META All Time High, Kalshi Drama, and Crypto is in a BULL MARKET plus Trading Updates

0:54What is up, everybody? Good morning. Welcome back to another episode of Full Port.

0:59We’ve got a lot to talk about, as usual. Joined with my amazing and lovely guest, G-Bunny, here.

1:06Guest! Co-host, sorry, I’m sorry. I’m a little, the coffee isn’t hitting quite yet.

1:12Man, it’s a rainy, dreary day.

1:15That’s it. I quit, bro. I’m out of here.

1:18You know, I’m the intern. We’re going to start referring to me as the intern of the show, just to make you happy on that one.

1:24That was bad. That was really bad, actually.

1:27I’m like, sitting here trying to post this.

1:29I messed it up because we do have a guest coming on today.

1:32We have Simran from the Say slash Monaco Foundation.

1:38They’re doing some amazing stuff over there.

1:40So if you have interest in tokenized equities, RWAs, perps, anything that has to do with Wall Street, modern finance, coming into crypto, he’s at the breaking edge of it and building there.

1:53He’ll be joining us in about 15 minutes.

1:55Until then, G, how are we doing? Good morning.

1:59Good morning. Doing great.

2:01Had a great weekend. Had a lot of drama on the timeline over the weekend.

2:05I think there was like, I think there was drama macro, there was drama crypto.

2:10So I think we had like a little bit of everything for everyone.

2:14Yeah. You know, what I love about the bull market, when you know it’s really here, is the juiciest drama is coming out.

2:21Not this like weak, petty stuff. Like we get, we’re getting like multi-billion dollar companies having employees feuding on the timeline.

2:30And there’s some meat to the bone there, obviously.

2:33Kalshi, obviously, taking the headline.

2:35Let’s start with that, right? Let’s start with, I think, Kalshi over the weekend.

2:41Yeah. I don’t know. Do you want to recap it or any?

2:44It starts with ICOBs, which, if you’re not aware, is a longtime crypto native user, has worked at a few different companies throughout the space, and then joined Kalshi.

2:58I believe a friend was working there and was like, hey, you should get involved.

3:00And he’s led their crypto side, basically stoked the fire with another ex-user who then turned around and dropped an entire thread of receipts on, you know, alleged wash trading, alleged kickbacks, alleged falsified numbers, alleged, you know, showing how, like, the entire open interest for a singular perpetuals market is being fully, you know, fully run through every eight minutes to get $500 million worth of volume in a singular market.

3:36And it brought a lot of attention.

3:38Like, usually, you know, I want to make a point here.

3:41Usually in crypto Twitter and our little echo chamber that we’re in, if you have a post that does well within the community, you get maybe 100,000, 200,000 views on a post.

3:51When you break outside of it, you start to see these 1 million, 2 million impression posts.

3:55He was well into that multi-million dollar impressions.

3:59And it became something that now it seems Wall Street Journal and other news agencies have picked up on it and are like, hey, we’re actually going to go and look at this.

4:08And we’ll report back with, like, real, you know, investigative journalism on what’s going on at Kalshi, which is crazy to see.

4:20Yeah, so basically, I don’t know if I was, I don’t know how quick I was to start seeing this, but I blocked ICO Beast a long time ago just because I thought he was putting, like, during, like, the Kato Yap stuff.

4:34It was just, he was putting up such slop and such unvaluable things that I’m like, I need this off my feed.

4:40And, like, more than just muting, so I blocked him.

4:44And, like, I feel like he’s always been, like, a shit poster, I guess.

4:50I don’t really know. But, like. There’s a category of professional poster, you know, professional poster within crypto where you’re just an influencer.

4:58People, there’s value to that.

5:02Yeah, well, I don’t find it valuable, so that’s why I blocked him, right?

5:05And so I don’t, I wasn’t really, like, paying attention to any of his stuff.

5:10It seemed like he was trying to, to me, it looked like he was trying to inverse bra some guy by posting stats that, you know, that everybody’s been calling out as fake for the last couple weeks or months.

5:23Even one of the partners, Tom Schmidt at Dragonfly, has been, like, kind of going at it with, with Kalshi on the timeline of, like, you know, like, this isn’t the first time that has been brought up that they did, whatever, half a billion dollars in volume on, like, three million dollars of open interest.

5:40And, like, the largest open position is, like, a hundred thousand dollars.

5:44Like, come on.

5:46You know what I mean? Like, come on. And, like, and, and, you know, I think people have been bringing, bringing up that they’re not the only ones that have done it, but that may, while that might be true, they’re not, they’re the only ones that are, like, trying to dunk on people and pretending like that’s real, right?

6:06And so I think that that’s kind of what stoked that.

6:08Now, you know, I tweeted it this morning, I re, I re, I quote tweeted something where there was a headline that came out this morning saying that the CFTC is, is, you know, starting a probe into Kalshi.

6:24And I quote tweeted that this might be the most expensive tweet of all time, right?

6:28Because I think Kalshi was raising or just raised at $40 billion, where I think it was at $10 billion, I think, less than a year ago.

6:39So it’s, it’s up significantly over the last 12 months.

6:43And so, I, I just think that, like, the implications of the events over the weekend and that tweet where the guy was literally, you know, he was basically trying to dunk on, I forgot that guy’s name, Ben, I think, is the guy’s name?

7:00Benji, I believe.

7:02Benji, Benny D. I think it may be Benny D.

7:05And, uh, he was trying to dunk on him and he, he basically was trying to inverse prime and get, for those who don’t know, inverse bras, like, uh, whenever you ratio somebody, especially in crypto, uh, he’ll screenshot it and put it on there.

7:16I’ve, I’ve been, uh, like, I, I think like one of my, whenever, like I get on inverse bra for inverse braying somebody, like, it’s like, boom, got it.

7:25Like, I think one time I was like, I think I was on like two or three times in one week and I was like, boom, I’m, I’m like in the zone.

7:31But anyway, he was trying to inverse brom and the guy like came back and was like, no, no, no.

7:38And, uh, like reversed uno card him.

7:42And like, just like looking at it is like, there’s so many, like outside of, let’s say the CFTC and possible SEC investigations.

7:52I think any and every investor is going to be questioning numbers.

7:58And if those numbers do turn out to be falsified, they’re going to, you know, either sue for, um, uh, what, what’s the, uh, what’s the word?

8:11I don’t, they’re going to sue management for like lying about numbers or, you know, materially hiding them or whatever.

8:17Right. And so then in that situation too, uh, there’s probably like a fall guy.

8:22Like I was like thinking about on my, on my, uh, walk this morning of like my recommendation to ICO beast and probably anybody else on the crypto team is to get your own personal lawyer.

8:36Cause like, I don’t know.

8:37The company’s lawyer is not your lawyer.

8:39A lesson that you should know. Yeah. The company’s lawyer is not your lawyer.

8:43The, the, the in-house counsel will be there to, you know, defend and save the business as much as possible.

8:50And like, he should probably lawyer up.

8:54I, again, I don’t know, you know, what information he was privy to or whatnot, but like, I think anybody from the outside looking in can obviously see that these numbers are not real.

9:06And, uh. You think this is a thing that we see across the industry?

9:09I don’t think it’s unique to Cal sheet. So, um, no, I, I don’t think it’s unique to Cal sheet.

9:13This, like I was, to me, it’s almost like, okay, if you look at crypto over the, since like 20, let’s say 2020, cause I think 2017 was ICO boom.

9:24People were like, oh, you can buy this next thing.

9:28And like, get in a two valuation and traded really high, blah, blah, blah.

9:31And so then what ended up happening, I think, especially in like the L1, L2 wars.

9:37And I think we were like talking about this a couple of weeks ago is people would falsify transaction volume, right?

9:43Like it’s very cheap to like, bot like transactions, right?

9:48Especially when transactions are very cheap.

9:49And so what a lot of L2s or any protocols would do is they would bot a lot of these transactions.

9:56And I was, I was, I was talking about like one of the frustrating things for me at 90CC when I was trying to raise.

10:01And so, here we go. Was people would be like, oh, well, you know, you only have whatever, a few thousand members of your community, whereas like this protocol is around the same size, same valuation, and they have, you know, 100,000 active wallets.

10:18And it’s like, well, those are all fake. So like, you know, whatever, right? Like, you know, you’re eating into this, or you’re buying into this porn, right? Like chart porn, kind of, right?

10:30And so it’s definitely been happening in the space. And I think initially, like, I think initially people fell for it and VCs fell for it. And then as they got smarter and more privy to it, they just like discount the numbers, right?

10:44So it’s like when people are like, oh, we have like, you know, 100% week on week growth. It’s like, yeah, well, it’s not sustainable because people are farming the token.

10:52So, you know, this is like not a long-term viable business. So I’m not going to give you credit for that. I think on probably like the traditional side, they’re probably not as privy.

11:06And listen, not to discount it because those guys are probably, you know, they’re very smart investors and probably even smarter than, you know, most crypto investors.

11:16And I think that like Kaoshi kind of got caught playing the game, right? And it’s like people bringing those things that have worked in crypto or that worked in crypto really well and no longer work.

11:32It’s like, okay, like find a new person that like will believe that. And I feel like that’s kind of what’s happening.

11:40Yeah. Right. So, yeah, I think as somebody who’s obviously raised in the space recently for a consumer trading platform, I’d put that in the same category as Kaoshi, which is consumer finance, consumer trading.

11:54I mean, I would say the entire space, and this is something that we’ve had to deal with, which is we’ve noticed that it is a norm within the industry for wash trading.

