市场反弹、Hyperliquid投资逻辑与 Kraken 筹资2亿美元

This is the most interested I've seen traditional—specifically, hedge fund managers—in crypto since Paul Tudor Jones called Bitcoin the fastest horse in the race. That was May 2020, so it's been 6 years since then. This is the most interested I've seen these hedge fund managers in crypto, and it's in Hyperliquid. These weekend markets are a big reason for that.

Santi, what's happening?

Not much, man. Excited to come back on the pod. A lot is happening in the crypto markets and the world in general. It's a good time to be alive, man.

Yeah, good time. Santi's gone rogue on us, and he's vying for our producer position. He's coming for Will's job. He's apparently put all of the data from Empire into Claude and—

All of it.

Santi's like, “I did a bit of analysis,” but I know what that means. You exported our Megaphone data and our YouTube data. You put it into Claude, used the new Opus 47 model, and asked, “How can we improve Empire?”

Not just like that, but that was something I definitely did. I even clicked through every single episode since 2021, 2022, and 2023, then ran a correlation with crypto prices to see whether viewership and engagement are tied to crypto asset prices. That's something that's not actually as correlated as you might think. I also looked at the drop-off rate by episode. It was really fascinating. Honestly, I could spend hours and hours and hours on this type of analysis.

You found that it's not that correlated, right?

No, not that correlated.

Yeah. There are 2 types of content in crypto. One is purely talking about prices, and that's what usually rips on YouTube. Our episodes don't do very well on YouTube; they do way better on Spotify and Apple.

But we got deprioritized by YouTube.

Yeah. Retail people do really well on YouTube in bull markets, and they're the ones who move with the markets.

Yeah. We got no Robinhood.

Basically, the TLDR is that we need to make sensationalist titles, which is just not on brand. I talked to Ryan and David—the Bankless guys—about that at length because they've got the headshots that are like—

I think my ego is one notch too big to—

There comes a time when you just hold the line on it, like—

Yeah.

I will not cross that line. We will not do the Bit Boys of the world.

Definitely don't want to go full Bit Boy.

I respect their category and whatnot.

You never go full Bit Boy. They never go full Joe McCann either. Too far, too soon. Okay, moving on.

1. State of The Market

Jeez. All right, let's get straight to business. There's a lot of news happening. There's just so much to talk about.

2. The Hyperliquid Thesis

Wait, let's talk about— I want to get your take on the general markets before getting into the news. A week or 2 ago, we were talking about markets being down 10%, and now the Nasdaq just hit its 10th consecutive day of gains. That's historically very rare for 2 straight weeks of gains to happen, right? I was going back through the data, and I think that's only happened once—maybe once every 5 years or 4 years, on average. Since the dot-com bubble, since 2000, it's happened once every 5 or 6 or 7 years. It's pretty rare, what just happened. I love your take on the old stock market.

Here we go. Thank you, Will. The last 10 days have been unlike any 10-day period in the market since 1950. The S&P 500 is up 9.8% in 10 days, which is in the 99.7th percentile of all 10-day returns in history.

Yeah, I was thinking about that today, and it goes back to just being optimistic. If you're optimistic, you're positioned well. I don't know where this ends, how it ends, if it will end, or if this is a new paradigm, but it's hard to overlook.

The Hyperliquid piece was very impressive. Colossus—we talked about that last week, I think.

Macro-wise, I was listening to that Leopold Aschenbrenner podcast. It was a 4-hour podcast, and the guy basically called it 2 years ago. When he got fired from OpenAI, in hour 1 or 2 of the podcast he goes into this whole discussion around how we're going to reach AGI faster than most people think. When that happens, everyone talks about this doomsday scenario: if it's in the hands of a different regime, it's no different from a nuclear arms race. He was saying we should nationalize these AI labs and not open-source them because this could be existential. You could sense a lot of nervousness in his voice. He said, “I just get the feeling that there's a handful of people who really understand how far this is going to go and how fast, and I don't think there's enough gravity in the market around it.”

This was the piece from 2 years ago, right? “Situational Awareness.” I tweeted out, “I finally read Leopold's essay on AI. Everyone, regardless of your interest in AI, should read this. I took notes. They're sloppy, but figured I'd share. Welcome to the future.” It went very viral—about 10,000 bookmarks and 1.6 million views.

My foolish mid-curve thing here is that I took notes on the whole essay. I didn't—

You didn't buy anything.

I didn't buy anything. The guy's up. What's his fund at, for people?

He raised an initial fund, and he's at $5.5 billion now. He rotates his book quite a bit. Some of his largest positions now are in Bloom Energy. He took a very big position in Bloom Energy—I think he put $300 million in it, now worth $1 billion.

He also took a big position in SanDisk—memory chips.

Right?

What people don't talk about is that his wife or girlfriend is the chief of staff to Dario Amodei at Anthropic.

Oh, really? So he's got some nice info.

