Weekly Roundup 10/30/26 (Prediction market election hiccups, Hyperliquid onshoring, pubcos push back at tokenization, agents are using stables) (EP.747)

Speaker A: Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and hosts may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only.

Speaker B: Brought down by Bad Mortgage Investments Lehman, which has 25,000 employees, will be liquidated.

Speaker C: The federal government loans American International Group AIG 85 billion.

Speaker D: This is a different kind of market and the Fed is asleep.

Speaker E: The federal government is stepping in to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis.

Speaker F: The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You

Speaker G: print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin.

Speaker H: Welcome to on the Brink. I'm, um, Matt Walsh.

Speaker F: And I'm Nick Carter.

Speaker H: Was down in New York this week for the Thai conference. Very good conference. But I've got a bone to pick with Amtrak. Have you been on Amtrak lately? Not lately. I heard that they. I've heard that there was like Amtrak 2.0 like this and M there. Weren't they rolling out some new, better version of it or. Oh yeah, they have a new Acela and it's like eight, eight minutes slower than the old Acela. So I don't know what the point is there. But they were excited about it. Oh yeah, everyone's excited about it. It's just. I don't think it's worse. Um, but I was on Nacella and I got a first class upgrade because I'm taking it so much. I've got all these coupons and I'm in first class there. There's multiple people playing music on their phones out loud on the speaker. Multiple people taking phone calls on speakerphone in the first class car of Acela. Was it the quiet car or. No? No, but. Well, I mean we live in a civilized society. No, not anymore, Matt. Uh, it sounds like you have to go into the quiet car to get the experience. I mean, uh, if I wanted that experience, I could take the Fung Wah bus. Like I don't need to be next to someone just having a full blown conversation on a speakerphone. Like, uh, who does that? That's just called living in a culturally heterogeneous society. And, um, that's the way it works. Now, unfortunately, that's. It impacted my ability to get a bunch of work done, so I wasn't happy about it. But one thing I do appreciate on planes is they have a quiet plane policy now. Have you noticed this? Well, yeah, you can actually rat on your co passenger and tell the flight attendant and tell them to shut up. Oh, uh, I didn't know that. I mean, it's going to become an issue with starlink. Right. Because people are going to be doing zoom calls on plans. Yeah. So there's. I think it's maybe United, they have a quiet plan policy and you can actually get the flight attendant to go yell at someone for quite a while. Scrolling TikTok with their speakerphone on. I just can't believe people do that. It's just so disrespectful. Yeah. I have no theory of mind for people who just play videos on their phones on public transportation. Like, I actually cannot conceive of what it must be like to be that person. I know. It's like, do you have AirPods? Can you put them in or can you just stop that? Well, before we started recording, we were talking about how all the. The poly markets are wrong these days. I know. Why are they getting all the elections wrong? I know. I was with someone earlier today that said there's going to be a red wave in the US and part of his rationale is that these poly markets have been totally wrong. The polls have been, I guess, wrong too. Right. The Israeli election. So both Brazil and Israel, the poly markets and the polls, which I guess the polymarks are like a compression of the polls. They were both wrong. Right. Uh, so the Brazil one was horrifically wrong. Like in the end, Bolsonaro lost by a lot and some people took that as

Speaker F: evidence

Speaker H: of fraud. I mean, I think he actually just lost the election outright. And in Israel, Netanyahu was a big underdog and he's won. Yeah. What are you making is going on? I don't know. Do you think is the way to read that, that poly market users are influenced by the polls? Well, for sure. I mean, that's part of it. But also you would think that there would be some sharps out there that are looking at interesting alternative data sources and baking that into it. And then the prediction market, it gives you a financial incentive to find the ground truth, not just what the polls are reporting. Everybody knows that polls are not reliable anymore because no one picks up their phone and they're also not reliable in a certain way because certain groups of people pick up their phone less. Right. So in the US it's commonly believed that the polls under rate Republicans. Right. Yeah, we'll see if that applies this time or not. But. So I don't, I don't know. I think that both Brazil and Israel were liquid enough for there to be a significant financial incentive for someone to go and find some alternative data to get to bottom of it. But it didn't happen. Well, we saw that in the last US Presidential election where you had very notable sharps actually commissioning their own polling and then using Polymarket to place bets. I wonder to what extent that's happened in Israel and Brazil. Well, and wasn't polymarket a little sunnier on Trump's chances versus the polls? Right, it was. Oh, yeah, definitely much sunnier. And there was that French guy, Theo. Remember Theo? That's the guy. Right. So he commissioned polls in Ohio. Right. Himself. So my

Speaker G: question is, why didn't this happen in Brazil? There was a super liquid market. Was there no one