12:05Again, transactions are cheap and the fees that you pay on wash trading is relatively cheap.

12:11There are services, there are companies and there are vendors out there that if you wanted to do this stuff for 10K a month, you can be like, hey, my protocol just added an extra $10 million worth of, you know, volume across these thousand wallets.

12:29And, you know, they’re all wallets that you can set criteria for, like, how old are they? Are they age? How many transact? Like, it is very complex. And this isn’t unique to crypto, right?

12:39Like, this exists if you’re going to do email addresses or proxies. This, like, gray hat hacker, you know, economy exists.

12:50And I do think it comes from, like, sneaker bot culture has really, really shaped where crypto has gone.

12:57And I believe that this is kind of pulling over of, like, hey, we can just take some of this stuff and make it look better.

13:02The issue is when everybody starts doing it, if you’re not doing it, you’re at a disadvantage to your investors and everybody else that’s looking.

13:11And so it becomes an ethics question at the end of the day.

13:14We’ve chosen to just not to participate, though.

13:17I think that also, this is something, I don’t know how true this is.

13:20I saw this last night on the timeline, and, like, I think it’s starting to pick up a little more.

13:26It was, like, people saying the FOMO, like, the FOMO P&Ls on the leaderboard.

13:33And this is, like, adjacent, not exactly the same, but the FOMO P&Ls on the leaderboard are kind of like what I think the casinos were doing, right?

13:42Where they would give you, they’d give influencers some sort of money to spend on the casino, and then they hit big.

13:49So then everybody, like, goes to the casino because they think they can win.

13:52And that’s, like, the same type of concept that’s being used on the FOMO P&L stuff.

13:57Now, I don’t know how real that is, but, like, those are, like, the things that people are starting to say.

14:01And I think it’s, like, to your point, it’s, like, the same type of thing, right?

14:05Selling people on that dream, whatever it is, and then capitalizing on it, right?

14:11And to your point, it’s, like, it’s – I’m sure there’s some, like, legal – I’m not an attorney, and I’m not a lawyer, but I’m sure there’s some legal implications there that people are discounting because they’re, like, oh, well, the president launched a meme coin, so everything’s fair game.

14:26But, like, not everything is fair game.

14:28And I think – you know, I think – I saw something yesterday.

14:31I think one of the guys from BitConnect was, like, is being sued by the government for $2 million for, like, a million dollars that he owed in back taxes and a million dollars penalty in interest.

14:47And he got hacked, I think.

14:49And he’s, like, well, I don’t have the money.

14:51And it’s, like, yeah, well, you still scammed. So, like, you know, I – and that was – I think that was 2017.

14:57I think that was the 2017 cycle. So here we are 10 years later with enforcement action coming out, and I do think that people are really discounting a lot of this of, like, oh, yeah, like, well, you know, we’re going to, like, print and blah, blah, blah, and this and that.

15:13It’s, like, yeah, but at the end of the day, like, laws exist for a reason, and, like, even though the law might take their time, like – It is a little terrifying, I think, for some people to realize the meme of crime is legal is not – it’s a meme, not true.

15:29Like, like, the hammer will come down on some people.

15:34And we’re seeing – we even saw this this morning.

15:36I was talking – you know, I’m very well-versed at this point in the tax world of crypto.

15:43So, several people over the last few weeks have been hit up for 2018, 2019, and 2020 numbers.

15:51And I would say most of the people that are still around are participating or still have their habits from the 21-22 cycle probably get a knock on their door at some point here.

16:01It would be – I keep my eyes on it.

16:05Gee, we have our guest today here in the waiting room.

16:08I’m going to pull them in.

16:10Let me see if we can do this without any issues.

16:15Wow, it worked. Fantastic. Simran, welcome.

16:20I gave a light intro on you as basically at the cutting edge of what’s happening in the world of TradFi.

16:27I think you giving a more formal introduction of who you are and what you do and why you do it is a great way to just jump into maybe a conversation on the world of TradFi coming into crypto here.

16:39Yeah, no, I appreciate you guys having me on.

16:41I’ve been a follower of the show, so it’s nice to actually be able to join on an episode.

16:46So, my background started off at Goldman on the commodities desk.

16:50I like to joke I got the first white hair in my beard when oil went negative.

16:53The rest have pretty much come from trading crypto either a little bit in the trenches or when I was head of DeFi at GSR.

16:59And now I have the privilege of working with some really smart folks to help build arguably what I would call as RWA infrastructure, right?

17:07What does this fundamentally mean? It means half of the team has either sat on the buy side or sell side of many reputable traditional institutions, whether it’s Goldman, whether it’s Jump, Jane Street, and or Hudson River Trading.

17:20And so, we have a keen appreciation for what it means to build for institutions, especially when it comes to the convergence of TradFi and DeFi, right?

17:28And so, building for that means building for 24-7 markets, building for Korea, building for India, building for the U.S., building for LATAM, building for what is truly a global asset class.

17:39This is only going to continue to increase in that forefront.

17:42And it’s very relevant right now.

17:45Go ahead, G. Before we kind of go down what you’re doing, I would love if you could talk about what it was like on the Goldman’s Commodity Desk when oil went negative.

17:57Because I was trading equities prop at that time, and I remember that.

18:02I was like, oh, shit.

18:03Like, a lot of people blew the fuck up.

18:06Because, like, at that point, like, nobody thought that, like, it would go negative.

18:11And, like, you know, like, it went to, like, negative, I think, $30 a barrel or something, right?

18:16Like, negative $37.63.

18:19Yep. Negative $37.63 is where it settled the day before expiry.

18:22It traded down to, I want to say, negative $60, negative $70 intraday before settling there.

18:27It was probably one of the most, like, exhilarating times for a young junior analyst on the desk, right?

18:33It’s trial by fire in the purest sense of the world.

18:36So I remember the head of commodities calling our desk because we were the oil office desk, right?

18:41And he’s like, so how much did you guys, like, make today?

18:43What’s the P&L look like? What’s the damage look like? And I’m like, Ed, Ed Emerson, who was the head of commodities at the time, I’m like, I don’t feel comfortable telling you this number.

18:50And he’s like, why? I’m like, well, it was just a linear desk, right?

18:54If all you were trading was linear products like regular futures, it’d be number go up, number go down.

18:58You can compute your P&L. But when you’re trading options, there’s a lot of convexity.

19:02There’s a lot of these higher order Greeks that you have to be like, well, what is the P&L if this thing changes and this thing changes and this thing changes?

19:09And all of a sudden, all your models are just breaking because the thing that was supposed to be forward at zero suddenly just blew through the roof, right?

19:16And vol is trading at, like, 1,000%.

19:18Optiverr has stopped quoting. It’s much easier for me to trade something one year out in the oil forward curve than it is for me to trade something that’s one month out because no market maker wants to get picked off, right?

19:28And so I’m like, I don’t feel comfortable.

19:30He’s like, let’s make this easy, right? I’m like, more than five, less than five.

19:33I’m like, more than five. He’s like, more than 10, less than, I’m like, more than 10.

19:36More than 20, less than 20. I’m like, probably less than 20. He’s like, 15 it is. And it ended up being, like, close to, like, 18 million after you count for all the hedges and everything else.

19:44But it was one of those days where I’m like, you read about books, you know, about massive trades, about macro traders, but then you get to sit in the seat where something that has never happened in the history of mankind, where Saudi and Russia are entering into a price war.

19:57You have the supply overhang that’s happening.

20:00You have demand destruction in the form of a global pandemic.

20:03And all of these things are just converging together.

20:05I’ve had to do it together. I’ve had to do it again. At once in an unparalleled way, right? And it’s like, why did Brent not go negative? It’s because it’s Seaborn. Why did WTI or West Texas Intermediate go negative? It’s because it’s landlocked. It goes through pipelines, right? And so when you have no place to store it, you can’t store it off the coast of Africa. You need a place to put it. And like, we don’t know where to put it. People are literally willing to sell it at a negative price to do so.

20:27Right. Yeah, I mean, I remember like the memes were, you know, like, I’ll fill up my bathtub, I’ll fill up my pool, and like, you’ll pay me to take delivery. But yeah, like, you think, like, what were probably like the long, because I remember I have a really good buddy of mine that trades electricity a lot in, I think, ERCOT, right? So I think that’s like the Texas area. And he was like, trying to buy, he was like, I’m getting long, like not oil, like the commodity, but he was like getting long, like Exxon and all that.

20:56All like, you know, all the oil guys. What do you think were like the long term effects of that? Because like, I feel like that must have brought a lot of supply off, because people were just scared of like, you know, to your point, like, we were also in the middle of a pandemic. So people are like, where, you know, how much demand destruction is there? And what do you think were like the long term side effects? I think like, after that, like oil went straight up for like two years, right?

21:20Yeah, no, I mean, you’re even seeing the effects of that even now, right? You’re seeing triple digits of crude. And it’s funny, because right after 2020, you had this period of consolidation, the head of GSR commodities research was saying, hey, we’re about to enter into this massive commodity super cycle.

21:35Whether you look at AI, whether you look at the energy complex, you name it. And then when Russia, Ukraine happened in 2022, that was finally right around when I, you know, left my role at GS to go join crypto full time.

21:48Like, that’s effectively when people were initially calling for triple digit crude, because the market was so undersupplied at that time, right? And so structurally, I would argue that there’s still the geopolitical factor, there’s still an overwhelming undersupply in the market, which is why you’re seeing crude trade where it is right now, right?

