TLDR

In this episode of BidCast, Jason Kam interviews Jai Prasad, co-founder of Definitive, a DeFi trading platform. They discuss the company's origins, business model, and revenue generation strategies, focusing on advanced trading features and the target market of sophisticated traders. Jai shares insights on product enhancements, market positioning, and future plans, including tokenomics and partnerships. The conversation highlights the importance of user acquisition and community engagement in the rapidly evolving DeFi landscape.

Chapters / Timeline

• 00:00 Opening

• 00:50 Introduction to Definitive and Its Founders

• 03:53 Understanding the Business Model and Revenue Generation

• 06:47 Targeting Advanced Traders in DeFi

• 10:02 Product Features and Upcoming Enhancements

• 12:52 Market Positioning and Competitive Landscape

• 15:59 User Experience and Education in DeFi Trading

• 18:49 Integration with Hyper-EVM and Future Plans

• 23:59 Future Vision and Goals

• 28:21 User Acquisition Strategies

• 32:38 Referral Programs and Marketing Efforts

• 34:31 Financial Health and Revenue Management

• 37:47 Token Strategy and Acquisition Considerations

• 41:44 Product Development and Partnerships
  

Transcript

<< Jason Kam (00:50) >>:

Okay, we're live. Welcome to another episode of BidCast. I'm your host, Jason Kam, aka AdamapaleefCap. Today is July 4th, 9 a.m. Hong Kong time. BidCast is being live streamed with BidClub members. Questions are from the members and my own. This is not financial advice. Today I'm speaking with Jay, the co-founder of Definitive. Jay, welcome.

<< Jai P (01:10) >>:

Hey, great to be here and happy America Day in Singapore.

<< Jason Kam (01:12) >>:

Yes.

America Day soon in the US, I guess it's now in Hong Kong. Very, very, very soon. I guess to start, for those that... mean, people might have used your product, but maybe just to start, can you walk us through the math on the path on the trading volume and then how you generate sort of 5,000, 25,000 US dollar of revenue per day?

<< Jai P (01:19) >>:

Yep, tomorrow morning for us, yeah.

Yeah, totally. is it fair to assume kind of the listeners are familiar with like the product, kind what we do, or should I give you guys like a quick one, two liner?

<< Jason Kam (01:52) >>:

Yeah, if you may.

<< Jai P (01:55) >>:

Yeah. And so the quick TLDR here and you know, the team story is important as you know, my co-founder, Zai, we've been in this space like six, seven years. This is my second startup. Sold my first one to Coinbase. And while at Coinbase, we were building the institutional trading systems that some of the biggest players in the world use. Like when you hear Michael Saylor teewapping billions of dollars with Bitcoin, they're using the stuff that half the team that works at Definitive.

has built in the past. So when we were there, we realized a gap in DeFi, which was like the same kind of  institutional grade infrastructure was missing for trading in DeFi as you're aware and most of your readers are aware. You go to like a Uniswap type UI, you choose token A, token B, you swap it, kind of executes and that's it. You don't know if you actually got really good execution, if you were protected from price impact and slippage.

If you got MEV and then after the trade is over, have no idea what you actually bought or sold reporting and all of that is best. So kind of the genesis of this company and the idea was to build this end-to-end solution for more of the advanced and sophisticated traders who are operating in DeFi and give them a very similar experience to what they're used to in CeFi. And so that's just quick one line or a few lines on what we do.

So how we make money is on similar to exchanges. We're definitely more of an aggregator than exchange. We're not an exchange. We're hooked up to 100 plus dexes on seven, eight different chains now. We add new chains all the time.  But how we make money is ⁓ on volume-based fees. And we have a fee tiering similar to exchanges. So more volume you do, lower the fees.

 And you know, we have our token edge. So if you stake our token, you also get additional fee discounts so that you can kind of find the fees in our in our page. But let's just say on average for some of our advanced orders, it's between 15 to 25 BIP. So if you do like a a TWAP order, stop order, take profit order, stuff that you don't often see in DeFi, which are, you know, common in CeFi. Those are the typical rates. So yeah, basically.

<< Jason Kam (03:59) >>:

Hmm.

<< Jai P (04:22) >>:

How we're currently doing is our 90 day daily volume is around three, four, like a million a day. On that, we make seven, six, seven K a day. And it's been trending up. So that was 90 days, 30 day. We're making 10 K a day. It's last month and a half. And volume's like five, six million a day. So we're just trying to grow that.

<< Jason Kam (04:49) >>:

Hmm.

