Arthur Hayes & Illia Polosukhin: Privacy Is The Last 1000x (NEAR & ZEC)

本站添加: 2026-05-26

[00:00:00]Guys, welcome back to the Roll Up Arthur, Ilia, good to have you back. The coins are absolutely flying. Arthur is bold up. I'm sure Ilia is too.

[00:00:07]Gentlemen, good to have you back. Thanks for having me. Great to be here.

[00:00:11]As always, it's a pleasure. Pleasure to have you guys. It's been a little while since we had both you guys on, but it feels as if the thesis are converging.

[00:00:19]So, I'm excited to get into it.

[00:00:22]Arthur, why don't we why don't we start by just kind of catching up our audience on the macro thesis?

[00:00:30]And then we'll get into everything going on with AI and near and how these things converge. But you were, you know, sort of cautious there for a while telling people to >> Then went full bull talk.

[00:00:40]>> And then now full full full full [laughter] bull.

[00:00:43]What what happened there in the middle?

[00:00:44]What changed?

[00:00:46]So, I think at the beginning of the year I wrote a piece about how I think Bitcoin was forecasting this AI deflationary credit event and the monetary authorities were not going to print enough money until they saw a financial crisis and earlier how this whole thesis about, you know, the NASDAQ was flat since October when Bitcoin hit its all-time high.

[00:01:05]But Bitcoin was following the US fast ETF IGB down like, you know, 50% whatever it was from 126,000 down to the low of 60,000.

[00:01:14]And I was like, yeah, this is a credit event.

[00:01:17]And then we had February 28th happen in the US. You know, shots fired on Iran and set up this whole, you know, [ __ ] up war. And it crystallized a liquidity positive event for the markets. Number one, AI is national defense. You know, drones, AI enabled drones, AI intelligence is running, you know, some of part of the warfare for for, you know, for all combatants involved.

[00:01:42]And so, you know, governments print money to win war. AI is part of war. The AI capex will be underwritten both in the United States and China by the the governments. And you know, we started to see bank loans and equity investments in chip makers, at least in the United States like Intel, you know, we had to something announced with the IBM the quantum computing a billion dollars uh into them. This is all part of the same theme.

[00:02:06]And on the other side you have countries who basically made a lot of assumptions about how they get their food and energy, you know, through contested waters like the Strait of Hormuz, and now that's very difficult. And now there's, you know, starting to think, "Well, why do I own these US Treasuries when I need to feed my population or to get off my island in the middle of nowhere cuz I have no jet fuel. Holding a US Treasury bond doesn't help me, especially if my ship can't get through the strait." So, I need to build redundant supply of all things that matter, food and energy. I need to invest in different relationships with different trading counterparties. I need to build a [ __ ] pipeline that's lets my oil, you know, get outside of the Persian Gulf with the UAE and then that the UAE. So, all this means is all these savings in the form of Treasuries need to be sold. You're buying real commodities. And again, the US won't allow that to happen. They're going to print the money to plug the hole to make sure the market still go down. And so, I think this the February 20th was a um a catalyzing event for the markets. And so, I believe that, you know, the governments, mostly US and China, and the EU will print money to fund the wartime economy, to fund the AI CapEx, and that's going to leak into Bitcoin.

[00:03:16]And that's why Bitcoin, you know, has done so well. And obviously now we're starting to see a run at least in a certain number of coins. And obviously, you know, two or three of them that I own, you know, near hyphen and Zcash have done very, very well since the 28th of February. But that's sort of my my thesis. And you know, I didn't really do any do many trades in the first quarter.

[00:03:35]I did a few more after the war began, but essentially we've been long these things for a very long time at very great prices. And now we're starting to see some validation in terms of um why we went long these things, you know, 6 12 months ago.

[00:03:49]I I the entire Crypto Twitter is debating whether or not this trade is consensus while all of us were just full port on this thing.

[00:03:58]Like we're like literally full port on this thing. Paid attention to the macro, was you know, watching your you know, episodes on CoinDesk and then some of your pieces and you know, it was kind of shaky and then all of a sudden these two assets NEAR and VVV and a couple others just start flying.

[00:04:16]You know, and so it's it's kind of coming together in this consolidation phase and Ilya, I I really want to get your take on this kind of consolidation of the market. This is not your first you know, quote unquote bear market.

[00:04:27]We've seen this before but it feels especially real right now in the sense that the market is evolving. The institutional allocators are very much here. As Arthur said, the macro environment is also quite kind of shaky if you will and this has led to the way that people are thinking about the industry as kind of much more of an adapt to the institutional era or die.

[00:04:49]And in addition to that, just generally adapt to the new sophistication and maturation of the industry. You need a product. You need revenue. You need real users. And you need a real sustainable path to genuinely positive strong tokenomics.

[00:05:04]From your perspective Ilya, what has happened over the last 6 months since 10/10, 8 months? Why has this market changed so rapidly and you know, from the founder perspective, how do you think about you know, enduring this with NEAR?

[00:05:18]Yeah, I mean I think there's like few different threads that kind of coalesce together.

[00:05:25]I think on a kind of L1 L2 thesis, right? The kind of I actually had a talk I think in 2019 which I said, you know, we're going to have a Cambrian explosion and then we're going to have a consolidation phase, right? Where you know, only few will survive.

