什么赋予代币价值？与6MV管理合伙人 Mike Dudas 对谈｜EP 168

Trading XRP where it is is a meme. It’s just a meme about costumes. Cardano, Sui, L2 tokens, infrastructure tokens—a lot of them, most of them, were just ways for founders and investors to extract liquidity.

The things that are not valuable, the things that people call worthless, are governance tokens. I don’t want to hold the token just so we can decide where the fees will be charged. And by the way, the team and core investors hold most of the tokens, so they’re going to add them to the equity fund, and I will be forced to hang on to my fate. It seems like this model doesn’t work.

But the basic principles are that you have to explain why the token has value. If there is equity, you need to explain how any value that accrues to the equity will then flow back to the token holders. Perfectly.

1. Mike Dudas and the Origins of 6MV

Well, Mike, thank you very much for joining me today. I’m glad to welcome you to the podcast. I think this is actually our first podcast together. I don’t think we’ve ever done one like this before, so thank you for coming. I’m looking forward to the opportunity to delve into all things Mike Dudas and all things 6th Man Ventures.

It’s nice to be here. Thanks for inviting me, Logan.

Perfect. Maybe we should start with 6th Man a little bit. I think you guys really crushed it, fund by fund. As a fund manager, I think that’s easier said than done. So maybe give us a quick background on how you guys started the firm and how your thinking evolved.

Absolutely. One of the most important things for me is to work on things that I personally am passionate about and interested in—things I find very interesting—and ideally, hopefully, things that will be important and influential for the future of the world.

The creation of 6th Man Ventures as a firm happened like this: I’m in my late 50s now. We started the firm when I was in my early 50s, and I wasn’t a professional investor. I definitely invested as an angel with my own personal assets, and I liked investing in crypto tokens and different assets like NFTs, but without any formal education. I’ve never been a partner, and I’ve never worked on Wall Street.

The genesis of the firm was that when I started working in cryptocurrency full-time in 2018, I had been somewhat on the periphery for a few years before that, working in the fintech space at Google, PayPal, Venmo, and many other companies. When I started working full-time, I didn’t have that kind of intrigue, curiosity, and interest, but I got caught up in the flow of information at first.

I started a company called The Block, which was doing research and information in the media industry, trying to explain to the masses what was going on in this really confusing industry of cryptocurrency and blockchain. It was a really great place to be in the flow of information. But I like to say this is a cash-flow industry, so it’s not that profitable. I ran this company for about 3 years, and when I sold it, I was trying to figure out what to do next.

It was absolutely clear to me that cryptocurrency is about money, markets, and flows. If I wasn’t going to create a protocol—and I’m not an engineer by training, so I just didn’t see that I had a specific advantage in it—then it made sense for me to invest. Essentially, I started with my personal investments in NFTs and tokens and angel investments in these so-called Web3 projects.

It was 2021, and I had become something of a super angel. Friends saw me doing it, and people I had known for a few decades started to recognize me as a crypto guy. I think a lot of people who started out as cryptocurrency investors have a similar origin story.

With one of my good friends of over 25 years—we met at Stanford many moons ago, Sarkis Kesarjian—we founded the firm in 2021. It was about $7.5 million, and we were actually writing checks for $100,000 to $200,000. It was a super-angel-style check during a very dizzying period of time, to companies we were passionate about.

These were typically application-level companies. We didn’t invest in things like Solana, and we didn’t invest in Ethereum or Bitcoin. Rather, we invested in the companies, protocols, and projects built on top of these blockchains—companies like Magic Eden, STEPN, Etherscan, Relay, and a number of companies that have had great success, including Livepeer.

Across the spectrum of use cases, it was essentially access to these crypto markets for our friends and acquaintances who knew us as crypto guys. But for the founders, what was really attractive was that I worked at The Block. I understood how to take the stories they were telling and the products they were creating and then amplify and tell those stories. That was our initial advantage.

That first year was crazy. It was a very turbulent time, but we chose some really good companies, did a good job, and were able to raise institutional funding in 2022. The $140 million fund was our second fund.

What was so interesting was that it was a very nontraditional LP base. There were institutions like Harvard and Yale, but it was also a lot of people who had made money in cryptocurrency, family offices—meaning wealthy people—and then some funds of funds and other institutions that were putting money in.

We were lucky enough to invest out of this fund from 2022 until about early 2025, so for about 3 years, again at the application level. Essentially, we went from a static position in early 2021 to, by mid-2022, having a $140 million fund to invest in cryptocurrency applications.

This is amazing. I don’t think you can say this, but I think I can say it for you: This is your first and second fund, and you guys really crushed it. Congratulations to both of you.

2. Liquidity and Returning Capital to Investors

What was exciting was the possibility of returning capital. The reason cryptocurrency as an asset class is so exciting is liquidity. Venture capital is typically an illiquid asset class. It takes many years to return capital, and honestly, only 10% to 15% of funds really perform well and outperform other asset-class benchmarks.

This is a complex and difficult question. You’re always drawing a line between getting liquidity and returns in an asset class where people want it, and investing in these long-term themes that can accumulate and grow over a number of years.

Maybe that’s a great starting point. You mentioned a few things. I think we share a common, nontraditional investment experience. It’s similar on my part: I went from Tesla, just doing products, to investing, and it’s an interesting leap.

