that you can buy a meme coin through the Apple App Store, like somehow make it make sense. Right. I think they did a very smart way of figuring out, I assume legally to make it happen. And props to them. Right.
- [25:35]
Bryce
That's a good point. Actually, before you move on Moonshot, I'm a big fan. There's somebody that was on the. I think they were on our podcast or I heard it somewhere about like when the Trump token launched, they like added. Moonshot was like the hub. It added like, I don't know, 500,000 or a million users over the course of like a week. It was like everybody didn't sign up for Coinbase because Coinbase was, you know, didn't list it right away. They all went to Moonshot. So that's a great call out. We gotta get them on the podcast. I'll make a note. TiVo, make a note to reach out to them. Cause that'd be a great guest.
- [26:07]
Tim Chen
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- [27:49]
Tim Chen
I think what's interesting there is again what they've done is abstract away all the things happening back end, right? My understanding what they're doing is technically when you buy a token, you are on ramping to buy a stablecoin to a self custodial wallet that's not discernible to you unless you want to export that wallet. And so for you it's like oh, it's a Web2 experience. And that's the same thing here, right? The crypto neo banking product we are building has a similar zeitgeist. So today there's two types of users. Those that are denominating US dollars and those that are not denominated in US dollars. So let's focus on the ones that are not because those are the ones that find crypto and Stablecoins as a 10x better use case. Right. And you don't really understand that unless you've traveled to international countries like specifically Argentina or like a Turkey where your your currency is devalued pretty much, you know, in a matter of months. So what's interesting here is. Okay, well how products today are mostly what I call defi mullets. Right. They issue you a sub custodial wallet and you have a globally accepted MasterCard or Visa.
- [28:52]
Bryce
Cool.
- [28:53]
Tim Chen
But that's only one direction I can only spend. But if I'm saving in stablecoins as one of these users, how do I make it my main bank account type experience? Right. And so our product has solved for that specific piece of the stack and today outside of Americans can't do this but today you can onboard within 5 minutes KYC you get a Swiss bank account and a globally accepted MasterCard. Like wow, you're telling me anybody in the. Well a lot of except of sanctioned countries too of course. But you know that really opens up the world of crypto to a lot of people who otherwise were not able to access it via a very safe, familiar, convenient type user experience.
- [29:37]
Bryce
Yeah, no, it's gosh. Being American sometimes is is difficult but you know it's in crypto, but I don't know. This wasn't a question we. We had on the outline, so I'm not sure if you. If you want to answer it or not, but, like, what. What are we still waiting for? Like, for Americans, like, what. What's kind of the law that's, like, holding up, you know, people like you and like, Makerdao and like, all these other, you know, people from, like, having their platforms, like, usable in America? Is there, like, some blatant law?
- [30:08]
Tim Chen
Yeah, it's a great question. I think the short answer is like, I think we're moving in the right direction. The long answer, I'll give two caveats. The first is, you see a lot of folks get aggressive in this administration because it feels like the laws are loosening, but they're not clear yet. And so they're going ahead and filing ETFs for random old tokens, right? It's like, okay, come at me, sec. If you aren't able to tell me it's illegal, then it's technically. Is this technically deemed kosher? Is that okay? I don't know. Right. And so you have a lot of folks moving more aggressively, but there's always a fear that who's to say in the next administration, will things revert and these guys get punished? Nobody knows. And so there's a kind of a risk, reward, trade off that a lot of folks are kind of considering right now.
- [30:53]
Bryce
Yeah, no, it's. It's a really good point. I was at the. The Trump Meme Coin Holder dinner this past weekend, and he gave this, like, you know, fiery speech. It was awesome. And, yeah, I think he really is, you know, all of his administration, his cabinet people are like, you know, obviously all in on bitcoin, whether it's, you know, Scott Besson or Howard Lutnick, even rfk, I saw he had, like, a bunch of bitcoin. And who else? You know, David Sacks. And so it's like, everybody is, like, all in on crypto. They want to, like, make it, like, you know, a big part of American culture and the American financial system. So I am hopeful that, like, by the end of this presidency, or hopefully not by the end, but hopefully as it kind of continues along, like, he's just gonna blow the doors open, open the floodgates. American people are gonna be able to, like, use every single defi platform. And it's like those defi platforms are gonna feel comfortable, like, coming into this market and, like, all that kind of stuff. But right now, you're Right. It's like that gray area that sort of like nebulous sort of like is it okay? Is it not that just keeps so many people out. Even though it's like you might not be breaking the law. It's just people don't even want to like risk even just a chance or whatever. So it's such a trip.