[00:05:42]And so I think like we kind of like approaching this now, right? Block space is effectively, you know, uh a very widely available commodity that has, you know, more supply way more supply than demand.

[00:05:56]And the only challenge that existed was like this this commodity was highly not interchangeable. And so, something we've kind of betted on with Near and Ten and chain abstraction was that we can actually make that interchangeable, right? And make that every chain, every asset, and every user can just actually connect uh together without thinking about, you know, which blockspace I'm using.

[00:06:19]I think the return to fundamentals, right? Something that you've been touting for I think over over a year, probably like few couple years at least, uh is happening, right? I think the the markets both like, you know, if you think of institutional investor I but I know when I'm talking institutional I'm not talking about BlackRock and Fidelity. I'm talking about like a funds, right? And and kind of people who are actually analyzing the market. I think the the times where it was like, "Hey, we're going to buy this asset because then there's going to be a bunch retail coming in and buying this asset."

[00:06:54]is kind of going going away, right?

[00:06:56]Retail is a lot uh kind of risk risk-averse, right? I mean, what what Arthur mentioned, right? People are more like, "Hey, can we afford oil and food, right? In the next year right now?"

[00:07:06]than, "Hey, should we speculate on this assets?" And instead is like, "Hey, what which assets are actually generating revenue? Which assets are actually providing product that we use? Uh where can we, you know, if we stake it gives us new capabilities, right? I mean, Hype, you stake Hype you get, you know, cheaper fees, you get more access to markets.

[00:07:26]Uh VV is the same, right? You you get kind of access to compute, same as Near.

[00:07:31]And so, like those are new capabilities that people want that are, you know, entering the market or um and so, like those assets are starting to become uh like the focal point versus hey, you know, yes, I can hold the Uniswap, but uh it's not very clear uh you know, I mean, before especially before fee switch, what what what that meant.

[00:07:56]So, I think that those are two threats that are converging and and really kind of uh kind of creating current current like broader market conditions in crypto.

[00:08:06]Yeah, I mean, the industry has kind of been a crash out mode. I think the bank with bros just broke up. David Hoffman sold all of his ETH. Merch no longer supports soul. He is fully on Zcash.

[00:08:17]Arthur and him are like best buds now.

[00:08:19]Arthur, let's get into it, man. Let's not bury the lead. Zcash privacy, why does this matter so much to you? You know, is this the core ethos? Where does Near Intends come in? Give us the kind of you know, top-down view here. Why are you so bullish on Zcash and and on privacy and kind of returning to this ethos of why the [ __ ] we're all here in the first place, man?

[00:08:39]So, I mean, obviously though the Zcash and the hype of the Zcash is a new thing. I remember when you know, Zcash was the hottest thing on the block in 2016 when it was about to launch mainnet. You know, at BitMEX at the time we listed the first derivative on the price of Zcash.

[00:08:56]That market was nuts back then and obviously, you know, the price went up to something like $3,000 on Poloniex Poloniex, if you remember that exchange.

[00:09:04]And uh Seven to one.

[00:09:06]>> [laughter] >> Seven Bitcoin to one Zcash. It was [ __ ] insane. That was a crazy day of trading. And and then it crashed down as the supply, you know, quickly inflated due to the block reward. But, there were some problems with Zcash. The trusted setup, you trusted Zooko and Eli and all these guys that they weren't [ __ ] you around when they did the whole charade about and they're creating the keys and all that. You had the, you know, heavy subsidy to the team, the 20% of the block reward. There was some consternation about that.

[00:09:35]But, you know, these things are past us now. You know, there's been upgrades to the protocol, which have removed the trusted setup. You know, as we know this cryptographically safe. Uh the 20% has gone away. And so, we have this clean slate and we have enough supply to have a real market, right? It was not just you know, the first genesis block and up and down and crazy volatility.

[00:09:53]I'm sitting at a dinner during uh Token 2049 last year and Naval is there and you know, he starts chatting to me about Zcash. I'm like, and it had ripped from like $30 to something like I don't know, 120 where it had over the over the past few days. And like he's like, "Yeah, I'm big in the Zcash." I'm like, "Okay, well, why?" I you know, I had a I had a big bag of Monero. He started talk to me talking to me about how the ring signatures of Monero are not as strong as you think they'd be.

[00:10:18]They've been successfully de-anonymized by Japanese law enforcement um for a particular criminal case.

[00:10:25]And so, they're okay, cool. You know, this guy is pretty legit, obviously. And I wrapped it in there. I bought a few million dollars worth of Zcash. And what I noticed was like I have a lot of brokers and like two of them would give me a price uh in Zcash because, you know, we don't do privacy coins, right? And all that sort of stuff. So, I'm like, well, if I can't get it, then I want more of it.

[00:10:43]It's like a hot shaka.

[00:10:45]>> [laughter] >> Then I did some more research to validate some of the things that Naval was saying.