Funny. Before running the hedge fund and before joining OpenAI, I think he was at Future Fund, which was Sam's endeavor at FTX to do grants. In another part of the podcast he did with Dwarkesh Patel, he talks about leaving OpenAI and about working with Sam. The lessons he learned there were pretty interesting, actually.

All in all, here's the stat for you about the FTX book: Sam bought a 7.8% stake in Anthropic. I don't know if you saw this week, but they're raising at an $800 billion valuation. That stake in Anthropic would now be worth more than all of Coinbase. FTX's stake in Anthropic would be worth more than all of Coinbase today.

Yeah, and that was liquidated by the trustee.

Yeah.

Right.

Yeah, at like $1.5 billion or something.

Yeah. Crazy.

Yeah. Talk about the creditors—they've all been made whole and then some.

So, is this market—maybe just get back in the market, then we can talk news? It feels like public market investors are very skittish right now. They're very jumpy, looking for something. There's all this AI-related fear. It's 2 sides of the same coin: a ton of fear, but also a ton of excitement and optimism. It creates these pretty intense drawdowns, but it feels like the market also wants to go up. The market is realizing that there's no way to—I mean, this thing's a runaway train, it seems like.

On 1 end of the spectrum, you're in the thick of it: people don't really know how to underwrite AI, good and bad, in their models. They're still trying to make sense of it in the wake of all these labs coming out with a ton of progress. It's hard to keep up with that, and it's causing a lot of nervousness, to your point, combined with this sense of thrill and excitement when you hear a podcast.

It doesn't take much to go listen to a podcast like Leopold's, Elon's, or some other Dario Amodei podcast, and you have this sense of, “We're at a precipice of human civilization.” It's dawning upon us. You also have rockets going far out into space and coming back. The market is definitely skittish but willing to go higher, right?

True. How are you—best to talk personally, because we can all pontificate—but how are you positioned? You tweeted out “Situational Awareness '24” like—

I haven't changed anything in the book. I didn't sell. I'm just a bag holder.

I just buy things and sit on them. I’m a bad podcaster, right? I’m not an interesting podcaster because I’m not trading that much. I rode Robinhood up from whatever it was—$10 or $15—to $125, and I’m still holding Robinhood.

Just buying some more Robinhood.

I just—I think I told you either here, on Twitter, somewhere, or by text: I bought a bunch of DoorDash. Yeah.

I thought your thesis was really smart: looking at the companies that people spend money on. For people who didn’t listen to the prior episode, you said something that really resonated with me: I looked at my spending year over year, and there are a couple of companies where I’ve consistently increased my spending. Amazon was one, and I think you made an investment back then. DoorDash is another one where you’ve just continued to buy.

I had a class my freshman year of college where my friend’s dad came in. This guy had, I think, a multibillion-dollar hedge fund at the time. I don’t know the size—maybe $5 billion to $10 billion in AUM, whatever it was—and he said all of his best trades in his life had come from looking at what was happening in his personal life, and then it became his kids’ lives.

When his daughter came to him and said, “I want an iPhone,” he bought Apple. Then she said, “All my friends are hooked on this app called Snapchat.” He did one of the early rounds of Snapchat. There were about 5 examples, and I don’t remember all of them.

He basically said, “You guys, there’s this term called alpha.” We were 18 or 19. He said, “There’s this term called alpha, and you don’t realize how much alpha you have by being close to the metal, by being young. Every year you get older, it’s harder and harder to get alpha.”

He said we were moving to a world where there was no alpha left on the internet, so we had to get alpha from realizing and seeing things in person.

Yeah, before that, Reddit forums were full of alpha. There was a hedge fund that just scoured Reddit forums. The manager made a fortune because he went long Mattel when the Barbie movie was coming out. He was reading the Reddit reviews and discussions and said, “Holy shit, this is a great movie.” Rotten Tomatoes would have told you that it was a terrible movie, but he said, “No, no, no. Mattel, the maker of Barbie, is going to make an absolute killing.” Lo and behold, it did.

Go whip up Claude instances and scour Reddit for all kinds of information.

Let’s talk about the news. We’ve got Tether coming in and backing Drift. Tether came out with a wallet—2 Tether stories. We’ve got Rob’s big VC manifesto, which maybe we can save until next week when he’s on. Kraken is definitely gearing up for an IPO. They had a $200 million investment from Deutsche Börse.

We also have the Hyperliquid Colossus piece. I don’t think we talked about that last week because I think it came out earlier this week. It’s probably what you’re thinking of—we talked about it on our episode with Logan, which comes out on Monday. I’d love to hear your take on Hyperliquid, so maybe we can start there.

This Colossus piece was by Patrick O’Shaughnessy, who runs a podcast called Invest Like the Best and an asset management firm called Positive Sum. He launched a physical magazine, which also comes out in digital format, called Colossus. They do these amazing profiles. I’d say they’re the best profiles on tech and finance people in the world right now. They did one on Jeff, the founder of Hyperliquid. It was a really good story, and I’d recommend people read it.

I’m curious what you thought of the article. I’m curious what you think of Hyperliquid. I’m curious what you think of Jeff. I’m curious what you think of traders running companies. Just give me your brain dump on Hyperliquid right now.

