# Robinhood Chain Meme Frenzy and Tokenized Stock Rivalry

**Podcast:** The Milk Road Show
**Published:** 2026-09-07

## Transcript

Zcash is going up.
We should probably, you know, long the other, again, not invest in Nodice.
You probably should long the other like privacy tokens in that same sector because they're the next ones to move because people rotate capital and they want to see what else does well.
The DGens have come to the Robinhood chain.
What is going on?
Which projects benefit the most?
And where is all of this meme frenzy going to take us this time?
Hello and welcome to the Milk Road Show, the podcast that knows that when the CEOs of AMC and Robinhood are arguing about lawyers on X, the DGens are the real winners.
I'm your host, John Gill, and today is Friday, September 4th, and today we are joined by Katie Talati.
Katie is the head of research at ARCA, where she spent years digging into fundamentals about crypto price action.
She puts out a weekly column literally called What is Driving Token Prices.
She also does this on YouTube, so if anybody can tell us what's actually going on here, she is going to be a great resource for all of us.
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But for now, welcome to the Milk Road Show, Katie.
Hey, John, thanks for having me.
I'm really excited to talk to you today.
There is a lot of chaos going on and I want someone to help me make sense of some of this.
Let's start with the Robinhood chain.
Can you just tell us a little bit about what's going on here and what people need to know about the frenzy that's taking off on Robinhood?
Sure.
So for people who haven't been following as closely, Robinhood basically announced last year that they were going to be launching their own L2 and they finally did it July 1st of this year.
And I feel like I don't want to call it like.
the DeFi summer of like 2020, but it was like, it's been a bit of a Robinhood summer in that sense.
So activity was a little slow at the start or not quite slow, but we had a lot of apps migrating on.
You saw like all the big DeFi apps saying we're launching instances on Robinhood chain.
But in the last few weeks, you've just seen a huge explosion in on-chain activity there.
particularly in the last couple days, things like DEX trading numbers, new transactions, revenue on chain, all of those numbers have spiked.
And it's gotten a lot of people's attention because the obvious way to get exposure to that is Robinhood equity.
Okay, so Robinhood is taking off.
Robinhood's stock is taking off.
But as far as what's actually on chain, I've heard a lot of attention on the Pons launchpad and the FOMO app, which I believe is chain agnostic.
But this is where a lot of this volume on the Robinhood chain seems to be coming from.
And it seems like a lot of the deejins from, you know, like you said, the prior Solana days have now just started doing this on the Robinhood chain.
What are you seeing happen here?
And do you see any signs of this slowing down?
Or is this just going to keep accelerating here?
It's hard to tell, right?
Because the thing is, is that usually when you kind of get in these trading environments where you see a lot of excessive trading activity, what happens is that as people kind of make money in one place, they're rolling it over and then they're continuing to use it.
So it's not just like, so you're kind of growing that overall pie.
What I have seen from the data, though, we have actually seen that like if you look at kind of like the drain number of users, number of funds, definitely a lot of those users have taken their money off of places like Solana and they're now putting it on Robinhood chain, which is interesting to see.
A lot of people also hypothesize that it was coming from other sources like Ethereum or it was new retail activity.
Not quite.
The FOMO app is actually an interesting one, though, because like social trading has been tried so many times again and again, and nobody's really cracked the code on it.
I mean, does anybody.
remember like even even just anything with a social following things like frintech people have been trying forever to like tokenize twitter and it hasn't worked but fomo seems to have really like cracked that code now i've also heard a lot of actual like professional traders complain that like fomo charges an egregious amount of fees so you have to imagine that it's very much a retail audience that's willing to pay you know like percentage points on their trades which is maybe what's happening so we're seeing a lot of activity from that and then pawns another can i you know, it's been crushing it in terms of numbers and revenue as well.
I think like the last few days they've, they've been seeing, like they were run rating earlier this week, like 70, $80 million in annualized revenue, obviously off of one day of data.
But they, I mean, they're basically, they're the same as Pump.Fun, which obviously is just on Solana and has generated a lot of activity and revenue for Solana.
People forget Pump.Fun is the second largest revenue generating app ever after Hyperliquid.
So they make a lot of money.
Ponds is also kind of on that same track right now.
It's just a much smaller market cap and people could actually see that activity happening.
Okay.
So let's talk about the winners and losers on this.
Do you think that this was like a...
a concerted strategy by Robinhood and Robinhood chain to try to go for the retail meme market?
Or do you think this sort of happened organically?
And then, you know, you mentioned that other people have tried this before.
A big name that comes to mind is Coinbase.
