大型科技公司财报、DeFi United 与 Pump Fun 的代币销毁

This episode is brought to you by Fidelity Crypto. You'll hear more about them later in today's episode. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.

All right, everyone, welcome back to Empire. Good week. Good week to have a good week. People are making fun of me for saying that on TVPM this week, but I think it's true. It's a good week to have a good week. So, Rob, Santi, what's up, gents?

What's up? How's it going? Nobody's having as good a week as you.

I mean, I think you are. I heard you're the padel champion, Rob.

Yeah, there's a—I have to give Ro Patel a little bit of credit in that as well. It takes 2 to win a padel tournament. There's also a little bit of an asterisk there, so I'm going to give myself some credit because I got us to the finals.

But then I had a little bit of a shoulder thing, so I actually sat out the finals. Literally, we had this padel tournament at Reserve here in New York. It was sponsored by Dragonfly and Rain, and it was all crypto people.

An Argentine kid walks in off the street and says, "Hey, listen, I really like padel." He just starts watching the games and the matches. Then, when I said, "Hey, listen, I need to sit out the finals," he was the first one to raise his hand and say, "I want to play."

He's in khakis. His shoes aren't tied. We're like, "Okay, I guess, whatever." Everyone's walking around having a beer or whatever. He comes in and smokes it—way better than me. The Argentinians are nasty at padel.

Nasty.

Yeah, he was just nasty. There's a little bit of an asterisk because I didn't play the finals, but I got us there.

Yeah. Santi, how's your padel game?

1. Takeaways From Earnings

It's all right. I'm actually wanting to get back into tennis. There are some good courts out here. You guys have seen them, so I want to get back into it. I want to do a different kind of sport and learn it.

You have the clay courts out by you, right?

Clay courts, yeah. They're pretty fun. The issue, though, is that there are a lot of pros playing there. The first time I went, someone said, "Oh, buddy, mind if I join?" I was like, "Oh, let's play." They give us the center court, and there are other courts next to it. I think Djokovic was playing on the court next to me, and I'm like, "Yeah, definitely not. I'm going home."

I don't want everyone to see it, right? They're having lunch, and everyone's watching you play. You're like, "Yeah, I'm not doing this."

No, you can't do that. Not at the club.

All right, it's a big week. We had some earnings this week. A lot of the big AI companies and hyperscalers reported, and probably the most important fundraise in the industry happened this week. That was a big one.

We should talk about that. We should definitely talk about HYPE versus HOOD. I don't know if you guys looked at the Robinhood earnings, but we had a guy, Shonda Devins, on our team. I actually still don't even know his full name. He's been at Blockworks for 2 years, but I just know his Twitter name. He compared HYPE versus HOOD, and I thought that was interesting.

DeFi United—I’d love to get your guys' take on whether that's a good thing or a bad thing, whether it's a bailout, whether that matters, and whether it needed to happen. Pump.fun is doing a lot of buy-and-burns, so I would love to get your guys' take on whether the buy-and-burn model is a good model.

Stripe had Stripe Sessions. Rob, we can tee up Stripe. Western Union had earnings, so they talked about their stablecoin. I know that's your thing. You thrive there.

Spicy.

This is going to be a spicy episode, ladies and gentlemen. It's on the menu. It's going to be spicy.

All right, where do you guys want to start? I'd love to get your guys' take on the state of the markets. Rob, Santi, we had a bunch of earnings—Meta, Amazon, Alphabet absolutely ripped through.

Smoke.

Microsoft, Robinhood—a lot of misses, I think, right? Except, obviously, Google absolutely smoked it. I would love to get your guys' take. I don't know if you have any takeaways from these.

Rob, Santi, we're going from left to right. Rob, you're snapping, so you're going.

You just love the public equities. I always wanted to claw right now to sound smart on macro. No, no, no. Listen, I think broadly, maybe there's the Robinhood earnings, and we've got Coinbase on the Devins. We've got Circle next week as well, maybe. Or maybe it's the week after.

I think there's a broad expectation here that crypto-specific stuff has just been crushed. Robinhood's crypto trading was down 40%.

They made up all of that with their prediction-market trading, which isn't surprising considering how excited people have been about prediction markets specifically. I expect Coinbase earnings to be something similar in terms of retail trading volumes. We'll see what happens on their institutional derivatives side.

It's a little bit hard to compare year over year on their quarterly financials because they changed the way they're reporting at the moment to consolidate a bunch of their offshore and institutional products and trading with some of their onshore activity. We'll have to see what it looks like, but I expect the retail side, which is where they make most of their money, to be quite bad as well.

Yeah, Circle's next week.

And I think the broad expectation is that crypto-specific stuff has just been crushed. Even Hyperliquid, which has obviously continued to do well, is still down 30% quarter over quarter in terms of trading volume on the perp side. Perps continue to take some market share relative to spot.

There's no denying that trading crypto tokens is in decline at the moment. Volatility is in decline. There's been a lot more excitement on the equity markets. Frankly, a lot of equities are trading like meme coins today. It's been insane to see the volatility return to the equity market.

That was true of the commodity markets earlier in the year as well. We won't be surprised. It continues to be more about the long-term opportunity: What is happening in the space, and how excited are we about that?

There's the other side of the coin that we talked about, which is Google and Meta, and what's happening more broadly in the equity markets. They continue to hit all-time highs despite tremendous headwinds across most of the macroeconomic market right now.