What I appreciate about your approach is that you’ve always focused on the consumer level. Even when I came into this industry from a product-experience background, you start asking about revenue, daily active users, and all kinds of basic questions about the product. When I was just starting out in this field, I started asking these questions, and people would roll their eyes and say, “What are you talking about?”

3. Crypto Apathy and the Rise of AI

With respect to your point about DPI and returning capital to investors, the situation is definitely shifting now from 2020 and 2021 toward real businesses. It was tricky both ways because some companies were returning capital faster, but maybe they didn’t always have revenues. Now it’s maybe 50/50 whether revenues matter in the long run. Probably yes, but those businesses that generate revenue obviously need a little more time to develop. I think the industry is maturing to a large extent, but the situation is definitely changing.

Absolutely. Another point is simply the durability of income. Historically, cryptocurrencies have had incredible money-generating businesses, but they may not have had the long-term, multiyear sustainability that, for example, the biggest tech giants have. They are not repeatable, deeply protected, long-term businesses.

There is a certain art to generating $1 billion or a couple of billion dollars in cash over a period of time. We have seen this, for example, in the case of some NFT marketplaces.

How do you make sure you can get some of that and give it back to your investors—your LPs—as a venture capitalist?

Yes, that’s true. That kind of return profile extends to a lot of larger asset classes where you see less and less protection in different business models. Of course, with a lot of these new AI-focused businesses with $100 million in ARR, you see business lines that won’t exist in 12 to 24 months. We’ve already seen this happen several times.

We are seasoned in the crypto business. We’ve seen everything, so little can surprise us anymore.

You’re doing a good job on Twitter and X. I’d like to get your pulse because I think you’re great at communicating the good and the bad and starting arguments in some scenarios, just from an industry-pulse perspective.

Obviously, the game has changed since you launched your first fund. You’re currently working on your third fund. What are you guys generally excited about, and how do you feel about the market today?

4. Real Adoption Beyond Crypto Token Prices

Yes, that’s why we’re very excited about the wide range of quality businesses we’re seeing in cryptocurrency. The number of verticals that we believe will become exciting, sustainable businesses is significantly greater than it was 5 years ago.

And it seems to me that we have already passed the stage of early experimentation. We only got to this point because the underlying infrastructure finally reached a point where it could support these types of businesses online. You have Layer 1 and Layer 2 blockchains that have high throughput, low fees, excellent uptime, and reliability. You have a market structure where you actually have liquidity provided in a variety of ways, with enough depth and people willing to provide it on the network all the time.

You can actually have real financial markets online, which you have for the first time for a number of different products. You also have much higher-quality assets than we have had historically. You don't just have crypto assets like Bitcoin, Ethereum, BTC, ETH, and SOL. You have stocks, IPO stocks, different types of bonds, and Treasury bonds. You have different high-quality assets coming online and different ways to trade them.

We have the infrastructure, the liquidity, and what's essentially happening is that the industry is starting to project outward. More people and more institutions are getting access to these assets without the crazy, archaic workflows that early adopters had to deal with 5 or 6 years ago. So it's an exciting time.

With that in mind, we've always joked about the “rags-to-riches” stage of cryptocurrency. We're still in the pre-adoption stage. In the last cycle, I think people thought we were going to have a longer bull cycle. They thought Bitcoin would teleport into the hundreds of thousands and pull other assets with it, which would give us a longer bullish trend to create more on the chain.

This did not happen. In early 2025, we entered a pretty bearish period, roughly where we are now, in early fall 2026. What's interesting is that this bear market wasn't as deep as many thought. There were a number of really compelling and strong companies that were barely affected. Of course, the volumes have come down to some extent, but we're making significant profits because there's fairly low overhead to use many of these protocols across many different use cases.

Stablecoins are one of them, as are money-market protocols like Aave, Morpho, and others involved in this category. You had really interesting new use cases, like Polymarket and other on-chain prediction markets. You had Hyperliquid, obviously, and Backpack, which I know is your portfolio company. You saw truly high-quality apps on the blockchain. We had more asset issuance.

The volume of stablecoins grew significantly, and the use cases for these stablecoins grew, along with their actual real-world implementation beyond just use in cryptocurrency transactions. So it was a very busy period, even if sentiment toward tokens was bearish.

You also saw implementation by the largest financial institutions in the world. Everyone from Stripe in the fintech sector to people like DTCC, which is the largest clearinghouse for securities settlement, was getting involved. The implementation was widespread. Big names like Western Union and banks started talking about deposit tokens on the blockchain. We could go on and on. I probably haven't even mentioned most of the good use cases.

What this reflects is that crypto and blockchain infrastructure and market structure are essentially starting to merge with the broader financial markets.

On that note, I've seen you talk about this quite a bit, so feel free to expand on that concept. I think it's become much clearer that the primary use of these blockchains is financial assets and financial markets. I think that's always been the case when you look at how people have made money on blockchain, but what we're doing now is expanding from just crypto assets to all assets in the world.

There are several approaches to this, from Hyperliquid to appchains to universal Layer 1s like Solana. The most interesting thing is that a number of really big experiments are being implemented at the same time.