I’m going to steal your thunder because you said something during the Logan podcast that’s very true: I’ve never felt this amount of interest from outside, non-crypto people in a really long time. Similar to how Polymarket really came to light and became what it is today because, during the contested presidential election, it caught lightning in a bottle, Jeff has now captured the imagination and interest of Wall Street.

Unfortunately, you had to have this geopolitical catalyst where people became very interested in trading commodities over the weekend, and Hyperliquid is capturing a lot of the interest and attention. Finally, I think—if you think about bringing blockchain onto Nasdaq, Nasdaq on blockchain—I’m very encouraged by what’s happening in Hyperliquid.

I don’t think it stops if there’s a resolution in Iran and the Strait of Hormuz, or whatever happens there. I think the train has left the station, and you’re going to see way more volume and activity because right now I believe there’s more volume of non-crypto stuff than crypto stuff.

Is that true?

There’s more non-crypto volume, yeah. Commodities are now the second-biggest asset on Hyperliquid behind Bitcoin.

Behind Bitcoin. I think, if I want to make a prediction and stay accountable, I think commodities flip Bitcoin later this year. Do you think commodities flip Bitcoin?

Commodities will flip Bitcoin later this year, and Hyperliquid can become a top-5 crypto asset.

Interesting.

Sitting at $25 billion, I think there’s a clean path for it to be $100 billion. I’m looking at Robinhood and Coinbase, which sit squarely in that camp. I think Hyperliquid, if they continue to execute—and I think they will—they have the technical talent. They have won over the minds of crypto traders and now increasingly Wall Street traders.

So here’s your data: Bitcoin makes up 25% of Hyperliquid open interest. Commodities are 17%. Ethereum is 16%. The HYPE token is 10%. The indices—I think that’s leveraged S&P—are 7%. L1 tokens are 4%. Equities are 4%. Solana is 3.5%, and then it goes to meme coins, privacy coins, DeFi, and so on.

I think it’s one of the most interesting stories—maybe actually the most interesting story—in crypto today. The interest in oil markets on Hyperliquid was really driven by TradeXYZ. When you saw the Iran war, or the attack, or whatever you want to call it, you had surging volume and open interest.

The pricing was interesting because oil markets are closed over the weekends, right? So you had weekend oil pricing, and it crossed the chasm into the mainstream. If you look at the daily volume and daily open interest, they skyrocketed with the Iran war.

We built this website called Weekend Markets. I don’t know if you saw it, but I can show it to you. It’s very cool. When traditional markets close, TradeXYZ is the only live venue for price discovery.

For people who don’t know, when Hyperliquid launched the ability for other people to create perpetuals—that was HIP-3 or HIP-4, whatever it was—TradeXYZ became the only venue for price discovery on the weekends. They now have billions in weekend volume and a 50-bps median error in predicting the Monday open.

TradeXYZ prices are now the most informative signal in finance relative to Friday’s close. We built this whole website called Weekend Markets where you can see all of the equities and commodities that trade. There are a bunch of charts, a map of everything, analytics, and the methodology.

It’s very interesting. There are probably more traditional capital allocators interested in these Hyperliquid weekend markets than in anything else in crypto today.

Yeah, oil is doing about $500 million in volume and $350 million in open interest. I’ll have to check that dashboard out. But the S&P—what are you seeing?

I know a lot of folks ping you, especially non-crypto folks, so you’re actually a really good first entry point for a lot of them. Are they interested primarily in commodities, or are they also interested in the S&P?

I think people are most interested in Hyperliquid, actually. This is the most interest I’ve seen from traditional hedge fund managers in crypto since Paul Tudor Jones called Bitcoin the fastest horse in the race in May 2020. So it’s been 6 years since then.

This is the most interested I’ve seen these hedge fund managers in crypto, and it’s in Hyperliquid. These weekend markets are a big reason for that. I got a call from a hedge fund manager this week who asked me to explain Hyperliquid to him. He said he found it because he spends most of his time on Twitter.

This is a massive fund. He spends most of his time on Twitter, and most of his team spends most of their time on Twitter. They get most of their trade ideas from Twitter now, which just goes to show the importance of Twitter.

The trader, he said, one of the best traders he knows, posted something on Twitter about Hyperliquid. He had never heard of Hyperliquid until a couple of months ago. He went down the Hyperliquid rabbit hole and listened to podcasts that Jeff had been on. They can’t buy HYPE in the fund, right? So they found the Hyperliquid DAT. This was kind of the bull case for DATs, right? He can’t actually buy HYPE, so he bought the Hyperliquid DAT, and it’s one of their biggest positions. He’s like, “Look, it’s one of the few uncorrelated things I can buy right now. Buying Hyperliquid is uncorrelated to all these AI trades that we have going on.”

Yeah. So I just prompted the AI. I said, “Explain Hyperliquid to TradFi.” For all our dear listeners, what it actually is: Imagine if the CME took its matching engine, order book, clearinghouse, and margin system and rebuilt the entire stack on a single integrated system, where every trade, liquidation, and funding payment is written on an immutable public ledger. That’s Hyperliquid.

