# On-Chain RWA Financing and Crypto Market Dynamics

**Podcast:** The Milk Road Show
**Published:** 2026-04-23

## Transcript

But there's actually real value being created in crypto right now and in on-chain finance.
And that is bringing assets in the real world that people like and use and putting them on chain and making them more usable.
What's up, everybody?
LG Doucette here.
Welcome to the Milk Road Show.
LG is not with us today, so I'm going to be hosting this episode.
This is a Milk Road Pro research meeting, and we are going to be discussing a lot of the most important things going on in crypto today.
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We've already got an echo going, I think, so things are going to be really fun.
Kyle, Martin, welcome to the Milk Road Pro Research Meeting.
I'm so used to saying that.
I'm so used to saying that.
It's just an instinct at this point.
But there's a lot going on in crypto, a lot of new products being launched, a lot of drama in the space right now.
Where do you guys want to start today, Kyle?
What's on top of mind for you?
There's a lot.
Maybe we just start with a little bit of markets and give the listeners our kind of like thinking on where the markets are right now.
I don't know, Martin, John, who wants to start us off there, who's got some strong opinions on where we're at in the markets.
Bitcoin, by the way, is sitting at about $78,000, a little underneath that as we record this episode.
We had a run up over the last...
a few weeks i guess technically and uh the question is do we go higher or are we cooked what do you think john yeah i think well that is the big question right now i'm glad to see us trading near the top of this range i'm glad to see that we haven't gotten like immediately rejected off of it um but i do think that we're coming towards a major decision point for bitcoin and the overall market here uh i think there's there's two ways to look at this a lot of people are saying or expecting rather that bitcoin is going to drop from here go lower maybe even than you know break down to the downside out of this range but because of that we're seeing a lot of negative funding rates so there's a lot of people who are going short and that to me is setting up this opportunity for a bit of a short squeeze we've got a lot more spot accumulation from people like sailor and institutions now for the first time offering access to spot bitcoin and ethereum to their clients charles schwab is one example of them so it's an interesting setup here because What always happens at the top of a bull run is the bulls are expecting price to go so much higher that a lot of them get leveraged long and get liquidated, and that flips us into a bearish direction.
A similar thing happens at the end of bear markets is the bears are so confident that we're going to go lower.
They get short with leverage, and then the bulls liquidate them, and we flip higher.
So that could be a setup that happens here, but ultimately I'm just watching very closely to see which way the price does break because I think we are...
near the end of this like 70 day or longer trading range um and i think bitcoin's going to pick a direction here soon so i'm just locked in to see what happens just trying to pull up my screen to uh to show the range you're talking about i assume it's this range john that is the very one does this look correct to you i just drew a couple lines on a chart for those that are Those that are listening on the podcast.
But yeah, we've hit the top of the range, which we've done, I guess, three times now so far since March.
The question is, do we come back down?
The bottom of the range would be 67.
Or do we finally break through?
Martin, you got any opinions?
Not really.
You keep making fun of me that I was too bearish a couple of months ago.
I'm still leading.
My portfolio is performing the best and you're still somewhere down below.
But anyways, my point is that I want to hear your thoughts.
Where do you think that we are heading from here?
I have no idea.
For me, I tend to be more bullish because I think all the risks are now muted.
And yeah, I am now more bullish, obviously, than I was a couple of months ago.
But now I lean towards bullish from here.
and um yeah i think we are gonna break this ranch and and go up yeah the thing from a technical side if you look at this chart it it doesn't look great right it looks like okay we hit the top which is exactly what we did here back in january and then collapsed and fell through it now this is when a war started i'm assuming we don't have a war starting here today we may or may not have a war ending um so obviously anything Do you think seller is looking at this ranch and saying like, okay, this is not a good buy right now?
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No, no, no.
He's dumping every clip he can get into the market.
Salers buying without a doubt.
But it really just depends.
Is the market ready to go full risk on again or not?
And I mean, in the stock market, it has.
We're back at all time highs everywhere.
Crypto hasn't been able to work its way out.
I think part of this maybe just has to do with the overhang of what's going on with the Clarity Act.
And so people are kind of just sort of sitting on the sidelines waiting to see what happens there.
But I don't know.
For me, it feels like.
Bitcoin's been so oversold for the last while.
And there's a lot of things coming together that are bringing demand back into this, like Saylor.
ETFs have flipped positive.
You talked about a bunch of the products that are coming, John.
We talked about this last week a lot, too.
There's just a pretty strong bid, I think, for Bitcoin here.
And so my assumption is we do break through unless...
something bad happens with Iran, which I don't know really what could like happen that would make everyone get super scared now.
I think a lot has happened.
So my assumption is we're going to go up from here and we should have a good few.
I mean, obviously we'll go up and down, but we should have a good few months here and a good year in 2026, I think.
Yeah.
Okay.
Well, you know how people keep saying the best narrative is price.