Yes, that was definitely interesting. Our initial thesis was that high-performance blockchains would enable more interesting use cases simply through greater scalability. I joke that we were only half right, because over time we gained a better understanding of the financial aspect and the fundamental question, starting from a product perspective, of what actually generates revenue.

That part was interesting. To your point, there will be a whole range of solutions that we're now starting to experiment with. I joked again that we were looking at this from a scaling perspective, exploring a maze of ideas about what worked and what didn't.

I think we're now looking at different trading infrastructures across different blockchain designs to figure out what's best for trading. We have some thoughts on that, but I think that's generally what the industry is doing right now.

I feel like, at least for me—it might have been different for you guys—this bear market felt a little more difficult because it wasn't really there. It was more like apathy, and there was no FTX-style explosion, or even what happened in 2017. You kind of knew you had 100x just from the ICO and the white paper, and you were like, “Okay, the fall makes sense after no one put anything up.”

But 2024 was a little more challenging because we had some products, but again, going back to your point, there was no revenue, so there was no real growth. Over time, these things just kind of fell into place, which was a little more difficult.

Yes, I think a lot of people were also apathetic, and a lot of people weren't interested in what the path of cryptocurrencies would be. So you saw a transition and a change in the composition of a number of stakeholders and active participants.

In the 2021–2022 cycle, the biggest selling arguments or talking points were often about “read, write, own.” We were going to change not only the world of pure financial markets, but also how governance happens and how people organize projects and companies. Some of these things will probably happen over time.

I'm still optimistic about the metaverse, but the time horizon is much longer. The initial proofs of concept, like PFP NFTs, are not what it's going to look like. Just like meme coins, for example, provide a really good battleground and testing ground for how people interact on the blockchain, they're unlikely to be the final form of most of the volume and value that exists on the blockchain.

You're going to have to work through these things with crazy, wild early adopters to get to what the real use cases are going to look like. At the same time, a lot of the apathy came from an industry or ecosystem that's very similar to cryptocurrency in many ways: frontier artificial intelligence.

Frontier AI was being developed among crazy people during the era of The Age of Spiritual Machines. I’m really good friends with Ray Kurzweil’s son, and this work had been going on for many decades before it finally turned into a tangible return. Intelligence became accessible to everyone in the last few years after simmering under the surface for quite a while, when most of us couldn't benefit from or experience it and thought the people working on it were a little crazy.

I think cryptocurrency will probably succeed, but the failures of the initial efforts by 2022, combined with the breakthrough of artificial intelligence, exacerbated that apathy. It prompted a lot of people to move on to greener pastures where they could see a more immediate return on their efforts in a shorter period of time. I really think cryptocurrency will catch up with that over the next few years.

It seems like it's starting to happen. We're recording this toward the end of September, so the markets are starting to come back to life and sentiment is improving. As far as the metaverse goes, I was kidding. I think we'll achieve this in a “Ready Player One” style, through in-game items.

I played a lot of RuneScape and World of Warcraft, and most of what I did, besides RPGs, was related to the auction house—buying and trading goods. So if we build financial rails with blockchains, you get the metaverse for free.

100%. And, by the way, it's finally happening. Instead of calling them JPEGs of IP that were created out of thin air, what you have now is, for example, Collector Crypt, Courtyard, and others that actually bundle assets—collectibles, Pokémon cards, and other IP—on-chain because there's a better market structure here.

Anyone can access them, you can trade with people from all over the world, you can pay instantly and store them, you can fractionalize them, and you can use them as collateral. Those are things that you can't do as a collector in the real world. It's interesting to see how this plays out across different asset classes.

I think you'll start to see it with game assets as well, but it probably won't be an attempt to quickly put new games on-chain. I think it will be existing games and existing value finding their way onto the chain.

And I think that goes against the philosophy of gamers, by the way, who are very much against cryptocurrencies and say they do it for love. But I think younger people—this new generation of kids who are going to be asset owners in the next decade—are going to think about things very differently.

So, going back to “read, write, own,” to your point, it was kind of a metaverse—not a metaverse, but the next iteration was Web2 and then Web3, which is how so many people were positioning it. To a large extent, we did a lot of experiments, but those experiments remained experiments, and now blockchain and cryptocurrency are mostly focused on the financial side, at least in terms of product-market fit.

So, for example, 6th Man Ventures—do you guys generally think about it maybe from a more consumer perspective? Did the thesis shift as you realized that the landscape was changing a little bit?

5. Why 6MV Changed Its Consumer Investing Thesis

That’s a great question. I think if we look back, the consumer things that we invest in today are very different from what they were 4 years ago. For example, in the 2021–2022 era, we invested in a number of games where it was like, “Hey, over the course of 3 or 4 years, we’re going to develop an ecosystem and new intellectual property, and it’s going to be token-driven, and we’re going to launch a community with these assets.”

People were going to love it, and it was going to be better than the traditional AAA games that they played. What we found—and it was obvious to a lot of people at the time, but it was just what I think we believed about this Web3 ethos—was that people were interested in it because of the speculative nature of the assets, the tokens, and the NFTs associated with these games, versus the actual quality of the games and the gameplay.

And the time horizon of people with these assets, as you said, on high-performance blockchains—when they have high throughput, low fees, frictionless exchange of value, and the type of people that it attracts—is not many years. They’re not thinking, “I’m going to be a part of this community,” even in the most passionate, committed communities.