Is there a possibility you could see a massive rerating of Hyperliquid if they get approved in the US?

You could see a massive rerating of Hyperliquid if they get approved in the US. I’m way out of my depth talking about this because I’m not a lawyer, a regulator, or anything like that, but they did hire Jake Chervinsky to run the Hyperliquid Policy Institute, or whatever—I forget the actual name. I think it’s the Hyperliquid Policy Institute.

Imagine what, after 2008, futures now have to trade through regulated entities like the CME or Cboe or whatever it is. I’m talking out of my depth here, but my understanding is futures have to go through these regulated entities, and the reason for that is transparency. I think it was Dodd-Frank that made this happen, and the reason for this is transparency: You have to see all the trades and make sure nothing blows up.

If you’re Hyperliquid or you’re Jake, I’m sure your argument to someone like the CFTC is, “Hey, you enforced that. You made this rule happen because you want all the trades to be public, and you want to make sure nothing blows up. Well, we’ve got this system called DeFi. No, things blow up, but you can see everything, right? And so it’s fully transparent.”

Liquidations work pretty well, and Hyperliquid got tested on 10/10 and, for the most part, worked pretty well. I would say that should be their argument, if they’re not already arguing it. Imagine HYPE gets approved in the US—boom, instant rerating.

Yeah. The CME is a $117 billion market cap, so the market always likes to understand comps.

I think there’s a possibility.

Yeah. We’ll have to—people should go listen to that episode that we recorded with Jake. What probability would you ascribe to it being offered in the US? I’d give it a 30% or 40% chance. When you go talk to hedge fund guys, what is the bear case? Have you heard anything negative around Hyperliquid?

Yeah. They’re like, “This is just never going to work.”

They’re just learning about Hyperliquid. I don’t think they even necessarily have a bull or bear case. I think many of them are just finding out about it now.

Yeah.

Yeah. So—

But look, I mean, let’s not forget Solana at its peak was a $100 billion protocol, maybe more, with a lot of memecoin activity. In the podcast with Logan, we talked about volume, and I think that peaked in January 2025—or 2024? No. You had fees at one point; there was, like, in January 2025, $500 million in revenue for Solana, mostly coming from memecoin trading.

Now let me ask you a question: How would you give the same multiple to protocol earnings coming from memecoin activity or commodities trading from TradFi?

Yeah, commodities trading.

Exactly. Okay, that’s why I think you see a path where Hyperliquid could be much larger than that.

3. ZKsync Ad

Yeah. So look at this. This is the top protocols mentioned at DAS, right? We scraped all the panels, firesides, keynotes—everything—to find what was mentioned the most. Bitcoin and Ethereum were obvious massive outliers. Bitcoin was mentioned 742 times. Ethereum was mentioned 143 times. Hyperliquid was number 3 at 66, followed by Morpho at 59, then Solana, Canton, and, surprisingly, Espresso. Then Circle. I have a lot of love for Espresso, but I didn’t expect it to be number 7 here. Then Circle, Stellar, Avalanche, Jupiter, Tether, Maple, Optimism, Superstate, and the list goes on.

4. Tether’s $150M Drift Recovery Plan

What other news are you looking at this week?

There was just a quick one: Tether invested in Drift through this mechanism to make the protocol losses whole, similar to the Bitfinex token, right? Basically, the affected parties will be paid out as soon as the protocol starts making more fees. I thought that was good to see. It’s always good to see when people that have suffered losses eventually see a path toward making them whole.

Right. $285 million in losses. I think this structured recovery plan is up to nearly $150 million in combined support, $127 million of which is Tether, right? It looks like, instead of a full recovery or refund, this is closer to a plan where users recover their hacked amounts by trading on Drift.

Did you see this?

Yeah, yeah.

Yeah.

So it incentivizes people to use Drift, and I think they have to use USDT, basically. So it’s a win-win for—

Which actually makes sense.

Yeah.

There was a lot of commentary in the timeline about USDC. I believe this happened during a time when people reached out to USDC to freeze the funds, and they didn’t act as quickly. Obviously, Tether also has the ability to freeze funds. There was some commentary around it being a pretty interesting deal—a big win for Tether and a loss for Circle and USDC.

So that’s that. I don’t know if there’s any more commentary. What do you think of this style of recovery plan? Any other thoughts on it?

No, I mean, it’s a good mechanism, right? It incentivizes people to use a protocol, so it’s a good way to structure these things. It was quite clever, actually, and probably the only way to do it, in my opinion, unless you have a massive dilutive event. I don’t know if there’s probably some of that at the underlying Drift entity.

Yeah.

5. The SEC’s New DeFi Guidance

That caught my eye. What else? Wasn’t there new SEC guidance coming out?

