Oneshot: Tempo Mainnet, Agentic Payments, and SEC Crypto Rulemaking | Roundup

But I think Stripe is kind of hedging their bets.

They're like, okay, if it's day of a coin, we got tempo.

If it's credit cards, we got Stripe's core business.

But we know agents are going to utilize us.

We just don't know how.

Nothing said on one shot is a recommendation

to buy or sell securities or tokens.

This podcast is for informational purposes only.

And any views expressed by anyone on the show

are solely our opinions, not financial advice.

Michael, Vance, and our guests may hold positions in the companies,

funds, or projects discussed.

All right.

Let's rip it.

Fones off.

It's.

Why money on the phone?

Hands and legs inside the vehicle.

I think we're going to make it.

How are we doing?

Pretty crazy week all around.

Seems like a lot of stuff is going on.

And some things are being paid attention to.

Should we get straight up or moves up on the screen

with the live tanker tracker?

Live tanker tracker?

No, I don't think this is a international relations podcast.

I think we can master it as a macro podcast.

But I don't think that that is necessarily our forte.

Let me ask you a question.

Do you remember when we almost hired Peter Zahehen

to come in and teach us a global macro during the Ukraine War?

And then you found the clip of him saying

that big point is going to go negative.

I was actually thinking about that.

And maybe just to tee it off, all the crypto we bought

kind of at the lows during the Ukraine War.

Do you remember how stressful that was?

It was I think the line that we finally came to was either

this industry is completely over or it's going to come back.

And it did come back and it come back.

I think we are in a similar period of time right now.

There's so much prognostication going on about how this war

is being prosecuted.

But I mean, you win by killing the other team's leadership,

right, like on a literal sense.

And they basically killed everyone.

Then being the Israelis.

And it now feels like there are some tactical strikes

on these energy sites that are tit for tat.

And the next leg of escalation is maybe the desalination plants.

But I don't know if there's a ton of desire to go there.

And then the last thing I would say is like the 20 million barrels a day,

very scary figure that's like 20% of global oil consumption per day.

It's really kind of more like six.

You know, they got the East West pipeline going.

There's talk about tankers getting escorted.

So I think overall it's hard to know how these wars turn out.

But it feels like we're on the tail end of this

in terms of the shock and all in escalation.

And I think there's a bit of overfitting happening as well,

which is an emergency bias or just like the overton window

of everyone's memory is definitely a real factor when it comes to market psychology.

And I think most people in markets right now are we're in markets in 2022

when we have the last shock.

But what, you know, that represented was a Ukraine-Russia conflict leading to an oil shock,

leading to inflation.

Now, how much can we strip out of the inflation effect that was actually because of oil?

It was definitely some.

But if you remember at the same time, the Fed, Jerome Powell was saying,

well, it's transitory because it's a supply chain constraint.

It's this is like the residual effects of COVID.

We can't get stuff, you know, shipped here.

This is when people were following, right?

Peterson of Flexport talking about how many tankers were going into the port of LA.

Like that's what was going on at the time.

And so I think that there's a bit of like you need to separate out the variables that

contribute to the effects.

And oil was definitely one of those.

Now, was it the overwhelming majority of what led to inflation?

No.

And this whole market sentiment of like not only are there going to be zero rate cuts this year,

there's actually going to be rate heights now as part of the narrative in Europe.

I don't know if that's come to the U.S.

U.S.

That's what people look.

The Twitter PR newswire is saying rate cuts are now, rate heights are now on the table

with Jerome Powell potentially staying.

If there can't be a confirmed new Fed governor or Fed chair,

like all of these things are just like this.

This is peak bearish for kind of like macro sentiment right now.

But I think my broader point is people are overfitting this oil

shock directly leading to inflation.

And so what I will say is there was actually a really good analogy that I heard or

comparable that I heard, which was the 2010 through 2013 period where the average price of oil was

95 dollars, which in 2026 turns is like 125.

So not only is it 95 and we're at 95 today, but like in today's terms, that's like as if oil was

at 130, 125. And so what also happened during that period of time, which was sustained high

energy prices, we had much higher consumption of oil for energy back then than we do now.

But we also saw a rip-roin stock market and over those three years, four years.

And I think that we're kind of overfitting this narrative from 2022 that oil shocked.

And this is not discounting the fact that wars are bad.

And like an escalating war with a large Middle Eastern country is where the US and Israel are

kind of contributing simultaneously is definitely not a good thing from just like an international

relations perspective. But I think the overfitting of this oil shock leading to inflation,

leading to like calamity from a market perspective is just it's not accurate or it's not as accurate

as people are pretending it is. So that's the general take.

