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- [00:04]
Laura Shinn
Hey everyone. Today's episode is a little different. It's a three part special. First we hear from Coin Fund's Seth Gins on Plasma, the first stablecoin focused blockchain that just launched. Then Solana foundation president Lily Liu explains why she believes revenue, not tvl, is the best way to measure real value in crypto. And finally, Figment Capital's James Pirillo joins to share his provocative thesis on pump fun and how streaming itself could be financialized. Three conversations, three very different fronts of crypto's future. Let's dive in. The crypto world is buzzing. On October 1st and 2nd, 25,000 people will be at token 2049 Singapore, the largest crypto event in the world. Featuring headline speakers like Eric Trump, Vlad Tenev, Tom Lee, Balaji Srinivasan and Arthur Hayes. Visit as now to get 15% off tickets with the code unchained. Binance is the world's number one crypto exchange, trusted by over 290 million users. With industry leading liquidity, security and a wide range of digital asset products, Binance is the place to buy, sell, trade and earn crypto. Download Binance today to get started.
- [01:24]
Seth Gins
Being out there probably two, three, four months ahead of the maintenance at launches from the other stablecoin focused chains, I think it's going to be a huge competitive advantage.
- [01:36]
Laura Shinn
I'm again joined with Seth Gins, managing partner and head of liquid investments at Coin Fund. Welcome, Seth.
- [01:42]
Seth Gins
Hey Lara, thanks for having me.
- [01:44]
Laura Shinn
So stablecoin focused Layer one blockchain Plasma launched its mainnet today. Its native XPL token also went live and is at roughly a $2 billion market cap. I saw a tweet saying investors from the XPL sale on echo are up already 220x. So why is the market and why is Coin Fund excited about Plasma?
- [02:06]
Seth Gins
Yeah, thanks Laura. So, so it's interesting and, and one thing I'd like to point out, seed investors are up a lot. But what's really interesting about Plasma is they did an ICO so it was available for anyone to, to invest in at a 500 million fully diluted valuation and right now it's trading at just over fully diluted valuation. So just stepping back, it's a great example of ICOs in, in this new regulatory regime allowing broad participation in the gains that for a while had just been left for for venture. But the, the reason we're excited is there's a really cool phenomenon happening around stablecoin chains right now. So the genius sack passed over the summer Genius act kind of gave us the the rules of the road for stablecoins and the the dynamics around stable coins are you need a way to move stable coins around in a very low cost fashion in order to make them a viable alternative for existing payment rails. And what stablecoin chains are proposing and and plasma is the, the first one, the first big one to be out there. But there's also Tempo which is stripes associated. Stablecoin chain circle is also doing one. What they're proposing is low transaction fees and then they monetize off of the application layer. This is a little bit of a new phenomenon, a new structure for monetization. What's really cool about it is you're getting your low transaction fees so you can be competitive with with traditional payments or much lower costs than traditional payments. But in order to have a viable business you need to develop your application ecosystem. So there's a forcing function for all of these stablecoin chains to rapidly build partnerships and develop the application ecosystem around them so that they have a way to actually generate value and plasma coming out first, tons of partnerships. My my X feed over the last few weeks has just been dominated by a fantastic social effort by them and really launching with big exchange partners like Binance, Earn launching with AAVE and a lot of other big protocols. So coming out of the gate strong aiming for that, that application monetization and then the big component or the biggest component, their NeoBank Plasma 1 which they announced a few days ago as well.
- [04:50]
Laura Shinn
Yeah, there's so much there. Like honestly when I was learning about this I was just like wow, this it just like flips everything you know, if you think about really does. Yeah. Like and, and it feels, it just feels super innovative and kind of like what this technology is supposed to be about. Talk a little bit because obviously you know there is a close tie to Tether itself which is the most dominant stablecoin. So talk a little bit about you know, what the tie in is with Tether and how it's used in plasma.
- [05:20]
Seth Gins
So very, the team is very close to the Tether team. You know I think there's some talk that this is the Tether stablecoin chain. I don't think that that's the correct characterization but, but they're very close. Look, Tether has been a wild success and I think the the next leg of Tether with USAT which was announced a few weeks ago as well and Bo Hinds joining from the administration to to lead. That is a very interesting US onshore genius compliant approach from Tether and the team Obviously very aligned at Plasma, very aligned with Tether. But, but I don't think it's, it's exclusively a, a tether chain. The, the good thing is all of the benefits of that close alignment with tether, the, the 175 billion plus of tether outstanding and the continued very strong growth of tether engagement, tether coming onshore and I think the visibility and the acceptance that it's now seeing in the US whereas in the past it was more of a, an offshore stablecoin. All of that is very accretive, very synergistic for plasma. But, but I think plasma also goes well beyond just being the, the tether chain.
- [06:55]
Laura Shinn
Yeah, yeah. And it offers zero fee transfers for USDT which allows that, you know, kind of wine distribution that they already have to kind of help juice liquidity into plasma. So you know, as you reference, there are so many stablecoin focused chains already or not already, but they're launching, they've been announced. So what sets plasma apart from the likes of Tempo or Ark or Stable or Codex or really any, any of.
- [07:24]
Seth Gins
These chains that, that it's mainnet launched, right. Like it's live. So, so I think that's, I, I think that's the biggest differentiator that this is an extraordinary team. It's a well capitalized team again with while it's not the tether stablecoin chain, they have an investment from the team, they're very closely aligned. So well capitalized. They've built out a great team themselves. Paul, the founder is fantastic and they're moving quickly and they've launched first. So being out there with mainnet before those other stablecoin chains, I think really taking the lead on as you said, flipping the model where you're not going to have high transaction fees. You keep transaction fees not at zero because you want to, you want to get rid of spam, but keeping transaction fees at a very low level that still enables things like micropayments and then monetizing at the app layer. That flipping of the script is something new and being out there probably two, three, four months ahead of the mainnet launches from the other stablecoin focused chains. I think it's going to be a huge competitive advantage as will be that, that close proximity to tether business development which is incredibly powerful.
- [08:53]
Laura Shinn
So you briefly mentioned Plasma1, which is the stablecoin native neobank app. Explain like some of the features like you know, why it is that we were saying that this kind of flips the script. Like why do you think this is significant and you know, just flesh out some of the details.
- [09:12]
Seth Gins
Well, so we don't have a ton of details but some of the key elements that were teased were having a way to spend stables through a card, having a savings account that's a high yield savings account and having these features available on a global basis. Because the installed base of users for Tether right now is predominantly ex us, predominantly developing world and having the benefits of a dollarized stable savings account and a way to spend that through traditional payments Rails or through payments Rails that are crypto native through the card is incredibly powerful for users who don't have access to those types of banking products from their own countries. So I think the promises kind of break down the frictions and the barriers to establishing a, a bank that actually gives people a, a real savings rate. A savings rate that allows them to protect their savings from inflation to, to dollarize their savings get give them access to that wherever they live and do that on very low cost rails. That's very much the promise of plasma one.
- [10:47]
Laura Shinn
Yeah, I mean some of the marketing language says that potentially your stables could earn 10% plus yields. And what has been long talked about in crypto is these countries where there's hyperinflation, where they can't trust their local currency. Places like Argentina where they've seen hyperinflation multiple times. So I could see that that would really appeal to what is traditionally Tether's user bas. You know also I wanted to just dive into some of these defi integrations that we mentioned. They have more than 100 apparently some of the ones mentioned are AAVE, Athena, Fluid, Euler. You know, I think I saw Pendle like they were just this curve I think I saw there were so many that were listed. So just talk about like, you know, why that's so significant and you know how that yeah, will affect their, you know, their strength in the market.