The SEC came out this week and said certain self-custodial DeFi interfaces fall outside of broker-dealer rules. One of the main attacks by Gary Gensler and his regime of terror was trying to make these DeFi protocols register as broker-dealers. You’ve got to get a license and all that kind of stuff. It’s obviously very against the permissionless nature of these things and, in a way, not even really possible.

On Tuesday, the Division of Trading and Markets issued a staff statement saying that crypto wallet interfaces are exempt from broker-dealer registration. So the SEC is telling MetaMask and Phantom, and I think basically every DeFi front end, that you are not a broker. That’s really important.

For years, one of the biggest legal questions in DeFi was whether building a front end makes you a broker. If the answer was yes, every browser extension that you use, every DEX interface, Uniswap, MetaMask—everything—would need a Series 7 license, a compliance department, SEC oversight, and a broker-dealer license. Now you don’t need that.

They created a category called—what is it called?—a covered user interface. This includes interfaces where you help users convert transaction parameters into blockchain commands. There’s an exception here, which is that custodial wallets are excluded. It includes self-custodial wallets like Phantom and MetaMask, browser extensions, mobile apps, and software embedded in self-custodial wallets. So, very big update. I’m surprised some of these DeFi tokens didn’t rerate. Did they?

No, no. The thing that did rerate because of regulation was Robinhood, but it was unrelated to that. They just lowered the $25,000 minimum equity requirement for day traders.

I mean, a lot of things are up, right? Aave is up 20% on the week. Bitcoin hit $75K. I think that’s because there’s a higher likelihood that clarity comes out.

So—

You think?

That's my take on why things have rerated. If you went into this roundup last week, it was a 50/50 dead split, right? Would the CLARITY Act pass? Fifty-fifty. Everyone—I was in D.C. last week—was saying 50/50. I'd say now it's moved to probably 60/40 or 65/35.

The other big update is that you had a couple of well-known crypto people on CNBC saying that if CLARITY didn't pass by April 1, it was completely dead. I don't know why they were saying that, but that kind of got incepted into people's minds.

From my understanding, if CLARITY doesn't pass by—we're already past April 1—if it doesn't pass even by May 1, we've got time. We've got until maybe August, maybe even 2027. Obviously, the longer the bill doesn't get passed, the more crappy stuff could get put into it.

Someone said—

“If this doesn’t get passed until mid-2027, this becomes the DEI bill, right?” So the longer you wait, the more stuff gets pushed into it.

6. Microstrategy's $STRC

Yeah, I think this is why things are actually rerating. This also goes back to the fact that I tend to think crypto is performing well because macro is performing well, the stock market is performing well, and it's very correlated. As it relates to Bitcoin, obviously MicroStrategy did a massive purchase funded by the proceeds from STRC, this perpetual preferred stock—

Via an ATM offering. That was pretty big. I think they bought 13, close to 14,000 Bitcoin. So that obviously continues to—I think it's one of the largest purchases they've done. Their total holdings are crazy: 780,000 Bitcoin, and they've spent close to $60 billion. Their average cost basis is $75,000.

So that's pretty interesting. I think this is something that the market is going to continue to pay attention to. Other than the premium or the discount, now it's this STRC perpetual preferred stock.

There's an interesting protocol called Saturn whose TVL has also gone up quite a lot. It's basically a wrapper on this thing. I think it's paying out an 11.5% yield, bringing STRC on-chain. I met those guys at a Wharton conference, and they were telling me all about this stuff.

We should—

We should bring Saylor on the show. I was actually at MicroStrategy's office in Tysons Corner, Virginia, last Thursday, and the whole meeting was about STRC. They're going to do some really interesting things with STRC.

I mean, it's 11.5%. There's a lot of discussion around this, and I think you'll find all kinds of takes on the timeline, but the facts are that STRC is paying an 11.5% annual dividend.

That's a meaningful increase and a pretty juicy yield. We've been discussing a lot of DeFi yield, right? When you put that into perspective of how low yields are on-chain, I'm not going to comment on the risk. We'll save that for a later conversation. The Saturn guys were giving me some good insights on it, but I do think that it's worth bringing—

A panel in here to talk about it. What is this 11.5%? Where's the yield coming from?

Yeah. How did—

Have you dug into STRC? I'd love to get your take on the 11.5%.

I'll save it for a more informed view. I do have preliminary thoughts. Most of it is just borrowed thoughts from the Saturn guys who gave me their own take, but I need to get smarter on it, to be honest.

Yeah, cool.

Yeah.

7. Kraken Raises $200M From Deutsche Börse

What else do we have for the week?

So we talked about Kraken. They raised $200 million from Deutsche Börse. I don't know if they go public this year.

You don't think so? In everything that I've talked to folks who have done the SPV and all this stuff, I think—I don't know. Well, here's the thing: I think it all depends on how SpaceX performs, and maybe Stripe, if it IPOs. But I think the SpaceX IPO will either be a huge detonator, good or bad, for the market.

To me, that is going to be the line—as you like to say, the line in the sand—this year. How that IPO performs is going to dictate a lot of what else happens after that. I wouldn't be surprised if people are lining up saying, “Look, let's just prepare,” because if SpaceX has this massive bid and wealth-generation effect, the gates will be open, right?