So like once Bitcoin is just, you know, showing.
uh strong gains then everyone will just turn bullish and i think then bitcoin can really explode and maybe that's true for all crypto because right now you know crypto is not obviously the very hot topic and like i don't think people are talking about crypto these days institutions are though but they are talking about how they could adopt this technology not necessarily should i buy other or should i buy you know sky well it there are certainly discussions happening too but it's not at the scale we want it to be so i think at some point all the capital that is now chasing ai and like what's the best you know trade in ai right now it might not be anthropic or open ai it might be just some infrastructure or energy providers whatever but at some point when bitcoin starts to lead and outperform everything else not correlate anymore with software stocks Bitcoin will bring more attention to crypto again and then people will start, okay, but Bitcoin is not the only thing in that space.
What else is there?
And then at that point, I think your goal as investor is what people are going to buy at that point.
And you need to think critically and not just like, okay, this is a good story or I don't know, it's still below 80% all-time highs.
Nobody cares about this stuff.
You need to be...
like very critically thinking guy and just like should i buy this token and if so why try to sort of um share your both pieces for any token that you have in your portfolio and imagine that you are presenting your your bull case to a bunch of investors would they be interested or is it just based on story and like you know that the story is compelling and attractive and ambitious enough so you might sound like a smart guy selling a big story but the numbers doesn't pick it up i i think the thing that is exciting about if you know if you're if you're in the crypto space you're going okay what is there even that's exciting what is there to buy what is growing it is it is real world assets coming on chain right um and i mean we've been talking about this a ton but the obviously we have our problems in defy Right.
We've had these hacks.
It's nonstop.
We've had a bunch of tokens that just don't do anything.
People just loop them and try to make money off them.
But there's actually real value being created in crypto right now and on chain finance.
And that is bringing assets in the real world that people like and use and putting them on chain and making them more usable.
Right.
So if we look right now, U.S.
Treasuries are about to pass 15 billion.
They're going to the like.
through the roof right now, right?
Like these were just a couple of weeks ago, this was under 13 billion.
So we're literally adding billions a week at the moment.
Stablecoins doing the same.
They're at all time highs every day right now.
I think it's like 321 billion or 322 billion, whatever that is.
And so the numbers are starting to ramp up here.
And I think what people need to remember about crypto or about blockchain is like, this is infrastructure, right?
We didn't really, other than Bitcoin.
The purpose of a blockchain is not necessarily to create net new assets, although that's what we focused on so much.
But as I've said for, I don't know, well over a year now, and John, you've always hated this, is most of crypto is uninvestable.
And it's because we make bullshit assets that represent nothing.
But what we have built that is really good is infrastructure.
right and so one example of a company that i think has done a really really good job and their token is is showing at least so far it's very very new is showing promise as a result of that is um usdai or chip is the new token that come out and what usdai is for those that don't know is essentially they are a lending uh company for or a financing company for gpus so there's a lot of companies in the world that want gpus and they need to borrow capital to do it so basically they're taking out a mortgage to to buy gpus right it's probably the the most in-demand product in the entire world right now so you can go to a bank and do that Or you can go to what's called USDAI.
And what they do is they're using stable coins in on-chain capital markets to basically get capital and then lend that out and be a lender for companies.
And so you can deposit in USDAI.
That's basically giving them capital.
They're going to go and lend that out to companies to buy GPUs.
And then the interest on that is what they get.
That's their revenue.
And then they pay that out to USDAI holders.
So you can get about 7.5% APY currently.
backed by by gpus so what's interesting here is they just basically looked at what is the best product in the world well that's gpus okay let's just take the financing for that put it on chain and We'll create an incredible business.
And boom, that's exactly what they've done.
Because it's all on chain, they can offer better rates.
They can scale this faster than you can on traditional financial rails.
So they haven't really done anything net new.
They didn't create this new digital asset like Bitcoin or like Ethereum or like Tau, right?
Like all they did is go, hey, people want GPUs.
OK, let me use the infrastructure that already exists, which is Ethereum.
And let me create a better financial service for them.
And boom, they've done an incredible job.
Now they have incredible yields and they're going to use that revenue to buy back this token chip.
And, you know, to me, this is an incredible business and they just launched their token.
It's done well.
I'm not saying you should go buy this token.
Obviously, it's been live for like 24 hours or whatever.
So the price action isn't really meaningful.
What is meaningful, though, is they're doing exactly what DeFi was meant to do.
This looping of assets and rehypothecation of a bunch of assets that don't do anything, that is not really the promise of DeFi.
That's what we've done because we just haven't had anything else to do DeFi with.
But finally, we are seeing a world where real assets are coming on chain, real businesses are coming on chain, real credit is coming on chain.
And that is what blockchain was built for.
As much as people are like, shit, DeFi is cooked because of what happened with Aave recently.
I'm like, no, no, no.
DeFi is actually here.
It's back.
And that is because of things like USDA, what Sky is doing, et cetera.
So I don't know.
I'm pretty bullish and excited for DeFi today.
I'm just not excited for most of the assets that exist in crypto.
And so when I think if Bitcoin breaks through this range, I still don't think the rest of crypto goes with it.
