TLDR

In this episode of BidCast, Jason speaks with Guy, founder of Ethena, discussing the company's business model, growth strategies, and future initiatives. They explore Ethena's revenue generation, treasury management, and the importance of institutional partnerships. The conversation also delves into regulatory challenges, the launch of iUSDe and Converge, and the company's approach to retail distribution and market dynamics. Guy emphasizes the potential for significant growth as the market conditions improve, highlighting the strategic vision for Ethena's future.

Chapters

00:43 Introduction to Ethena and Market Overview

03:43 Business Growth vs. Token Holder Returns

06:50 Revenue Streams and Treasury Management

09:52 Institutional Adoption and Market Dynamics

12:33 Converge and Institutional Integration

15:49 Securitize Partnership and Future Prospects

18:46 Challenges and Regulatory Considerations

21:49 Future Growth and Market Positioning

30:33 Exploring Growth Efforts at Athena

32:04 Progress on iUSDe and It’s Market Potential

35:39 Innovations in Fund Structures and Tokenization

38:13 Institutional and Retail Distribution Strategies

40:57 Navigating Regulatory Landscapes and Market Conditions

45:30 Competitive Landscape and Market Confidence

49:28 Roadmap for Future Growth and Market Positioning

Transcript

<Jason Kam (00:43)>:

All right, we are live. Welcome to another episode of BidCast. I'm your host, Jason Kam, aka Maple Leaf Cap. Today is April 17th, 2025, 5 PM Hong Kong time. BidCast is being livestreamed to BidClub members. Questions are from the members and my own. Today I'm speaking with Guy Young, the founder of Ethena. What's up, man?

<Guy (01:09)>:

Thank you very much, thanks.

<Jason Kam (01:12)>:

I guarantee you the members are here that you just don't see them. Maybe you guys should say hi in the message. I want to start with the Ethena's numbers. I I have some high level numbers here. 5 billion of USD outstanding, 40 % state, of which 600 millions is on exchange, 4.6 % APY last time I checked, generating about 240-ish dollars of annual interest income, if I'm not mistaken.

How should I, are those numbers right? And then secondly, how does that translate to the revenue that the Ethena treasury or even the token holders are occurring?

<Guy (01:50)>:

Yeah, I've got a pretty long answer to this. So apologies for the length, but I have a slightly divergent view on this whole sort of question versus the rest of the market at the moment. So I think taking a big step back, I think before we start thinking about value capture back to the token, we need to recognize a few different things. One is like the life cycle or stage of a business just in terms of how long it's existed and where it is relative to where it wants to grow to. And then also the type of business is quite important here and whether it's a

<Jason Kam (01:54)>:

No.

<Guy (02:20)>:

Balance sheet driven business like Ethena or like a swap based business like a pump or a hyper liquid, I think they actually look very different. the reason for that is that the network effects and mode that you build from building a business like Ethena to something that's 10, 20, 30 billion dollars in size is very different to something like pump, which doesn't actually get more useful as a product, the larger that it gets. I think you can actually just look at like Tether versus Binance as a very clear reference point here, which is when these type of products become dominant, they are so much more dominant than their peers even in the trading space. so Binance market share, anywhere between 40 to 45 % and sort of shrinking actually through time. Tether market share, 70 to 75. And the reason for that is when these products become dominant, their network effects compound on each other, which is I want to use Tether because it is the most liquid and you continue using it and it continues growing and becoming more dominant as a result of that. The reason I'm giving this context is that...

The Ethena story in terms of where it can go and my vision for where I want to take this is just so much larger than where we're sitting today. And I think that trying to clip too much fees back to token holders now of like a few hundred K or a million a week is just insignificant versus where I think the outcome of where we can take this is going forward and actually putting all of that cash into reinvesting into growth, which is basically just going to be the yield on sUSDe I think is a much better trade off at this stage of the cycle for Ethena's growth.

Basic examples here was like, would the people who are listening to this call think that it's a better long-term outcome for Ethena to take $10 million and give it to a Robinhood or a PayPal or a Binance or a BlackRock or whatever it is to help distribute our product or spread that $10 million over a few weeks of fees that sort of come back to the token? My view is that the former has a much larger impact in terms of where we're going than a little bit of buybacks right now.

But yeah, I think that that's my super high level view, which is there is just so much for us to go and do in terms of like integration and still growing this product, you know, quite literally five to 10x where we are right now over the next few years. And I think that trying to focus too much on capturing a little bit of value now might actually, you know.

hinder your ability to actually go and to capture that. And I also think you want to get to a size where people just stop trying to copy Ethena and you just give up at some point and you just say, it's the biggest, it's integrated everywhere. And me as a startup coming to actually compete with that, I'm not even going to bother going forward. So that's kind of my view on things. I know that people in the market have this obsession with capital being returned to token holders and that kind of stuff right now. I think the one piece that I would sort of just stand back and say is that,

<Jason Kam (04:40)>:

Hmm.

<Guy (04:53)>:

Clearly this thing can produce a lot of cash in the right environment. This isn't sort of like a hand wavy. This is an L1 where if you 100,000 acts the activity that's sitting here at like a fraction of the cent, it might produce this much like 10 years in the future. I think it's quite clear that there is like a functional business model here that produces a lot of cash in the right environment. I just think, you know, like most businesses in the real world,

Some people need to focus more on growth in the beginning rather than capital distribution. And I think if you go into any normal business and say you want capital returned within a year and a half of being live, it sounds like a ridiculous statement to make. So yeah, I think that's my view.

<Jason Kam (05:30)>:

Yeah. No, it's a

good rant as a former investor in stocks. That's a right rant that I should be giving. And just to dive into that just a little bit, we should not be reading too much into the fee switch, because it seems like you're just not going to buy back, regardless of what the fee switch says.

<Guy (05:48)>:

Well, no, think

there's sort of three phases to this, right? There's one which is you make clear to the market that there is no equity code that is rugging token holders for the fees. And we've made that like abundantly clear now, like the equity is taking zero cash from this at all. And I think if a token is not doing that at a minimum, it's completely uninvestable. So that has been crystallized that there is no sort of side door that's going to an equity company on the side. So that's like stage one. And that's what we sort of come to the beginning. The second one, I think, is showing that you can monetize. So it might not be

<Jason Kam (06:01)>:

Hmm. Hmm.