After SpaceX, I think you'll see back-to-back IPOs.

Yeah. What do you think of Kraken's valuation coming down from $20 billion in late 2025 to—I don't know if you saw this—$13 billion? I did not see that. Was that the valuation at which Deutsche Börse invested?

I think so.

I'm guessing it's something to do with them buying secondary. I saw one line about it being secondary. So I'm guessing it's a 35% discount—or 35% off that $20 billion mark—because they're buying common instead of preferred, I would guess, but I'm not entirely sure.

Yeah, you're right. It was $13.3 billion. They bought a 1.5% stake in it, probably structured as secondary. There was also a somewhat security incident at Kraken—not related to user funds, just someone in their support group, I think—but, as a footnote, Kraken is a very well-run machine and can grow into a Coinbase-type outcome.

Yeah, and Arjun Sethi is doing a fantastic job, for what it's worth.

So I'm encouraged by that, actually. I might look in the secondary market. Last time I looked at their numbers, I got an offer in their SPV, and one of the managers was doing it. What I wanted to look at when I evaluate—I’m going to invest in Backpack, for instance—is the cost structure. Backpack is also much smaller in scale but very interesting. Armani Ferrante is a very good builder.

What you want to look at in an exchange model is how much of their cost structure is fixed and what is variable, because inherently they're tied to crypto asset prices. When prices are up, obviously they're very profitable. I did an analysis back in the day of Coinbase, Robinhood, and Kraken. Of the three, Robinhood was best positioned because they have more diversified trading volume that is ex-crypto, but they were also able to cut costs quite a bit. Robinhood was number 1, then Coinbase, and then Kraken.

To me, that was a bit—and I appreciate that this was pre-Arjun's time, so there's been a lot of reshuffling, and they brought on more competent operators. Maybe that's me middle-curving it, but I want to see a lot of operating leverage in any business, and not as much fixed cost—or at least the ability to flex up or down, right? What you don't want is margins getting crushed when you have a drawdown, and I underwrite a business through the cycle.

That was something that kept me on the fence, but I've heard from a bunch of folks recently that, in terms of how they built the DeFi team, for instance, and other parts of the business, they're really on top of the game, to be honest.

Yeah.

What is going on with xStocks? Anything? I mean, we talked about Hyperliquid and these perps on S&P, but I've been seeing some commentary on the timeline around pre-IPO.

Yeah, like Anthropic and a couple of others. I think reasonably low volume, to be honest. I haven't seen anything as dramatic as oil, of course, but we've got some data on this. Let me pull this up. You can see, actually, this is the xStocks data. It's still small, right? $17 million.

Yeah. But I talked to the xStocks team at Kraken the other day, and they're—I think a lot of the exchanges, including Kraken, are betting that on-chain equities will have a massive year, a massive, massive year. So I think that's a bet not only of Kraken's but of other people's as well.

So, did you see Nikita Bier's post? Here, let me share this. Nikita Bier, who's the head of product at X, came out with this:

“X has always been the best source of financial news for traders and investors. Billions of dollars are allocated every day based on what people read on the timeline. Today, we're launching our new Cashtags feature in the U.S. and Canada on iPhone, bringing real-time financial data to X.”

Here's how it works: When you search for or post a hashtag or contract address, X will automatically suggest matching stocks or crypto tokens. Anyone who taps a hashtag will see a post mentioning it along with its price chart, so you never actually leave X.

So, yeah, this is X direct. I mean, this is trying to complete Elon's vision, right? This is them trying to let you build the all-in-one financial platform.

8. Why Have L2s Underperformed

What's going on? Anything interesting going on in the Ethereum ecosystem as of late? It's been crickets, other than Tom Lee claiming that Ethereum is going to 62.

I don't know. I mean, yes, but I'm not deep enough in to talk about it. I talked to some founders at EthCC, and the vibes were low, but there was actually some cool stuff—

Happening.

What has been going on is that EtherFi migrated from Scroll to Optimism mainnet. They migrated over 70,000 cards, and I think—

Look, I know you're an investor in Scroll, so I don't know how much you're able to talk about this, but it seemed like Scroll did something maybe kind of shady. They jacked up the fees when EtherFi was trying to migrate from Scroll to Optimism.

They manually jacked up the fees, which would cost EtherFi way more money than it should to migrate off. One of the founders of EtherFi tweeted out that the situation was even crazier than anyone would ever believe, or something like that.

Yeah.

Yeah. What do you—I don't know if you have thoughts on that.

Yeah. Well, to put it in context, EtherFi is carrying the boat for Scroll in terms of TVL. I think they had—if you strip away EtherFi, there's practically very little TVL.

I don't have insight into what's going on. What I do know, looking at what is happening on-chain, is that over the 6 days in early April, the network raised the amount it charged to publish data on Ethereum mainnet by a factor of 1,000—like, 2 orders of magnitude—and that forced users to pay over $50,000 in excess transaction fees.

