Investors Roundtable: Navigating Crypto's Changing Landscape - TOKEN2049 Singapore 2024

I'm pretty sure everybody probably knows the three of you if you're if you're here you you're aware of the VC scene uh VCS are the enemy of this cycle and um and so I want to First dig in the one of the things that we've heard a lot of criticism of VC's over the last uh you know uh uh called 3 to 6 months which is the overfunding of infrastructure versus application okay this is kind of it's a refrain that everybody seems to keep repeating it's the common Mantra infrastructure is overfunded do you guys agree yes or no why KY why don't you start um ye yes generally we we have fast l1s we have on andof ramps we have Key Management Systems Basics work Bridges all that [ __ ] so we're not really investing in that stuff anymore we haven't in quite some time okay why what what do you think explains the Delta and evaluation between all the infrastructure companies and the applications which tend to be valued less uh I mean I think it that that's harder to do I mean look if you think if you if you assign a one or two or 3% probability to like a thing being worth 15 billion in two years then you can underwrite kind of any investing decision yeah I mean one way one way to look at it is it's Downstream of these grandiose narratives an infrastructure like an app you you can sort of like put a future Tam on and you can put like oh this is how much money it's going to make and infrastructure is like ah it's going to be like this generalized Computing platform and Amazon is worth two trillion and so this is like AWS which makes all the money so you can like back into these ridiculous narratives that that make it easy to justify really large valuations and so it's it's a little bit of a side effect of I think um a lot of easily influen people in the broader Market who think of these like big narratives and then you can kind of back into so do you agree that infrastructure is overfunded relative to applications or no yes you do think so yeah yeah why do you think uh uh why do you think applications are not getting more of a bid if that's true um do you mean on the on the market like retail side or do you mean from the VC side both both I think from the market side it's because it's it's easier to put a number on it you can look at a cash flow and you can say like oh here's how many users there will be here's how much money they'll pay you here's how much you know payment volume there will be therefore you can make this much and then it becomes I mean if you just look in the world there's not that many $5 billion doll companies in the world right um and so it's it's harder to sort of make the math work when it comes to exit um and therefore people are more r on the front end but the other reason I think is it's it's harder to build and those there's just fewer of those people like the type of person that understands enough to like build something on a wallet as a service you know or build something on top of salana like you need enough technical depth but then you also have to be good at ux and and acquiring users and there it's just harder so there's just not as many Founders who are good which means there's you know Upstream not as much money going to go into it actually have a theory and sorry to cut off hands um we were very early in helium and helium has been a very interesting example for us because to us we thought at least like the vision was very cool like trying to disrupt Telecom and like there's it's super hard and they have a long way to go but like at least the idea is very sexy and like Telecom is like one of the largest markets in the world and one thing we've observed over the years is we've like told other people about healing and both professional investors and Retail audiences is like the learning curve to learn about Telecom is like okay like I have to go commit you know a minimum X number of hours to like learn about that before I'm going to buy this token and our obervation is that like most people are unwilling to do that because it requires like a very different knowledge set than the like defi nft knowledge set so you think it's just a lack of knowledge from crypto investors that means that these things are priced at a lower premium I I think that fairly certain that's true for helium and I suspect that is probably true for any application that requires at least some Market specific knowledge and do you think that changes or is that just like okay we're sort of [ __ ] if you're investing in something that's too far from the core of crypto markets will mature markets will mature well just that's Alpha right I mean if you're willing to go deep on something like we we've done this in a couple of domains too where it takes a while to get up to like uh reinsurance or investors in a in a reinsurance company it takes a long time to get your head around the insurance markets and reinsurance markets and then how you know blockchain or smart contracts or D5 protocol might work there but if you put in the work then you realize that there's just like nobody else around there's no competition like nobody knows how to do it that there's not that many Founders and so instead of being like the 30th you know um D5 protocol that does the the same thing like some tweak on perss here you are on like a you know trillion dollar market where there's no competition and so I think I think the smart VCS you know whether it's