<Guy (06:18)>:

that you're taking 30 % of the gross interest income, maybe take five in the beginning and just show the market you can monetize this in some way, but it's not sort of the full extent of where you think that you can actually capture value.

this product going forward. We've obviously done that through the lifetime of Ethena, so there's $60 million that's sitting in that reserve fund. That's like through cash that we've obviously captured through time with, know, percentage of the yield ranging anywhere from like 10 to 50 % plus depending on where the conditions are. So I think the fee switch that's coming in I think is more of a demonstrate and I'm obviously going to like vocalize this in the governance forum when...

when we sort of tick off the pieces that are on there, but it's more just demonstrating to the market, we can skim a bit of fees off of this thing and demonstrating that you can monetize this, but we think the take rate here is gonna be X percent where in the future, once you're at 20 bill plus, interest rates are at 2 % in the real world, we think that that number can be much higher basically. So that's sort of the sequencing that I think about in the three different phases. And I think right now, Ethena's sort of between one and two, yeah.

<Jason Kam (07:16)>:

Yeah. then obviously, you do have the $60 million in the treasury. Of that $200 to $250 million of interest incomes that flows through, you talked about like $10 million to Robinhood, for example. What is now in your mind the annualized fees that come into the Ethena treasury that you can work with aside from the $60 million that you have today?

<Guy (07:38)>:

Yeah, I think like a take rate somewhere between 10 to 20 % on that is something that we've been able to capture while still growing. think that this is obviously, it's a very difficult conversation to have, right? Where the interest rate is fluctuating from like 30 % in December to four to 5 % right now. And so if we're having this conversation back then, the number was like in a run rate basis of 1.2.

<Jason Kam (07:47)>:

Okay.

500 or something.

<Guy (08:02)>:

It was 1.2 bill actually in December. That was like a great number. So I think

<Jason Kam (08:04)>:

Okay. Yeah.

<Guy (08:06)>:
that's a little bit of the difficulty here, which is like, yeah, we can be sitting here and talking about the numbers at 250, but like, you know how this market can change in terms of A, the supply growth and then also B, gross interest income. And so I think there is a ton of volatility even just like on the top line of Ethena. And I think that's just pretty obvious from like the product design. But yeah, think the rough numbers that you quoted at a point in time is sort of reflective of.

<Jason Kam (08:31)>:
Yeah.

<Guy (08:32)>:
We're starting now.

<Jason Kam (08:34)>:
And then the cash, the burn rate today, are you tapping from that treasury or is this separate in the equity box?

<Guy (08:40)>:
Yeah, no, think it's just with raise funds that we've had through the Actico and then through the foundation before we don't have any need to A, either sell tokens from the foundation again or B, raise any more capital to sort of pay for the operating costs. like Ethena's pretty lean. It's 25 people right now.
where a lot of those heads have actually been hired for growth initiatives on both like the new chain supporting like the ethereal exchange and then some of the institutional stuff that we're trying to come out with now. So it's actually a pretty lean business in terms of like running operational costs that we don't really need to capture that much.

<Jason Kam (09:13)>:
Okay, so next couple of years, you don't see any need for tapping to the treasury. Okay. Okay. And your North Star currently is still the amount of USDe outstanding. Like that's the number you're trying to get up.

<Guy (09:26)>:
Yeah, I think that's correct. Obviously, I think this is a journey that everyone has to go through, which is you can issue the product in the beginning, but then you can be actually quite powerful as a forcing function to create new growth with some of these new initiatives that we're doing, whether it's a chain or other apps that are building around it. And so I think we've done that initial growth with existing apps that exist on chain right now. And I think the next push is putting in resources where...
there are new things that are being built with USDe. I think in the same way that, you know, Luna actually, despite the ways that they didn't do a lot, right? I think they did one thing, which is pretty good, which is like say, we've got this core product, but we actually want to support these different teams in terms of building on that core product and allowing that innovation to sort of like be built on their dollar product. And so I think that that's kind of like the next phase that we're going through, which is pushing this ecosystem and Converge is one piece of that. Yeah.

<Jason Kam (10:18)>:
You can hear me right, Guy, when I'm speaking? OK, cool. And then I guess, how? And are you taking any fees on the BlackRock 144 billion?

<Guy (10:23)>:
Yeah.
Yeah, so we take roughly 10 % of the gross interest income on that. I'd say our thinking around this product is less of something that...

<Jason Kam (10:39)>:
Okay.

<Guy (10:45)>:
You know, we're betting a huge amount on the success of the business or like revenue that we'll generate coming through this. You can sort of think about it as just a very complimentary product to USDe for both go to market, but then also the way that we manage like the backing for USDe. The secret source that people still I don't think have recognized, which is going to be coming live pretty soon with this is that actually USDtb is a very interesting way for us to tap into another source of yield, which is
the over-collateralized lending market within DeFi. So you can sort of think about what Sky and MakerDAO access right now. We're about to have, this is on the Aave public forums, but about to have USDtb allowed as like a borrowable asset within Aave. Why that's interesting is that actually we can double dip as Ethena, which is we're holding USDtb and capturing the full TVL yield in the back of USD for the liquid cash portion.

<Jason Kam (11:36)>:
funny

<Guy (11:37)>:
And then you can also lend it into Aave and then collect the lending yield on top. it's actually kind of like, it's almost like MakerDAO SuperChargers, if that makes sense, where you can capture like both the lending spread with the DeFi plus the T-bill yield on top. And so that just allows us to actually, A, diversify a bit of the sources of like income that are coming through, but then B, actually supply dollars into markets where people are levering up as USD as well, like slightly below market interest rates. So yeah, that's one piece which I think...

<Jason Kam (11:48)>:
Hmm.
Hmm.

<Guy (12:05)>:
will help to sort of smooth, yeah, yeah, smooth the, yeah.

<Jason Kam (12:06)>:
Let's go.
I think last time we spoke, and I think a lot of us are pretty excited about this, which is the Central exchange adoption. mean, after Bybit, we're hoping for a couple more. And then you see Binance out there doing its own like USD1. I guess, is that still like a big effort for you to get on board with Central exchanges? How is traction there? And do you think that's a growth venue going forward?

<Guy (12:33)>:
Yeah, 100%.
I think, well, the USD1 is very much a different product. It's obviously just like T-Bill backed with the World Liberty guys. don't know to what extent they're going to be pushing that very hard, but I sort of see it like another FDUSD on the exchange. I think the one reasonable piece is that BFUSD I think, has been not great in terms of like an outcome for them. I think it was sitting at 600 mil. They've done a, I think the management of like the, you know, return on the product. 

and pick up has not been, I wouldn't call it a success relative to the size of Binance in general. Without naming names with exactly who's coming online, we did have a pretty unfortunate piece with this barfing stuff, which I'm happy to address publicly here, which is the German regulators having an issue with the micro application that we put through on USD and that actually paused two exchange listings that we had coming out. Obviously, I'm not going to mention by name who they are, but we... 

to go with that and basically put a pause into that until we could sort of clear that. So yeah, part of the issue here is we're trying to get that piece cleared, which has been a big blocker for a lot of stuff that we wanted to do basically in the last month, which has been extremely frustrating on my side. And this includes our USD as well. So we've been just trying to work through that on our side. And once that clears, a lot of the stuff can sort of bring back to market.