The timing was suspicious: it happened to be the exact same time EtherFi was migrating over. The on-chain data is there, so it's definitely pretty damning.

What went wrong with Scroll?

I don't know, man, to be honest. Scroll was one of—I was an early investor. This was during the era of ZK rollups and the zero-knowledge-proof roadmap, which I think is very real and has a lot of merit. One of the co-founders is a deep cryptographer, and that, to me, was interesting enough to put on a position.

Not just Scroll, but other networks have faded into no man's land. ZK—tell me an L2 that has performed well. This goes back to Vitalik's post earlier this year, I believe, which talked about the roadmap for L2s—or lack thereof—and put into question the need and role for L2s.

I think it's an admission that the market had already woken up to. If you look at the performance of Optimism, Arbitrum, zkSync, and many of the other networks, it's pretty dire. If I look just at the price, I'm going to pull it up here: Scroll has an $8 million market cap and is fully diluted at $45 million. That $45 million is below the first round, to put into perspective how dire things are.

Yeah. So does it come back up? What does it need? Where's the volume going to come from?

It ties into a lot of the conversations I've had with infrastructure providers, some better than others. You're at a point where, whether you want to see it or not, it's a melting ice cube. Back in 2017, there were no users and no traction, so you could sell the dream. That's not a damning comment; every founder, whether you're Elon Musk, Scroll, or anyone else, has to sell a dream, and then you have to back it up.

Crypto spent so much time in this suspended era of white papers and trying a lot of things, and the market had a lot of patience for that. Today, that is basically nonexistent. I said a year or two ago that there was going to be a growing divide between the haves and the have-nots in crypto. Today, that divide is very wide when you compare the activity happening in Hyperliquid with pretty much everything else in crypto.

There are some novel attempts. I think the neobank category is pretty hot right now: you have Plasma, you have EtherFi, and you have good attempts like Aave, which has its own neobank attempt. Three theses that I have as an investor, which I translate into my personal portfolio and investment, are that the demand for stablecoins outside the US is and will continue to be dramatic, and it's unmet.

The world is only going to become more volatile, and there's a big affordability crisis. Those 3 pillars have on-chain implications. Position yourself accordingly.

But it's very tough. Even Solana has come out of its—I mean, the volume and the revenue of Solana, again, we talked about this on the Frictionless podcast, is down from $500 million at its peak to $20 million. So what is going to be the catalyst that brings Solana back there?

There's good stuff happening under the hood, don't get me wrong, like Western Union deploying its pilot there. They have a very competent set of engineers and teams that are genuinely trying to figure things out. But in my conversations with a lot of these teams, it's like you have to go for the jugular. You have to either use your capital or go out of your way to cement yourself as an enduring protocol.

The second-to-last piece I'll say is that I think now you're going to see protocols go to zero—genuinely go to zero. Not float around and say, "Hold on to the dust, because dust becomes moon." I don't think that dynamic is going to be as prevalent as it was in prior cycles, where you're holding a bag of LEND, for instance, which migrated to Aave.

I think the market would rather just say, "Look, we're going to rally behind Hyperliquid, and we're going to rally behind Bitcoin." Other than Hyperliquid and Bitcoin, what is, in your mind, something that, when you talk to your normie friends, they'd be remotely excited about or have heard of?

Well, Hyperliquid. What did you say? What's the other one?

Bitcoin.

Yeah. I mean, stablecoins and prediction markets are the hot things.

But both prediction markets don't have a token, right?

Yeah. Yeah. Yeah.

I saw—I don't know if this is true or not—

But things lag, dude. Things lag to the normie market. We've been saying for a while: What were the 3 hot things last year? Perps, prediction markets, and stablecoins. If you were doing one of those, you got funding, a lot of users, and a lot of money. If you weren't doing one of those 3 things, you got crushed.

Now it flows into the normie market. There'll be 3 new things this year. I don't know what they are, but there probably will be.

Will there?

I don't know. Equities on-chain, like tokenization. Equities on-chain, like, there.

Yeah, I think tokenization actually—it feels funny to say because tokenization—

Feels like such a thing that's been around for so long, but yeah, I think tokenization is probably one of the 3 big things this year.

I met with Daniel from Tokeny the other day. He pioneered ERC-3643, which is becoming more mainstream now for RWAs. Definitely, RWAs are something that, if I want to talk more about one particular topic on this podcast, it's what traditional issuers are doing and will be doing on-chain, and where that will happen. In their own networks? I think it will happen in public, permissionless networks.

Yeah.

Wasn't there something—I saw Jamie Dimon come out saying something more about this? I love this arc of Jamie Dimon going from totally against crypto to now being way more in the camp of blockchain. They talked about Arbor; Arbor is doing some interesting things.

Jamie Dimon has gone from being totally against crypto to being closer to Larry Fink than he's ever been, and that gap continues to close every month that goes by. He's actually been vocal about the CLARITY Act. At one point, he really went after Brian Armstrong.