Yeah, and yesterday was, I think, base 16Z had a good tweet with yesterday, everyone kind of

threw in the towel, admitted it was over. And you know, it fully now is there's no cuts priced in

for the US. The Europeans are considering hikes at the next meeting. And so we're now at a place

where you're paying gas prices of spike 30%. Like the reason you hike rates into that is to

destroy demand. That's like the only lever they have to pull to do that. But that's all been priced

in. So, you know, you're also like oil prices increasing 20, 30% also destroys demand. So you're

going to destroy demand to further destroy demand. It makes absolutely no sense. So, you know,

in terms of the, I don't know, there's there's not an extreme fear or greed gauge for global macro,

but when you see, you know, the bob alliates of the world, the radalios of the world, the Rory

Johnson's of the world, these are like the KOL oil people and like the Flexport guy. When you

ever see him on CNBC, you're approaching a geopolitical top in terms of like the stress level. So,

you know, I think it's similar to, you know, what we were talking about in the last shock that

we saw in 2022, which is like, we've been holding our noses and buying. I think that's basically

all you can do on the go for it. Well, I would just say like from a psychological perspective,

the best buys that have ever been made either, you know, basically at framework are the ones that

feel the most painful. I remember telling you just press the button. But it's this like, it's

this weird feeling where you're like, I don't know if this was going, this is going to be an amazing

decision or this is going to be a terrible decision. But like, I don't feel, I don't feel happy

making this decision right now. That's usually the best time to be buying, I would just say.

And I think this is with the crown of crypto, I always think of crypto as like the money that is so

dumb is that it is smart. It front runs things without knowing them both ways. And, you know, crypto

had an off day today and it's Thursday, March 19th, but it's been hanging in their relative to

even things like gold, like gold broke 4700 today. That's almost like a 20% retracement from

peak. And so crypto, I think as it constructed background led by the majors led by Sailor and

Tom Lee led by STRC, the ETF inflows turning on, stable quantity is a broad narrative fixing

quantum. You know, we've heard behind the scenes, there's going to be some serious efforts to

at least put out the narrative fire and then put out the technological fire whenever it does start.

And you've got a lot of people on the sidelines have sold the four-year cycle and that are

theoretically waiting to rebuy. But it does feel like we're starting to really put in a convincing

low for crypto. And 59, I think 50, was the absolute low. But these things are positive. You have

you know, positive tailwinds with increased circulation of stablecoins, S&P partnering with hyperliquid.

And then this new regulation that I guess the rule makings come out. Not a regulation.

Regulations rule making. And I mean, why don't you want to talk a little bit about what that is?

Yeah. So SEC came out kind of like completely under the radar in terms of, and I can't

remember if this is a day ago or two days ago, but I don't even remember, you know, what happened

exactly because, you know, a ran was taking too much of the narrative away. But essentially what the

what the SEC came out is provided it came out with was providing a clarification, a rule making

around the classification of different assets in the crypto space. And which ones are

likely to be commodities, which Paul Akins just came out and flat flat said most crypto assets are

not securities. There is also an understanding of which ones would be considered securities, which

lo and behold, the one that he identified is tokenized equities will likely be securities.

If you put it on a blockchain and it's the Apple stock versus on the NASDAQ, it's still Apple stock.

Everybody should understand that. But generally, I think we're moving in the direction where

at least for the next four years, this SEC is going to be in place. And it is probably assumed like

it is it is not impossible to get the rulemaking changed. But once rules are made, I think it's

probably going to be pretty difficult for future SECs to go back and say actually what was said by

that previous predecessor of mine was absolutely incorrect. And we're going to go 180 degrees

the opposite direction. And so I think what basically people are hoping for with clarity

from just like an implementation perspective is now has now been declared the kind of going standard

rules set out by the SEC or the vast majority. There's large elements that have very specific

applications. So the stablecoin yield question, which I think is the biggest sticking point,

that has big implications for circle and coinbase. But I do think that broadly from just like a system

or a universe perspective of assets, the SEC basically came out and gave us clarity this week.

And nobody seems to have paid attention to that. So I think this is obviously extremely bullish.