<Jason Kam (13:52)>:
Do you have a sense of timeline on when the regulator will hold up when clear?

<Guy (13:58)>:
We're really hoping it's within the next 10 to 14 days. So we put out a tweet this week on basically agreeing with the German regulators to close down the minting entity that we had over there. And they just want to have a two week period where anyone who sort of held the USD within Germany has like a ability to come and redeem with us. So yeah, I'm basing what I can see right now. I'm hoping it has like full closure within 10 to 14 days.

<Jason Kam (14:21)>:

And that's the only holdup with this access. They basically tell you that once it's clear, we're ready to go. Is that the right way to think about it? OK. OK. Yes. There are a bunch of growth initiatives I want to go into. We can take Converge first, because that's the one that is the most recent. I guess the easiest way for me to ask this question is, how does it really work with once it's live? I guess, when is it live? And then like,

How does it work with a fund like us or any Wall Street institution? What is the flow of dollar and what do people use it for? Why don't we start there?

<Guy (14:57)>:

Yeah,

sure. Maybe I can just give you like a super high level what we think the opportunity is here, why we've been doing this. then, yeah, hopefully that sort of gives a bit of clarity from the top. So I think the frustration that we had on our side in the last couple of years is just actually looking at the inflows that we've had into the market and saying like really outside of BTC ETFs and a bit of stable coin supply growth, there's actually been no real inflows into the market at all. And you can actually just look at

DeFi TVL versus where it was in 2021. And it's actually, you know, many, many, like 40 % below basically the peaks that it was sitting at during that time period. And to me, that was actually a very strong indication that we haven't actually built or delivered any products to what I think is the most important thematic thing that's going on within crypto now, which is the institutions are actually here and they're wanting to deploy their products and capital into our system. And really like BTC and stable coins have been the only thing that have actually been beneficiaries of that.

So think given that we basically just have the view that if you're not actually thinking about how you're catering your products towards these pools of capital, you're actually just going to be left for dead if you're still continuing to just do the sort of DeFi games within our own ecosystem. Because right now all we've seen is really just like chips being reshuffled between different apps and different chains with no real inflows. If we also just take like another perspective on this,

I kind of have a view that there's only two actual use cases for blockchains right now. There's speculation and think, know, meme coins and Solana and then derivatives on hyperliquid are kind of the two obvious use cases that are being dominated outside of Ethereum. And then the second one is settlement for stable coins and tokenized assets. And that second use case, if you actually believe the crypto thesis going forward and, you know, all financial assets start to move on chain and we start to build infrastructure around that, you should think that that second bucket is much bigger as an option.

than the first one, which is just facilitating trading shitcoins, right? And we think that that second bucket, like Ethena plus Securitize is uniquely positioned to actually go and capture because you really have like two businesses that are coming from either ends of the spectrum where Ethena is taking...

<Jason Kam (16:49)>:

Hmm.

<Guy (17:02)>:

crypto native assets, i.e. USDe and then our institutional i.e. USDe product and saying, how can we put this in a format with different applications or just by itself to export out of crypto into TradFi? And that obviously brings new inflows into crypto. And then Securitize comes from the opposite end of the spectrum, which is saying we've got TradFi assets and they're going to do a lot more than just Treasuries. You know, their ambitions are to do everything like equities, private credit, Treasuries was sort of just the first step. How can we bring those assets on chain and then plug them into the financial infrastructure that like Ethena brings with its ecosystem?

And so think that coverage over there is actually really interesting because you're coming from two ends of the spectrum of like DeFi plus TradFi coexisting within the same place. And so yeah, this is really the place where when we have this iUSDe product and you have the different RWAs that...

securitizer bring on chain, we're actually just trying to build purpose-built applications and infrastructure for these people to use our products and actually bring in flows on chain. From like a user experience perspective, it actually looks almost identical to what any user would be experiencing right now. The only difference is that on some of the applications, there's going to be like an institutional button to turn like on and off. So like one example here can be a Pendle, right? So when you have iUSDe and you're trying to sell this to TradFi you know, it was 18 % analyzed roughly in 2024, but it's obviously an extremely variable rate.

Your ability to go to TradFi and say would you like 10 or 12 percent fixed on the same asset is obviously extremely compelling to like a huge amount of capital that sits within TradFi, but they cannot interact with like a Pendle pool when you know a North Korean could be buying the YT on the other side. so the sort of like permissioning and compliance actually sits at the application level where we're saying everywhere that we found product market fit building financial infrastructure around USDe, if we put a very thin layer of basically KYC and permissioning at the app level you actually put that in a format where drag file can underwrite that.

On the other side. So whether it's levering up like iUSDe on like Aave's new Horizon markets, whether it's putting it into Pendle producing like fixed rate returns out of that, all of these different areas that we found product market fit, all we're doing is saying like these applications can exist as like purely permission as DeFi or slightly adjusted for TradFi to be able to interact with them. that's like one piece that. And then at the chain level, I think there was a bit of a misunderstanding from the market when we came out and that was my fault in terms of how we communicated that. It's not like a permissioned private blockchain,

<Jason Kam (19:07)>:

Hmm.

<Guy (19:18)>:

which is kind of like the first read that a lot of people had. The only overlay that we have in this whole piece is that there's gonna be a staking component for NL, which is actually there for institutional users. You can sort of think about it as like a second failsafe behind the centralized sequencer that sits on like an L2. And so if you have some sort of hack or issue where whatever, BlackRock's lost hundreds of millions of dollars on this chain, the real risk is actually...

people moving the USDe or bidl from that chain into another one where they can then sell it into ETH or some other asset and then sort of like escape with it. And really like the perimeter of where these things are unsafe is actually at the bridge layer basically, where if you're taking like USDe and bridging at three layer zero and it comes onto ETH L1 and is then able to be sold for anything, then you actually lose money. And so all this is sitting here is doing and doing is providing basically a way for these institutions to stay in there and actually be part of like the DVN that sits within like a

<Jason Kam (19:57)>:

Yep.

<Guy (20:13)>:

zero bridging network and so they have an ability to say actually if these are stolen funds that are trying to come out we're blocking that transaction and it's actually stuck within this environment until we sort it out and so it's actually like you can think about you know base running a single sequencer that is much more permission than anything that we're describing to do here because if Coinbase decides that that transaction is not going through it's not going through we're basically running this as something which just has a second layer of a safety net or guard rail, it's around getting assets off the train basically, if something catastrophic has happened.