I think certain pieces of crypto go with it, but not everything.
So I don't think we have this crazy altcoin season.
Martin, you've been very bullish on Sky as well.
Have you looked into this new product from Chip or do you have any thoughts to add to that or what Kyle just shared there?
Let me ask one question.
Are you bullish on the product or also on their token?
I'm bullish on the product.
Actually, Martin wrote a really good pro report about this a month ago.
So if you guys are pro members, you would have known about this a long time ago.
Now, I'm really, really bullish on the product and what they've created.
I think this is what DeFi was made for.
And so you're going to see this across every single financing product in the world.
The token is now over a billion.
fdv which is crazy so again i'm not saying to buy the token long term sure i think the business model makes sense they're going to use the profits to buy back chip like it all makes sense so at some point it's on my watch list now i i plan to buy chip at some point but a billion dollar valuation seems crazy considering it just launched 24 hours ago um and their tvl is i can't even remember but it's in the hundreds of millions so it's it's probably overvalued at this point i would say yeah it's 342 mil um I guess I had made two issues here.
One is at the point when I was writing my pro report, they only had deployed 17 million into GPUs.
The rest was backed by PayPal USD.
So I wasn't sure if they are able to, like, again, the story to lend money against GPUs is compelling, but you need to see it like in real, not just like in theory.
Right now it's at 65 mil.
which is you know 3x from a month ago which is good and if that ratio is going up then i like that i think that's the the thing that potential investors should look at and the other thing is we don't even know how this is going to work when there is insolvency or bankruptcy of that lender they are lending the the money to you so you know We now saw there was a hack with Aved, did something different, but what's going to happen if someone was using GPUs and now they're out of money and they don't have money to pay you back, then there are GPUs.
How this whole process, like are some people from USDAI coming to the data center and just taking all these GPUs and then going to sell it somewhere on Facebook?
You know.
So, yeah, I think This is bullish for crypto because it just showcased what crypto is able to do.
And like this is probably something that you wouldn't be able to do outside of crypto.
So this is really a good thing because you can sort of create that capital or capital formation, how we call it here.
That's pretty appealing.
But I want to see it like once when there is a crisis, how they will behave.
And also there is just 20% token in circulation, which means potential VCs and team unlocks are just going to create a lot of sell pressure on the token itself.
So yeah, bullish product, but let's see about the token, not bullish there.
Yeah, you can see 47.6% of their TVL or like of the yield that you're getting is coming from PYUSD.
So they've allocated 281 million into PYUSD.
And then the rest is all Well, I guess I don't know what the rest is.
Yeah, the rest is all in GPUs.
So they're at a 50-50 ratio at the moment.
And look at the APY on GPU lending.
15%, 10%, 12%, 11.5%, 12%.
It's pretty incredible, right?
This is obviously a very in-demand product.
So you can see as they start to...
And you got to understand, it takes a little while for them to actually get these loans serviced.
And so they probably have a huge, and they might even have this deal pipeline somewhere.
But as more and more of these come through, less and less is then put in PYUSD.
And then their APY will be much, much, much higher.
So I think they're tracking for over like 10% in the coming months.
And all backed by GPUs, which is pretty massive.
And also they say that they have on the backlog, they have billions.
in demand.
So the companies are reaching them and like, hey, we want to use your product.
And yeah, if they really have billions and they are able to deliver it, then yeah, it's very, very attractive.
And the thing is, what's interesting about this for those that are listening to understand is you can go and apply this to anything.
So let's say we want to start, I don't know, lending capital for, I don't know, energy, right?
A deployment of solar panels or the deployment of, I don't know, not gas or whatever is in demand in that moment.
What's interesting about on-chain finance is you can just launch a stablecoin like this, get deposits immediately at the speed of light.
Anyone who has USDC, USDT, ETH, whatever, they can swap into this immediately.
And that is giving them capital to then go and lend out, right?
So it can happen so fast.
And the Tradify world does not work like that.
And it's global.
So they have access to way more capital too, right?
So it's just, it's, you know, this is possible in traditional financial rails, but it would take a year, right, or something to get this capital and deploy this capital.
But on on-chain finance, it sort of compresses that timeframe into maybe weeks or months rather than years.
And so it allows capital to move much, much, much faster, which is really the big unlock of DeFi.
That's the whole point in what we've built here.
Can I remind you guys Deepin, if you remember Deepin?
This is exactly what I was going to ask about.
I would love to ask about this because there's a project specifically called Render that allows people who have GPUs that are idle or not being used to put them into a marketplace and allow the market to pay for the cycles of those GPUs.
Render also has around a billion, I think it's around $900 million market cap, and their token is much more open in the circulating supply in terms of like...
like how much is actually out there.
It's not like a whole bunch is still being held back by VCs.
Talk to me about the differences you see here.
Why is this project different?
Why do you think render has struggled?
I mean, they're roughly around the same size as market cap at the moment.
Just thoughts on this versus a deep end project that's doing something similar.
Yeah.