- [32:01]
Tim Chen
Part of that equation is also if you think of America as a company and their number one cash cow product is the fiduciary tradfi ecosystem Today, likes of JP Morgan, BlackRock, are you willing to introduce a new product that could potentially cannibalize this cash cow? Right. And the answer is, well, only if it makes sense that it's a win win situation. So perhaps they're working through figuring out how the tri fi guys can get a piece of it too.
- [32:27]
Bryce
Yeah, no, I know they're making a big push for stablecoins too and how we're currently kind of like running out of buyers for U.S. debt. Except the stable coins, right? Tether, USDC, whoever, a lot of them are backed by short term treasuries. And so I think he said right now there's $300 billion or something in stable coins and looking to like boost that to like $2 trillion or something like that. So if stable and if you, I think somebody not at the event, but somebody was doing an analysis on this, like if you got, if you kept the current ratio of bitcoin valuation to stablecoin valuation or market cap, like a $2 trillion stablecoin, this was actually, I think it was, David Sachs said it. A $2 trillion stablecoin market cap would equate to like a $20 trillion bitcoin market cap. Like that would be crazy. So it's like you have a big flood of cash coming in, a lot of American companies winning, winning, winning. I think you know, that that does, you know, kind of stem off to, to crypto companies. So yeah, it'll be interesting to see how it goes.
- [33:37]
Brendan
Essentially there would be like mutual growth is what you're saying. And that growth in one, growth in one sector would be growth in all sectors. Especially when it's something that is as pivotal as the stablecoin space because that's used as liquidity in all the other sectors. And so I think both of you made a really good point where maybe that's what we are waiting on. Maybe we're waiting on a little bit stronger legislation or regulation on the stablecoin front. You know like the Genius act has kind of talked about Maybe we are waiting or maybe the government is waiting for these tradfi players to get their feet really dug into the crypto space so that we can have this mutual growth where trad fi in the US is growing and they're growing because crypto is growing. But you know, maybe they're saying, hey, you guys better get ready. You know, who knows? We're theorizing here, but maybe they're behind closed doors here saying, you guys need to adopt this because we want this sector to grow so that you can grow. And if you grow, the US grows and we all win at the end of the day. So that's what we're waiting on.
- [34:41]
Tim Chen
Reality is stranger than fiction now, so I feel like anything is possible.
- [34:46]
Bryce
Yeah, I also saw Trump's, you know, media company DJT just announced recently they're buying up two and a half billion dollars of bitcoin and like a microstrategy basically copycat. So like everybody's doing that. And then World Fi Liberty, which is another sort of thing that the Trump Organization has, is affiliated with, like they have like this, you know, a bunch of crypto. They have a stablecoin, I think it's USD 1 or something like that. So it's going to be very interesting to see how this all shakes out. But Tim, I want to make sure that we highlighted everything on Mantle that should have been highlighted. Was there anything that we didn't touch on yet that we should riff on for a bit?
- [35:25]
Tim Chen
I think those are the most that we're mostly excited about. Right. Those two new products that are solved as bridges to onboard retail and tradfi into crypto. So happy to riff on other topics or happy to go deep as well?
- [35:43]
Bryce
Yeah, no, I think we totally nailed it. The Neo bank, the index. I mean, these are all things that are going to bring on, like you said, the next trillion dollars of market cap to crypto, hopefully the next billion users, and it's going to be really big. I'm really excited about everything you all are building at Mantle. If we zoom out, what are the kind of like, as we wrap things up, are there any macro trends that, that you're looking at that could be, you know, tailwinds to what you're building or potentially even headwinds?
- [36:12]
Tim Chen
Yeah, I mean, interest rates are funky, right. Like eth. If you stake it, it's about, was it 3 to 4%? I haven't checked the last. Where it's. Where it's something like that.
- [36:21]
Bryce
Yeah.
- [36:22]
Tim Chen
So that's why it's not as attractive because you get U.S. treasury, right, like.