But CapEx, man. I continue to hear people talking about the amount of CapEx that's going to be required for data centers and AI. People still do not understand it. You can feel it.

Internally at Blockworks, we do this survey every 90 days about AI and stuff like that. Last quarter, 81% of the company was on Claude, and 19% was on ChatGPT. The company has mostly switched since 5.5. It's mostly back on Codex and ChatGPT.

One of the main reasons is that Claude feels like it's getting worse. Dario had this measured approach—or I think he called it a disciplined approach—to scaling CapEx, and he's giving Sam a bunch of crap for YOLOing all their CapEx. It seems like Sam's approach might have been the right approach.

Just to overlay some of the stuff that Rob is talking about, Visa is interesting. They posted a really strong quarter. They're up 17%, and management called it the highest revenue growth in 2022. They mostly attributed that to Visa as a Service, and they called out agentic and stablecoin capabilities.

Coming into the year with predictions, Visa is a company that we should be tracking to see what's actually happening with stablecoins. Western Union reported earnings last Friday. The stock was down quite a bit on the day and then rebounded a bit.

You guys posted an article about it, and it got picked up. It seems like they're launching their stablecoin next month with a couple of partners, and then they're working toward a digital-asset network.

So, obviously, I think that will be something to monitor as well. It wasn't pretty, though. Western Union's operating margin just got crushed from 18% to 13%. If you look at the agent receivables number, it was not pretty at all.

You've basically had declining revenue and growing agent receivables. To give you an example, Western Union used to be exclusive with a lot of agents on the cash-out side. Now they're not, so it's more competitive. You're seeing that in the margins.

2. State of The Market

It will be interesting to see how, and to what extent, a public company can pull off a transformation of this scale. In many ways, Visa is probably—Kai and the team there have been very early on this train. But, yeah, that was another thing to note.

We've talked about Western Union on the pod. I've talked to a couple of people in the industry about this in particular, and I've learned a lot about how money moves from Africa to China, and why Tron and why USDT.

If you hear the Western Union management team, they talk a lot about how they haven't figured out how to incentivize people to hold their own stablecoin. I think that's something that I would love to get your take on, Rob or Yano, because a lot of times we talk about Circle, Tether, and other stablecoin issuers, and we've commented on the pod that everyone will want their own stablecoin. But it's not as easy, I think, as I had appreciated.

The reality is that USDT is the preferred currency. I've heard some people go as far as saying, "Why does Western Union need to launch its own stablecoin when it would be better served just working with USDT or USDC?" I think there are obvious reasons for that, but the other example here is PayPal, right? PYUSD was heavily incentivized out of the gate, and then it's kind of not lived up to expectations.

Before I go any further, I don't know if you have views on that, or if you, Yano, do. It's something I want to talk about for a minute: Are we going to see more businesses launch their own stablecoin, or are they just going to work with Circle, Tether, or Paxos?

Just to be clear about PYUSD, it's up to $3.5 billion. It's still continuing to grow. I think they're down a decent amount on the month, but it's been heavily incentivized. They continue to push it, and it continues to grow year over year.

At the same time, to your point around USDT, everybody wants it. Just to be clear, USDT is losing market share at the moment. The number-one beneficiary of that is USDC.

We're in this period of time right now where there's this interesting thing happening. We've been talking about this a bunch, but every single fintech that I talk to today is doing things on stablecoins if they're going global. I think we've long speculated that this would be the case, and it's been something that I assumed was happening as I had these conversations.

My deal flow as a venture capitalist now is that I'm talking to companies that were the best fintech companies a few years ago, that everybody knows had nothing to do with crypto, had not been public about crypto, and had not been doing anything with crypto. Then you talk to them, and they're like, "Oh, yeah, a year ago, after GENIUS—or right before GENIUS—we started moving all of our infrastructure to stablecoins, and now all of our business is stablecoins."

People you would never hear of, who would never talk about it—that is universally true now. I do not think there's a global fintech today that is not heavily using stablecoins, whether they talk about it publicly or not.

Yeah, yeah.

Right. I just want to add one point to that. One of the things that's happening here is that there's Western Union with USDPT, or U.S. Dollar Payment Token.

Yeah, and they've been very public that this is not an externally facing stablecoin. This is an internal settlement mechanism. Corner USD, same exact thing, right?

There continue to be a lot of people focused on these internal settlement mechanisms—not a PYUSD, where it's like, "Hey, we're going to try to get this integrated into a bunch of other people." I still continue to hear that happening in a lot of places, but there is this push and pull right now. People are saying, "Okay, well, let's do that," or a lot of people at these fintech levels are asking for something other than USDT, something they feel more comfortable with.

It'll be interesting to see what happens over time because that's been surprising to me, given that Tether has had this stranglehold on emerging-market finance.

One of the other things to comment on is the capex front. Earnings this quarter have not rolled over. We still have double-digit earnings growth, with the S&P 500 posting 13% earnings growth. That's massive. One last tidbit—

But it's still really concentrated, right? It's very concentrated.

It's very concentrated. That's right. The other thing, which leads me to the last point I wanted to make, is that Paul Tudor Jones came out with a really good episode of Invest Like the Best. We've all seen it.

He said something that I want to put front and center. He said that the stock market reminded him a lot of 2000. His point was something along the lines of, "This is the easiest bear market since the 2000 dot-com bubble."