<< Jai P (04:52) >>:

and grow that pie up slowly and it's kind of trending in the right direction. you know, how does this, so just to kind of give you context, like basically, I think 10K a day in fees is I think roughly like three and a half, four million a year  in revenue, which, and so, you know, we're hoping obviously by end of year to, you know, more than double that and get on track for like a 10 million, you know, run rate. That's kind of our main goal by end of year.

 And so one thing, what you'll find interesting is,  you know, we've onboarded something like 70, 80,000 users, but actually the ones that are actively trading are, you know, our metrics are all transparent. So they're in the hundreds. So I think the lever for us to grow is pretty, so these are all really high value users. So, you know, we've talked to probably a hundred different liquid funds and 20, 30 of them are actively trading here. You guys do it and you know, people like,

<< Jason Kam (05:22) >>:

Got it.

They are.

<< Jai P (05:52) >>:

Coinbase Ventures is, you know, they have their own exchange, but they actually use us for on-chain stuff. So we have a lot of these high value traders who are, you the average trade size is like 40K, not, you know, 40 bucks or 100 bucks. So  we have a pretty good stronghold on  the high value side, the larger side of the market. And that's what our product was built for. But, you know, I've

we've done a lot of self-reflection and I think goal of this to tell you where we lack as well to see and to show the listeners on what we're trying to prove is, you we were kind of like caught off guard by the growth of like pump fun and you know, the token launch pads. And so while you can trade any asset on any chain, we're optimized for trading these assets in size.  And you know, let's say a

And you know, if someone launches a token now, yes, you can trade it on Definitive, but we're not super optimized for trading something that's like 50k market cap or 100k market cap. And what we found was that kind of this new breed of Degen that were part of this cycle. So the 2020, 2021 cycle, like they were trading the DeFi 1.0 apps, like the Uniswaps and you know,

<< Jason Kam (07:08) >>:

you

<< Jai P (07:15) >>:

the 0x's of the world And those users get our product and they use it. But this new breed of traders who came on board who are just like punting on the pump fun coins and all the launchpad coins, they're just different breed. And our product wasn't optimized for that. And so we're really, we've been kind of focused on making our charting faster. Like our goal is from contract address

<< Jason Kam (07:31) >>:

you

<< Jai P (07:44) >>:

to swap in under 10 seconds. So if someone sends you a contractor address on like a TG chat or somewhere, you should be able to swap on Definitive in no time. So we're making a lot of optimizations to do that. And we're launching like a mobile app as well. So we're kind of going after, we have a good stronghold and great product for large institutions. We don't have a great product or we didn't for like brand new trench traders.

<< Jason Kam (08:05) >>:

Hmm.

<< Jai P (08:13) >>:

And so we're definitely starting to compete there. Slowly we started the Avalanche actually, because I think in Solana there's Axiom Photon. So on EVM there, it's like wide open right now. And so we're really focused there. We started with Avalanche. We have great relationships there with the team, the foundation and people in that ecosystem. And now we're going to expand that product to base, et cetera. We support these chains, but we weren't hyper-optimized. So to kind of put this all together, right,  we have

<< Jason Kam (08:13) >>:

Hmm.

<< Jai P (08:42) >>:

Today we have a few hundred active traders every day. We have a lot more traders, but ones who are really trading are less than 1,000 a day. But they're very high value. With some of the changes that we're implementing and some of the marketing and some of the tokenomics, think there's room for us to really grow that number. The products there, the tech there, and with some of the new things we're launching, I think we can easily

No 5X, the number of traders, which easily, obviously leads to  growth in revenue as well.

<< Jason Kam (09:20) >>:

That's very helpful. I guess on the product feature and product capabilities side of things,  what's the timeline on this push of a refreshed experience?

<< Jai P (09:34) >>:

Yeah, so I mean, it's kind of an everyday thing. Like every single day there's something small that comes out, which it's a culmination of a lot of small things that will lead eventually to something that's very competitive to Axiom or Photon And I would say that I think timeline we're aiming for is maybe, you know, at this point, like end of August. So another like two months or so where

will probably be like 90 ish percent of the way there or even further. And our mobile apps actually already develop app store approved, et cetera. So  that plus some of our differentiators, like we have a cross chain swap product coming out, et cetera, which will make us basically the only place where  you can trench, but then when the coin goes up and you want to sell it with a TWAP and you have a million dollars of it, you can also TWAP it.

will probably be the only place where we support the entire life cycle of the coin from the second it's launched to the second it grows big and then you really need all the advanced execution that we built and the insta-grade features. And I can talk about some of the technical differences and why that's important as well, if you'd like.

<< Jason Kam (10:46) >>:

Mm.