So, I mean, I don't know a ton of the details of Render, so maybe I'll go over to you, Martin.
But one thing I would say is Render is a marketplace, whereas this is just financing, right?
So this is like acting more like a bank, whereas Render is a marketplace where like, hey, if I need compute or whatever it is that they're selling, I go there kind of like Facebook marketplace type thing or Amazon and I find what I need and then I rent that essentially, right?
So like there's a lot of problems of like, is there enough scale there?
Can you get what you need there?
I don't really know.
But this is different.
This is, hey, I need GPUs.
I'm going to actually buy those GPUs and put them in my massive data center that I've just built in Texas.
And so I need some GPUs, but hey, I don't want to put $200 million into GPUs today.
I want to do some financing.
So I can either go to the bank or I can go to USDAI, right?
So it's a completely different model.
So yeah, I don't know, Martin, do you have anything you want to add to that on Render?
Yeah, I think it's different use case.
And also, Like for render, do we really need decentralized AI compute or is it just, you know, something we came up with?
Like, look at all the big players today.
They are looking for data centers that are able to provide them all as much GPUs collocated as possible because it improves their product and latency and everything.
So like, I'm not sure.
well maybe there are some smaller labs or like you know niche use cases that might be fine to have you know different hardwares across the world and that might work but i don't know i'm not i'm not not sure that that's the case and we haven't seen that so far so i mean we're at a place in the world where you can no longer get gpus you have to buy years out at this point right like nvidia is completely sold out um now the biggest companies in the world are starting to build their own things like Google is, et cetera.
So, and then now there's like the cloud providers that are doing this, right?
So you can get some of this from, compute from like, I don't know, Amazon, Microsoft, you know, you name it.
But that's probably going to get used up pretty soon here.
And so like, maybe there is a world where these marketplaces do make sense, but there's sort of edge cases where, okay, I can't get it from any, like if I can choose from getting it from Microsoft or from something called Render.
I'm going to Microsoft all day, every day.
But in a world where there's none of that left, maybe then people start to go to these edge cases where it's like, OK, well, I've got extra compute on my Mac Mini and I'm not using it right now.
Let me put that in this marketplace and someone can tap into it.
Right.
I could see that happening.
I don't know that the world is there just yet.
And I don't know that they've done a great job of sort of marketing themselves to the world.
So I don't even think most people know that that exists.
But I could see if things get used up too much, then that could be a place that you go next, right?
But they're not the only one doing that as well.
This is a lot of like what Tau is doing, BitTensor, is they have a bunch of subnets kind of doing this as well, but not just on compute, but of many different parts of the AI infrastructure side.
So yeah, I don't know.
I don't know if that's going to work out.
We'll have to see.
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Yeah, I think my take on this is that this is just another example of the beauty of the digital asset of the Web3 space, which is that there are so many different ways that you can configure your product or service, different kinds of users and segments of the market you can target to serve and offer products and things to.
And then, you know, we're all trying to see what finds product market fit.
and what grows faster and et cetera.
But I think that's the beauty of being in a space like this that's emerging is that you can see rapid iteration of different kinds and styles of products and services that all in some way use digital assets and then see what the market adopts.
And maybe it's something where it's like, Right now, there's not a huge demand for some of these things, but laying this infrastructure out is the first step because then once the agentic economy comes into the play and once other different kinds of things start to happen, as Kyle, you said at the beginning, as assets, we call them real world assets, now they'll just be assets, like digital assets, assets, they'll all be on chain, right?
That changes the nature of the landscape and what...
products and services will find product market fit.
So I think it's just a really interesting example of how there's a lot of different ways to configure things around crypto that leverage crypto and digital assets and find product market fit.
Yeah, so it's an interesting difference there.
And I do think Deepin, there's a place for it and it's going to succeed.
Right now it's struggling because it just has token dilution.
That's how these all work.
But if you can find revenue from it and use that to...
to incentivize people to, you know, lend out whatever, then I think that can work.
But it takes a while to build that out and actually get that started.
Right.
But especially in a world where, you know, a lot of people are probably going to lose jobs because of AI and Uber is going to get disrupted and all this kind of stuff, starting to rent out the access resources you have in your home, whether that be electricity or that be, you know, your compute or whatever, it's probably going to be a thing people are going to want to do if you can't.
you know, go and drive your Uber around anymore to make your extra side cash.
So I think there's definitely going to be a place for it in this world.
And I think you make a good point.
You know, as the agentic world comes out, even us in our company have thought about this like, OK.
you know, where are we going to get the bandwidth to have everyone running their own agents?
And we know we want that, but it's like, okay, are we going to use like some sort of cloud thing?
Are we all going to, you know, buy everyone Mac minis, which you can't really do?
Right now, it's months to get that.
So like something like a render could make sense for us at some point, right?
So yeah, I don't know.
I think all this stuff will have its time, but it's not a today thing, that's for sure.
Martin, I want to ask you a question.
You have been one of the most bullish people I know on the DeFi space.
