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- [00:00]
A
Well, good morning, everyone, and welcome to another day of watching to see what our dysfunctional government will actually do. And I can't look at it any other way. I don't know that anybody else can. It's. I kind of wanted to know. Wonder if this is all a head fake if, you know, people are betting on prediction markets, probably a bunch of Senate staffers are doing that. And, you know, some of them will get rich because they know what the hell's going on. But the reality is the most important framing of the entire clarity, I don't know, story, theater, call it whatever you want, is that it's becoming more and more obvious to anybody who has any intelligence that the status quo of zero regulation and zero legislative intent is a really bad idea because it is the worst of both worlds. It allows more theft, more scams, more everything bad, but actually discourages real innovation. So that is becoming, slowly becoming into the zeitgeist. And as long as that's the case, we'll eventually get where we want to go. It's just painful in the short term. That said, the crypto market certainly seems to be sniffing it out. I mean, you're seeing all sorts of interesting stories. There's a story this morning that I do want to talk about about S and P, which is interesting because S and P effectively. And I didn't see the whole interview with Kathy Clay, who I know and like, so I do want to give her the benefit of the doubt here. I suspect I know what they're doing, but they came out with a crypto digital, with a digital asset index and didn't include Bitcoin, which I actually agree with because I think bitcoin is, you know, more or less is the denominator by which everything will be measured. So why should it be in an index of digital assets that the Digital Asset Index, there's no gold in the S and P. And gold is a $30 trillion asset bigger than any individual asset in the S and P. So I don't really see the issue, but a lot of people are up in arms about this. So, you know, curious what what people here think. I know we're trying to get a few people up on stage, but, you know, it, it, you know, it feels to me like that is it is appropriate to have an index of non bitcoin digital assets that are, quote, based on utility and productive. And all of this makes sense if you actually have a regulatory structure in the US where people can invest on it. So that's sort of where I'm at this morning. You know, Gaurav, I haven't seen you up here for a while. I mean, you know, are you enjoying your summer?
- [02:38]
B
A lot. A lot. And then you haven't been holding topics that. That would entice more spicy topics. You know, people like me. These are very U S. Centric topics.
- [02:54]
A
Let's, let's bring question because I tend to agree. I don't know what the spicy topics are. I mean, you know, what do you think we should be talking about?
- [03:03]
B
Robinhood chain memes rising again. Where did the liquidity come from? Why. Why on earth do we have new projects bumping to $200 million valuations in seven days, seemingly all algorithm organic and so on? I think, I think that's spicy enough, right?
- [03:25]
A
Yeah, yeah. Well, I mean, look, I think it's really. Well, Robinhood chain is. Is different than those. Those are two very different things. You know, we could talk. Which would you prefer to talk about first? Because, you know, Robinhood building on arbitum for their own corporate use is a trend. You know, there's a trend. Want to be able to manufacture excess value. Right. So if you can create something of value that you own a huge piece of, companies will always do that. That's just that that's logical. Whether it will succeed or not, who knows? I mean, you know, the fact that Coinbase did base without a token, you know, I'm sure that that's. That they're unhappy that they did that because at the time they would have. It would have been worth a lot of money. You know, who knows where that will go or where that goes? I mean, what are your thoughts on it?
- [04:14]
B
I think a much bigger game that these exchanges are looking at, especially the fully regulated exchanges, is what Binance recently played. You get a clearinghouse to get US stocks on your books and then you tokenize it on your chain. And those tokens now, which are obviously under your custody and under your clearinghouse, are traded 24, 7, 365 days on a crypto platform through global audience. I mean, that's the game I don't think any exchange would like to miss. Regardless, wouldn't you want to go on with the topic first and then we jump onto the spices because I'm going to get into a zone. I'm driving with bad network so I can use that time just in case. Otherwise I'm all in for spice.
- [05:02]
C
Yeah.
- [05:03]
A
No, no. Well, I mean, look, at the end of the day, it's the summer and you know, worrying about what our doddering, you know, septuagenarian, you know, senators are going to ultimately do it. It annoys the crap out of every single one of us. I mean, you know, I, I don't even have to ask Ryan what he thinks. I mean I'll get a laughing emoji in a second. Right. But, but, but it, but it matters because what you just described, Gaurav, is really important. Which is the, the most important.
- [05:31]
C
Yeah.