22:03It’s not just macro politics. It’s not just geopolitical risk that’s being priced in, in terms of upside cost. It’s also people saying, hey, like, is there actually enough oil to go around? The short answer is yes, but it’s like, are we actually pulling it out of the ground, right?

22:15Like, that’s the other thing that I think people often forget, where it’s one thing to have these massive oil reserves that are sitting there. It’s another thing to be able to pull it out of the ground, right?

22:23You see this with copper every now and then. I think there was a Financial Times article even recently that said, oh, hey, we’re entering into this like massive copper shortage over the next few years.

22:32And it’s like, people have been saying this for the last 60 years. And anytime anyone ever says this, somehow, there just happens to be more copper to be able to pull out of the ground and to be able to supply into the market.

22:42So I guess like, it’s funny, I like, what do you like, do you follow the copper market very closely? Because like, like, I, you know, like, I mean, FCX is like at all time highs, right? It’s right near all time highs. I think copper is also at all time highs. But to your point, right, is like, some new technology comes out, somebody finds a new mine deposit, right? Like, all of a sudden that that has an impact on price. Like, what are your thoughts there, I guess, on copper, if you have any?

23:09So short answer would be, I mean, COMEX is trading like up 50% year to date. I think it’s very important to always discount from an inflation adjusted perspective. So we are hitting all time highs, even if you look at like the real price inflation adjusted. But that’s just reacting to the current regime of things, right? Obviously, you have these supply chain constraints, anything that was going through the trade of Hormuz, anything that was being consumed by data centers, etc, might have been not priced in. But when I look at the overall, like industrial demand, China is like the biggest consumer of copper.

23:39But by far, then obviously, you’ve got conductors, any electrical materials that are used in buildings and data centers around AI demand somehow is still relatively marginal compared to that. So even if we are underpricing in the overall shock that AI might have when it comes to copper consumption, I still think there’s sufficiently enough supply to be able to more than offset that demand over the next like five to 10 years, right?

24:03And I was actually even looking at this last night, where like, right now, I think like, what is it, 23 metric tons of this is like produced or something along those lines. And I’m like, this is like a ridiculous amount when you look at the overall history of how much has been produced over the last like 60 years.

24:18Oh, interesting. So you’re a seller of copper here is what you’re saying?

24:22I would be a seller of copper, sure. I mean, it got into my head. I’m not actively looking at the market. I’m not actively looking at like where LME is trading versus anything else. But I would probably be a seller here, yeah.

24:35All right, cool. Well, no, I appreciate you like sharing war stories and stuff. And I know I definitely would love to, to get into what you’re really focused on over at Say and, you know, I think like your background and having that background from TradFi is really important in understanding, you know, how markets work and how that’s going to port over to crypto, right, in general, because I think, personally, like I’ve been really excited about what I’ve seen on the tokenization side, especially with like stock tokenization and bringing all that stuff on chain and, you know, the 24-hour trading. And I think we’re seeing more and more, right, like you get events happening over the weekend.

25:12And, you know, how does that affect, you know, I think last weekend was the AI stuff where AI stocks opened down on Monday because of, you know, all the AI CEOs.

25:22And then there were a couple of headlines this weekend where it seemed like the escalation was going to go up in the Middle East, but, you know, turned out to be a nothing burger.

25:32But like being able to trade 24-7, I think as a trader personally, like when I first started to hear about this, I’m like, fuck, man, like you’re going to have to always be on, right?

25:41Because like I think that was always the thing about Friday, 4 p.m. is like see you Sunday night at 6, right, no matter what happens, right?

25:48You got to pause. You can actually live your life.

25:52One of the things I like to joke with some of my ex-colleagues who are still in frat, but I’m like, you guys still have a close, right?

25:58We don’t have a close. There’s no concept of like at 2.30 p.m. on the oil desk, I would ring a cowbell to be like, okay, hey, energy closes in, our marks are in, we’ve pushed settles.

26:07You can now price whatever you want to price off of those marks. We don’t get that benefit in 24-7 markets, right?

26:13And even now, the fact that traditional markets are beginning to embrace 24-5, 24-7 just means that effectively people can now more accurately price in the underlying risk and things, right?

26:23Previously, when let’s say there was something happening on the weekends when traditional assets weren’t being traded on the weekends, right, what would you do to be risk-off?

26:30You would sell Bitcoin, right? You would sell crypto because it was the only asset class that you could realistically trade that was like a risk-off sentiment in that size, right?

26:37Now, you can actually trade Tesla. Now, you can actually trade S&P.

26:40Now, you can actually trade gold and other things over the weekend and actually react to those geopolitical headlines as they unfold.

26:46But actually, going back to the kind of commodities angle that you were mentioning earlier, one of the things I’m quite interested in is really how do we give people access, market access to things that they never previously had exposure to, right?

26:56So you have a friend that trades electricity. Right now, if I ask a random Joe Schmo off the street, right, do they have exposure to electricity?

27:04They may not think about it, but the answer is yes, right?

27:06I’m sitting in a lit room right now. If you’ve ever charged your laptop or charged your phone, we all have exposure to electricity in one form or another.

27:13How do we hedge against its price, right?

27:16How do we speculate on it? If you ever want to look at a very volatile asset, I encourage anyone who listens to look at the price side of ERCOT or PJM West and tell me this motherfucker doesn’t move, right?

27:26And so it’s like, how do you actually give people access to that in a market that’s fundamentally evolving to be 24-7?

27:32Those are the kind of questions that I want to answer with Monaco, and that’s why we’re building it.

27:36Yeah, can you please, for the viewers that aren’t aware, the relationship of Monaco, say what you guys are aiming to truly do on top of what you’re building, because I find it fascinating.

27:49We enjoyed, obviously, spending time with you in New York for the last few months talking about it.

27:54Yeah, so the origin story is very much – I was head of DeFi at GSR in charge of integrating the market maker on a bunch of different DeFi platforms.

28:03And at some point, you take a step back and say, like, what is the next mountain I want to climb?

28:07What is the next dragon I want to slay? And the thing I keep coming back to is I really enjoy trading.

28:11The best trading infrastructure has always been built by traders, for traders, for traders, right?

28:15Whether you look at FTX, whether you look at Hyperliquid, whether you look at Interactive Brokers, which was built by people who were originally pit traders back in the commodities days, right?

28:23And so at the end of the day, who better to build for a 24-7 market and for traders who live and embody that 24-7 market than people who’ve done it before?

28:32And that’s kind of what the genesis of Monaco came out to be.

28:35Say was one of the early believers of Monaco, gave the original funding and gave the original backing to say, hey, why don’t you come build it here?

28:41We want to be the blockchain built for trading.

28:43We want you to be the trading product that sits on top of it.

28:46And so that’s kind of how Monaco came about.

28:48I happened to meet friends of friends, again, who come from rather premier institutions.

28:51And we said, hey, why don’t we just put our heads together, come build this?

28:55And that’s effectively how Monaco came into being.

28:57What Monaco is fundamentally, it’s a central limit order book, thought parts later prediction markets, very much focused on RWAs, right?

29:03So, of course, we’ll have some crypto assets that are readily available.

29:06But the name of the game is how do we fundamentally change access and give people access to markets that we never previously had, right?

29:12Why did SK Hynix, which is a 43-year-old company, just become accessible to U.S. customers in the world’s largest ADR offering for $23.5 billion, right?

29:22Why did it take 43 years for that to happen? Because of antiquated market access, right?

29:27But if you look at the amount of foreign investment in U.S. equities versus U.S. investment in foreign equities, it’s a 20 to 1 ratio, right?

29:33So the real question is how do we give people in India, in Korea, in China, and all over the world access to the greatest capital markets in the world, right?

29:42That is the problem that we want to fundamentally solve and do for our generation and next generations what Robinhood probably did for us, right?

29:50Which is like how do you fundamentally change what the landscape looks like?

29:53How do you fundamentally give people access to a market that we’re previously unable to happen to?

29:57Do you think we see a lot of, obviously, the dumbed-down version of that is?

30:05Companies from India, China, these other countries want access to the American capital system.

30:11And Americans are more than ever looking to speculate within the financial sector.

30:18It seems like a perfect marriage.

30:20What do you think the second order effect of that is, where obviously it’s going to happen at this point?

30:26Do you see that fueling more innovation, more finance, more return?

30:31What do you see happening as that collides?

30:35Yeah, so I think there’s going to be good things that emerge from it and probably not so good things that emerge from it, if I’m being very intellectually honest, right?

30:43I think this gives people a chance to, dare I say, escape socioeconomic bounds that they probably couldn’t escape before, right?

30:51If you look at any country that experiences hyperinflation, you’ll see that Web3 adoption tends to be much faster there than in traditional other developed markets.

30:59Why is that? It’s because for these people, this is a chance to, dare I say, escape the permanent underclass, as it’s often joked about online, right?

31:06So that’s one benefit, and I view that as a massive pro.

31:09The other side of that is, like, as you begin to see this hyper-financialization of the world, do things become financial instruments that probably shouldn’t be, right?

31:18Prediction markets are this one thing where it’s like, are prediction markets and sports betting just the same?

31:22We could spend the entire day talking about this, right?

31:25If you look at what’s happening with Cauchy and the noise around that, with parlays, how much of the volume is true versus not true?

31:30Has this truly gained mainstream adoption? Or is it just all a marketing ploy?

31:34That’s not, you know, my job to discern.