Like, what do you think Coinbase is going to do to respond to this?
So yeah, like, walk me through that rivalry of Robinhood strategy on this and Coinbase's response.
And just what are your thoughts on that?
Yeah, so I won't lie.
I don't think Robinhood set out being like, we're going to make a whole meme chain up.
But the the big thing that people still forget and the reason that memes are still very prevalent in the crypto um you know community the crypto culture is just that they're easy they're easy to understand they're easy for people to trade and people really see the roi on investing in these projects and that's why they still kind of have this like you know they have sunk their teeth into um the trading kind of fabric uh crypto.
I'll be honest, as a digital assets investor who's looking for fundamental, like great long-term investments, I hate that a lot of it is memes because it doesn't really like point to any actual like, you know, investing acumen.
It's really about trading and not necessarily about like, okay, what's a long-term, you know, project that's going to do something.
That said, some memes do manage to evolve beyond that.
They try to build things.
I'm very happy that, you know, some of them try to like actually make something of themselves, but it's not always the case.
But I think I don't think Robinhood chain set out to just be meme coins.
I do think they needed to create activity.
So they're not going to kind of shut this down because the amount of money that they're making on sequencer fees is, you know, it's, it's, it's extraordinary.
You know, you make that kind of money and you can report that as a whole new line item.
That's why the stock is ripping right now.
Cause people don't think that, you know, wall street has properly evaluated these opportunities right now for this, this kind of new business line for them.
And it'll be a bit of a surprise at earnings.
We'll see.
Right now they're actually subsidizing fees on their network.
And so, you know, we'll have to kind of see when those subsidies drop off in another month.
Like, how does that actually work?
Are people going to still be paying higher gas prices to like access the chain to push through transactions?
And, you know, if they haven't kind of found the new shiny thing, that might still be the case.
We'll have to see.
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Okay, so Robinhood, like you said, the meme coins they're benefiting from, but they also launched a lot of tokenized stock products.
And that's a big part of this whole frenzy too, is these trading pairs between memes and tokenized stocks.
Coinbase also launched tokenized stocks about a week or two weeks ago.
And there seems to be another rivalry between these two brewing here.
Talk to me about where the tokenized stocks fit into this whole frenzy that we're seeing.
Yeah, I mean, tokenized stocks have really taken off since the beginning of this year.
You know, I think the beginning of this year, people were taking a much more thoughtful approach to how do we bring kind of real world assets on chain, RWAs.
And tokenized stocks, though, are the easiest kind of thing for people to trade, right?
Because they represent, you know, in most cases, at least price, like the price discovery part or the price match part between what is on and off chain.
In some cases, you actually get all the rights and, you know, pieces that go along with owning that stock.
It's not just like a synthetic stock.
So stock trading has definitely taken off on chain, which is, I mean, when I started in crypto eight years ago, like I even said, I was like, most of the assets that are on chain are just tokenized equities.
And my boss at the time was like, yeah, eventually we're going to basically be just trading like tokenized equities on chain and you're just going to become an equity analyst.
And I was like, Oh, okay, cool.
I thought that would be maybe like a few more years from now, but we are here now.
And so I do think this is kind of like the natural evolution of digital assets.
And it's been more enabled recently by the fact that we've had a more friendly regulatory regime that, you know, there is a lot of discussions at the levels of the SEC and the CFTC on how to kind of like properly regulate and offer like guidelines on how these tokenized stock products should look.
And it's also clear from you when you look at, you know, what places like ICE, DTCC, NASDAQ, they're all looking at like, how do we make markets 24 seven?
Because they know that even though there's tokenized stocks right now, it's not nearly the entire volume of all the markets in the world.
But that is happening and it's going to come soon.
So I think that that is a huge and growing market.
And we're definitely going to see that continue to expand.
I think right now, though, for the most part, we're kind of in a bit more of an experimental stage for most of these companies.
They're really just rolling out the initial kind of beta test of like, how does this work?
What do customers like?
Also, what fits for retail is going to be very different from institutions.
Like personally, right now, like if I want to go buy Coinbase stock, I'm not going to buy the tokenized version of it on base, like for our, you know.
digital assets fun i'm we're going to be going to a traditional stock broker and buying it there and holding it a traditional prime broker because that's kind of like what you have to do as an institution so to bring actual tokenized stocks to institutions it's like 30 more steps and probably a couple more years down the road okay so there's a still a long trajectory of adoption and growth and you know migrating from the legacy system to the tokenized one but that is happening and it's accelerating um i want to talk about the dex wars that this is on launch unleashed because Aerodrome is kind of like the biggest liquidity provider and DEX on Coinbase, and that's the DEX that they're using for their tokenized stock products.