- [05:32]
A
Which is the internationalization and the globalization of finance. Because being driven by crypto Rails and tokenization. Right. That's what I entered this space because of. That is literally why I became part of this space. You know, coin routes is I. People say well, what's the reason for it? Well, the reason for it is it's a better platform for trading anything. And the reason for that is that tokenized trading has significantly different market structure characteristics than the closed form methods of trading in each individual market. Now, I've made my career a study of the individual nuances of the US markets, European markets, the Japanese markets, etc, actually wrote a book on it that will come out in February even though it's already cleared editing and is just going through the print process now. It's crazy how slow that is, but it is a big deal and it, it's a big deal that I don't think people really understand the investment implications of. And so it is worth talking. And one of the reasons that we need a clarity act is so as to get a level playing field so that at least the smart regulators can actually start trying to build it. Like for example, yesterday, for those who care, I'm on the board, I'm actually slated to be president of IT in, in two years of Security Traders association in New York. And we had a discussion about the evolution of market structure in the US and this sounds like a very US centric thing, but it isn't because the main topic is the fact that the current SEC chair wants to dismantle some of the protections that are in the not protection. Some of the prescriptive parts of the US stock market. This thing called the order protection rule. One of the things that people in crypto kind of understand, but they don't really know what it's about, is that the current market in crypto doesn't fit within any of the equity markets rule sets because things like you can, the best bid is always higher on one market. Right now OKEx is bidding higher than, than Coinbase, you know, for Bitcoin. But it doesn't really matter because net of fees and everything, it's okay, that so called crossed market is illegal in, in in equities. And so, and that rule makes it illegal. And so you know, changing that and allowing for a more robust competitive market is a good thing. And they're trying to do that. This is simultaneous with what's going on with clarity and what's going on with you know, crypto rules. So there really is.
- [08:06]
B
I can quickly interrupt, Dave. I mean I think tokenization of stocks is also clear for NYC and Nasdaq. And so I don't think, you know, it's just limited to, to one aspect. I think also by default you're right and cross platform difference.
- [08:25]
A
But there's a big difference, Gorav, between the NYC and Nasdaq right now. Now I know the players, right? You know, there's two forms. There's the let's keep everything in DTCC form and keep it as a closed system versus the let's open up the system and work with firms like Securitize and others that will have a more open platform. And that's a big, that's a big deal. You know how, how that plays out. Now the funny part is is in a truly competitive world the latter will obviously win because it's better. But this is where a lot of this, the rubber meets the road and the same thing is going to happen in every single major locality, in every single major market. Right. What you said about Robinhood is brilliantly stated. Every company, every exchange, every aggregator of liquidity wants to be able to have their own chain or their own have the access to those global markets. And you can't get that if you build a disclosed system. And the regulators of course have their own thing. So all of that gets very, very interesting. Right? Gorav, you're, you're in a dead zone like you said. Yeah. When, when, you know, we'll try again in a bit. Ryan, what's up?
- [09:36]
D
I'm glad that wasn't me. I'm not sure what was going on there. No, I think, I think you're right. Everyone is looking at their own chain but I don't think they want the regulatory or technical headache that comes with having a layer one. That's exactly why bas, when they rolled out their chain they decided not to have their own token because it was just so unclear at the time of what exposure and compliance risk that was for them. So there is a huge technical overhead when it comes to rolling out your own layer one or even a layer two token. So I think they're all wanting to have their own Token, I think they're wanting to be able to control their own transaction layer, but I think they're still kind of milling around looking at all the current layer ones, not really sure which one they can actually deploy on. I, I think Solana has gotten a bad rap over the last couple years. I, I think Ethereum is, is just. Right now it's hard in the ecosystem because no one's going to take it seriously when everyone's parading around with unicorns and mythological creatures at their dev conferences. So I think they're wanting to jump in somewhere. They just don't know where to jump in because this, this entire ecosystem is, is a circus.
- [10:52]
A
So isn't it, isn't it really like, you know, kind of a Tale of Two Cities, as it were? I mean, not to get all Dickens on people, but you have the inside the, the crypto world and liquidity pockets where memes and, you know, very obscure arguments become, you know, incredibly emotional. You know, it's funny, I saw Puncher up here. I was going to. Yeah, on like the whole bip110 debate, people are screaming and yelling, and yet in the, in the, the boardrooms or the places where people have lots of money and, you know, it's not nearly what people think about this. I mean, these, these are still human beings, but they basically don't care. I mean, you know, penny stocks have existed with, with huge gains and, and all sorts of things have existed side by side, you know, with the regular equity markets for a long time. I mean, when the Wolf of Wall street was happening, anyone who's seen that movie, right, you know, when, when Jordan Belfort was doing what he was doing and, and, and his firm was a big deal out on Long island, yada, yada, yada. Most people on Wall street didn't even know it was happening. I mean, hell, I was on Wall street and didn't know it was happening, you know, at the time. I mean, we, we kind of heard about it and learned about it because of the way the Internet bubble developed. But the, the truth is that I think a lot of what goes on, a lot of what we see in the crypto world, people in the city of London or in, you know, major financial centers, Singapore, Dubai, New York, etc. They kind of look at it like, yeah, okay, fine, whatever. I mean, let them have their fun, but when it gets real, we'll deal with the real stuff. Don't you think there's some of that going on, Ryan?
