叙事与估值、Hyperliquid 的 TAM、Pump 的问题与 Ethena 的代币重置

Nothing said on Empire is a recommendation to buy or sell any investments or products. All right, everyone. Welcome back to the roundup.

We have Santi, we have Rob. I tried to match you guys. I'm wearing a button-down shirt today, and you guys want a T-shirt.

You know, it's the last week of the summer. I'm letting myself be a little more casual. Jana's trying to close the quarter and put on his suit and tie to make sure he hits quota, but Rob and I don't have quota this quarter.

No, no. That's how you know Santi's got no quota: the quarter doesn't end in August. It ends in September.

That's right. That's right. That's right. A monthly quarter. Monthly quarter or quarterly quarter. There you go. Rob, what were you saying?

Well, I was going to say you do have a little bit of a Murray Hill-in-2023 vibe, like selling point-of-sale.

I've got to go change my outfit. Hold on. That's the worst.

Turtle.

That's horrible. That's horrible.

I'm sorry.

1. Is Crypto Risk Worth It?

What are we talking about this week? Let's talk about markets. Santi, are you still bearish?

Bearish crypto or bearish the rest of the economy? Bearish crypto. Obviously, I got a lot of hate online saying, “Oh, that guy's a plumber that's sidelined.” For better or for worse, you can't be sidelined when you have all these bags that are vesting. Even if I wanted to sell, I can't just sell overnight. I still have positions in—I don't know, go [expletive] look it up.

I'm loving it because I'm a genius, not because—well, I am invested and locked. I was writing about it, and the short answer is that I still don't think you're getting paid enough to take this type of risk. There's still more risk, and I don't think the risk-reward is there relative to other opportunities.

I appreciate that if you're only investing in crypto, it feels like a good moment. Last episode, we talked about Hyperliquid. We talked about how I was very surprised that Bitcoin didn't go below $60,000, and I felt we had bottomed there. It was like, “Okay, Saylor sold. We were all in agreement that it felt like we could go much lower.” If you didn't go below $60,000 after all of this stuff, it feels like a bottom.

We're in a very different state of the world today, so we should celebrate that. That's not a bad thing.

I mean, that was a tough time to record the pod because hours after we recorded, you know—

We recorded on Wednesday. Thursday was the White House—

Thursday. Yeah, exactly.

No, no. The White House thing happened like 2 hours after we recorded.

No, it was Wednesday. It was August 19th. We recorded on the 19th, and then obviously they said we're going from $2 trillion to $4 trillion and pumping a bunch of liquidity in. The first thing that happened was this $2.7 billion short squeeze, and then the more important thing, I think, was that financial media quickly started writing about how the debasement trade is back on.

I don't think Druck and all these guys are looking at crypto Twitter, but I do know they read Reuters, the Financial Times, and The Wall Street Journal every morning. When they all start writing that the debasement trade is back on, there's a clear reason to start buying gold, obviously. But there's a higher-beta gold here, which is Bitcoin.

But gold didn't trade well, has it?

It all went into Bitcoin, baby.

It's digital gold now, Santi. We're all in on digital.

But you know what it is, though? There was some really good content coming out this week that I'll highlight later, so you guys can hang out for an hour and hear me not be bearish.

Was it David Senra or Patrick O'Shaughnessy?

No, Patrick O'Shaughnessy was very good. But what I'm trying to say is that I've thought a lot about this discussion around which asset you own. We know that U.S. government debt is untenable. Twenty percent of the budget is going to service the debt. We all know that's not good.

The real question is where you hide in that train that eventually reaches some kind of reckoning. Maybe there is one, maybe there isn't. I've had this constant discussion with people about it, and I always come back to the idea that you want to be in inflation-proof assets.

If you run the simulation of what happens, you want to be in technology because technology produces the most growth. In many ways, having Bitcoin is like—you don't want Bitcoin to be at $1 million per Bitcoin. That's a terrible statement—

Because it means things have gone terribly wrong.

That means we're bartering and the [expletive] has really hit the fan. You have way bigger problems in your portfolio and in your life. It's like the insurance policy I don't want to buy because it makes me feel like—

The revolution is coming for you, Santi. We get a $1 million Bitcoin, and you're getting the guillotine.

You're getting the guillotine right in the middle of Monaco.

Yes. Thanks for doxing me.

In any case, I'd be really curious to get your guys' thoughts on it, because that's what I meant earlier when I opened the episode. It feels like we should celebrate. It feels great that crypto's back on the menu and that it's doing well. The founders that have ground through it, that we all backed—obviously, I'm celebrating that.

What I still struggle with is the risk-reward here. I still think I'd like to make sense of the fact that the market's at an all-time high and keeps climbing these walls of worry. We're going to talk about Nvidia earnings that came out yesterday and the stuff in Jackson Hole, but if you run the simulation of what happens here through the rest of the year, if the markets go down, crypto is much more exposed.

We're no longer having conversations about crypto being uncorrelated. That was very clearly proved incorrect.

Well, crypto has to have been uncorrelated if the market has gone up and crypto has gone down.

You're right. It has been uncorrelated, but not in the way that you—

Even in the last week, the S&P went down, AI stocks went down, and crypto went up.

No, the equity market hates what Bessent is doing. “Hates” may be a strong word, but they have not liked what Bessent is doing. They're worried about what it means for the global economy. Obviously, your guy Druck came out and wrote the piece talking about why he—

Are we acting like Santi knows Druck now?

I just think he's a big Druck guy.

He is a big Druck guy. Yeah, he's a big Druck guy.

Well, the AI wrote it, but he kind of used the calculator to write it.