31:35I would simply say that in a world where you have very simplified payouts, right, whether they’re binary or whether they’re in perp form, you give people a chance to speculate on markets that they previously didn’t have access to.

31:48But you also then kind of sow the seed for hyper-financialization and kind of removing a lot of other controls that might have previously been in place, right?

31:56Does everything deserve to be a financial market, right?

31:59Should I be able to buy and sell life insurance like it’s just any other market?

32:03Should I be able to put a hit out on someone?

32:05Probably not, right? Now you enter into moral issues, ethical issues.

32:08Now, obviously, it’s not my job to tell people how to live their lives, but I do think there’s these various edge cases that you have to consider, especially if you want to be a responsible citizen of the world and responsible member of financial markets.

32:21So fascinating.

32:23It seems to be a recurring theme that we see culture, ethics, and technology more than ever colliding into it’s possible or making things possible that were never possible before.

32:34We actually need to – who’s going to decide how we use this tech?

32:37Where do we draw the line?

32:38Is it the politicians or is it the techno lords of America and the globe, which is a scary thought to think that at this point it almost seems like the Elon Musk, the Mark Zuckerbergs of the world are the true leaders versus the politicians in some cases.

33:00But, yeah, a fascinating world where we’re going to see, I think, new markets go to new consumers, and we’ve seen this before playoff crypto where the ICO boom, we saw lots of money be made, lots of good stories, but also equally lots of very bad stories.

33:17There will be opportunity galore as this happens.

33:20But it does seem like the SEC, the CTFC are taking action versus Congress, who is kind of not doing much right now or can’t agree on much right now.

33:31I mean, there’s certainly a bit of an impasse from a political landscape perspective, right?

33:34We’ll see what the midterms bring with them.

33:36I think what’s interesting is you have a president that is arguably more active in financial markets than any predecessor.

33:44I think I was looking at it where it’s, like, Nancy Pelosi, who’s hailed as one of the most successful congressional traders in history, averages, like, double-digit number of trades per year.

33:55And I think the current president is up to, like, triple digits, if not quadruple digits.

33:59I think, like, the number of financial transactions that they have to disclose legally.

34:02And I’m like, how is there not a very clear conflict of interest?

34:06How do we expect anything to get passed in Congress when you have someone at the helm that does, right?

34:11Like, love the guy, hate the guy, but at the end of the day, like, he’s part of a broader system, and I think you have to respect the fact and understand the fact that, hey, there’s a lot of competing interests here.

34:21And so is this the best representative of the industry?

34:25And if not, what needs to happen in order for us to get there, right?

34:28Like, you would have thought that Clarity not passing would have been a massive, like, bear event.

34:32That’s clearly not what happened. We’ve just repriced it off and said, hey, this is actually not the end of crypto.

34:37This is maybe just a step back in terms of the U.S. being a home for what we thought would be the next evolution of digital assets in the U.S.

34:46That’s clearly not happening, but now we’re just going to move offshore, probably.

34:50Well, I think what helped with that, right, is the fact that the SEC and the CFTC both were, like, ready.

34:58You know, they both put out, like, press releases within 48 hours of being like, hey, we have a set of rules that we’ve been working on, and we’ve been waiting, and boom, here you go.

35:06So now it’s like, oh, okay, like, you don’t have legislative clarity where it’s like, okay, this is the rule set forever, but at least you know what the rule – what probably the framework of the rules are for at least the next two years, right?

35:18And I think that’s probably kind of what helped it.

35:20Okay. But to Trump’s credit, I will say, and we’ve discussed it on the show, where it’s like if the S&P is down 100 bps at any given day, like he’s on, like, code red, you know, like save the market at all costs.

35:33Call Jensen on stage, right?

35:36Like, you know, like all this stuff, whatever he can do to save the market.

35:41This is the definition of a bag worker.

35:43Like, truly, truly was like, I’m going to bag work for America.

35:46Like, we’ve never seen it like this before.

35:52So, Simran, I do want to touch into, you know, specifically what you’re building, where you see – where you get the most excitement right now.

36:00And I definitely also want to touch on, because we’ve had some conversation, and I would love to get this on the show and so people can hear about it, this world of tokenized equities and then tokenized equity pairings that seem to have been maybe not as much right now, but a meta of, you know, slapping a meme coin onto an equity and it being, you know, the greatest thing since sliced bread, your take there.

36:25Let’s just dive into it. Like, where are you getting the most excitement now?

36:28Where do you see the most innovation that makes you excited for where crypto and equities are going?

36:34Yeah. So, there’s, you know, two wolves inside of me that are kind of competing.

36:38One is the institutional, like, there’s the right way to do things.

36:41And if I ever want BlackRock or Citadel or someone else to hold a tokenized equity, there’s a proper way to do it.

36:47The other one is, like, how do we get people who are very short-term minded and have very short attention spans into the space to experiment, to try new primitives and see what results from that, right?

37:03So, on the left-hand side or the institutional side, right, one of the things I’m excited to announce is we have a partnership with Denari, which is one of the largest tokenized asset issuers in the world.

37:13I think they’ve tokenized over 700 or so equities, so every member of the S&P 500 plus more.

37:18And for a lot of the folks in the tokenization space who have raised a lot of money, who have a big brand, I would say Denari is one of the most, like, underappreciated folks in the space because they’ve actually put the fives in the bag.

37:29They’ve actually tokenized the equities. And the way they’ve tokenized it is by actually making it peri-passu with the stock certificate.

37:35What does that mean? It means that if you actually hold a de-share, you can actually get the dividend yield that you would get if you were holding an actual share in your interactive brokerage account, right?

37:44It means you actually get the governance right that you would have if you were actually holding the share in your brokerage account.

37:48So, from an institutional-friendly perspective, I love that because it’s not a trust-me-bro vibe.

37:53It’s not a SPV vehicle. It’s not a, hey, take this additional credit and counterparty risk, which no institution would ever want to take because why would they, right?

38:01They get less liquidity, less benefits, right?

38:03So, there’s that angle. The other angle is kind of what’s been happening on, dare I say, Robinhood chain, where, to your point, you’re seeing this pairing of traditional markets with very interestingly named meme coins and seeing a bunch of experimentation happen.

38:15And it’s like, well, why did it take this long for it to happen, right?

38:19Why did the HIMSS-BONER pairing have to wait until 2026 to pop off?

38:23And what is really the catalyst that’s caused it to happen?

38:28What do you think that is? Yeah, I was going to say, what do you think it is?

38:32I think it’s really the fact that you have a new chain, which has obviously the backing of someone who’s got massive distribution, right?

38:40I mentioned Robinhood earlier during this conversation because I’m like, when I think about the number of users, I think it’s got over like 30 million funded accounts.

38:46By comparison, I think Hyperliquid has like 1.8 million accounts, but that’s not really users, right?

38:52Because a user can have multiple wallets. But you’ve got like 30 million distinct users that have funded accounts on Robinhood.

38:58So, from a distribution perspective, you’ve got a lot more entryway for people to be able to come in, experiment, try new things.

39:04And I think there’s this kind of new meta that’s blossoming where it’s like, well, like RWAs are no longer a concept that was like theorized like four years ago, right?

39:15I started hearing about RWAs literally three, four years ago when it used to mean risk-weighted assets instead of real-world assets, right?

39:21And now it’s like, hey, literally, you can do so in a very permissionless way.

39:24And so, when we think about market access, right, at no point has tokenization been so accessible to people, and it’s only going to get continuously more accessible.

39:33But this idea of like pairing it with something that is so central to the ethos of crypto, which is, dare I say, the trenches, which is, dare I say, mean coins, I think is the next kind of natural thing of like, well, what happens if you put this thing, which is meant to be this enshrined traditional thing, with this very mematic thing together in an AMM and just see what happens, right?

39:52It was only a matter of time for this to happen.

39:54It just so happens to happen on a new ecosystem that’s undergoing this renaissance and is a callback to, dare I say, the 2020 and 2021 days.

40:04Yeah, it feels like two cultures merging. It also feels like you have two different communities merging, where you have the meme coin community, but you also have like, Hymns has their own, you know, Reddit, subreddit, where you have people that are, they love Hymns, for whatever reason it might be, but, you know, you have, you’re starting to see this crossover.

40:27And as you mentioned, having these other regions that have companies have startup culture, that isn’t as defined as like, you know, the startup culture we have here in America, they want capital, they want the upside, we have our own community of people of capital that are like, hey, you’re raising for an Chinese, you know, AI startup at a million dollar valuation, I’m in, let’s get, let’s get involved.

40:51There’s upside, there’s upside, I want to speculate. Same, similar thing happening, I would say on a different side of the risk curve, for like the Hymns meme pairings.

41:04I do think probably the most interesting thing is if you start pairing any of these like long tail assets with things like the S&P 500, right? And the reason why I find that interesting is, if you looked at the performance of the S&P 500, I think it was even last year and parts of this year, obviously like meaningful performance.

41:21But if you compare it to the price of gold, like the S&P actually is not that amazing, right? So your choice of numeraire, or your choice of quote asset is really what kind of drives how much you value one thing versus another fundamentally.

41:34And so if instead of holding this long tail asset, I just want to go towards a flight to quality, right? I can say, hey, pair this with Bitcoin and ETH, which is like the flight to quality for digital assets.

41:45Or I can say, hey, now I have a broader choice of things that I can pair this with. And so if I want a flight to quality, maybe it’s the S&P 500, right?