I think paired with the partnership of S&P 500 in hyperliquid showcasing that there is institutional

interest to bring these assets or bring these industries and tokenize them on chain. Like that is

a fundamental, I think, unlock as well. You've got mastercard buying BVNK for I think $1.8

billion, which it had been rumored to be in the works for a long time. And then it was kind of

like, well, we didn't hear anything. So we didn't expect it to close. And some things died on the

vine at the 11th hour, but this one did close. And also paired with the whole launch of tempo,

which we should probably talk about as a whole entire subject, which is like agented payments

feels like, you know, the narrative of stablecoins is starting to move in that direction,

at least from just a adoption or institutional kind of producing of platforms and frameworks.

So yeah, it just feels like it's extremely bullish week for crypto, but

obviously no one is paying attention. And if anybody was, like there are so many instances in the

last six, 12 months where it's like, if this happened in 2021, we would have just blasted off into

the stratosphere. And so I, it's a tale of two cities. Once again, I think, you know, every

asset is going to have its 15 minutes of fame when it's on hyperliquid and, you know, just like

watching oil go from 95 to 120 two weekends ago was like a watershed moment for a lot of people

because they had to do it on hyperliquid and those screenshots get shared. And you're going to

have that play out with everything. And I think, you know, the guidance is very bullish. I think

one of the more bullish things that we had this week was talking to a team of builders in Asia

who really fundamentally believe in hyperliquid and perps as a concept is something more fundamentally

fair than zero DTE options or even holding spot. There's so much belief in these underlying

concepts as well from the entrepreneur side that like at the end of the day, that's kind of what

we're missing relative to the AI side of the house, which I would say maybe has too much of that,

where it's just like people just like believe in this stuff. And like believing in financial

concepts often comes with a negative connotation. But I think a lot of where we see people going

is just more focused, more narrow. And, you know, we, we're in a group chat together, Michael,

this morning and I'm just trying to pull up what this person said. It's like, you know, before

crypto is legal, people could raise hundreds of millions of dollars by selling tokens, you know,

after crypto is legal, you know, you can still sell the tokens, but there's no interest. And

I think this is kind of like a false dichotomy in many ways where look at hyperliquid, you know,

it's 42 billion dollars FTV was launched within the last two years, it's team of five, it's team

of 10, like those outcomes are still possible. What is not possible anymore are the, hey, we're worth

a billion because we're worth a billion because we're worth a billion. Like there's just like not

happening anymore. And I would say that's playing out in the AI side. But that is so fraught in so

many ways, like the Neo lab funding. And I think there's good Neo labs and bad ones, but the vast,

vast majority of them, I would say these are the old L ones of last cycle. And it's going to be

down only if and when they ever get liquidity. So you better hope that someone buys these things.

I wanted to double click into this too, because I think there's a lot of interesting parallels. But,

you know, we've talked about this. I can't remember if we talked about it on this podcast, but

in 2016, 2017, well, it's basically 2017 with the ICO craze. I think, you know, that, I think

if that is being basically a recognition of companies staying private longer, like all of the

interesting tech companies in 2017, I mean, there was like Uber and Airbnb and some consumer

application companies. But the vast majority of, you know, if you worked at a startup, there's an

85 90 percent chance that you worked at some enterprise SaaS company, which is probably just not

like the most sexy or interesting place to be. And so this whole like ICO craze was brought on by

people and there's a latent amount of attention. And there's a latent amount of capital that is

looking for opportunities, but also looking for interesting new places to play, you know, speculation

gambling. And so I think that that, you know, it's probably how you could look at a lot of the

attention that it garnered. And you have this ability to have like seed or series A level, you know,

return profiles of these tokens that would happen in like months or weeks, sometimes days. And so

it's just like this, this kind of build it built on top of each other. And I think what then

occurred is a period of time where in 18, 19, 20, you had basically the start of the crypto venture

industry, which where, you know, paradigm got started. I think polychains was maybe a couple years

before we were in 2019. But like basically everybody got started in that like two, three year period.

And that was in recognition that we're at the tail end of the technology cycle of the venture class,

basically applying applied to what is probably better utilized at the time of a private equity

business model where you're able to underwrite these sustained cash flows, you're able to lever them

up, you're able to like very accurately predict all these things because you have 85% of your revenue

coming in before the year starts with these annual contracts or these multi year contracts.

