老伙计们回来了！见顶信号？

Damn lads, good to be back. I think it’s our first episode of the year, and we’re almost in May, so it’s a bottom signal. Well, sometimes it’s the bottom signal or something. We’re kind of a mixed signal. It’s hard to read us, I’ve noticed. When we come back, we come back for different reasons.

It’s going to be a jam-packed episode because so much has happened, and a lot has happened recently as well. That’s one of the reasons why we’re here. Justin, what’s going on with life, man? How’s 2026 treating you?

It’s really been an amazing year. When we last spoke, I’d recently sold all of my ETH, back in, I think, November. Crypto hasn’t done too well since then, but everything else has done phenomenally. Obviously, that’s changed a little bit in the last couple of weeks, but I’m still sidelined for the most part.

1. BTC & STRC

I still have some venture bags, some locked tokens, et cetera, but I’m still sidelined, still expecting Bitcoin to maybe go to, let’s say, $85K, and then expecting the bear market to resume. Life is good.

Okay, let’s bring up the Bitcoin chart just to see where we are for this year, because there are different time horizons. If you look at recently versus the longer-term chart, it looks very different depending on how you zoom in.

Obviously, the year started super bullish. We were talking last episode about how we expected a breakout, and we got one. January started off pretty well, and then we had the biggest collapse we’ve had in years. We see those red lines around February and going into March, and it was a little bit traumatizing touching $60K. That was really unexpected in terms of how quickly it happened.

Ever since then, we’ve been slowly looking like the bottom is firmly in, and we’re hopefully back into greener pastures. But those red months, man, that was painful. Taiki, it seems like you got bearish and then bullish again. You’ve timed things okay. Am I judging it properly? You’ve done okay?

2. Jordi's Vibes

Yeah, I’m super bullish now. My bull case is around STRC, I think. I think STRC is going to grow a lot bigger than people expect. People are looking for reasons for it to fail, but I think this is the first time Saylor’s been buying billions at the pico bottom. I actually have some charts I can share. I think there’s some significance here.

The reason I became bearish a few months ago was because the MSTR mNAV was collapsing, and this coincided with a BMNR mNAV collapsing. Justin, if you can share my screen.

On April 20, Saylor announced the third-largest purchase in Strategy’s history. I looked at this and thought, “Wow, he actually bought so much Bitcoin at higher prices.” It was a ridiculous amount. It was like half a million.

I overlaid his buys—his 10 largest buys—on the chart. Usually, he’s top-blasting, right? That’s what he’s meant to do. But this is the first time he’s actually buying at reasonable prices, in the $60Ks and $70Ks.

If you overlay the squares, the red squares indicate his 10 largest buys. Usually, he buys a lot when the mNAV is over 2, but this is the first time the mNAV has been around 1.1 or 1.2. I think this could put a bottom in the MSTR mNAV and reintroduce reflexivity to the upside.

I think this is something that people aren’t really taking into account, because if MSTR is back, if Saylor’s back, he’s going from being cooked to now cooking. It could be the beginning of one of the most hated rallies ever, with Saylor just buying billions and it continuing to go up. He’s no longer underwater.

I think this is the most important thing. If the MSTR mNAV just goes up, then I don’t see why Bitcoin can’t bottom. I think people’s bear cases are going to be really invalidated.

How much has Saylor done in STRC? It should be more than $10 billion, right?

I think it’s around $10 billion. Let me pull up the MSTR.

The reason I’m asking is that people are talking about the yearly dividends he needs to pay. I think the number I saw is around $1.4 billion, roughly. Compared with the cash reserve they have, which from what I recall is $2.3 billion, that means he can cover about a year and a half of dividends only. At some point, he needs to be selling MSTR to increase the buffer, right?

Right now, STRC is at $8.5 billion. But if the MSTR mNAV is going up, then he can raise more cash. One thing he can do is, at some point, buy back STRC and delever. He can lever up at the bottom, and then, if it pumps enough, he can delever. I think the market will probably take that as a good thing.

I’m not sure if he’ll do that because he’s kind of a crazy person. He has a lot of optionality in terms of the dividend. He can move it up, he can change it, and they recently decided to go to every 2 weeks instead of monthly.

You’re just buying an instrument that is some kind of debt instrument, and he can change the rules and not pay dividends if he wants. It is the ultimate Ponzi. It is the biggest Ponzi imaginable.

Coffeezilla did a special a few days ago that went into how, first of all, this is definitely going to work. It’s definitely working, and it’s just sucking up whatever Bitcoin the remaining people who forgot to sell are panic-selling under $80K.

It’s definitely working, and it’s definitely going to keep having this outsized effect, I think. But what these things do, in essence, is create a tail risk. Meanwhile, people are clipping coupons and hoping that the tail risk doesn’t hit. As long as the tail risk doesn’t hit, the game goes on.

Is this a big tail risk? I don’t know. We have bigger tail risks. The quantum risk is what was driving a lot of the selling at the start of the year, because there were all these negative headlines. Then you had all these whales saying, “Guys, it’s been a nice ride. I’m going to take my $10 billion and leave now in case something goes down with quantum.”

Arguably, this isn’t even the biggest risk to Bitcoin. I don’t know. I kind of like the Ponzi right now. It’s good for the industry.

One thing I’ll say about STRC, and Taiki, I’m sure you can validate some of these claims or expand on them, is that I’ve seen reports that Saylor has said he only wants 20% of his BTC holdings issued in STRC. That would actually imply that most of the buying is behind us.