I remember an NFT project called Nouns, a collective-ownership project, and I think people were like, “This is going to last forever.” I don’t think a Noun has been purchased in over 100 days recently. There’s just not a lot of stability in cryptocurrency.

So we focused more on consumer things that are transactional. For example, one area where we’ve had success is Pump.fun. This is a platform for launching tokens. We invested thinking it would be all sorts of tokens, but they gravitated toward memecoins because they’re the lowest-friction, highest-volume, easiest things to launch.

As I said, we talked about prediction markets. Prediction markets started with this idea that the most popular things for a while were political markets, I think in 2023 and 2024. Those were long-term markets; one market could raise a ton of money, but people invested in them for longer periods of time. That’s not really what scaled.

What has scaled in prediction markets is much more like cryptocurrency trading. It’s short-term markets—5- or 15-minute crypto markets, prediction markets that expire in less than an hour, things like that. We just had to adapt to the reality of how people behave on blockchain, so we typically invest in things with shorter time horizons when it comes to consumers.

But we do a barbell because there’s another side of it. For example, I worked at Paxos, where I met my partner Carl, and we invested in a number of stablecoin-facing companies, like Squads, which is a leading stablecoin-services company for business-to-business payments and multisignature operations. We’re basically in every product related to moving money on-chain on Solana.

Then there’s another company called Dakota, which is a competitor to Bridge and allows stablecoin banking for large enterprises. So, another fantastic company.

But the point is, we straddle it. On consumers, you need a business model that typically has high velocity, high volume, and some level of fee collection. On the other hand, you need things that are, as I said, stablecoin funding, and the other is a decentralized money market where people are willing to invest capital and have this free capital because it’s generating significant returns, or returns that I might not be able to earn in my brokerage account.

You see more and more of these products appearing on the blockchain. For example, on Kamino, I can access yield and products where I can borrow funds that I wouldn’t be able to access in my Vanguard or Morgan Stanley account.

Yes, that’s interesting—something like a barbell approach. I think this is the right approach. It was even more interesting with Pump.fun and, I would say, with the idea of social commerce.

If you think about it, Pump.fun was something of an initiative, at least for someone who entered the market with products that fit social commerce. And now it’s kind of evolved in terms of ideas that fit the timeline. What do you think about the evolution of social commerce and where it’s heading?

6. Social Trading, Slippage, and Better Assets

Yeah, I think it’s in its very first iteration right now. I would say that social trading, as you see on the Pump mobile app, or as you see on FOMO, or even as you see on Twitter, is not a game that I would call particularly well-structured for the retail trader today.

The reason is that the attention spans and retention times are so short. Structurally, the leading traders are basically trading in front of people before it’s widespread, and usually in size. From the way I look at it—and I’m not a social trader—the leading traders have, so to speak, privileged knowledge.

That’s difficult. I put $100 in the account and tried to increase it, but nothing worked for me.

No. As for the market structure, I think Pump.fun is better than the others, but some of these apps have crazy slippage. It’s not just that they’re not great retail products; I know all of these leading platforms have definitely told their investors that their long-term plan is to bring better assets into their apps.

They say, “Hey, our user-acquisition funnel is these memecoins that get attention and get people excited, but eventually we’ll offer them better products, and there will be incentives for longer retention.” We haven’t seen this yet, so I completely understand why the average observer would be skeptical that this would actually happen.

But honestly, it has to happen because you can’t let your customers lose money. There’s just not an infinite number of people who can come to these apps.

At the same time, in today’s market, we saw the launch of Robinhood Chain, Base and Coinbase, Solana and Backpack, and a product called Stonks. You’ve seen a lot of better assets being issued on-chain.

The first way that retailers access them is through this weird thing called “stock memes.” You have memes that are tied to stocks, and you have to buy stocks to get into the meme—or you have to buy, excuse me, a meme to get access to the stocks—and they’re given to you over time for holding the memecoin.

This is a rather strange thing. This is typical cryptocurrency. You’re kind of loading people up on quality assets because it’s hard right now to get people to buy quality assets on-chain and hold them without some weird crypto primitive, like a memecoin that gives them the volatility they want.

So we are moving in the right direction. We’ve gone from pure memecoins to memecoins with some underlying assets that you can get some access to. But again, this is not the end state, and we need to move pretty quickly, I would say, to the end state: to get people to copy-trade and hold better assets.

Because frankly, otherwise people won’t do anything on the blockchain. They’re going to go where they see their friends making money—in artificial intelligence, in infrastructure, and at the supply-chain level. They’re going to see them just holding QQQ and making pretty good, steady returns while they’re rolling in money on the blockchain.

So better assets mean better long-term returns for people, even on the blockchain. In the meantime, one thing we haven’t talked about is that a lot of things are ex-U.S., meaning they’re accessible to people outside the U.S., and frankly, people in the U.S., at least by the rules, shouldn’t have access to them.

There are some positives. We get access, for example, to stablecoins, stocks, pre-IPO stocks, and crypto assets for people outside the U.S. who otherwise wouldn’t have access to them, quite easily, through apps that they can download from the App Store. I think that’s a net positive.