And so it gave way to this whole new kind of like venture landscape for crypto. And that

invariably like gets way over its fees as it does with every single technology wave within

venture. And so like bad things were funded 2021 was crazy. And we kind of had to put the genie

back in the bottle a bit, but there's now like the durable value of what sustains after all

these tech cycles. And that is what we're seeing with stable points is what we're seeing with

the adoption of things like hyper liquid and S&P 500. It's basically everything that we're talking

about. And we have the regulations on our side. The other thing that's going on in San Francisco this

week, it's in San Jose, Santa Clara is GTC. And what this means is that everyone and anyone who

is investing in AI comes out of their holes or comes out of the woodwork. And and basically is

like, Hey, I'm here. There were two photos that were shared. I saw one. Wait, wait, wait,

picture Bitcoin Miami in 2021. Now, now making it a little dirtier. And I think that's kind of

where we're at, at least at the school held at the shark tank in San Jose, which is where the

San Jose sharks play. So, but there are there are two photos that were shared, which I just found

to be hilarious. One of them is actually a billboard here in San Francisco, which is mayfield fund

is so there's this whole history of like you go up and down 101 and it's every like hot tech

company, whether it's the AI companies or the enterprise SaaS companies, they have a billboard.

But there's a billboard, you know, I think in San Francisco, that is for the first time I've ever

seen this mayfield, which is one of the oldest venture capital firms is is promoting the fact that

they have $3 billion of capital raised ready to deploy for for you and your AI startup. Like,

I have never, it is usually the board's companies trying to attract the venture dollars. I've never

seen the billboards for the venture companies trying to attract the venture firms trying to

attract the companies. The second photo was one of the sessions at GTC was a reverse pitch,

where it was the venture firms pitching the startups as like a pitch competition.

If there was ever going to be a top, it invented dollars attracted to AI. We are at least

bridging breaking new levels. I don't know if this is the top and it goes back down, but it is

just crazy. And so I think this is kind of like what I wanted to kind of utilize this to represent

is AI is at this level where it can do no wrong from a venture perspective. At the same time,

it is also one of the most hated industries in the history of tech from a consumer perspective.

And so there's this like more dollars than anybody knows what to do going into it.

And at the same time, and I think this is also another interesting fact, which I heard on

podcast this week, which is a great point. We're talking about the private credit cycle.

Basically all of these redemption requests, Cliff, whatever it is, it had like a five or seven

percent gate, but it got like 14 percent requests last month. And you've got like all these

outflows and they don't know how they're going to handle them. And like is this the start? Is this

the end? Who knows? Everybody's talking about private credit. And like the private credit blow up

is sort of one of the biggest narratives. You know what nobody's talking about?

The low the the equities that those loans back.

If if there was, I think I think it was Mark Rowan from Apollo had a comment this week where he

said somebody asked him about the marks for the private equity.

John Zido, this is John Zido. Right, right, right. He said all of the marks are wrong.

There is there is real stuff like like the the spidey senses are tingling in other industries,

whether it's enterprise sass that's been levered up and the loans are like in kind of disarray or

it's the we always go this direction with new tech waves. And like we put way too much venture capital

into things. And then it gets way out over its keys and bad mistakes are made. Yeah, crypto,

like in the middle, just kind of like biting its time and like building and building and like eating.

Let's talk about the so the private credit thing is a really good point. For people who don't know,

there's been all these redemptions for Michael's point, the actual companies that have issued these

loans. A lot of them are these software companies. John Zido from Apollo said that he thinks that the

average software company returns between 20 and 40% of the value of the loan, which is a lot of

write downs. It's like, you know, if you're doing it alone, you expect to get back one X. It's

not like an equity expectation return. So that's a problem. And we see that on the skyside too.

Like sky now has 11 and a half billion dollars of stable points starting to walk out thought

fully, the credit mix and the duration mix. But for now, it's kind of just like, you know,

just stable coins. And I think that's where everyone is comfortable with. And when you have six

billion dollars of stable coins, immediately accessible for redemptions, it's like the,

that's like the golden state of a credit instrument you're in, you're out in one Ethereum block.

It's amazing. And as you look at the credit instruments that are available to allocate into,

there's some pretty vanilla treasury products. But anything a little bit more complex than that,

like we need to be really thoughtful about like, you know, there's ETFs that are credit like where,

oh, they added a new loan, they removed the loan. It's, you know, the nav is bouncing around.

There's private credit instruments where there's very limited reporting on the underlying instruments.

And I think this is actually kind of like a downstream trend of tokenization that's really

important is like, how do we do like, like, and BDCs, business development companies are generally

the public vehicle that these product credit funds raise out of like, how do you do properly

where you have control over the assets? You don't have like a race to exit with other depositors.

You don't have, you know, obfuscation of the actual underlying credit.

These are things that like crypto can develop and it will take a lot of time and engineering.

And I think sky will lead on this. But it's a minefield out there if you're trying to deploy

into credit. And that's why sky is just kind of taking the most risk off, you know, style that you

can possibly have. And until things are safe, like, why take more risk than you absolutely need to,

it feels like the market has really come to appreciate that about sky.