He’s also currently authorized to issue $21 billion of STRC. That’s actually more than 20%, but it would be about another 2× of buys from here. I do think he has a lot of optionality, but I do think most of the STRC buys are behind us unless we see a lot of quick BTC price appreciation, in which case he can obviously issue a lot more. Taiki, is that correct in your understanding?

There isn’t, in any of his SEC filings, a written cap at 20%. I think he mentioned it once on some podcast. But then again, he also mentioned he wasn’t going to issue MSTR above a 2.5× mNAV, and then he just changes his mind.

Everything is flexible, guys.

If the markets are going to let him lever up, he’s going to lever up, I think. It’s optimal from a game-theoretical perspective to keep everything completely open.

But I have a question for Justin. If Tom Lee tomorrow woke up and posted a tweet that said, “Hey, we’re recreating STRC on BMNR,” would you buy back your ETH?

Not all of it. I don’t think I’ll ever have that much crypto exposure again, but I would definitely probably buy some.

I do think, though, that crypto is still just not that interesting of a trade. For one, we’re in a bear-market year. I do think that the 4-year cycle has held, quote unquote, perfectly thus far. I agree that’s a silly thesis.

I just think it’s not the most exciting place to invest right now. Tech is outperforming Bitcoin from the bottom to the upside, especially AI and high tech. I’ve had better luck playing around there than PVPing in crypto when it’s a really tough market. It’s still hard out there, I’d say.

3. CHIP Launch

Yeah, we had a new launch today. This USDai token, CHIP, is out, and it looks like the Koreans are back. They’re bidding. It’s one of the bigger Upbit days we’ve had in months, and they’ve done really well in Korean stocks, so maybe they’re putting some of it back into their crypto accounts.

That’s good for everyone, because the reality is that outside of Bitcoin, the rest of the tokens, especially if you go past ETH, have been crime season only. The only stuff pumping is these things that ZachXBT was calling out, which we’ll certainly get to because it’s one of the main things I wanted to do an episode about.

Hyperliquid is certainly the winner from the last cycle. Outside of that, you look at everything else—even the darlings like Solana and BNB—and everything is going down.

It's just not been performing. With these recent hacks, there's even a lot of people saying, “Is the DeFi project dead?” You look at Aave, something that's supposed to be the flagship DeFi product, that's been around forever and never really gotten hacked. They're dealing with a certain situation, but I guess let's wrap up before we move on to those hacks. Dim, are you kind of optimistic? Even at this pop, is this 80K pop going to last, or how do you feel?

4. Peptide Maxxing

I also really like STRC. I do think that ETH will most likely play a similar game, and you'll have a round 2 of DATs trying to see if they can do a similar STRC instrument. The reality is that none of them, other than BMNR, I think, is able to do it. But I would say that the preferred and the bid that we will be getting on AI stuff, which I think USDai clearly encapsulates, is enough for a sustained bid throughout the year in some ways.

5. BTC Quantum Risk

You'll still have average volatility. So, yeah, I want to keep playing. That's for sure. The casino's open again. The casino's open. There's not a ton of people in, but there are a few people in.

[Laughter.]

Look, on the quantum side, it does look like the Bitcoiners, as chaotic a bunch as they are, are at least putting some proposals up. The one that we know we're tracking internally, obviously, very closely, is BIP-361. Jameson Lopp has posted about it. There are a couple of camps, as always, among the crypto factions, and he basically says, “You can just propose improvements, and if you think you can do better than BIP-361, write something,” because there's a lot of people complaining, but no one's doing anything. We have to just start doing stuff.

You can look at this Nic Carter tweet—shout-out to Nic Carter for being one of the early people putting attention on this. There are proposals out, and we can argue about them, but in essence, we should at least start having escape hatches. Some Bitcoiners seem to think that this is not a problem, and even if they end up being correct that this doesn't become a huge actual black swan—or gray swan, I guess—in the future, a lot of investors are concerned.

There are 2 factions of crypto. There's the ideological side, the cypherpunks we've talked about, and then there's the people who are more interested in investable Bitcoin ETFs and things like this. I think it's undeniable that the people who matter are the ones who actually have billions of dollars in these products. At the end of the day, everyone who's looked closely at the game theory has identified that almost certainly, this is how it plays out: some people will want to do some kind of fork, like a Bitcoin Cash-style fork, but all the money and all the people will just talk with their dollars.

Everyone who's going to support, in essence, quantum-saving all the Satoshi coins—all the coins that are potentially—

You mean Satoshi coins, right?

Yeah, all the Satoshi coins, plus all these early coins that seem to be lost. That will reduce the supply of Bitcoin and help the price. It's pretty obvious that you might have an ideological problem with taking Satoshi's coins, but it doesn't really matter. Reality's always going to win. We saw that recently with this Arbitrum movement on the hacks, so we'll get to that, too.

I've been thinking of going on a little bit of a side quest. I haven't seen this proposed elsewhere, but I think the Satoshi coins and the coins that are vulnerable should obviously have a lead-up time for anyone to claim them. This is still many years out, and we can start signaling it today, but I do think the best use of these funds is that we can kill 2 birds with 1 stone. The quantum coins can be rescued, and then they can be allocated to subsidized mining rewards for probably the next 250 years.

I think that would be an amazing way to settle the security budget problem, which is another very significant problem that's not even addressed or discussed much anymore with quantum taking the lead.

The thing with quantum is, yeah, it's an issue, but it's similar to the Iran war in the stock market. By the time you're waiting for a solution, we might just be on new highs, right? If you're waiting for the war to be over, you're just top-blasting.

Yeah, and then when there's some quantum solution, everyone's happy about Bitcoin. It might be at 150K at that point. If you were waiting for a solution, then damn, there you go. You just top-blast. You're supposed to buy when people are fearful, right? I think that's basically what the market's telling you recently: just buy the fear and HODL, I guess.