Speaker H: that

Speaker G: thought to themselves, um, actually, I think Lula has a better chance than the market saying,

Speaker H: or is it just the case that in an 80, 20 situation, sometimes the 20 happens? And this was one of those times. I'm actually totally of the view that the market was wrong rather than, oh, an unusual thing happened. Yeah, well, the market was, was wrong, I guess. Uh, but only to the extent that, hey, it still said that there was a chance. Right. And so it's, uh. Well, right. It wasn't 99 1, but yeah, a lot of people were saying, well, no, unusual things happen. Like underdogs win sometimes, like if you roll a die, you know, it, whatever, sometimes you're gonna get two sixes or whatever. But I don't think elections are like random draws. They're not like a coin flip or a card draw or a dice roll. An election is something that is theoretically, if you, if you had all the information in the world, you could know what was going to happen ahead of time. Right? Correct. Yeah. Like people are being truthful. Yeah, yeah. That's not the case with a casino game. With an election, theoretically, you can definitely figure out what's going to happen before it happens. You just have to ask a representative sample of people. Right. I think truthfully, the market in Brazil should have been like maybe 50, 50 to express some uncertainty or maybe in the lowest favor. So I think there just was a lack of professional traders that were, uh, actually focused on that market. Is My conclusion. Yeah, that's not a bad conclusion. I guess we'll never know though, right? You don't know who's actually putting money into the field and what size they're putting it into the. Because that obviously matters a lot. Yeah. And so, uh, now coming to the elections taking place, I guess they have been taking place in the US with early voting, but officially next week, the market seems to think that right now the Democrats are going to take both the House and the Senate. Right. So what the polls are saying. That's what the polymarket saying. Although be careful of polymarket because there's an ongoing cyber exploit there. That's true. Don't use polymarket right now. So the midterms, wow, the Democrats are 67% to sweep on high volume. That's both houses. We don't know if the French guy's active or not. And they're 93% to win the house and 68% to win the Senate. So we'll see. I think the polls would have to be horribly wrong for a Democrat sweep to not happen.

Speaker G: Well, the Bolsonaro guys like living in your backyard now. Did you see that?

Speaker H: Yeah, that's

Speaker G: tough. You lose an election, you got to leave in the dead of night the very same day.

Speaker H: That's how it's going to be in America pretty soon. Too tough. Where it's going to go the way of Brazil. All

Speaker G: right, let's hop into the deals of the week. First, uh, one up in the Castle island portfolio, Birch Hill, an on chain credit and asset management platform.

Speaker H: They

Speaker G: raised a $4 million round of financing from multicoin capital,

Speaker H: Parafi

Speaker G: Asset, Castle island and nascent.

Speaker H: Uh,

Speaker G: congrats to the whole team over at

Speaker H: Birch

Speaker G: Hill. Really excited

Speaker H: this company. Kalshi, the prediction market platform there is 1 billion from Sequoia, Wellington Tiger Global, Dragoneer at a $40 billion valuation. Wow, that's a big raise. Thank you. Raise.

Speaker G: Then we have Luxor, which is a Bitcoin Mining and AI Compute Infrastructure Company. They raised $16 million from CMT, Kin Micro, BT and others.

Speaker H: Predicate is a defi compliance protocol. There is 8 million from Blockchain Capital, Paxos One KX and Tribe Capital.

Speaker F: And then it's

Speaker G: Zeal,

Speaker F: which

Speaker G: is a

Speaker F: crypto

Speaker G: wallet

Speaker F: app. They're acquired

Speaker G: by Etherfi for an undisclosed amount.

Speaker F: Those are the

Speaker G: deals of the week.

Speaker H: So there was some interesting quantum news this week. Alice and Bob announced that they had figured out they haven't built this yet, but figured out that you would only need 30,000 physical qubits to solve ECDSA in an hour. Uh, there's something called cat qubits. So not going to try and explain what that is. It's not an imminent risk to Bitcoin, but it is a new advancement on the frontier and their approach involves superconducting qubits.

Speaker A: How far away are we from that in terms of um, is that like an order of magnitude away in terms of qubits?

Speaker H: Well, it's always hard to compare qubits across modalities. The largest arrays have been in the kind of 500 to 1000 physical qubit range. Um, but those are uh, typically the larger ones are not superconducting. So we're still pretty far from this I guess is the answer.