Yeah, I guess for a trencher who is like kind of just watching the tape every every day,  what can they do, I guess, by early September that they can do now in Definitive.

<< Jai P (11:03) >>:

Yeah, so some of the kind of main features are like right now we don't support  trading pre bond tokens. So that's something that will support. So the token has to be bonded to trade. Yeah, so that's obviously, you know, kind of the one of the first and the most basic things. Then there's just a lot of, so like in their trench use case, people

<< Jason Kam (11:13) >>:

Hmm

Okay, good. That's a good start.

<< Jai P (11:29) >>:

 You know, they have a lot of presets where they're just like I want to buy point one, know point two one $SOL Etc others like preset buttons and click it click them the trade executes ASAP So that's something we're building. So just to give you context And this is a little technical but when in today's definitive product when you you know, and execute a trade we do pre trade simulation, so

Why that is important is because we go and simulate whatever you're trying to buy and ensure that you're actually getting that token back. And so what that means is that adds latency, but that protects you from, if you're trading million bucks, we don't want you to get honey pie. We don't want you to get med. We don't want you to lose money in slippage. So we simulate the trade, but simulation adds latency.

for like a new trench coin, which is like a hundred K market cap, it doesn't matter. You just want to like trade really fast and execute. Right. So because we built the product for people who are trading a hundred K a million, we had to build some safeguards in the execution to ensure that they're getting the best execution. You know, we're quoting for market makers like Wintermute and all these people who are getting,  we have RFQ with them.  obviously for trenching, none of that shit matters. Like you just want to execute fast. So

There were just some trade-offs that we made for a specific user segment for specific assets. And we have to kind of redo that for the trenching use case. So basically there is a lot of,  so what can trenchers do? You know, trade as fast as they can on Photon, like have presets, ensure their orders always fill, have basically take profits, stop loss, et cetera.

<< Jason Kam (12:58) >>:

Hmm.

<< Jai P (13:19) >>:

What can they do that they can't do on Photon or Axiom? One big thing is that they can go cross-chain. So because we support all these chains, they can ape something on Solana, something new comes out on virtual, then they can go from like pump fun to virtuals in one swap in one place, which I think is extremely powerful. No platform has Solana and EVM right now. So that's kind of one thing. The second thing is that  once the token actually goes up in value,

<< Jason Kam (13:41) >>:

Hmm.

<< Jai P (13:50) >>:

So what some of the existing platforms do is they have integrated one specific DEX and all trades execute on one pool of that DEX.  So once the token actually gets big and let's say you own 1 % of the supply and you're actually selling it on that one pool, you're just getting crushed, right? Like the price impact is terrible.  So with Definitive, you can actually use our SmartRouter routing and make sure that you execute across every venue and get best execution.

So when you're actually selling the token that has gone up in value, you'll like save a lot of money  on it. I think those are like a couple of the low level features. Then we also have a mobile app coming out. So now you can again do this on your phone, cross chain  and ensure that you get like actually the best execution for this. So again, like I was saying earlier, like we were  targeting the trading larger size, but now

<< Jason Kam (14:19) >>:

Hmm.

<< Jai P (14:49) >>:

will probably be the only place where you can go from basically the second it launches to the second it hits millions of dollars and ensure that you get really good execution and good trading.

<< Jason Kam (15:00) >>:

Do you expect, I guess, $10 million of revenue a year, it would be about $30K US a day, just about,  versus, at one point you were hitting 25 to 30K, there was a point in time.  I guess when you get from 2 to 4,000 today to there, effectively 10x your revenue run rate,  would you expect the composition to be mostly made out of a

kind of the pumpfun on trenches versus the institutionals today. The incremental.

<< Jai P (15:33) >>:

Yeah,

for sure. I think, so actually right now we're at like 10k a day. But yes, like at the peak, we were doing like 40, 50k a day even some days. And obviously like this is where I think we'll get to the end of the year and I think we'll grow a lot more from there. Like walk, crawl, run approach. yeah, so the composition, I think...

<< Jason Kam (15:39) >>:

Hmm.

<< Jai P (15:59) >>:

I guess the insto flow right now is probably more, what we're seeing at least is more concentrated in like the larger cap coins and like Bitcoin. You know, in Jan and Feb, all the instos were aping like every AI coin, right? Like our virtual ecosystem, AI16Z, all those coins were like all actually insto bid back then. I think that like, there maybe has to be like a

<< Jason Kam (16:22) >>:

 Yeah.