Telos infrastructure Healthcare massive like trafi markets there there's like trillions of dollars sitting there and so smart VCS will go after it your we're bullish on infra still I think there's work to be done in terms of maybe not the speed and cost of blockchains but frankly the alignment of blockchains like you know helium is a good example they just launched an L2 on Sal I expect there will be more of those in the pipe like how do you actually get people rowing in the same direction there's a ton of fees in just Defi and block space and the traditional kind of Crypton native Revenue drivers but you kind of have this fragmentation problem that always persists like is unis swap aligned with e is maker aligned with e can you inine those things can you get the l2s to pay consistent rent I think that's kind of more where the Innovations in infrastructure will come from going forward versus like more block space cheaper block space I I think we've kind of been there done that and I would expect to see some of those valuations compress the other side of that is that polka Dot's still at 10 billion so like you know you kind of you get what the incentives are at some level okay so do you do you think then that we have a dirth of applications in the space or you're like well kind of but really infrastructure is the biggest problem I mean I think like not to you know shill bear chain but like if you have all those Primitives aligned if you have block space and you know all the fee base of that blockchain being all the apps that are enshrined the proof of liquidity keeps everything aligned like you can probably get to like 3 or four or 500 million of Revenue and then you know you slap a multiple on that and that's the most impressive chain I think to some extent hyper liquid has this as well um so I don't think there's like you know an existential problem with infrastructure versus apps I think in many cases they're all the same thing in crypto like you said you know Dogecoin is is consumer pump fun is consumer it's going to look a little bit different but it's inherently tied to the the infrastructure um um and maybe like you know what does pump out fund do in the future do they move off Salon do they have the alignment can they you know continue to be the bull case for soul I think that's going to be kind of the existential question of this cycle is like can you keep everyone kind of moving in the same direction I don't think without ens shining it into the infrastructure level you can actually do that one thing I'll add here I think is like at the end of the day I mean there's there's sort of like if you've been in the space long enough it's also just it it kind of gets boring to look at the same stuff over and over again and you're like am I doing like do I really want to look at the 18th version of the same thing again and and so it's just more interesting if somebody comes along and there like hey here's an application of this thing that you wouldn't have thought of um here's how we could apply this to I don't know AI here's how we could apply this to some some Market you know teleco that you just wouldn't even thought of and and just from like ay what do you want to do with your life perspective it's just way more interesting so I don't know I would I would encourage a lot of Founders to sort of think about what the hell do you want to do with your life and do you want to be like the 90th person to do the the same thing or do you want to go like do something novel in interesting and frankly I think for this stuff to really go mainstream we were talking about like GPT earlier right it's like you kind of need a chat GPT kind of you know end user application and then that ignites this interest in the space that's like oh now I get it because right now I think everybody here kind of gets it but there's a lot of people in the world that that look at this as infrastructure and they're like I don't see it quite yet so it's hard to to deal with these abstract things like Financial infrastructure even and so we could get a couple of like really really killer apps um built on top of this stuff I think it would also ignite like a whole new cycle of investment interest in okay so speaking of this cycle one of the critiques that many people have levied against VCS is the rise of these high FTV low float launches which are often called also tied together with the concept of VC coins and many people feel like VCS have been uniquely extractive to crypto over the last few years uh and there was a there was a a tweet by I think Archer Chong from Defiance where he said that uh crypto really needs more hedge funds and less VC funds because the VC funds you know they back these projects very early uh they put in a little bit of money and then the the project goes live at a multi-billion dollar valuation uh and then they sell their tokens you know selling them to retail and so really they're taking money out of the economy rather than putting money in right that's the that's the argument and the liquid funds at least they you know they buy the tokens that all the VCS are creating and launching these markets what do you think of that idea is that a good description of the market structure in crypto is something broken about it and if so how should it get fixed I me I think it's a generally accurate description the reason it happens is because it's easier to raise a VC Fund in crypto than it is in uh traditional world