- [11:46]
Seth Gins
Well look, I think all of those integrations that you mentioned are very popular products. Whether it's borrow, lend, whether it's a savings and yield product, whether it's yield trading and the idea of being able to use these products that people love but on a very low cost, fast finality chain is very appealing. Being able to do it in a stable coin that they're familiar with, that they're very comfortable with and like using in Tether, very appealing. So I think the launch integrations reflect the seriousness that people are taking this team and what they've built and how well, how mature they fleshed out the protocol. Going into mainnet launch. And again, the idea is really a lot of the users that are using these protocols, these defi protocols on other chains will actually benefit greatly from having a rich ecosystem of applications on a very low cost, short finality or quick finality stablecoin chain. So I think it shows really strong commitment and buy in to Paul's vision for plasma.
- [13:18]
Laura Shinn
So before we went to the adrec.
- [13:19]
You did also mention the ICO briefly, and they use that in an interesting way to also bootstrap a lot of stablecoin deposits on the network before launch. Talk about, you know, how they did that and why that was, you know, why you think that was a smart strategy?
- [13:36]
Seth Gins
It was actually, it was a really cool different type of ico. So because they're a stablecoin chain, they said, we're going to have you submit stablecoins into Aveda Vault and your percentage of the overall stable coins that are submitted will be the percentage of the $50 million raise at a 500 million valuation that you'll be able to buy. And because they're a stablecoin chain, they got a lot of people submitting stables to participate in the ico. And that then created kind of this bootstrapping mechanism where they kind of had a warm start to the ecosystem. So they opened up. We didn't know at the beginning how many stable coins they were going to accept. They started out by saying, we're going to accept $500 million in stablecoins. And they got that submitted in two minutes. So it sold out incredibly quickly. It showed how much demand there was for the ico. And then a few days later they said, okay, we're opening up another 500 million. And that sold out in 20 minutes. So it really didn't take long for them to get $1 billion of stables. And I think they accepted tether and USDC and then they converted the USDC into tether. But a billion dollars of stables that was then locked for a number of months going into the sale. And I'm just looking at the dashboard here. So right now they have 1.1 billion in deposits. So continuing to see a healthy amount of deposits even as those deposits have now unlocked and people are able to claim their ICO purchase.
- [15:25]
Laura Shinn
Wow. Yeah, that's so smart. Definitely aligned incentives. So, as we mentioned, today was also the launch of the XPL token, the native token. What is the use for XPL token?
- [15:40]
Seth Gins
So at this point, I think we're waiting to get more clarity on the full tokenomics around the XPL token, but the expectation will be that it will participate in revenue off of the application part of the ecosystem. So I think when people look at comparables for the XPL token, the view very much is as we see applications gain more activity on plasma, there will likely be a degree of revenue share into the token.
- [16:24]
Laura Shinn
Okay, yeah. It's not uncommon for the purpose of these tokens to be fleshed out as time goes on. So as we've been talking about, plasma seems to be focused on Tether's traditional user base. And I wondered if you could talk about what you thought the launch of this would mean for people in those countries. Just talk about, I guess the geopolitics of this innovation that we're seeing.
- [16:59]
Seth Gins
So it's really interesting. So the geopolitics of an expansion of dollarized stable coins and plasma is one component of that are very interesting. You're basically circumventing capital controls around the world where historically countries have tried to prevent their citizens from being able to dollarize their assets. So when you mentioned earlier, you have people in countries that have high inflation that are in a position where they lose a lot of their savings to inflation, they can capture the yield from the plasma. 1 NeoBank Another big aspect of protecting their savings is being able to dollarize those savings by holding tether or other dollarized stablecoins. So blockchains like plasma make it easier for people to get access to dollarized savings and that really breaks down the ability of countries. If you have an Internet connection, you and in some cases if you have a vpn, you'll be able to dollarize your savings. And with the Genius act, you'll also have assurances around the backing of the stablecoin. So you'll have essentially a dollar that you know is money good as a result of a legislative framework in the US and you'll have access to it as long as you have an Internet connection and in some cases a vpn. So it really, it drives a very strong push for dollarization globally, certainly of savings. And that's why when I look at treasury talked about 2 trillion of stablecoins outstanding by 2028. Not a venture firm, but the Department of Treasury talked about that a few months ago, which is pretty wild. I actually think that's going to massively undershoot where we end up by 28, I think it takes less than a year for us to be at a trillion dollars and I think it compounds from there because as you have more uses for stablecoins in the US as you have more Interest in dollarizing assets abroad. I think the network effects of money and the strength of the dollar end up being one of the strongest network effects you can find. And we blow through that $2 trillion target very quickly.
- [19:58]
Laura Shinn
Yeah, I did want to also ask about Tether launching USAT in the US Explain. It feels like they have so many different irons in the fire right now. So I'd be curious to hear, you know, I don't know, does that work with plasma? Are these entirely separate? Like how, how do you see the go to market for both of these or just whatever the regulatory restrictions are?
- [20:22]
Seth Gins
So USAT I think will be coming over over the next few months and I think the, the, the advantage of USAT is really saying we're going to, we're, we're going to take a look at everything that is laid out in the Genius act and we're going to make sure that we have a stablecoin that is exactly what our traditional corporate business development partners are going to want. So I think a big component of USAT is to make sure that there.
- [21:04]
Laura Shinn
Is.
- [21:06]
Seth Gins
No argument for a company that is a large multinational based in the US to, to not work with Tether on their stable coin. I, I think you have. Well, well, Tether has been incredibly successful offshore and has an incredible brand. It's been around now for six, seven years and it has gone through periods of time where there wasn't a clear regulatory framework. Now they're doing a fantastic job of converting the business into shifting the business toward a fully compliant stablecoin which they've really done over the last few years with their attestations around reserves and providing more transparency over the years. But I think USAT is really saying don't worry, don't focus on the fact that we were around through this unregulated or less regulated period. We're just going to start from a point of providing exactly what you need in exactly the framework that's laid out by the Genius Act. And I think that's. It probably wasn't a necessity because I think Tether would have been absolutely viable and it would have seen increasing incredible engagement with onshore business development in the US but, but I think by issuing a new stable coin and making it fully in the, the constraints of the Genius act, it just makes the, the business development push that much more straightforward.
- [23:12]
Laura Shinn
Okay, and, and for Plasma, do you feel like USAT and Plasma are just going to address different geographies?
- [23:20]
Seth Gins
I think Plasma will actually be a blockchain that USAT transacts on Quite a bit. We don't have a ton of color on the relationship, but from some retweets and comments on X, it seems like there's likely to be a close relationship. So I think we'll see USAT transact on plasma over time. That's probably much more of a 2026 dynamic. But. But I would expect USAT to be the, the. The primary stablecoin that US enterprises use on. On plasma. But. But a little bit of TBD on that.
- [24:05]
Laura Shinn
Okay, I see. Okay. So I guess the last question is just, you know, a tether obviously is starting at this point in time when we'll call this moment in time the beginning of the great stablecoin race. Maybe because we're just seeing so many new chains launching so many new ventures and stablecoins, clearly they are in first place at this moment. But going forward, I wonder if you have any thoughts on how you think this big competition is going to play out.