- [12:28]
D
Oh, absolutely. And this is why I think the idea of like tokenized stock. And stock being traded on blockchain has been such a stutter step through the years. I mean we've been seeing this for 12 years now, people trying to put stock on a blockchain thinking we're going to trade it like a crypto asset. But I think the reality is, I think you're right. They're like, okay, they can have their fun as long as they're in their own ecosystem. But the moment we start merging ecosystems and start bringing the real money onto a chain, they're exposing themselves to all sorts of shenanigans. All of these contract risks like all of these hacks, all of these bots, all of these defi protocols, all of these cross border OFAC violations, everything is exposed once you bring it onto a global permissionless chain. And I think that's what terrifies them because there's so many unknowns. So I think they still have several years more of research and cautious stepping and eventually I think they're just going to have to roll out their own ecosystem. I don't think they're going to be able to bridge into one of the current public ecosystems.
- [13:41]
A
Yeah, I'm not so sure. I mean, you know, if we, if we had, you know, Carlos or Brett from Securitize up here, I mean, I think that they would agree in part with what you're saying. Certainly about the, the need for the how when I use the words need for compliance, I want to be careful about that. It's not about their personal think thought of needs for compliance, it's about the fact that, that governments are going to insist upon it and that there are ways of handling it. I don't know, there needs to be new. I think we need to embrace standards. The thing about stocks are that if you allow it to be completely ephemeral out in on the blockchain with no notion of who owns it, well then you can't vote it, you can't understand it. You know there are, there are rules in virtually every geography about who can own what, you know, depending on the type of company, you know who, you know, whether or not non citizens can own it. You know, depending on the type of company whether or not US companies can own it. So like an exchange for example, can only own a small percentage of certain businesses and certain businesses can only own a certain small percentage of exchanges. That's just one stupid little example. But there are tons of them. And so a permissionless blockchain where you can't track who owns what and what type of people they are, is going to have a real capital markets problem in virtually every geography. I think that's what you're saying, right?
- [15:00]
D
That's exactly what I'm saying. They're diametrically opposed. You cannot have anonymity and regulation on this same system like this. I mean, the same thing with credit, like having credit on the blockchain, anonymous credit is not a thing. You know, lending money to someone that you cannot physically or financially threaten is just not a thing. So credit on the blockchain, publicly regulated stocks and markets on the blockchain, like, I just don't think it's going to happen on Ethereum. Maybe a layer 2 that's not anonymous. Maybe it's a permissioned KYC AML'd identity checked layer 2, but I don't think anything on mainnet for sure.
- [15:48]
A
Yeah, I mean, it does bring up. It does bring up a lot of interesting implications. Gaurav, are you back?
- [15:55]
B
Yep, I am.
- [15:56]
A
Cool.
- [15:57]
B
Can you hear me?
- [15:58]
A
Yeah, now we hear you. Yeah, you were Mr. Roboto before.
- [16:02]
B
Okay, Yeah, I missed everything in between.
- [16:04]
A
So, yeah, basically what Ryan and I were talking about is the, the kind of a derivation of what you had started, which is that a lot of the large use cases in crypto are going to need to be permissioned in some sense or another because of the capital markets regulations in various localities. And this is not a US centric thing. This is, you know, whether it's Hong Kong, Singapore or Tokyo, it doesn't matter. Right. Europe. And so that it does create interesting implications for, you know, people's, you know, development of chains. Whether it's. That's the whole reason why Canton Network surged into prominence from nowhere, because they allow for permissioning. Right. And some level of anonymity. And look, obviously there's ways of doing that. And, you know, curious, you know, you were talking about new projects, you know, like what use cases or new projects are you seeing or any of them leaning into all of this?