because the times of liquidity is shorter raising money from LP saying hey I'm invest now I'll sell the company in 11 years is like very few people want to sign up for that and very few LPS believe that anyone who tells that to them is capable of doing that productively um so that's why it happens I think actually the solution is is actually to move in the opposite direction um I'm a very public advocate of 100% unlock on day one for all tokens this has not happened and will not happen under the current regulatory regime in the United States because there's a rule called Rule 144 I won't get into all the details of it whatever but that's why all of these things launch with small floats they used to be 1 2 3% now they're more like 10ish percent we push our portfolio companies to go higher than that if they can but I think what happens is if you are in a world in which the norm is everyone launches with a 100% unlock then if the token is trading at 4 billion on day one like the price is going to collapse very quickly to what it should be whether the price is 100 million or 200 million whatever and like yes some VC will have made some extractive profits and you'll have a vertical line on the can like fine but then at least now the market price from that point going forward will will be correct and I think the worst thing is is all of these teams launch tokens and they have two three four years of Hangover of everyone else is like ah you know I don't want to buy that thing like all the VCS are up 30X like I'm going you know I I lockups explicitly distort the price like that explicitly is what they do there's no way around that and I think the solution is like get rid of the lockups things will open at lower prices it may take some time it may take a week it may take six months I don't know but I think the market will adjust and realize hey it's very dumb to open at a $4 billion doll price so you think solves the problem the market structure problem is solved if instant everything instantly UNS I think that that is easy like conceptually and solves probably 90% of the problem 90% okay do you guys agree with the story I don't know if VC coins are that much more extractive than the historical Capital formation process of crypto I think icos were frankly way more extractive and there was no semblance of we're giving 50% of this to the community or there's an air drop it was just like pure retail banol you know gas Wars to get hit the contract and you know that was kind of it I don't know if unlocking everything on day one solves anything I think that may even hurt a lot of projects they're giving out ongoing incentives like I think about you know like helium not that helium was like low float fdv but like the more those emissions are worth which is a function of the float the more you can incentivize the more you can bootstrap the more you can kind of do that but I think at the end of the day like Salon was VC coin jolu been funded eth these have all been huge retail wealth generation events and even the Ico bubble you know in the fullness of time that was probably 10 billion in and a few hundred billion of FTV out so it's just about selection and uh at the end of the day you do have to do your own research I don't think we're going to solve anything by you know like different like enforced Market structure that the social consensus of that would be impossible well I I think there's there's three three other things going on here so one there's a lot of people calling themselves VCS that are not actually VCS uh like my definition of VC is somebody who comes in and is actually going to roll out their sleeves and help you and be committed with you for you know 5 10 years and when things go south they back the truck up and they double down right and and actually the reality is most people are not VCS they call themselves VCS and that sort of taints the name now that's one two I think there is an incentive structure because you're giving out tokens as incentives uh to build your ecosystem to drive up the value of the token especially on the private side and that let you give away fewer tokens and so I think it's incumbent upon Founders to be much more disciplined about this and so part of it is like okay well yeah you could go raise it two or three or four should you in some cases you should actually that makes a lot of sense and in some cases if you do you're going to cause Point you're going to kill the project uh and so I think there's actually discipline required from Founders um in terms of how to manage the float and how much to how much to put out there and what valuation to raise that and be really really smart about that um three I think that actually I'll take the other side of of Kyle's take here which is I think that um Force holding is actually really good for most people and actually more I'll take the other side I think more people should be subject to longer lockups and you see this for example with um you know there's I can't remember if it's like Schwab or Fidelity but somebody's done this research where it's like the people who forget their passwords are the ones who perform the best on the equities markets it's like yeah cuz like it's hard and these things are really volatile and most of them are going to go up and down a lot even the winners but if you if you think of these things as Venture as a venture portfolio which is like if you're in the E Ico you crushed it and kind of nothing else