The nuance here is that he felt most Americans are really levered on the stock market. His metric for that is that there have historically been a lot of stock buybacks, and now, as we're going to have more IPOs, he doesn't think we're going to be able to absorb all of that. That might be the unwinding event in 12 to 18 months.

I don't know if I got it right, but Yano, I hear you nodding.

Yeah, yeah. No, I mean, I'm nodding to all this. We can touch on the Paul Tudor Jones episode in a second. There are 2 things I want to comment on.

One is that, with stablecoin adoption, you're going to see a dichotomy. I did the fireside chat with the Western Union CEO and got dinner with one of the high-up people at PayPal the other night. I wouldn't understate how tough it is to move the bureaucracy in these companies.

Whereas a founder-led company—like, we just published this data on Whop today—can pivot in 3 days. Klarna can pivot in 2 weeks. I actually think you'll see 2 different types of companies here with stablecoin adoption.

I would also say, on the earnings—and I know this is a crypto podcast—I don't know if we need to pontificate too much on the hyperscalers. But I actually wrote down some of the highlights from earnings calls as they relate to crypto, and my big takeaway was how much crypto was mentioned in the earnings calls.

Visa said it's positioned as the hyperscaling bridge layer between stablecoins and real-world solutions.

SoFi said the crypto supercycle—you remember, Santi, we used to talk about the supercycle all the time—the SoFi CEO said the crypto supercycle will transform money movement, positioning SoFi's national bank charter and stablecoin as foundational infrastructure for frictionless global payments.

The Mastercard CEO, Michael Miebach, said, "Mastercard's diversified, future-ready—in delivering, building on our strong foundation, we're advancing agentic commerce with Mastercard Agent Pay and expanding our stablecoin solutions through our acquisition of BVNK."

Then you had Vlad from Robinhood, who, no surprise, is a big fan of crypto. He said, "The price moves up and down, but crypto as technology infrastructure is going to be big."

I don't know. I'm not here to say whether a company should beat or miss earnings, but I'm pretty blown away. It's the most I've ever seen CEOs talk about crypto in an earnings season—ever in history—and we're only a couple of days into this.

I would expect that to be the big trend of this earnings season. I would just encourage folks to zoom out from "Did they beat? Did they miss?" It's really amazing what's happening on these earnings calls.

Visa card payment volume with Rain and Bridge is up 200% year over year. They have 160 stablecoin-linked card programs, and they've just added support for 5 new blockchains.

We haven't even talked about this. One of the biggest, least-talked-about pieces of news this week was that Facebook rolled out stablecoin payouts in Colombia and one other place. They did it on Polygon and Solana. There's a lot of really good stuff happening right now.

Yeah, I mean, I think, to your first point around how hard it is to move an organization, you do have to give a little bit of credit to Western Union for trying. They're launching the—Santi's over here gloating because he loves Western Union, so I like that. I'm getting a Yano. You're also in it, right? You're getting a bottle of wine, or we're getting a fancy dinner in November.

You know, this is the good thing about being the host: I get paid either way. I’m joking. Whoever wins, I’m joining you.

You’re the escrow agent here.

Yeah, that’s right. But listen, they’ve got the stablecoin launching next month. They’ve got the Rain Card launching around the same time. They’ve got this digital asset network that’s connecting everybody. They’re trying to go outside of the correspondent banking network.

Meta specifically said it’s USDC payouts that they’re doing with Stripe on Solana and Polygon. For Visa, the fastest-growing part of that business for a while has been its services business, which is a lot of the software that sits on top. The fastest-growing transaction part of that business, or transaction revenue, has been its Visa Direct business.

Visa Direct is its non-bank network settlement. They’ve started to push more and more toward stablecoin rails. The fastest-growing parts of Visa right now—and I know it’s small—are the stablecoin settlement on its cards and its non-bank settlement network on the Visa Direct side. Mastercard has Mastercard Send doing the same thing. They’re also trying to catch up on stablecoin settlement for the cards directly.

I mean, we didn’t talk about Stripe Sessions, which is going on right now. Stripe Sessions is literally only talking about 2 things right now: agentic commerce, like command-line commerce, and stablecoins. Those are literally the only things they’re talking about right now. Visa is talking about the same stuff almost entirely.

The market kind of cares about 2 things right now when it comes to these businesses: stablecoins, and how our agents are going to transact—what kind of commerce is going to happen in the age of AI.

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4. Stablecoin Chains

Yeah. Can I say something controversial here?

Sure.

Absolutely not. I guess I’ll shut it down. Let’s all shut it down.

I think this is going to frustrate a lot of people listening to this. People are really trying to grapple with the fact that Stripe, Tempo, and Canton have been able to get more adoption in 1 year than most chains were able to get in 5.

Yeah, I know you were looking at me because of Canton’s incentives. But how do you define adoption? There’s not really any flow going through Tempo at the moment. It’s been live for about 6 months.

Great headlines. Great headlines. All right, they’ve got more. Here’s a controversial take: there are more stablecoin payments today going through Polygon than any other blockchain. And Stellar.

I’m not surprised by that. Polygon has positioned itself as the payment chain.

Polygon—the chain that gets the least amount of love among crypto natives? Certainly within the Ethereum community, the hate that Polygon has gotten from Ethereum since the very beginning is incredible. It’s always been, “Are they an L2, or are they not an L2?” No one made money on Polygon. The insiders didn’t make money on Polygon. This is the double standard within the Ethereum community.