- [24:39]
Seth Gins
So I think there's definitely a network effect. As I mentioned earlier, I think money has one of the strongest network effects out there. Now, obviously we're talking predominantly here about dollarized stablecoins and the dollar is kind of the basis of that network effect. But if you look at the way that the stablecoin market has kind of delineated, Tether has very much seen its market share be resilient and expand. So I think the base case would be that tether's distribution. Now this is the base case, let's say X us. And then I think so the base case X us is the network effects that they have and the momentum probably continues and they're probably the dominant stablecoin outside of the U.S. i think for USAT, there's very much the question of how effectively they can drive business development. Because I think the US engagement with stablecoins is going to be around payments. It's going to be around equity security token settlements. So when we're trading equity security tokens 24 7, how are you going to settle those? When you have Coinbase stock as an equity security token and you're trading on the weekend, you're going to settle that in stable. So I think that's going to be about getting out there and building the business development relationships for USAT for things like security settlement, commodity settlement payments, Rails. And I think Bo Hines is incredibly, incredibly well positioned to do that business development. But I think you're also going to see some pretty intense competition out of circle with usdc. So I think it's a little bit More of an open competition and obviously Stripe has a very big installed base and that will be another business development vector for engagement, particularly on the payment side. So I think the US will be a little bit more of a greenfield competition, but I think you'd have to say that there's some degree of bootstrapping advantage to the positioning that Tether already has abroad. And with plasma launching early, that should be or being the first mainnet to launch from a stable coin chain perspective, that should be a little bit of a head start for use cases onshore as well. But again, definitely more of a greenfield dynamic with US enterprise business development versus the ex US playing field.
- [27:43]
Laura Shinn
Yeah, it's a tiny bit of a head start. It's not quite the same head start they enjoyed in 2014, but it's something.
- [27:53]
Seth Gins
And 2014, so. So 11 years, not. Not seven years.
- [27:57]
Laura Shinn
Yeah. All right, well, it's been so great chatting with you. Thank you so much for coming on and change.
- [28:04]
Seth Gins
Laura. Thanks for having me.
- [28:06]
Laura Shinn
All right, so that was my conversation.
- [28:08]
With James and now we're going to shift gears to a pre recorded interview with Lily Liu, the president of the Solana Foundation. The reason it's pre recorded is because she was in Korea when we wanted to have her on for Korea Blockchain Week. And so she obviously couldn't make this time, but we had a great discussion. She made the case that revenue, not total value locked, is the best metric for evaluating crypto protocols. She explains why she thinks TVL is often gamed and what revenue really tells us about adoption and utility, and also discusses whether focusing on revenue too early could actually stifle innovation. So here's my conversation with Lily.
- [28:44]
Lily Liu
TVL is not a metric that tells you how much value that liquidity is actually bringing to the broader ecosystem. We've got to start to complete the picture here. How does tvl, what is the mechanism for how TVL actually results in protocol value capture?
- [29:02]
Laura Shinn
Today's guest is Lily Liu, president of the Solana Foundation. Welcome, Lily.
- [29:07]
Lily Liu
Hi, Laura. It's good to be back. Good to see you.
- [29:10]
Laura Shinn
Nice to see you, especially because I know you're in Korea for Korea Blockchain Week, so thanks for taking the time for this. You recently tweeted that you thought revenue was the North Star metric, as you call it, for protocols. Explain your reasoning.
- [29:25]
Lily Liu
Well, I think it's got to be thus far. What is one of the critiques that we always get as an industry? Where's the fundamental value? How do I value these things? How do I know the price should Be ten hundred, a thousand, a million. Right. And it's honestly something that our industry has papered over, not really wanted to talk about for a really long time. And I think that now there's, there's overall the spiffation where you've got bitcoin the asset and everyone else trying to be, is trying to competing to be financial infrastructure. So I think now you can be just clear as an industry. There's digital gold and what is evaluation metric for that? I don't know. How do you want to value gold? So you can apply that logical framework to digital gold store value asset. It's a little bit one of a kind, sort of the non sovereign store value. And I think that's something that people fundamentally understand and there's on that pedestal room for one and then on the other side which is blockchains as financial infrastructure, I think there's also going to be a power law. But then the question is do you value financial infrastructure, a financial infrastructure, platform, technology platform, the same way that you've that you value store value asset? Of course you don't. Now what we do have as precedence in different ways that we can start to think about this is well, if your infrastructure then the value of that infrastructure should be derived from some version of its utility. So the kind of question has always been how does usage and utility actually flow through into token holder value creation. Right. And let's put value creation aside for a second. Let's just talk about price creation right now those are two different things, value and price. And so what we've anchored on as an industry for the last five years, once people started to move on beyond, move beyond. Okay, there's this thing which is digital gold and then the everyone else category. We've been talking about TVL for a really long time and that's fine to talk about TVL starting in DeFi summer in 2020 when this thing was so new, so so interesting and so impactful to be able to do defi on chain that it was fine as a metric back in 2020 when you needed something to normalize these new phenomena that were popping up almost overnight. And we have a precedent for that as well. Back in the 90s we would look at what app downloads, you would look at installs, you would look at signups, MAUs or DAUs and then MAUs.
- [32:03]
Laura Shinn
Yeah, monthly active users and daily active users.
- [32:06]
Lily Liu
Right. And many of those metrics people still talk about all the time, but they talk about them in the context of these are important upstream metrics that ultimately are going to flow into value creation and then value capture, price creation, price capture. And that is the kind of evolution of the discovery course that we have not had as an industry. And so we're still sort of stuck on this 2020 TVL comparison. But if you actually think about how TVL flows through, first of all, it's an easily gamed metric. But then if you think about how does TVL actually lead to value and price creation for holders? Well, explain that mechanism. Right, so then what people typically say is, well, if you have a lot of tvl then it means that there's trust in the system and that is a precursor to economic activity taking place and that transaction volume of continued activity is going to be the precursor of fee revenue, so on and so forth that will eventually accrue. Right, so let's finish that sentence and let's finish that thought. What is the mechanism for how utility and usage of a blockchain actually flows through to value creation, price creation for holders and stakers? Right. Well, the way is, if you look at chain revenue, let's just talk about L1 protocols for a second before we can talk about apps as well. Dapps and Dapp chains. Right. But generally speaking, the way that utility flows, flows through is you've got kind of generally three sources of revenue for holders. So the first is inflation and that is a protocol parameter that gets set with many different considerations and it's set differently for every protocol there's inflation. In the case of solana, that's around 6% today, reduces every year on a set curve. Within the Ethereum world, it's around 2 to 3% depending a number of factors in there. But category one is inflation. Category two in our case is a base fee, which is basically a fixed fee for any transaction that you put through the, that you put through the network that's fixed. And then there's also a priority fee, which is a variable fee that people can choose to pay more or less in order to prioritize their transactions. So you've got inflation, you've got a base fee, what's called a fixed fee, and you've got a variable fee. And the sum of those is revenue that accrues and those are block rewards that, you know, the allocation of those is also, you know, obviously an ongoing discussion whether it accrues to validators or to stakers. But over time that is going to be split between validators and stakers in the pass through of that to stakers. And right now about 60% of holders are stakers the pass through of that to stakers is how it's a token holder. You are participating in the revenue, the value creation of usage of the network. And so this is something that is not talked about very often and I would say one of the reasons why it's not talked about very often is because it's not been a metric that any protocol has really been able to demonstrate up until more recently for a number of reasons. One is just because it takes a while to actually drive real world adoption of this new sort of, this newfangled blockchain technology. And then also another reason is because a number of the sort of the number of the chains that have the most mind share don't actually have the ability to capture this business model and this value creation pass through to holders. Because if you break that down, inflation based fee, priority fee, the priority fee is high margin, right? It's like being in grocery store where you want to be selling your most high margin products and the highest margin product that you can offer in a chain setting is execution transactions. And if you take those execution transactions and distribute them across any number of, of sovereign execution environments, call it L2s, whatever you want to call it, then what you've done is you've taken your most profitable, your most profitable transactions and you've given up that value capture, right? And that you see exact. And that's on top of the well known critiques that we've heard over and over again about fragmenting liquidity and the impact of that on, on overall capital markets, capital markets kind of system where liquidity is always important. So in addition to that sort of well, well acknowledged fact, what that also means is reduces value capture for token holders. And so this is something that is not often talked about, right? You'll see so many charts in our industry which is TVL rankings. But then if you take the TVL rankings and you marry that up with protocol revenue rankings, what you can see is, you can see a number of examples where someone would be like I've got $2 billion of TVL. Yes, but your protocol revenue is $2,000.