So, so what one with like double flick is like the BDCs, and I think it's important to talk

about the structuring because that's like, this is what we're basically talking about.

These are like semi public entities, which have a nav and they have sort of like trading value

in certain instances, but they're, but they're semi private as well in that you have very

prescriptive ways that you could subscribe and withdraw or redeem from these entities.

BREET is like a great example of one, which is a real estate investment trust that Blackstone put

together, which is this like, I think $60, $70 billion real estate investment trust. And the,

you can subscribe on a monthly basis, you can request rip withdraws on a monthly basis.

They can get it, like, there are all these types of models that are rules that are implemented

to keep these things semi liquid. But what invariably has happened is that a lot of these

entities are investing in illiquid assets. You know, if you're, if you're buying in office building,

or if you're buying a data center with these, with these, with these assets that are put in,

but they have the ability to withdraw or redeem on a monthly basis, it's not like you can like sell

10% of that data center, be like, okay, cool. Like I need to, I need to get some liquidity on that.

Like you're holding on to that asset or you're fire selling that asset. And so it's this like,

how do you manage the illiquidity mismatch, which is what basically these entire, you know,

private credit entities are going through right now, which is you've got, you know, software loans

that are usually private equity backs companies or owned by private equity. And these loans are,

are, you know, still, I think in large part performing, but it's just a question of the underlying

business of these companies. But and so if that was, let's say, to take over, or if you were to

start to see real redemptions that force the sale of some of these loans, you're going to have

to potentially have a fire sale of some of these assets. Now in 2022, we knew that or 20, maybe

was 21, 22. I can't remember exactly what, but be re went through this exact situation,

which is that everybody knew that there was going to be an issue with office leasing because nobody

was going back to work, nobody was going in offices. And so you're going to have this situation where

basically like the revenue that you were going to be getting from these buildings that had less

than 20% occupancy is just like going to go flat. And it takes a while for that to happen,

but they were trying to figure out a solution. And I think it was CalSTRS or CalPERS stepped in and

basically bought a bunch of these positions of redemption requests into BRE, or withdrawals from

BRE, and basically stopped, like, staved off the total liquidating or castiating effect.

But it's sort of like you need that white knight to come in. Otherwise, you're going to start

to see like fire sales of potentially companies where the loans are going to get fire sold,

and that requires, you know, like potential tate over of the company itself. And so like that,

this is what I mean when it's like nobody's talking about the private equity for these private

credits, you know, and assets. And the equity could get screwed here, which, you know, and that's

like private private equity itself is like an order of magnitude, maybe two, larger than venture

capital. And we're talking about venture capital getting out over overseas. Like this is where people,

like, this is this is where some of the reading the tea leaves or like tinfoil hat perspective is

like, oh, this leads to that leads to this other thing. I don't think they seem I get there,

but this is the perspective that people have. And this is why it's an issue because there's

ill-equity mismatched that is currently sorting itself out. And it's going to take a while.

So the the correct the quick history of of private credit is starts basically in the 1980s

with this guy, Michael Milken, later went to jail. Don't need to really get into that, but he

effectively created the jump on financing market for companies that are not investment-grade.

What that means if you're not investment-grade is you're not triple A, you're not, I think,

triple B, you're triple B, or you're B-mined below. And you know, that was kind of the start.

Then, you know, when he went to jail, effectively after that is when the old milken team went and

started to follow, they were really the first kind of large product credit fund. You know,

people would do LBOs, you know, in and around that time. And generally, how the financing

worked was it was bank financing against the company. And that was like the first iteration of

this. Everything was kind of just growing on a linear basis. The deals got larger. The access

to capital got better. And then really the kind of most recent development was like the ETF

of this stuff. And so like there's credit ETFs that you can invest in. There are also these

things called BDCs, which we've covered, which are, you know, this kind of new type of vehicle.

But I think this is actually a perfect application of tokenization to deal with how to use

structure, originate, syndicate, and then allow fermenting and redemption of these credit assets.

And so I think crypto has a lot to contribute here. It's a reason for optimism that people

don't fully understand, but I think it's being acutely recognized by the market as it tries to

get out of these things. So, you know, all roads lead to tokenization in one way or the other.

In terms of other crypto items to cover this week, there's a big acquisition by PBNK,

by MasterCard, which is great. And then Tempo launches their blockchain as well, which was...

It's not Tempo, we should talk, you know, basically, adjantic payments.

I mean, a lot of people were shooting on Tempo. I think that's cool.