Uniswap is the one that's getting the bulk of the volume from the Robinhood chain and from the meme frenzy that's taken off on the Robinhood chain.
Could you tell us a little bit about some of these differences?
Like what I see some data I pulled up.
Uniswap controls about 99%, like basically the whole share of the tokenized stock DEX liquidity on Robinhood chain.
They've processed, I think, billions of dollars, like 20 billion in the last couple of months or so.
And Aerodrome is seeing $100 million of inflows in the week that they've been trading these tokenized stocks.
So there's a lot of growth on both of these.
But talk to me about the differences between these two DEXs and the sort of rivalry that's emerging there.
Sure.
So if you're not familiar with Uniswap, they've been around since I think they launched in like 2018 or 2019, like a very long time ago.
They really pioneered the automated market maker process of trading on chain, essentially the best way we have without, you know, a centralized limit order book in process.
And so for kind of single swaps, they've been fantastic.
They've also been on the cutting edge of, you know, kind of new technology, creating web hooks, you know, creating all kinds of like workarounds for things like impermanent loss and stuff.
So, but Uniswap been around forever.
They were the first to launch on Robinhood chain.
And that has been obviously a huge benefit to them as like the primary like on-chain trading venue, as it is for them when they've been, you know, they're the, you know, one of the first decks that they were basically one of the first decks is on Ethereum and they managed to gain so much, you know, traction there as well.
So first mover advantage is very important in this sense.
But Uniswap, they issued their token in 2021, I think.
And they actually did it after they had a competitor launch their own token, and it managed to take a lot of liquidity from their...
from their trading pools uh and they finally launched a token in response the token though for many years has just been a governance token so it's used for voting it was used for emissions to incentivize liquidity but really not much else and they've only recently um in this just this year managed to do a few things to really finally finally kind of like codify things around the token which is They said that, you know, the token is like the main form of value, their equity, you know, equity in their labs business is not really the main beneficiary.
And they have turned on a fee switch finally.
The fee switch for them is a little complicated, so I won't get into too many of the details here.
But basically, it takes a fee, an extra fee on each swap, in addition to whatever fees that LPs take.
And that is basically used to go and buy back and burn uni tokens.
now that just started part of the reason people are so excited about uniswap right now and why it has helped perform so much is because they did this and then they launched on robin hood chain and their volume on robin hood chain has been insane and as a result they have burned a lot of tokens from just that on-chain activity AeroDrum, on the flip side, it is the same idea as an AMM model, but their token acts slightly differently.
So they actually use the vote escrow model, but you can kind of just think of it as a flywheel that they use for better incentive mechanism when it comes to getting people to provide liquidity, which you can think of as market making if you're not really familiar with all these DeFi terms.
What they do is basically instead of giving fees back to liquidity providers in the form of whatever base asset is trading, they give them...
emissions that come out and those emissions go to the LPs and then essentially those LPs can choose to lock those arrow tokens in.
the vote escrow contract, but basically stake them.
And then they earn all of the trading fees from the protocol that are essentially distributed that way.
So what it does is it encourages, and then with those fees, you can direct them to individual liquidity pools.
And so basically what it does is it creates a bit of a loop where you have your liquidity providers acting as kind of like your equity token holders.
And they're also the ones who are kind of then also directing equity to certain.
So you can, as a, you know, if you say you've got a new token launch, a main point, you can say, okay, I'm going to buy a chunk of Aero tokens and then I'm going to stake them.
And then I'm going to direct my emissions to the, like to my new pools that I want to do well.
And as a result, you can basically encourage people to provide liquidity by offering like a really good.
by really offering extra emissions to those liquidity providers.
So it provides a really nice feedback loop.
And as a result, what it means is that the token actually has usage.
I mean, it's also used in governance as well, but it actually has usage.
You're actually getting revenue from it as a user and everybody's kind of tied in and aligned in the ecosystem versus Uniswap where, you know, there's not really an incentive to hold the UNI token, which is why until recently it really massively underperformed.
the last thing on aerodrome is that aerodrome is currently only issued on base and velodrome their sister dex is issued on arbitram basically what they're doing though is that they've actually got a big upgrade coming i believe in the next few months and they're going to be going cross-chain they're planning on launching on every evm chain um so that would that would include robin hood that would include ethereum that would include um you know, any L2 out there.
And they also have kind of some updates to their engine and how they kind of make more of the emission process a bit more, I would say smooth or smoothed over.