- [36:27]
Bryce
The high hurdle right now.
- [36:29]
Tim Chen
Yeah, yeah, yeah. Backed by the full force in mind of the American military. So if that goes below, right. If it goes below meaningfully, will we see then folks flock to Ethereum and therefore we'll get more altcoin season. Because if you're not going to get any meaningful safe return, like if you're at, you know, 0.5 or 1%, it doesn't really make sense. Right. You're gonna, people retail is going to start yoloing that. And I think the second thing is just look at other types of policy changes that could be act as stimulants in the economy.
- [37:02]
Bryce
Right.
- [37:02]
Tim Chen
In terms of the opposite of austerity measures, you know, indirect quantitative easing like Trump is doing to incentivize, you know, was it more births in the country? People like babies get like $5,000.
- [37:15]
Bryce
Yeah, I heard talk about that.
- [37:17]
Tim Chen
Right. Like cool. My first question is how do I put this into like bitcoin, right? Like you're going in, you might get that 21 instance again, but who knows. So I think macro wise a lot of it is just focusing on liquidity cycle as it relates to the interest rate changes.
- [37:36]
Bryce
Yeah. And those, those interest rates, you know, it's something that most people really don't think about. I mean I, I, you know, I'm not like thinking day in and day out about different staking rates and then kind of normalizing them against interest rates and being like, oh my God, you actually have a negative real yield on your stake when, you know, kind of risk adjusted against like, you know, a short term treasury bill. But like the interest rate cuts are going to have like a multiplying effect like if they ever come. I mean, because people are just going to say, okay, now I'm getting yes, less yield on, on my cash. That seven and a half trillion dollars that's in money market funds is going to start coming into, you know, stocks and crypto and all that kind of stuff. But also people are going to lock it up in the stake because like, oh well, you know, you're still going to be able to get a high yield staking different assets. So it's going to be like a doubling effect. So that's kind of a calculus that I hadn't really thought about yet.
- [38:22]
Tim Chen
But and when you really think about it, right. It matters because a lot of the capital is sitting in the fixed income market. Right. And then you think about, okay, who are the decision makers behind that? Is it a small investment committee? Is it A handful of people. What are they thinking? What are they talking about? Right. Eventually. Are we just saying it's a handful of people who, if they're susceptible to groupthink. And in today's world, Internet hive mind, move so quickly in one direction. Plus you can buy tokens or whatever, stocks with one click. That's why tension drives these markets. That's why things move so quickly. So when you really think about it, I think we're going to be in a period of hyper reflexivity. Upside downside. Upside downside.
- [39:09]
Bryce
Totally. I couldn't agree more. I mean, we certainly saw that exactly play out in April, right? I mean, when we had just. It was the end of the world, right. For so many people. Like, the first couple weeks of April was like, oh my God, Liberation day. But it's actually just like we're all dying day. And then like it, you know, the month ended higher and like everybody kind of crushed it in April if you just like kind of held through that volatility. And so, yeah, it's, it's crazy and like, you know, break at this all time high on the S and P or the nasdaq, like, you know, when that comes, it's like people are going to be like, oh my God, did I really, you know, sell everything? Because I thought Trump was gonna like ruin the world. I think it was like a huge case of just like systemic like Trump derangement system syndrome, like, along with like many other factors and stuff. But like at the end of the day, people just, people got shaken out and so we'll, we'll see what happens. But, but Tim, man, this was, this was awesome. We're really pumped that we got to talk to you and we hope you can bring you back on again soon because a million more things that we could unpack. But where could people kind of follow along with your journey personally as well as Mantle?
- [40:10]
Tim Chen
Yeah. So you can follow our Twitter accounts. If you can include a link in in your show notes, I think that would be great. So that'd be easiest place to get latest and greatest updates.
- [40:20]
Bryce
Perfect. So find Mantle on Twitter X and yeah. Tim, thank you so much for your time today and we hope to see you back again soon. Everybody listening at home, thank you for watching. Come back again again next week. We'll have some more incredible guests for you.
- [40:46]
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Tim Chen
Rapid fire round of questions.
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Will
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Tim Chen
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Bryce
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Tim Chen
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Tim Chen
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Tim Chen
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Tim Chen
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