- [16:58]
B
I think the code is pretty public for the, for the decade. If you want, if you want to establish a chain and you want retail, the best method to do that is to get memes. And, and so that's what happening on art right now. There are projects that are launching meme coins and creator coins. I mean, the, the new word for memes is creators and so on and so forth. So, yeah, that. That is happening. And then, you know, more defi. They're trying to attract defi. I haven't seen many or haven't been, you know, contacted by any on those lines. But I see a lot of movement there. But, but bottom line, they're trying to get retail through memes. That's, that's for one.
- [17:48]
A
Yeah, well that's certainly one way. I mean, you know, we have you know, one speaker. Eric, you know you're behind the mic, right? Yep, yep. Yeah, Obviously you, you're, you're, you know, you're directly involved in what's in some of these trends in defi. I mean what, what are you seeing these days? I mean are you seeing green shoots of, of crypto becoming, you know, capital attracting capital flows again or you know, what are you seeing?
- [18:11]
C
I, I think right now it's honestly kind of like an awkward state where you're kind of seeing these type of defi native liquidity in the form that we're used to like different types of yield farming, different types of AMMLPs, different types of lending or provisioning for crypto native assets slowly shifting away. And in terms of, at the ground level, in terms of what the builders are actually building, it's almost always exclusively RWA related financialization because they kind of see this missing piece, right? RWAs, you can't really borrow against them. There's not really a lot of liquidity. The redemption period is ultra long. Sometimes it takes days to be able to unlock the underlying value of it, sometimes it takes 15, 20 minutes. So it's a very, very kind of slow moving asset of these tabular RWA tokens or equities. And they're trying to figure out a way to act as a stopgap solution to make it more utilizable on chain. And that's kind of where we see the building trend is going like in terms of having it reaching a production scale, having it reaching a mainstream level liquidity. That's yet to be seen. But this is something we can look forward to for the next few months.
- [19:29]
A
Yeah, look, I've been very outspoken for seven years about how absolutely pathetically bad the AMM model is from a market structure point of view. I totally understand why it developed. It developed because of the necessities, the limitations of the technology and the need or desire of so many people to try to get outside the financial system for a variety of reasons. I mean, I get it, but there is literally no way to stop exploits in a world where you depend upon third party oracles for pricing and you have the ability for a liquidity pool to get overwhelmed. And we've seen it time after time after time. So the fact that you say that it's kind of slowly bleeding out. I think that's good. I think one of the reasons hyperliquid succeeded or has been as successful as it's been is because it is an order book and order books are simply a better method. There's two good methods of market structure that work, that are time tested, that fit the aggregation of supply and demand, which is harder to exploit, not impossible, but harder. And that's order books and auctions. And people are starting to figure that out in the crypto space and getting there. Like you mentioned, securities, you know, RWAs, I mean look, the single worst market in all of finance, you probably don't even know that much about it, is the securities lending market in the equity markets. The reason is because those markets are by, on purpose have been kept, you know, have been kept opaque and all attempts at really automating it and opening it up for price discovery has fallen away. And defi publicly literally is the answer to that. Right. A distributed way for lenders and borrowers of assets to come together with competitive prices. So all of this is going to happen. But you're right, people throw, it's like trying to run a race where people shooting at you or throwing things at you as you're running down the thing. That's what's been going on. I mean, do you see that?
- [21:31]
C
Well, actually I have to counter.
- [21:33]
B
I mean.
- [21:33]
E
Oh, sorry, go ahead.
- [21:36]
B
I was simply trying to place that. I mean if you go on to the popular, I mean quote unquote, popular RWA markets, what you essentially see inside is, I mean, assets that are yield bagged. So you know, 14 is a good number, 11 is a not so good number. So all these real world assets backed by yield are sort of most popular, most popular in the RW market. And I mean, I think RW is just a name tag then. It's, it's exactly what Dave said. It's a defi utility that's, that's selling at the, at the back. RW is just a name tag on the top. Maybe the security to the capital, if at all anything.
- [22:23]
A
Eric?
- [22:24]
C
Oh yeah, I was just saying it's kind of slightly unfair to say that recently for amm, it's not really working that well. Just to add some clarifications, it's because these days in defi, AMM has been kind of evolving into pretty much an order book. They kind of move into RFQ models, they kind of move into a quasi curve order book models like the latest versions of Uniswap, et cetera. So the rest of the defi world is kind of catching up into a cloud model and they're kind of understanding it. Obviously, like us at Injective, we've been doing it for the longest time trying to sell that vision for a defi world. And it's just like one of those things where there's a lot of technical constraints and then these days it's mostly resolved, especially with all those scaling solutions. And what really remains is just kind of like balancing between hyper aggressive expansion versus proper security and safety processes. Recently, all the major exploits, at least it almost always have to do with improper privatization because they're in a rush to get a lot of assets out. They don't do routine cleanups because it is just that competitive within Defi.