[00:10:49]Then I [ __ ] bought some more and I kept buying because, you know, Zcash was hot back even 2016 because we know that Bitcoin is synonymous and not completely private. And a lot of us value that privacy for certain things. There's nothing wrong with wanting to have private money over the internet. And that's what Zcash represents. That's what Monero represents. And as we are learning, the ability for big tech, big government, and AI to essentially know everything about us and to trace everything that's going on in our lives, to have pure just cryptographically be proven privacy with money is going to be super needed. And I think that's why I was like, okay, well, that's why I'm going to make Zcash my second biggest bag, and I've been accumulating ever since, and it's done phenomenally well, even though I, you know, bought well after it 4x off of the, you know, the more rebound $30 Zcash. And so, that was that. Then it's like, okay, well, how does this thing work from a UI/UX perspective? The best app is, you know, what's called, I forgot what it's called before, but it's actually now called Ywallet.

[00:11:56]Um you can use shielded Zcash. So, big The one of the big things back in 2016 was, great, we have the Zcash thing, it works, but nobody can hold it in the shielded form. Everyone's using transparent Zcash, which is just a shitty version of Bitcoin, right? So, like, what what's What are we doing here?

[00:12:13]And, you know, with the uh popularity of Ywallet, now Zwallet, where I can hold shielded Zcash on a a nice app. If you pair that with a Keystone um cold center, now you can have the ability to have a cold storage for your shielded Zcash, and I absolutely recommend anyone who holds Zcash to hold it in the shielded format. Otherwise, why are you [ __ ] holding it in the first place?

[00:12:38]And, so, okay, great. This is a great user experience. Now, let's turn to the fun. We invested in the round uh of Zwallet when they, you know, moved house.

[00:12:46]And then it's like, okay, within the Zwallet app, I can now send any crypto asset I want to anyone across the internet in a an anonymous way.

[00:12:57]From shielded Zcash using Near and Tens.

[00:13:00]Now I'm into, you know, USDT on Tron, and I've sent it to whoever I'm going to send it to in an anonymous fashion.

[00:13:07]That's huge.

[00:13:08]And, you know, they look at the price of Near. You know, it's been it's down a lot of of its all-time high, just like everything else in crypto. Everything goes through cycles, and I thought, well, okay, I think this privacy narrative is going to be a thing. Obviously, Zcash is the first place you're going to go. The second is, if you're enabling people to essentially send the value anonymously using the blockchain at any chain.

[00:13:29]That's huge as well.

[00:13:32]You know, and the economics will catch up with NEAR, and this is a great asymmetric opportunity. Now, obviously I didn't scale the NEAR position as large as as Zcash, but I think NEAR has a 20x potential where, you know, Zcash might have a 5x potential over the next year, something like that. So, you scale the capital that you allocate accordingly to the risk, and and and that's why I think these two assets form the core of my privacy thesis on how, you know, we at Mails are going to profit from the realization that privacy matters in this AI, Big Tech, Big Government universe that we live in.

[00:14:06]Yeah, and and it feels increasingly important as AI continues to, you know, just leech our data. We're willingly giving it over. You know, this is this is why we're starting to see a greater shift into privacy as the the AI overlords are just continuing to, you know, to to suck it out of us.

[00:14:23]Um and so, you know, Ilya, as you're you're coming to understand, you know, how uh authors and capital allocators are thinking about NEAR, you know, obviously there's a big AI story here uh in in terms of identity and rails and all these things that agents ultimately need, but intense is the thing that has unlocked the value from the Zcash ecosystem, and it's very very central to make uh this money productive, right? Um and so, uh you know, I I've got some stats here.

[00:14:54]NEAR Intense is nearing $20 billion of volume, or yeah, $20 billion all time of volume, uh $18.9 billion.

[00:15:02]You guys have generated $33 million of fees off of uh this volume through NEAR Intense. A lot of this has been uh Zcash cuz it's kind of the only place to do this. Um you know, one of the things that Arthur had mentioned in this uh in this bottom, you know, paragraph here that alludes to the next piece is that uh you know, confidential intense uh will create a positive cash flow situation for the protocol. Can you just talk us through how you foresee, uh intense sort of how how you plan on monetizing it? What is the current cash flow situation at NEAR? And generally, how we plan on scaling NEAR intense to, you know, better the entire NEAR ecosystem?

[00:15:42]Yeah, for sure. I think the thesis Arthur outlined, which is you know, we need privacy on chain. And I I would actually double down on that. If we want blockchain to be used in day-to-day, without privacy, that's not going to happen, right?

[00:15:58]Actually, privacy is the mass adoption enabler. Right? If I'm paying for coffee in the coffee shop, I don't want every like the coffee shop to know like how much money I have. And I don't want everyone else in the world know I just paid in this coffee shop, right? Like I don't want the next time I'm paying there, there's somebody waiting for me there, right? So, like if we wanted to do like somebody was just actually uh tweeting about somebody's ether file, like somebody's credit card transaction.

[00:16:24]Like it's literally on chain.

[00:16:25]Everybody's talking about it on Twitter.

[00:16:27]Like this is just like insane, right?

[00:16:29]So, privacy is effectively the enabler for the adoption of crypto, stable coins, and other assets as money in day-to-day in, you know, in actual transactions. Uh I mean, again, if you're doing investments, like I have, you know, 100 addresses for each investment that, you know, like one when I send money, one when I receive money.

[00:16:51]Each of them are segregated. I have like spreadsheets. Like it's just insane, right? Like you don't do that in in a normal world. And so, what confidential intense is really our approach to not just I mean, Zcash offers, obviously, like a a sovereign, you know, govern- government resistant, private asset, which is amazing and and really need this. What we wanted to bring is actually how do you transfer trade, pay, earn, and do everything else confidentially and with all the assets that we support, right?