Tempo might not do great. I have no idea if it will do great or not. I’m sure they’ll build a great product on top of Tempo, which doesn’t mean they can route things to Tempo. Most of the headlines are about building cool products and the things they have coming out. Most of the people they’re surveying, and the partnerships they’re talking about, are with people who are blockchain-agnostic and don’t care about the blockchain.

They’ll route to whatever service the company they’re working with decides to use for the best transaction flow. Stripe will probably do a good job integrating into that. But they’re also going to launch on Polygon, Stellar, Solana, Monad, and whatever other chain makes sense.

I’m going to shill Blockworks Data, if I may, because I was on a podcast earlier this week, and protocol revenue is really down. The question is more around the fact that stablecoin transfers don’t make as much money as meme coin trading. There could be a lot of growth in stablecoin transactions, but that doesn’t mean the L1 is going to accrue a lot of value.

We’ve talked here before about how Tempo probably does a lot of things for Stripe as a business, but the blockchain itself—like, is it worth $5 billion? A lot of the Stripe investors put money in it. I think Stripe’s margins just get better because it gets more customers and bundles a product. People always make money on bundling.

But if you’re just a standalone payments chain without the muscle of Stripe selling other services, it’s a struggle. It will be a struggle, I think.

The counter is that Tron actually does make decent money. Tron has decent fees, right?

Yeah, and I love that Tron—

They’ve jacked up the fees, which is what Ethereum should have done, and what other chains should have done.

Can we go back to 1 thing? We have 2 of the smartest macro guys telling us that they’re bearish.

Except he likes Bitcoin, so I don’t know.

He mentioned Bitcoin as a good setup in a trade, and he astutely pointed out that the quantum thing is a threat. Cybersecurity is a threat. He was bearish on AI.

Paul Tudor Jones came out and said the stock market as a percentage of GDP is at an all-time high—around 250% of GDP is in the stock market. Druckenmiller is also bearish. He’s seeing a lot of these narratives. To your point, go look at photonic stocks. They look like Wi-Fi did back in the day. To me, that feels like late-cycle behavior.

Santi, can I ask you a question? I actually don’t know the answer to this. Have Druckenmiller and Paul Tudor Jones been bearish for a while? Have they been bearish recently while things have continued to do well? Do you know what their view has been over the last couple of years?

I think so. Anytime there’s something on Druckenmiller, I like to drop everything and listen to it. He was bullish on NVIDIA 3 years ago.

I’m referencing an interview he did with Morgan Stanley recently, and that’s where his tone was bearish. He was long energy, but he was bearish on a lot of these narratives. As for Paul Tudor Jones, I don’t know how many public appearances he’s had, which is a good question. But they’re both traders.

He flipped bearish in mid-2025, from what I can tell. Let’s call it summer of 2025. What has the stock market done since then?

It’s up 30%, 20% or so.

No, and he actually said in mid-2025, “I’m flipping bearish,” but he thought we would have a blow-off rally. He said, “This feels exactly like 1999,” talking about last year. He said it was pretty likely that we would get a blow-off rally and that he was comfortable missing it.

That actually aligns with this: it’s now a year later, and he’s calling it 2000. I think they’re both saying the same thing, which is that as a trader or an investor, you shouldn’t be positioned to try to squeeze out 100% of the gains in that cycle. You should be comfortable clocking 70% to 80% of the gains and then protecting principal.

Or you could just, as he said in his interviews, be like Warren and stay long, compound, and not do anything. I loved the part of that podcast where he was talking about Warren Buffett. He said, “I had so much cope about Warren for the longest time,” and then Warren just kept compounding. That was great.

So then what do you do? I mean, Santi, you’re in 2 camps there.

There’s the Warren camp, and there’s the PTJ camp. Do you try to time the market, or do you not? I went to a lot of cash in November. Does it hurt to see a rally?

Yeah, we’re all psychological. You’re sitting there watching the markets rip in your face, but I feel comfortable holding a decent amount of cash. My view is that the world just becomes more volatile, and there will be dislocations in the market from time to time. I want to be able to have cash to take advantage of them because I know myself psychologically—I just feel better when I have a big bucket of cash, and I can be very aggressive.

The strategies that I’m doing have a yield pickup. I’m still long. I still have equity exposure. I don’t short by any stretch of the imagination, but I like having some long exposure while keeping probably 30% cash.

You know what’s funny? I always thought that crypto volatility would start to compress over the years. What’s actually happened is that crypto volatility has just spilled out into the rest of equities. You hear these earnings calls and things pump 20%. That shouldn’t technically happen.

I think it’s been happening as more and more of the market has been driven by algorithmic flows instead of retail flows. The marginal buyer today is a retail trader, and there’s more and more retail trading. There’s much more retail trading in derivatives than there has ever been, specifically.

You add in that a lot of the market is algorithmic, and you’re having people refine these things over time. I expect that we’ll continue to have a decent amount of volatility across all assets, just because of this hyper-financialization that’s happening right now. Crypto has gotten lower volatility, though. Volatility in equity markets has come up, while volatility in crypto markets has come down. Maybe the right equilibrium in the future is somewhere between historical equity volatility and historical crypto volatility.

5. The DeFi United Recovery Fund

Let’s switch gears a little bit. I want to hear you guys’ take on DeFi United. So, we talked last week about this big hack, right? One of the DVNs set up on Kelp’s LayerZero bridge had a forged cross-chain message, and the DPRK—North Korea—got a couple hundred million dollars. There were all these spillover effects, and we talked about it in more detail last week.