In any case, you need to zoom out. It's not a hedge in the way that we thought about it. Five years ago, we were talking about it like it was a hedge. When you think about how you construct your portfolio, putting crypto in that bucket—and I appreciate Bitcoin might be different from all the other stuff—is as high-beta as it can possibly get.

That's all I'm saying. When we talk about the rest of the year and what macro means for crypto, you ultimately bring it back to what Rob spends night and day thinking about: allocators, and whether they have the appetite to put on more risk in their portfolio. I don't know. I would love to know.

Yeah, I mean, I do think people chase. FOMO is real. We've seen it. We haven't seen it in crypto recently, but we're seeing it in AI. The Instinct stuff is a complete, obvious example of this—the chasing that people are doing.

2. Are AI Assistants Overhyped?

Can we talk about Instinct? Can we go down that rabbit hole for a second?

For sure. Yeah.

Have you used Instinct, Rob?

I have. Have you actually used Instinct?

I have actually used it.

How could you say it's a mediocre product?

I didn't say it was a mediocre product, but Town is better.

Oh, my God. Are you an investor in Town?

No, I'm not. And by the way—

There's no way Town is a better product.

And by the way, you know what is even better?

The Atlas concierge is better at all the normal stuff that the concierge stuff does. I will say Instinct is the best product experience I've had since Claude Code came out in May or June of 2025 and since ChatGPT came out in November or December of 2022. It's the craziest product experience.

It was. I do not understand it. Now, I'll give one caveat.

Let's zoom out. People might be like, “What are these products?”

Okay, so there are these chatbots. One of the dreams of AI is that you could outsource all of your personal-assistant needs to something in your pocket, and a lot of people have tried this. It has not worked until, I would say, 2 things got released at the same time: Instinct and Grockbot.

So Instinct is—

Grockbot is, you know, SpaceX's company, and it's like $250 a month.

What’s that?

Grokbot is also better than Instinct.

I’ve heard Grockbot is amazing, but it’s $250 a month. It’s $250 a month, and it’s a separate app that you have to download called Grockbot, or just “Bot.” I forget what the name is, but it’s $250 a month. Instinct is a text—you can just text it—and you give it access to a bunch of things, and it just does things for you.

I was delayed in Jackson Hole, and it booked 5 flights for me, then went and got refunds for 4 of those flights. When I landed at 5 a.m., it had a car waiting for me at the airport. I didn’t touch a thing. I just texted this thing.

3. Is Crypto Undervalued Again?

So listen, my point was not that Instinct isn’t doing all of those things super well. The point that I was making on Twitter—which, by the way, I think Instinct is a good product—is that you and I might be a little bit different because I’m not going to give it access to all of my stuff, just from an OpEx perspective. My usage of Instinct is maybe less robust than yours because I’m doing things much more slowly in terms of how I give it access to a lot of my information.

But for the things that a normal American would use it for—the things like scheduling, making reservations, changing or checking into flights, changing flights, that type of stuff, which I think a normal American would use it for—I think it is undifferentiated among the other people who are also doing a great job in the space. My point wasn’t that this isn’t a good product. There are probably 5 of these products now that do a really good job, and Instinct is actually a little bit more limited in some ways.

Instinct can’t make calls today, right? I had 1 of my agents on Atlas actually call my haircut place and ask why there wasn’t a time for me next week with my preferred barber. They told him that he was out on vacation. Then they had a back-and-forth about, “Okay, what times can we get me in as soon as possible?” because I felt I needed a haircut, right?

Okay. But you're saying normal Americans won't use Instinct and a high credit card. But the people who are using Instinct today are people who could get an Atlas card. The people who are using Instinct today are, and there's another one called Carta, which also has a very good concierge, which does something similar. And so I think my point was that I think the world is going in this direction. These are incredibly useful products. I think Instinct itself is somewhat undifferentiated among the other people who are building these great, useful products, but that doesn’t mean they’re not useful and great. The fervor around it on Twitter, where everyone was like, “Oh, this is the best thing I’ve ever done,” and now it’s, “I’ve got to put in money at $2.5 billion and then $5 billion”—all of that is groupthink because I bet you half of those people have not used any of these other products, right?

There is just a general dynamic in venture capital and in tech today that you bunch into things and rush out the door. There’s a little less thoughtfulness around where we put our money these days. I do this personally, too. Santi and I were just talking about this before we went live. I like Instinct; I just don’t think it is so much better than the alternative today.

Yeah. And there’s an idea that I think this market is rewarding people who buy high, buy higher highs, right?

Yeah.

Yeah. So, tying this all the way back to Santi’s original point, I think you were making a point around groupthink and people chasing, and I think I would make a—

Yeah, go ahead, Santi.

Willingness—where are we in the state of the world’s largest allocators and investors, and their willingness to continue to take on more risk at a time when markets are hitting an all-time high, we’re in Jackson Hole, and there are fears of debasement. Yeah?

I think that is the trillion-dollar question.

Here’s a different way to maybe look at crypto: it’s an asset class that has been beaten to death, and you have these valuations that are getting completely crazy. So, let’s say Rob is right and Instinct, by the way, for those who don’t know, is a 2-person company. A 23-year-old launched it, and it spun out of a company called Sierra, which is Bret Taylor’s company. It’s a brand-new company.

Then let’s look at Hyperliquid. Hyperliquid did $154 million in revenue in Q1 and $148 million in Q2. That’s a $600 million annual run rate. If you had a fintech company that was 3 years old, doing $600 million in revenue with 13 or 14—or 11 or 12—employees, sub-20 employees, it would be one of the hottest companies in the entire world, on the front page of everything. There wouldn’t be an Instinct article in the Journal; there would be a Hyperliquid article in the Journal.