Speaker G: I thought this was maybe one of the bigger stories of the week. Google unveiled uh, an MPC product. So MPC is multi party computation. This is a custody service. It's geared towards financial institutions, not surprisingly allows banks and other institutions to securely uh, sign crypto transactions. Um, I suspect that a lot of these banks and exchanges that use this will

Speaker F: be

Speaker G: actually sending stable coins and

Speaker F: sending

Speaker G: RWAs. Um, I thought

Speaker A: this was just huge news. I mean if you think

Speaker G: about who

Speaker A: you would really want to manage keys, uh, at institutional scale beyond the usual suspects in the crypto space like

Speaker G: fireblocks, Google would be top of the list. You think about just their cybersecurity posture and uh, all the keys that they have to manage anyway in the course of their business. This makes a lot of sense to me.

Speaker H: Yeah, it was quite interesting to see the Google's focus on this. Uh, and yeah, I mean I think they are very credible. So they're a good company to be doing this. I don't think their solution is post quantum, which is odd because they've set themselves a 2029 deadline for being post quantum. But the hard thing with

Speaker G: MPC is that I don't really know

Speaker H: what

Speaker G: it looks like

Speaker H: in a

Speaker G: post quantum world. All these blockchains are different. I think it's going to be really complicated to make an MPC product in

Speaker H: a

Speaker G: post quantum world, don'. You?

Speaker H: That's the challenge. Um, and so it's kind of interesting that Google's rolling out something which their own guidance says will probably be obsolete in a few years.

Speaker G: It's always interesting to me when Google pushes into financial services because they could totally start a brokerage, they could start a bank, there's all sorts of things they could do. But you wonder if it's just that they make so much money from financial services companies on their ad platform, just on the core product that they don't feel the need to push in there. And

Speaker A: I

Speaker G: wonder what that's going to look

Speaker A: like

Speaker G: from a custody perspective. Because if you're a big bank, I don't know that you could actually use a third party custodian at scale to protect crypto assets. I get that you could do that initially. You could use these sub custodians and some banks are doing that. But if we get into the hundreds of billions of dollars of assets being secured, wouldn't you want that on prem? Like if you're State street bony, don't you want to own that?

Speaker H: Yeah. Speaking of their ad business, they had terrible financial results yesterday. And, uh, the Stock sold off 10%, uh, in about an hour and it's down again today. Was trading at 325 yesterday. Today it's at 280. I mean, an awful 24 hours for the company.

Speaker G: I wasn't aware

Speaker F: that they changed the way that the auctions work for the ad platform. Did you know about that?

Speaker H: Yeah, there was a viral post on Twitter earlier this year that they changed away from the second price auction, which I guess was meant to be really fair to the buyers. You don't run into the concept of a vicre auction many places. You do in crypto and then I guess you do in ad purchasing, and that's about it.

Speaker F: The interpretation there, I think, is that they're trying to goose the revenue by changing

Speaker H: the, uh,

Speaker F: model. Right.

Speaker H: Yeah. It seems like they had adopted more predatory pricing techniques on the ad platform. And apparently it's quite interesting. Searches have gone up, but ad revenue's gone down. And that's because people are hitting the AI generated answer all the time. That's hard to monetize,

Speaker F: I would imagine. It's hard to monetize, yeah.

Speaker H: So that just answers your question. And you don't need to go and click on any sponsored link or anything.

Speaker F: I mean, they're lucky to be

Speaker G: even keeping what they're keeping because they do have actually good AI and apparently they have two frontier models that haven't been released yet. So I'm eager to see what those look like. But, uh, obviously Anthropic and OpenAI are capturing some of that revenue these days.

Speaker H: Yeah. And Google's cloud business is a standout and has done really well. And they do have a frontier level AI model. Um, they

Speaker F: have two of them.

Speaker H: Yeah. Depending on which kind of index you look at, I think it's definitely at the frontier, but the Golden Goose is not looking good. I don't know if AI models will be able to successfully monetize with ads. I think OpenAI will figure it out eventually. If I had to guess, I think there'll be a tier that's just ad supported and it's free.

Speaker F: Yeah,

Speaker H: but uh, I mean, conventional search, I don't know if it's going to be long for this world.

Speaker F: What do you make of Instinct raising again

Speaker G: this week?

Speaker F: Does that valuation make sense

Speaker G: to you?

Speaker H: Yeah, I mean it's really, really aggressive. I've been puzzling over it too because I didn't know anybody that uses instinct. I

Speaker F: used it as of

Speaker G: a week ago.

Speaker H: Okay, so I know one person, I guess I asked all my friends, have any of you used instinct? And apparently it's popular with women. Uh, and uh, it seems to be fairly reliable. But I don't see a huge difference between Muse, instinct, dot, I guess anthropics, rolling out. I don't know. I struggle with evaluation a little bit.