Now, what’s happened is that all these companies have basically put in money to stop the bleeding. There’s a big hole that we talked about last week. I forget how big the hole is—$90 million? I don’t know if one of you knows, but there’s a $90 million hole?

It’s $300 million.

Yeah, $300 million. I thought $292 million was the hack.

Excuse me—$292 million.

They’ve raised over $300 million.

Yeah, of course. $292 million.

So there’s a big hole, and a bunch of folks stepped in. Joe Lubin and ConsenSys put in 30,000 ETH. Mantle put in 30,000 ETH, I think on a loan. LayerZero put in 10,000 ETH. Stani kicked it off and put in 5,000 ETH of his own, which is about $10 million. Kelp put in 2,000 ETH. Solana put in some. I think Circle was buying Aave.

There’s a big pending vote for Aave on Arbitrum right now, which I’ll abstain from talking about because Blockworks is the second-biggest delegate in Arbitrum. But I’m curious what you guys think of DeFi United. Some people were upset because it’s a so-called bailout. I’m curious what you think of it.

There are a couple of observations. First, I think the Solana Foundation also stepped in and brought Aave to Solana. That was always a big head-scratcher. As much as I’m an investor in Kamino and MarginFi, Aave coming to Solana—I think you take advantage of an opportunity, and it was good to see other communities step up and contribute.

The more cynical take was a tweet that said, “North Koreans are waiting for DeFi United to refill so they can go at it again.” I’m not in that camp. I do think that Luigi joined the team from Avalanche, and I hope this is a learning opportunity. I think there are clear areas of improvement for the protocol, but, gun to your head, would you rather not resolve it or resolve it this way?

I think resolving it—I don’t know if “bailout” is the right term—but I’m more in that camp. There’s a lot of good work done there, and it’s a backbone of DeFi, so as an industry you shouldn’t let it die or become severely impaired.

Yeah, I think the pushback against this happening is completely brain-dead. It shows a real inability to understand second- and third-order effects, frankly. This was clearly needed. It was obviously very important for the future of DeFi and for the future of Aave specifically, which is still, I think, the largest money market in crypto, although Morpho is getting closer and closer.

The argument that you should just let things fail is similar to what people were saying about TARP during the global financial crisis. There were a decent number of people around the global financial crisis who said, “We should just let the banks go under.” Every single one of those people would have been in a food line trying to get handouts if we’d actually done that. We would have been in a global depression.

This obviously isn’t at the same scale, but it was very important to ensure that we could continue taking advantage of the momentum we’re talking about in terms of the adoption of tokenization, stablecoins, and large corporates coming on-chain.

Now we have to learn from it. We have to change the way we operate, and we have to make sure that we have better security measures. Without that, this would have been a massive overhang for the industry for a long period of time.

It’s nice to see so many people pitching in who understood that and who technically have no exposure whatsoever. Solana had no exposure whatsoever. Tron had no exposure whatsoever. It’s nice to see everyone come together, and now—

Did Circle come back around or no? Didn’t they donate a bit?

I think what I saw was that they were buying Aave tokens, but they didn’t contribute to the fund. I’m not quite sure. I’d have to go back and look. I don’t know if anyone knows exactly what’s going on there.

Circle Ventures, by the way. I think it was Circle Ventures just buying Aave tokens.

Oh, okay. All right. Frankly, going forward, we’re now in a situation where it’s not as if Lazarus was going to stop trying to hack things. This is their profession. They wake up every day and ask, “How can I hack different types of financial institutions? What can I hack—on-chain protocols, et cetera?”

That was going to continue to happen whether we did this or not. Now we just need to operate better. Do you know how much Lazarus has hacked since 2017? $6 billion. You know how much they’ve hacked? Probably more than the crypto industry has produced in revenue.

This year to date, not including some of the recovered funds, we’ve had more than 30 incidents, including today’s Wasabi Protocol hack for $5 million. There have been about $770 million in hacks, and roughly three-quarters—75% or 76%—of all hacks are attributable to this entity, Lazarus, which is tied to North Korea.

We’re at April 30, and we’re already on pace to have a record year in terms of DeFi hacks and total value lost. Historically, it’s been between $600 million and $900 million, up to $1 billion. If it continues at this pace, it’s alarming.

Obviously, things to monitor as we bring on guests and have these conversations are whether this actually impacts some of the deployments we’ve talked about and whether it impacts institutions coming in. It doesn’t seem like that’s the case, but what I will tell you is that one of the largest funds that has historically been very, very active—if not the most active—on-chain has not been on-chain for 2 years. They have zero interest in doing yield strategies on-chain for this reason. They just don’t. I spoke with them this week, and they said, “There’s no interest.”

They’re doing other CeFi carry trades and delta-neutral strategies, but nothing on-chain. That is pretty damning, to be honest.

Probably one of the largest funds. There’s zero interest. I haven’t touched on-chain for the last 2 years.

I was like, okay. Well, is it because of the security, or because the yields are too low, or what’s the reason? “Security.” Security. Yeah, because the yields—you can always, if you’re sophisticated and active, still clip decent yield on-chain. You have to be really on it, and there are still people who do it, but it hasn’t been as lucrative, given that the risk-reward just isn’t there, at least not what—

Even as we’re recording this, hundreds of wallets just got drained by the same address on Ethereum mainnet. Seems like a new live exploit worth flagging. Is that like 1Password, like a password manager? Not a password manager?