- [37:21]
Laura Shinn
So you're saying like this, this like.
- [37:24]
People are just gaming that particular metric, right?
- [37:27]
Lily Liu
And the reason why TVL is indicative, it's, it's not unimportant. But the reason why it doesn't, it's not an automatic carry through to actual value creation and capture is because you can imagine a situation where you know, I could be, I could have a million dollars of TVL, let's call it for, for large numbers, $100 million of TVL. And I could literally put that into, call it a lend, borrow once and touch. Touch it once a year. Now that is important because on one hand it is creating market depth that other market market participants can trade against. And then the idea is that is providing some baseline of liquidity that others will be able to access and increase transactions against and that will generate fee revenue. Right? So absolutely that is part of it, which is why TVL is important. It's just not the end all be all metric, which everyone knows at this point. But it's also because if I touch that $100 million once, I pay fees on the way in and I pay fees on the way out. That means I pay fee twice, fees twice over the course of an entire year. Right? So that $100 million of liquidity's sort of fee generation could be twice a year, it could be twice a minute. And TVL is not a metric that tells you which one of those it is. And therefore it's not a metric that tells you how much value that liquidity is actually bringing to the broader ecosystem. In this case to the protocol.
- [39:01]
Laura Shinn
So obviously I understand a lot of what you're saying and some of that I think makes a lot of sense. But I do think that there would.
- [39:12]
Be people who would look at what.
- [39:13]
You'Re saying would say for instance salon of people used to always promote rev real economic value which is measured by transaction fees out of protocol tips. But that now that it's down on Solana it's not being talked as much. So I wondered what you would say.
- [39:31]
Lily Liu
No, yeah, what I'm saying is pretty much RDV it is and so look like this is not something where talk about in the months that it's good and then think that it's and then stop talking about it in the months that are. No, like this is we, we have a, a core interest in that metric. Always have. And, and that is not a 2025 phenomenon. That is actually a 2018 phenomenon. 2020 phenomenon. So this has been, this has been a, this is not a new thing.
- [40:04]
Laura Shinn
And when you say that, you know, you feel like TVL can be gamed, there are also ways that revenue could be gained. You know, wash trading artificial volume, even like incentive programs and grants can like influence it in an artificial way. So I wondered how you would, you know, like address those criticisms.
- [40:30]
Lily Liu
Every metric can be gamed, especially in the world of, of fairly competitive trading participants on chain. So nothing is perfect. And but the thing is that if you're actually paying for transaction. So to actually game tbl, it's basically free, right? Because obviously you have to have the stock of that asset or that sort of quantity, the inventory of that asset. But then to actually token, to actually put that on chain, let's say dollar putting dollars, or in this case, let's call it minting a money market fund and putting that on chain is things that people can actually do pretty easily first party. Whereas to actually be regularly paying fees, that is a cost. And so to put assets into a different form of inventory is much less costly for people than for people to actually be paying fees.
- [41:33]
Laura Shinn
It's a cost, but I mean, there's also opportunity costs. So if someone feels like they could be earning more money by putting their money into a different protocol, then like don't you feel that that alone shows, especially like TVL over time shows a certain level of stickiness or confidence or trust in a protocol. So wouldn't you say that like, if you, if you're looking at TVL over time, then that's especially. It's less gamble.
- [42:04]
Lily Liu
It's in the same way that people still look at app downloads, people look at users, people look at clicks, and people look at monthly actives and daily actives. Those are all still metrics that people look at in the tech world 25, 30 years on. Right. Those are seed stage metrics, those are series A metrics. And then once you get to series B and series C, you've got to demonstrate something that is downstream of those metrics. And as an industry, we were a seed series in 2000. And when it comes to sort of Defi and actual real utility emerging on chain rather than just.
- [42:42]
Laura Shinn
You said 2000, did you mean 2020 or.
- [42:45]
Lily Liu
Oh, sorry, 2020. Yeah, with DeFi summer. And so that was when Defi just kind of look as an industry in terms of, in terms of its maturity, seed stage. And now as an industry, we're getting to series A and into series B. And then you've got to evolve the way you think about those things into actual value creation. And so I think what we're, as an industry, what we should be doing is finishing the sentence, which is not to say that you don't care about tvl, which is a way of talking about market depth. Right. It's not to say market depth is not important. Of course it's important in the same way that app downloads and users and clicks are important because those are all upstream metrics of eventual value creation. But we've got to, we've got to start to complete the picture here. How does tvl, what is the mechanism for how TVL actually results in protocol value capture?
- [43:41]
Laura Shinn
Let's just talk about kind of like this focus on revenue. You know, since crypto is basically a newer industry, some would argue that focusing on revenue could hamper innovation. I'm sure you know the long history of startups that have succeeded by not focusing on revenue too early. Uber, Amazon are some examples. So what would be your response to those critics?
- [44:08]
Lily Liu
I think we already have the answer for that in Amazon, which famously said we expect to be loss making for a long time. We want to have no profits for a long time. But they had plenty of revenue. And also with so many of these very high growth companies that were innovating on entirely new tech and entirely new markets and entirely new business models. And I think what we proved out is primarily in a place like the United States, there's permanent capital formation that was also highly patient and willing to take a bet on innovation. And that's why you see so much innovation coming out of the United States in places that are able to price and value innovation in human capital. So I think the critique would would be disproven by the success of high innovation economies with tons of venture capital, which has primarily been in the United States and then also on the other side of the world. So I don't think that is a critique.
- [45:11]
Laura Shinn
All right, and so you've made a strong case for revenue. Are there any other metrics that you find useful or that you like to consider in addition?
- [45:21]
Lily Liu
Yeah, well I think that generally I think these blockchain ecosystems, I think there's sort of three components, you could call them, stacked on top of one another. There's the network, let's call it the chain. There's the applications. And oftentimes those applications themselves have their own tokens. They're not protocols quite in the same way as a chain is like a layer one protocol. And those applications, oftentimes they will have a token attached to them, typically call them a governance token. But those applications, the profitable ones, are typically those that are going to be taking a cut of transaction revenue. So there's application revenue and then I think so there's like network applications and there's the asset layer and assets are what is now really coming to the fore right now with for certainly stablecoin issuance tokenization. I really see Stablecoins as being b0 of tokenization. And so those are I think kind of like the three components of how, of how these Ecosystems are starting to come together and so I think about those three things kind of being distinct. So for example, on the defi llama page, for example, they're aggregating revenue at the asset layer, which is T bills for example, and revenue at the application layer which is typically cut of trading revenue. And then the, and then the revenue that goes to the L1 protocols. And the business model for that, or let's call it the revenue model for that is fundamentally different. That is a function of priority. Fees, Fees, you could conflate inflation in there as well. Right. And so I think you gotta disagree with those three. And in those three, different parts of an ecosystem actually make money in different ways. Right. So the asset issuer will take, will typically make money off of a, um. And so the folks, they are going to be the most sympathetic to TVL because it looks a little bit like a um, it's kind of like a um of a protocol. And then the applications are typically going to look at trading volume because they get a cut of trading volume. That's how exchanges work. That's how decentralized exchanges work as well. That's their business model. And these chains are kind of like these funny new things that don't have a great corollary to something that we already see in either the financial world, assets or in the tech world applications. And these changes like, kind of like this, this, that's the new thing that we, I think we need to develop our shared language around. And what is the business model that a chain should have?