<< Jai P (16:27) >>:

a true on-chain narrative right now where I feel like the instos that we're seeing at least are maybe more defensive right now because they're like, okay, I'm gonna buy $HYPE I'm gonna buy Bitcoin, whatever, maybe some revenue generating $SYRUP has been really popular. I know you had sit on here. So there have been some of those coins that have been very popular, but those are, in terms of volume, the instos are just buying and holding it. They're not actively trading it.

While like in the AI days are actually trading it so so I think what we'll start to see to answer your question is  Yeah greater growth from like the kind of casual on chain trader on chain degen Who's maybe like using some of the other apps? I think they'll kind of come to us and know the other other thing that's going to be really cool about what we're building two other things actually one is I'm sure you've seen like the fees on

some of those things like, it's like 1 % a swap. Like you get absolutely housed. I think one thing we've learned from being in Coinbase is we're here to build this for the longterm. Like if traders and users just get screwed over in two months and lose their money, they're never gonna come back. And so we wanna make it fair. Like if you just take our token, the fees go down. Like the fees will be 50 % less than what some of these other people are charging. The other cool thing is this technology update that we've made.

is that in those other platforms, you can only sell into $SOL So like you buy some shit coin, you have to sell it and you want to buy another one. You have to sell to $SOL and then you have to rebuy with the $SOL. So effectively you have to do extra trades and on each of those trades you lose money, you lose 1 % on each of those trades. So we're building something with our trench mode where you don't have to do that and you can go from like any to any, which is I think also a huge, huge unlock.

like once people realize it. So I what we've found so far is like, to some degree, like, you know, the meme cycle is came up, like trenching came up and people haven't actually like thought about all the ways that they're getting screwed and losing money. And now they're starting because it's, it's chopping all the market chopping. They're getting a little more educated into it. So I think there's a lot of education we need to do as well on like why, you know,

I'm telling you and you get it. You've maybe been in DeFi and the space for so many years, but someone who's new might not get it. So there's also this education side that we have to invest in.

<< Jason Kam (18:59) >>:

Yeah.

I guess it's cool that you integrated Hyper-EVM. Hyper-UVM. And how has that launch gone since June 2nd?

<< Jai P (19:10) >>:

Yeah, I mean, the honest answer there is there was a lot of hype, no pun intended. Through the ecosystem, myself, co-founder Dennis, we're both very early hyperliquid users plugged in the community. And I think the first few days there was a lot of volume, then it's tapered off. And I think it's just because the ecosystem is not that mature yet. There isn't anything to really trade there.

Other like there's what I think liquid is probably one of the main coins there. And I think some of the protocols like Felix and stuff, I think when they launch their token, that's gonna really spur that ecosystem into life. Because right now they're just not that much to trade on hyper EVM itself. Obviously, people are trading high people are trading unit on hyper core, but on the EVM there's not that many assets.

<< Jason Kam (19:47) >>:

Hmm.

Yeah.

<< Jai P (20:10) >>:

But we don't care, right? Our bet is  we'd rather be early, we'd rather be first there.  Once the ecosystem comes, you know, we're ready from day one and we can support any asset on that.

<< Jason Kam (20:21) >>:

Yeah.

I suppose it's kind of a good segue into the next question, which is  that discussion started occurring with hype being its own sort of layer one exchange with allegedly ultra-low latency, and there are a few other players coming out that are trying to give run on the money from central exchanges. All of them have this CLOB design with a layer two roll-up kind of

 Do you feel like that overall design, can you port your entire stack onto that design? Or is that something that's just orthogonal to what you have already built?

<< Jai P (21:05) >>:

I guess, sorry, like ported over to like integrating like a CLOB that

<< Jason Kam (21:11) >>:

Yes, or a better way to put it, I can run a TWAP on Hyperliquid, for example. Not that they will support the spot tokens on everywhere else, but I suppose with all these exchanges that have a similar design that's like beefy burly. Can I still use your tooling on those exchanges?

<< Jai P (21:16) >>:

Yes.

Yeah.

Yeah,

so great question. So  I would say for the product, my co-founder, Dennis,  worked at Tagomi, which I don't know if you remember Tagomi. ⁓ Yeah, and so Tagomi, for the listeners, was one of the first crypto prime brokers. And Tagomi, what they did was they integrated all the Seify exchanges, and the Coinbase bought them.  And so if you think about like,

<< Jason Kam (21:46) >>:

I do

<< Jai P (22:01) >>:

lighter and hyperliquid, they're essentially, you know, they operate, look and feel exactly like C-Fection. There's an order book, et cetera, same logic. So we actually have probably one of the best teams in the world to build that layer of integrations. We don't have it now because right now we integrate, you know, with AMMs and  like mark some on-chain RFQs. But yes, like in the future,

We want more CLOBs like that's good for us. We want more those sort of exchanges because we have the expertise and the people who know how to build, you know, the best way to like execute across all those changes. So we haven't done it yet.  But that's something we want to do later this year.