mattered um what you really want to do is force people to to hold and I'm not even talking retail like set that aside for a second it's like you want your team to hold you want your employees to hold uh you want the investors to be forced to hold um and I think that that there's a reason that the technology markets for the last 30 years have snapped to that um because I think that Force hold actually creates alignment because actually most people don't have the discipline to go through that and it can actually wreck a culture like when you know when a stock price goes down 80% at a company like a lot of people will lead your competitors will poach people y yada so I think there's actually like structural reasons that these longer lockups were were invented in the first place um and actually like the the sort of mixing of of unlocked versus fully locked people is actually what creates a lot of the mess here like I I want to get your response to that I want to get your response to the challenge they they pose like here here I'll th I'll throw out the question right it's sort of like the ve models on curve are kind of interesting right like if you could create alignment where it's like everybody that's buying a token is locked up for four to six years including the team including the investors including anybody that wants to buy in and they're buying in on referential terms that's I think very interesting and that that is analogous to what happens on the equities markets um until you're like truly truly sustainable in atet scale everybody that's buying all the way up is locked up for many many years uh and in those cases you don't even have line of sight it's not like oh you lock up for three years and and while IPO it's like please lock up and maybe one day at some point in the future we'll we'll IPO what's your take um it's basically the exact extreme position from your yours which is like even retail should be locked out for six years yeah yeah look I mean you can't have a liquid Market if everyone is locked up like by definition then it's no no no longer liquid um like it would be nice if people are forced like if employees are Force holders like sure but I don't know I kind of look at it as like it's a job of the CEO I mean if you look at forget about early stage companies you look at a a mature public company all the employees get stock options when they work there those stock options vest over six 12 months and then they can sell their stock whenever they want to right they work there as an employee and like the CEO's job in leadership team's job is to convince not only the public at large to like buy the stock but also to convince the employees to not sell their shares and like that's part of the natural process of the system and like I I think the same thing applies in the early stages now the difference between traditional markets and crypto is investor disclosure on which employees are selling and like if you work at a publicly traded company you want to sell your shares there's some process you have to go through right to do that yeah so I I I do think you need investor protection around it but I think like you you act like you know if you had great public dashboards on Dune and nanson and misari and whatever that show percentage of insiders that have sold over the last X months like those are very easy dashboards you know to construct if the basic disclosure requirements are there so I I think you can get to the outcome of filter out all the quiet quitters and like great the token price goes down because they they left and now the token price is more attractive so now they you can go attract better Talent at a lower PR like everything here has a natural equilibrium to it and like the best people will navigate that and and the worst won't and like great like let the free market allocate accordingly would you um how would you feel if there was a Founder in your portfolio that had sold you knew they sold all their tokens I mean great you think that's great okay how let me ask you what if there was somebody at multicoin who worked for you who sold all their carry they like sold all of it to another party at the moment they joined the firm would that change your perception of uh I mean it's a perfect example do you let your employees freely trade their carry in the fund no we have like a ob a compliance process and like we have restricted asset an unrestricted asset sure sure but they sell you know they sell forward on the carry or something they you know if they disclosed it and they're going to yeah selling forward on carryer I'd find be problem um and I I think selling forwards on is wony and look I think a lot of this is is like holding the POS my position is that you should have maximum freedom but then like there are norms and like and the people who violate those Norms hopefully will be punished meaning like the price of their respective tokens will go down sure commensurately and like you need to have the regulations in place around disclosure so that like people will act accordingly the problem right now is if you have free markets without disclosure like that's that's clearly a a bad I agree with that a bad yeah we're we're in a weird like local minimum where we have like the worst of Both Worlds right now correct okay yeah yeah okay so so so Kyle you're an unlock Maxi yes you're an unlock mini or locked up Maxi uh what's your take on do you think token unlocks work do you think