It is an interesting time for markets. Obviously, one of the things that's happened this year that's a huge deal is that the volumes on the HIP-3 RWA markets have really exploded. We've had all kinds of mainstream coverage on Bloomberg and everywhere else, and a lot of crypto people have started trading these things.

Instead of trading Litecoin and whatever shitty coins they were trading in the past, now they're trading oil and silver. It's a similar game: Do you want your developer to be some guy who just issued the coin, issued the shitcoin, or do you want the developer to be the Ayatollah who decides to shut down the street? Which kind of developer do you want to try to predict the movements of? The games are similar in some ways; you just need to focus on different alphas, I would say.

Who's been trading real-world stuff? Justin, sounds like you're pretty active in the real-world stuff.

Yeah, I've been very active, but not so much on Hyperliquid HIP-3, just in my standard Fidelity brokerage, buying, DCAing, and selecting tech names and whatnot.

You don't want 20x leverage? What are you doing on Fidelity, bro? What are you afraid of?

[Laughter.]

He's bear-pilled, man. He'll be bearish. He'll be bullish at 100K.

No, I'm fairly bullish. I think Bitcoin's going to go to 85K. I just don't see why, if I'm buying Bitcoin at 80K, which is what it's at at the time of recording, even if I'm hopeful that we go to all-time highs this year—which I think is a stretch—I do think the 4-year cycle has held so far and probably will hold.

Even if I think all-time highs are imminent, that's much less than even a 2x at this point. What are we doing buying Bitcoin? There are much safer ways.

I'm saying buy Tesla, buy Nvidia, Intel, and Google. Those are what I've been most interested in lately. You can do it on 24/7 markets, bro. You can do it with high leverage.

Justin sold his ETH, and now he's just a no-coiner. He's like, “If I can't do it anymore—”

I'm building. I'm building.

I do love all my private chats basically becoming all traders in a week. It's actually unreal. But to be fair, some of these guys are finding edge, right? The fact that Citrini sent Analyst 3 to the Street, that's a way to capture alpha. So I think if you're young, energetic, and you want to play, no game is too difficult. You can win.

Yeah, it's like the people that bet on the WNBA deal they're doing and then just did it themselves, right? It's the way to do it.

You're an expert in this stuff.

Yeah, I mean, there are obviously a lot of markets that are volatile in traditional markets. We have the SaaS companies that have completely zeroed out, so you probably want to avoid those. But biotech is starting to look very interesting. There are a lot of positive things, both on the administration side and on the technology side.

Obviously, with the Trump administration, you have a very pro-experimental-treatment health secretary in RFK, and he's basically saying that we should start legalizing peptides and psychedelics. There are all these executive orders being passed now, and it looks like there's a chance these things are going to work.

I've been using AI to ask how I should actually make a bet. I'm bullish on peptides. I've been bullish for a very long time and very early to this, and now Google Trends for peptides have exploded. How do you make a bet? I don't just want to buy Hims or whatever.

I'm not on the Hims thing. I can't do that kind of left-curve stuff. It can do well, of course. I'm looking for, obviously, private opportunities for all these startups. It seems like there are a lot of people entering the space, and a lot of money is going to be created.

Judging by the GLP-1s, a single drug can just be infinite money—trillion-dollar drugs. So, yeah, I'm trying to get some reports together. I don't have anything to report yet. I'm still doing some deep dives, but there are some really nice AI tools out for doing analysis.

You're basically saying that you disagree with Shkreli. That's what you're saying right now.

Well, Martin Shkreli—if anyone’s been following him, he’s been doing some debates and stuff. It’s been kind of surprising to me that someone who seems sharp in some ways, at least, and obviously this is his sector—he’s the pharmaceutical guy, the pharma bro, the original guy in that sector—is very bearish on anything to do with peptides. He thinks they’re all scams, they don’t do anything, and their half-lives are low.

I feel like he’s going to become this meme in crypto: Do you really want to be sidelined when the industry you spend all day on is going up and you’re sidelined? It feels like that’s going to happen to him.

He’s a maxi, right? The new thing never really appeals to maxis. It’s what happened to me with ETH last cycle. He’s a maxi. He doesn’t like the new technology.

But, Jordi, I think you did a show with Thiccy maybe a couple of months ago, and you were trying a peptide called SLU-PP-332 or something. Is that right?

SLU-PP-332. I’ve been taking SLU-PP-332 for a while.

So, yeah, you’ve got the SLU-PP-332 right here.

Yeah, this is experimental. First of all, this company doesn’t even exist anymore. They shut down. Heavy metals were found in the supplements.

They were kind of the most legitimate U.S.-based company, but now that everything’s getting legalized, the research companies in that category—they were selling for research purposes only, intended only for lab use, not intended for human consumption. That was a gray zone they could sell under, and now they can’t do that anymore. They have to apply for all these licenses, so they’ve had to shut down for now.

I’ve stopped taking it. It heats up your body a lot because your mitochondria are working really hard, burning fat, and it just heats you up. I see Dim laughing because he’s spent a lot of time with me over the last few months, and he’s seen—

Look, it makes you jacked.

[laughter]

I was getting really jacked, and my body fat was flying off. But I don’t necessarily recommend doing this. I did it for 2 or 3 weeks and saw the effect.

But I’ll say this: if you think that peptides are—what does Martin Shkreli call them? He calls them placebos. He thinks it’s a placebo effect. This is his category. He’s in the space; he’s knowledgeable. He can tell you how many amino acids there are, and he can tell you all this stuff.