Speaker F: I do

Speaker G: too. And maybe I'm

Speaker F: just not

Speaker G: creative

Speaker F: enough to think about the revenue levers there. But if I was being charged 20 bucks a month, I don't think I would use it.

Speaker H: I find the personal concierge style agents quite useful, but uh, I think it's going to be kind of a slow build there.

Speaker F: Uh, in other news,

Speaker G: Stanley, ah, Druckenmiller. I don't know if this is him or not, but trade, ah, xyz, uh, which is kind of a key input in the hyper liquid ecosystem in terms of listing new markets. They um, announced a bunch of things. Um, so they announced that ICE is investing in the company. Uh, they will help them launch a US exchange and clearinghouse offering for 24, 7 hyper liquid based perps to Americans pending CFTC approval. Obviously. They also announced

Speaker A: Stan, uh, Druckenmiller is investing. And then he tweeted.

Speaker G: I

Speaker A: didn't even know he had Twitter.

Speaker H: So this was his first standalone tweet ever, allegedly. And there's a lot of debate as to whether this is him. He has replied to tweets in the past and those replies would make it seem like it's very much not him in charge of the account. Well, maybe they sent him something to paste or something, said,

Speaker G: hey, this

Speaker H: would be

Speaker A: helpful. But then Elon retweeted it and said something interesting. Right.

Speaker H: And hyperliquid is up huge today, so there's still debate as to whether it's a genuine tweet.

Speaker A: I could be wrong on this,

Speaker G: but I am under

Speaker A: the impression that Stanley

Speaker G: Druckenmiller has never had a down year.

Speaker A: Does that sound right

Speaker G: to you?

Speaker H: Sounds right. I don't know for sure. Just hall

Speaker G: of fame level investor

Speaker H: also in prediction markets. Utah, the state of Utah has charged Kalsha and its founders with 13 felonies. So this is not anymore a civil case, uh, over alleged illegal gambling. Even as the CFTC has sued Utah to defend federal jurisdiction. So this is the second, the second state that's charged Kalshi with, uh, actually criminal charges for this.

Speaker G: That's kind of crazy. I mean, I think we both believe that this is gambling

Speaker F: and

Speaker G: that these are gonna, there's gonna be a

Speaker F: Supreme

Speaker G: Court case,

Speaker F: it's gonna

Speaker G: go back to the states. They probably won't be able to operate in Utah. But I don't know,

Speaker F: man,

Speaker G: you got to really tip your cap to founders

Speaker F: here

Speaker G: because

Speaker F: sometimes you just wake up and you're

Speaker G: being sued by a state for a felony and they're trying to put you in jail. I mean, sometimes that

Speaker F: happens. As

Speaker G: a founder,

Speaker H: I don't know, I might be on Utah's side actually. Really? Yeah. I think if you break the law like you broke the law. So. Well, I

Speaker F: think what they're doing is they're hanging their hat on the CFTC and CFTC saying, look, we take the lead here on this category, event contracts. And that's what the federal government is saying. So it's a federal government versus states issue. Now I tend to agree with you that it will eventually go to the states, but I think we just got to go to the Supreme Court first.

Speaker H: More to come on that,

Speaker F: I guess we touched on this already. But also in prediction market news, polymarket,

Speaker G: um, I think. Is this still going on? So this happened about an hour ago, a couple hours ago maybe. Uh, they're suffering a front end exploit tied to a third party service provider and funds are being drained out of user balances. Uh, as of right now, I think it's $2.6 million. So if you are using polymarket, I would disconnect your wallet right now.

Speaker H: Yeah, it's not looking good. Did you see this Wall Street Journal full page ad telling the public company CEOs that their stocks are being tokenized and fear mongering over it?

Speaker F: I did. And I think, uh, Alex Thorne had some good investigative journalism on the political action group that put that together. It looks like it was funded by the American Bankers Association.

Speaker H: Yeah, so this is, uh, apparently organized by a conservative leaning nonprofit, 501C4. And so you're saying it's a front for the ABA.

Speaker G: Um, I'm saying the ABA

Speaker F: is on

Speaker G: record as being a donor

Speaker H: to that.

Speaker G: They're

Speaker F: one of the

Speaker G: donors.

Speaker F: They're not the only donor.

Speaker H: It takes a lot to buy a full page Wall Street Journal ad. That's not cheap. Are

Speaker G: you following

Speaker F: this drama

Speaker G: with

Speaker F: like the

Speaker G: publicly listed companies

Speaker F: not

Speaker G: wanting to get tokenized?