<< Jason Kam (22:48) >>:

Is the fee you charge still 15 to 25 BIPs on those exchanges?

<< Jai P (22:51) >>:

I

think it'll change for like a order book model, but we aren't there yet. So I don't know what it'll be exactly. But yeah.

<< Jason Kam (23:02) >>:

And the cross-chain swap that you have is also turning on by August?

<< Jai P (23:06) >>:

I know.

Yeah, so it's pretty close. think cross-chain swap we're hoping for end of this month.  So that should be live by end of this month.

<< Jason Kam (23:16) >>:

And just so I understand, it's like I have a $FARTCOIN on Sol and then I want to ape into $VIRTUAL on base. just run a TWAP directly. It's like, okay, same account and just clicks trade and it happens. Is that right?

<< Jai P (23:29) >>:

Yeah, exactly. It happens and then it's settled on base. So you'll end up with virtuals on base. Yeah. So you don't have to bridge. You don't have to bridge. So why that's cool again for the listeners is one, you don't have to bridge. Two is you don't have to worry about gas, right? Normally you'd have to bridge, make sure you have gas, et cetera. Again, you don't have to do anything. You just click a button and then it'll just run, you know, it'll show you the status of it running.

<< Jason Kam (23:36) >>:

wow, okay. That's cool. mean, I...

That is cool.

<< Jai P (23:59) >>:

Once it's run, you'll have the asset on the other side.

<< Jason Kam (24:02) >>:

I like that. I think it's slowly reaching the features that people want. then I guess your target for the end of the year is getting to 10 million annualized run rate revenue. It's a little hard to look longer term because things do change quickly. But if we were to look at 2026, what else do you have planned in your mind that really excites you?

<< Jai P (24:25) >>:

Yeah, so I mean I I you know I'll say is like we kind of see it as a few phases I'll go through end of 2025 into 2026 so I think our kind of the first phase that we're trying to like hit from now till say the next eight weeks is goal is like You know CA to trade in under 10 seconds on any chain on any pre bond token on any token So that's like what we're working on right now. You know that gets us like

basically  gets us the trench features we're lacking and highlights what we're strong at, which is like the larger side thing. So it makes us like a full fledged platform and feature complete. So that's kind of the first area.  I think the next is we want to, unlike some of the others, we actually have a live token  edge. So we want to use that token and basically create like a token flywheel. We make revenue.

lot of interesting things there we can do with our tokenomics to drive value to our users and to our active traders who are on our platform and give back to them for using it. So definitely want to invest in that because that's something we really can leverage.  Then kind of the next goal is  to start integrating these other clubs and these other venues. So basically make sure that if it's on chain,

And it doesn't matter if it's just the ERC20 token, it's an RWA, it's a stock, whatever, and it's on chain, it's tradable on definitive. Like be quote unquote, the definitive best place to trade on chain,  any asset. And I think a good trend there is we love that more is moving on chain, right? Like stocks, I don't know how big that'll be or not, but just RWAs, cetera. There's just more types of assets coming and that's just good for us and good for our business.

<< Jason Kam (26:18) >>:

Hmm.

<< Jai P (26:19) >>:

And then another thing is like we're launching, we have launched actually an API, it's in early days. So we built this infrastructure now that I've told you where you can trade any token on any chain, you can cross chain it. We have PNL reporting. So we've had a lot of other projects reach out to us. They're like, wow, like we're building an app. We want to enable some trading in the app. How do we do it? Can we integrate you? So I think this, you know, good learning here is from the Hyperliquid team where I think

building your first party app is cool, but to really scale, enabling other people to build on top of you is even better, right? Because that's just flow that comes to us. So that's kind of another lever that we're pulling. And then finally, our vision from day one has been not just spot trading,  it's been basically  structured products and purpose as well. So.

I think I don't know if we'll get there this year. I think we're just laser focused on winning on the spot side. But later in the year, if we have more resources, we want to enable perps and enable structured products. So some cool things that we could do that others probably can't do on the structured product perp side is because we have spot on all these chains, we can actually run very interesting basis strategies.

<< Jason Kam (27:30) >>:

you

you

<< Jai P (27:43) >>:

where you're holding some spot asset on Solana and running the short on hyperliquid. And we're completely managing all that collateral for you. So we can run basically basic strategies across chains because of how our infrastructure is settled or other sort of similar structure products. So again, that is probably pretty far out, but it's all things that we are slowly building towards and hopefully we'll get there.