Even Solana—maybe Solana’s old news at this point—but I’m looking at Blockworks’ data right now: $3.3 billion of Solana DEX volume yesterday, 4.2 million non-vote transactions on Solana, 24 million trades yesterday alone, and 2,100 transactions per second. I think people are missing the other side of this, Santi. Bitcoin rips, and then people start to investigate the industry again.

There was a podcast with Harry Stebbings on 20VC. I didn’t listen to it, but I watched a clip. It was Insight Partners, I believe, which is one of the most historic venture firms. Harry said, “What’s a place that you think could be hot today that no one else is looking at?” The founder of Insight Partners said, “Look, blockchains have been beaten down. There’s definitely a lot of value in these things. I think they could have a resurgence.” I’m paraphrasing.

But in fairness, let’s talk about what happened. Bitcoin rallies from $60,000 to $68,000, then up to $70,000-plus. Obviously, that is a big train to drive everything else, but the best-performing stuff has been Hyperliquid, which is now at $80-plus, and Pump. For all intents and purposes, Hyperliquid and Pump have been some of the best-performing assets that have rebounded the hardest. That tells you everything, and I think it is not at odds with what I’ve been saying time and time again.

If they’re just printing cash, Hyperliquid is what Ethereum was back in the day. I was transporting myself to October 2021, when Ethereum was hitting $4,000 for the first time. It was printing $44 million a day. Sit with that for a second. If you were to run-rate that—which you should never do, ladies and gentlemen; you should take some sort of average or through-cycle figure—it was on a run rate to do $15 billion or $16 billion in fees.

There were no L2s. It was going into the Merge. There was talk about ETFs. Of course, transaction fees were $7 to $15, which was the tell. Hyperliquid today does not seem like a train that is going to slow down anytime soon because you’re going to have some of the largest IPOs later this year. You’re going to have constant volatility in the markets and the need to do price discovery 24/7, 365.

The real question is: What is the upper bound of Hyperliquid fees and HyperEVM? Rob, I know you talked about it. I want to go to you because you said, “I feel like it’s fairly valued.” Last week, I felt like it sort of stalled in its revenue and earnings potential. Do you still think that’s the case, or have we changed our minds?

Oh, yeah. I mean, from a multiple basis, from any perspective, if it were an equity, it’s fully valued. Clearly, what’s happening now—and we talked about this last time when I said it was fully valued in April, and then it got range-bound for the last 4 or 5 months, and I got yelled at a little bit for that one—I think today, obviously, what people are underwriting is the Trump point.

Trump came on during his speech last week, I think it was Wednesday, and said, “Hey, we’re trying to bring—or the chair of the CFTC is trying to bring Hyperliquid into the U.S. to be fully compliant.” The expectation—and that’s when things obviously went from, “Okay, well, it’s trading sideways in this kind of range-bound area,” to now it’s up to around $82—was that it could come into the U.S.

You can dream again about, “Okay, well, it’s not just that it’ll keep doing what it’s doing and make this many fees, and $600 million of annualized fees is great.” We totally get it. That’s great. But at an $80 billion FDV—and I’d have to go back and do the math, and I get that the actual floating market cap is much less than that—it’s still pretty fully valued.

But now it’s, “What if it comes into the U.S., and what if this happens?” I think it was a Blockworks person, Shondaanda, who wrote this article about a way that could happen, which I disagree with, but it is a point of view that people are talking about.

If that's true, now all of a sudden the TAM is not just people who are overseas, who want to trade 24/7, or who are doing this from a regulatory perspective. The TAM is now U.S. large institutional capital markets.

By the way, Hyperliquid's infrastructure is as good exchange infrastructure as we've seen. This is the way exchanges would be built today if they were built today. Nasdaq has pretty good exchange infrastructure, but CME is still not great.

I think now it's, "Okay, let's price in the venture outcome," and that's what the market has obviously done lately.

I mean, I was looking at Bloomberg's data. I should go back on something I said earlier in terms of there being no end in sight for the revenue growth. If you look at quarterly revenue for Hyperliquid, it's actually been slightly down. It peaked in Q3 2025, when you had around $300 million of quarterly revenue, and then it's been in a downtrend.

It feels like it stabilized at $261 million of quarterly revenue in Q1 2026, and then $156 million in Q2. You've had the last couple of quarters. Exactly where does it go from here?

Well, remember one thing that is worth noting about this: they have growth mode on in HIP-3. Growth mode means that, essentially, for the HIP-3 markets—all of the real-world asset markets—they take 10% of the fees they charge on the crypto markets.

I think HIP-3 has been as high as 60% or 65% of the volume, depending on the time frame that you look at. They're doing volume in these markets, but they're much lower-fee markets. The reality is that they have to be much lower-fee markets if they're going to compete against CME, where I think it's around 4.5 bps.

Where it goes from here, I think the question becomes: Can it actually enter the U.S. in a real way? Can it be there? There still aren't really large U.S. institutions trading on Hyperliquid. There are people who buy perps—we talked about it last week—and there are people who want exposure to the token, but the current regulatory murkiness that it sits in today, especially around TradeXYZ and those HIP-3 markets, which are the ones that have people really excited, has put us in a situation where there's a lot of interest.

There's a lot of retail, prosumers, smaller market makers, takers, and so on. But we're not yet in a place where somebody like—name your person—would feel comfortable actually going and trading on it. Now people believe that could be true in the future, and that's the reason for the $20 change in price, not anything to do with the fundamentals.