- [23:43]
A
Yeah, no, it's. Look, I was trying to throw you a softball to be fair, because I know, I know that Injective has been doing that, but, but that's besides the point. No, the, the thing that people don't understand about market structure, I mean you obviously do because you're in the middle of it, is it's always at the edges. So a model could work extremely well 99 of the time and still suck. The reason it sucks is because in that 1% of the time people get screwed. And that, that happens literally in every single type of market. Because what no one wants to admit, but we all know is true is when there's a lot of money involved, there will always be people searching around the edges for flaws in the market structure to try to take advantage of it. I mean, I could go back and describe, you know, describe a company that, that when I was at Citi, we bought called atd. They literally had eight people sitting in a room writing, believe it or not, Pearl scripts. I mean, you can't make this stuff up because, you know, it's so long ago. But they were literally writing scripts to figure out ways to take advantage of flaws in things like dark pools. You know, very esoteric stuff such as poke the pool to see if there's an order and then go the other way. You know, all sorts of little things. So it doesn't really matter. I mean, this, the, the notion of an exploit in an AMM sounds new and sounds scary. And everyone says, oh, is it a crypto thing? No, it's not a crypto thing, it's a markets thing. People will always do that. And so that's why the notion of the technology maturing matters. That's why people participate when they think that they understand where the risks are. And people just generally hate it when they don't understand the risks. I mean, you understand the risk, Eric. You understand the risk, or of. I mean, everyone privily listening to my voice understands the risks. And, you know, it's just. That's the key. And the developments over the last two years in terms of figuring out how to build in a way that is less risky, that that will work better and can evolve more, has. It's been really interesting. I mean, it's good. I mean, there's been a lot of momentum, positive momentum. I don't think it's shown up in prices of anything yet, but it certainly. It certainly feels real to me. Nobody.
- [26:01]
E
I'll dive in. Sorry I took so long to get on the call, Dave. I know it's been a while. I've been traveling, but good to be back here. I'm delighted to hear that we're back to talking about crypto utility and not hyper focused on Mark Saylor and his whims. Yeah, I think it's healthy that the topic shifted. And I mean, clarity's probably frustrated everybody that's been in crypto that we. We're still waiting for this to pass, but, I mean, there's two weeks to get it done before the summer recess, and I'd like to see it happen. I mean, I crossed my mind back to being at Mar a Lago and sitting there listening to a couple of US Senators and saying that this thing was going to happen and, you know, maybe that prophecy is going to materialize. But, you know, RWA is a topic that we. We talk about often in our group, and I'm just delighted to see that, that the metrics and the numbers that are coming out of some of these RWA platforms are startling. And certainly Robinhood are leading the charge. And it was just interesting listening to some very smart people talk about what's really going on behind this. But, yeah, I'm delighted that we've got a real utility case for crypto. I mean, those that have been around for a long time will know that tokenized assets, or security tokens is what they were called. I think, you know, circa 2020, 2019, somewhere around there. And RWA is stuck, and we need these. These laws to be passed. I mean, these guys that have pioneered most of this technology have done this in the face of an absolute onslaught from an unfriendly regulatory environment and leadership in the US and, you know, imagine what's possible once they do establish these guardrails. I think this is such an early stage for A huge accessible market.
- [27:57]
A
Yeah, I think that, you know, probably the. The most important thing that's driving this in a lot of people's minds, and I haven't had a chance to read it. Literally, I just noticed it right before I got on here is written by the head of Franklin Temple in Digital Assets. The title is Agentic AI. The Killer Use Case for Blockchain Encryption Crypto. I'm very curious to see what. What she says, because she's this Sandy and she's been right about a lot of things as. As they develop and Ryan, you're in the middle of all of this, but it is. It's a major deal from an innovation perspective. It's a major deal. What will. What is going to happen? It will be the same as multiple other times in our history. And we've seen this before. So everyone looks at the word disruption and they just assume that all the leading companies will get, you know, we'll just. The earth will open and they will be swallowed whole. That's not what happens. What happens is the ones that adapt do well, new ones enter and the marketplace is shaken up. I mean, it's hard to believe for people here, but, you know, there was a time when there was no such company, like a Citadel or a Jane street or a Virtu. They literally didn't exist. And yet now they're three of the largest financial companies in the world. I would expect the same thing in, you know, 20 years from now, people will look back and I don't know what the companies will be and what technologies they'll be using, but there will be new ones based upon what's happening now. So, you know, it is a. There is a lot happening, and it's all coming together at the same time. Ryan.