But basically the two of them have been kind of at odds with each other because for a while, Aerodrome has been the dominant decks on base, which for a while did have a lot of retail activity, a lot of meme activity.
Since the launch of Robinhood chain, a lot of that has migrated over.
Coinbase is trying to bring tokenized stocks back.
Aerodrome is, you know, kind of their premier trading partner for those tokenized stocks, which is great to see, you know, kind of that alignment and good to see Coinbase, you know, supporting homegrown projects from their own ecosystem.
So we will see.
I mean, the wars are just starting, in my opinion.
I think like kind of after this launch gets going.
We're going to see more.
And I think I alluded to you before the call.
I mean, we have another L2 launching in like another two weeks here that could also end up being, you know, a big boon for more on-chain activity.
We'll just have to see.
Okay.
Well, I want to talk about that too, but I want to kind of stay on this rivalry that's heating up.
And like you said, it is still in the early stages, even though it's been going for a long time.
I want to talk a little bit more about the emissions thing and the buybacks, because this has been something that's gotten a lot of attention.
Uniswap, as you said, for a long time was trying to turn on this token buyback switch.
They finally got it in place and it's now driving real revenue to the uni token holders.
But Aerodrome, I had the CEO of Dromos Labs behind this project behind the team behind Aerodrome rather.
The CEO, Alex Cutler was on this show earlier this week and I asked him a lot of questions about this too, but he says that that skimming liquidity from the liquidity providers and using that to buy back the tokens is exactly the opportunity that he sees for Airdrome to exploit, to outperform, and to attract capital away from Uniswap.
What do you think of that take here?
Is Uniswap vulnerable or is this going to be another one of these things of like, everyone says they're going to dethrone the incumbent, but nobody's ever going to actually displace Uniswap?
It's a good question.
It's hard to say because honestly, the dynamics for Aerodrome are so different from Uniswap.
And because Uniswap just changed up their whole fee structure, it is hard to tell too.
what is going to be the user behavior.
And when I say user behavior in this sense, it's actually liquidity providers.
Those are the ones who are most impacted by this.
I actually, I had a different conversation kind of concerning really what the fee switch change means for liquidity providers and for users.
So the big thing is that, you know, what the CEO of Aerodrome or what Dromos Lab said is that they're skimming off the top.
What does that actually mean?
So what it means is that, so just as an example, so Uniswap right now, say you go trade.
You're going to trade ETH for USDC.
Okay.
So in the past, you would pay, maybe you're paying like a 30 basis point fee that's being taken by the liquidity providers.
They cap that, they take that off.
That's great.
Liquidity providers.
Now what happens though, is I go in and my fee is say 32 bps.
Okay.
That two basis points that is now going to the Uniswap.
have a weird name for it like something jar but it's like they're it's going to this this going in this like this pot and then they're using out of that pot to do this programmatic buy and burn of uni so that's what's happening there now what the concern is is that for liquidity providers in automated automated market maker products their main way of hedging against impermanent loss which is basically the idea is that like As you trade in a pool, the two pools become like imbalanced.
The way they kind of hedge against that is that they go to centralized exchanges like Coinbase, Binance.
on htx by bit whatever and they're arbitraging to what the actual rate or the actual price is over there because basically as these pools become imbalanced on chain the that that's what's determining the price of the asset so if say your you know your eth price ends up being five percent off in these on-chain pools they just go and they arbit out and make their money on the centralized venues now what happens is that when you introduce extra fees They have a margin of error where they can basically trade and be profitable.
When you introduce extra fees, whether it's assessed to the user or even though the user is paying it, what happens is that their margin for error and their margin to make money decreases just slightly.
And as a result, it changes how those arbitrage models work for these market makers, these liquidity providers.
And that's really the setback there is the problem.
The other thing is you have to think, okay, it's 2026.
We have had, okay, seven years of Uniswap, seven, eight years of Uniswap being live before they introduced different fee structures, which were never there before.
And that's why kind of there's that concern of like, oh my God, are we going to really change this entire fee structure?
So that is really the difference there is that you're eating into liquidity provider, you're cutting into their bottom line.
And as a result, you're going to have them change behavior.
Now, the question is, Are the switching costs low enough that they're going to say, forget Uniswap, I'm going to pick up and go provide liquidity on Aerodrome where, you know, I'm earning, I can direct, you know, I have more saying kind of the protocol.
I get more direct fees.
I'm getting Aero and becoming kind of like an equity holder as well.
I'm more aligned with the project.
TBD, you know, the market makers and liquidity providers that have these setups where they are providing liquidity.
These are.
very complex undertakings.
They have lots of models, lots of bots running to do these arbitrage between different chains.