And as Kyle and we've just been discussing, there's a huge push for tokenization, trillions of dollars of capital coming on chain.
However, I think you've also been a little scary berry after the Aave hack and this whole situation.
What in your mind changes in terms of what you're expecting the DeFi landscape to look like?
Does this make institutions more hesitant to come in?
Does it mean that we're going to have to bring in more robust security measures that actually...
makes DeFi more attractive to institutional capital.
What is your headspace at right now around DeFi and the consequences of this hack?
I think how people usually analyze something is that if they find lending borrowing markets interesting on the blockchain rails, they probably start looking at Deleter and that's Aave.
Aave has 60% plus market share.
And then if Deleter has some problem, it probably shows Like the whole market or that specific market might not be like ready or like, you know, not institutional ready as some people might expect it.
Now, I think what happened with Aave was unfortunate, obviously, but the smart contracts are still like untouched.
So there was no problem there.
The problem is that they probably didn't do proper risk assessment when they were allowing restate Ethereum to be used as collateral on their platform.
That being said, I think the risks are still quite high, but this is for Aave specifically, this is not an existential threat.
It will just make them stronger.
But in the short term, midterm, I think that there was a lot of governance drama who is going to capture revenue you know all the key contributors leaving including the their main risk manager which was chaos labs so like if you just combine all these things together and you are a fan managing uh like tens of millions of dollars and thinking about deploying it into other and you see all that i think the risks are pretty high and you would probably wait a couple more months before you deploy into other so like In the long term, I remain super bullish on Ava.
It's still the leader.
And I think everything they are doing just makes sense.
And now they are expanding into other products.
So that's pretty positive.
But yeah, current view is bearish.
Look, this isn't the first time that a lender has lent money or a let's call it like a bank has interacted with an asset that was not a great asset.
right?
This has happened many, many, many, many times in the history of finance, right?
This is a normal thing.
So I don't know that this is necessary.
I mean, it's not a problem of Aave.
They didn't necessarily do anything wrong, but they did not manage risk well.
They probably shouldn't have allowed this asset on their platform.
Okay.
This story has existed in every single bank that exists that we know of today.
So I don't think that any institution looking at Aave is like, okay, this thing is untouchable.
I think it's like, hey, they are Right now, there's a bunch of uninvestable assets that exist on blockchain, and that's the dominant products that are being used inside of Aave.
That's a problem.
But it will look at Aave and go, wow, this is a way better lending borrowing marketplace than what exists in traditional finance rails.
It is way more efficient, way more cost effective, right, than anything else we've ever seen.
So this is interesting.
I wonder what happens when this thing starts to have good assets inside of it, like GPUs or tokenized U.S.
treasuries or, you know, blah, blah, blah, blah, blah, blah, blah, right?
Like if you apply Aave and they just give it good assets instead of shit rehypothecated assets, obviously an incredible product.
And so I think if you just do a little bit of due diligence, which I think institutions are doing today, they're going to see through this and go, oh yeah, okay.
There's just not a lot of good assets right now in this space.
But as we bring more and more of our assets, the big boy assets, that's where Aave is going to flourish.
So now I would say this has obviously been an opportunistic moment for competitors to Aave.
Spark has done extremely well over the last few days in terms of their inflows.
And so they sort of crushed it.
I don't know about Morfo, but maybe they have as well.
And so there's an opportunity here for others.
But Aave is definitely so far and so big that I think it does bounce back.
It goes back to everything I kept saying is we just need better assets on chain and then all of our DeFi will work so much better.
It's hard to do that when you're playing with garbage.
It might take some before we onboard like more reward assets that, you know, will scale into billions.
But I also want to say the problem was that there was some restricted ETH on the blockchain and what the hacker needed to do was because if you want to sell a set worth hundreds of millions, there is not enough liquidity.
So what that guy, I don't know, or a group of people, what the hacker did was they let it another and borrow wrapped ETH against it.
And because there is a lot of liquidity for wrapped ETH.
So I sort of feel like those are the cause that if you are a leader into something and you have enough liquidity.
So it's like double X4.
You attract a lot of people and everyone's using them.
But at the same time, when there is hack.
people couldn't like get all this money so they are using you because you are the best you have the most liquidity so you know so this is like you need to also have this in mind yeah yeah yeah i think your point Sorry, I was just going to say, I think your point about other competitors getting an opportunity because of the bad press and attention that Aave has gotten has been really interesting.
But I would also point out because I think people who are in crypto are very acutely aware of how much bad press there's been on this.
Aave has crashed to prices not seen since two weeks ago and is seemingly holding pretty stable there.
So I think that to me is a sign of very bullishness.
bullish confidence from the broader market in Aave, right?
Like the token is not dumping.
There was a bull run or a bank, what do they call it?
A bank run, not a bull run, a bank run on Aave, so to speak.
I wish there was a bull run.
But those outflows seem to have stabilized now too.
So it looks to me like a lot of the market is just waiting to see what the final resolution of this is going to be.
And they're still trying to kind of track down some of these funds.