[00:17:23]150 plus assets. And so, confidential tense is effectively a a private shard on top of NEAR that internally you can come in into the this private shard, you can transact there.

[00:17:35]And nobody's able to effectively access what's happening there. It doesn't require to have, you know, user kind of client-side cryptography. So, all all of the cryptography happens inside. And so, it's lightweight, it's programmable, right? You can write smart contracts and deploy into this. And so, it allows us to, I mean, already we have, you know, trading, transfers, so you can do payments confidentially. And then there are going to be a lot more features coming both with partnerships and integrations across the whole ecosystem.

[00:18:08]And so, I'm really excited because again, I think this is the execution layer for this privacy thesis that really allows to kind of this to go to go broad and and really become accessible. Again, the types of things, you know, payroll. Like nobody uses crypto for payroll because everybody will see how much everybody's paid, right? Like that it's a very basic like invoices. Like all of the different use cases that we all talked about that crypto should do, like they were effectively not really possible when everything is transparent. And so, that's really exciting and kind of really enables for us to, you know, ramp up volume, ramp up transactions. And indeed, we're taking a fee from every single transaction and buying back NEAR.

[00:18:50]And so, that I mean, that economics is pretty straightforward.

[00:18:54]Um And the goal is to continue doing that as well as, you know, across ecosystem we can we've reduced our inflation. And we halved the inflation effectively last November. We're fully diluted. And I mean, I would continue pushing community to try to reduce inflation further uh as we actually getting more and more revenue uh in the ecosystem, so we actually kind of balance the book, right? And and and really start become deflationary, start become kind of uh economically sustainable and and and profitable.

[00:19:23]>> to further on Ilia's point, like the fully diluted pieces I think super important if you want to talk about an L1 that can really perform well in a in an up market. There's lots of L1s that do all sorts of fancy [ __ ] but like there's a [ __ ] big-ass bag of VC donkey do-do above your head that's just waiting to sit on you. It's >> [laughter] >> You want You want the clear water runway to run, and then NEAR has that by just the virtue of just being around for long enough to clear that. So, it's it's a su- it's a great asset to have that blue sky in front of you. Like there's nobody in front of me dumping donkey do-do on my head.

[00:19:59]Yeah, everybody who wanted to dump already did, so.

[00:20:03]Yeah. Yeah, it's been what, like 3 years?

[00:20:05]>> [laughter] >> So, it's Yeah.

[00:20:09]It's one of the few fully diluted tokens that's out there, especially, you know, one of one of the only L1s that's out there.

[00:20:14]Um and so, you know, it's already got, you know, 30-plus million dollars of cash flow. Uh you know, this is uh you know, one of the main revenue drivers. Ilia, how will intense What Maybe you can just speak to the rest of the AI functionality that NEAR has, NEAR AI, Iron Claw. There's There's several products that you guys have now. What is maybe the most exciting of the product suite and how you see this fitting together with confidential intents? And if you can, speak to the revenue potential of some of these some of the rest of these products and ultimately how they can also uh help to affect, you know, the general situation at NEAR that we're talking about.

[00:20:52]Yeah, I mean, so the high-level thesis is in the future, we're going to use computing with AI, and the blockchain is how everything will get executed, right?

[00:21:03]And so, that's why we're we're doing these two parts in parallel and really tying them together. And so, AI, same thing. You want AI to be private. You don't want effectively, you know, labs to harvest your data. Like right now, there's actually harvesting everybody's data so that they can train better model. And then, you know, someone's subsidizing it with subscriptions. Um and so, you really you really kind of want to prevent that. You want to give more context to these models. You want to give them more more access.

[00:21:32]Uh again, if if it's something that is run by a third party who you you have no idea what they can do with your access.

[00:21:39]Like, you know, you give them your credit like your crypto account or your bank account. Now, they can be harvesting that data as well or even like send a transaction on your behalf.

[00:21:47]You wouldn't know. Like all of that you want to prevent. And so, that's what we're doing on the AI side is creating privacy and security-focused uh kind of agentic experience. And then, in essence, the execution arm, right?

[00:22:00]Same as, you know, you do for payments yourself right now manually. I believe a lot of it, if not everything, will be done by your agent, right? You effectively will delegate to it. If you trust it, if you give it all the context, you'll be able to delegate everything from daily shopping to, you know, uh positioning you with like a hyper liquid, you know, hedge spot position, you know, uh add some prediction markets uh to top it off, right? Like you you will say like, "Hey, I I want to take this position, you know, I think tomorrow something will happen. You know, create me this thing and it'll go and find all the right assets in right combination and, you know, create that position. Right now, manually this this going to be insane, right? I I have this example actually with IronClaw right now. You can drop your uh address like your crypto address and it'll analyze all your assets and positions and suggest better earn opportunity, right? Better yield like how to position uh across different protocols. But you can imagine that being like a lot more uh scaled up from there. And so, that's where like these two pieces really work together.

[00:23:02]AI, think of it as like your new computing interface and intense is the the commerce layer behind it, right?