If he thinks these things are placebos, he’s fully convinced. There’s not a single person out of the thousands of people I’ve seen take this stuff who ever says, “Oh, yeah, this works.” It’s just a question of what the pluses and minuses are. That’s a different category.

Jordi, you’re going to cause us to need to add a second financial disclosure. One, it’s not financial advice, and NMA—it’s not medical advice.

[laughter]

Yeah, don’t take peptides without—

Is there anything you recommend that’s very low-risk, easy to acquire, and high-value?

The main argument with Martin Shkreli that I saw was with Max, the founder of Superpower, on BPC-157. This is my favorite peptide. You can take it orally. I don’t like injections, so you don’t have to inject it. This is low-risk. No one’s ever had any side effects, and it’s been taken for decades by a ton of people.

This will heal your gut, and it’ll heal your shoulder and knees. It’ll just get your body to heal itself. It’s like a Wolverine peptide. There aren’t many studies on this. No one has really wanted to fund $100 million studies.

But that’s the question, right? I think Shkreli’s point is, why is that the case? If its efficacy is so great, why is that happening? Why isn’t it happening?

Who would make money by you doing that, and what money would you lose? A lot of players would lose money because you would take this instead of all these other drugs, right? You can’t patent this. You don’t have a patent.

I think it’s happening now. Max said that, for Superpower, he himself is funding the first big study. Everyone I know who’s taking it has been helped by it, and there are zero side effects ever reported. This one I feel safe with. I’ve taken it for 4 years. I’m pretty early on this one, and it definitely changed my life.

I’ve talked about it, so I suggest it pretty comfortably. But again, I’m not a doctor. I’ve just done a lot of research. That’s it. NMA—not medical advice. Not to be confused with NAD, which is a nice, energy-boosting peptide that I do suggest. So pick that one. Pick NAD, everybody.

6. Big Defi Hacks: Drift & Kelp

All right. We’ll get into health-maxing at a different time.

Let’s talk about some of the big things that have happened very recently. The hacks are certainly the most worrying. We had the Drift hack first of all, which was almost $300 million. The Drift vaults got drained by North Korea, it seems like, and the attack vector was a combination of social engineering and people showing up at conferences.

We weren’t told which Asian conference they were meeting the team at. I don’t know if it was Singapore or Korea. I’d be surprised if it was Singapore, given the amount of cameras and security. Maybe it was KBW, but apparently a team pretended to be a trading firm, reached out to Drift about integrating, spent months talking to them in person and on calls, and managed to get 2 people to download their trading software for a trial. They used this as a backdoor to basically drain Drift, and that money’s kind of just gone, I would say.

We’ve seen Tether try to step in, and we don’t know exactly what the terms are. It tried to offer some kind of backstop to keep things going. But that was a pretty bad one.

Unfortunately, back-to-back, we have this very recent one involving Kelp’s restaked ETH. We’ll look at some of the memes talking about what the hell we’re even doing with ETH here. That was another very large hack, and some of the money’s being saved, so we don’t know the exact damage. It’s not going to be as bad, but it’s still probably going to be over $100 million.

I guess I have 2 questions for you guys. First, do you think the prevalence of this stuff is increasing? It feels like it really is increasing because of things like Mythos or other AI models that are making these attacks easier. Second, obviously the big question is: Is this a nail in the coffin for DeFi, which has already been struggling and hasn’t grown in over 5 years of TVL? I’ll pull up that chart in a minute.

As far as the second question, it’s an open question for me. Aave was the gold standard, and is the gold standard, for where you can put your money safely over a long duration. But obviously, that’s proven to be untrue.

Maybe if you’re on ETH mainnet, you’ll come out whole, but there was a lot of uncertainty there. Your funds were locked for a long period of time, and you might have exited at a discount, which was an option. So, yeah, it’s tough. I sympathize with the argument. I don’t really think there’s a clear answer yet.

I do think it’s obviously very damaging for the industry, though. I’m like the DeFi guy, and I haven’t really done DeFi stuff in the past few months. I trade perps, and I farm on-chain strats.

I used to be the DeFi guy. I mean, you were the meme coin guy, then you were the markets guy, then you were the shorting-ETH guy. Are you the DeFi guy?

Well, I’m shorting—I was shorting ETH on a perp DEX, farming the points. Now I’m farming on-chain strats, which is also farming.

One thing that could be bullish is if people start looping this on-chain. Then there’s more demand for BTC and whatnot. But, yeah, you can look at the TVL chart. You can look at the Aave TVL chart. It looks pretty gross.

I feel like the risk premium for having capital on-chain isn’t very good nowadays. I do think that if Bitcoin is high enough, there are going to be some margin games to be played.

Can you bring that back up? Let’s look at some of these protocols because, you know—so, Lido, I wouldn’t even call it DeFi. No one does anything with Lido staked ETH. No one uses it for anything, right?

It was supposed to basically replace ETH as the money LEGO, but that hasn’t happened. You have Aave, which we’ll get into, but, yeah, we’re seeing some pretty big, huge drops there. EigenLayer—EigenCloud, now it’s called—has $10 billion of TVL. Why is that still there? I thought there was—

Yeah, they’re trying to do more AI stuff. I thought the whole secure-ETH-restaking thing was like that. No one wants AVSs.

I don’t know. Obviously, that’s not going to happen with this hack. People still had a bunch of ETH on it.

Keep in mind, they’re doing that because these restaking projects pay you slightly more than the regular staking amount.

So it’s not as though people are believing in EigenLayer, thinking it’s the future, or farming it. It’s more that they’re getting a fraction of a percent more yield on their staked ETH.