Arbitrum is going to recover, I think, $70 million worth of the Ethereum.
And so the ecosystem is actively working on handling this.
And so I think that there's a lot of things about this to say, like, you know, anytime you're operating a business with finance, there's going to be a natural attraction to bad actors to try to exploit it, manipulate it, take advantage of it, abuse it.
But the way Aave has handled this and the way the overall ecosystem has handled this, I think, has been admirable.
And there's lessons learned for everybody who was involved at every level of this to improve their operational securities and have more robust safeguards so this doesn't happen again.
But I do think on the other side of this, we see this return to bullishness, capital come back, and then a brighter future and a more secure one for DeFi overall.
So that thing is really encouraging me.
Just the price of Aave.
It just kind of went back down to where it was two weeks ago and then it's just like holding it.
That's a good vote from the market.
It says we still believe in this.
Tells you there's no one left to sell, right?
Everyone who's, yeah.
One last thing.
There is like 4 billion worth of restaked ETH on Aave still, but I wonder what they should do right now about all these other restaked ETH that's available there right now.
Because it's so frozen.
Let's be honest.
What's risk taking?
It's just a wrapper.
There is smart contract risk.
There is a bridge risk.
But like there is no real demand for risk taking.
So there is no real yield behind it.
So it means that people are just taking incentives that all these risk taking providers give them, which is, you know, not sustainable at all.
And they are just looping the strategy using AVA.
So now.
What should AVE do?
Should they sort of, you know, stop allowing all these restate ease as collateral?
Because like, I feel like that's just a way for hackers to like, okay, this is your honey spot.
Just come in and try to hack this because I'm pretty sure that this issue might be also with some other restate protocols.
Yeah.
I mean, technically the issue was an issue of layer zero, right?
And their bridge.
Part also helped out and how the security they put around that bridge.
So hopefully, and I mean, what we've seen from a lot of DeFi is they're now double checking all of their, you know, all their bridges and all their multi-sigs and all the different things and making sure that they've, you know, beefed this up.
So I don't know, hopefully this prevents, but I mean, we're seeing a ton of hacks, I mean, both in DeFi and outside of that too.
So I don't know, we'll see where this goes, but.
we obviously this industry needs to take security more seriously that's that's like the most obvious thing take away from all this john i'll say one thing that will make you happy once ethereum really works as a one you know uh composable ecosystem like there are no bridges it will be just like one system and all the ropes will communicate together synchronously and asynchronously but no bridges, and it will be the final state for Ethereum where you don't know if you are on Optimism, Arbitrum, Ethereum, or some other layer too.
It will be just one seamless chain, no bridges, and you'll be just fine.
And is that when ETH will hit 250, was it million?
What was the etherealized?
252,000.
252,000.
Right.
Yes.
So is that when that happens?
So I think that that report is actually one of the best things that's been written about Ethereum recently, but I don't think it was a price prediction.
Basically what they were saying is that assets have attached to them, some assets have attached to them a monetary premium, which says that because people use certain assets, there's no money.
This is like a really in the weeds term of monetary theory and economic theory, but I think this is worth understanding.
There is no money.
There are assets that we use as money.
So the dollar is a representation of debt that's owed by the United States to the Federal Reserve that we use as though it were money.
But it is really debt that we're using as a currency.
It's a different thing.
So there are a lot of different assets that have some degree of this monetary premium associated with them because nobody would really care about U.S.
debt if it wasn't.
accepted by everybody as money, right?
So there's a monetary premium assigned to dollars.
Bitcoin has monetary premium.
Gold has a monetary premium.
And so what the report was saying was that, you know, Ethereum is a productive monetary asset.
It's a hard asset.
It's fungible, and it actually produces a yield natively to it.
And there are a lot of distinguishing properties of Ethereum as money that make it very attractive and unique in the marketplace.
And if it were to demonetize the monetary premium associated with Bitcoin and gold, then it would be valued at $252,000 in the ETH.
That's not to say that… it is going to do that it's not a price prediction but it's kind of giving a sense of what the total addressable market of money is and what the monetary premium of ethereum might become if it became sort of the the credibly neutral base layer for settlement of value and it was used as money globally yeah it's an interesting way of framing the the the total addressable market and thinking about eth as an asset not so much an exact price prediction I'm still a believer that ETH is money.
We haven't talked about this in a long time.
I feel like that whole, what do we used to call it?
Ultrasound money or whatever.
It was like two, three years ago.
That's been lost.
And I was a big believer then.
I still think it is, but I think it just needs a lot more good assets on it so that it becomes a real...
financial market right like like ethereum is becoming the new financial like capital markets of the world of the internet and and so like that is worth a lot And the underlying currency of that that powers it will be worth a lot, like you just said.
It's just not that today.
It's nowhere even remotely close to that because all we have are a bunch of rehypothecated assets.
And most of that is just rehypothecated of ETH.
But this is why I get so excited of things like USDAI and even U.S.
Treasuries, which is super boring.
And I don't invest in U.S.
Treasuries.