- [47:55]
Laura Shinn
Okay, yeah, well it's been great getting your thoughts on this topic. Thanks so much for sharing them. From Korea.
- [48:05]
Lily Liu
All right, thanks Laura.
- [48:06]
Laura Shinn
Catch you all later.
- [48:08]
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- [49:57]
James Pirillo
Trading and meme coins to me is like it's all gambling. For pers trading, it has this like essence and this like, this, this feeling of being like, like poker. Meme coins sort of look like slot machines in my mind, but they're both gambling.
- [50:13]
Laura Shinn
I'm here with James Perillo, general partner at SIP and Capital. Welcome James.
- [50:18]
James Pirillo
Thank you for having me. Laura, longtime listener, first time caller, guest.
- [50:24]
Laura Shinn
Yeah, thanks for the chat. So this, this, by the way, you guys, was not planned, but we invited James to talk about a little Twitter essay that he wrote on Pump. Fun. And we actually had thought we were going to start streaming on Pump on Tuesday and it didn't happen. So it's just. Maybe it's kismet. It was meant to be that the very first interview we were going to stream on Pump is about your essay about Pump. And I'll just quote from it. You said Pump is laying the groundwork for an Internet economy of a terminally online new generation, one in which culture and speculation are not adjacent but inseparable. With streaming returning to their product suite, they now set their sights on becoming the entertainment gateway for viewer financial participation. So explain what your thesis is like. I don't even know what that means. Like viewer financial participation. So yeah, explain what you, what you wrote.
- [51:18]
James Pirillo
Yeah, so I've been trying to think like I had a. I didn't know that first of all, I didn't know that you're going to be streaming on Pump and that this would be the first one. What. What an honor. Hey Dougie, please buy some of those tokens. Let's, let's get some performance in this token. Let's see how it goes. It'll be interesting to see whether that's a reflection on like whether people like the guests or don't like the guests. It's a lot of cool, interesting, like, experiments to do. You actually, like, are going to blow out all the questions I had for you because I was going to ask you some questions about streaming. But yeah, I've been trying to think about what the. I had this, like, article. I wrote it very quickly, honestly, Like, I wrote it, like, over the weekend. And I did it mostly as, like, your inspiration, honestly, Laura, you and your interview with Noah. And then I keep reading all these, like, endless articles on prediction markets. Like, it's all I see in my timeline all the time. And how this is like a better form of like, audience participation or I guess we'll call like, audience fi. I don't really know what to call it. Right. But it's. It's sort of the idea of, like, blurring the lines between passive observer and like, active participant. And we see a little bit of it today. You see, like, on certain streaming, like, platforms like Twitch, you can like, tip the streamer, like $5, right? If you like something that they're doing, you can send them a tip or you can buy an emoji. If it's like the Bachelor or some, like, some reality television show, you can vote, you can call in and you can vote on, like, who the winner should be or who you like or who you want kicked off of Love island or whatever. And I assume you pay for that as you're doing it. And so these are. These are just like very small ways of, like, people financially participating in the outcomes of the shows, the entertainment that they. That they enjoy and that they consume. And I think that what I was trying to suggest is that there can be a much closer link between the host, the entertainment and the viewers. Not only one where they pay for something, but where they actually potentially participate. They can pay the content creator simply by buying the coin, in Pump's case. Right. You don't need to have any sort of expectation of profit from that. That can be your contribution. But at the same time.
- [53:44]
Laura Shinn
There are.
- [53:44]
James Pirillo
Things that tokenization opens up and we've seen it and we'll continue to see it. And at the same time, I think there are going to be a new generation of streamers that come out of influencers that come out, content creators that come out and they are going to find ways to actually have on their rise to fame and on their rise to potential fortune, that their. Their audience also gets to participate in some of that upside for being early and for supporting someone who they saw like, they saw, like, when they were just at 100 streamers, audience members, and now they have, you know, 10,000 every stream. And so I think it's really just, like, showing the evolution of, like, where this medium is going to go and, like. And there's been an evolution in social media to a point where it's entertainment.
- [54:35]
Laura Shinn
Yeah, I actually, while you were talking, I was like, oh, maybe it should be called Attention Fi. Because it's, like, about. Yeah, attention. Well, okay, so in your essay, you kind of surveyed the current landscape, and the two incumbents that you picked out were Twitch and Kik. So explain, like, what you think the issue is with them. And by the way, you know, there are other streaming platforms as well. Like, over the years, we had actually been approached by a number of them. And just because, like, you know, my whole thing was just doing pods, I. I didn't, like, really seriously consider it. And now I'm realizing because crypto news is changing so quickly that our standard model of doing two podcasts a week in covering, like, kind of two big topics or, you know, one big news story, and when it could be newsy or like another topic, it just doesn't make sense anymore because there's so much news now that, like, we are just going to have to leave too many stories on the cutting room floor and just not cover them. That's why we are realizing we have to start streaming, because also it makes the news cycle for any particular story shorter.
- [55:44]
If we can stream, then we can.
- [55:47]
Get things in more quickly, just have more stuff and try to do it same day or day after before the story moves on. That's another reason why I hadn't really been open to it before, but definitely am now.
- [56:00]
James Pirillo
Oh, I was gonna say, like, attention spans are shorter. News cycles are shorter. Like a meta that, you know, that's created even within, like, the crypto markets. Right. It used to last, like a couple months or maybe a whole cycle, then a couple. A couple months, then a couple weeks. And now it's like, you know, by Saturday or Sunday, you see these, like, prices go up, and then by Monday, like, the prices are crashing down and, like, everyone is sort of like, onto the next new thing. And I think even I'm a little older, as you can probably see from the gray hair I have. But I think even younger generation, like Gen Z, for example, are, you know, they're. Where are they consuming their media? They're consuming media through, like, TikTok, right? They're consuming media through streaming. And I think streaming has, like, you know, there. There are literally kids who like, instead of going out on Friday nights, like stay home and stream. Some of them are hosts and some of them are watching. And when I was a younger person, like went really young, like I would either go out and when I was super young, I would like stay at home and I would watch television with my family on Friday nights. And now you have kids, like just watching streams, right? So everything is moving a lot faster. It's like, it feels very, very reactive to like what's happening in the world at this very minute. And I pointed out Twitch, and I pointed out Twitch and Kick because like they're kind of the big names that everybody sort of associates with streaming. Of course there's been other platforms and but, but I think like what I was trying to point out mostly was I think that this is like an inflection point and this is a change in like a shift in like how streaming is. Entertainment is going to be like consumed, which is mostly like through financial participation or like audience fire, attention, fire, whatever we want to call it. And like, but if you look at it, it's really mostly about like, if you look at like the individuals, the creators, it's mostly about personal branding and about the evolution of personal branding from maybe like 20 years ago. It was like I would call like the self promotion era. And so I used to work at like kpmg, right? Like an account and very, very, hey, accounting is important, right? Warren Buffett said accounting is important. So accounting is important.