<< Jason Kam (28:07) >>:

⁓

Got it, okay. I guess, how would the trenches know about your product? Like how do you plan to reach them?

<< Jai P (28:21) >>:

Yeah, I mean, that's a good question. And that's the hardest question in kind of all of this, right? Like I think building is clear and we know what to do and we can execute it. So yeah, I think a few things on like how to reach these users.  I guess one is we've had a lot of success partnering with  foundations, protocols, new projects. So for example, we have very good ties with Solana.

<< Jason Kam (28:27) >>:

Mm.

<< Jai P (28:52) >>:

with with Base Avalanche, where the foundation has supported us as a new product and key people in the ecosystem have supported us there. So one thing we found is if a new product, so same thing happened with Hyper-EVM and maybe that's how you heard about our launch. So the key is when a new project or a hot new meme coin launches, we really try to partner with the team and offer free trading for that coin or something and have that coin market

to their users like, hey, use Definitive to buy, it's free. So basically partnering with new projects and new coins and new memes that are launching has been very effective in the past. And you want to continue doing that because it's really cool when it comes from the project itself to their community. Helps us onboard users.  I think second is  what I think the Axiom team has done incredibly well has been their referral and growth mechanic.

No one knew about them six months ago.  And they've done really well with incentivizing their existing users to refer others and giving extremely lucrative referral bonuses and that sort of stuff. So I these are things like both Binance and Bybit did in the early days as well and stuff that we've really studied well. So that's obviously something that we're looking into. I don't want to share too much there, but we have our own program that's launching in it.

It'll also tie in directly to our token.  You know, I think three is  just one way to grow is obviously the sort of stuff like the podcast community. We, again, we're like doxed US based founders. I think we need to really leverage that more. And we've been already doing that. Like a lot of in-person events, that sort of stuff that we've been doing. I found that some of the other projects that do this sort of thing, like their founders are all like Anon.

still and they haven't put their name out there. So, which is good. I mean, they've crushed it. They're great products, but I think there's strength in just putting your face and name out there and, you know, showing the community that you're here for the long run and you're not just here to kind of make a quick buck. yeah, those are some of the things we're doing. And yeah, we have like a dope marketing team now and something we've hired for, which we didn't have earlier. And, you know, XP, ex compound finance team actually, marketing lead who joined us.

to lead our marketing efforts and we got some dope degen interns and stuff. So we built that part of the business as well and a lot of stuff that's coming from coming down the pipe. Yeah, that was probably last like four to six months wherever you like hired, a team, et cetera.

<< Jason Kam (31:28) >>:

That was recent.

Okay.

And then on the referral side, you don't have a referral program previously.

<< Jai P (31:40) >>:

We do right now, yeah.

<< Jason Kam (31:43) >>:

You do

now, but not... Okay.

<< Jai P (31:47) >>:

I think we did have one a while ago and then I think all these programs need love and need to constantly iterate as the market changes. So we had one when we kind of started. It's still there, but it needs a full refresh, I think, to be competitive with what's there now. And our focus really has been last three

<< Jason Kam (31:57) >>:

It did.

<< Jai P (32:13) >>:

last six weeks into the next two months, the summer has just been like heads down. Like let's, let's make sure the product is there.  because you know, no point doing marketing and spending time, money on it. If people come and they can't, you know, trade instantly and achieve that same experience that they get elsewhere.

<< Jason Kam (32:31) >>:

Got it. OK. then, with the referral program be  net inflation? Would it cost inflation on an extra? OK.

<< Jai P (32:38) >>:

No.

Yeah, no inflation. But I don't want to share the details there, but no inflation on edge.

Yeah. And I think anything we do, by the way, like going forward, will not have, I think our goal is to not have any inflation on edge.

<< Jason Kam (32:56) >>:

Got it. And full-time employees, have like a, or do you have to sell tokens and how does that all work on the cost side?

<< Jai P (33:07) >>:

Oh, so we're funded, I think we raised like 10 mil across like two rounds. So I mean, in terms of run rate, I guess if that's kind what you're asking, let me just pull it up, give me a second.

<< Jason Kam (33:13) >>:

Hmm.

Yes.

Sure.

<< Jai P (33:29) >>:

We have.

We have 14 full-time employees,  couple of few contractors. I think our burn is  basically on par with what we're making right now  in revenue  currently. So maybe the burn is like 20 % higher than what we're currently making in revenue.

<< Jason Kam (33:38) >>:

Hmm.

Currently, okay.