Yeah, but why would EigenLayer pay out emissions on having this kind of TVL when it doesn’t suit their story anymore? I understand that there’s a tiny yield that people were looping multiple times to get it to maybe 2% instead of 0.2%.

Anyway, then you have Morpho. We’ve seen so many issues with Morpho vaults whenever there’s a blowup, like Stream Finance and all this other stuff. These vaults aren’t created as safely as people think.

You have Ether.fi, which is one of the few good products in crypto—one of the fundamentally sound neobanks. I don’t know why they need all that TVL. I think they’re just running it in their vaults.

Sky is doing okay. Ethena was supposed to be a basis trade, which has disappeared. I’m not surprised it has disappeared, but now they’re probably rightfully pivoting to other stuff.

The problem with Ethena is that it has the whole looping thing with USDC on Aave as well, and it’s hardcoded one-to-one. Everything on Aave that’s hardcoded probably needs to be looked at and reevaluated.

And then what’s all this other stuff? Babylon—again, BTC restaking. What are we doing?

Yeah, it is interesting when you look into it. Even though that top-line number might be almost $85 billion of TVL, if you actually take out the things that don’t really count, quote unquote, it’s really just a couple of billion dollars left. It is pretty shocking.

There’s a bunch of double-counting, too. I feel like 6 years ago it was, “DeFi is the future of finance,” and now it’s just a feature. The ability to transfer stablecoins on-chain, or the ability to borrow against ETH or Bitcoin permissionlessly, is cool, but maybe that’s all it is.

People just speculate and create new Ponzi schemes on-chain. I do think that if Bitcoin goes up, there’s going to be new stuff. You just have to pull capital from random protocols.

If you want yield on stables, just put it in STRC.

Which is kind of ironic, but these hacks basically show you that there’s a tail-risk structure that retail, and now increasingly institutions, can’t really underwrite anymore. Why would you want reflexive crypto collateral that’s stacked on other crypto collateral? You don’t want that.

I think where things are going is toward institutional RWA rails, where the depositor has direct access to the issuer, basically. Any hack that happens in the Wild West of DeFi is an argument for a protocol that provides yield that’s RWA-related, rather than some kind of weird native ETH product.

Like the CeFi thesis, right? It’s centralized enough that it’s safe, but it has the convenience and composability of DeFi, along with the self-custody elements. I think that makes sense, and it’s totally valid. It’s just very different from the dream that DeFi was 5 years ago.

I would have considered what we’re describing now a failure back then. Although now I would describe it as a success story. It’s the idea of distribution.

Going back to USDai, maybe AI-collateralized yield is a corner that crypto degens would want to rush to, and it’s still a coherent story for someone who’s just in crypto and doesn’t want to hold cash. I think these stories will become more prevalent, and the more esoteric ones will just fade away.

One of the takes that I saw was very much in line with the thinking I had myself. Spreek tweeted that the space will consolidate around a couple of very competent teams before expanding.

In essence, what’s happening with security is that you clearly need a lot of resources to fight. You can’t just be a random couple of guys forking something and then getting $100 million of TVL. Those days are over. It’s not like 2021 is ever going to happen again.

Everything is getting hacked unless you have extremely good security. Even the LayerZero guys have had issues, and they’re very good. The only thing that makes sense is that we’re going to have fewer teams that are very well-capitalized and extremely security-focused.

We’ve seen that already with Hyperliquid, where there’s just one team that’s able to scale massively. You don’t need 50 perpetual DEXs. Maybe you need a few more to try different things, and we’re having Lido with no fees and different models, but it really needs to consolidate to a few teams that have a huge budget, have raised a lot of money, can hire a lot of security people, and keep everyone’s TVL safe. Nothing else makes sense.

Getting to the specific hack that happened, I built a staking and restaking protocol myself with Mantle back in the day. You guys remember mETH? At the time, I liked the fact that it was extremely safe because, in essence, the actual ETH—which is the valuable thing—is kept locked with a cooldown period of about a week, as all staking has.

Even if something happens to the Mickey Mouse receipt token, the real ETH, which is valuable, is safe. All that’s really at risk is what you have in the liquidity pool, which is usually a tiny percentage of the actual amount.

Let’s say we got mETH to $1 billion. Maybe the liquidity pool has $5–10 million, or 1%. You’re 99% safe in a bad-case scenario. With the Bybit hack, we saw a few cases where somebody takes mETH when they’re not supposed to have it, and the mETH gets taken away. They can’t do anything because there’s no ETH—there’s no real ETH.

However, in this case, because Aave allowed this as collateral and allowed the bridged version as collateral, they were able to borrow against it. Even though it’s a Mickey Mouse token, you can borrow against it. You don’t need the actual ETH; you just take the lending protocol’s ETH, which clearly increases the risk of the whole thing much more.

Yeah, Jordi, you forgot Wintermute. Look at the right-hand side there. We have Evgeny saying it’s always Wintermute’s fault.

It’s always Wintermute’s fault.

Sorry, Evgeny. Always. Can we, for a second, just talk about LayerZero? Obviously, I think the core messaging business is taking a hit and will probably take a hit for at least the next few quarters. It’s a brand issue.

But at these prices—it’s trading at $1.60 here—it’s becoming a pretty interesting forward-looking bet to me. I view LayerZero as a Layer 1 call option, not as a messaging protocol anymore. I don’t think the market should be pricing it as a messaging protocol.

It’s a Solana competitor now. It’s a Solana competitor.

I don’t know if you want to pull up the comparison chart. It has Tether, Citadel, Arc, D, and TCC. I’m reading it here. On day one, that’s not a normal launch. I don’t know when the launch is going to be, probably Q3 or Q4. Also, in terms of tech, Brian and the team are a very serious technical crew.