<Jason Kam (20:45)>:

I guess then two questions is, what's the uptake so far from the institutions? Kind of who are they, if can disclose? And then secondly, I still have a bit of trouble imagining Bridgewater just 1 PM coming in here and just clicking buttons, aping somehow coins that are in fire blocks into, let's say, Pendle.

Like for somebody like Bridgewater and Blackrock and like Viking and some other actual funds with real custodians that need to like ape into this stuff, how would they go about doing this on your chain?

<Guy (21:16)>:

Yeah, I think it's obviously going to be slower process than like...

launching a new chain without a token and then doing a points farming campaign and then seeing the numbers go up. This is obviously something that's going to take a lot more time to actually do properly. This is something that I spoke about in the tweet when we released it. But you know, the things that are hard to do are usually the things that are worthwhile doing because no one else is bothering to try and get it done. So I completely agree with you. It's not going to be easy to get them comfortable, get them on chain and doing things. But it's also because the upside for doing it is so large that you should be taking that bet and putting in the work to make it happen. As it relates to your question around the uptake,

We're obviously coming out with iUSDe stuff, which again has been paused because of this bathroom piece. But we have basically a half a billion dollar commitment from one entity that sits within Trad-Fi to come and like see this initial product. And that's just that they're comfortable to actually take it and use it on chain or on centralized exchanges as well. And so to me, it was a pretty strong indication that like a dollar with a structurally high yield, the demand for that isn't $5 billion. It's like north of 100. And we're delivering a format now.

where we bought a single entity providing nearly half a billion dollars into that. And so I don't think it's actually gonna be like a demand side problem for like iUSDe the asset. The second, the piece that's gonna be a bit harder to draw out is saying like, do you wanna go and use this in interesting ways within like the infrastructure we put around things? And I think that, you know, that is gonna be something that takes longer to do and it's gonna be hard.

<Jason Kam (22:24)>:

Hmm.

Hmm.

So it seems like your combo would be more to like, you know, like us trust and SSNC and those vendors. And basically ultimately getting the funds that are onboarded to them to like somehow buy, you know, your products on, your chain. that would take. Yeah.

<Guy (22:56)>:

What?

I mean, there are conduits that you can go through to sort of act as middlemen between like big pools of capital and coming on-chain to do these things, right? So like, you know, even just naming one fund, like Brevin Howard obviously has like access to a $50 billion LP base and they have like a division of their arm, which can actually use it. They're doing things properly on-chain. And so you don't actually need like every single entity on that to say like, I'm actually physically there doing these things is actually, you just need a few connection points to the right pools of capital where someone can be executing this on-chain. You know, some of them might

<Jason Kam (23:03)>:

Yes. Yes.

Hmm... Uh-huh.

<Guy (23:27)>:

even face into whatever galaxy that's sitting there and saying, we can actually do these on-chain functions for you and manage that for you on-chain. There's another project, don't know if you've come across, Upshift, again, their whole product offering and saying, we'll collect these pools of institutional capital and then do all of the hard work that sits for you on-chain. So think the key is just getting the product that they actually want to use on-chain, which we believe a dollar with a structurally higher yield is one of those big products that actually makes sense. And then putting a...

<Jason Kam (23:35)>:

Hmm.

<Guy (23:56)>:

thin wrapper of compliance around it which actually allows them to tick the box to say that we're comfortable with that and then I think the operational piece of actually getting the money in and out and sort of doing things someone can always act as like a middleman to get that done and I think it's just sort of connecting those two pieces.

<Jason Kam (24:10)>:

Hmm.

terms of, because eventually, if it works, the uptake here from outside capital should be meaningfully more than, let's say, $5 billion if you really nailed this. In terms of getting it to a certain level of heft, like couple billion dollars, are we talking weeks? Are we talking months? Are we talking quarters, in your mind?

<Guy (24:31)>:

Yeah, it depends how you define it, because securitizers have a very big chunk here and very small changes can materially move that number. So one example here is that we hold nearly one and a half billion dollars a biddle.

if we flip a switch that moves from Ethereum to Converge and that's like the money that's sitting on there. And so there's quite a few of these pieces where if we're just making business level decisions to say, we're holding these assets here instead of there, and this applies to Securitize as well, their number can be much bigger, much quicker. So I think like, know, multi-billions in like a few months from launch, I think is reasonable, but a lot of these things are gonna be like business level decisions of entities that we're working with just actually shifting their assets in terms of whether holding them over there.

So yeah, I think that that's fair and I think that I use it.

<Jason Kam (25:17)>:

And it seems like that effort is bigger than, let's say, bringing in stocks and RWA onto your chain. It seems like that's much smaller versus bringing capital in buying crypto products. For now.

<Guy (25:28)>:

The stocks will definitely come and I think there's a very interesting overlap with the Ethereal exchange that's launching on there where, yeah, they're not just wanting to do crypto perhaps. Like I think actually, and I've spoken about this on podcast last week, think that if I create a perhaps product around the equities, like a $10 billion.

idea in isolation, if you can do that properly. And so I think there's interesting overlap between all of these other assets that Securitize can bring on-chain in spot format and then thinking about how you add these crypto primitives or derivatives and that kind of stuff around it. So yeah, it's definitely on the list of things I want to do.

<Jason Kam (25:45)>:

Yeah. Yeah. Yeah.

Yeah, and I guess aside from the accrual to USDe itself, because it will drive USD TVL, when it comes to actual ENA contribution, there are, in my mind, three pieces, which is one, the Eth ENA being bought for staking. The second piece is the, I think you're going to use USD for grass fee. Does that just get expensed? And then thirdly, are you going to give out any token incentives on this chain to like facilitate action? I guess those three things.

<Guy (26:30)>:

There might be a little bit, but it's not going to be like an excessive farming campaign. think a lot of this has to be just driven by, Is that real demand from drive for all these products sitting on chain? And we have to rely on the fact that these products themselves stand on their two feet. So there isn't a plan to do some huge farming campaign for it. I would say, yeah.

<Jason Kam (26:53)>:

get a purchase for staking.

<Guy (26:55)>:

Yeah, there's API staking and then also we're releasing the tech documents that come out today, but there is going to be a sequence of this running on the train and the fees there obviously come back to Ethena as well. And obviously when you're including in exchange that's sitting on the train, there's a pretty decent amount of activity that could actually originate from that type of activity as well. yeah, there is also fees directly from the sequencer itself, which would all be due back to Ethena. So there's no new token that's coming out of that.

<Jason Kam (27:22)>:

Got it. So the Minimus ENA being kind of emitted for ENA stakers that are validators. And they will be earning fees from the USD. That is the transaction fee on this chain. And I guess you don't really expect that ENA being purchased for validators to be a material driver. You don't expect a lot of things to be brought and staked at the moment. OK.