<< Jai P (34:02) >>:

That being said, to be clear, obviously the hope is we increase revenue significantly and then drive a lot of that towards the token. We just don't want to do it too soon. There's this fun dance of we want to ensure that we're actually growing and have started to achieve product market fit before turning on things like buybacks.  Because doing it too early is going to hurt us more than...

anything else. And that being said, we have just off our venture funding, we have 20 months of runway just off of that. If I don't even take into account any of the revenue. basically we're in a good spot  to not have to need to use any edge to pay for operations. And again, the hope is we won't need to if we continue in the same trajectory.

<< Jason Kam (34:48) >>:

Hmm.

Yeah, and there's no equity entity sort of siphoning capital  cash flow away. It's a pure, yeah.

<< Jai P (35:02) >>:

Yeah,

correct. Yeah, there isn't. Yeah. So I mean, there is a US equity entity and a Panama token entity. yeah, so US equity entities, what race like the venture, venture funding. And that's what it's running off of right now. And  it doesn't, you know, there's no, it does have an edge allocation, but that's all publicly disclosed.

Contracts are disclosed and none of that has been touched.

<< Jason Kam (35:33) >>:

So when you reach 10 million AR, like not even one, like actually you're annualizing and let's say three to four million of bodies cost the remaining $6 million of cash flow flows to the treasury. And then that would just can be redeployed into token if you so choose effectively. Okay. Okay. Interesting. I guess, I mean, here's kind of a left field question because the tooling here is quite good. Like we use it.

<< Jai P (35:42) >>:

Yeah.

Yeah, exactly.

<< Jason Kam (36:03) >>:

A lot of times when things are not listed on CEXs and I don't want to bridge around, I think, by the way, one of the other cool things is we do have prime brokers, know, like Galaxy, Falcon X, Anchorage.  Some of the new stuff, you need to get it approved and the approval time could take, you know, four hours up to, I don't know, weeks.  But on you, like there's no need to bridge and then you kind of just plop your dollars in there and you can start TWAPing

I think that's what's been driving a lot of the volume from institutionals.  But  it's really good tooling.  I guess what's going through your mind at the time when you were launching a token? it would feel like...  It would feel to me that when the US is no longer a country that goes against crypto and tokens,

you already see an M&A spree that's kind of happening in the market. And  I guess you can predict this, but now you might have bidders and buyers that really like the tooling and they want to be a part of their offering.  Do you feel like having a token would prevent you from getting acquired, for example?

<< Jai P (37:17) >>:

Yeah, I mean, I think good question.  So  I guess I'll give you the kind of historical context here is both myself and my co-founder Dennis had gone through like prior acquisitions.  And we've been through the equity acquisition process. And one of the reasons to like start this company, I think was maybe not to just get immediate, like we knew exactly what to build and have very strong team was not to actually get it immediately acquired.

It actually was to go like the full path, the crypto native path with the token. that was just motivation for what the vision we pitched to ourselves, our investors, our team, why we got them on board. So I think one of the reasons was, yes, we wanted to stay true to the vision and why we launched the token. I think second is that I think today, yes, it's probably complicated to acquire a company that has kind of the equity entity.

<< Jason Kam (38:04) >>:

Hmm.

<< Jai P (38:16) >>:

has a token, has been done before. think Coinbase acquired some security company recently. I forget what they're called. So it has been done, but it's probably a little complicated. There are some protocol buyers as well that operate in the trading and the deck space. For them, it's less complicated and they might not be US based. And they're more open to buying other projects with tokens. So there's that new category.

But if you think about it, say 12 months from now where, again, you just said the US has become more friendly, maybe more projects and more teams and more things are tokenizing faster and sooner, I think there'll be new frameworks created to make sure that these sort of companies can get acquired. yes, I think today itself, it is maybe hard for a Coinbase or...

like a Kraken or something to acquire a company with a token, but I that is changing pretty fast.

<< Jason Kam (39:19) >>:

Yeah.  I suppose, let's say if you do get to your target and then you will be profitable. I totally get why you're not doing it right now, because it just goes up and down.  But let's say you start building a treasury, it's business actually pretty good.  How would you actually think about the capital allocation of the treasury? The edge holders probably have to vote on it, but you can guide them towards what you want them to do.  There are many models.

The most aggressive would be what hype has done, but there are other ones. Like in your mind, what would be the most ideal case for edge?