41:53Or maybe it’s some other index basket, which is typically not as volatile compared to this thing. So for people who want to be able to do risk on risk off, it’s a much cleaner trade than having to figure out something much more complicated.

42:06Well, I think also to that point, right, is like, I’ve been thinking about the psychology of it a lot, where you could just as easily, like give somebody USD or pair it with USD or whatever.

42:18It’s just there’s something about the psychology of, especially like in this meta recently. So like Quotrons is a project that I’ve been like, pretty bullish on. And you receive the fees as RWA, as tokenized stocks in my account, when it could just as easily be like USD, right?

42:37It’s just like, but it’s delivered as like NVIDIA or SpaceX or whatever. And I’m like, oh, like I’m, you know, like I’m building my portfolio while I’m speculating in crypto and the psychological thing.

42:50And like there is no psychological difference, right? Because like when you compare the price of NVIDIA compared to Bitcoin or Ethereum, it’s basically a stable coin, right?

42:59And so like, when you look at it from that perspective, there’s just something I think that happens psychologically in people’s heads because they’re like, oh, I’m earning this asset that’s like better than a dollar.

43:10Because when you get a dollar, like when you get a stable coin, you’re just like, all right, cool. Like this is like my dividend and like let me go on.

43:16But at least for me, there’s been something where it’s like, oh, I’m building my portfolio by speculating in meme coins and I’m earning the underlying stock.

43:26You know, like I have my, my, my thousand X moon shoot that like, I’m hoping to like retire my bloodline on, but then also it’s like, I’m building out like my safe IRA almost like on chain.

43:38And I think there’s something psychological there that I have found to be really interesting and exploring in this on chain stuff because we’re basically like redoing DeFi summer, but instead like it’s not like a race to sell whatever the reward is, right?

43:56Because the reward is like a tokenized equity that you’re like, oh, this does, this doesn’t go to zero within the next, you know, seven days.

44:03So like, I don’t need to instant sell as soon as I get my rewards, right?

44:07A dollar will only ever be worth a dollar, but a dollar today or an equity could be worth a hundred tomorrow, right?

44:12Yeah. That’s very true. How do you see the, the speculation environment changing?

44:18Obviously, the meta that we’ve played in, in crypto, and maybe I’ll turn this towards like the crypto world less than the equities for a second.

44:27Um, we’ve, we’ve, we’ve had DeFi summer, we’ve had, you know, uh, meme season, I would say we’re, we’re seeing like meme equity season right now.

44:38Um, how, how do you see things progressing?

44:41Do you see speculation only continue to be like, people want to gamble, gamble more, or do you see this flight to the index, you know, portfolio baskets, the less volatility, um, and people like yourself that are like, like, Hey, like, we’re not just trying to bring meme coins into 24 seven trading.

45:01We’re trying to bring anything in so that you have the optionality to choose between how you want to deploy your capital.

45:08Yeah. I would say the large part of new interest will probably be speculative, uh, for, for better or for worse.

45:18And I think that is a byproduct of one, the current like inflationary market, right?

45:23There’s a reason why, again, people are willing to take 40 to one odds on, on random things, uh, or look for their next hundred X for a thousand X or, uh, sometimes it’s escaping their economic situation.

45:34Sometimes it’s just for the utility of it, but both are just mechanisms for speculation for, for lack of a better word.

45:39I do think for institutional adoption and flow, you will begin to see more, uh, probably structured products, index products begin to emerge, but then you’re kind of meeting like two different ends of the spectrum.

45:50And I think the hope and expectation for anyone building in our space is that we can help bridge both together, right?

45:56For one, one prime example I like to give is Yieldmax.

46:00Yieldmax itself is a regulated ETF product.

46:03All they do is covered calls. They’ve got about eight to $10 billion in assets under management.

46:08Anyone who’s been in crypto since 2020 may or may not have heard of DOVs, decentralized option vaults.

46:14What are those? They’re just covered calls, right? It’s the same exact strategy. And so it’s like, whether you’re doing it as a risk management tool, whether you’re doing it as a yield generation tool, both, both sides of the aisle are using the same exact instrument.

46:26So the real question becomes, how do we help bridge people who are trying to hedge with people who are trying to speculate?

46:31And I think the biggest kind of divergence is typically your time horizon, right?

46:36People who are hedging, if I put on my oil trading turbine, oil producers are hedging a year out, two years out, right?

46:41Oil refiners are hedging a year out, two years out, versus people who are speculating are probably speculating for the next few days, few hours, few weeks, few months at most.

46:50And so I think the biggest kind of divergence and what makes it difficult to help bridge the gap between speculators and hedgers in the digital asset space is really your time horizon.

47:01And I think until we begin to see that shift, it’s going to be hard to build for that convergence.

47:05But my hope is that will inevitably begin to happen.

47:08Well, like, but to that point, I will say that, like, I feel like all, let’s say, even commodity markets, a lot of these markets, right, they start off with naturals that need to hedge.

47:18And then speculators will come in because they’re like, oh, well, I like, you know, I like the long term fundamentals of copper.

47:24So, like, I’m willing to buy it, right? And it’s like, but I think, like, all these markets, to your point, it’s like you need to, I think, build both ends of the barbell here because the naturals need the hedgers, right?

47:36Need the speculators, right? Because where else are they going to get that liquidity from?

47:40Because, you know, Exxon probably has the same worldview that Chevron does.

47:43So, like, you know, they’re not going to be selling to each other, but you need those speculators on the other side to be like, okay, like, price is low enough that I’m willing to take on the risk, right?

47:52So, you know, I think that convergence does happen over time.

47:55It’s just I think on the natural side of things, they’re much more cognizant of the regulations, right?

48:05And so because they are all regulated entities, whereas, you know, Joe Sixpack with, you know, $1,000 in his interactive brokers or his crypto wallet is like, yeah, whatever.

48:17Like, I just want to speculate and make money, right? And so they don’t necessarily worry about the regs as much as, you know, the big guys do.

48:24So I think once that, once we get that, I think that’s where, like, that convergence will start to come.

48:29Okay. Do you think about, and again, this is coming up, I had a very interesting conversation last night in D.C. talking about technology and AI, et cetera.

48:41You just mentioned the word of, like, convergence.

48:44One thing that’s been on my mind is this idea of, like, how do we see a trading platform?

48:50What is their responsibility in the idea of, like, convergence of a consumer taking a trade because another person has done it, social trading?

48:58What’s your take? What’s Monaco? Is Monaco entering the social trading space?

49:02Are you just trying to provide the instruments as, like, a building platform?

49:08What’s your approach there? Just, I’m curious because everybody’s talking Loop, FOMO, Pump, Axiom, GM.

49:16Like, it’s, hey, where can I see other people trading?

49:20So I think there will be some social elements to what we build.

49:23But at its core, I would say the, when I think about the ideal customer profile for Monaco, it’s really myself, right?

49:30Like, I’m building a product that I myself would use.

49:33And as a byproduct, I would say it’s probably for someone who’s a bit more of a prosumer.

49:37Someone who’s actually managing a portfolio of positions as opposed to entering a single position.

49:42Someone who actually thinks about, like, market microstructure.

49:45Who thinks about maker versus taker orders.

49:47Someone who’s average trade size is probably not the same average trade size as someone who’s purely in the trenches, but who does have a view that is, like, driven by agentic trading.

49:57Or who does have multiple agents.

49:59One’s doing fundamental research. One’s doing technical research. And they can put a trade thesis together and then execute it in a very cost-efficient way.

50:05Right? That for me is the ideal customer profile. So we will have certain social elements of it. Part of that actually comes to our asset listing process. And I think we kind of discussed this last time you were in New York very briefly, and I’m happy to go into some of these.

50:18No, you should. You should totally go into this. Well, happy to do so. So if I take a step back, when we look at the landscape of like what it takes to list the market, right? And I mean like actually list one, not just be a launchpad, but to have meaningful liquidity and microstructure behind it.

50:34If I go to, for example, a leading venue like Hyperliquid, you need to have 500K hype to be a proper deployer, right?

50:41I don’t know about you guys, but I don’t have, what is it, $80 million or whatever the current prevailing price is.

50:46I lie around on my couch cushions. Unfortunately, now they’re my friends, right?

50:49And if I want to list something on a centralized exchange, I have to go take a listing manager out to dinner, convince him this will be good for him and be good for the exchange, et cetera, et cetera.

50:58And then I have to go convince a market maker to say, hey, why don’t you pony up your cost of capital balance sheet and actually quote here?

51:05I promise it’ll be worth it. That sounds like a very painful exercise all around.

51:09And so one of the things that we do at Monaco is we want to circumvent that and have this be a platform that is very driven by active traders and opinionated traders, right?

51:18How do we solve that? Well, if I take a step back and say for a platform, what is the most interesting or most useful metric, right?

51:25Ideally, trading fees is a pretty useful one, right? Volume can be, but obviously maker versus taker volume can be very different.

51:31And you can have a lot of takers that match with one or two makers.

51:35And so for me, the most interesting thing is what is the amount of fees that you’ve paid on a platform?

51:39What we say is your fees map to what we’ll call an activity score.

51:43Anyone with an activity score beyond a certain threshold can propose a market on Monaco completely for free up to two markets at a time, let’s say, right?

51:51And the benefit of this is so no one tries to claim every market at once, similar to kind of what’s happened with the trade X, Y, Z narrative on the HIP3 ecosystem.

52:00When someone proposes a market, they also give what we’ll call an indication of interest, which is how much activity do I expect to do in this market over, let’s say, the next 60 days?