4. Why Pump Trails Hyperliquid

Yeah, I think Hyperliquid is being compared more to the Coinbases of the world, which is a much more asset-light, much leaner business. Coinbase is a $65 billion business today, maybe a little bit more, right? It's hovered between $40 billion and $60 billion. Hyperliquid is around $40 billion on a fully diluted basis. Obviously, it's less than that—call it $18 billion today on a current-market-cap basis.

To me, that's the trade that people are doing. The interesting thing, going back to Pump, is that Pump is basically generating very similar revenue—a little bit under Hyperliquid—but it's a fraction of the valuation, with pretty interesting traction on some of the new products. If you pull up that dashboard—full disclosure, I'm an investor in Pump.

Which dashboard do you want?

The Pump one. I do want to bring it home to a relative valuation. Pump has really rebounded. Take a look at that.

You want to look at revenue by product?

Well, and then total. Do it quarterly, so we can compare what we were talking about with Hyperliquid. Remember, Hyperliquid was generating around $160 million of revenue, so on a quarterly basis, call it $150 million. Pump is generating around $90 million to $100 million, and it's a 1/40th of the valuation.

It was around a $1 billion current market cap—well, 1/8th of the valuation, sorry, on a current-market-cap basis. Obviously, people like Ansem and others have been super bullish. Martin Shkreli was on live trading and made a lot of money. There's a lot of incentive for all the people on Twitter and all of the content creators to be on it.

The common denominator is that both of these are killer applications of crypto. Crypto has been super social, and it's been trading. From that standpoint, help me make sense of why there's such a divergence in valuation between the two.

We can talk about the buyback. I think they've slowed down the buybacks, and that's something that maybe—

I'll answer your question. Here, it's because of the vision for the company. What is the future for this company? Why is Pump moving up? People are talking about buybacks, and people are saying memes are getting reignited. That's not a future that excites me.

I think very highly of the Pump founders—Noah and everyone else. If I were giving them feedback, it would be that they've done a horrendous job of telling the market what they're trying to build.

Now flip that, and I'll show you Hyperliquid. These are the numbers that matter to me on Hyperliquid: 38% of Q3 notional volume on Hyperliquid was not crypto-related. When I look at this chart, I'm like, "Okay, my vision for crypto has been that every stock, bond, currency, and commodity would eventually come onto public blockchains, and we could trade all those things on public blockchains."

If Hyperliquid is the venue where you can do that stuff, that's a cool future. That's 1,000 times bigger than where we are today. I don't know what that is for Pump, and I hope someone gives the Pump founders that feedback. They should go talk about that.

They're not. By the way, my portrayal is not that this is a zero-sum game. Hyperliquid can be extremely successful. Hyperliquid is more like stealing the thunder of what Solana tried to do: the Solana narrative, which is NASDAQ on the blockchain.

Solana is still, I think, much larger in market cap. Pump, on the other hand, isn't necessarily competing against that, and I don't think it's ever tried to go after that narrative. It's just like a new eToro of sorts, which younger generations love. It's at the intersection of being hyper-social and trading, similar to Robinhood.

I compared Hyperliquid to Coinbase. Maybe the good comp there is CME or something else. Pump is really eToro, Coinbase, and social media all in one. Ansem had a really good tweet that said, "Why can't I directly trade on X? This would be a killer product."

I think that's right. For younger generations, there's an entertainment value. People come on-chain and start trading memes because it's exciting.

I think we're in a story- and narrative-driven market. I thought crypto would eventually look more like finance, and we would value these things based on DCFs and financial models. It turns out I was completely wrong. Finance ends up looking a lot more like crypto, where what matters more than the revenue is the Palantir CEO getting on a chair, sitting cross-legged, seeming like he's done a bunch of drugs, saying crazy things, and the stock going up because the market likes that.

Maybe that's just a sign of an inflated, bubbly market. Maybe we'll be having a very different conversation in 6 months, saying, "The DCF did matter." But right now, I think all markets in the world are driven by stories.

My only message to the Pump founders is that I love their business. It seems like they've built a killer business. It's one of the biggest success stories. They're telling a terrible story to the market.

The Hyperliquid founders are telling a story—or Jeff is. Jeff has his own way of telling stories, which is maybe not to tell the story. The metrics are showing and telling the story for him, which is why he doesn't have to do it.

It's a story-driven market right now. That's my take.

Yeah, I think that's a big part of it. This was the point I made earlier: the $20 was entirely around what Trump came out and said. There was no change in the fundamentals in the last week. It was that Trump said something that was a new piece of information, which made people believe that the TAM had gotten bigger and that the story was bigger than they had believed before.

I also think there's a general perspective now, because it keeps happening—and we talked about it in venture with Instinct—that you buy the winners and just keep buying the winners. You keep buying the highs, and you don't try to—

There is no such thing as value investing anymore. Value investing is a way to lose money and a way to underperform. People are starting to buy that story not just in crypto markets, but in general markets as well. There's a general perspective now that flows, storytelling, and venture-type outcomes matter more than anything.

At the same time, it's all sort of blending together. The Instacart thing had a tweet that someone else put out—I forget who it was—that said, "The venture investors are now pricing these things like options." I think that's actually kind of true. It has always been an option, but it's always been about finding alpha and supporting founders. Now it's just, "Can I put enough money into this thing to kingmake it, so my option value is high enough?"

That's what's happening there. At the same time, public-market investors are mostly bunching into things that they think can maybe get a venture-style outcome in the public markets. The way people are pricing all capital markets today just feels very different from what has ever been true in the past.