Yes, similar to how we started exporting U.S. dollars through Circle and Tether. At first, people were pessimistic because it was kind of unknown and strange, but then they saw them buying Treasury bonds and thought, “Oh, this is great.”

I think we’ll do something similar with the capital markets of the United States. Wealthy individuals tend to have access to them, but making them much easier for the global population is extremely interesting.

Yes, definitely. Access to these stocks pretty close to an IPO or, as Hyperliquid and others have suggested, pre-IPO markets. I understand that there are synthetics and a number of caveats in terms of what you actually have an impact on. But I think the most important thing we've seen in the last few years in cryptocurrency is that people value access over form in many cases and are willing to deal with some inefficiencies to get access to these exciting assets and products.

And, by the way, you want all assets to be on all blockchains. To me, you don't want to be picky about what assets or what things people want to trade. You really want to provide them with everything, with the deepest liquidity and the best execution.

Yeah, I mean, the ethos is always that Bitcoin exists because people said, “The government shouldn't tell me what I can own and how I can use it.” So I think it would be problematic, by the way, if there weren't any rules in the world at all for all the assets and all the ways people can access them. But I deeply believe that it's great to have people who are skilled enough to find a way to interact with these products do that.

And there will always be, I think, an alternative to deeply regulated platforms. They're never going to be the primary place for interaction—or maybe they will be in the very, very long term—but the access points and the ways they're used will look very different. But I think that's really cool.

And as you said, you mentioned stablecoins. Making stablecoins so competitive actually pushed the big U.S. banks and governments to offer better products to their customers, just to stay competitive, and we'll continue to see that for both retail and business.

I agree. What do you think? So maybe with longer retention times, so to speak, we're all competing to create the same thing? Are we all racing to create an app equivalent to Robinhood?

Because even with Robinhood, I believe—and correct me if I'm wrong—they have about 10 or 13 business lines that do over $100 million in revenue, but I believe that, at least in the past, most of their money has come from options volume. And so, even with Robinhood, arguably the best super app out there today, they're still more focused on short-term trading, and even now, I think they're making even more money on the prediction markets.

Yes, I mean, not just Robinhood, but a number of different banks, fintechs, and consumer and business companies that do pretty much the same thing, right? I can use Vanguard; you can use Morgan Stanley. There are different banks that I can choose from, so I don't think that's necessarily a bad thing.

Even if you just look at artificial intelligence companies, for example, their models are now looking increasingly similar. You just choose the one that you give a slight preference to because of how it communicates with you or how much information you've given it, and it produces better results. And, by the way, that could change.

But I think this is not just a crypto phenomenon. The scale of the businesses we interact with is growing. The ability of all of them to do a lot of things and offer a lot of the same things and products is diminishing. And then there's always going to be a need for more than one, whether it's a geographic region, whether it's, “I prefer this particular value proposition that's most important to me,” or whatever.

For example, if you just think about the leading brands in some of the areas that we talked about, like Pump, FOMO, Jupiter, and Phantom, I would consider many of the products that they offer to be substantially similar in many ways. But I think that they will have differences. For example, Pump will always focus more on memetic and social assets than, call it, Phantom or Jupiter. We'll see which one becomes a bigger use case over time. But they're all going to be, quote, super apps in many ways.

I think you guys at 6MV have been very flexible, to your advantage, by not being chain maximalists. I'm generally very ashamed to be a chain maximalist. I think it forces you to be dishonest with yourself, just to keep yourself within bounds. So it's best to always seek the truth and update your previous thoughts.

I know you guys were excited about Ethereum and various chains, Ethereum at one time, and Solana and Hyperliquid. I think you're also excited about Robinhood's chain. How do you generally think about the potential different uses, whether they're going to continue to exist, and people are just experimenting with each of them?

7. Solana, Hyperliquid, and the Chain Landscape

Yeah, so I'm just thinking about it in terms of use cases, right? If you're trading spot assets, to me, Solana becomes the de facto place you would want to do it on an exchange. It has the highest asset diversity and the best liquidity across the widest range of assets. This is a permissionless chain at a basic level, and you don't have that kind of issuer risk and so on. I think Solana will always be a great place to trade spot assets.

I think it has a chance. Hyperliquid today is the best place to trade perps on-chain. Obviously, Lighter is another option; it's on EVM. But I think Solana has a chance. I mean, if people are trading spot assets, they should want to trade perps and other assets as well.

But I don't think that chains tend to determine what people do. If you just look at how people interact in retail with these apps, like the Pump app or FOMO, it's just unclear to me if they know what chain things are still on. I think the people who tweet about them probably do, but the average user who clicks on a TikTok ad and downloads one of the apps doesn't know. They just see something like a “cash cow” or something. I think it's very optimistic that people don't know, that it's abstract, and even in the past it was extremely difficult to just put different sets of applications together. I appreciate the newer applications.

The other thing is that we have great teams at all these networks now. For example, infrastructure like Base gets a lot of junk, but there are really good teams building good products on Base. And you can buy great assets there.

There are really good teams on the Robinhood network, and some of them are brand new, like Rialo and Pondo. Interestingly, they don't necessarily look as venture-backed as they have been historically, which I think is interesting and quite optimistic.