52:09We take all of those up, add them up together, work with our network of market makers, Oracle providers to be able to facilitate this.

52:15Now, a few things. One, when we take into account your indication of interest, we prioritize how much activity you’ve done on the platform over a rolling 30 to 60 day window.

52:25Why? Because I want to value someone who’s quite active in the ecosystem more than someone who’s just as an opinion because opinions are free.

52:32They’re like assholes. Everyone’s got one, right? So we want to prioritize people who are active, opinionated.

52:37Two, what is the benefit of proposing a market outside of just being able to trade in it?

52:42Well, if you propose a market and you deliver the volume, we effectively give you revenue share coming from the taker fees of that market in perpetuity, as long as that market doesn’t get delisted.

52:52Why? Because you were early, you proposed the market, you were active, you held up your side of the bargain.

52:56We want to make sure that you’re properly incentivized for being an early adopter and early mover in the space.

53:01Three, I can now take this indication of interest to any set of liquidity providers and say, hey, you were worried about justifying the cost of capital.

53:08Well, now I can give you actual indicative demand for how much demand there is for this given market, right?

53:13Or how do I keep people honest and hold them accountable?

53:16Well, if you said you were going to trade X amount of volume, you ended up doing next nothing, we effectively slash your activity score.

53:22And the only way to improve that is by either trading more volume on the platform, hence generating more fees, or by proposing another market and actively trading on it, right?

53:30So what this fundamentally does is say, hey, you don’t have to have $100 million or $50 million to be able to propose a market.

53:38If you’re active and you’re opinionated and you’re early, you get to propose this market and you get to reap the rewards of it.

53:44And it can be a very trader-driven process, right?

53:46We can take care of the market makers. We can take care of the infra. We want you as an active member in the ecosystem to tell us what you want to trade, when you want to trade, how you want to trade it, right?

53:55So the way I envision this happening is obviously we’ll initially launch with 30 to 40 markets.

54:00Then from there, we want to have trading groups and trading networks say, what do they fundamentally want to trade?

54:05Why do they want to trade it? And work with us to help facilitate this in a very active way.

54:10It’s a very unique approach.

54:12We have not seen this almost like forum board-esque way of launching new venues or new assets to trade.

54:23It’ll be exciting to watch that play out.

54:25I love that you’re democratizing this instead of, you know, selling to the highest bidder or selling to the wealthiest bidder.

54:32Well, this was – I mean, I feel like, first of all, like the solution is very elegant.

54:38But I feel like this is kind of what hype was trying to say they wanted to build, right?

54:43Like they want – like they were like, oh, we’re going to democratize access.

54:46But, you know, now it’s a whale game, right?

54:48And so to your point, this is – I think this is one of those things where it’s like you can build a market as long as there’s demand there and you’re committed to doing volume and stuff too, right?

54:57So it’s very interesting.

54:59And the other thing is like I effectively want to disintermediate the role that TradeXYZ or any of these other deployers were doing and say, hey, why don’t we just have the traders who are at the other end of this trade be the ones that are actively proposing markets, right?

55:12You don’t actually need a middleman. You can simply have, you know, people who are active who are trading millions of dollars say, hey, I want to trade, you know, electricity perps.

55:20Build this electricity perps. I’ll facilitate this. It’s our job to facilitate.

55:25And maybe I’ll play a little bit of like the bad guy in the room here.

55:29Not even, but like I’m sure there are people that are thinking right now everything’s going to be on chain.

55:35Like why not? Like why do people have to decide?

55:38Is this just a disconnect of like, well, there’s not enough money to go around, liquidity, like we can’t just like list everything day one.

55:44You have to choose it.

55:46Is that the reasoning for that approach of still like choosing, like letting people choose?

55:52So it’s more driven by the fact that on day one, we’re probably not going to have 100 market makers and we’re not going to have 100,000 daily active users on day one, right?

56:02So as the protocol scales up, I want the roadmap of it to be driven by people who have a vested interest in seeing the protocol succeed, right?

56:10And so fundamentally, right, depending on what narrative is playing out in the broader market, that fundamentally drives what market becomes interesting, right?

56:18People weren’t talking about trading oil on HIP3 markets until the Iran conflict broke, right?

56:24People weren’t really talking about trading memory or even pre-IPO markets before there were certain catalysts that brought mainstream attention to them.

56:31And now all of a sudden, people wanted to trade those things, right?

56:33So there is a cyclicality to this.

56:35And because not every market will be equally interesting to all market participants at every single time, we simply want it to be driven by people who do want to trade in that market and want the incentives for doing so.

56:47Yeah. Fascinating.

56:50So if all of a sudden Canadian maple syrup was like the hottest market in the world and everybody wanted to trade everything around maple syrup and they were like, hey, listen, Monica, we need maple syrup markets.

57:03Let’s get you some maple syrup, buddy.

57:05I love it.

57:07Let’s get you some Canadian maple.

57:09That’s so funny.

57:12I mean, you basically just need an oracle, right?

57:14That’s basically all you need.

57:16Well, so what does it take to list the market? It takes an index price, it takes a bid, and it takes an offer.

57:22That’s it, right? So by virtue of our distributed network of oracle providers, we feel pretty confident that we can list in most markets.

57:28Now, obviously, there’s always going to be something far more esoteric that takes a little bit of time.

57:32But again, that can be demand-driven, right?

57:34If we have a bunch of people that want to trade that market, we’re more than happy to help facilitate it and prioritize that with our network of oracle providers.

57:42I guess so, like, just a question, because I’ve been going down, like, the rare earth element.

57:48And these markets are minuscule, right?

57:51Especially compared to traditional gold and silver and copper.

57:58I guess, like, the issue then becomes, right?

58:00Like, let’s say there’s, like, the equivalent of, like, a London fix that comes in, like, every day as the strike price.

58:07But then as, let’s say, like, how do you keep the market honest, right?

58:11Because, like, the thing that keeps the market honest in physical markets or, I guess, in the paper physical markets is that you have to take delivery at some point, right?

58:18So it has to come down to spot.

58:20Like, how would you be able to keep it honest if, let’s say, there’s some small rare earth element that people wanted to do?

58:28And let’s say it’s trading at whatever, $1,000 a kilogram in the equivalent of the London fix.

58:34But, like, how do you, like, how do you, like, keep that honest so that it doesn’t, like, drift away and it’s just kind of, like, people?

58:41Because I feel like we’ve seen that a little bit on the privates, right?

58:44Where it’s, like, they just, like, go out of whack because there’s really nothing, like, to hedge it back down to parity.

58:51Yep. So the choice of market-making participants that we have is also driven by people who, dare I say, are very active in RWA markets, right?

58:59And when I say RWA markets, I mean the actual underlying markets, right?

59:02People who are actually trading on the LME, actually trading on the CME, and can, dare I say, internalize the risk.

59:08There’s a slew of folks that are out there that are tourists in the space that say, hey, we can trade this as long as it’s listed on another decentralized exchange.

59:15For me, that’s less interesting because I’m like, that just means someone else has to list that market before us.

59:19I want people who are, one, willing to actually internalize the risk, two, can actually warehouse the risk, and three, if it’s physically driven, be able to offload it either in the physical market or in the paper market in a very meaningful price.

59:31So that’s from the choice of market participants that we have.

59:33But then on the other side, we’re also baking into account different aspects of market microstructure that we can leverage from the likes of CME, right?

59:42The number of times I’ve heard the phrase hogs are limit up or limit down because the price of the underlying futures market moves more than X percent, which caused them to go limit up or limit down to halt trading, is more times than I can care to count, right?

59:54This is when I was sitting on the desk at Goldman. And so we can take into account those same things of limit up, limit down circuit breakers to make sure that the price does not diverge too far from where the underlying mark price should be as a function of where the fixing comes in.

1:00:10Right, there’s all these lessons that we can genuinely take from TradFi and then adapt for a 24-7 world rather than having to recreate the wheel every single time.

1:00:20Yeah, that is true. That’s the benefit of coming from that background.

1:00:23Yeah, and I would say you’re certainly in a better position than someone like myself who does not come from a TradFi background where if you’re like, figure this out, I’m sure I would come up with something that would not work.

1:00:34Because there already is a system that works that you’ve lived and you’ve seen, you even know probably the shortfalls to some of that where if you were to tweak it, you would know how to tweak it correctly.

1:00:46But it’s like there’s many solutions, there’s many ways to skin the cat, there’s many solutions.

1:00:49I think the question of like what is the solution that is most appropriate given where we are in terms of market evolution and who are going to be the first 100 or 1,000 people that are going to be trading this.

1:00:59At the end of the day, like there’s 8 billion plus people in the world.

1:01:02Do I think there’s every 8 billion person who can be trading on every platform in the world?

1:01:06Probably not. And so this is a byproduct of also knowing your audience.

1:01:09And if I happen to be my own audience, if I’m building for traders like myself, we can speak a very similar language and build around that, I think.

1:01:16Yeah. Well, Koushi might report that you have 8 billion traders.

1:01:21I’ll leave that for the CFTC to decide.

1:01:23Well, Koushi, anything else here?

1:01:30Simran, like I said, I always love talking with you because it’s such a high intellectual level for TradFi meeting crypto.

1:01:39I love it. Thank you. Koushi, what do you got? Anything that you want to ask Simran before we move?

1:01:45No. No, I think this is a very interesting combo.

1:01:48I know when we met in New York, you know, we had the same type of combo and just kind of your view.