<Guy (27:43)>:

I think that there'll be a reasonable amount, but I don't think it's going to be like at the size that you see on like L1s at the moment. But I think, yeah, basically amount of fees that are coming from the chain. But then also like the business model can be quite different, right? Because a lot of the chains right now basically rely on like flow and volume based transactions.

<Jason Kam (27:49)>:

Hmm.

<Guy (28:02)>:

to capture fees back themselves, but actually it looks quite different when you have USDe as a gas token because it becomes like almost like a balance sheet driven chain, if that makes sense, which is like the more apps that are using USDe and the more that it exists on the chain, we're just making it continuous, and extremes just from the gas token being USDe and obviously the backing that sits behind it. So I think that is one thing that looks slightly different here, which is it's all of the stuff that's sitting on this chain outside of the exchange are much more like NIM type businesses rather than like.

transaction fee, MEV type stuff that you see normally.

<Jason Kam (28:34)>:

And since you have the hope that it's going to be a multi-billion dollar TVL on this chain soon, this is in addition to the current TVL of USD. And are there any, I guess, what's the best way to ask this? What kind of effort or which party is the most instrumental, you think, to this growth of this TVL?

<Guy (28:43)>:

Correct.

Yeah, I think the first person that we're going to come out with around iUSDe with that number that I mentioned is going to be pretty big. That will obviously be the vast majority in beginning. I think the piece that we...

<Jason Kam (29:11)>:

Okay.

<Guy (29:12)>:

The piece, the reason that we've done this with Securitize and I'm not sure the market is of like fully appreciated now is that like they are obviously the tokenization partner for BlackRock and like everything that BlackRock decided to do on chain goes through Securitize. And so having them is like the deep, this is like the default issuance layer for everything that them Apollo and their

are doing to come through here as the first step is a very meaningful thing I think because like if we think about what is the narrative for ETH right now it's like okay well we lost speculation to Solana we lost speculation to other places but you know institutions are building on our train we're actually challenging that in a massive way to say

you don't decide that it's actually us as the asset issuers and stable point issuers, securitization, partners are actually deciding where these assets go and what's actually built on top of them like afterwards. That's like one of the big pieces for us, which is this huge optionality here for what else is there that BlackRock and everyone else that securitizes working with, what else are they wanting to do here and how can we sort of support that going forward? And being the default place that securitizes coming to do that business, we think is actually a very meaningful piece in terms of like, yeah.

<Jason Kam (30:18)>:

They are pulling, they are as a part of BlackRock pulling clients into you of kind of doing the marketing is this one.

<Guy (30:25)>:

Yeah, and also like whatever they

come out with next, right? They've only done a treasury product coming out of BlackRock. There is a lot more that is coming. That is going to be A, through securitizing, and B, on converges, like the default issuance layer to do that. so that's kind of, yeah.

<Jason Kam (30:32)>:

Hmm.

Interesting.

The funny deal I saw recently is that they acquired a fun admin that a lot of funds use in this space. I wonder if that fun admin service could just directly plug into your chain. then secondly, they could sell to traditional funds as well. But that's interesting. That's cool. Would you say Converge is the biggest growth effort under Ethena at the moment? Or is there anything else that is big that you think we're

that ranks in higher priority here.

<Guy (31:09)>:

I think iUSDe is going to be bigger just as a product because not all of it's going to be used on the chain. And I think just holding plain vanilla, iUSDe to or people actually just as collateral within prime brokers in the real world, putting it down to get leverage on investment banks, all those different pieces. I think that actually iUSDe to as a product can be bigger than Converge's chain.

<Jason Kam (31:29)>:

Yeah.

<Guy (31:31)>:

a higher level of confidence that there's extreme product market fit for that as a product versus us taking a pretty big swing at something that is speaking openly pretty unproven at the moment, which is how much more do these institutions want to do? So I definitely can't admit that the probability of that working the way that we've described it is definitely lower than us pushing our existing product into TradFi But like I said, think the upside for doing this is so high.

<Jason Kam (31:41)>:

Yeah.

Yep.

<Guy (31:57)>:

still like a bet that's worth taking on our side. So yeah I think that's probably a bigger piece.

<Jason Kam (32:04)>:

So, tell us more about the progress at iUSDe. Like, how's it going?

<Guy (32:08)>:

I mean, it's all ready. It's literally ready to go. And this barfing piece again has slowed us out from coming out with it properly and the pressing and all that stuff that sits around it. So at a very basic level, all that's happening is we're putting a permissioning layer around USDe, the asset. So it basically has the same token format and standard that you see with BIDL where you need to be KYC to hold it and like sitting on a ledger and you can't permissionlessly send it through, you know.

any DeFi app and that kind of stuff. The interesting thing about it is that once you put it in this format, you can actually then take it as like collateral to do a bunch of things, you know, even outside of crypto, which is like, whatever hedge fund is sort of taking this and has a relationship with an investment bank in terms of just getting leverage or like a prime broker, this asset then you can actually take out of crypto and say like, who else can like interact with this and where can we use this? And so yeah, for us, it's like,

I think just speaking to people, the size of tickets and the cost of capital for people who sit within TradFi is that much lower. So like even 8-ish percent is pretty interesting to a lot of people in crypto when the duration is also so short. You can get your money back in seven days. So yeah, I think it's really just waiting for market conditions to be a little bit better where funding rates aren't literally below T-bills like they're sitting right now. And us to sort of clear some of the stuff around Buffin.

Yeah, I am very confident in terms of like the size of demand that sits out there for a product like this with this kind of guy.

<Jason Kam (33:40)>:

Yeah,

ownership of this will also be through, you know, like a Galaxy or a BlackRock. Like it's going to be wrapped before it's offered to like real financial actors that don't necessarily have to infer.

<Guy (33:51)>:

Yeah, this is actually a very cool piece and I should mention it, like you said, it's been set up in a very flexible, like fun structure where actually any hedge fund in the world.

can come in and work with the tokenization partner that we're working with and actually just put their own fund structure on top of it. So the initial person we're coming to market with is just a very large hedge fund who's basically opening up a platform to all of their LPs and just saying, you can co-invest into this vehicle with us whenever you want. it's sort of like an investment manager that sits on top of the asset. And all you need to do is send them fiat. And what they're doing under the hood is saying, we're turning fiat into USDC, minting USD and holding like an investment vehicle that actually sits on top of it. And so all of their clients actually did not need to fucking touch

<Jason Kam (34:04)>:

Hmm.