But where we are now, you have a lot of good teams in a bunch of different chains that aren't going anywhere. You have the Robinhood chain and Base, which are backed by 2 of the largest fintech and financial brokerage institutions in America, both of which have global businesses. And, like I said, you have Solana, which doesn't necessarily have an exchange or a corporation tied to it, and I think that's a feature, not a bug.

8. The Problem with ETH’s Value Proposition

But now there are so many teams with different use cases that are building a global business that serves business and consumer users in different use cases, from DeFi to stablecoins and all these interesting trading things. I don't hear much about teams like this building on Ethereum L1. So I don't know what this portends in the long term, for example, but I just think that, with the EVM, I'm not very constructive on ETH as an asset that has value.

I was talking about the barbell approach, and I hate that murky middle ground. ETH has never been able to tell a coherent story about what it is and why it's worth holding in the last 5 years. I just don't hear people saying, “I'm developing on Ethereum,” too much. One of the main signals of this is that the biggest areas of growth for Uniswap lately are on these new L2 blockchains. And that's not surprising.

And, by the way, this is the idea, but I just don't see how this design will be beneficial for the ETH asset in the long run. But that could very well be a good thing because I think a lot of people who have been ETH missionaries have made a lot of money, and they probably don't care too much about whether it's 10 times more from here.

Yes, I really appreciate Ethereum. Personally, I complained about it a lot, but that's how I made my first money: being very excited about the DeFi summer that was happening with it after 2018 and everything that was happening with yield farming.

Totally.

It was a fun time. And so, originally, almost all of the innovation in cryptocurrency was born—not necessarily scaled—on Ethereum.

Yes. And then the people who created on it did so despite incredible headwinds.

Oh, of course. High fees, awkward transactions, all that stuff.

And then, when the L2 roadmap took hold, there were all these L2s, bridges, and such nightmarish things. Eventually, users and developers just said, “Hey, a lot of these things, like this decentralization, as the early missionaries described it, don't really matter to us. We just need functionality and products that work.”

So I think the developers and products that have had a lot of success recently, particularly over the last year, in the EVM ecosystem are paying more attention to their architecture and design and their value to end users. For example, the “Solana products” have been paying attention to those things over the last 5–6 years.

Yes. We need to make products simple and high-quality, first and foremost. You mentioned tokens, and I think that's obviously been a hot debate in the venture capital market over the last 5 years: equity versus tokens. If you look back quickly again, everyone just wanted tokens, and now everyone is saying, “We should focus on equity; equity is the most interesting part.”

I think even Hyperliquid was an interesting kind of test, so to speak, in the sense that it's a kind of quasi-equity where they do buybacks and everyone gets a token. That's kind of the scenario. Even the companies that we've seen, in some cases, have used tokens before they had product-market fit.

I think it puts the team in a more difficult position because you're both trying to find product-market fit and trying to work with market makers, for example, to provide liquidity, but also not get distracted by the price of the token. So what would you guys think overall about the debate between equity and tokens?

9. Tokens vs. Equity: Where Does Value Accrue?

Yeah, I would say it looks like, in the market, you're going to have to pick one. You will have to choose either one, or make sure that if you have both, there is some complementarity between them and that they work together in harmony. It can vary depending on the project.

For example, Pump.fun has both equity and a token, right? They're investing an incredible amount of money into the token by buying it and burning it. So they say that the continued success of the business will benefit its owners, and they've been demonstrating that for over a year now, investing, I think, over $400 million in buybacks and token burns. That's a pretty incredible amount of money.

This is simply incredible. But you have to trust them. This is not just a protocol. You have to trust the company, and you have to trust that the company will succeed in creating products and developing in such a way that this value grows and, in the future, fees could accrue to the token.

They are the best people for this, and that's why half of the money is now going to an equity fund to promote growth. If they continue to operate the way they are now for more than, it seems, 14 months, you're betting that the commissions will continue to accumulate and grow, and that they will invest well in products, marketing, and so on, as the company does.

I don't think they've answered the long-term questions about where the ultimate value is—whether it's in tokens or equity. The market is still figuring that out, but they're looking at a very long-term horizon and don't feel like that's necessary for most companies.

It's not just Pump.fun. It changes over time. For example, look at the Magnificent 7 mega-cap companies, which are now investing all of their free cash flow into capital expenditures after not doing so for decades. These things are changing, and the market will feel more comfortable with teams that communicate. The main thing is that you have to communicate.

For example, Hyperliquid is a protocol, so we'll leave that out of consideration.

There are other companies that have both shares and tokens. Venice, right? VVV. I don't know their tokenomics very well, but they were brave and released the token very early. The token has utility in the protocol, and at the same time, they have equity in the company.

I think this is one of those cases where time will tell if they can convince token holders in the long run that these 2 things can work together. I know Backpack has a structure—it's one of your investments—where they have a token and shares. They proposed a way for token holders to convert them into shares over time.

The point is that there are all these different models where a token and equity can work together, but you need to have a clear understanding of why each one is valuable. They're usually valuable in different ways.

10. Governance Tokens, XRP, and Cardano

What's not valuable, and what people have been calling worthless, are governance tokens. I don't want to hold a token just so we can decide where the fees are accrued. And, by the way, the team and core investors hold most of the tokens, so they will accrue the value to equity, and I will be forced to hang on to it. This model doesn't work.