But it is still like that is what most of the world does invest in.
And so the more of those things come on Ethereum, which you're seeing is accelerating at a very fast rate.
the more valuable Ethereum and ETH ultimately become.
So that is the end game.
If you have any USDC, you are investing in U.S.
Treasuries.
And that is the exciting part of the boringness to me, right?
I like that crypto is like...
If you have USDC, you are not investing in U.S.
Treasuries.
You're getting none of that.
And unfortunately, Clarity Act looks like you're going to get even less of that.
If you're investing in USDS, you are getting some of that.
All right.
So let's talk about this.
What's the letter?
There's a lot of fear right now that the Clarity Act is going to be delayed and never passed.
For two years, it's been promised and talked about.
But now the American Bankers Association, I think, has asked for a 60-day delay to negotiate.
There's a senator on the U.S.
Banking Committee who's also asking for that.
And this morning, a lot of crypto institutions have come out and said, we need to push for this now and not wait any longer.
The U.S.
Congress goes into recess in August, and it seems like there'll be midterm elections before this ever gets brought up again, and the Democrats are very hostile.
So clarity may never happen.
How big of a risk is that in your mind?
Or can we just proceed with business as usual based on what we've got from the SEC and the CFTC already?
At this point, no clarity is better than clarity.
Because at least in terms of yield and in terms of stablecoins, which is, again, what I keep saying is the most important part of our...
fucking industry right now.
And if Clarity passes the way that it is now, it's not even just that they can't give yield to users, it's they can't even give it from business to business.
So what a lot of people don't understand is the reason why stablecoins exist in the way they do and they're on exchanges and the reason why Coinbase and Circle have a partnership is these issuers of stablecoins, they pay exchanges out of the US treasury yield they're making to list them on exchanges.
And then Circle pays.
coinbase to use usdc that goes away in the way that it's structured right now so it's not just that hey hey coinbase you can't pay yield to whatever it's circle you can't pay yield to coinbase anymore and so everything changes if this happens and it's not great um now Like, obviously, they'll find ways around it and they'll work through this, but it slows down the the like the progress we're making right now.
It's like, I don't love it.
It sucks for consumers.
It sucks for businesses and crypto in general.
It's just it's a weird situation.
And so, like, without clarity, they can keep doing what we're doing, which honestly is working and it's growing quite fast.
So I don't know.
The problem is, is there's a lot of things in clarity outside of the stable coin yield that are very important and are necessary for this industry.
So I don't actually mean.
It's better to just not have it.
On the stablecoin side, though, it is.
And so it's frustrating.
And I just don't even understand why we let banks who have a monopoly on this, why we let them have even a decision here.
It makes zero.
The whole point of politicians is to separate what's going on over there and make decisions on behalf of the people.
so obviously publicly not doing that they are literally going let me see what these guys the people who pay me the banks want and let me like do that it's insane that that's even how this world works and we're all just watching it and going yeah okay whatever that's just okay we should be revolting this is fucking insane to me and yet everyone's just like just pass the thing whatever coinbase you're like you care about yourself and it's just like Does anyone realize what's going on here?
Do you realize what we pay politicians for out of our taxes?
Because that's not happening right now at all.
It's absolutely pathetic and we're just okay with it.
It's mind-blowing to me.
I think crypto has gotten so used to begging the government for scraps that they've forgotten to ask for the whole meal.
Martin, do you have any thoughts on this?
Sorry, go ahead.
Whoever.
I think the whole old financial world just has a lot of you know lobbyists and muscles who are making those decisions because they want to protect their businesses and their interests so it's a very tough game to play because you are new technology and sort of disrupting all these guys back so like i can see the pushback but i'm quite positive here and i think that brian and like you know everyone else who is like trying and fighting for crypto they will find their ways and eventually it will pass.
And I'll tell you the good thing about if Clarity passes, decentralized stablecoins, ones that don't come from centralized issuers, they can offer yield and they can exist in any way they want.
And they do not part of this regulation.
And so something like Sky becomes so valuable because if this happens and Coinbase can't get yield from Circle anymore, Why would Coinbase not use USDS instead?
Because then they can get the yield, right?
That's not illegal.
They can't get it from Circle, but they could get it from Sky.
So it puts decentralized stablecoins and yield bearing stablecoins into a whole different universe here for anyone who's looking for yield on dollars.
So I don't know.
We'll see if that happens.
I'm kind of with Martin.
I don't think that it gets past this in the way it is.
But if it does, it's a perfect setup for something like Sky.
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I think that this is a good reminder that decentralization doesn't matter until it does matter.
And then it's the only thing that matters.
And I think that that would be an interesting angle that could lead to a bull thesis on decentralized finance and decentralized products.
Yeah.
Okay.
So I think on this point, if this doesn't happen...
Right.
Because it's still kind of a coin toss if it does.
We've already gotten a lot of guidance from the SEC, from the CFTC.
There's been a lot of regulation in Europe around this.
I think even Russia is pushing forward a bill to allow digital asset activities in their country.