What it more likely means, yes, that liquidity could dry up on Uniswap in certain pools.
We'll have to kind of see.
I think it's going to be several months, though, before we see that shift in behavior, especially because we are seeing already a new shift in behavior going on to Robinhood chain.
Gotcha.
OK, yeah, there's a lot in that answer.
There's a lot for people to know about this.
I've been trying to learn about this stuff, too.
A lot of this stuff has changed very quickly because, like you said, a lot of this stuff is just from the last month.
If you had to bet.
on one horse in this race between Aerodrome and Uniswap for the next year, let's say.
Who do you think is the faster horse?
Who do you think is going to just outperform here?
Oh, gosh.
Okay.
So not investment advice to start.
My compliance team will be very happy with this little disclaimer here.
Not investment advice, but we really like Aerodrome just because their token model makes a lot more sense.
And like I said, it really locks in people in terms of actually being part of their community, one of their token holders.
ARCA has long been very pro token holder rights.
We really want...
tokens that issue to not just be these governance tokens that aren't worth anything while, you know, labs divisions or, you know, that are foundations that are behind these projects, you know, just sit on giant treasuries.
So we're, we're very pro anybody who has like a token that works.
Now Uniswap has managed to change that recently, which I'm very happy about.
I think what it really means though, is that, What I want to see with Uniswap is that this kind of activity on Robinhood chain isn't just a flash in the pan, right?
Because everyone, like I joked earlier, is like we're re-annualizing one-day revenues for the whole year, which is insane.
Like you need to actually have, you know.
You have to actually have a history.
So I think if I see like six months from now that Uniswap is still continuing to dominate Robinhood chain, that Robinhood chain itself activity is really high and it's leading to like this increased burn, then I would probably have a more favorable opinion on Uniswap.
But I think from the data right now, it's too early to tell.
Because like I said, I don't know if this on-chain activity, this on-chain renaissance we're seeing on Robinhood is going to be like here to stay or if it's going to fade in a few months.
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Okay, so you want to see some track record, you want to see some of these things last and not just be cool for a couple of days.
I think that makes a lot of sense.
I think yes, not financial advice, do your own research, anything you say can and will be used against you in a court of law.
Yeah, all that goes here.
But for myself, personally, I think they're both going to do incredible.
And I'm really excited about both of these things.
So yeah, we'll see how that plays out.
I want to ask you about something else that has been a huge performer in this bull market.
actually in this bear market really, but Zcash is up over, I think over a thousand percent year over year.
They just got a grayscale ETF listed, which a lot of people weren't expecting that this might bring some more institutional adoption, access to new pools of capital.
And the price I think got almost to a thousand.
Seems like it's getting.
Keep going, maybe.
But could you tell me a little bit about this craze around Zcash?
Like, is this just a privacy narrative, like catching the wind, you know, in a bear market?
Do you think this is a project that's here to stay?
Why is everyone so, why is there such a frenzy around Zcash right now?
This is a great question.
And I'm constantly asking myself that because I am like, why?
Zcash, what?
Like, these are one of these legacy projects that I personally never, you know, got that excited about.
I understand the privacy narrative, but I've always been the person of like privacy is a feature, not like the main attraction.
What does that mean?
I think it's great when L2 say, hey, we're going to have built in privacy features.
We're going to use EK technology to shield transactions.
And so I think from that aspect, it's great.
Why is privacy?
Why do people care about privacy right now, though?
Why so much right now?
So there's actually two sides to this argument.
The first is that with institutional adoption of digital assets, which it is here, like it wasn't.
three years ago but two years ago a year and a half ago everyone was very much like okay institutions are coming in they're going to use crypto but people don't realize is that being able to see assets move on shane it's a blessing and a curse because you know half the time we see wallet movements on shane and we're like oh no there's a bitcoin whale and they're selling all their bitcoin and the market's going to tank it can cause a lot of fear Now, what happens when we can tag a wallet and say, oh, my God, that is BlackRock's wallet and they're moving Bitcoin and they're going to sell it and tank the market.
So it's a huge problem for institutions because they don't want people to know what is going on with their transactions.
So Zcash does solve that.
Most people think Zcash is actually kind of like the privacy light token of all of the original privacy tokens because it's like opt-in privacy.
So some transactions are viewable, but some are called some are shielded, which means that you can't see the tokens, can't see where they're moving.
And so but that is kind of an opt in feature.
So they've always touted that, you know, it's great because when you need to keep you, you know, you need to work with regulators and stuff.
They're going to be happier with Zcash because there's like this opt in privacy.