- [29:29]
D
Yeah, I mean, along those lines. I mean, once upon a time, we looked at MySpace and thought, man, this is a juggernaut. Everybody is on MySpace. Nothing could take that down. And then Facebook came along, and then Facebook's the juggernaut. Billions of users. Nothing's going to take that down. And then in a matter of six months, TikTok. And then we were looking at Google thinking, nothing is going to take Google down. Everybody's on Google. Google is all encompassing. And within six months of releasing the GPT models, OpenAI started stealing all the search traffic. Right. And. And now. And, you know, then we're looking at OpenAI thinking, you know, nothing's going to take this down. It's so smarter than everything else. And then all of a sudden, Claude Opus and Fable and you know, they're, they're stealing all the attention. What I am noticing though is that cycle of, you know, believing that something can't get taken down and then getting taken down is happening faster and faster and faster. Where that window used to be years, then it went to, you know, quarters and then months and now it seems like weeks where we're, we're jumping between OpenAI's recent model and then Claude's recent model and then, oh no, Kimmy 3 just came out of China and it's eating everybody's lunch. It's just, it's escalating so fast that it's like, you know, watching a game of ping pong. But right now what's being developed on the agentic level, I don't think anyone is ready for it and I don't think anyone realizes how advanced this is getting. When anyone with these clot, with Claude code and you know, the, what they call code vampires, literally these guys that don't sleep will stay up, you know, for days at a time on caffeine fueled development cycles. They are building so much software so fast, entering so quick, quickly that all of the SaaS companies, all of the current systems that we're using, all of what we think AI is and these little chat resources and maybe, you know, customer service bots, in about four to six months we are just going to get completely blown away in realizing how much of the systems that we're interacting with are vulnerable to these automated agentic systems that are just going to come on like a flood.
- [31:56]
A
So what does this mean from. Let's ask the question because I think you're probably right. I think that it's, it's, there's always this dynamic tension between productivity improvements and things that you can get that are better and things that are exploiting. I'll give an example. Like the travel agents, right? So how far are we from an AI driven travel agent that can, that, that, that when it becomes widespread, the airlines and the hotels all have to completely change their policies or they get screwed because they leave exploits in, you know, this, you know, there's all these little ones that you can always find. But it's really hard for individuals. You know, there's so much of the economy that gets disrupted by this. I mean, I assume you're seeing that so many of the things that we do that depend upon, well, this is hard to do like using your reward points or you know, people leaving stuff on the table. You know, with agentic AI, all those things are going to Be you can't leave those exploits or you're just going to get them, they're going to get used. And so companies are going to have to change behaviors pretty dramatically, don't you think?
- [32:59]
D
Yeah, absolutely. But while the general public is focused on AI as an assistant, like I just want something to book my flights for me. You have AI that is gaming prediction markets and finding backdoors into code and you know, rigging up like the craziest exploits you can ever imagine. You have other people exploring alternate ways of creating electricity and uncovering, you know, mathematical thesis that haven't been exposed, you know, or even attempted for over 100 years. You know, while the general public is looking at AI just to answer like, give me a recipe for blueberry muffins. You have an entire, you have an entire group of, of coders and researchers and scientists that are just, I mean you have guy, you have kids in college. And this is, this is the real, you know, crazy thing is think about how many crazy ideas we had for businesses and apps and cool stuff to build in college, but we did not have the experience, the money or the, the team to actually do it. There's no restriction anymore. Any college kid with any crazy idea can now stay up all, all night research stuff and build things out faster than the experienced, you know, 30 plus year senior software engineer. So where we're getting to right now is just an unprecedented amount of productivity at the, you know, the 20 something year old level. And the systems that they are coming up with is, is crazy. I can't even explain to you like the stuff we're going to see, but what I am seeing is the, you know, the Forbes 100, the Forbes 500. Companies, like the top tier companies are scrambling trying to figure out how do they get a piece of this before they become irrelevant. Every insurance company, every medical company, you know, every large company is looking at AI, thinking how do we not become irrelevant and how do we not get our lunch eaten in the next six months to a year?