1:01:54And I thought it was very interesting. And I think that I’m really looking forward to what you guys are building.

1:02:00Appreciate it. Thank you so much. If you guys are in token, we’d love to catch up there.

1:02:04Otherwise, I’ll see you when I’m back. Yeah, of course, man.

1:02:07And maybe before you jump off, a hard shill for where to find you, where to find what you guys are building and how to get in touch.

1:02:15Awesome. Yeah. So we launched public testnet. We’ve done over, I think, what was it, $9 billion of testnet volume without any incentives.

1:02:21We’d have over 180,000 accounts registered.

1:02:25So feel free to check it out at trade.0xmonaco.com.

1:02:28Or you can go find us at MonacoTradingOnX.

1:02:31My Twitter handle is, I think, 0xTurbanUrban, which is also, funnily enough, my Telegram handle.

1:02:36So easy to find me there.

1:02:39I appreciate you jumping on.

1:02:42Such a pleasure. Such a great conversation. So many people messaging me saying this was an incredible convo as well.

1:02:49We’ll stay in touch. And, again, just thank you. Pleasure. Thank you so much, guys. Appreciate it. Cheers, mate. Thank you for coming on.

1:02:57Wow.

1:03:00I feel like I’m back in college.

1:03:02The last 24 hours of conversations I’ve had have been so high level.

1:03:08Like, very, very cutting edge.

1:03:11Very, like, on the things that are going to actually matter over the next 12 months for the financial landscape.

1:03:19At the highest level.

1:03:21Like, we’re talking, like, multi-billion dollar decisions, industries colliding with retail.

1:03:28And it’s kind of crazy to think that if we had any of these headlines back in 2019, 2020, Bitcoin would be at a million dollars.

1:03:40Like, we would see, like, we would have just, like, the craziest, craziest gains when some of these headlines were coming out.

1:03:46It feels like it quite literally would take Trump coming out and being like, we’re moving all the money into Bitcoin and we’re going to be crypto only.

1:03:57That’s what it would take for us to see those, like, insane, you know, like, 20% moves again in the crypto market.

1:04:04I think that’s just a function of where we are in the market.

1:04:06You know, we’re at the beginning of a bull market. So, I don’t know. I think the froth will come.

1:04:12But, yeah, I mean, I think, honestly, like, it’s interesting.

1:04:15I think I said the same thing after I went to Art Basel where, you know, NFTs and crypto art artists basically stole the show at 010.

1:04:26And if that had happened in 2021, people would have lost their shit.

1:04:31Like, you know, it happened five years later.

1:04:35And, like, nobody cared. So, it’s the same thing.

1:04:39I think it’s just a function of where we are in the cycle.

1:04:41I agree.

1:04:42Maybe I’m reaching a little bit too much there.

1:04:46I do want to make sure we cover your trades that you mentioned.

1:04:52I know we’re going over an hour now.

1:04:56But, like, I want to kind of go over a couple things from the weekend on the macro side where Meta Muse really started picking up over the weekend.

1:05:08And so, I guess it opened down and then just went straight up yesterday, all-time high yesterday, all-time high today.

1:05:17I think the implications of this are, you know, one is I think Intel also, Intel and AMD also were on a rocket yesterday and, you know, maintaining that, right?

1:05:30Because, you know, and I’ve been, like, saying – I’ve been saying this now for a couple months that when you use these agents, like, demand for compute and inference is going to go through the roof because you’re going to start using it for, hey – like, right now, I think people generally use AI for what’s the weather?

1:05:50Where should I go? Where should I go? What should I pack for my picnic, right? Like, stuff like that.

1:05:57But then the next step is buy the stuff for the picnic, right? Like, and make sure it arrives before I go on my picnic.

1:06:06And that requires not only GPUs for inference but also CPUs because you need, like, a local CPU in order to do this stuff, right?

1:06:17You’re doing actual processing at that point.

1:06:19To do the actual process.

1:06:21And so this is where I think, you know, Meta really caught a bid because it was the first, let’s say, like, consumer grade where you didn’t need to be very technical at all in order to utilize this stuff.

1:06:37And, like, basically people were saying this is, like, reskinned open claw for, like, normies.

1:06:41And I think one of the things that I saw is that people are starting to get scared is, like, what Meta is showing you.

1:06:47I think it was Ben Thompson that might have written it is that – and he’s the founder of Stratchery, which is a great, like, tech-forward podcast.

1:06:57The guy is, like, a brilliant mind.

1:06:59I don’t listen to his stuff as often as I should, but, like, I love his stuff whenever I do listen to him talk.

1:07:05And I think he was the one that said how it’s kind of showing that you don’t need frontier-level intelligence to have really capable AI agents, right?

1:07:15Because Muse is not – you know, Meta is not frontier-level, but it’s really starting to catch people by storm.

1:07:21It has access to all your Facebook stuff, your Instagram stuff, so it has access to – Memory. Memory becomes, in my opinion – and this – I think I believed it, but I don’t think I indexed as hard as I did.

1:07:35After last night and the conversations I had, the way AI was laid out is essentially if you have this database of just everything about you, everything you’ve done, everything you’ve thought, everything you’ve said, and then even the relation – I think – and the example is, maybe stop thinking about this as, like, you and I are both single males, right?

1:07:58We aren’t thinking about this as, like, a mother of, like, two kids who’s, like, ah, like, little Joey got sick last week, and he ate this food, and we ordered this, and this is what we ate from our fridge, and, you know, he has been playing soccer, and he hurt his ankle this way.

1:08:14When she goes to the doctor, what does that actually look like when she’s using AI?

1:08:20And that AI is basically becoming, like, a memory machine of, like, here’s all the contacts, everything I have, boom, can provide something that a doctor – and she knows, like, little things that might not even be in there.

1:08:31But, like, that requires so much storage that I think that – I think as much as you’re, like, hey, compute matters right now, the memory side is going to become just exponentially more needed.

1:08:44And that’s only for, you know, ones and zeros in data.

1:08:47Think about this when it’s photos and videos.

1:08:49We have video contacts.

1:08:51And I think even Meta now is in a great position of they have all of this data about what have you posted, what have you said, what images do you have, who are your friends, what does your social graph look like?

1:09:01And they know how to do this to make it, dare I say, addictive, right?

1:09:05Like, coming out of the All In podcast, they literally confronted the head of – I guess she was the head of AI or head of consumer at Meta.

1:09:17I mean, like, look, you guys just got fined $17 billion for making addictive platform and engagement stuff for kids.

1:09:26Aren’t you just going to do the same thing for AI, this cute little Muse character, and make kids addicted to using Muse?

1:09:33And I dare I say, I feel like they’re going to go down that route again of just making things addictive to use in some way and using, like, your memories to make it feel like it’s the best experience possible.

1:09:48That’s why I don’t want to move off of Anthropic right now is because it has all of my contacts.

1:09:54So that’s why I have everything stored on my Mac Mini, and I want everything done on my Mac Mini because that is my central brain, and I can plug and play whichever model I see fit at any time.

1:10:08So it’s like – I do a lot of stuff on GrokBot. Like that’s my quick stuff. You know, I’ve gone through my stack like multiple times, but like, you know, when I want to do like really strong work or, you know, get some opinions on technical stuff or stuff that’s more difficult, I’ll fire up Astra and stuff like that.

1:10:25And so I’m just like model agnostic. And I think the whole reason why I haven’t been using Muse and I messed around with Muse a little bit over the weekend is because I don’t want to like set this up and have port my memory on there and then be like, okay, when the next one comes out, that’s better. I need to move over to there. So, you know, I’ve been, I know I’m in the minority on this.

1:10:46I think most people want that ease of use of like, hey, I just like plug it in and it works. And I think that, you know, Meta, I think Grok has also done it. Like I think X to Elon’s credit has done it. Maybe it might be a little more technical, but for sure, like I definitely think that, you know, this is very interesting times, right?

1:11:07And I want to highlight news that came out yesterday that led to me putting on a trade that I put on yesterday afternoon and I tweeted about it was so Amazon blocked access to the Meta Muse agents yesterday because they said they didn’t have any, they didn’t have a deal in place or they didn’t have permission or whatever.

1:11:31So they blocked access to Meta Muse to buy stuff on Amazon. So I looked at that and I’m like, huh, like who’s the only person that I think, or the only company that I think could actually compete with Amazon at scale? It’s Walmart.

1:11:45And I, you know, Walmart has a very different type of business than Amazon does. And I’m like, this is like a great way. If I’m like Walmart in the C-suite at Walmart, it’s like, hey, how do you get some of that AI multiple and become like an AI company is like, you know, partner with somebody like, like Meta and be like, hey, Amazon won’t let your agents shop on their site.

1:12:07Right. Guess what? We have the same low prices. Cause like in, in terms of competition, like I think the only real business that can compete with Amazon in terms of cost and speed is Walmart. Right. And so, you know, like I know Shopify and Meta made an announcement yesterday afternoon where, you know, Shopify was going to integrate with Meta Muse agents.

1:12:30That’s great and all, that’s great and all, but those are like, I think more small businesses. When I’m buying toothpaste or socks or deodorant, I don’t care if I buy it from Amazon or Walmart. I want, I want it as fast as possible, as cheap as possible. So I kind of think, you know, I bought some September, I bought calls for one year out on the bet that, that Walmart doesn’t stay asleep at the wheel here.