<Guy (34:29)>:

any USDC managed wallet, anything, all they're doing is sending, fiat into a fund and buying like essentially shares of a fund that replicate the underlying. And so it's set up in a maximally flexible way where you can take the basic legal structure and fund structure that we put in place and actually just like throw in your own like new name that sits on top of it. So it's actually a couple of, yeah.

<Jason Kam (34:48)>:

Hmm. And this box, do you operate or securitize operates?

<Guy (34:54)>:

Securitize does basically like the fund admin, the tokenization piece of it, all of like lower level stuff that a lot of people don't want to touch. And then you could even be a crypto native fund and actually just say what...

said like with our existing LP base this is sitting here and if you want to put money into this you know and that's sitting on top of it.

<Jason Kam (35:14)>:

That's

That's cool. And I guess this is where we talked about before, which is at the minimum, short-term US treasury rates at the best is kind of the crazy yield that crypto offers through fund future basis, effectively. Cool. Well, probably hear about it more in hopefully two weeks. Fascinating. OK, so we talked about iUSDe. We talked about Converge.

<Guy (35:26)>:

Correct.

<Jason Kam (35:39)>:

There are other things we discussed historically. There's the apps for distribution. There's the potentially setting up an ETF and then just apes USDe, and then redeploying for buyback. There's like, I don't know, is there anything else on your list that you thought you're really excited about aside from the couple of things we talked about?

<Guy (36:00)>:

Yeah, I think the other cool thing with iUSDe that comes out of it is you can put it in a format that can actually sit within the ETPs and ETFs. So I think an ETF is much less likely now in the US, but we're making good progress on something in Europe around an ETP. so again, just getting into like an exchange traded format that you can actually just put into different distribution channels there, I think is interesting to us. The other one is...

Yeah, I think just more apps that we've seen coming to market. we like the ethereal pieces opened up its test net now and there's been like market makers in a few like early tests that are getting involved there. And I think the initial feedback has been pretty positive. Obviously when these things are successful, they can be pretty large in terms of the demand sink for dollars that go into them. And I think the value proposition there is actually uniquely interesting to me, which is kind of you've got two of the killer products of crypto coming together in the same place, which is kind of dollar with a yield and then

<Jason Kam (36:38)>:

Hmm.

<Guy (36:54)>:

speculating on  and having those things like by default integrated with like Ethena providing liquidity I think is actually an extremely interesting and compelling idea even though the  space is obviously extremely saturated at the moment. And then I don't know if you've seen like a few of these things that came out this week. I just found this intellectually pretty interesting was this insurance, re-insurance businesses that are actually like underwriting re-insurance in the real world and

<Jason Kam (37:07)>:

Mm.

<Guy (37:19)>:

collateralizing it with USD on top. So you're almost stacking two forms of uncorrelated yield into a single product. And then they're actually tokenizing that product so you can then take it onto like a more. Anyway, I thought that was pretty interesting because like obviously the capacity to earn 10 % like uncorrelated real yields in addition to like what you're using on the sUSDe collateral. Pretty interesting product. And to me is just the thing that I find most interesting right now, which is kind of like.

real assets or businesses coming in, putting a crypto primitive on top and trying to make it better in some sort of way. And I think that that's a pretty cool use case that's coming out of that. And then, yeah, as we spoke about publicly in the roadmap piece, we also have the telegram launch, which for anyone who's gonna be there in Dubai, we're gonna have some piece that we're taking out a token just around the department. So yeah, I think all the stuff that we've been speaking about here was really on the...

Institutional side of the distribution like barbell and then the retail side. I'm pretty excited about I really think the two avenues there are kind of centralized exchanges plus Telegram I think the two most interesting retail distribution

<Jason Kam (38:27)>:

And this is issuance

<Guy (38:30)>:

It's more interesting than that.

It's basically like, so right now you only have USDT within like the centralized app and the TON

spaces, so not actually sitting on the TON chain itself. Think TON, I'm obviously excited about what they're doing, but I think we can openly admit that the DeFi ecosystem there is underdeveloped or immature versus the rest of the chains, and that's not a criticism. I think it's just a statement of where it's at. I think that that is less interesting to us than the centralized distribution of just sitting within the wallets as a savings technology that sits alongside Tether. So it's a pretty cool way you'll actually have within your main app that actually has the real

users sitting within the wallet rather than like the DeFi ecosystem itself. You'll basically just have an option to toggle between USDT for payments, sending to your friend, all that kind of stuff. And then savings, which is sitting with Ethena, is like the only option there within the main app itself. The cool thing about that in my perspective is that, what is the one financial product on earth that like everyone wants out of finance? It's basically just holding a dollar in your bank account, getting a yield and then spending with it. And you're actually able to do that through a single token sitting within your...

<Jason Kam (39:24)>:

Hmm.

<Guy (39:38)>:

Telegram app itself. So holding USD, making saving saving like generating a yield on it and then integrating card payments as well directly within the app where you can actually just double click on your Apple pay and then just spend your USD that's in your wallet directly on your on your phone payment. So to me that's like very cool, very real use case that can actually touch the hands of like many.

<Jason Kam (40:01)>:

Hmm.

<Guy (40:01)>:

here is that we're also getting to work a bit closer with the Tether team because, yeah, think the Tether obviously was like the only asset that was sitting in there and they were quite defensive, I think, in terms of who else was coming in there to operate alongside them. I think the piece that people don't realize about Ethena and Tether is that 70 % of the perpetual market is actually denominated in USDT. And so what that means is that

<Jason Kam (40:16)>:

Yes.

<Guy (40:29)>:

when Ethena is backed one to one with pervs, a dollar increase in USDe supply necessarily creates 70 cents increase in USDT supply because as we're adding a short to the market, you always need a long to match that short. And so that actually creates like 70 cents of tether demand on the other side. So you can actually think about like, as Ethena is growing, 70 % of that growth is actually feeding through into tether on the other side, which is something that even Paolo didn't realize until like a couple of months ago.

<Jason Kam (40:43)>:

interesting.

Hmm.

<Guy (40:57)>:

And so that's one piece where we're again, you know, I think they're like a bit more open now to us basically working on Telegram and TON now sitting there because they sort of understand that even if assets are flowing into Ethena, it sort of feeds through into them as well. And so, yeah, that's just.

<Jason Kam (40:57)>:

Hmm.

And are the Germans holding it up still? Or is this separate as well? OK, this is completely separate.

<Guy (41:17)>:

No, no, this

is more of like a technical implementation thing. We had to rewrite all the contracts specifically tailored for Telegram, and that's just taken a while to get audited. There's obviously many pieces of the business that's within Telegram across different teams and that kind of stuff. And I think we'd always guided towards Q2 for getting that product out. yeah, this has just been something that's been an attack in engineering rollout rather than anything else blocking it.