This was 3 minutes ago. I’m just seeing this. We’ll say more about it. What is it? I’m literally on Etherscan looking at the funds go out. Funds just left—funds left my wallet to this address. I’m not sure what the vulnerability surface is. Others are getting zeroed out as well. Mainnet ETH only.

Yeah, so this is—I mean, look, I don’t know if it’s impacting things right now, but I would say this is a big problem. This would be—I think this is enemy number 1: North Korea and Lazarus right now. I actually think it’s a huge problem.

Yeah. I think free markets end up solving the problems; that’s my belief. There will be great entrepreneurs and founders who step in and try to solve this problem, and there will be great capital allocators. Rob, I don’t know if you guys are getting pitches yet. I haven’t seen many companies doing this, but I’m guessing you’ll start to see companies trying to solve some of this stuff.

I think there’s one called Hypernative, which is real-time security and threat detection. Hypernative is a company that had a Series B a couple of years ago. So, there are companies like Hypernative, and I’m guessing there will be many more Hypernative-esque companies. I don’t know. I don’t think this is—

The fundraising in the security market right now is actually picking up a lot, as expected. All of the security companies are out in the market, so it’s very clear that this is a problem that needs to get solved, and people are trying to solve it.

I was talking to one of my portfolio companies. We had a board meeting earlier this week, and this is not a portfolio company that has ever had a security issue or a hack. They’re probably one of my most professional portfolio companies in terms of thinking about opsec and things like that. For a period of time after what happened with LayerZero, they locked down their protocol and did a full 2-day review of every single thing they do.

They’ve decided that they’re going to make a bunch of changes, despite the fact that they’ve never done anything nearly as reckless as what we’ve seen happen to some of these guys today. They’re saying, “We’re going to go the 3rd, 4th, or 5th extra step because we know that this is happening. We know that the attack vectors are widening, and we know that it’s getting more sophisticated.” They’re going to do a full-scale review and change the way they operate.

One of the things they were doing was getting a bunch of real-time alerts through Hypernative. I saw one of these founders at our padel event yesterday, and they were telling me, “I think we have too many alerts now, because I literally get an alert every minute that something could be happening, and now I can’t sleep anymore.”

I was like, “I haven’t slept in 3 weeks.”

Yeah. But I think very clearly this is something that everyone needs to be taking extremely seriously, no matter how seriously you think you’re already taking it, because it’s only going to get tougher and tougher and tougher.

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7. Pump Fun’s Token Burn

Let’s shift gears a little bit. Pump.fun just started buying back its token and burning it. Pump.fun tweeted out:

“The future of Pump. We have burned all of our bought-back $PUMP tokens, which is around $370 million worth of purchases, or roughly 36% of the circulating supply, in order to gain trust with our community. On top of that, we’ve initiated a programmatic buyback-and-burn scheme at 50% of revenue for the next year to instill trust, predictability, and sustainability for the underlying ecosystem, and to remove as much of the supply from circulation as possible. Pump is changing for the better of token holders, the team, and the ecosystem.”

Alon followed up that post and said, “Today is a turning point for Pump. I want to give more context on the bigger picture. Over the past 9 months, 100% of revenue went into buybacks. Basically, no other platform has done this at that scale. However, we received ongoing feedback about a feeling of lack of trust. I have many thoughts on why that is.” He said, “Today, we’re changing that.”

He also said, “Why not use 100% of revenue for buybacks?” The short answer is that the business simply needs the other 50% to grow. I have thoughts on that, too. I’d love to get your guys’ take on this. I’m actually interested in your thoughts on that because—

You give us your thoughts on—

Yeah, because my perspective is that the most interesting thing out of this announcement was the fact that they said less than 50% is going to growth capital. They specifically talked about the big bets and things like M&A.

There’s been a lot of discussion online, which is totally correct: the idea of using 100% of your revenue to buy back a token just tells people that the product is the token, instead of growing the business, building new products, and trying to find things that people want to use. I thought it was actually a very good thing that they did that.

I’m interested in your perspective on how you think about, as a founder—I know you don’t have a token—how people should be managing the token versus their business.

There was a great piece on investor relations that Runa Digital Assets wrote called “The Hidden Driver of Token Performance Is Investor Relations.” I’m as biased as it gets here because we have an investor-relations product, and I think it’s the fastest-growing thing at Blockworks right now.

Companies need to start treating users and shareholders as different groups. That’s the problem that’s happened in crypto to date with investor relations: people have treated the users and the shareholders as the same group because there’s this idealistic dream. Imagine if Uber started and the first Uber users were the ones who owned the stock. It’s kind of a utopian dream.

Actually, your customers end up being very, very different people from your shareholders. Apple has its iPhone customers, and then it has its shareholders. Those are 2 really different groups, and you have to communicate with them very differently.

There are some groups that do this really well. EtherFi does a good job of this. Maple does a good job. I think Aave is starting to do a good job, and I think LayerZero is starting to do a good job. There are a few people who are starting to do a good job at this, but for the most part, people don’t.

I think this is 7 months of investors telling Alon and the team, “Guys, you need to communicate your story. You have to talk about investor relations.” While I like this, you can’t just do it once and be done. Imagine if Tim Cook never showed up to quarterly earnings calls and then one time said, “Guys, calm down. Apple’s a good stock. We’re going to be fine.” You can’t do that. You have to do it consistently.