they're broken should they be changed I mean the one example of unlocking all the tokens is friend Tech and uh I think that's trading at like 15 million FTV so like I think some of on some level it's just not viable to do that I I think the great thing about this industry and permissionless Tech in general is like the solution to having you know less coins is actually having people launch more coins in the near term like let's figure out what works let's figure out what doesn't it seems like the exchanges are now kind of the uh the police of some you know sort although they did list a mcoin yesterday um but I think we're going to figure it out if we launch enough coins just because the incentives are no longer going to be there for funding things that are redundant funding the 18th per deck on the fifth chain I think what the market is really yearning for is novel use cases and I don't think it needs to be like you know Instagram onchain I think energy is interesting I think you know Kyle just let around in a company that does um deepin with with energy I think that's a super interesting category um and I think it's possible to build amazing things on crypto it's just like we need more than like a few years time to get there so I'm pretty optimistic I don't know how much it has to do with the actual structure of the tokens like I don't know what what Sal's like uh like allocation of the pie chart and when it unlocked but like it went through some brutal times and then it got really really good and like the cognitive dissonance of people saying like you know a three billion coin is like you know it's if there's only 10% float it's it's too extractive but at the same time you know bitcoin's at a trillion eats at 250 billion son is at 80 billion like there's something there which doesn't quite make sense um you can't really have it both ways I will say too I think one of the one of the things that'sit a little different here to be to be so back to your Market question is I I do think that the token markets are going to have much higher um Network values than traditional companies do market caps and and effectively the reason is that what you have are Market participants in a lot of the world that a don't have access to the dollar and so you if you're in like a 10 or 20% interest rate regime all of a sudden a bunch of dollars is great and B they don't have access to productive Financial products that can give them dollar cash flows of any sort and what you have with a lot of these tokens is sort of a potential Dollar Cash Flow you know fee taking sort of asset plus some sort of call option like on a venture return and that's like the best possible asset that could possibly exist if you're in Nigeria if you're in Brazil if you're in you know sou parts of Southeast Asia Indonesia like Eastern Europe like that that is better than any Financial product you could possibly create and so in effect the way the Market will manifest that will be through very very high PE so I think there's also this element that people have a difficulty reconciling which is like why can such and such thing be worth a billion dollars as a company it would only be worth a 100 million or whatever but I actually think that's that's pretty rational and so there's also an element of I think um I don't think I don't think the network values will ever converge to like market caps of companies and that's always also going to create an incentive for the VCS to invest in certain kinds of things that have certain kinds of expression into different markets like the capital markets are just going to behave differently here I think than traditional e markets Kyle you invest into a lot of applications that you know have real world or physical analogies in the in the stock market how do you guys think about valuations and valuation methodologies when you're looking at kind of pure PL networks that are more like Solano or ethereum versus something that really has identifiable revenues and as a more kind of corporeal business strategy yeah I mean I'd say we're kind of thinking about it like a traditional VC would we construct at least what we think a hypothetical DCF could look like in the success case in 5 years time and then discount probability back to the status quo see if that makes sense sure and but do you do you agree with this idea from aichel that the multiples are not going to conge between the crypto businesses and the real world businesses um I think they are unlikely to converge in the next few years um you think they eventually converge I mean look 20 years like I don't know you know like what it's it so so that that's kind of a silly prognostication um in the foreseeable future no uh and I think the reason is the players in the game are different yeah um Finance started out as like the elite of the elite and it was like literally John Pier Pont Morgan on Wall Street like saving America and like the the history of Finance over the last 150 years is democratization of access Robin Hood and now like crypto and like dude there's still like six seven billion people out there who like don't really know anything about investing so like those people are not going to be sensitive to PE multip when they're choosing what they're going to buy uh I think I think the Tik Tock Tik Tock ification of investing like perfectly captures why the multiples are unlikely to converge and so you don't think as this Market has become more mature as there are