<Jason Kam (41:43)>:

Does having Ethereal prevent you from going on like hyperliquid, for example?

<Guy (41:50)>:

So we bought the ticket for Hyperliquid, which you might have seen. And so yeah, we've got the USD ticker there. We're just waiting for connectivity between Hypercore and the EVM, which allows the arbitrage to actually close before we actually start to put any real assets on that. The issue though is that Hyperliquid is not designed in a flexible enough way where you can actually just take that as collateral to trade on portfolio margin.

<Jason Kam (42:04)>:

Yeah. Yeah.

Hmm.

<Guy (42:20)>:

going to have unless they rip up the entire order books being denominated in USDC. So the use case there is kind of like if you want to close your positions on perps and then swap into USDe as like a savings asset in the spot side of the book. So we almost said there's like an HLP equivalent if that makes sense within the spot side of the exchange. There's like a savings tool which is like one click away. Obviously USDe within the EVM can be useful in the same way that it has in other ecosystems. But I think

<Jason Kam (42:38)>:

Yeah.

<Guy (42:48)>:

Yeah, it doesn't sound like there's a big urgency or desire from the Hyperliquid team to either push portfolio margin on the exchange itself or allow for different assets as collateral on that. And so you're never going to be able to have this of like yield bearing use case on there until they've sort of like redesigned the way that they've done the exchange there.

<Jason Kam (43:00)>:

Hmm.

I guess unless until like Ethereal makes significant headway in volume and traffic and TVL, they will start sort of maybe consider it.

<Guy (43:18)>:

Yeah, it's an interesting question

there because like I think a lot of people have speculated around a hyper liquid stable coin coming as well. And I'm not saying this because we're building one and I'm trying to put down the idea but like finance can only grow FDUSD to like very low single digit billions. There's a very good reason for that and it's like when you shop your own stable coin into your own exchange, it's very limiting unless you can be using it across every single exchange. And the very interesting piece about this is that it's a huge

<Jason Kam (43:31)>:

Yeah.

Huh.

<Guy (43:48)>:

It's a huge risk to your own core business, which is printing millions of dollars now to actually rip up the liquidity around one pair and say, okay, come do it on a new pair instead of the USDC one, because you actually just run the risk that people don't ever come back and make that pair of liquid again. And that's actually the moat that Tether has with Binance, which is no one wants to take the risk of ripping up the BTC USDT pair because it prints Binance $10 billion a year. And so, you know.

<Jason Kam (43:57)>:

Yeah.

Uh-huh.

<Guy (44:16)>:

can make 4 % on that because no one ever wants to run the risk of killing the cost of the exchange business. And that's the same that I think hyperliquid is in now, which is it doesn't make logical sense to sort of risk the core trading business in my view to try and shoehorn your own asset in on the other side.

<Jason Kam (44:21)>:

Hmm.

I guess since Trump became president, it's been about, I guess, a couple of months, has the US regulation gone more friendly to you? And importantly, the Stable and Genius Act that we hear, like, the way that regulatory sort of regime is going, do you feel like it helps you, the USDe? Does it feel like it hurts you? Is it important that you're regulated as like a payment stable coin in that regime?

<Guy (45:02)>:

No, not from my perspective. yeah, I'm very happy, I think, with where it's like landing at the moment, which it looks like there'll be a carve out for everything that isn't like pure payment stable coins right now. And they'll come to address it within two years. And I think, you know, in the conversations that we've been pulled into, there's like specific mention of Ethena and Sky being in this bucket of like other that they'll come to in like two years. So I think that that's as much as we could have asked for there. We don't have retail presence now in the US, which we are.

<Jason Kam (45:22)>:

Good? Uh-huh.

<Guy (45:30)>:

Exploring and we think that like our USD is actually the better sequencing of events here Which is like face off to US institutional users with your product first to sort of slowly get your way into the into the country in a in more conservative way and then the The plan that we have is to actually before actually opening up retail access Without sort of checking with anyone. We want to go into the SEC for a no action letter

from them, which is basically just going in to say, this is our product, this is what we do, this is why we think it's beneficial to consumers, and can you give us the okay before we do it, before we come in. So I think that that's our approach, we just don't want to take any unnecessary risk now, which is sort of like presuming that people are fine with everything and risking something. So that's kind of our approach here, which is phase it in with our USD and the institutional product, and then get explicit confirmation from people there that they're fine with what we're doing before.

fully open up the retail presence in the.

<Jason Kam (46:26)>:

and what's

the timeline there?

<Guy (46:29)>:

I really can't give one so we've been in conversations with them but I think I don't want to overcommit on that side because obviously that's pretty much entirely outside of our control.

<Jason Kam (46:37)>:

Got it. has any of the, I wouldn't want to call it competition, but there are a bunch of folks that recognize the spaces trade, Falcon X, Sten X, CredX, I don't know how to phrase this question, but has any of them sort of pulled volume from you or do you view as any of them as like potentially threatening to your business?

<Guy (47:03)>:

I think the honest answer is no. Like a few of them have got to like low nine figure size. And I think I actually see the growth of one of them. like one was called Resolv and I sort of came out and I was complimentary to them saying like they approached the design, interestingly, and then they TVL out like four X in two months after I sort of gave the public. We had our own LPs actually leaving Ethena and they're like, you think it's safe? Okay. And then they went in there.

<Jason Kam (47:11)>:

Huh.

Nice. Very helpful.

<Guy (47:31)>:

No, I think the issue is that everyone is kind of like already so many steps behind in terms of like integrations getting to the right places and that kind of stuff. I think maybe I'm being too dismissive here, but I think once you've got Binance Collateral, people will basically just stop doing that. And it just becomes an extremely high hurdle for people to come in and convince like these big platforms that have done the work on Ethena and got comfortable with what we do.

I think the big piece here and I think it worked in our favor was actually going through the Bybit incident and some of the liquidation stuff that we have this year and having like literally zero issues out of what people perceive to be you know one of the worst right-tail events that could have happened sorry left-tail events that could have happened to Ethena without like any issues it actually built a lot of confidence in the market to say like

<Jason Kam (48:16)>:

Hmm.

<Guy (48:20)>:

it's actually pretty lindy now and there's a pretty high hurdle for what I need to see from someone else to not just use Ethena and be comfortable with what they're doing, if that makes sense. So I think if you're to come in and compete now, you have to so explicitly beat Ethena in terms of returns, whether that trade off makes sense, i.e. taking the risk on a new team who hasn't proven themselves at huge scale for what has been like, you know, over a year now. And I think that's just a pretty high hurdle for people to come in and do. So yeah, there are like, you know, there's been...