My concern here is that this is just Alon trying to say something, because they basically say, both in his tweet and in Pump’s tweet, “We’re doing this to gain trust with the community.” Don’t do this as a one-time thing. It feels very one-time.

In general, I don’t really like buybacks that much. Buybacks, to me, tell me that a founder doesn’t know what to do with your cash.

Like, it tells me you don't have better ideas. Obviously, crypto's weird. There are some companies that just end up with this huge amount of capital, right? They're like a Series A company, but they end up with $1 billion. So, it's a bit of a weird market in that way. A lot of the L1s and L2s ended up with that, but I just think it's often better used for R&D or product development.

Now, there's a counter, which is that if you genuinely believe the token or the stock is undervalued, then you should probably buy it. But I just think it's a lot of money to use to buy back a token to satisfy a very small number of investors on Twitter who are kind of complaining.

They burned a third of the token, and the token's down. It makes you wonder: Is it even working? It makes you wonder: Do you need a token for this business? Would they be better off buying back these tokens, or having Alon do what most founders do, which is tweet about the product development, how many users they're getting, and how they're winning the market? Pump is in an amazing place, actually. It's the most profitable protocol in crypto.

Such a sick business, with amazing—huge market share and all these users. They're one of the few companies in crypto with real revenue, real profits, real users, and massive market share. But they're just talking about the buybacks. I just don't get that. That's not what I would be doing, I guess.

No, just an honest question: Should Pump have launched a token? Sometimes it goes back to the core of it: What is the role of the token here? I get running an exchange, where you incentivize people to get on the platform and get discounts on fees. But they were running a phenomenal business before that. Does the token hurt you or help you? What is the calculus? Is it going to increase user interest or volume on the platform?

I actually don't hate having a token. But you hear all these public company CEOs—and oftentimes the founders, when they go public—tell their team, “We will not focus on the equity price,” right? I heard Brian Armstrong, when Coinbase went public, tell the whole Coinbase team that. Bezos famously has really banged that drum at Amazon. I've heard Tobi at Shopify bang this drum.

Obviously, it impacts mood and morale, but I think, as a founder, you need to show your team that it's about growing revenue and users, making a profit, building the business, and being innovative. Instead, what I think a lot of crypto founders do is tell their team the whole focus is on the token.

Yeah, yeah. I just don't like it. I don't think it's the right strategy. How much did they raise in November of last year? Was it $500 million or $600 million?

I think $500 million, right? Or $600 million.

Yeah. And so they now bought back—here, here's the ICO stats. They burned more of that at this point. There's more value destruction.

Look, you can't look at it in a vacuum because obviously the market's down, but they're still cranking some decent volume. How much are they making on a weekly basis? Look at that. They had $8 billion across Pump.fun and PumpSwap. They had $8 billion in volume in just March, right? Their Q1 alone was $27 billion in volume.

This is a sick business, and they should talk about how amazing of a business it is. That's what I would be doing if I were them.

Yeah, I mean, it's either you don't have enough growth opportunities to invest behind, or you're trying to instill confidence through a brute-force mechanism that, to your point, is probably better handled by being more communicative on a daily basis and just going out there and really talking about Pump. The market's speaking, right? The token's down after this burn. It's very clear to me that, to your point, it's a one-time thing.

Look, I'm biased. I'm an investor. I was an early investor there. I still hold my tokens, but it's a cash machine. I still don't understand why it needs a token.

I had an interesting conversation internally yesterday. We talked about this maybe 2 months ago, when Across announced its take-private. I talked right after that with a bunch of protocols that were considering something similar. Then I talked to another company yesterday where they're just too big to do a take-private because its public market cap is in the hundreds of millions of dollars.

It's a similar situation: Its revenue is up and to the right, its adoption is up and to the right, and its usage is up and to the right, but the token has been down and to the right. It has literally not stopped going down for, call it, the whole year, and I think it's halved since the beginning of the year.

I don't believe this is necessarily a long-term trend. I do believe there are reasons to have tokens. I think some of these tokens will do very well. How you design the tokens continues to matter quite a bit.

But we certainly are at a point where people have forgotten the thing that matters most in markets, which is liquidity. There is just no liquidity for these tokens right now because of access reasons, interest reasons, and the weight of everything else that has happened in the space.

Right now, crypto tokens and equities are seen as distinctly different asset classes, but I don't believe that will be true over time as people reinvent themselves and reinvent their tokens. In this short-term period, though, that's going to continue to be true until liquidity comes back into the space.

When we started this podcast by talking about the fact that Robinhood trading is down, crypto trading is down 40%, and Coinbase will be the same thing, that is going to have knock-on effects. It doesn't matter if you're the best business in crypto; it's going to have knock-on effects.

In the same way that the Hong Kong Stock Exchange—the same exact company—trades at a discount to the same company on the Nasdaq, that is essentially what is happening here. I don't expect this to exist forever, but it is something that you have to think about right now, and I think a lot of these protocols are thinking about it.

Yeah, I agree with all that. I agree. Anything else, guys? No, but to your point earlier—and I think Santi asked the question—Pump is still, if you take its first quarter, probably going to do over $300 million worth of revenue this year.

Great business.

That's what I'm saying. Go talk about the business. You get 1 day a year to go talk about your valuation, which is when you announce your fundraise.