- [58:11]
Laura Shinn
I'm not laughing at you.
- [58:12]
James Pirillo
No, it's okay. I was on the, I was on the tax side. It was incredibly dry, but it was, it was just September 15th. So please do your taxes. You have a few more weeks if you're in the U.S. but the self, the self promotion era was like 20 years ago. And what that meant for like social media, like as social media started to like build up and become like more ever present in our daily lives. And what you would do is like you were told to build your personal brand as a professional. And most professionals that meant like posting on LinkedIn, right? It meant like going to these like professional conferences and then like going golfing with your boss like on Saturdays, even if you hate golfing, right? And like going to like happy hours even though you hated drinking, if you didn't like drinking. And essentially the idea was like promote yourself, promote your business and get a promotion. And that's how you work your way up through the ranks. And that's like, that's like the personal branding, right? And building your personal brand. And then like 10 years ago, it was like kind of like the influencer era. And all of a sudden, like, these younger people were like, I don't want to do that. I'm posting on Twitter, I'm posting on Instagram, I'm posting on YouTube or Snapchat and amassing this huge audience. And, like, this is short clips, right, of, like, my daily life of whatever I'm doing. I'm hoping to amass this, like, kind of huge following on these platforms. And eventually, eventually people started to kind of get paid for it. And content, this is sort of like also the content era, right? Like now all of a sudden, content is like the word that everybody had in their vernacular. That didn't really exist, like, 20 years ago. And so content became like every aspect of culture, like, was like, there was content about it. Like, if you weren't on a vacation, there wasn't content. Like, what did you really even go on a vacation, right? If we did post on Instagram and. And so, like, lines for donut shops and ice cream shops became incredibly, like, overcrowded. And, like, young people just wanted to take pictures and post it as content. And so social media companies essentially became ad tech and content creators. The source was like, their source of revenue and free advertising for the companies and something that they could sell. And this is also working for your bags, right? This is also working towards, like, some sort of, like, benefit for the individual through maybe being able to sell goods and services or something of that nature. And so I think streaming, like Kick and Twitch are sort of at the later stages of, like, the influencer content, like the influencer era, where until very recently, content creators weren't paid anything. And then Twitch and Kik kind of view it. I view it more as entertainment than it is social media, right? It's very much like, here I'm streaming, I'm providing entertainment, you're watching it. And. And then what wound up happening was that these companies were able to, like, sell advertisements, like on seller advertising space on the streams, and as a result of that being able to, like, share that revenue or subscriptions and we're able to share a percent and they're sharing a percentage of that revenue for, like, with their most popular creators. But for most people, if you have a hundred, if you, like, have like a hundred, if you have less than 100 viewers, you're making nothing, like, literally nothing. You're just doing it for the love of the game and because you're hoping, or maybe you're hoping to, like, get big one day for the largest streamers it's like, very, very lucrative. But that's like, point 1% of like all streamers. And everyone else is sort of just doing this and really not seeing any financial upside from it at all, despite maybe even having good content. And so what I was kind of trying to show was that, like, Kik takes a very. I had it in the 5%. Exactly the numbers. But I think Kik takes, like you.
- [62:03]
Laura Shinn
Said, they take 5% and Twitch takes 50%.
- [62:06]
James Pirillo
5% and Twitch takes 50%. Right. And it's a little bit more beneficial with some of the other, like, there's some other, like, nuances, but that's like the main sources of revenue. These companies are, like Noah said, are not profitable. Right. They are paying out to creators, and creators aren't making that much. And then kind of this was the, the, the inspiration was, you know, that pod, that stream that you had or that podcast you had with, with Noah where he's like, look, like we're, we're profitable. We're very profitable, and we're not, we're not only are we profitable, but we're so profitable that we're actually sharing like, you know, $21 million over the last, like, month with streamer with content creators. And they're, they're making more money than they've ever made before. And so it's sort of starting to pull the monetization forward. It gives these, like, early creators an opportunity to make some money early on. And ideally, in time, they build a big audience and they're able to like, invest in themselves and their personal brands and actually make these streaming them as a streamer and them as a content creator more successful.
- [63:18]
Laura Shinn
Yeah. One thing that you said got cut out a little bit. Did you say. You said if you have less than some amount of viewers, then you basically make almost nothing. Was it like a thousand or what was the number that you set?
- [63:33]
James Pirillo
Yeah, so I think the number. I was looking it up, like, if you have like under 50, you're okay. Like, like every time that you stream, you have under 50. Like, you're, you're making like almost nothing.
- [63:44]
Laura Shinn
Got it.
- [63:45]
James Pirillo
And I think if you're, if you have like under 100, you're making roughly like 600 to maybe $1,000 a month maybe. And so I think it just, it's, it's very small. Once you get over 100, I think it starts to look a bit, little, little better. But you're also streaming quite a bit. You're streaming quite frequently. It's almost like a full time job. And you know.
- [64:07]
Laura Shinn
Okay, one other question for you is. So I actually don't know for Twitch and Kick, are they making money like from ads that they're running on the streams or where is the money coming from? Well, I guess from Kik, it's coming from Stake.
- [64:21]
James Pirillo
But the way it works is there's two parts. There's the subscription, so people pay subscriptions to, to watch the stream, some of the streamers. And in addition to that, there's advertising. There's way more advertising on Twitch than there is on Kik. So the ad revenue is like lower on Kik, but I think the content is a little bit more free on Kik. And so it's a little bit more, let's call it racy, for lack of a better word. The moderators are a little bit more lenient. It, let's say as they're trying to grow and trying to expand. But the subscription revenue is split 50, 50 on Twitch and it's split 7030 with the like in favor of the content creators on Kick trying to like kind of I think eat into, into Twitch's business.
- [65:09]
Laura Shinn
Oh, okay. I thought you wrote 95 5. But anyway, so in your essay you gave as an example the Trump meme coin. But I couldn't help but think, well, okay, that coin has been pretty much down only since the inauguration, which was basically a few days after launch. Obviously it had that little spike for the Trump dinner, but it's kind of interesting that that also happened to be timed around when the token unlock was happening for them. So basically insiders, they enjoyed a little bump when they were going to sell. But when you, you were trying to give that as an example of this future that you're talking about or how you think that this world is going to look. But I don't know if it's an example that inspires people. So just talk about why you think that that particular example is like a paragon.
- [66:00]
Even though, I don't know, it doesn't.
- [66:02]
Look so great chart wise.
- [66:04]
James Pirillo
So it's the only thing that Trump token holders have gotten out of, of it. But I mean it's a, it was a big thing, right? I think like you were able to go down to, I think his golf course and, and have dinner with the President. And then for like the top, top echelon, there was like a, there was like a ceremony or some sort of event at like the White House that like you were invited to. And so what I was trying to do, I mean, price excluded, right? Like, like ignore the Price for a second, like I, regardless of what your political affiliations are one way or the other is like, it does show that there can be utility. And it also shows, I think, and you're right, like there were insiders on this, on this token that like they, I think they raised for the token, which is usually a little unusual for some of these. Although maybe in the future streamers, like more popular streamers do rates for like before they launch on pump. I don't know, it's a thing that could exist and could happen happen. But there's really no additional benefit into owning the Trump token now than there was a month ago. But in February there was like certainly a benefit to owning some. And if you were on the cusp, like I wonder whether or not you would have bought more. My guess is that you would have. And if you did, you did have a once in a lifetime experience that you otherwise probably will never have again. So I think what I was just trying to demonstrate was, was like that it provided access to someone, a person that people cared enough about to buy the token and spend time. And I think that that just is like a more who happens to be.