Speaker H: Yeah, but why would you not want it? I guess

Speaker F: so I'll set this up a little bit. So under this new SEC

Speaker G: exemption, there's the creation of something called the TSV. And the TSV is the tokenized stock venue. And it's pretty boxed. Right. You can only, um, operate it up to a certain volume level. So it's not going to be a scaled rival to

Speaker F: the

Speaker G: New York Stock Exchange. Uh, and there's like four or five of these things that are approved right now. Now I think the way this works from my understanding,

Speaker H: is

Speaker G: that

Speaker H: they send you something

Speaker G: actual

Speaker F: physical

Speaker G: FedEx and you have 30 days to opt out. If not, if they don't hear from you, they can tokenize your stock. But if it goes through, I think you're tied into it and you can't pull out until 2031 or 2032 under this exemption. And so I think there actually is this incentive, if you don't fully understand it, to just say don't do it. I don't want to have to worry about operating like a new market here and uh, getting the feeds into my corporate departments that overview things like that. Uh, and so I kind of get it. Like, do you want your treasurer,

Speaker F: your CFO

Speaker G: actually having to

Speaker F: go

Speaker G: figure this out now? What's the big risk? I don't really think there is one. I don't think that there's going to be these like massive price dislocations or anything like that. But, um, it's interesting because there's a bunch of stuff on Twitter right now that NASDAQ is calling up, um, their customers

Speaker H: and

Speaker G: saying opt out of this. So

Speaker H: there's clearly some

Speaker A: competitive stuff going on.

Speaker H: Yeah, I thought the way it was written was pretty funny. It says the WSJ add attention public company CEOs, your stock, their tokens, your problem. Crypto will soon tokenize your shares on unregulated venues. As if crypto is just one entity. Yeah, I mean, scary, certainly.

Speaker G: Yeah,

Speaker H: there is some of that. But what we're talking about is

Speaker G: regulated

Speaker H: venues that are operating under

Speaker G: SEC

Speaker A: exemption.

Speaker H: Yeah, I mean it's not by definition, it's not unregulated. Yeah. It is a big drama right now, and I think it's up to, like, 30 companies that have opted out of this at this point. Uh, we haven't talked about DATs in a while. There was some DAT drama this week. Data Vault AI, they're a small cap Bitcoin treasury company. They fell around 50% after disclosing they haven't been able to withdraw their Bitcoin from an exchange called Biconomy.

Speaker G: Do you remember Biconomy? This was like an ICO

Speaker A: project in

Speaker G: 2017

Speaker A: or something.

Speaker H: I don't know if I remember it. I guess it's. They advertise themselves as the largest crypto exchange by trading volume. Sounds quite tenuous.

Speaker G: I could not have written this headline. Haven't heard of biconomy

Speaker F: since

Speaker G: 2017 or whenever that ICO was. They did raise a bunch of money. I've never heard of Data

Speaker F: Vault

Speaker G: AI,

Speaker F: and I

Speaker G: can't get over the fact that a publicly traded company would be storing Bitcoin on an exchange called Biconomy that did an ico. That just seems too hard to believe.

Speaker H: Yeah. So they have, uh, lost track of 1300 Bitcoin in biconomy. My goodness, what a strange way to collapse. Do you remember those ICO websites that used to have the advisors? I really wish we had

Speaker G: those.

Speaker H: Still, there's

Speaker G: a lot of people advising on ICOs that I would love to dredge

Speaker F: up.

Speaker H: I'm sure they're on the Internet Archive. They are probably. So there was a bitcoin vulnerability found with AI. So automated security research uncovered a bitcoin core memory exhaustion vulnerability that was fixed. Glad we're finding these bugs. Uh, in a lot

Speaker G: of ways,

Speaker F: it's

Speaker G: surprising we

Speaker H: haven't

Speaker G: found more

Speaker H: in

Speaker G: bitcoin.

Speaker H: That's. I guess bitcoin was. Yeah, Bitcoin was probably one of the most scrutinized open source projects in the world.

Speaker G: Uh, here's some more Quantum news. Category Labs, which is the team behind the Monad blockchain, they unveiled Quantum Cadence, which is a post quantum version of its consensus protocol. Kind, uh, of rethinks the way that the validator signature scheme works. Um, they put out a big academic paper on this as well. Uh, it's nice to see blockchains moving faster. I think you got monad, you got eth. There's a bunch of ecosystems that are,

Speaker H: uh, really

Speaker G: getting on it here with this upgrade cycle.

Speaker H: Yeah. And I think it's powering a lot of the enthusiasm behind zcash too.

Speaker G: Definitely.

Speaker H: In, uh, Robinhood News, their prediction market Revenue has now overtaken crypto trading. It was interesting, um, in that earnings call they came out and said that they're transitioning off of Kalshi. Rother is going to be their primary for uh, prediction markets. But prediction markets and then

Speaker F: the, the actual Robinhood

Speaker G: chain.