Most people use the privacy features on Zcash because they want to be private.
But that is kind of where that narrative started, which is, you know, institutions are going to want privacy.
Now, the flip side, the original kind of, I would say, maybe DJing community or even just like the OG crypto community, they have watched Bitcoin become this very institutionalized product in the last three years.
They've watched it go from being, you know, this cyperpunk movement, this, you know, not everyone owns Bitcoin to Bitcoin is talked about every day on CNBC.
And they're like.
what the heck there's now like 50 etf products for bitcoin like everyone owns it you know you're everyone owns it everyone's talking about it blackrock is constantly you know on on you know touting it which i love i've been waiting for this adoption for so long i'm so glad we're finally here but for a lot of people who have been in the space early they really feel like bitcoin itself has become too institutionalized and that's why it trades much more now actually based on etf flows and a lot less on things like minor flows, on, you know, TAA, on even kind of whale wallet movements.
It's, you know, much more ETF dominated.
A lot of people have been attracted to Zcash because it still has that kind of grassroots cypher funk community and it offers that extra layer of privacy.
So that's kind of where it initially kind of caught that bid.
I would say last year, I was actually looking at the chart on it.
Like it had before this last run up, it ran up a thousand percent between like.
last fall in August of this year, 1,000%.
That is a huge amount of money before this latest move.
It's probably up now like 1,500% in the last 365 days.
And considering, like you said, it's a bear market, quote unquote, that's a huge move.
So that's kind of like what has been happening with Zcash.
Now, more recently, the ETF was definitely a surprise, but not totally unheard of.
We have a way more friendly regulatory regime.
And from what I've heard, actually, is that the SEC isn't as fully staffed as it was prior to this current administration.
And so as a result, even products and stuff, they're being a little bit easier with kind of getting these filings approved.
And so I wasn't that surprised to see that ETF come through in terms of, you know.
there's enough interest in it because it was the only token that was up so much.
And at the end of the day, when anybody sees a thousand percent return, they're like, well, why am I going to make another thousand percent return if I invest in it?
So the ETF has definitely been a nice, a nice little surprise to the upside, but not completely unheard of.
I mean, we've been seeing ETF products now come out for pretty much all of the top 20 tokens and have no real issue with getting approved on the regulatory front.
Grayscale, though, they have been they've been long in Zcash and they've long had a Zcash trust product, which was their product that was a precursor kind of to the ETFs.
If people recall, they had their Bitcoin trust, their ETH trust.
And those were kind of like the only way actually in a public market to get access to Bitcoin and Ethereum before they were made into ETFs a couple of years ago.
So that's kind of what's been happening with Zcash narrative.
And I can talk a lot more about it, but I don't know how excited people are about just privacy by itself.
Well, I think it's a narrative that's gotten a lot of attention.
And I think because of that, like you said, that insane performance we've seen from this asset, people are kind of wondering why an asset that was just flatlining sideways for many, many years has suddenly blown up like this.
What do you think happens for, like you said, privacy is not exclusive to Zcash.
There are a lot of other projects that have Privacy is a feature or is an option.
There's Monero.
There's Mimblewimble on Litecoin.
There's the Midnight sidechain.
Ethereum is working to have privacy on the native L1 by next year.
So it's not like exclusive to Zcash.
Do you think we're going to see like a follow on pump and a lot of these other privacy assets?
Do you think this stays localized in Zcash or how do you think about that playing out?
I mean, this is kind of what happens in all markets, right?
It's like people do get excited about like what is kind of the next trade and what is the next narrative?
And as an investor, that's what you have to think of as well.
Like that's what I'm trained to do is like, okay, you know, Zcash is going up.
We should probably, you know, long the other, again, not invest in out ice.
You probably should long the other like privacy tokens in that same sector because they're the next ones to move because people rotate capital and they want to see what else does well.
Do I think that those should do well or are going to do well?
Again, I'm not sold on the only privacy narrative, which is why Zcash is a really interesting thing to look at and an interesting case study.
Can I sit down and write a fundamental investment thesis around its long-term viability?
Not really.
To me, it has definitely been more of a trade versus a longer term, okay, it's got a real business, it's got real cash flows.
That said, Zcash has been trying to develop more things on-chain.
But it's kind of the same way Bitcoin had ordinals.
Bitcoin was trying to do Bitcoin DeFi.
We're going to kind of see.
The thing that Zcash might be successful at is that they have like more of a centralized development system in terms of like pushing out features and like new upgrades.
You might see that.