What's also absolutely not working is that the teams you mentioned at the beginning are launching tokens without a clear understanding of what a token is. People don't have the patience for that these days, and they shouldn't, because the evidence suggests that these L2 tokens, infrastructure tokens, and many others were just ways for founders and investors to extract liquidity.

In many cases, a lot of the DeFi 1.0 founders left their projects after 3 or 4 years. You look at people like Hayden from Uniswap or Stani from Aave, and they are the exceptions in terms of really sticking with these projects, continuing to hold and invest in the tokens, and growing the business. Respect to those people, but they are exceptions.

There's no right way to do it. Certainly, without the passage of the Clarity Act, I don't think there will be any more regulatory clarity in the US about what the right way to do things is, so you will continue to have these strange structures. You have funds outside the US that are issuing tokens.

The basic principles are that you have to explain why the token has value. If there is equity, you need to explain how any value that accumulates on the equity will then flow back to the token holders. If you do that and report it, the market has shown that it rewards those kinds of projects.

There are a few others who do it, perhaps not as well, but they are appreciated, like Grass and others. So I'm bullish on tokens with income if they communicate clearly.

People were too bearish on tokens.

Yeah, and then the rest of the stuff, like L1s, L2s, and infra—most of them are memes. Do you understand what I mean? XRP, where it trades, is a meme. It's just a meme for boomers. Cardano is the meme for boomers. I don't want to name too many others, but a lot of them, like alternative L1s that don't have transaction volume, are just memes.

Essentially, as a token holder, you're at the discretion of the founders and early investors.

11. Where Crypto Meets AI

Yes. Interesting. I largely agree. How are you thinking about this? Many of our colleagues may have implemented mandates or focused more on robotics and AI. What do you think about this in general?

I think it's a return to a certain intellectual flexibility, so to speak. When something changes, you need to change your mind, too. It seems like it's a hot trend, but it also seems like AI will become more and more integrated into our lives. It's not hard to imagine that robotics will also be the basis for things that happen in the physical world.

So how do you think about it in general, or do you not think about it?

Yes, we're thinking about it. Cryptocurrency, from its inception, was about how we convert energy into money, right? What's so interesting is that a lot of the companies doing AI data centers are figuring out how to convert a big part of the AI value chain—how to convert energy into intelligence.

What's interesting is that so many of the people who were at the beginning of mining Bitcoin, cryptocurrency, and Ethereum are now turning these data centers toward intelligence. Naturally, a lot of these people—and I mean not just venture capitalists, but cutting-edge investors and people who run businesses—will have a lot in common.

That's one way they do it. We're interested in energy when it's converted into intelligence. We're interested in things like compute markets, and in compute technology as an asset class. There are a number of companies working on these issues. Some are crypto companies, and some are not. Maybe some of these things will be tokenized.

I think you'll start to see these 2 protocols, as primitives, coming together in a lot of ways. Another one, obviously, is open-source models. So you have computing and markets, energy for intelligence, and then, of course, open-source models.

The whole spirit of cryptocurrencies is at odds with closed-source companies, governments, and big banks. Now you see a lot of companies operating on open-source models, so we're interested in that and exploring it. We're looking more at the structure of the market now, at the spirit of how products are created.

The other thing is the movement of money. We don't have a lot of explicit investment, I would say, in agentic finance and payments. But the stablecoin companies and blockchain payments companies that we invest in are adding features and capabilities for agents, machine payments, and machine money—not just payments, but also the movement of money, loans, and credit.

I would say we're almost being dragged into AI, as opposed to being proactive like some firms and jumping into it, because our advantage is, for the most part, in financial markets. We're not rushing to invest in robot training or anything like that, but in things where we think we have a unique and long-term advantage—where we can provide connections to capital, help people understand the structure of the market, and understand where the money is involved.

So we're focused on moving money, accessing it, and so on.

I've been trying to find more and more intersections between cryptocurrencies and AI, and honestly, it's been hard.

Nous Research initially started with decentralized training and then created a really great product that refocused on the Hermes agent. There was another AI company that started as a compute technology, I think as a decentralized compute technology, but then moved more toward a neocloud. My current position is that I’m very bullish on each of them individually, but I don’t see any traction at the intersection yet. I hope I’m wrong, but right now it looks like cryptocurrency is going to be the financial backbone of all of this.

Crusoe would be another example, but you’ve seen a lot of these companies completely transition into AI companies. I think a number of crypto investors have been pulled by that, but I think that’s normal.

I expect, for example, that 6th Man Ventures will invest more in AI companies over time, again because they can be defined differently. These will be market companies; these will be the type of things that we just discussed. I think that’s totally cool.

What will happen then is that they will—and we’ve done this even in pure crypto companies—invest more in equities where we think the value of the company will be in equity, not in tokens. We hope that this equity will be tokenized. We will encourage companies to tokenize their equity because we think it’s just a better way to access more investors.

There are a whole host of reasons that I don’t need to explain to you as a Backpack investor. Even with crypto investors, in my opinion, it’s just becoming more fintech. We’re all just becoming more venture-oriented, and whether you’re in AI, fintech, or cryptocurrency, it’s all kind of blurring in my head.

I think you have to stay flexible. Obviously, you don’t want to go outside your zone of influence, so to speak, but the world is an interesting place, and you have to follow your intuition. That’s essentially what we’re trying to do without having FOMO, or expanding our reach beyond areas where we think we have a long-term advantage.