Speaker F: These are fast, fast growing parts of Robinhood. You have to tip your cap to them in terms of the product innovation over there.

Speaker H: So do you remember the Libra or Meme coin?

Speaker F: This is the Argentina guy, right?

Speaker H: Yeah, this was Javier Malay's meme coin.

Speaker F: No, but who's the guy? Who's the.

Speaker G: Was

Speaker F: it an Argentinian or an American? The guy that made that one.

Speaker H: Hayden Davis. The infamous Hayden Davis.

Speaker F: Yeah.

Speaker H: Who somehow escaped criminal charges in the US by the way. M. And now the charges in Argentina against the President, Javier Milei, his sister, and then Hayden Davis have also been dismissed. So there is insufficient evidence to establish a fraudulent scheme based on Milei's promotion. So it appears that everyone involved with Lieber has gotten off scot free.

Speaker F: I'm um, no expert on how the policy works down there, but it seems like there were some bad things that happened there.

Speaker H: I mean, the president of Argentina promoted a Meme coin that was front run heavily I guess by its creators. And I think anyone that bought it lost money.

Speaker F: And here we are in a glass house in the United States of America. We would never see something like that in this country.

Speaker H: Yeah, that's right. The Keystone Hardware Wallet manufacturer. They destroyed 19,000 hardware wallets. So following a security breach, an attacker obtained a device authentication key somehow. I don't know how that's possible. And all customer information as well, just to make it worse. So it's really a bad time in hardware wallet land, huh? Huh? All these hardware wallets having horrible problems.

Speaker G: It's really

Speaker F: hard to make a

Speaker G: hardware

Speaker F: wallet. It's like, I mean,

Speaker G: I'm surprised that we talked about this

Speaker F: last week,

Speaker G: but I'm surprised that ledger

Speaker F: didn't have some sort of a tamper resistant

Speaker G: thing

Speaker F: on the device itself or on the

Speaker G: packaging

Speaker F: at least. It's. Yeah, it's

Speaker G: a shame

Speaker F: that

Speaker G: that didn't happen. Um, here's some more DAT news.

Speaker F: I thought we were done with

Speaker G: DATs,

Speaker F: but I guess not.

Speaker G: Um, let's do

Speaker F: a

Speaker G: couple

Speaker F: of them.

Speaker G: Strategy

Speaker F: shareholders, they approve daily dividends,

Speaker G: um, on its

Speaker F: four perpetual,

Speaker G: uh, preferred stocks. Um, that's kind of interesting. I, I would support that. I think that's something maybe that you should see in most stocks is just daily dividends. Why not? It sounds like a total Nightmare to administer, but could make it, could make it more interesting. And then you have Canton Strategic holdings, which is the Canton Dat. They announced that they're going to tokenize and trade 247 on a new TSV, um, that is built on top of Canton as early as Monday. So we're seeing some more, uh, DAT

Speaker F: news.

Speaker H: Some reading material for you for this week. Alex Thorne has published a new article, why now is the time to add and hold btc. So no prizes for guessing what he says in that article, but I thought it was very good.

Speaker G: I like it when

Speaker F: Alex Thorne gets

Speaker G: bullish. So you think that's a bottom signal, like we're ready

Speaker F: to, to rip off the floor here?

Speaker H: Another interesting signal I saw this week. Y Combinator. They have not left crypto in the cold. They're still doing a crypto request for startups. So some funds have pivoted away. They have not to summarize what they're saying, they think major assets will be tokenized beyond just dollars and stocks. They think assets will be issued from startup equity to micro securities that could never have been tokenized. New financial primitives Agents as financial actors. So it seems like YC is also pretty bullish on crypto.

Speaker G: Yeah, I thought that was interesting. And it feels like YC has not had a lot of crypto stablecoin infrastructure companies past few years. So hopefully this does bring some more attention to the category on the topic of agentic finance. Uh, we talked about Instinct earlier, but I don't know if you saw it this week. They did add payments, uh, into the product and it's

Speaker F: a

Speaker G: stablecoin denominated payment. It's a stablecoin rail

Speaker F: on

Speaker G: the back end and it's

Speaker H: striped. Built

Speaker G: it in Instinct.

Speaker H: Yeah. Wow. Wow. Uh, so that's egg on my face because I guess I said that agents weren't strictly going to have to use stablecoins.

Speaker G: Yeah. And I guess they don't have to. And I. You've talked about this in the past, but I think the machine to machine side of it, as opposed to the

Speaker A: human intermediate side of agent payments,

Speaker G: maybe makes more sense for stablecoins.