[00:23:09]Again, not just for regular payments, but also supply chain work, uh goods, right? All of this will be flying through because like it's so much better approach to uh finding, negotiating, and settling deals than uh your traditional, you know, emails and invoices and billing that that operates right now. So, those two pieces that work together, and we have like a very specific example we call agent marketplace where agents can actually hire other agents to do work or to deliver goods. And so, that's kind of the glimpse of this future. Uh it's still early, but we have like first actual like real-world businesses using this where effectively, you can hire an agent to, you know, source you some, you know, components for your uh for your supply chain, or you can hire an agent to build you a marketing website, or you can hire an agent that will build a uh you know, application, or you can hire an agent that will write investment copy. And that agent is runs on our verifiable compute, meaning you know what it's doing, right? You can inspect what happened.

[00:24:17]It runs on, you know, our secure infrastructure, so you know you can give it access to some of your contacts, right? Like one of the reasons why we hire people into the company is because we actually need to give them access.

[00:24:30]And historically, it's been hard to give access to third parties. Well, with agents who run on verifiable secure compute, you can actually give them access to uh to get all the information from your company. And so, what I'm describing here is really changing how labor and supply chains work. And so, our target market here is really all of the labor and supply chain total market like running on intense.

[00:24:55]Yeah, I mean, you can see that the the AI and the intense crossover, right?

[00:25:00]With the agents using intense to transfer value, people wanting to actually use confidential intense to you know, use their Zcash or or or transfer that value. And so, there's kind of like while people may argue like NEAR has a fragmented approach, you can kind of see that from the beginning you know, I think one can infer that you've had this vision for quite a while, right? And and and I think it's important to kind of establish that.

[00:25:28]Yeah, I mean, well, when we started in 2017, the thesis was that AI will be how we build software, how we interface with computing. That was 2017, and we just realized we needed a blockchain to really like make this happen. And so, that's when in 2018 we we focused on NEAR Protocol. But yeah, I mean, those pieces were always kind of part of the DNA here.

[00:25:48]Yeah. And Arthur, man, I think I think people want to hear about Hyperliquid. They want to hear about what the hell is going on with Hyperliquid at that 6140 right now. I mean, wow. I I feel like these the Zcash and NEAR privacy trade is like is far different than Hyperliquid, but it's all part of the same kind of like puzzle, which is privacy's very important. It's a core part of the industry. It is very empowering and liberating, and it's extremely extremely extremely mispriced based on the lack of privacy in in the world today, especially for money. Hyperliquid is the best shot at having DeFi and DEXes overtake centralized finance. Like, you know, a lot of us forgot that we came here in in a sense to take over TradFi, to be the actual financial system, to be an alternative at the very least, right?

[00:26:42]And a lot of that dream has been kind of sucked away with high FTV, low float scams, infra, yada yada yada. But Hyperliquid is kind of like this golden child of fulfilling that dream and vision. And so, while these two theses are far different, Arthur, they attract a lot of the same people. Here's kind of what your high-level Hyperliquid thesis is. Where is this thing going?

[00:27:05]Um and why you so bullish up on it?

[00:27:08]I mean, what are the What is the What are the What is one of the killer apps of crypto?

[00:27:12]It's exchanges. Who are the wealthiest people in crypto? Exchange owners, right? I mean, BNB is still what? Number four or five largest cryptocurrency. It's not even a cryptocurrency. It's CZ's computer and some chain he launched, right? So, like we know how to make money in crypto.

[00:27:28]It's just that people want to trade make make it hard, like infrastructure and RWA and yada yada yada yada, right? Like exchanges make money. We know this.

[00:27:39]Right? The goal of exchanges at the end of the day is we have the internet, we have blockchain. Let's let anyone anywhere trade anything. And let's add some leverage on top of it to make it fun.

[00:27:51]And you know, that's what we have been doing. You know, I've been in the I've been in the centralized exchange game.

[00:27:56]And we all knew that we're moving towards this DEX feature. And it started with dYdX. It was the first, you know, golden child of DEXes. And that did extremely well in terms of the price performance from 2020 to 2021. And it kind of lost the plot. Uh you know, they try they try dYdX is literally trying to do all the same thing as Hyperliquid, just that it's well executed. And the tokenomics were fugazi. Then we have something like GMX um in the lull of like 2023. Yep. They had a a good model.

[00:28:23]Again, you know, they could have worked on some things with the tokenomics uh in terms of the way and a number of assets listed. And then you had a former high-frequency trader like Jeff and his team.

[00:28:33]Very good engineers. And you know, they actually they shipped the good code. And the number one thing they did was they fixed the tokenomics. Because perpetual swaps is not a new thing. You know, we created them in 2016.

[00:28:46]Decentralized exchange is not a new thing. It's been around, you know, since 2018, 2020.

[00:28:51]All right, but it's really getting the tokenomics right. No VC sales, only a team allocation, and pretty much all revenue going back to token holders.

[00:28:59]Like no other project does this at scale in terms of the revenue that hype generates. And that's why it's so successful.

[00:29:06]And that's why people are so involved in the ecosystem to such an extent that when they launch HIP 3, the ability to permissionlessly list markets.

[00:29:15]Now you are able to trade Nasdaq and S&P and oil. And again, these are all secret small markets in January and December of last year. But the fact that politicians like to [ __ ] around with us on the weekends means that there's no price discovery.