Basically, they have the a16z team, which is the strongest by far from what it looks like in terms of what they’ve managed to achieve technically. Their presentation around the technology left a lot of people surprised that they’d been building all this in stealth.

It’s very interesting that the FTX estate still holds a certain amount of LayerZero. We’ve tried to buy it from them, and they actually don’t want to sell it at this price. They’re waiting for higher prices.

That’s the one thing they’re not willing to sell at the lows. They’ve sold—

Yeah, the one thing.

Every single AI name known to man. Not only have they sold Anthropic, which may be the most valuable company in the universe in a few years, for nothing—you know, exiting the golden ticket, the golden ticket that FTX had.

How did FTX have this ticket? You guys remember the Effective Altruists, that little crew in the Bay Area?

A lot of my friends in the Bay Area were effective altruists. So Sam was in this crew, and in essence, Anthropic was just kind of all EA guys. He gets this absurd ticket, being in Berkeley and around all these guys. It would have been worth it if the estate had just held on to this and airdropped it now at the $900 billion round, whatever it’s going to be.

You know that meme of what the crypto world would look like? Yeah, yeah. Spaceships. We would be awash with liquidity instead of being the poor guys while all the AI guys are running rampant. If you really think about it, imagine if the FTX estate tokenized Anthropic shares on-chain and then airdropped them. That literally would have been the greatest airdrop event in the history of airdrop events. But I guess the lawyers want to keep milking the estate for hundreds of millions of dollars.

I think they did. Did they up the Anthropic thing? Apparently, I don’t know if you guys saw that Elon is doing this deal now with Cursor, potentially buying it for $60 billion. $60 billion. The FTX liquidator had a $200K seed-stage check that owned 5%—5% of potentially a $60 billion acquisition that they just sold at cost.

I mean, honestly, that’s why they’re gatekeeping their zero. They think this is the 100x ticket they have. Yeah, yeah, yeah. Anyway, better not to think about this parallel universe where these things were held onto for crypto people. Or just imagine if FTX never got caught or exposed as a fraud. SBF survived for a few more months, all these investments did well, and then he just recycled this money into investing back into crypto. That would have been nice.

7. ZackXBT vs RaveDAO

Yeah. One of the other topics that I want to get to is, of course, what prompted this episode, which was my rage at seeing somebody try to go against ZachXBT on his recent tweet. So let’s bring this tweet up. Zach has been talking about things like Rave. Rave is a token that I had not heard of until it somehow went to $20 billion, $30 billion.

There’s an unspoken rule in these Binance pumps that you don’t try to go over—what was it? $20 billion was River? What did River get? Yeah. Okay. Well, it makes sense as well. I think it was $20 billion, right? That’s the number. So around $20 billion, you’re supposed to stop the crime, because even saying that this is organic in some form becomes not so believable. You lose credibility at $20 billion—not that anyone believed River was worth $20 billion or that Power was worth whatever billion.

These guys missed the mark. They went—what did it go to? I don’t know, $30 billion? I don’t really know. I should have charted it. I have it. Around the same? Yeah, $30 billion. Yeah, it went to $28 billion. If they stopped at $20 billion, maybe they don’t get the wrath from Zach.

This thing went to $28 billion and is now trading at $1, which is still pretty high. It got Zach to tweet, and he was trying to point out that this is the scam where somebody has Binance perps and Bitget. It’s usually Bitget where the token’s spot gets bought up, and even though all the volume is happening on the perp, the tail is wagging the dog. The spot supply is held, and then these guys just liquidate everybody and farm funding, or whatever they’re doing.

Now he’s talking about Meme Coin, which is another one—M. He’s basically asking these guys, “Why do you think your token is worth, in this case, $6 billion or $20 billion or $30 billion? Can you give any explanation?” This is the first time that someone has taken it seriously. We saw Richard, the co-CEO of Binance, respond that they’re actually looking at it.

That kind of prompted the bubble to burst, because I think people are starting to worry that if Binance just delists it, then there’s no point being long because it’s just going to—who knows how they’re going to settle it. We had a pretty funny response from Gracy from Bitget. As a trading firm, I don’t want to talk ill of any exchange, since we’re active on all exchanges. However, it was quite an interesting response that she gave, and I’ll let you guys discuss this tweet.

I don’t want to comment myself. I’m not going to say what kind of doctor—you know, I’m not saying what was going on here. She basically said that Rave is a carbon copy of GME, which you guys remember was GameStop, and that this is not crime. This is just retail getting overly excited. She highly recommends watching the movie Dumb Money. There’s a lot to learn from the movie.

Incredible. Dumb Money. Okay, guys, this is just GME. It’s just the guys in the pajamas, guys. That’s what’s happening.

I think there’s a clear effect that comes off of this, right? Basically, Zach has raised the hidden cost of running this trade across every exchange where it has worked. The fact that these CEOs have come out and had to respond publicly basically means that the next low-float squeeze setup carries some kind of nonzero probability of a mid-trade delisting, a suspension, or some other public callout by Zach.

I think that’s a real change in expected value for the people who have been running these trades. I did an exercise where, if you pay very close attention and go back to Friday and start tracking all these low-float coins that you were thinking maybe they were trying to pull something similar with, all these coins have kind of lost their accumulation strategy. They’ve gone down since, because everyone is taking a step back and reevaluating whether this makes sense or not, whether the squeeze strategy is good anymore.