Speaker H: Right. That's kind of where I come down to. But

Speaker G: yeah, you

Speaker H: can

Speaker G: send a

Speaker H: stablecoin on

Speaker G: Instinct via stripe integration.

Speaker H: Wow. Very, very cool. Yeah, I mean, I will probably get made fun of for saying this, but I just give my agent my credit card and obviously I could get in trouble doing that if something goes wrong. But, uh, nothing terrible has happened yet.

Speaker A: There's some payments though that I just Think you're going to want to make very, very small payments. And credit card is not good for that unless you do big batches.

Speaker H: I totally agree. I think there's no reason to assume that AIs will make human sized retail payments. They could pay more frequently, they could pay in smaller bundles. If, um, if they're buying something that's a digital service that's deliverable in real time, there's an additional risk that you need final payments. People are going to start to realize that finality matters beyond just crypto people. So there is a good case for stablecoins in that context. I totally agree.

Speaker G: I had a, um, panel

Speaker F: at

Speaker G: this Thai conference and I was asked about tokenized deposits and I gave a really impassioned argument around why they don't make a lot of sense for anyone except for the banks. And,

Speaker F: uh,

Speaker G: there's a bunch of bank people working on tokenized deposits in the room, but they didn't want to talk to me after.

Speaker H: So let me ask you something. Do you. Did you think that the exponential time hypothesis would be disproved this week?

Speaker F: Well, I was, I saw it was, uh, eth and I just thought they

Speaker H: disproved

Speaker F: Ethereum.

Speaker H: They had disproved eth. That's right.

Speaker F: Uh, I was not familiar with the exponential time hypothesis, I must confess.

Speaker H: No, neither was I. Neither was I. Apparently it was a very important thing in computer science, which they all thought was true, and it turns out it's false. We just keep on ticking through these discoveries

Speaker G: here,

Speaker H: and I just hope we as humans are fast enough to latch onto the implications. I mean, we seem to be doing a lot of theoretical work, but where, how do we get from ETH is false to. I don't know. My phone works slightly better. Yeah. What's the process to get there?

Speaker G: I don't know. Are some of these going to be the

Speaker F: key to,

Speaker G: I don't

Speaker F: know, traveling from Boston to China in an hour or something? Is there some breakthrough here? Um,

Speaker G: I'm sure there is.

Speaker H: There must be, but I'm. I would say I have absorbed that. We're really good at math now. That's. I've accepted that I am ready for the applied discoveries.

Speaker F: Yes.

Speaker H: Whatever it is, a new peptide, maybe some new drug, or a, uh, material science discovery of room temperature superconductor. Dare I say fusion? He was like,

Speaker F: the fusion. I mean, the gold thing

Speaker H: is

Speaker F: real.

Speaker H: Let's hit the applied discoveries. Guys, enough of the, Enough of the theoretical stuff. I've had enough.

Speaker F: I just don't. The problem with all these theoretical discoveries is the number of human beings that actually understand

Speaker A: these discoveries is just so small. I mean, there's 10 people in the world who probably understand this ETH thing,

Speaker H: and they're trying. They're filtering through last week's discovery. They don't even have time to.

Speaker A: Oh, uh, yeah, they're doing Navier Stokes.

Speaker H: So I asked my. This is kind of cheating. It's like asking the student to grade their own homework. But I did ask AI to grade and assess all of the major math discoveries ever made by AI and to rank them. Yeah. And the three of the top five took place last week. Is that right?

Speaker A: That's crazy.

Speaker H: The eth1, there's a quantum thing, some physics thing, and something called the Cakea conjecture. So those three are all in the top five. So not only is the pace accelerating, but the most important ones all happened last week.

Speaker F: I mean, what a time to be alive. When you really think about it. We've got. You can

Speaker G: turn, what is it, methane into gold or whatever we did two weeks ago.

Speaker H: Mercury.

Speaker G: Mercury into gold.

Speaker F: All

Speaker G: right, so that's pretty big deal.

Speaker F: We got

Speaker G: quantum computers that are about to discover all sorts of

Speaker F: new

Speaker G: cures to diseases and also break a bunch of crypto stuff. And then we got this AI stuff, just discovering new

Speaker F: math

Speaker G: that's gonna allow us to, who knows, what, like, travel to different planets at some point. How can you not be excited about the progress here?

Speaker H: I continue to believe it's the most exciting time to be alive in world history. It has to be right this moment, Right this very moment.

Speaker G: I mean, you could have been born in centuries where just literally nothing happened.

Speaker H: There are no

Speaker G: inventions. Just, you know, you were

Speaker H: born on a farm and you stayed on the farm, and you never went five

Speaker G: miles.