more hedge funds and more uh traditional investors coming into crypto that that is going to cause some convergence between those two worlds it it will it will slowly compressed but I think it'll take a while to get there I mean uh what was there was like um was uh uh somebody just put out a report on dpin like yesterday um you guys know what I'm talking about yeah yeah compound yeah yeah yeah I think it was I think it was uh compound DC yeah yeah so like there is more you know there are like Banks and financial institutions writing research about crypto and claiming different valuation metrics what what what's your take Vance I mean they're going to be twice the size as nor normal outcomes just cuz there's less float you know half of the cap table is held by retail or it's in the treasury or it's held for airdrop so that makes sense to me um they're also frankly tokens are different Capital assets and equities you're using them to participate in the network you're using them for different things it makes sense that there would be some sort of like monetary slh holding premium um I also think you know people are willing to bid crypto and I think institutions now as well just because the prognosis for traditional Venture and traditional frankly technology is so poor um that you know anything that gives you a different look maybe a little bit more liquidity maybe just a different use case or Capital asset that will command a premium maybe over the long term that doesn't persist but like again you can't both believe that Bitcoin is worth a trillion and then also believe that like these will be valued like equities at the same time if you view them as one asset class if you view them as different I think that's a different case but um tokens are more valuable than equity and I think you're seeing that reflected in the tick topic of investing and people just being more retail oriented in this this as a class I I would take it one step further I think there will come a time at some point in the next 5 years because I I do think that maybe 20 year time Rison the convert but I think there's going to be a window of time where it's just more rational for a company that has cash flow to launch a token that distributes cash flow from the company and effectively Ico that or give that token out to the market because rather than iping on the NASDAQ because just rationally speaking the multiple that you get on your cash flow is going to be so much greater if you can if you can reach everybody in Brazil and Nigeria and Indonesia and so on and so it's just rational so I I actually think that I would take it one step further which is it's it's going to I think the market will eventually realize that launching a token is better than iping like like what would the base token be worth if it was locked today you know coin base is 40 50 billion Bas is probably a 1020 billion token yeah and in the limit you could imagine the base tokens Network value is actually bigger than the coinbase stock market cap like I I think that's a very reasonable outcome over the next five to seven years same same thing with telegram you know if they charge towards an IPO and they get it done maybe they public at 10 or 20 billion ton is worth 30 or 40 billion today right like the incentives are very one-sided Kyle do you agree with this take I generally think tokens traded at premium to equities I mean that's empirically obviously true sure and the question is why and I think the answer is on who are the players playing the game right and I think the the players in the crypto Market are different than the players in traditional markets right but even okay let's say the Bas were to launch its own token which clear we have no idea what that's going to happen um if they were you know presumably coinbase would hold back 20% of the tokens 25% of the tokens right so even if it were to trade in the neighborhood of 2030 billion or something like that let's say for the sake of argument um you know 20% of that is okay they hold 7 billion that's huge though and the is huge the second they do that everyone else is like they did what you know we're watch we're going to get it do but it doesn't dwarf coinbase's Core Business is is the point that I'm making well no I think there's a world where I don't I mean if if Bas looks a lot like e what is eth worth right now like there's a crossover point right if you own 20% of the tokens and you know if you if you sort play Let's I'm I'm saying this is the case not Financial advice obviously let's say eth you know is worth 10% of Bitcoin or 5% of Bitcoin 500 billion a trillion dollars is it so crazy that the thing that has all of the users cuz based Far and Away has more users than anything else is worth 10 or 20% of that could it be worth you know 100 billion or 200 billion you know in the limit here 10 years from now whatever and you own 20% of that like you have $40 billion worth of basee tokens and your market cap is $40 billion yeah that's actually not crazy I think as an Kyle if you had to put a point estimate on what you think base token would be worth I'm not speculating we got you here on stage to speculate what the [ __ ] I'm happy to talk about unlocks not all right all right all right all right we we we'll move away from that um so let me ask question again um so we we've gone into an era that is is now much harder uh for VCS to enter into the space in 2021 2022 it was very easy for anybody with a you