But yeah, I think TradFi is trying to buy a little bit more time before this thing passes as they figure out their internal strategy and make sure that their points really get reflected in the bill. Going back to the earlier point, I think it will have passed.

All right, we're going to wrap with some YouTube comments because I haven't read these for a while, and I just pulled up our YouTube.

As you do that, here's an interesting tidbit. I don't know if you know this, but Jamie Dimon was on the air and told CBS that they're considering prediction-market services.

What does that even mean? Prediction-market services? They're like, "Let me get my rake. Let me get my—"

So I—well, I had a post about this—

Bill on something? What is that? What?

Yeah, but everyone is going to want to build prediction markets. For me, prediction markets are another form of a derivative, right? Or an insurance product, like a CDS, basically. The lines are increasingly blurred there.

Yeah.

What's a YouTube comment? Hit me with that.

YouTube comment. Do you want the good ones or the bad ones?

Always the bad ones first.

All right. "Santi, who famously completely missed Hyperliquid despite being full-time in the space, at the same time sent Infinex to zero before launch. I like Santi, but it sounds like he doesn't use DeFi at all. He hasn't farmed for years."

How can you be qualified to talk about any of this stuff?

How are you qualified, dude? How are you—

Not qualified? How are you qualified? And by the way, I've never said I'm qualified.

Santi is many things, but definitely not a contrarian. He is skilled at telling us what has already happened, not what will.

Damn, you're getting roasted.

Thank you, man.

Oh, here you go. “Just want you guys to know Empire is my favorite crypto podcast. I live in Bangkok, so I couldn't be a D. Fair. Fair experience.”

So, all the negative comments are about me. There's no negative comments about you because you haven't been on the show for a while. There's a lot of talk about how—

And Rob has his entire Dragonfly team censoring comments.

My good takes, my good looks.

I love it, man.

Any content of the week?

9. Content of The Week

I think I mentioned this, but I've been obsessed with the Leopold Aschenbrenner podcast. It's 4 hours. I'm still only 2.5 hours deep.

And then, yeah, I know that one. There's another podcast that I want to listen to about this VP of Amazon, by the way. It's not Leopold Aschenbrenner. So anyone who's going to roast me on the timeline for being wrong on that, please. There's another podcast about this Amazon VP, Ethan Evans, I believe. So, yeah, I want to listen to that. Apparently, it's very good. A couple of people recommended it.

All right. I'm saving it.

What about you?

I'm just the same old. I'm going back and listening to David Senra's Founders podcast. I haven't listened to that in a while. I'm listening to his founder interview one.

I just listened to Tony Xu. I've been talking about that DoorDash one, but I just listened to Evan Spiegel, which is decent. I'd say decent. Some people are just such good storytellers. Some people have the it, and some people don't. Tony Xu from DoorDash has the it.

He's got the it.

Evan's kind of got the it.

You know who has the it this week?

Me.

Other than you. You always have it.

Allbirds has the it this week. It's the wildest corporate pivot that I've seen.

Allbirds has the it. I saw a new thing. It was like Allbirds just dropped their AI finally. It's like a ChatGPT wrapper. You go to Allbirds.ai, you type in any question, and it just goes, “Shoes, shoes.”

Forget about it. The stock is up 10x—or was up 10x yesterday—on the news.

We can all definitely agree that we're closer to the top than we are to the bottom when these things happen.

All right, content of the week. I'm watching Seinfeld for the first time.

This is just in the 20 minutes of spare time you have to fall asleep.

We're working on a few things right now that aren't public yet and just sprinting. I've got 20 minutes at the end of the day where I just need to turn the old brain off, and I usually don't even make it through a full Seinfeld episode. But, yeah, it's good.

I think this is how culturally disconnected I am. I think I've seen 1 or 2 episodes of Seinfeld, maybe.

I've never seen it.

Yeah.

Do you have a TV in your room?

No, no. I don't sleep with my phone in my room.

Either.

Yeah.

No, I don't have a TV in my room.

Which I should—not because of pride or anything. I should have a TV. I'd love to have a TV.

No, it was actually a colossal botch. When we bought this place, the guy we bought it from had a huge TV in the corner, and it was hanging up—a beautiful setup. I was like, “I don't want a TV in the bedroom.” Should have just kept it.

So, okay, parting thoughts. We're going to talk about how to make Empire great again. We will continue to level up. I want to focus on more public companies doing interesting things in crypto. That includes Better, that includes Figure, that includes Klarna, obviously Western Union—more of that.

I think I want to focus on that because, other than Hyperliquid, this might probably be the biggest detonator for the next cycle if a lot of these traditional companies start implementing. There's a lot to talk about. I've been following it, kind of going down the rabbit hole of what's happening—chatting with the Framework guys about positioning Better, looking at Figure. Kind of interesting stuff happening.

Yeah. We had a call with the Figure guys a couple of days ago. It's interesting.

All right.

All right. Well, let's leave it at that, man. Thanks, everyone, for listening. Continue to roast us—or me—in the comments and in the Telegram group. We'll see you next week. Cool. Cheers, everyone. Have a good weekend.