Binance was allowing this stuff to happen for a long time, because whenever we get one of these events, the volumes just go crazy. There are billions traded on these River-type coins, and they make fees. At the end of the day, they’re in the fee business. They can just say, “This is the casino. It’s like a memecoin. People decide to short it and lose all their money.” That’s kind of it. We’re not here to protect the consumers.

I think this is the first time, after the Zach tweet, that we’ve seen them actually step up and say that they’re going to look into this and try to do something. We’ve seen Zach do this before. He has the power to call out exchanges in a way that nobody else can, because he’s done so much good tracking all the North Korean stuff. He has that voice. Kudos to Zach.

It’s been kind of painful watching River go to $20 billion. I just don’t see how our industry can recover and flourish when this stuff is happening, coupled with the fact that we haven’t really had a new thing since 2021 or 2022. We’ve got to stop doing this stuff. It’s absolutely insane that there’s still capital to extract and that the extractors are still doing it.

It’s kind of like the whole take that we’re in late-stage capitalism. You’ve got to extract everything and just get out before it collapses. That’s kind of the feeling you’re getting from crypto now. Everyone’s just trying to max-extract the last sliver of capital they can before this thing goes down. If we all shifted our mindset, obviously we could build so much better stuff.

Yeah, I mean, between the hacks and these kinds of scams that just kill perp traders’ accounts, that’s why there’s not enough money anymore to bid even good coins. There’s just not enough liquidity. The casino only thrives when there are games going on and the game is kind of fair.

So actually, Jordi, you’ve asked me, Dim, and Justin about how we’re doing and how we’re feeling. How are you feeling? We’ve seen some pumps across the board despite the scams and the hacks. What are the vibes?

Vibes are okay. I’m just happy that we’ve put in a bottom in general, and it’s back to buying dips for me. I’ve just been buying Bitcoin dips, which is what I’ve always done best at. I tried to do that in February, and that worked very badly. I would say one of the largest losses of my career was trying to buy Bitcoin from $75,000 down. That did not work very well, but obviously things are kind of recovering, so I’m doing okay.

The number of coins at really, really cheap valuations has increased, so it’s nice to find a few longs that are fundamentally sound. I will say that Selini is not very active on the crypto venture side right now. We’re doing a lot of venture, but it’s other tech stuff— a lot of the AI-related stuff.

I don’t see many strong new crypto projects coming around. I think maybe we’ve done two this year.

We did a Catalyst, which is more of an AI play. They're using AI intents to let people trade on their ideas on Hyperliquid, for example. If you want to express a trade, it'll help you abstract and do it. Stuff like that makes sense.

I do believe the hyper-financialization of society is continuing. I am a bit surprised that prediction markets have become so mainstream, but it makes sense when you look at the direction of things. So we're making bets, but less of the usual stuff. When was the last time you invested in a new, straightforward DeFi app or just an on-chain app? It's probably been a year or something, right? Venture?

Obviously, we're involved with DreamCash. But again, it's very normal stuff where you're dealing with RWA perps. I've been very bullish on them. They've grown tremendously, and I think they'll keep growing.

I'm happy that space is taking off, even when the crypto assets are not doing well. The crypto rails are working for 24/7 markets, and you can use stablecoins. It is an incredible product.

I've also started using Erebor, the crypto-friendly bank that has appeared in the US and is now regulated, with Palmer Luckey and that crew behind it. It's the best bank account I've ever used. You log in, deposit stablecoins, and it displays them as dollars. Then you can just send wires. It's like magic.

I am bullish on the rails. I don't feel too badly right now, I'll say. Just a few more green candles. I call this green candle therapy. A few more green candles and everyone feels—

But Taiki, it's very possible there's a pump and you get those green candles. Bitcoin may even go back to its all-time high this year, but don't you see the broader problem? Where are the apps, or what is there to be excited about, aside from the few select categories: perps, RWAs, stablecoins, and prediction markets? Some of those have less of a connection to crypto than what we used to think of as crypto.

Yeah, I mean, it could just be that, right? Maybe Bitcoin goes up, hype goes up, stablecoin stuff does well, and then that's all that happens. Once Bitcoin reaches a high enough price, some random thing pops up, and that's where the speculation happens.

No one predicted DeFi in 2019. No one predicted NFTs in 2020. I've said it before, but there's no way in the world that, with the OpenAIs and Anthropics of the world going public, you won't have an AI coin cracking the top 10.

Yeah, these guys are facing their own governance issues right now, but—

Yeah. If you want to find crazy multiples, the crypto-AI intersection is by far the best place to dig. I'm highly convinced that you'll get something like that this year or early next year.

I was looking at TAO. It was doing well, and then one of the teams rugged, and now it's—

TAO, with all the might of the All-In podcast, the number-one podcast in the world, fully backing it—and then it did a little pump into the $300s and went back to the $200s.

Jordi, did you see how much Calacanis actually put in? What a whale. He's like that crypto influencer who's saying, “Here's my 10x long. I'm up 50%.” Then you look at the notional, and it's dust. I mean, come on.

Anyway, for everyone's information, Jason put in $500,000. This guy has something like $100 million, and he's been shilling it.

He's got more than that? Well, he's been shilling it nonstop, and he has a tiny bag. I don't understand it.

Oh, yeah. Not even.

[laughter]

We'll see what kind of coins emerge. I'm waiting to see if anyone is going to do a really culty coin. I think we need a cult leader—

Yeah, to really push this through.

8. Pasta of the Week

All right, guys, let's do a pasta. Obviously, it's late April, so let's do the pasta of the 1st quarter. Justin, do you want to kick off the pasta?