know pied idea about crypto to go raise a bunch of money and and start calling themselves a VC now everybody knows it's much harder um but it's also true that every cycle uh there's always the rise of a new generation of VCS and they always look a little bit different they always have different ideas they kind you do something relatively knew so let me ask you this um if you guys were starting over today okay you sort of had a you know memory wipe reputation wipe Twitter wipe you're starting from zero how would you rebuild your fund if you were starting from scratch you had no name no reputation I I would either take a very I would concentrate which is what we did with Define in 2019 I would either move to India I would move to China I would move to Hong Kong I would try to get a vertical or Geographic bent I would probably be dpin oriented um or kind of a specific I don't know maybe like kind of public Equity crossover like you'd have to do something so different I think the the tough part about being a VC and starting right now is like it's crowded man yeah and there's a lot of deals but like we still haven't seen kind of like a breakout small fund this cycle where someone like hits like a like a THX and is like okay you're now at the big boys table and part of me think that that may not be possible I I do think kind of like you know the people that are doing a good job or like EV3 Alliance like you know friction list like folks like that but again they're all so specific I think that's kind of how you'd have to do it so your your strategy would be deepin in India look India is the new China deepin is you can touch it you know there's some there's a physical sometimes mode um yeah but there there's kind of like two two Dimensions to your question I think one is the could you replicate what happened let's say from 2018 we're all kind of like 17 18ish kind of starts and I think that like that 18 to 22 window was such a unique time in this industry's history that I don't like everybody here went from like $10 million funds roughly speak speaking order magnitude to like you know billions of dollars under management I don't think you're going to replicate that going forward it's just like that's that's how you know Industries work like they go through a maturation curve and we're in a different place today than than than we were 5 years ago um if there's a question of what would the right given that given what the macro situation is and what the market situation is where LPS are and Y yada uh what would you do today I agree roughly you got to focus what I would probably personally do is move much more on chain and go uh go Anonymous like I think the the There's an opportunity to be sort of in you know in Asia being doing stuff on chain being outside of the sort of us regulatory scope being Anon and and being really liquid on chain um and there's a lot of just low hanging fruit right now um I think there's you you could be generating very very very excellent returns if you're smart and Technical right now on chain or the other thing I would say is like be more liquid be more liquid I mean there are 70 80 binance listings a year the vast majority of them are uninteresting but all of them do not have a structural buyer and so I think that is the prognosis for a breakout success when you're starting a fund is like maybe you a venture hedge fund structure doesn't really matter but can you buy some Bargain Basement stuff maybe fundamentally oriented maybe you know you're in the memec coin Bach and all like it doesn't really matter but like liquid I would say is how you could do it strongly agree um risk return inventure is poor compared to liquid today so I would tell anyone start starting today focus on liquid and um you don't have to build a brand you can there's like some Med that comes from it but I don't think it's necessary um I mean you guys are the poster Childs of liquid with a brand yeah I'm not saying again you said the point was wipe my my memory my brand yeah yeah yeah but like would you not try to rebuild that brand as part of being a liquid manager I don't think it's strictly necessary I think it it is EV positive if done correctly yeah um but again not not strictly necessary okay but I I um I would focus on liquid liquid growth opportunities that's where I would play okay fair enough um the last question I have uh because running up on time is um there's often a perception from people in crypto that VCS are in the room where it happens that they are you know somewhere in the back room with the founders kind of deciding what the next narratives are going to be there's a lot of smoke in the room and scars exactly exactly exactly and you know like I've seen you know I've been in the rooms with you with the cigars yeah um so the the question I have fundamentally is when it comes to where crypto is going what narratives take off what becomes cool what doesn't become cool how much are VC's makers versus takers with respect to narratives and how much do you think that you as a VC as one of the leading VCS in the industry um how do you think about your responsibility to the industry in that regard well I think I think there's the the thing that VCS would like to think is true and then there's a thing that it's actually true and I think people would like to think that that somehow we can influence this it's sort of like you know VCS are not known as being low ego people generally speaking in reality I