- [67:44]
Laura Shinn
The president of the most powerful country in the world. But anyway, yeah, of course.
- [67:50]
James Pirillo
But I mean you could, you could use any sort of celebrity, right? And I think like, if you can pay for access to them, like and you have the means to do so, you could do that. And I think that like whether it's streaming, whether it's like, you know, maybe special streams, maybe it's in person meetings, whether it's like literally like revenue share for ads or rev share for like maybe the creator, maybe the creator revenue goes back into buying a percentage of the token. I mean, I think there's like a lot of different ways that like you can add value and like what's valuable to one person, what's valuable to another is like entirely different. Some people want cash flow and other people want an experience. You know, like I have my, my nephews want money in their, like for Christmas and my parents don't want money. They want like an experience for, for Christmas, right? And so one gets a hot, like we do a hot air balloon ride with one and we write a check for the other. And I both think that that was an amazing gift. And so I just think that like it opens up for the first time. This, like not the first time, but it does feel like you can participate, you can, you can buy the token if you want and maybe there's going to be some added Benefit, Maybe it's a discount if you own a certain number of tokens. Maybe it's access, early access to tickets to a concert or an event. It can literally, it's as creative as you want to be. And I think, like, one of the things that this points out and that I didn't talk about is that, like, right now we're in, like, very early stages of this. Right? Like, we assumed that this is, like, we. We thought it was really interesting. It really kind of caught fire. The mango girl, like, tweet video where she sort of said, like, yeah, I've made, like $30,000 this week or something like that. And it was like, on the streets and she was being interviewed by, like, another streamer. I saw that video in the morning on, like, Saturday morning. I was like, oh, God, this is. This is powerful enough to, like, get people to pay attention to it. And it's going to have a lot of, like, opportunistic individuals come in and try to, like, run the same playbook and probably try to profit. And. And that's generally how the first wave of adoption comes, right? It's like, speculation and, like, and really very little substance. And these are people who aren't thinking about the token. They're not thinking about the creator coin at all. All they're thinking about is, like, I think I can get paid, I can make money really quickly doing this. I should do this. And, like, that's going to happen. It happens. There's dental coin and then there's. Right. And they both did ICOs. And so there's like, plenty of examples of this, like, throughout history. But I do think that one of the areas that hasn't been thought about yet and maybe will eventually is like, creator coin tokenomics and what should tokenomics look like for creator coins? And maybe there's different tiers depending on how big you get. But I do think it's like an area of exploration that's actually kind of interesting. And the more that creators view their token as a product, because the token is a product. Anyone who builds a product and then watch the token has two products, the token and the actual thing that people want, they think people want to use. And I think if the more thought that goes into that and the more care that goes into that, the more likely this has a real. Like, this could have legs.
- [71:13]
Laura Shinn
Yeah. I will just say, you know, what you described, I feel like, reminds me a little bit how, you know, when you go to see a celeb that you love, like, like, let's say it's like a music performer or something. They will have levels of access. You can buy a VIP ticket and whatever. Or it's similar to back when Kickstarter was a thing, or it might still be, but a big thing. I had creator friends who were doing things and yeah, it was like I wanted to support them at a high level and then I was going to get extra special things that they would send me or whatever. And so, yeah, it's similar to that. And I think that's like what the tokenomics thing is that you described. But yeah, the one piece. And we'll try to keep this short. This is maybe just the last bit here is like you wrote, you know, collapse is not disqualifying. And you're talking about the tokens that these credo coins. You're saying, collapse is not disqualifying. It's a narrative climax. A rug no longer marks the end of someone's career. It's a ritual that cements an anti hero's lore. So that. That, I don't know, that like, raised my eyebrow a little bit. So just explain briefly and then we'll have to wrap. But. But that was the one thing because, like, I'm sure, you know, like most people have lost money on fund. It's like 60% or more. So that's like another thing. Why. Yeah, your thesis is very interesting. I understand where you're going, but also just where we are now. It's not the most savory experience for everybody we have.
- [72:46]
James Pirillo
Okay, so what I would say about meme coins in general versus perps. Perps are sitting on this, like this pedestal right now, right? And it is when you're trading 100x perps, you are gambling. Right? And most people are losing money and losing their shirts on perp trading. The difference between curb trading and meme coins to me is like, it's all gambling. It's all, you know what you're signing up for. And like, if you think you're going to get rich trading year of them and you're just like some random person that walks into the casino like, guess what? You're the mark. Like, the difference is, is that for perps trading, it has this like, essence and this, like this, this feeling of being like the world's like poker and meme coins sort of look like slot machines in my mind, but they're both gambling. And generally speaking, most people walk away not making a lot of money. And when you look at the two products that have really had some sort of product market fit and the applications that have like made the most money over the last two years, it's been perps trading perps Dexs and meme coins. And so I, I sort of, you know what you're getting yourself into. And what I meant by the rug part is like, I think, I think gains you like maybe accidentally sold his whole bag. And you know, it was a bit of like. And he's still streaming, right? I mean, and so it was entertainment. And there's all these like P L cards that exist. And while people. And like there's Reddits, like Wall street bets where people are like posting loss, they call lost porn, right? And it's just like, oh my God, look at how much money I lost today. People are trading zero day options, right? Like, it's all, it's all sort of the same thing and different flavors for different types of users. And I don't know whether everyone expects to make money when they're trading these. I think they hope they do, but I do view a lot of it as like, kind of like lottery tickets. And there's plenty of people who have made their entire like, like their entire fortunes off of meme coins. Like fart coin was worth like over a billion dollars. And everybody was like. And a lot of people I know like made quite a bit of money trading and that was a pump coin. So I think it's like, it's easy to look and say like a bunch of people lost money, but I think like mean coins are generally. It seemed like this cycle, the first sort of wave of like people coming back into the. Into like investing in crypto. It was sort of like we started to see like a heartbeat out of the. Out of the bulk bear market. And it was people buying meme coins, having them run up. And then some of those people made a lot of money and then maybe they moved over to something else because they thought they had a better opportunity there. But I think it was literally like the first thing that kind of suggested that there was life again in crypto investing and trading after 2023. From my perspective, it was like the first time I heard people make.
- [75:42]
Laura Shinn
All right, well, we'll have to see how this plays out. I really enjoy chatting with you about your thesis. I do agree there is something there, this attention fi world or whatever we end up calling it.
- [75:53]
But anyway, thank you so much for coming on and my pleasure.
- [75:57]
James Pirillo
Thanks for having me.
- [75:59]
Laura Shinn
Thanks for tuning in to the weekly news recap. Let's begin. Tether explores record $500 billion valuation in private raise Tether, the issuer of the world's largest stablecoin usdt, is in talks with investors and about raising up to $20 billion in a private placement that could value the company between $500 billion and $600 billion, according to Bloomberg. The proposed deal would involve selling roughly a 3% stake, with Kanter Fitzgerald acting as lead advisor. Chief Executive Paolo Arduino said the company is considering bringing in, quote, a group of high profile investors to maximize the scale of the company's strategy across all existing and new business lines, including stablecoins, artificial intelligence, commodity trading and communications. Tether reported $4.9 billion in net profit in the second quarter and says it holds $162.5 billion in reserves against $157.1 billion in liabilities. While insiders caution that valuation targets could shift, a $500 billion figure would put Tether in the same tier as SpaceX and OpenAI, far ahead of rival Circle's $30 billion market value at Unchained. We are working on evaluating whether Tether is actually worth this much. Be sure to subscribe to our Bits and BIPS newsletter so you don't miss the story. Circle considers reversible USDC transactions to attract Tradfi stablecoin issuer Circle is exploring ways to make transactions in its USDC token reversible in cases of fraud or disputes, the Financial Times reported. Circle President Heath Tarbert said, quote, we are thinking through whether or not there's the possibility of reversibility of transactions, right? But at the same time we want settlement finality. The idea aims to align stablecoins more closely with traditional finance where refunds are possible, potentially boosting institutional adoption. But it challenges one of blockchain's core principles, immutability. Currently, Circle can freeze or blacklist addresses.