5. Ads (TOKEN2049, Avalanche Summit)

There still is this multiple differential between public and private markets, but the way people are putting frameworks around things feels like it's all converging. It's bunching into the winners, making the winners, thinking a lot about what the future can be, pricing growth rather than value, and not caring about cash flows.

Oh, Santi, you're muted, which means I get to talk over here. You have the founder of Pump right now tweeting. He said, “Pump made 5 times Polymarket’s revenue yesterday. Please make it make sense.”

It’s not true, by the way.

This is a jump.

Yeah.

It’s just not true. He’s looking at a DeFiLlama dashboard that is very wrong, but I understand.

A classic tale as old as time. I will say, I definitely agree with a lot of that. You’ve had 2 companies now, SpaceX and Anthropic, basically say that their TAMs are $28 trillion and $30 trillion. That gets investors extremely excited. You want to see an infinitely expanding TAM, as big as it gets.

Maybe in a different decade, you would have been laughed out of the room and lost all credibility. But there are outcomes that are just so big now that you cannot put multiples on them and try to make sense of them. NVIDIA buying Hugging Face—it offered to invest at $5 billion, Hugging Face rejected it, and then NVIDIA came back and bought it at $12.6 billion. It’s been impressive. I think it was on $100 million to $150 million in ARR, and the pace of growth is incredible.

You can’t make sense of it on a multiple basis. It fundamentally does not make sense. And I think that is, Janna, to your point, probably the most articulate way I’ve heard someone describe why HYPE will probably continue to trade at a much higher multiple than PUMP, because the TAM for all assets is much, much larger than memecoins.

As much as memecoins are a phenomenon that is here to stay, they found product-market fit since the earliest days in crypto. Go look at Pump’s revenue through the cycle—it was as durable as Hyperliquid’s—but its TAM is not. Hyperliquid’s TAM is multiples, maybe orders of magnitude, bigger than Pump’s will ever be in the current framing. That probably explains the big discrepancy.

6. Ethena Fixes Its Tokenomics

Let’s flip a little bit. I like this—a good old token conversation. This is what happens in the bull, baby. I think we should talk about Ethena. Ethena announced today that, in one fell swoop, they did it all.

I’m going to read this post from the Ethena Foundation: “We are excited to announce 4 updates regarding the Ethena ecosystem.

“1. Buyout of early investors. The Ethena Foundation executed a buyout of all locked tokens from certain major seed investors that sold any ENA within the last 9 months.”

Rob, they buy your tokens. I was going to say—

Not our tokens.

You haven’t been selling any ENA. So, 2: alignment of token and equity. The Ethena Foundation and Ethena Labs have reached an agreement on a master framework agreement whereby IP and ownership of value accrued by the protocol is assigned to the foundation exclusively and governed by token holders, with no residual cash flow due to equity investors in the Labs entity.” Awesome. Love that.

“3. Revenue buybacks. There’s a governance proposal now live for the implementation of the fee switch, whereby net revenue accrued across all business lines under the Ethena brand will be used to programmatically buy back the Ethena token.” So we’ve got the fee switch and buybacks.

“And 4 is removal of monthly VC unlocks. The Ethena Foundation and lead investors have agreed to eliminate future overhang associated with monthly VC investor unlocks by releasing the unvested tokens.” This is interesting. All team—

That’s a Kyle Samani thing, you know.

All team tokens remain locked per the original vesting schedules. This is exactly what you should do. I’ll just say this is exactly what you should do.

I’m also biased. In the tweet thread, they came out and said, “Building further on improving transparency for the Ethena ecosystem stakeholders, Ethena is pleased to announce its participation in the Blockworks token transparency framework.” So they disclosed everything here, many of these things for the first time ever publicly: entity structure, supply and vesting schedules, insider allocations, foundation agreements, and protocol value accrual.

I messaged Guy. I didn’t know this was coming, but I said, “Just amazing, amazing job here.” I think this is exactly what teams should be doing. I hope that this is a model. I think many teams have started to look at this, but I hope that a team as good as Ethena, and as important to the whole industry as Ethena, doing this will inspire other teams to take note.

I thought Felipe from Thea said it best: “Token capital markets are now in a much better place than they were a year ago. Many large tokens have solved the token equity issues and worked through low-float, high-FDV overhang. There’s much less leverage in the system, and valuations are much more reasonable. This is a good setup.”

So I think that’s great. Shut up and show me the chart. Ethena’s up 25%. The market’s liking it. It’s the right thing to do.

I wonder, Rob, if you could give us a little more insight on how they actually removed all of this. Did they just buy out investors that had been selling and unlock everything?

Yeah. I’ll have to be careful about what I can say and what I can’t.

You can say everything, Rob. It’s okay. Rob, do you have that tab open that we’re seeing here?

And in case anyone listening to the pod doesn’t know, Dragonfly led the seed of Ethena, and then we were also large investors in the Series A and in a further public round that they did. We’ve been the largest investors in Ethena for a long time.

So it is essentially exactly what he said. For anybody who had been selling the token on unlock or had been selling tokens in Ethena for the last 9 months or so, they offered to buy them out, and I think basically everybody took it. That included the unvested tokens.

They also decided that, as Santi alluded to Kyle Samani earlier but didn’t elaborate, Kyle Samani has this point that he says a lot, which is that it would be better if tokens were all just completely unlocked all the time, because that allows for real price discovery. You don’t have these monthly overhangs.

For all of the remaining investors and advisers, their tokens are now completely unlocked. There is no vesting schedule. You don’t have to worry that on a particular day every month somebody might be selling. There should be more price discovery, but that also means there are more liquid tokens today than there were before today.