don't think it matters I don't think what the VC say matters at all like I think um it it has to be founder Leed I think it has to be there there's a notion of a community and some set of things that people believe that's almost like an emerging property of the project uh like bar Chain's done a great job of this manad has done a k was just up here they've done an excellent job of this ethereum did really job of this totally you know Salon did an excellent job of this there's like some opinionated thing that they were able to project into the world because because I think people people in the market get very skeptical if the VC is carrying all the water um and it's almost like an anti- signal to your earlier question um so I actually don't think the VCS matter at all okay v i I think um there's a difference between investing in something that you think will work and be enduring versus investing in something that you think the market will like and like the latter is kind of the cynical take and there's a concept of momentum trading when something gets hot you know you just pile into it you can do momentum Venture in this industry like ooh you know Celestia's at 20 billion I'm going to do like the 18th da protocol just like ship that thing out and you can kind of see that sometimes where people are like you know oh yeah I'm working on six D5 protocols on six different chains and like we're just going to see where the chips fall and I I think the incentives will naturally go away for those people because retail should not buy those tokens they should not be rewarded but we take our you know job as a steward of the industry seriously and you know if you shill enough [ __ ] narratives like people are just going to bail on you um and so I think you know in in the fullness of time all of this will self-correct but I do think the the cynical people right now are probably making money doing it and that stops at some point maybe this year maybe next year but it's certainly not a long-term thing so the cynical people are the people who are takers and the good VCS are makers is that what you're implying I think there's some element of Truth to that um if you're [ __ ] hot on Twitter you can make narratives happen um but I think like actually believing in the long-term enduring value of something that you're investing in at some level you can't really fake that and I find that most people can see through people who are trying to you know just narrative be a narrative massager uh versus kind of someone who's actually creating something anybody you want to call out no not particularly nobody on this stage I I don't I think everyone here is good they won't hear no yeah yeah nobody cares what's your take generally VCS are takers of narratives there are exceptions um inadvertently the largest maker of narratives by far in the crypto industry is vitalic not intentionally but just like he likes to write stuff and he's a curious guy he's pretty smart and he says something and like it becomes a narrative at this point he knows that that happens and just doesn't seem to give a [ __ ] which you know you can disagree with that decision or not but like he can say a curve there he sort of was like he didn't realize it he realized it and was like oh [ __ ] and now he's like I don't care yeah yeah maybe he doesn't care anymore I don't know how he's but like you know account abstraction or like roll of centric road map or there's been pick your thing I mean ZK whatever like so there's been a lot of that and I don't want to put it all on metallic but I'd say like has come from ethereum core um and there's been a lot of waves of it over the last few years again I don't think it's like some intentional cabal coordinated thing but just definitely has sprung from ethereum core repeatedly um and there's been tons of takers of that of those narratives um I think we have been involved in making one narrative that's deepin um and it took a lot longer to become a narrative than we thought it would and it was a lot harder than we thought it would I I want to take some credit for that one um so ic's can be makers at least partially um but it's it's harder than you think yeah I would say I think you guys are one of the most makery yeah I agree that crypto yeah I appreciate that thank you I think dpin specifically was like hard for able to grock the capital formation and like the risk and how the systems work and like we really beat the drum on that for a while but um yeah it's it's hard to hard to make a narrative as someone who has tried and failed many times fair enough I I would argue though that I think it gets easier over time like the real the real lever to being a narrative maker is having a brand and the brand comes from having a track record so if you've done a bunch of stuff and you've been consistently right when you do the thing people are like wait a second maybe that's right and then that when you talk about it from a place of conviction people are like well maybe that's a thing and I should pay attention um and so I think I actually you might you might say like today most VCS are takers and I think in maybe 10 years The Leverage actually evolves and and a lot of the best VCS will become much more narrative makers by virtue of the track record right all right so no Smokey back rooms except in multicoin other than that we're all we're all honest actors in The Market all right uh we got a wrap thank you everybody thank you all