I think that's like a permission, permission-less, like...

Yeah, it's true.

Anyways, so like, you don't need to worry about it, right?

And I think what they're doing is, you know, they're doing interesting things,

the MPP protocol, which is kind of their version of X402 for adjantic commerce,

cheap fast, quick finality, stablecoin transfers. I think all that is great.

In terms of the tech side, I think really the motion that they're making on the go-to-market

side is what's really impactful. Getting people to use crypto and not hate it, I think is a huge

contribution to the industry. So, hats off to paradigm in Tempo. But what's your take?

Yeah, I think the best way to think about this is like, many people probably heard of X402.

And I can't remember the exact products. Basically, it sets up this like front,

like a touch-stack versus touch-stack of Stripe versus Coinbase.

And you've got basically like MPP on the top, X402 on the top,

you've got like whatever the wallet manager is for Coinbase, you know, as one of the wall,

and then privy. And then you've got like base versus Tempo in a lot of ways.

Now, there's also a question as to what's the asset. I'm sure USDC is going to be the primary asset

within Tempo, but obviously Coinbase has, you know, some bias there as well,

and some benefit as well. And so, you know, does Tempo start to push another asset? Who knows?

I think there's a lot of questions, but it basically sets up this like Stripe versus Coinbase

situation, which I think is super interesting as we look to Stripe potentially going public in the

near term or a year or so. I think there's a lot of really smart people who think

agented payments is going to be kind of the future of crypto. I personally think I just like

need to see more of why this is a huge advantage. And I think that there's potential use cases

in like cross-border remittance, which I think is fundamental. There's like I saw privy just

announced something with gusto today, where there's like contractor payments done via privy,

which cross-border remittance, where it's like you don't have to pay this like crazy insane

fee. That takes out like Western Union and a lot of the correspondent banking, international

wiring, like there is basically all you need to do is pair that with like a local currency

FX function, and you've got based like payments anywhere to anyone. And an instant settlement,

which is huge. And so I think that there's definitely cross-border remittance use cases,

but this agentic kind of like what are agents that are going to be using stablecoins for,

that they wouldn't be able to paired with something like a RAM. And RAM, last week, I think it was

last week, maybe the week prior, announced that they're doing virtual cards or virtual accounts

for agents. And it's going to be this really interesting battle where, and obviously there's

going to be agents that probably will use both or each or or one or the other, like many

different models will will kind of proliferate. But you need to be able to send money back and forth

of your agent that's transacting on behalf of someone or transacting on behalf of the agent

itself. That's an obvious point. But how do you do that? And why do you choose one versus the other?

And what, you know, permissions do you have? I think these are all really, really big questions

that haven't been answered. And we know that agents are humans. They're not going to be able to

like sign up for Wells Farger account or get a credit card in their name, but they can have someone

permission an account or permission a card to them that gives them access to send and receive.

And one of the elements that I think has been really interesting that nobody has talked about,

but I think people started to glean is this whole like stablecoin yield part of clarity,

where you've got people on the banking side saying or community banking side saying the second

that clarity goes through, like we're going to see deposit flight. And we're going to lose assets.

We're actually able to make loans to destroy the banking business model. Like, no, that's just like

complete bullshit. And the reason why is well, why aren't we seeing that now? We already have 3.5%

3.8% yield. It was up to 5% on Coinbase. And this year you have JP Morgan hitting all time highs

in terms of profit. You don't have any deposit flight whatsoever. And so if that's not happening

now, why would it happen after basically what's happening right now gets solidified into law?

I think what they're actually worried about, which is JP Morgan and Bank of America being the

two largest credit card networks in the world in the country, they're worried about if stable

coins can pass back yield in some way, shape or form. Does this erode the strong network effects

that they have with their merchants and partholders? And everybody should remember that credit cards

are effectively the business model is merchants paid two and a half to three percent. Consumers get

paid one and a half to two percent via points, cash back, whatever it is. And so being able to

have that two percent cash back, I think is one of the reasons why I just I think it'll be

seemingly difficult if not impossible for, you know, basically a stable coin or a payment mechanism

to break the stranglehold of in-person sale, coin of sale transactions with credit cards. It's

just like with Apple Pay and Apple cards like it is now and RFID, it's just like it is entrenched

so hard into the consumer that it is going to be hard to rip out. Agents is a new, it's a

greenfield opportunity. And we don't know how agents are going to prefer to pay or how they're

going to be structured enough to choose different payment methods. But we do know is that if they're

able to earn two percent yield, two percent back on credit cards, if they have this ramp,

you know, virtual card or this, you know, maybe it's a striped virtual card who knows. But I think

striped is kind of hedging their bets. They're like, okay, if it's stable coins, we got tempo.