Importantly, he kept the team vesting going, which means that the team is still aligned with the protocol over the long run. When Guy came to us and proposed this, I initially really liked the idea, but we were trying to figure out how we thought the market would react.

You have these 2 sides. On one side, you get rid of all of this overhang from people who were indicating that they were sellers at these levels. On the other side, there is a pot of tokens that are now potentially out there and liquid that weren’t before.

My perspective—and now it looks to be vindicated—was that this is what you want. You want real price discovery. You want people to feel comfortable that they know what is happening and that there isn’t asymmetric information between them and the other holders of the tokens.

You want a situation where you don’t feel like you can’t underwrite the long-term performance of the token, even if the revenue goes up. That’s a lot of the concern. Now we’ll get real price discovery. People seem to be excited about it.

Was good price discovery?

What’s that? There was good price discovery, right? I mean, they had, like, 8 million.

I mean, on a circulating versus fully diluted basis, over 60% or 70% of the tokens were already in circulation. It’s just been a brutal market. It was down about 75%, as is everything else. This definitely helps because you’re at a point where probably the cliff—the residual—is small enough that you can buy it, and there are just some people who have been dumping constantly. The beauty, and the good and bad thing about crypto, is that you can see that; it’s very well telegraphed, and it doesn’t inspire much confidence.

A lot of the ENA is now locked in DATs, right? I mean, that’s the other component here, right?

Yeah, a big portion. I think it’s over 20% that’s locked in USDe, the DAT. That’s been the best-performing asset over the last week: USDe. I will say—

I’m not a genius, nor am I sidelined, ladies and gentlemen. I have exposure to ENA because I invested in this DAT. [laughter]

So there you go. Although you could have sold at a dollar; now it’s, you know, $0.80 or so.

No, no, I agree with you. There’s been good price discovery, but I think if you run a public company or a token project, what do you want? You want to take your equity or your token and put it in the hands of people who want to be sellers to the people who want to be buyers and want to hold for the long run. That allows you to do this now, at a time when the market seems to be waking up.

It happened at a time when Ethena also came out and announced that they’re trying to put the fee switch on and that they’re aligning all of the value accrual back to the token. That’s what the market wants to see. Because the market wants to see that, and now you have this situation, I expect—I’m very bullish on Guy’s ability to continue to execute—that they’ll do really well and that he’s got a lot of other good things coming down the pipe to continue to make Ethena a bigger business.

7. How Does Ethena Keep Growing?

On that point, can we spend a minute? We talked a lot about stablecoins as a big theme. How do you go long stablecoins? That’s a question I constantly get from people, especially those new to crypto. They’re like, “These stablecoins are really working. Other than Circle—and maybe Tether, if they raise or not, I don’t know—we’ve talked about Ethena.”

What is the latest? We’ve also talked a lot about yields coming down quite a bit on-chain, to the point that it just doesn’t make sense. I think this touches on macro, the first question we started the podcast with, because you kind of need to have a view on macro and on-chain rates to form a thesis on Ethena going forward.

Historically, the Ethena model is basically a tokenized hedge fund of sorts. Your yield comes from the funding rate, which is well understood and works really well in a bull market, maybe not so well in a bear market. Typically, that positive funding rate is how the yield on Ethena has historically been generated. It’s been really interesting, but it came down quite a bit, and I think that’s a big part of what’s reflected in the token price. What are the prospects of the project diversifying away from that? What’s your thinking around yields coming back, and what does that look like? Going back to what drives the marginal buyer for ENA, I think you need to have a view on what rates are.

I mean, they’ve been pretty clear. I forget exactly when it was announced, but earlier this year they announced that they weren’t just going to be doing basis on crypto—on ETH and Bitcoin. They’ve diversified into basis in equity markets as well, and also secured lending. I think they announced a $1 billion deal with FalconX to do secured lending.

They’re also working with Janus Henderson and BlackRock on a number of, call it, slightly higher-yielding collateral. Janus, I think, is their CLO product—their collateralized loan obligation product—which is a little higher-yielding. They’ll continue to diversify their collateral and the way in which they create yield.

So I don’t actually think it requires a big view on the forward curve of on-chain yield. What I think it requires is a view on on-chain finance getting better, there needing to be a yield asset that sits underneath a lot of pieces of on-chain finance, and their ability as a team to find the best risk-adjusted yield to power that on-chain finance. I think that’s what it requires, and I think Guy is as good as anybody at being able to do that.

You forgot Robinhood there. I think it was announced quite recently. So they’re playing—

Yeah, they’re powering the Robinhood Chain for the vault product there. They’re also on Coinbase for the vault product there. They’ve got—you can imagine—they’re having those discussions with all the fintechs.

I guess implicit in that is you’re assuming that if crypto continues to catch a bid, there’s more demand for these assets. The basis trade obviously works really well in a bull market, not so well in a bear market. You combine that with the idea that if on-chain rates somewhat follow off-chain, traditional rates, and rates go up, then rates on-chain should go up as well, which benefits Ethena, right?

Well, I also think they’re going to do a better job of, or continue to do a good job of, making sure that they find the best risk-adjusted yield, whether on-chain or off-chain. It doesn’t just need to be—you know, a lot of other people are just sitting in treasuries or just sitting in one product. They’ve made it very clear they’re not going to do that.

Then it’s a question of how they become distribution, as a piece of collateral or a piece of a token that underlies all the rest of this on-chain finance that’s happening. We don’t really have that in crypto today. We have stablecoins, and stablecoins are kind of the quote asset and the collateral asset for the vast majority of things that happen on-chain.