[00:29:31]And so, you know, they get 3 days of a free out free roll on what's going to happen with public opinion. But now we have Hyperliquid. And now it's the only place of price discovery on the weekend and decent enough liquidity and everybody can trade it. It's not just anyone with, you know, a US brokerage account that can trade these very important price signals to human civilization. And now you're having, you know, TradFi media mouthpieces writing about Hyperliquid because it's the only place they can go. If they could go to CME and talk about the oil futures CME on Saturday, they would. And they would completely shut Hyperliquid. But they cannot ignore Hyperliquid because it's the only place available to trade. And everybody can access the data, everybody can trade. And that's why now we have this flywheel effect that people starting to learn about Hyperliquid, understanding that the revenue goes back to you as the token holder. You get fee discounts if you stake enough hype. Now you can participate in listing your own markets on Hyperliquid. And so it's it's becoming a self-fulfilling prophecy. And that's why, you know, it's I guess it's through its all-time high.

[00:30:32]I think it's going much, much higher because again the the TAM is the easy TAM is just like, okay, centralized exchange trading volume, right? And yeah, Hyperliquid is it's like don't know, 7 or 8% of that market and it's only going to trend higher because they list more funds to leverage is higher and it's easier to use.

[00:30:49]Yeah, Arthur, the market cap of Interactive Brokers, I believe is 153 billion.

[00:30:56]In that range, around 150 billion.

[00:30:59]Yeah, and and I mean just if they just take Binance's volume, you either think of the 10 to 15% of Binance perps, like the price of Hyperliquid will be much higher than it is today. So, they don't they don't even need to reinvent things going into the trap. I will be just we have a captive number of traders with, you know, stablecoins or other crypto assets who are trading and spending a lot of money on centralized exchanges who want a different type of experience and want to actually own a piece of the exchange for reals.

[00:31:26]Yeah.

[00:31:27]Yeah, and hype and near both absolutely ripping as we record this pod on May 21st at 11:43 a.m. Eastern. Um, I I want to I want to I mean, we're talking about TAM and and some some big, you know, addressable markets here. Ilya, you know, you you put out the number or you put out the the total addressable market of all human labor, which I think is is interesting to think about, you know, wages and salaries makes up 11.7 trillion dollars annually to give it a numerical value to the sense of the market size. Um, and and how you know, agents are increasingly becoming, you know, part of of the workforce. Arthur, you also had part of this AI displacement theory as part of your thesis and how this would actually lead to, you know, this consumer credit meltdown.

[00:32:17]Could be a bumpy road in, you know, the interim, but ultimately that would lead to massive money printing.

[00:32:24]I'm curious how how, you know, you guys both see the AI labor displacement. How how you see this playing out? Will this ultimately lead to agents? Are those agents going to be on chain? You know, how is the economy going to react to this, Arthur? And and Ilya, how can we prepare for this inevitability to ultimately make this as smooth a landing as possible?

[00:32:48]I mean, I think the dislocation of labor and AIs very dependent on where you live, right? If you think about let's stick to America where I'm sure a lot of your viewers are from or lives.

[00:32:59]The type of people who are losing their jobs are those who are most protected in the United States as high-income earning white-collar professionals on the coast, right? You wouldn't This conversation was not being had about, you know, the blue-collar worker in the Rust Belt when they were losing their jobs due to the addition of China and its low-cost labor to the global workforce.

[00:33:19]Nobody cared and obviously Donald Trump and other politicians gave them a voice after they already lost their jobs, but like no one was having this conversation right now in, you know, 2005 when the Rust Belt was getting gutted in the United States. But because the type of person who's losing their job in the US is a college-educated person on the coast, high-income earner, very politically active, they will be protected. And I don't know what that what that solution is going to look like, but they will be protected.

[00:33:44]The Indian, the Bangladeshi, the Filipino worker in the back office processing center for an American company is going to lose their job immediately. No one's going to care what happens to them. They'll be out in the street starving, educating, whatever.

[00:33:56]Like that's where the violence is is really going to We're going to see that.

[00:34:00]Maybe you won't see because you're not going to tune into the mainstream news to look at it, but that's that's a difference in the situation in terms of the the displacer. They can't print their way out of this. They're just [ __ ] The United States can print their way out of it because, you know, the US dollar is still a reserve currency and that is going to impact financial markets that are mostly concerned with, you know, high-net-worth Western individuals. So, it's unfortunate, but I think it's going to be very bifurcated situation depending on where you where you live.

[00:34:27]Yeah. Um yeah, go ahead, Ilya. No, I mean that I think the the displacement already started, right? It's just like it's also not evenly distributed as well. Uh, I think the the only opportunity is to be on the forefront, right? Kind of the way we talk about is like, hey, you need to like you need to use these technologies to the to your leverage to uh and really enable like learn quicker, apply them faster. Like there's there's a massive opportunity right now to use these technologies to because like it now it doesn't matter like if you don't know something, AI knows it and can help you through it. If you, you know, you don't need to be in a specific country to start a business that can accept global currencies, right? With, you know, intents and kind of uh crypto in general. So, like the opportunity is there. Like this this is the best time.