1:12:59You know, it’s, it’s, it’s gapping up a little bit today, but also it’s, you know, it’s not a pullback from the highs, you know, I think it’s got like a nice little setup. If it does end up becoming like a retail AI play, some multiple goes into that. Right. I think this gap down was, if I had to guess, it was from earnings.

1:13:18Yeah. And so, yeah. And so, yeah, I mean, I, I’m like, yeah, it’s not a big position, but I do think that this is a position that could run. Right. Like, you know, I think if it’s going to work, it should probably start working in the next couple of weeks.

1:13:32It’s management will start talking about it. I think other, you know, investors and, and analysts will probably start talking about it as well. But I just was like, oh, I think that’s like a very interesting read through from all of this is like, if Amazon’s not going to embrace, you know, cause technically Amazon, I’m sure Amazon’s also working on their own.

1:13:50AI agent type of thing, you know, Alexa shopper, right. Or like whatever it is to make the experience better on using Amazon. So that’s also why they probably don’t want meta utilizing their site as well as I’m sure they make a ton of money off advertising and upselling and all this stuff.

1:14:08So, I don’t know. I thought this was interesting. I thought the setup was interesting. So I bought some calls. I also want to highlight before we go of Leopold, our homie, like looks like he’s starting to print, right? Like he bought a lot of like short dated calls. I think he has the micron thousand dollar calls. And, you know, I mean, this thing looks like it’s getting ready to go.

1:14:35Go crazy, you know, NVIDIA. Well, NBIS also like this is my very technical reverse head and shoulders, right? We kept like that right shoulder so far. And, you know, I think, you know, we break down that trend line above 260 should start going higher. And then where is NVIDIA? NVIDIA back close towards like post earning highs.

1:15:01Yeah. You know, this is like kind of what I was saying on the show is like, you know, Leopold probably had that information was like, oh, this is crazy bullish, bought a lot of short dated calls, the market, like all those, all three of those stocks market gap down last Monday has since recovered and is above the highs from before the gap down.

1:15:23And people are turning bullish on AI again, right? On the agent thesis, which we’ve been discussing, pounding the table on for the last couple of months of like, like the next wave of exponential demand is AI agents.

1:15:38Yeah. And now I think the market’s starting to catch up to that, right?

1:15:41And for me, it has half felt like it’s played out already because it’s such a normal use for me. Like, it’s like, isn’t everybody doing this? And then.

1:15:52But they’re not nobody. It’s crazy to me to realize that nobody is.

1:15:57Nobody is. And then I think like, you know, I know that these numbers at the beginning of the year were something like less than 1% of people like pay for AI. And I think now it’s like still like 3% of users like pay for AI.

1:16:11So the fact that like, I don’t know how many subscriptions you pay for, but I’m on like 3 max, I’m on 4 max subscriptions. And yeah, like I don’t utilize all of it at this point. But yeah, I mean, it just, I don’t know, I think it’s just very interesting.

1:16:29It’s like the trade is still, in my opinion, decently early. I think there’s a lot of like political stuff that’s obviously coming down the road. Anthropic, open AI, they’re all playing Game of Thrones and trying to like control the fate of the world.

1:16:47We’ll see how that turns out. But I do think at the end of the day, we’re still, you still want to be long compute, right? You still want to be long these names. And, you know, I still feel fairly comfortable holding all of these names.

1:17:01And like I said, last Monday, on that gap down, I was like, do I sell some of that risk? Do I not? It’s like, I’ll give it, you know, a little bit to see if new information comes out.

1:17:11And, you know, like, I don’t know, I feel, I still feel very comfortable in it, right? You know, now, earning season will be starting in about probably three weeks for Q3 earning season. And, you know, all eyes on that at that point, right? Micron might be reporting before then. I’m not, I got to look at when Micron reports, but it might be pretty soon.

1:17:32So, yeah, I mean, yeah. And then like, you know, I just want to cover like crypto in general. You know, I got hit up by a couple people yesterday, asking like, what was up with that move? And I was like, dude, I just think that like, people were overly bearish going into Clarity Act, and then the Fed raising rates.

1:17:54It wasn’t as bad as it feared. And, you know, like, we rallied. And then also, I think clarity from the CFTC and the SEC in terms of like, we’re going to do something.

1:18:04Again, they’re doing the job of Congress, and they’re basically stepping in and being like, you know, hold my beer, I’ll do it for you if you can’t. Like that. I love that.

1:18:13Yeah. And so like, I was like, it’s just like, I think a continuation move where people were digesting that over the weekend. And, you know, risk comes back on. I’m sure part of it is, you know, it’s outperforming gold. So, I mean, gold that looks like it’s ready to go to.

1:18:29So, like, I feel like any given day, we’re going to walk in and gold will be up like, you know, three or 4%. You know, rates hanging out near 5%. Not great. This looks like it’s getting ready to go higher.

1:18:43I was about to say, I would be buying this chart.

1:18:47Yeah. Dollar looks like it’s getting a little stronger.

1:18:53Yeah. I mean, I just, again, like, I think at this point, right, I feel like all eyes are on the midterms.

1:19:02And Trump is going to do whatever he can to win and to do whatever is needed to see how many seats he can save.

1:19:17And that probably bodes well for the markets short term.

1:19:21So I’m like, I’m bullish right here.

1:19:24I it feels better than ever to be not only in the equities market, but the crypto market.

1:19:31Oh, that’s another one. Look at this. Oil down a lot.

1:19:35Oil’s down. I think we see the, you know, I couldn’t see it.

1:19:39But then we had Iran come out this morning and they were like, if the U.S. backs off, it’ll take us seven days to open up the Strait of Hormuz again.

1:19:49This kind of posturing, one, I low-key hate it because it’s like Iran being like, oh, the only reason we can’t open this is because of, you know, the United States.

1:20:01Also, I think that it’s going to take some time for them to probably clear some landmines that they’ve, or like sea mines that they put out.

1:20:08But, um. It does seem like this narrative of like, hey, this is how we open everything back up and go back to normal happens.

1:20:16It’s starting to crack out and more than ever, it feels like resolution could possibly happen.

1:20:25I don’t know. You said this last week and I was such a hater on it, but I see it starting to play out a little bit.

1:20:30Yeah. I mean, like that’s what I said last week, right? All you need is a de-escalation in Iran and, you know, it’s off to the races, right?

1:20:39And like we see oil down whatever, 10-ish percent in three, four days.

1:20:45And, you know, if there’s further de-escalation, this thing probably hits 80 or maybe even lower, you know?

1:20:51And so I think to me that’s like an upside surprise, right, where it’s like, okay, now if oil – obviously the lower oil goes, the less inflation becomes a worry, right?

1:21:03And so then that sets the table for going from, oh, we have to like hike more over the next 12 months to, hey, we can actually start easing because inflation is softened.

1:21:14And risk assets go boom.

1:21:17And, you know, we’ve said it a bunch of times on the show where Trump is a stock market president.

1:21:23He probably, you know, he probably has alerts every whatever, 100 points on the S&P up or down to see what’s happening.

1:21:30And for better or worse, that’s like, you know, the type of president that we have.

1:21:35And, you know, you kind of have to play for that, right?

1:21:39And so, you know, I think he knows what – he knows what he’s doing in terms of like capital markets and knowing how that affects his chances at winning in the midterm, so.

1:21:48Yep. Well, again, midterm is still a heavy topic of attention as we get closer to them.

1:21:54But this morning, all numbers look good.

1:21:58Everything looks exciting.

1:22:00If you were long into today’s Open, I’m sure you were quite happy.

1:22:05Anything else you need to go over, G, today that you – we haven’t touched on?

1:22:10No, I think we covered most of it.

1:22:13There’s probably like one or two other things we’ll probably end up covering on – On Thursday. On Thursday. Yeah. But, yeah, we went a little longer than I thought we would.

1:22:23But, yeah, overall, a great episode.

1:22:25A great episode. Fantastic guest. Again, thank you to Simran.

1:22:31And, yeah, I think we’re going to have a lot to talk about come Thursday.

1:22:36And probably – in my opinion, my projection here is that we’re probably going to see the entire AI sector significantly higher by that show.

1:22:45That’s my prediction. And if I’m doing anything after the show, I’m probably buying Micron.

1:22:52All right. Cool. I love it. I love to hear it. I’m still – I’m still very long Micron.

1:22:58Well, hopefully we’re both richer on Thursday’s show as well.

1:23:02That would be the best case for all of us.

1:23:08But, gee, another great show.

1:23:10Thank you to everybody who tuned in.

1:23:12I also want to highlight, you know, as we’re bouncing, you know, we’re on YouTube.

1:23:17We’re on Spotify, Apple Podcasts, X, getting all those things up and running and those accounts going.

1:23:26So, like, follow us wherever, you know, you listen to podcasts, whatever your preferred podcasting platform is.

1:23:33And feel free to give us some feedback.

1:23:37I feel like – I’ve been, like, pretty happy with our numbers.

1:23:39So, you know, I think that we’re growing steadily and looking forward to building this into something bigger.

1:23:46We have this morning 2.3,000 listeners or viewers on X.

1:23:53Incredible. One of the top shows. A follow and a retweet mean the world to us.

1:23:58So, thank you. And if there’s ever anything that you want to see us do, talk about, get in touch, we do not take your participation in the show for granted, and it means a lot to us.

1:24:11All right. Yeah, awesome. Yep. With that said, we will catch you on Thursday, 10.30 a.m. Eastern Time.

1:24:17Same place, same topic, same great content.

1:24:22See you then. Cheers, everybody. Peace. Peace.