You saw a lot of funds take off in the 2020–2023 era because of the expansion of coverage. In some cases, venture capital funds came into cryptocurrency and exploded at the top. I think you’re probably seeing a lot of that right now.

There was a great post by Ben Enis of Menlo Ventures, which was one of the early investors in Anthropic, about funds that missed those early rounds that were done 3 or 4 years ago and are deploying at the top now. It’s going to be very interesting to see what’s likely to be a class of funds that do explode over the next few years.

What do you think about widespread investment in AI? Are we closer to the top? Will we engage in recursive self-improvement, and will we all somehow be consistent?

12. Are AI Valuations in a Bubble?

Overall, no. If we look at the market in 2035, the value of technology companies should continue to be much higher. I don’t think we’re in a bubble, but we could be in a bubble for AI lab companies, especially as independent entities, if giants like Meta are able to spin off Muse and essentially destroy entire lines of business for startups that are valued in the tens of billions.

That remains to be seen. This may be the peak for venture capital, as you say, but I don’t think that’s the peak for “intelligence,” or artificial intelligence as a set of technologies that are moving the world forward. I’m just getting started.

I guess I don’t know. I’ve been diving deeper and deeper, trying to catch up, to be honest. The more I dig into it, the more optimistic I become, but I’m very cautious. I don’t want to exaggerate, but I’m more into artificial intelligence, and it’s a very interesting field.

I think I’m more drawn to AI because I’m not an engineer. As products become easier for me to use, I see people around me—my family, friends, and others—using these products. Again, Muse is just an example. You start to get the proliferation of AI, and you get a mix of not just productivity gains, but people doing things they could never do before.

It’s pretty wild: getting organized faster and having more free time. It will take several years for people to get used to this new normal. What am I supposed to do with all these opportunities and all this time? I think that’s why we’re going through this strange, dark period.

This will definitely be strange. I definitely think that we’ll have 10 times more solutions because I have all this information at my fingertips that I didn’t have to research for an hour. I think we’ll get a metaverse, we’ll have something like global markets, and we’ll have agents acting as colleagues. We will have workers who will cook and clean.

It’s going to be a weird future. About 90% of people are just going to be scrolling through bad videos, and we’re going to have all sorts of societal things to think about. I’m not going to get too philosophical.

A full episode of Black Mirror. Do you have any hot thoughts? I think Mitch Albom or something wrote about “The Five People You Meet in Heaven,” but I know you have a lot of opinions on both the broader markets and the retail side. Anything that particularly excites you or that you find uniquely spicy?

13. The Next Five Years of Crypto

Nothing spicy. That’s it for now; my thoughts aren’t spicy. I think we’re entering a period of relentlessly better assets on the blockchain and more liquidity on the blockchain. We’re saying that, on the blockchain, the people who have access to these things won’t necessarily know it. They’ll interact through an app with an attached personal wallet that just sits in the background.

The on- and off-ramps are getting better day by day, and people can move money into and out of the blockchain economy from the traditional economy. I’m pretty relentlessly optimistic that the application layer of cryptocurrency will grow significantly in value and in terms of value delivered—I mean, not just the value of the tokens, but the value delivered to end users—over the next 5 years.

End users will include, as we’ve said, machine agents in addition to humans. It’s not spicy; it’s actually a bit boring, and it could be a longer-term 100x compounder.

What’s interesting is that you’ll keep reading, and it’ll drive people crazy about memecoins, scandals, and generally things that aren’t where the real money is moving or where the economic impact is happening. A lot of what’s happening in “cryptocurrency” is going to happen within big companies and among stakeholders that don’t necessarily identify with this crazy little community that we were born into.

I think it’s exciting. I come from fintech and, before that, technology, so this is what I always hoped for. This is where I feel comfortable working.

I think that will lead to, ultimately, really significant asset divergence. I really think we’re probably getting to a time where some of these things that have been traded in an inexplicable way, like Cardano and things like that, have the potential to go down significantly and never recover. Fewer assets will succeed.

This, in my opinion, was the most difficult part because it inevitably gives the impression that these things should be valued by discounted cash flows. Going back to maybe this bear market, it’s like, “Okay, everyone’s talking about earnings. What if we went back to discounted cash flow and P/E ratios?” Then you might look at these things and think that many of them are overrated and some are underrated.

Regarding your point about divergence, cryptocurrency has a funny habit of being more memetic sometimes. Trying to break these things down and figure out when that transition is ultimately going to happen, I think it’s bullish but also bearish, depending on what assets you own.

It’s going to be bearish sentiment on a lot of these infrastructure assets that we’re going to see, but I think they’ll just disappear. I think the volumes will drop to the point where eventually the exchanges will have an incentive to delist them and really drive people away from those assets, where their traders and clients are just losing money over time.

They don’t want people to be stuck in these big, high-market-cap assets that aren’t moving. Allegedly, this will not bring the desired trade flows. I would like to see exchanges take a more active role in this cycle, and I think they will.

Perfect. Well, we can end this here. Mike, thank you so much for coming on the podcast.

I appreciate the conversation and everything you guys have to look forward to at 6th Man Ventures.

Thank you very much, Mike. Thank you.