But there is certainly a world in which Ethena, which is a slightly higher-yielding asset—call it a money market fund plus, and then some basis and then some CLOs—can be used as collateral. We see some of this in the traditional world, where people have used money market funds as collateral instead of just US dollars.

I think that’s what you have to have a view on: that they will continue to win distribution across the rest of the ecosystem. People will want to use it as infrastructure for trading terminals, exchanges, and a lot of the rest of the lending ecosystem in crypto. At the same time, there’ll be a trusted party who can get you a very good, low-risk or risk-adjusted yield.

Just to tie up this discussion: we talked about Hyperliquid, we talked about Pump, and we also shared revenue. I’m looking at the ENA and Ethena fees, and it’s been pretty interesting. Even as the funding rates have come down, they’ve still managed to produce pretty durable revenue through that.

They peaked at $162 million in revenue in Q3 of 2025. That’s come down now to, call it, $56 million. It’s been a steady decline, but I think it’s pretty interesting where that goes from here. Again, it’s a protocol at a very similar valuation to Pump, and Pump is producing basically 2× the revenue.

This goes back to the TAM and the interest of new capital coming into the space. It probably likes Hyperliquid and Ethena much more, for the simple reason that it’s just a much bigger TAM. Stablecoins really capture the imagination.

Unless Pump is able to do what FOMO did, which is onboard a bunch of normie users. I know Rob made the good point that they’re not the same thing, but I’m just saying: the customer acquisition that FOMO’s been able to do—I think Pump needs a little bit of that.

8. Can FOMO Onboard Normies?

What is—I know you record a podcast—can you just do the one-liner on FOMO? It’s been growing quite a bit. It might be the breakout app of this, if we want to call it, a new cycle. What have they done exceptionally well?

They’ve built a really beautiful product experience that feels really easy to use and not crypto-native at all. It just feels beautiful to use. They combined that with very data-driven customer acquisition through off-crypto-Twitter platforms. That’s how I would describe it.

Do you think that was an opportunity that Phantom gave up or lost?

I think it’s an opportunity that everyone in crypto has not done very well. They’re one of the first to really capitalize on TikTok and Instagram in an amazing way. Did Phantom not do it right? Yeah. But do you know who did this before FOMO? The first time I ever saw FOMO, I thought of the Tensor guys when they built—

So, do you remember Tensor went and built Vector?

Yes.

Well, it got acquired by Coinbase. Vector is what FOMO could have been—what FOMO is today. Vector was the closest thing. I don't know if you ever used it; it was a great app. It was so fun to use. It was what FOMO could have been. So that's what I actually think—

What Vector could have been.

What Vector could have been. Yes.

Yeah.

Yeah. Yeah, I mean, it's the thesis that finance and social, and trading and social, are coming together. It's one that a number of people have shared for a long time, and it's even part of the reason that we underwrote Polymarket in that way. But it's been very clear that the time is now, and FOMO built this great product and had this great marketing machine at a time when that has really blown up, right?

The social aspect has unlocked this virality and this sort of—I don't want to say addictive, but sort of addictive—nature of these products, where people love to come on and engage with people on them. They like to both trade and engage with the content creators, and those content creators like to engage with their fans. It's become a very, very, very, very social experience in the way that, honestly, trading crypto has been for a lot of people through the timeline for a while. But now you can do it directly on-platform.

Guys, anything else we didn't talk about that we should?

I was just going to say, of course, NVIDIA earnings. Everyone should be talking about NVIDIA earnings. It's as important as the Fed.

Have you taken any chips off the table with anything that you hold in AI or equities?

I haven't made a trade in a long time. I've not traded underlying tokens. I've had other structured products and stuff like that, but no, I have not.

Santi, are you worried about this insider-trading investigation into Leo?

No, for the simple reason that it doesn't affect markets, because Citadel took over his book and they already offloaded 100% of it. They had a really good month. I think they're up 5% or 6%. Citadel did.

The gist of it is that he just got married to the Anthropic chief of staff, and they're all roommates. I think the SemiAnalysis guy, Dwarkesh[?], and it's all—

Do you know who else was roommates? Oh boy.

Who?

SBF.

FTX. [laughter]

Well, I think the gist of it is more that—and the reason I asked is, I know you and Leo have a parasocial relationship, but—

What are you talking about, Rob? I'm on the other side of the world, brother. Incredible.

No, but I also—it feels very plausible to me that this is true, because obviously everything Anthropic is doing, investing in Anthropic itself, is obviously fine. Private markets have different standards, but a lot of what Anthropic is doing is cutting deals, and they know a lot of information about what's happening at the public companies. Of course, then he's trading a lot of these public companies.

I saw a tweet where the tweet itself wasn't great, but it was talking about the difference in how venture capital and tech work versus how public-markets investors work. Generally, in private markets, their whole job is essentially to trade on inside information. What I mean by that is not in public markets, but you want to have asymmetric information about what private-market companies are doing well, so then you can go and try to fund them.

People take it a lot less seriously in the tech world and in Silicon Valley than they do in, call it, New York hedge funds, where people are deathly afraid of slipping up because the public markets have this different standard. It wouldn't surprise me that a 23-year-old who has spent his entire career in high-growth private markets would make that mistake.

Well, we'll see, because you bring up an interesting point for a later conversation, which is that there's a whole lot more liquidity in private markets today. The lines between public and private are largely irrelevant in my mind, other than your rule-making that was set at a time when private markets were way, way smaller relative to public markets.