- [35:09]
A
Yeah, I mean I think there's, there's a lot there now from a crypto and a project perspective and an investing perspective, I mean, what does that tell you? I mean, you know, you know, people here are more interested in oh my God, you know, Ethereum is outperforming Bitcoin and you know, it looks like it's about to reclaim 2000. Does that mean we're going to all, you know, blah blah, blah, blah blah. And you know, to me it's hard to make heads or tails of that it would seem that if you're right, that there are a few investments in the world of crypto, a few investments in the world of, well, whatever, in other assets that are going to outperform others. I think people are myopically looking at that. I mean your basic trend is that markets that are exploitable will get exploited. Prediction markets are going to. People playing in prediction markets without using these sorts of tools are losing money to people that they don't even know they're losing. I mean there's all sorts of implications here, right?
- [36:14]
D
Yeah, absolutely. And I guess the, the boiled down point for me is the chain and the cryptocurrency that is going to be used in the coming society. I don't think we've seen it yet. I don't think any of the technology that we currently have is capable of keeping up with the billions and billions of agents that are being brought online and that they need a control layer, they need an intent auditable layer. All of the aspects of handling the amount of transactions and auditability for the coming agent economy. I don't think we've seen the technology yet and I know a lot of groups are currently working on this and I don't think they're going to build it on top of Ethereum and maybe they'll use Bitcoin for a security route somewhere in there. But I really think Bitcoin is going to be kind of like the grandfather core anchored value store that can't really be gamed, can't really be hacked. I think Bitcoin will be the ongoing safe haven. Everything else is just going to be a cluster.
- [37:32]
A
Sorry guys, just have to get something for my wife.
- [37:37]
D
I could keep my lucky on this one all day long but.
- [37:40]
A
Yeah, no, no. Well, I mean the thing is is I think that that dovetails very neatly with the, that weirdly that S P story. Right. I mean Bitcoin is sort of outside the system and the system, you know, as it were, as you describe, it's like if you looked at, at all the, that what happened in the Internet bubble in, in 1999 and 2000 outside of Amazon and, and there are a few other companies that survived and did very well but you know, but the, the big ones were all private and people really didn't know about them yet. Right. The ones, I mean Google didn't exist. Right. You know, so you know, Facebook didn't really exist. You know, X didn't exist. TikTok didn't exist. I mean they were think they just didn't happen. I mean, YouTube was an idea, it was part of something and it kind of got bounced around and then exploded when got bought. But the, there's a lot of people who believe that there's huge value that will end up in the crypto world, but that a lot of that value hasn't even been created yet or is in the nascent stages. That's essentially what you're saying, right?
- [38:44]
D
Exactly. I think there are some promising projects out there for this coming control plane, but I think we're still looking at how the US Government's going to regulate AI and then how that's going to dovetail into the next generation of crypto projects. So I honestly think that's why Ethereum is going to be holding back for another six months or so. Just because there's so many unknowns with the way AI is going to be working on these chains. I think Bitcoin's the only one that's kind of immune to this.
- [39:21]
A
Well, immune, yes, but I mean, look, we all know how markets work, right? You know, like what Gaurav was talking about, about memes and about this stuff. I mean, these markets are really small and it does not take a huge percentage of liquidity for people to get excited and to push prices up. I mean, prices can be, it can move irrationally higher on assets, you know, very easily. And you know, look, Ethereum could easily double from here with every single thing you're saying being true. Now, it could easily not, but it could easily, you know, but this is, this is the world we live in. I mean, right, Rich? I mean, you've seen this in the markets.
- [39:58]
E
Yeah, I mean, I appreciate what Ryan's saying. I mean, I'm listening intently because I do agree, I think a lot of technology that needs to sustain what's coming with this whole agentic industry hasn't arrived yet. But certainly what you're touching on, Dave, we've been here for 10 years and every time we think the market's dead, it just blows your mind. And I think that's going to happen again. You know, I just, just don't see how it doesn't happen. And it just takes a bit of sentiment shift and people just start looking at price action and, and it's a self fulfilling prophecy really. So you separate the two things. The real technology, the real advancement and progress of these protocols and versus the speculation, which I think brings us back to memes again. As much as I'm loath to say it and I've been seeing on X, you know, over the last couple of weeks, just how quickly the appetite for memes came back with some really large accounts pushing, flagrantly pushing their own meme coins. And people are lapping it up, so it's not going anywhere.