So, just to put a finer point on that, Pump now, with the burn, is trading at—if they're going to clock $300 million in revenue this year, give or take, at the current pace—

That's what they're running toward, yeah. It's half of the market cap. It's the cheapest protocol in crypto out there. You can rest your hat on meme coin trading. Even in today's depressed environment, it's still going.

So, NFA, but from a pure cash-flowing durability perspective, this is as good as it gets.

Yeah. Content of the week?

8. Content of The Week

Well, I already said it, so I'm going to cheat here, folks. You should go listen to the Paul Tudor Jones episode of Invest Like the Best. I thought it was really good.

The man wakes up at 3:00 in the morning to see the Asia market open, works out 2 hours a day, and has been doing the same routine for the last 20 years. The man loves the game. It's incredible stamina, and incredible routine and discipline.

Something he said is that he thinks it's much harder today than it has ever been, and that's something that Druckenmiller also says. You would think that, as a veteran, trading gets easier, but it's harder and harder. There's just this wealth of information, and it's really hard to stay on top of it, whereas 20 years ago you could have just focused in.

So, that's my content of the week. It's a really good podcast.

My content of the week was you on TVPN yesterday.

Didn't even—And then we didn't even talk about the Blockworks fundraise. I don't want to turn this into the Blockworks show-show thing. We talked about the Blockworks rebrand last week. But, yeah, we raised—

Talk about it. You should talk about it.

Yeah, we raised—we raised around—we just announced it yesterday.

We raised it at a $192 million valuation. ParaFi and Reciprocal co-led the round. Good folks participated: Coinbase Ventures, MoonPay, and a bunch of other great investors. Rob did not, so I will keep drilling him for that. I just have to beat him on the padel courts. And what else? I don't know—20 of our customers invested, founders and operators from around 20 of our customers. That was cool. That was a good win.

Can I just say something? Beat me on the padel courts? Did I dominate you the last time we played?

You get one. I'll let you get one. It's like you get one day a year where you can talk about your valuation and how great the company token is, and the equity value, and then you have to go back to building. I'll let you have your one day, and then—yeah.

Well, congratulations. Great team, great business. That was great to see come out, and you guys have great investors. Awesome.

Yeah, appreciate it.

So, other than TVPN with you, my content of the week is that I pre-bought my tickets for this weekend for The Devil Wears Prada 2.

Whoa. I'm excited about that. The first one was a banger, okay? I love you, Rob. I love you. That's great.

People did not give it enough credit. Saturday night, you know where I'll be.

Oh, we know where you'll be, but we're not going to say, just for security reasons.

I love the fact that you pre-bought the ticket. Do you snipe them? You don't think The Devil Wears Prada gets enough love, you're saying?

The first one got a ton of love, but I think people may be sleeping on the second one. Is there a Polymarket on it? Like, box office?

On the box office. Look at this. Yeah. Wow.

Wow. How much do you think that cost?

I have no idea. You know better than me, but I would say—

Google's up 7%, so I think they're printing.

Printing. The Devil Wears Prada 2. All right, that's a good one, Rob. I like it. I can get behind that. I think all of us listened to the PTJ Invest Like the Best, which was actually the best content of the week. I'm just boring, guys. I have one. I just started a new book, mostly because 6 of my last 6 recommendations were either Invest Like the Best or David Senra. I really need to see something more interesting and creative than that.

I just started a new book by Jack Weatherford. It's the book about Genghis Khan. It's called Genghis Khan and the Making of the Modern World.

Oh, yeah. Dude, so good. You should read the sequel to that, Mongol queens, which no one really knows about.

Oh, yeah, yeah, yeah. Genghis died. Most of his daughters inherited a big part of the empire.

Mike is going through Hardcore History every day—just hours of Hardcore History. Then he calls me, and we talk about the business. We talk about history nerdy stuff, and he was like, “Look, one of the interesting episodes—I just got through the Mongol episode of Hardcore History.” They were talking about this idea of revisionist history, basically.

Genghis Khan was this horrible, horrible, horrible human who killed more people than anyone in history until Hitler came along. Then, at some point, we started liking Genghis Khan. This book was kind of the book that kicked off a lot of the revisionist history, or so this podcast makes the claim. So, yeah, I'm excited to read it. Rob, you'll have to let us know. I hope you enjoy the show, man.

The other thing that everyone should be watching right now, too, is the NBA playoffs.

Who's in the final?

It's still the first round.

Oh, okay. I went to the Knicks game this week, and they blew out the Hawks. The Cavs are up 3–2. Two teams I care about.

The Knicks are up 3–2, you're right?

Yeah, the Knicks are up 3–2, and the Cavs are up 3–2.

You're a Cavs fan, right, Rob?

I'm a huge Cavs fan, but because I've lived in New York for as long as I have, they're like my second team. I went to the game on Tuesday, I guess. A lot of people were there. The person in front of me kept zooming in and taking pictures of Timothée Chalamet—literally, right there the entire time—not watching the game, just taking pictures of Timothée Chalamet.

Fun event. Going to the Garden when the Knicks are in the playoffs is a good time. Isn't there a Miami Grand Prix this weekend for people who are going to Consensus and stuff like that? Rob, are you going to that?

I'm not going. I'll be at Milken instead.

Nice. Nice. Right on.

All right, folks. It's all we got. I'll be in Miami if you're at Consensus. Say what's up. Cheers, folks. Have a good weekend.