Every major fund, from Coatue to Altimeter to Gavin Baker's fund, is crossover. Tiger, of course, has done this for a really, really long time because they realized, as they should, that there's a lot of value to capture.

I remember when I was at Sageview, it was a hybrid fund, and we were looking at things. Then we transitioned to fully private, just doing growth. But I've always felt that a hybrid approach is really interesting, because you might be looking at a private company, looking at their churn and their data, and then say, “Well, it's better to invest in Salesforce because I'm looking at a Salesforce competitor. I'd much rather put it in the public markets.”

9. Content Of The Week

If you can traffic across private and public markets, if you still want to make that distinction, then you should. But, yeah, we'll see. I have not followed this at all, but it will probably be a pretty interesting case to follow.

Content of the week: the 55-minute episode for August 27. It's pretty good.

No doubt. I mean, we—

No, no doubt.

No doubt. Content, yes. Yeah, we can keep going if you'd like. Maybe we should livestream. Content of the week—I have 2. I'm going to cheat. I know it's—

Dude, we're banned. We're putting a 30-day ban on Invest Like the Best and David Senra.

We have an embarrassing lack of range on this podcast. No, man, this is a very good episode. This guy, Neil Moa[?], used to work at NVIDIA and Apple before that. He has a very good way of describing the state of affairs in the world. I really enjoyed that podcast. Worth your time.

The other one is SemiAnalysis, this discussion between Dwarkesh[?] and Dylan Patel. Very good. The reason why I like listening to these AI podcasts is that you have to be paying attention to this stuff. No matter what business you're in and no matter what industry you're in, it's super relevant to understand the state of models, open source versus closed. It really informs a lot of—

Those 2 I found really interesting. They all came out this week. I would highly encourage you guys to listen.

Rob, what do you got?

I recently reread The Creative Act: A Way of Being, Rick Rubin's book. I assume you guys have both read it. I had read it a few years ago, and it felt more apt to me today than it did even a few years ago. In almost the age of AI, creativity matters more, and the way in which you produce things and bring things to life is more of an art than it ever has been.

I had a different lens on it this time, and I liked it more the second time. I will recommend a reread to anybody.

Can I ask you a question, Rob, real quick, on that? What do you think about Standiller[?]? It seems like he used AI to write this.

Do you have an issue with that?

No, I don't have an issue with people using AI to write. With that article specifically, I thought he did not like—it was sort of AI-sloppy. Not the content itself, but the writing. At this point, I think most of us can pretty much always spot when something has been written by AI and when it hasn't.

I have a perspective that this is a tool to help you write, in the same way there are many, many other tools. But you should try to distill it into something that feels a little bit more human and takes a little bit more thought. It almost felt to me like he had a point he wanted to get across really quickly, get the op-ed out, and had Claude write it for him, versus spending a little bit more time with it.

I think people would have given him a lot less slack had he taken the ideas, had Claude write most of it, and then edited it a little bit more thoroughly. People would have given him a little bit more slack there.

That said, there was a good point that somebody made, which was, “Well, what people did a year ago or 3 years ago, they probably would have just had that thing ghostwritten, and we wouldn't have given them any crap for that.” It is generally true that people use tools to write, and the point is what matters more.

I don't have any concern with it, but I do think people are going to react negatively for a while to things that seem like they're obviously made by AI and that you didn't spend real time on it.

Handwritten cursive only.

Did you write cursive? Did you learn cursive when you were a kid?

Dude, I only write cursive. I have beautiful handwriting. I've been told.

Yeah, you do. Actually, you do have beautiful handwriting.

How? Rob, why do you know his handwriting?

Rob and I write love letters to each other.

Pen pals.

Or pen pals. Sorry, I meant to say pen pal.

He had a handwritten note for me last time I visited him. It was very nice.

Janna, what's your content of the week, man?

Content of the week is—

Before we really—

That Jackson Hole trip I had, I ended up having a 26-hour travel day. I got to the airport at 8:00 a.m.

I jinxed it, right? Didn't I?

What did you say?

I said it's really hard to fly into that airport if—

You did. You did.

If you can't fly at night, I'm sorry, man. I'm really sorry. I had 12 hours at the Jackson Hole airport, which is a tiny airport. There's not 12 hours' worth of stuff to do. I ended up connecting to Denver. The Denver flight got pushed about 5 more hours. I flew into New York, landed at 5:00 a.m. in Newark, and then had to drive 3 hours to the North Fork. So, it was a 26-hour travel day.

Can I ask you a question? Why did you not just go back to Jackson Hole, half an hour away from the airport?

What do you mean?

You said you were in the airport for 12 hours. Oh, because they kept saying, “1 hour later,” “1 hour later.” It was the worst type of plane delay, where they go, “Flights at 10:00, flights at 10:30, flights at noon, flights at 1:30.” It's the worst type of delay. Anyway, that's what happened. So, I watched all of Shane Gillis's show, Tires.

That's my fiction. I'm trying to bring some fiction to this.

It's good. I mean, it's not as good as my fiction, but okay. You guys don't know Shane Gillis. Come on. Come on.

No, no. I know Shane Gillis. I just haven't seen it.

A little culture here, Santi. A little culture.

No, no. I know this guy. I just don't know the name. I'm terrible with names.

He's a funny fella. Anyway, he's got a show on Netflix called Tires. I was desperate for things to do. I made all my calls, got through all my emails, got through everything.

Clearly, you didn't do anything because you had this app do everything for you. Incredibly lazy and unproductive, man. You have to get back to work.

Back to work. All right. Thanks for listening, folks. Happy end of August. We will see you in September.

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Block Works team may hold positions in the companies, funds, or projects [music] discussed.