- [41:01]
A
Everybody wants to get rich quick, right? You know, and so it's. It's, you know, P.T. barnum said there's a sucker born every minute. We know that people will always try. It's like, whether it's prediction markets, it. It doesn't matter. Momentum chasing is very, very real, and it will always be the case. But there's also a simple fact, which is money is being printed at absolutely accelerating rates throughout the entire civilized world. I mean, every government is in a process of spending more and more than they can afford, so the denominator is changing. So, of course, in nominal terms, prices are going higher now in that. That creates what I'll call the sloshing around effect. So you're seeing things like, I was in. In Atlantic City, you know, this past weekend. I was in Vegas, you know, you know, a week before playing poker. And. And, you know, poker goes through its cycles, too, in terms of, you know, how many people are playing in tournaments. And what it is, there are record fields in pretty much all of these events from all of these rooms and places because people, you know, there's just. There's. There's more money chasing stuff out there, and people all want to get rich, and. And it doesn't matter what market you're looking at. They're all. It's all the same. Now, is this, you know, is this cyclical? Yes. Are we at a top? We had about. I don't know. But I do know that it doesn't take a whole lot to, you know, to do what Gaurav was talking about, which is, see these green shoots, see these things happening, and things can move a lot faster. I mean, I've heard so many people in bitcoin spaces saying, oh, bitcoin has to go down to 40,000 because there's no catalyst for it. And it's like, I mean, in my lifetime, every time someone says there's no way something can happen, that's usually what does happen, right? I mean, I can't be the only one who has seen that. I mean, that seems to be where we're at, right?
- [42:50]
D
There's no way bitcoin's going to a million next year. There's no way bitcoin's going to a million next year.
- [42:57]
B
Yeah.
- [42:59]
E
Preach it, guys. Preach.
- [43:00]
A
Yeah, that's, you know, look. Yeah. You got me there, Ryan. You got me. But, but seriously, I mean all the changes that you're talking about, things that are going on in the world, they, they all line up behind some of these investments. And, and that's where you want to be. And trying to time it is very difficult, especially because, to be blunt, you're going to see you. Look, I ran a quant firm back in the days. I mean, I would say that it was not before AI. I would say that at Two Sigma we were kind of on the cutting edge of using data and whatnot and what at the time felt like AI, but isn't even close to where it is today. I would say that things happen much faster than you expect. But expecting that an individual sitting there looking at a screen is going to be able to pick out what's going to happen better than well coded AIs searching through mountains of data is just wrong. Right. You know, those sorts of, of edges are going to go to the machines. It's just, it's that simple. And I think that's what you were talking about, Ryan. Right?
- [44:03]
D
Oh, it's, it's like trying to, it's, it's like trying to day trade right now. Like, you know, in some of these markets, like they just move so fast because everyone's running programs to do it.
- [44:15]
A
Yep.
- [44:16]
D
And if you're, you know, if you're the, the old adage of you, if you want to make, if you want to have $1,000 in the stock market, start with $2,000. You know, it, it's the, the average person trying to do short term investing is just going to get blown away. And the same with the, the person just kind of piddling around in the crypto markets trying to pick a couple fringe altcoins thinking they're going to strike it big, they might as well just go buy a lottery ticket.
- [44:45]
A
Right. And that's why, you know, being in the market in, you know, if, if you have a investment thesis that makes sense, stick with it and do the work. I mean, that's what you do. That's what Gorav does. It's a lot of the people who are up here during times that aren't the summer when people are kind of yawning, but it is what it is. So we're getting close to time and it is the summer. So some of us are trying our best to enjoy this interview inter meso before markets start getting active again. Anybody else have any other topics to talk about? If not, we'll call it here and we will see you all on Friday morning.
- [45:29]
D
The ones guys.
- [45:30]
B
Absolutely.
- [45:30]
D
The one thing I'll add in Dave on closing is Proof of Human will be the biggest thing over the next year.
- [45:37]
A
Oh I, I agree and if you have any any ways to invest in that, I would love to hear hear it because I totally agree with you.
- [45:44]
D
Yeah, it's not currently there's a lot of pro promising projects but Proof of Human is still unsolved.
- [45:50]
A
Yeah, it's.
- [45:50]
E
I'll DM you some, I'll DM you something you can do some research on. Dave.
- [45:54]
A
Love to hear it Rich. Thanks.
- [45:56]
E
Hey guys, take care. Cheers.
- [45:57]
A
Okay, take care.
- [46:00]
D
Bye.
- [46:07]
A
Foreign.
- [46:13]
F
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