[00:35:21]Like there's hasn't been any like any other time in the world where it was so easy to do things and run businesses globally uh because you can effectively uh but you need to do it. Yeah, you need to you need to have the agency, you need to have the uh kind of the sovereignty to to execute on this. And I think this is actually where uh to me this is where ZK, Hive, Near, that thesis is really coming from like the sovereign sovereignty that people want to feel, right? And really want to execute on. Um and so I think that's like almost like the you know, coming back to some of the core movement of crypto, right? That that kind of started this whole thing.

[00:36:05]Uh and I think that this is like the time to to for for anyone to lean into this and and uh uh really kind of pull pull pull yourself out, right? If if you haven't yet. Um so, yeah, I'm I'm kind of like this is exciting times for people who willing to seize opportunity.

[00:36:22]Yeah. And Arthur, from the capital allocation perspective, you think it it is the idea here that, you know, broadly we we could see consumer credit and and, you know, kind of a this bumpy road in the interim, and that's going to lead to, you know, generally not not a a state of market affairs where everything goes up at once, but that's the reason why we're seeing a more secular bull run. Elliot described this sovereignty thesis, this privacy narrative, because those are in reaction to the the greater narrative here.

[00:36:52]Sure. And I guess liquidity will not flow every I mean, the good thing about Bitcoin is that if there are more units of fiat tomorrow than today, it will go up in price mathematically. Just that's pure math. But like everything else is very narrative driven.

[00:37:05]The only things that are really doing well, if you think about like sort of global capital markets, is AI stocks.

[00:37:11]Period. End of sentence. Right?

[00:37:13]Everything else is pretty much [ __ ] Because most people are impacted in a negative way in terms of this AI Whether you're a business that sells to somebody who lost their job, or you're self are not spending, or, you know, a particular swath of the workforce is no longer there. Like or you're getting cut out of the capital mar the the credit markets because AI hyper scalers are taking all available credit. Because every government believes that they need to finance AI capex boom, and they're going to deprioritize everything else.

[00:37:43]And so, it's we all think this is an amazing bull market. Yes, there's, you know, selective cryptos are doing well, but it's really just AI stocks. It's really what's driving this. I think it's going to continue going higher, but this is not like it's a general rising all tide that's rising all boats or whatever the hell the [ __ ] metaphor goes.

[00:37:59]And and, you know, I and I think you've written a little bit about this in your in your latest pieces, but like when does the music stop, if ever? What what are the signals to watch out for, you know, when we start to realize, okay, you know, maybe there's less, you know, money printing as a result of AI capex spending? I mean, it could be a mega IPO. I don't think the SpaceX IPO is big enough. I think they're only raising something like 75 billion of new actual capital into the listing, but I haven't looked at it yet.

[00:38:26]I think it's going to be politics. And I think at least in the United States and Western economies, which are the ones that where the capital is in the first place, you're starting to see a message, and I think it's going to be a very seductive message, which is we humanity and our interactions did provide the data for Elon and I don't know, all these guys to get very, very wealthy. Where is ours? It's not like AI can exist without the sum total of all human knowledge and interaction that's happened for the past 10,000 years. Yet, me or my community is getting [ __ ] Higher electricity costs, pollution in the water, minerals no longer available to build the data center. Where is mine? And so there's I think in the United States there's going to be a very cogent political message that's going to attract both Democrats and Republicans to a Democratic challenger. I think it's going to be AOC. I think she is going to be the Democratic nominee for 2028. And 28?

[00:39:21]Way, dude. And I think investors are going to freak the [ __ ] out. Wow.

[00:39:26]>> AOC although I disagree with a lot of things that she says, it makes a lot of sense.

[00:39:33]Um if you're somebody who is not long Sanders 50X up in a year. Yeah. And the investors are starting to see that like, oh well, if there's going to be this massive progressive taxation on the AI profits, that's not to say that the business is not going to make any money, but am I paying 100 times revenue for a business that's going to have a 50% AI tax slapped on it? [ __ ] no. And if she starts to pull well versus, you know, Rubio or J.D. Vance or whatever Muppet the Republican Republicans put up after Trump, then you're going to see yourself maybe I should take some chips off the table. And once you start asking questions about the future like that, then it's it's over until there's some clarity after the election.

[00:40:12]Yeah.

[00:40:12]>> So I guess it could be a mega IPO, but I the more I think about it, the more I think it's going to be, you know, an AOC or someone like her in advanced Western economies gaining traction with this message. And investors starting to say, I disagree.

[00:40:28]However, it makes a lot of sense for people and therefore I need to, you know, take some chips off the table.

[00:40:34]AOC running at 9% to be the Democratic uh presidential nominee for '28.

[00:40:41]Under underpriced according to Arthur.

[00:40:43]>> Yeah. I know who this is. Is Gavin Newsom? I think Gavin Newsom's got a lot of bad baggage with, you know, the this management of uh of California and I think it's going to be very tough for him to dig himself out of that. I think AOC, she's starting to hint at the right message in terms of how she can really cut through about issues that affect everyone in lots of communities in America who are impoverished by the inflation caused by the buildout of AI capex, but do not own enough financial assets to part to really participate in the upside.

[00:41:13]Yeah.

[00:41:14]Ilya, you're in SF right now. Anything to add there? Just kind of, you know, been there for about a quarter or something. How, you know, is does it feel like there's a lot of excitement?