If it's credit cards, we got striped core business. But we know agents are going to utilize us,

we just don't know how. And maybe tempo is across both. I don't know. But I do think that that is

more the nuance of why the banking industry is so scared of clarity. And I think it has to do with

the credit card networks much more than it does the deposits. And so that's just a little bit of

why tempo launching this week is super important. Because it emphasizes the facts like, hey,

we just solved this problem soon. Because status quo right now is that if you have a third party,

you can earn yield. So if you're holding USDC on Coinbase, you can earn yield in the form of rewards.

And so the status quo is like, you know, banks are going to be able to not, like, the users are

going to be able to earn the same yield that they are today if the status quo basically says the

same because genius is already enacted. So like the banks need that to change. And so I think it's

just an interesting setup with everything going on. And that's why not only is it like a big launch

by tempo and the strike team and everybody around that, but it is also a big launch in the

context of everything else is going on in the background. Honestly, I hate these banks.

They were the ones who were like de-platforming people and like doing land acknowledgements,

you know, and like just the full DEI circus. These people should not be in control of who gets fixed

income yields in the future, especially if something like AGI happens, you really want community

banks and JPMorgan deciding how much yield you get. Just a terrible outcome for all of mankind.

The nice thing about the SEC rulemaking and the CFTC rulemaking is that that does take a lot

of the market structure into their purview. And then we already have genius. And so I do kind of,

I am sympathetic to Brian Armstrong's perspective of like, unless it's a perfect deal, why pass it,

there will be a symbolic victory, of course. But I think more than any market structure,

we need to build very compelling products and things like hyperliquid and sky and syrup are just

incredible, you know, the proof is ultimately in the pudding with these things and people will buy

them if we give them a reason too. I don't think market structure really stands the way of a lot of

stuff, especially when this rulemaking has already happened. I think one of the interesting points

that we should talk through, okay, so we talked a lot about agentic payments and agents. But like,

what do we think about the intersection of crypto and AI or just like what's going on in AI right now?

Not outside of the like funding landscape, the venture landscape, just like what is happening in

the AI space that's interesting or, you know, the intersection of crypto and AI?

I honestly think the intersection of crypto and AI is too early to really forecast at the moment,

but like the end state is fairly clear. Like we turn over the governance of something like sky

or hyperliquid to an AI and we just tell it, go off, build more products, make more money and

distribute it to the token holders. Like that is the purest form of capitalism where you strip out

all the costs of AI and then you have all of the crypto revenue directed towards the tokens.

And like that is a concept that does not exist today in traditional equity markets. And so it's

easy to see the end state. The agentic commerce stuff, I do think is cope right now. It just feels

like a lot of people who really are jazzed up about a bunch of words being smashed together

and being able to raise money on that. And so like I do think the future of agentic commerce is far

out. But ultimately the things that are so powerful about AI will be even more powerful in crypto.

Because crypto is like the last real free capitalistic playing field that you can apply these tools

to. And so we start with that as the framework. I think there's just so, so much that you can do.

I think right now the probably the clearest use case is something like USDA AI,

user app and stablecoins, you can pass the depreciation, you can press through the rents link come.

Like that stuff is so awesome. It addresses a need that's immediately apparent,

financing of these things. And it allows people to give us more respect. Like what we've learned

with Skye is like, you know, you want to try this thing? No, not really. Do you want a hundred

million dollars? It's like, oh, yeah, you guys are awesome. How does this all work? Money ultimately

talks. And I think we should stick to you at least for now. Well, and that's kind of the angle

that I was going to approach it from as well, which is. And I mean, there's all kind of people

talking about the numbers. And I don't know how much of them are verified or how much of them

are just like, let's take the last two weeks and analyze that. But the idea generally is that both

and Throppet and OpenAI are somewhere in the 21 billion annualized revenue run rate right now.

And I think the, but what is the biggest

decider as to what the revenue run rate is, it is basically compute. And as they launch and as

they do live with more compute, you actually have an increase in the amount of revenue that they're

able to charge. It increases the context window. It increases basically like the amount of users

that they can have on simultaneously. Like the capabilities of what people are willing to pay

for probably actually increase. It's like Fermi's paradox. But you know, it's like as you have more,

like there's an, there's an increasing potential of revenue as you unlock more compute.

The other thing is there's an interesting take I saw from

Film Patel, which is like Y to H 100 rental prices continue to go up. Yep.