What I do think, though, people will be.
or what people should focus on besides change that are chains that are solely privacy focused are which because like i said i think the bigger narrative here is the fact that institutions need privacy and i think if you want to focus on something you should look at like which chains have actual privacy tech right now that can be instituted so ethereum is definitely one of them Um, another one is like a layer zero has their upcoming zero chain that is going to have, um, you know, they're using, they've managed to figure out, they said like ZK privacy that can shield transactions in, you know, kind of a regulatory compliant way that works for some of their like launch partners who are, you know, they are the institutions they have to abide by certain regulatory requirements.
There's obviously like some of the L2s.
I don't think you mentioned things like, uh, well, there's ZK sync.
Um, there's, oh, what's the other one?
Um, Aztec Network.
There's a lot of them.
Yeah, Aztec Network.
I'm thinking of the one that starts with an S.
Anyway, but there's like so many of them.
Oh, StarkNet, StarkNet.
And they all use like the different either ZKs or ZK Snarks to like, you know, shield and mask transactions.
And the reason also that like some of those privacy techs, in my opinion, are a little more interesting is that a lot of the zero knowledge stuff, it's not just that it works in a way where like you're not just like shielding transactions.
but you're able to shield transactions and then essentially like attest to, okay, this information is true.
So like you can kind of trust it on chain without having to like actually see the data within the block.
So to me, those, those.
Those are a bit more interesting in terms of like actual privacy versus like, hey, you go to the Zcash block explorer and you can see blocks being sent back and forth and you can't really see anything in there.
And you don't necessarily know for sure.
Because also Zcash had its fair share of problems.
Like I'm not, you know, they've managed to patch it, but like they basically found a bug over the summer where they figured out that somebody within who had.
of all the shielded transactions, basically somebody could go in and mint more tokens.
And because they shielded so much of the Zcash supply in general, you didn't really know who had minted a lot of tokens.
And it led to a huge panic, actually.
Zcash dropped a ton at the time.
They managed to patch it and they made everyone kind of migrate their tokens over to like a new shielding technology, which should in theory like cap the supply and all these other things.
You know, there are these there's there are unintended consequences of having privacy, which is basically somebody could exploit the chain and you wouldn't know.
All right.
We've talked a lot about a lot of different assets.
I want to ask you about something you've been following a lot in the content you're making, which is this buyback mania that we've seen.
As you mentioned, PumpFun and Hyperliquid had huge success with this.
And now we're seeing.
like almost every token under the sun trying to launch their own buyback program.
The most recent ones, Layer Zero, Kinetic, and now Lido is instituting a buyback program.
What should investors know about this?
Is this just like everybody trying to copy something that worked for someone else?
Are these things going to actually move the needle?
Like what is your take on this whole buyback narrative that's this kind of like going crazy in crypto right now?
So I think what people forget, especially with crypto, is that we had a huge regulatory regime change.
less than two years ago.
And that has actually made people way more comfortable with this buyback and with having buyback and burn mechanics.
So that's the first thing that's kind of pushing a lot more people towards this path.
But at the end of the day, Hyperliquid's absolute runaway success.
Like let's call it for what it is.
Like the fact that they are using 97% of their revenues to buyback and burn their tokens and their token has just been.
insanely strong in the face of like serious headwinds in the market and again it is kind of continued to just plow through you know volume all-time highs on all of their products and they've still managed to do well in a bear market where assets are depressed because they've got you know excess business lines that focus not on just crypto trading that has led a lot of projects to say well we have to do something similar because look at them they've done it so i think that's I think the buybacks and kind of this return to fundamentals, it's been a long, long time coming.
I've been pounding the table for it for years, and I'm glad to see projects finally doing it.
In many cases, there's also a few other caveats to why I think some projects haven't done it yet and they've just started now.
So first is that in a lot of cases, the projects you just mentioned, I think mine is Kinetic.
They're the newest one in that batch.
But most of them didn't have enough of their token supply on market for on-chain votes to pass these.
these buyback and burns, first of all.
Second is the regulatory regime shift.
And then third is, yes, that success of hyperliquid.
So I think it's like I said, this big confluence of factors.
But the buybacks are not all perfect.
A lot of them have become programmatic, which is good.
We like to see programmatic.
We don't like discretionary.
But in many cases, the buybacks are dependent on how much revenue they have.
Lido is a great example.
They are a great product.
They have...
billions and billions of TVL.
They're the largest Ethereum staker, but they've been losing market share for a few years and they don't actually have enough in the part of the reason they didn't do buyback and burn for so many years is because they wanted to reinvest any of their earnings into growth.
And the second thing is that they actually don't make that much money because you have to remember like staking rate on Ethereum is like what, 2% and they're taking like a tiny sliver of that.