<< Jai P (39:56) >>:

Yeah, I  think it would depend on obviously how much or a few things. One is what are other growth leaders we want to invest in that could continue to grow the business. And that requires that require treasury money. So just for example, some things that

When we actually started this company, we were actually more focused on yield. We actually pivoted into like a pure trading based thing. we've always, we've kind of thought about how we can build this place where you can have yield, lending, perps and spot. So if you want to expand it, other verticals, right, you need money to do that. So there's always kind of this trade off between using, using the capital for growth versus directing it all.

into edge. And so that's like one part of the calculus.  But I think at the very least, once we get to a good spot, drive least 30 to 40 % of what we're earning towards edge.  The better we do, the more we can drive.  Because we're obviously hype is extremely unique.  We are VC back.

No different calculus here. We probably can't do 97%, but you know, if it up to me, if we can get to 50 % or even a little higher than that, I think that'd be extremely awesome.

<< Jason Kam (41:34) >>:

Understood.  Interesting. I mean, it'll take a while. It'll probably be like this time next year if you get there.  Is there anything else we haven't covered?  Okay.

<< Jai P (41:44) >>:

But I think we want to start sooner. We want to start it sooner. Maybe

we start with 5%, 10%, scale it up from there as revenue scales.

<< Jason Kam (41:54) >>:

Got it. We covered quite a bit. It's kind of blocks and tackling. There's no one big thing that could get you there. think improving trench mode would help, but there's the cross-scene swap we talked about, there's the API access we talked about, there are a bunch of features that gets you to decent feature parity. Is there anything else that we haven't covered that is an exciting internal effort that you you should cover?

<< Jai P (42:19) >>:

Hmm. Yeah, I mean, in terms of the product side, you know, yeah, I think those are probably kind of the majority of the things that, you know, we've talked about, right? Like I do. I'm a strong believer. Like it is, you know, culmination of small things that add up. Even if you look at hype, right. It was like, hey, they had good liquidity. They had the HLP ball. They had amazing UX.

<< Jason Kam (42:31) >>:

Yeah.

<< Jai P (42:48) >>:

just like small things add up. It was a PerpDex. It had been done so many times before.  And so think it's kind of similar here. think one other factor for us  is partnerships. So for example, I won't name them, but we have a couple basically big OTC desks that use us  as their DeFi execution backend. actually, they're on their telegram. They're getting...

requests from the clients and they're actually just executing on us. We're talking to exchanges who want actually to integrate our offering into them because they want to support DeFi. So those are like some things that can really get us to some exponential growth in addition to just what we're doing, like partnerships and integrations with other players who want, who have like a very strong CeFi offering, but

<< Jason Kam (43:24) >>:

Hmm.

<< Jai P (43:43) >>:

want a DeFi offering and that the question is should we spend all this time, effort, money building it or should we integrate with someone or obviously buy someone.

<< Jason Kam (43:52) >>:

How soon do those get turned on, you think? The large pipes.

<< Jai P (43:55) >>:

So the OTC

 are pretty quick. They just use our app. Basically, we have a partnership with them. Their traders use our app. The CeFi stuff, it's long. That's maybe a six month timeline stuff. There's a lot of DD, contract audits, compliance checks. It's not quick.

<< Jason Kam (44:02) >>:

Easy. Yeah.

Hmm.

Got it. And I take it you're not allowing for trading on central exchanges anytime soon.

<< Jai P (44:24) >>:

⁓

Again, it's not right now it's on a roadmap, but I think what you mentioned what a lot of the others have mentioned are they saying listen if the coins on CeFi or we're just going to use it on CeFi we use you guys for new coins or it's coins that have more liquidity on DeFi  and so maybe at some point, know CeFi and DeFi just generally converging So again, it is on our like maybe our Q4 or a longer term roadmap, you know to integrate CeFi but then the question is

If you have Hype and Lighter and some of these venues and they have all the CeFi assets, do we even need to integrate CeFi? Like we'll probably just be fine integrating Hyperliquid and a few of the other, you know, co-opt dex's that are coming out, which essentially just offer CeFi liquidity and the same market makers.

<< Jason Kam (45:11) >>:

Got it. Got it. sense. Let's see if the group has any questions. Give me one second.

 No, I think that's it. Look Jay, I really appreciate your time. I mean, good luck on getting to that 10 million ARR target. I thought... It's such a stealth launch with your token. I don't think a lot of people actually know that you have a token. Funny enough.

<< Jai P (45:34) >>:

I

don't know if that's good or bad, know, thing up only. That's the hope.

<< Jason Kam (45:39) >>:

Yeah, up only

listing and sort of the AR itself. But really appreciate your time, and we'll talk soon.

<< Jai P (45:46) >>:

All right, man. Thanks a lot. Take care.

<< Jason Kam (45:48) >>:

Thank you.