Do we even need the Clarity Act to continue doing business?
Kyle, like you said, things are growing already.
And what we've got is sort of working.
It's just not some clarity around this.
What do you think about that?
I think we do.
There is a lot of capital that wants to come into this space that is not going to do it until they know they're not going to.
get sued or go to jail for it.
And so there are companies that are getting ahead of it.
And so when Genius first came, you saw stablecoins go through the roof and really pick up.
And again, that's not even in law yet, but they at least have some clarity around what the rules are going to be when it does go through.
And so there's some jumping the gun, but ultimately to get the onslaught of capital that we're going to get into this space, we need this.
So it is very important.
And the US is obviously the biggest capital markets in the entire world.
So it's very important that we get it in the US.
Yeah, I tend to agree.
I think not everyone has balls like Coinbase because they are still able to offer yield.
It's labeled like, I don't know, marketing rewards or something.
But yeah, obviously, there are billions staying sideways because there is no clear regulatory.
Yeah, it would be certainly positive if it passes.
And we need that.
All right, gentlemen, I think we're coming towards the end of our time here.
So I want to end with a conversation about what you're looking at buying.
Are you buying?
Are you sitting in cash?
Are you stacking things?
Kyle, you know, you mentioned chip AI.
Are you looking to deploy into that?
Are you just sitting and watching right now?
Where are you on that?
Not looking to employ into it now just because of its valuation.
Nothing wrong with the company or the product.
So it's on the watch list, but I would need it to pull back massively.
I think Bitcoin is still an incredible buy here right now.
I mean, you could also sit and wait out and see what's going to happen.
If it's going to come down here or break through, you could wait for it to break through.
But I do think Bitcoin is a good buy.
I also think you've got Tom Lee and Saylor.
just pummeling money into these assets.
No other asset has that in the digital asset space.
So I think those are still the two best spots to put capital into.
Martin, what's on your radar right now?
I am becoming more and more Bitcoin maxi.
At some point, I didn't have any Bitcoin and now I want Bitcoin to be a big part of my portfolio.
Because it just, you know, whatever AI is going to do to the market or, you know, all the valuation or frameworks we use for valuing stocks or crypto, I don't know.
Bitcoin is just a different class.
It's like a better version of digital gold.
And I think it's immune to whatever shock is coming because I think some shock is coming.
And so, yeah, I want a big portion of my portfolio being in Bitcoin because I think that's a good hedge against it.
I am very bullish on Bitcoin as well.
It may come as a shock to both of you, but I'm also bullish on Bitcoin and I've been deployed into Bitcoin.
I like to buy when Bitcoin is going down, not when it's going up, because when we go up, we usually come to these moments where it's like, should I buy now?
Should I wait for a better entry?
Blah, blah, blah.
So if you just buy while it's crashing, buying fear at any price, you kind of know that you're maybe not going to get the exact bottom, but you're not going to miss a good entry.
And then you just be patient with your capital.
So I've already.
accumulated when the big crashes happened.
And if it goes back down, I'll accumulate more.
Ethereum, I also have a large position and I'm extremely bullish on that.
I think the setup here is ideal for ETH just because of all the things we talked about.
Tokenization drives value to Ethereum.
The agentic economy and rise of AI is driving a lot of, it's already driving users, new users, agentic users to Ethereum.
And then you've got the growth of stablecoins, the proliferation of real world assets.
So many different things are driving capital and value and economic activity, which are all different things, to Ethereum, to ETH.
And I think they will continue to do that.
Another thing that I'm watching closely is Aave because Aave is going through a period right now where there's been a huge sentiment driven amount of selling pressure and capital flight.
And that to me presents a great opportunity because I believe very much in the value proposition of DeFi and the product and the robustness and quality of the product that Aave has created and offered to the market.
But because there's this huge negative sentiment rush right now, I think it presents a good buying opportunity and at least a local bottom here on that.
So those are some things I'm watching.
There's a couple other things on my watch list too.
But to know if I'm going to deploy into some of those or not, I really got to see Bitcoin make up its mind one way or another.
Because if I think Bitcoin is going to go back down to $60K, maybe I'm not going to go wading into alts.
But if Bitcoin goes up and starts threatening $100K again, just like Martin said, price is one of the best.
best pieces of marketing and public relations you can have.
And that could be very bullish for the rest of the digital asset ecosystem.
So I think it's a really interesting time to be paying attention here.
And that's what I'm doing.
I'm just, I'm watching closely right now because I think the market is getting close to a decision point.
All right, gentlemen.
I think one of the big rules I was told never to do in podcasting is to just ask the guests if they have any final thoughts, but I'm going to break that rule.
It's a research meeting.
I got to jump.
You got to jump?
Okay.
I got to jump.
So I got no more.
Okay, great.
Well, we'll end the conversation.
there.
Really great conversation as always, guys.
Thank you to the audience for joining us.
We hope you're enjoying these research meetings and we will see you all in the next episode of the Milk Road Show.
Thanks for being here, everyone.
Bye.
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