Sure, absolutely. Scrolling through my timeline, you don't really get much in the way of Crypto Twitter on your timeline anymore. I don't know about you guys, but for me it's mostly been AI, oil, and so on.

When I saw an Ansem tweet—Ansem's back—I wanted to read it. He was basically saying that ETH is really not in a good spot, especially with the Aave attack, Solana taking more of the retail mind share, and so on. He was saying you can short here and target lows of $1,300.

Then another tweet popped up, and someone quote-tweeted it. This person had what I think was a Moonbird PFP, a throwback to 2022, and said, “The only reason I buy and hold ETH is to buy NFTs.”

[laughter]

Japanese soldiers. Yeah, Jordi uses that a lot. Japanese soldiers.

Japanese soldiers, baby. Still fighting that war.

Supercycle. Also, unrelated to the bullish note, the fact that ETH is at a higher price now than it was essentially when the KelpDAO thing got hacked—I don't know how you explain that.

Well, I mean, ETH/BTC is doing very well. There's been a lot of talk that Pectra is a big part of that. I do think ETH actually has a credible roadmap there. There's a lot of things wrong with ETH, but we'll see.

I mean, they've frozen some on the Arbitrum side, which I think was a clear decision that they made correctly. All this decentralization theater that lets North Korea get away with an extra $100 million is pointless.

Justin Sun has been a bit clownish lately—not that this is anything new. First, he tried to negotiate with the hackers. I don't know if you guys saw the tweet where he publicly tried to negotiate. Let's bring that one up.

I like Murch's response, which was a question mark.

I'll say this: if you think that Arbitrum made a mistake, then, as Smokey the Bear said, you're sniffing some glue, my friend.

Yeah, Smokey said, “How much glue do you have to sniff in order to fight Arbitrum for freezing North Korean hacker funds?”

Yeah, I concur.

Let's not play this game. We invested in a protocol that was on Blast. If you remember Blast, North Koreans hacked this protocol, and it was something like $80 million.

In the end, they froze the money in the hackers' account, and the hackers couldn't move it. People want things to be decentralized and don't want anyone to move their funds, but at the end of the day, if you can stop the hackers from walking away with $80 million, you should. Otherwise, there are all kinds of issues you might not want to deal with in the future.

So, let me join you. Given all the Justin Sun talk, what's your pasta of the week?

Oh, you want to ask about my pasta? Sure. There seems to be a little bit of World Liberty Financial infighting going on there. I'm not taking any sides. We all know the whole World Liberty situation is weird. We don't really know exactly what's going on behind the scenes, but now Justin Sun has decided he's going to file a lawsuit because they won't give him his tokens.

They believe that he was shorting the token on HTX while it was locked and then tried to move tokens. I don't know exactly what the situation was, but he has tried to sue them. I don't think he got the memo that his investment is what got him off the hook with the SEC.

He seems to have decided that he needs to file a lawsuit, which seems insane to me. What is $50 million to Justin Sun? This guy claims to be a decabillionaire or something, so I don't know why he's doing this.

[laughter]

Eric Trump, World Liberty Financial's president, has responded to Mr. Justin Sun: “The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall.”

So, pretty good response there, and yeah, let’s see what happens with this lawsuit.

I mean, it’s just so transparent, right? Everyone knows Trump is in his last term. Democrats are likely going to sweep the midterms. They probably win the presidency because things flip-flop back and forth. He’s just trying to position himself for the next cycle. He’s deploying early.

Justin Sun is deploying too early, I think. I think he should not deploy anything. Give it a year. Yeah, he should give it a break, I think. Justin, we got you already. Taiki, pass it?

Yeah, so with the whole Canto situation, there’s a lot of drama, lots of tension. I couldn’t help but notice that there was this on-chain transaction sent from some random person to the North Korean hacker, which had this message:

“Hey, just wanted to say that LayerZero got what they deserved. Honestly, I’m glad you breached them. They slashed all my Sybil accounts after I spent a huge amount of time and money farming their airdrop. I ended up with nothing. I know 10K is nothing for you, but it would change my life and help me get back on my feet. I’d be beyond grateful if you could send a small fraction to this address. Stay safe.”

Incredible. I mean, he’s e-begging. E-begging. Let the record show: not a dollar has gone into that account, just 11 cents of ETH. North Koreans are not playing. Trust me, they’re not.

This is even worse than Justin Sun asking them. They don’t need $300 million. This guy’s just begging them for 10K. [laughter]

Yeah, yeah. What’s that, like 4 ETH? North Korea can afford that, right? I just thought that was funny. It’s just like, “Yeah, LayerZero. They didn’t give me an airdrop. Please send me 10K.” Dim, what do you got?

Okay, guys, I think you’re dominating today with Taiki. You can pull it off.

Yes, I love these memes. This has to do with our previous topic, obviously, around the hack. Someone calls Dave and explains the ETH situation, and Dave basically responds:

“So, you staked your ETH on the Ethereum blockchain to earn yield?”

“Yes, Dave. Except you don’t want your capital to be locked up, so you actually staked it with a liquid staking protocol called Lido.”

“That’s correct, Dave. And Lido gave you a liquid staking receipt token called stETH in return.”

“Yes, Dave.”

Anyway, this kind of keeps going into this crazy loop that explains all the hoops you need to go through to end up with this receipt token. The guy calling basically says, “You’re 100% correct, Dave.” Jesus Christ. [laughter]

We have strayed further and further from God with these abstractions.

All right, guys. It’s been a busy start to the year. I’m glad we finally got an episode in. Hopefully, we’ll do another one soon. I hope you guys enjoyed it. We’ll see you in the comments, and hopefully see you back here soon. Take care. Bye-bye. Bye, everyone.