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But cannot reverse completed transfers.
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USDC has a market capitalization of $74 billion, second only to Tether's USDT. Circle, which went public earlier this year, is also developing its Ark blockchain, designed to support stablecoin applications with sub second settlement speeds. FTX pursues billions as estate prepares new creditor payout the FTX bankruptcy estate is pushing forward on multiple fronts this week. On Monday, the FTX Recovery Trust filed a lawsuit against Bitcoin mining firm Genesis Digital Assets, seeking to recover $1.15 billion allegedly invested with misused customer deposits. Lawyers argue that former CEO Sam Bankman Fried rooted the funds through Alameda Research, with more than half going directly to Genesis co founders Rashid Makat and Marco Crone at the same time. FTX confirmed its third major distribution to creditors, totaling $1.6 billion and set to begin Sept. 30. U.S. claimants are expected to reach 95% recovery based on Nov. 22 prices, while international customers stand at 78%. Payment processors BitGo, Kraken and Payoneer will handle the disbursements. Adding to the Week's drama, Bankman Fried's verified X account briefly posted quote GM sending FTT tokens soaring 32% the account later clarified that a friend manages the posts as the former FTX chief serves his 25 year sentence. Cloudflare introduces net dollar stablecoin for AI web Cloudflare has announced plans to launch the net dollar, a US dollar backed stablecoin designed to support transactions in the emerging AI driven Internet. The company said the token will power instant and global micropayments, enabling personal AI agents to handle tasks like booking travel or ordering groceries, while business agents could automate supplier payments. CEO Matthew Prince described the initiative as an effort to create quote financial rails that match the speed of the modern web, supporting fractional payments to reward originality and sustain creativity. Developers and creators would be able to monetize content, APIs and applications, while AI companies would be expected to compensate sources. Cloudflare is also contributing to open standards including the Agent Payments protocol and X402 to ensure interoperability. The announcement follows a wave of stablecoin launches after the US passed the Genius act, which provided new regulatory clarity. Proposal seeks to slash Hype Token supply by 45% Crypto investment firm DBA's co founder John Charbonneau and Flashbots strategist Hasu have introduced a proposal to reshape Hyper Liquid's tokenomics by cutting HYPE's supply nearly in half. The plan would revoke authorization for unminted tokens allocated to community rewards, burn tokens held in the assistance fund and remove the current supply cap, together reducing supply by about 45%, according to the authors. The problem lies in how fully diluted valuation, or FDV is calculated, since it often includes tokens that will never circulate. They argue this inflates supply metrics and distorts valuations even though existing holders would see no change to their ownership share. The proposal has sparked debate in the community, with supporters calling it a fix for misleading metrics and critics warning that removing the cap could unsettle supply expectations. Charbono also appeared on Unchained this week to discuss the rationale behind the plan. Kiln Prepares to stake $6 billion in Ethereum Staking provider Kiln is preparing to redeploy 1.6 million ether, worth about $6 billion after abruptly withdrawing the assets earlier this month. The firm had unstaked its holdings on September 9 as a precaution following a security incident in its Solana operations, which raised fears that Ethereum wallets could also be affected. Quote we target early next week to re enable new ETH validators, Kiln Co founder and COO Thomas DeFuoc said in an email to Unchained. The move marks the first step before restaking can begin, as most of the ether remains in the network's exit queue. The withdrawal caused a backlog in Ethereum's validator queue, where waits now stretch beyond 40 days. Analysts noted that Kiln's return could coincide with billions in additional staking from ETFs, treasuries and retail demand heading into the fourth quarter. Delay in Quintin's nomination puts Clarity act at risk A stalled nomination at the Commodity Futures Trading Commission CFTC is raising alarm across the crypto industry, according to a report from Unchained, President Trump's nominee for CFTC chair, Brian Quintenz, has yet to receive a confirmation vote, leaving the agency with just one commissioner at a critical moment. The uncertainty threatens progress on the Clarity act legislation that would make the CFTC the lead regulator for spot crypto markets. Quote how does a market structure bill work if the vast preponderance of crypto lands in the jurisdiction of the cftc, but there's nobody home? Asked Coin Fund President Chris Perkins, sources told Unchained. The White House delayed the vote following a request from Gemini founders Cameron and Tyler Winklevoss, who previously clashed with quintons. With Senate Democrats also pressing for more commissioners from their party, industry leaders warn that the leadership vacuum could imperil both the act's passage and its rollout. Aster overtakes hyper liquid in perpetual trading race Decentralized exchange Aster has surged past rival Hyperliquid in daily perpetual futures trading. On Thursday, Aster recorded $29.5 billion in 24 hour trading volume compared with Hyperliquid's $10 billion, according to DeFi Llama. Open interest on Aster also jumped nearly 600% in under a week, rising from $142.7 million on Friday to $1.03 billion by Wednesday, data from Coinglass shows. Despite the milestone, Hyperliquid maintains deeper liquidity, with $2.17 billion in open interest and $299 billion in 30 day volume far exceeding Aster's $48 billion. Aster's rapid ascent follows a public endorsement from Binance founder Changpeng Zhao, whose family office, YZ Labs, is a major backer. Skeptics have questioned Aster's decentralization quote they claim to be a Dex, but that's misleading, one Hyper Liquid investor wrote on X, pointing to the absence of validators or on chain execution. Originally APX Finance, Aster rebranded earlier this year and launched its Aster Token in September. Meanwhile, Hyperliquid introduced its native stablecoin USDH on Wednesday, attracting nearly $2 million in trading within hours of launch. USDH is the ticker that sparked a competitive process that was eventually won by the ecosystem aligned startup Native Markets Just nine hours after deployment on Hyper EVM, USDH surpassed Circle's USDC in market share, reaching 8.9% and more than $24 million in circulation, according to Dune Analytics. Allium data shows 57 active addresses hold USDH with an average balance of $425,000 and the top two wallets exceeding $10 million each. CZ rejects report of YZ Labs fundraising plans Binance co founder Changpeng Zhao has pushed back against a Financial Times report claiming his $10 billion venture firm YZ Labs is preparing to raise external capital. Quote Complete false news from FT with fake slash, wrong made up info and negative narratives, zhao posted on X, adding that YZ has not sought a single external investor. The FT cited remarks from YZ Labs CEO Ella Zhang suggesting the firm could eventually open to outside investors after building expertise in sectors like AI and biotech. Zhao denied this, saying the company operates independently and was not spun out of Binance. Quote There is no demo. WTF is a demo for a fund? Zhao added, criticizing the report. In related news, YZ Labs expanded its investment in Athena Labs as the firm aims to grow its synthetic dollar USDE on the BNB chain and strengthen institutional partnerships. Unchained is produced by Laura Shinn with help from Matt Pilchard, Juan Aranovich, Margaret Curia and Pam Majumdar. The weekly recap was written by Juan Aronovich and edited by Stephen Ehrlich. Thanks for listening.