Yep. Which is like everybody expected, Michael Burry included, you know, the class at short

seller. And you've got Jim Chanos, who's like calling for everything to fall off a cliff.

Lost. Lost. He's predicted six of the last two recessions. I think the big, the big thing is

they all expect to basically like the, the GB, so the GB 200s are out. The GB 300s are out,

but they're kind of like still in training mode, I would say. So they're scaling up.

And this is the shift, you know, from basically air cooled to liquid cooled.

The capabilities of a hopper relative to a liquid cooled GB 300 is like, I think six point six

or depending on how you measure it, it's like five to six acts in terms of token throughput,

per energy. And what, so what the expectation was that, you know, all the hoppers that are deployed

are basically going to fall off a cliff in terms of the rental prices. Well, what has happened

is the exact opposite in the last few months, which is it's actually increased about 40 or 50 percent

per hour. And Dylan had a great take on this, which is basically like, when hoppers came out,

you had GPT-4. So there's two ways to measure it. It's sort of like the universe of throughput,

and you're able to like say, okay, well, the throughput is much less. So therefore,

and the the GB 300s are, you know, renting at that price. So therefore, the hopper should be

renting at whatever that, that whatever that percentage price is. The other way to look at it is

there's the utility function, which is how much can you currently utilize, like what's the revenue

potential relative to the amount of compute that's available? And, you know, the H100s came out in 2020

or started to come out in 2020. And so back then, it was GPT-4. We're now on GPT 5.4.

And the ability to run GPT-5.4 is actually completely feasible on on hoppers now. Whereas in

previous iterations of the model, you actually had to have the state of the art just to be able to

run it. And so what you're able to do with GPT-4 and the revenue potential at that point in time

was orders amounted to lower than what you currently have now. Maybe it was a billion,

two billion, three billion, he estimated at that point in time. And so like the rental price

at that point in time was relative to what it was. Now, you can run GPT-5.4 on hoppers.

And so the revenue potential is hundreds of billions. And so you're able to say, well,

because the revenue potential is hundreds of billions, I'm willing to pay for something that's

already turned on, that's already live, that I can literally plug in and hit ready set go. And

continue to train, you know, GPT-6 on these black wells that are currently getting deployed

or currently. And so it's this like as the revenue potential of AI increases and everybody

expects that it will, the expectation that these currently deployed out of date GPUs are going

to fall for cliff, I think is a flawed, you know, it's flawed relative to what we're seeing in the

market right now. So that's number one. Number two is as you add more compute, these foundational

models, OpenAI and Thropic XAI, will continue to scale their revenue. And the expectation based off

of what Dario has said in terms of the amount of GWATs that he is putting into the ground versus I

think is four or a half or five by the end of this year basically triples the amount of revenue

that they have currently. So it goes from 20 to let's say 60 or maybe it's 80, I can't remember. But

the so like going from 20 million to 60 billion is just the GPUs turning on.

So like the AI potential I think and the AI trade for these foundational models is just it is still on.

And this is where it's leading in the direction of like oh well, if that's worth that, then you know

the other one that's competitive to that should be worth some percentage of that and that's why the

venture capital ecosystem is going nuts. Just like when you know in 2018 everyone was like oh well

if Ethereum is worth a hundred billion then all of these L2s and all of these alternative

the ones are should be worth you know billions. And like that same logic is being applied again

unfortunately. But I so I think there's just like a lot of things that the market is telling us

and market is actually telling us a lot of the market you know pundits were wrong. But once again

because this whole Iran conflict is overshadowing everything nobody's really paying attention to this.

Like nobody's really talking about the fact that like capex should be worth multiples of what

it is currently worth if it's already deployed into the ground. And the the fact that it is continuing

to launching and hit these you know launches this year I think means that the AI potential revenue

is going to increase which hypersteilers have gotten hit over the head because they said $600

billion basically all their operating cash flow goes into the ground this year for AI build out.

Or 100 yes it's 100 and so there's some multiple that they have to make off of that. Well I think

that that trade is basically still intact but the match 7 is down you know 15 20% since the highs.

So it's just like weird stuff going on but I think AI is the revenue potential is

is going to be much larger basically than most people expect and it's going to grow a lot faster.

Well I think we've covered crypto we've covered macro we've covered AI we've covered some

regulation stuff I think that's it for this week. Thank you everyone and we will see you

the next time we do this which is we're definitely going to be off next week.

Yeah you may just get an hour of me talking into the camera.

Andrew Rowan all right we'll be there thank you.