So even though they are making money each year, it's not that much to run a whole Dow foundation operation.
And so for them, the biggest pushback for years of like, you need to do a buyback and burn was that, uh, like we could, but then we wouldn't have money to run.
And so that, that was kind of the big, uh, push and pull there.
They just passed their buyback though.
It is contingent on how much money they make.
Um, and in their case, it's also contingent on the price of ETH because as ETH goes up and down, that affects their revenue.
So, um, you can go and look, I can't remember the numbers for them, but basically they said, you know, if we make X amount of revenue above that, we'll start buying back with like 50% of our earnings.
um you know tokens from the market and we'll put it into treasury or we'll burn it um like i said camera specifics so that's what they've you know kind of set in stone kinetic i believe is you know theirs is more programmatic i believe there's closer to hyper liquid where they're doing more like the 90 percentile range of you know buying back their revenue and they're currently doing that layer zero hasn't actually passed their full fee switch yet right now they just have um buy back and burn happening on stargate which is their cross-chain DEX.
Cross-chain activity has kind of been down, so that's kind of gone down with it.
However, with the launch of Xero that I mentioned, their new L1, that is going to have economics a little bit more like hyperliquid tied to kind of like the, you know, part of the trading that goes through or trading that goes through on that chain is going to go back to buy back and burn.
It's a very simplified version of how it works.
But so that should be coming soon.
And then actually another really notable one we didn't talk about is Athena.
They just passed a day before yesterday, their vote passed to turn on the fee switch for ENA buyback and burn.
That has also been a long time coming.
Also important to note, though, it is contingent on the supply of their stablecoin.
It is not now happening to buy back and burn.
It's going to happen when they reach seven and a half billion dollars of supply in USD.
And for context, last I looked, their supply of USD is just about four billion.
So they could get there, you know, if we have more bull market activity and supply expands massively.
But we're not there yet.
So even though there is a fee switch that's been turned on, there's buybacks.
Again, it's contingent on something.
Yeah, so not all of these are created equal.
You are so full of information about crypto.
I could talk to you all day, but we got to start wrapping this up.
Katie, I want to end with a couple of questions here.
What are you going to be researching next?
Obviously, you do tons of deep dives into crypto and you're full of alpha and all these things.
But what are you working on right now?
What are you researching next?
And what's on the horizon for you here?
Okay.
I mean, I guess the big thing right now has definitely been, like you said, like a lot of the stuff we talked on, Robinhood chain, tokenized stocks.
I mean, I'm very interested about how, you know, kind of DeFi is evolving right now as it's being brought more on chain.
You know, we've gone from, okay, people are trading on chain.
People are doing simple borrow loan products to now we've got vaults, right?
We've got the rise of projects like Morpho and, you know, the other like modular lend borrow protocols.
So I've been spending a lot of time in that area and looking at like, how do these, how do these projects interact?
How do we kind of grow on-chain assets that are not digital asset native?
What does that mean?
Like I said, tokenized stocks, RWAs in general, how do those kind of grow on-chain?
How does that economy start to kick off?
And then what is the infrastructure that's going to be supporting that?
Because for me, that's the real long-term get here.
All right, I have a very specific ask for you guys.
Somebody listening to this knows the person running marketing at a crypto or AI company that should be advertising with Milk Road.
We reach more than half a million investors across everything we do and Q4 is filling up.
So don't be the brand that waited too long.
And the cool part about sponsoring the show is this episode is still going to be getting plays months from now.
So send this to them.
Look like a genius and tell them to go to milkroad.com slash sponsor.
Yeah.
And even though there's a bunch of shiny objects in the short term, the long term is still what's most exciting about crypto to me as well.
So I agree with you on that.
Katie, where can we send people to find more of you and your work online?
OK, you can follow me on Twitter.
It's right at the bottom here.
Katie Salati.
Pretty easy.
You can also go to Arca's Twitter.
Also pretty easy at Arca.
And we also have a YouTube page.
That's where you can find all my weekly recap videos.
I try to talk about the market, the most exciting things that's going on every week.
And yeah, that's how that's how you can learn more.
Katie Talati, head of research at ARCA, thank you so much for being on The Milkrow Show.
I really enjoyed this conversation.
I know our audience will too.
Thank you for being here.
Thanks for having me, John.
And thank you all for joining us.
I hope you all learned something today.
There's a lot in this one, so take it slow.
But until next time, stay safe, stay educated, stay bullish, and we will see you all on the next episode of The Milkrow Show.
Thanks for being here, everyone.
Bye.
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