Speaker H: I mean, that was basically all of human history until 1200.

Speaker G: Yeah,

Speaker H: but I agree, like,

Speaker G: let's

Speaker H: get the atoms

Speaker G: side of

Speaker F: this

Speaker G: moving. I

Speaker A: would like to travel faster. How about we start with that?

Speaker H: Like, invent a better battery. Could we do that? Better battery?

Speaker A: How about just looking at, um, science fiction and just trying to copy some of that, like Star Trek

Speaker G: Beam

Speaker A: Me

Speaker F: Up. Could

Speaker A: you imagine?

Speaker H: Well,

Speaker F: is that possible? Can we.

Speaker H: That raises a lot of philosophical questions. Like, is it still you? Right? Like, if it's, you know, you've taken apart atom by atom and reconstituted somewhere else, is that still you?

Speaker A: Well,

Speaker H: probably not. Right. I'm

Speaker F: not in two places at one time, so. I would think so. Right.

Speaker H: But there's no continuity. Right. It's not the same atoms it's like a different bucket of atoms. So you, from the perspective of the internal state of the new you, it feels like it's still you. Right. Because all your neurons. But it's probably not the same you. Don't you think?

Speaker A: Well, I think you're just assuming that. How do you know it's not the same atoms? Maybe they just move at the

Speaker H: same time. Well, no, it's definitely not the same atoms. I think that's the premise of the machine.

Speaker F: Well, I don't think we've discovered that in OpenAI yet. I mean, give it a couple weeks, but I take the point.

Speaker H: We have to do more philosophical work before we invent the replicator. I'm not comfortable with it.

Speaker F: You're not comfortable with that one.

Speaker H: Okay.

Speaker A: All right. Well, I think I applaud all these discoveries, and a lot of people are talking to me about the gold one. I think I need to get a lot smarter about this, and

Speaker G: maybe we need to start exploring

Speaker F: some

Speaker G: investments.

Speaker F: If

Speaker G: we

Speaker A: could

Speaker G: make these things not radioactive, I think that would be a huge benefit, is what

Speaker A: I'm

Speaker G: hearing. People like the idea. They don't like the idea of getting radiation poisoning from

Speaker F: the

Speaker G: new gold.

Speaker F: That's not a very popular part of this.

Speaker H: Yeah, I also got a lot of feedback on that, and apparently I got the James Bond reference wrong. Goldfinger finger. Yeah. So. Because I was complaining that it was too easy to take over Fort Knox, which in the film. It really was.

Speaker F: Yeah.

Speaker H: But someone reached out and told me that, I guess, like, there's a character called. I don't even want to say the name. I feel like it's vulgar. Pussy Galore. Am I allowed to say that?

Speaker F: Yeah.

Speaker H: What were they smoking back then? You can't name a character that.

Speaker F: Yeah. I don't know if the film ratings were, uh, up to our categories now.

Speaker H: You couldn't do that today anyway, so she apparently had done some kind of inside job. Maybe. So maybe that's why I was easy to take off. I don't know. I wasn't really paying attention during the film.

Speaker F: Been a long time since I saw that movie.

Speaker H: But I think the radioactive thing is fine because you're not touching the gold every day. Right? Like. Well, that's what I said.

Speaker F: It's like, look, we're just gonna bury this in, um, Wyoming,

Speaker G: and we're

Speaker F: going

Speaker G: to issue

Speaker F: some tokens on top.

Speaker H: Tokenization totally fixes this. Yeah. You don't need to interact with the gold ingot very often.

Speaker F: Well, that's, uh. A lot of people want the gold ingots

Speaker G: is kind

Speaker F: of the

Speaker G: feedback I'm getting. It's like, look, I

Speaker F: want to be able to

Speaker G: spend this in

Speaker F: a time

Speaker G: of emergency,

Speaker F: and I get that you can't do that with radioactive

Speaker H: gold. Who's spending gold? Who's taking gold grains with them to the market and weighing it? Uh,

Speaker F: people that are getting ready

Speaker A: for the, you know, the apocalypse. It's these people that have the MREs. There's more people

Speaker H: out there

Speaker A: than you'd think.

Speaker H: I mean, I think if it's the apocalypse, you'll still. You'll happily take the radioactive gold. At that point, probably everything's irradiated. Uh,

Speaker F: that's a great point.

Speaker H: It's just you're bathing in radiation anyway.

Speaker F: This is a really good

Speaker G: point.

Speaker H: Yeah. So

Speaker G: maybe it doesn't matter. All right, I think that's a good place to leave it. Everybody have a safe and healthy

Speaker F: weekend, and we will

Speaker G: see you on Monday.