I'd say five to 10 that have like emerged in the last year, they all get to like low nine figures with, know, side TVL deals and that kind of stuff and then sort of die off after. So, yeah.

<Jason Kam (49:01)>:

Understood. Got it. So if I were to summarize, it seems like the plan here is a piece, well, I wouldn't say a piece, but answer all the questions regulators may have. Figure out a way to get into the US, but in the meantime, solve the hurdles you have with traditional institutions that can onboard you through iUSDe. Clear the hurdles with more exchange adoption. Clear the hurdles for reaching retail at the moment mostly through Telegram.

And hopefully you could get the 5 billion TVL to add another zero to the end of it, maybe in one quarter, two quarter. And then in the meantime, maybe increase the war chest from 60 million to, I don't know, call it 100 million if the yield and the 8 TVL increases. So you can start cutting $5 to $10 million deals with more strategic partnerships that widen the TVL. Is that the right way to think about your roadmap? Did I miss anything?

<Guy (49:52)>:

Yeah,

think on the the just the cash piece of the end we don't like we can still capture that Those millions of dollars to like the Treasury or whatever and you know We can still fund those other things that I've described there very easily like we have more than enough money to go

do those deals. I'm more an example of like growth versus like capturing value type thing, which I was just trying to give us like an example. So yeah, all those like pieces that we can go out and do aren't conditional on us generating more like cash income going forward. We can afford to do those things right now. I think the other piece I just wanted to get across was that this period reminds me very much of I think when we maybe did the first one of these around like six months ago, which is kind of just before we off in Q4 where, you know,

<Jason Kam (50:08)>:

Hmm.

<Guy (50:38)>:

TVL had stalled, rates were low, everyone's like, this thing's never growing again, it's like dead in the water. And then the thing about Ethena is that like, the growth is very violent and like...

non-linear where you go through these periods of like lulls and you can see it on the chart and then it just adds like four billion in like a month when like rates come back. I think the piece that I just want to get across is that like even in Q4 of last year we really didn't have much of the infrastructure set up to even capture like a big amount of the opportunity. Like we had one centralized exchange. Aave wasn't even listed. Like if you remember we had to cap out the growth of Aave. It was like capped at like a hundred mil a week and then the opportunity sort of disappeared when I got to a building.

<Jason Kam (50:56)>:

Hmm.

Hmm.

<Guy (51:15)>:

hadn't opened up for a billion of allocation directly from there. And you didn't have any of these institutional pathways, new pieces around Telegram and that kind of stuff. So the point I just want to get across is that when the market comes back, and that doesn't mean that yields are like 20, it means like 12 to 15, this is going to grow twice as fast as what you saw in Q4 because the tentacles of Ethena are just sitting in so many different places now where...

the access point to just get in and for this thing to grow is that much quicker. so even as like a stepping stone bridge type thing, like Aave has basically completely de-levered its USD holding. So that's gone from like one and a half bill back down to zero. Like when rates are attractive to do that, like that's like one and a half to two bill, like just out the bat sitting on Aave. You've got a bill from Sky, which when it sort of clears that cost of capital that comes in like very easily from their treasury holdings. The telegram thing, like what we've been discussing with the foundation there in terms of like

<Jason Kam (51:52)>:

Huh.

<Guy (52:08)>:

targets, how we're both putting incentives and the incentives that are coming from the Telegram Foundation. That's like targeting one to one and a half billion as I could roll out that we're doing.

And then there's this like iUSDe piece, which I mentioned, we're sort of expecting 500 to start, like, who knows how that big that is when it's like 15, 20 in size. So like, that's just like literally four different things that I've described there. And I think that's like three to five billion just straight out the gates without any normal sort of like return coming in the market. So yeah, I think that's one piece I wanted to get back was that actually the growth that you saw on Q4 was us actually with very, pretty limited distribution. I think that's where we are right now.

<Jason Kam (52:23)>:

Who knows?

<Guy (52:46)>:

trust from people like pre-buy bid. And so think when this does come back, if yields are anywhere even like close to 15 to 20, it's like north of $10 billion like very, very quickly. Like literally within that is my view.

<Jason Kam (52:57)>:

Yeah, that's

very helpful. And then that's a good segue, which is kind my final question. And then maybe the members will have some more. It would seem like a lot of the groundwork and infrastructure work you have done set yourself up for step functions of USD TVL over time. And this is contrasting with a token dynamic where the best thing are happening now. And you have a cap table previously that probably need DPI and need returns.

basically gunning the business for growth at the moment, which is redeployment of treasury dollars into growth efforts. I guess the high level question is, how do you think about maybe in the short term, the 3 to 12 month horizon, the potential decoupling of your token price versus the fundamentals in the TVL that you're building?

<Guy (53:47)>:

Yeah, I think it can happen and, you know, the token itself is always going to be quite reflexive to the cycle, I think, because like when there's an all the run rate, a billion of revenue in December doubled in a month, it looked like, you could argue even like cheap relative to the growth back then. So yeah, it's obviously extremely sick. I think the, we did obviously see like a lot of turnover in the cap table during this unlock, I think. And you can see all the stuff on chain. And I think we shared a note with some of,

people on this call when it happened, there was quite a bit of selling that actually came through from some of the earliest investors who were up like 160, 200X basically around the unlock. I think that there's a big bifurcation within the cap table of the largest holders, including myself, plus just the largest VCs who actually have not sold a single token. And I think that actually comes out for a much larger outcome. then sort of smaller trading entities, trading firms and that kind of stuff, who basically sold everything that they did. And so there's like this very weird distribution of like,

Some people have sold 100 % and then the others, all the most are basically holding out for much higher. I think, and obviously you need to do your own work on this. I'm talking about Invert, but like my perception is that the heaviest amounts of that has basically been washed through right now in terms of like that initial unlock that came through. And,

Yeah, I think the piece to get across, and you can see this on-chain, that I myself haven't touched a single token. The majority of our team really haven't done much at all. And yeah, the largest holders themselves have chosen to hold high rather than take the liquidity that was there.

<Jason Kam (55:26)>:

Helpful, thank you. Any questions from the members and guys or anything else we haven't covered that you want to talk about?

<Guy (55:34)>:

No, I think that's it. think, yeah, difficult to come on here. think we're, I don't know, market is exceptionally weak, rates are down really low. We've had like many months of stalling growth, but I think, you know, we've been through this period before a couple of times last year. And I think the piece I wanted to get across was just, you know, we're still here trying to take big swings and big ideas to move this forward. And I think like before people will be surprised when the market does come back.

<Jason Kam (55:37)>:

Yeah, extensive.

<Guy (56:03)>:

how aggressively this could swing back to the upside.

<Jason Kam (56:07)>:

Cool. Guy, thank you so much for your time. Appreciate it.