[00:41:23]Is it, you know, crypto '21 vibes at conferences? Is Is it bubbly? Is it um are you doing a lot of investing? Like what's kind of the scene on the ground there?

[00:41:32]Uh I mean, definitely like everyone's doing AI, right? Like you stand in line, you know, to get some food and like everybody around you talking about agents, so.

[00:41:40]>> [laughter] >> Uh I mean, it it it definitely feels as as the same like a bubble and, you know, just like fundamental shift that happened. Uh and and we kind of seen playing out.

[00:41:54]Um I think crypto is definitely less, right? Like back you know, across '20 '19 '20 '20 '21, I think like in our bubble, yes, crypto was hot, but like the normal world wasn't affected, right? You still, you know, you would like people would invest, but they wouldn't use, right? Now right now everybody's using, building, kind of in some way interfacing with it. And we see this, you know, with Anthropic's revenue and kind of other adoption metrics across the board.

[00:42:23]I think the Yeah, I think the the transformation that this brings, right?

[00:42:28]As I said, like every business is effectively pivoting to do something with AI, right? And if they not, they probably going to become obsolete one way or another. And so And I think this is We also see this in crypto, right? Like crypto is actually shrinking. The There's not my many new founders coming in to start. So, yeah, I think from from like early stage like angel seed investment it's also I would say been pretty hard because There's like in AI right now there's a bifurcation. There's either people raising a billion seed seed round, which at that point you're like, let me do the math on my angel investment of 50k.

[00:43:09]>> [laughter] >> And if that makes any sense, or you know, people are trying to raise for like what I call kind of a traditional approach, okay, we're going to build some SaaS for specific use case to do this thing. And it's like they're competing effectively at the the person who's doing that job at the company just using, you know, an AI agent and telling it exactly what it needs to be done and it's just doing it, right? Like they're building a SaaS effectively a SaaS trying to catch up with experts who already can just in English describe exactly what they need and software just gets built for them. And so, it's really hard to like measure in can they actually get escape velocity before the general tools become so good that you don't actually need, you know, an engineer to go in like codify the things that a person can just describe. And so, yeah, I think it I think the space is is really interesting, right? There's a lot of excitement, but at the same time, I mean, we see this with Anthropic, right?

[00:44:04]Every like they just have like two, three people team that just ship a product that just like live out of the vertical, right? And so and like the reality is because they have a horizontal platform that's so that's so generic that you can customize it into anything.

[00:44:19]Yeah.

[00:44:20]Guys, we've got a few minutes left.

[00:44:23]Do you guys have any questions for each other? You know, Illia is a builder, Arthur capital allocator.

[00:44:28]Arthur, anything you want to ask Illia about, you know, to inform the thesis for your next piece or Illia, what you know, what we should Do you think that NEAR is going to be deflationary in terms of the revenue generated from all these amazing things you've described versus sort of the uh the endemic token inflation that's baked into the protocol?

[00:44:47]Yeah, I mean, the goal definitely target next year. Um and like again, like we'll we'll push to uh keep reducing inflation. I think I think the there's something that like you know, a lot of builders in kind of blockchain space have talked a lot that like we've overpaid for economic security. Like it's really not like it's not really worth the that much. Um you know, what we're paying. At the same time, it's actually been like economically politically economic hard to actually reduce inflation, right? Um and so we've been, you know, we've been building out governance mechanisms to actually do execute on that like in in a in a straightforward way. So, I'm kind of I'm I'm kind of pretty confident we can, you know, get the community to the level where it's like, "Hey, look, as the revenue grows, it makes sense to reduce it and actually really balance it out."

[00:45:42]So, uh so again, next year with both like growing revenue and reducing inflation.

[00:45:47]And also we have we're working on a few uh interesting ideas around like how can we fund security and validators in a different way that goes beyond just like traditional inflation.

[00:45:59]Uh yeah.

[00:46:02]Yeah, Arthur, um I'm curious if you think that this rally that's ongoing is going to stay pretty much with these top couple assets or you know, how quickly it may kind of permeate to the rest of the space and if that's kind of detrimental to the entire idea of having a couple top leaders of the market that people can pile into and you know, keeping the the sustainability of uh of this rally going. I mean, every vertical has stars and dogs. The stars create the validation for the dogs to exist. And so, there will be the dogs of privacy, the dogs of um DEXes. And you know, very talented traders will be able to play that um that bifurcation.

[00:46:44]You know, for a capital allocator like me who doesn't really want to spend all day looking at screens, like I've picked my assets and I'm going to hold until the macro changes. Yes, I've got price targets out there, you know, $150 for hype. But, you know, as a you know, people know, like I'll change my mind in an instant if the macro macro changes. If it's the government's saying, "Okay, we're no longer going to fund all this AI capex with debt when it eventually runs out of the cash flow to pay for it." You know, that's a a negative signal. You know, if this Iran war thing goes off the rails, um that's a negative signal as well. So, again, but you know, long and strong.

[00:47:22]The trend is our friend until it ain't.

[00:47:24]Gentlemen, thank you for joining us.

[00:47:25]Awesome episode. NEAR, Zcash, Hype, the trifecta.

[00:47:29]Awesome. Thanks to talk. Always guys.

[00:47:30]Yeah, lots of fun. To the moon, baby. Go kill it.