How a Top 100 Hyperliquid Trader Finds the Next Big Trade

How does a top 100 Hyperliquid trader find opportunities without blowing up? David Hoffman sits down with KoolKrypto to unpack his risk-first approach to perps, how he spots mispriced DeFi tokens, and why buybacks change the investment case. They debate the upside of Hyperliquid versus Lighter, the bull and bear cases for Zcash, and why crypto options could become the next major growth market. Plus, how a changing macro environment could set up crypto's next inflection point. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near2026 🌍 RIPIO | LOCAL CURRENCIES, ONCHAIN https://bankless.cc/ripio 🛡️VIZOR | THE WALLET ZCASH DEVS USE https://bankless.cc/vizor 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless --- TIMESTAMPS 0:00 Trading Without Blowing Up 05:25 KoolKrypto and the Revenue Meta 10:53 The Bull and Bear Cases for Zcash 24:16 Options vs. Perps 30:08 Valuing Crypto Exchange Tokens 37:09 Hyperliquid vs. Lighter 47:17 The Crypto Options Wars 56:55 The Next Crypto Inflection Point --- RESOURCES KoolKrypto https://x.com/koolkrypto223 --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Big Station, I am here with Cool Crypto. He is a big Kool-Aid man on crypto Twitter and also a top 100 perps P and L trader on a hyper liquid, at least that's in his bio. Cool, what does it take to be a top 100 perps P and L trader? How do me, how do I and the listeners become one of those?

• 0:24Speaker 01

  You know, there's, there's a good case to be made that some of it might just be survivorship bias, if I'm being completely honest with you, of the people in the top 100.

• 0:32Speaker 01

  Well, I'd honestly, I would say just like all of crypto is just not blowing up. Like, like it's, it's so much more about risk mitigation. Like I literally never use more than 1X leverage on like the entire portfolio or incredibly rarely. And so I think, I think for most of the guys who are there, they just avoided big blowups more so than they necessarily even capitalized on big opportunities. Cause like the big opportunities in crypto are so readily apparent in my opinion, like there's some massive dislocations that happen in crypto. And so as long as you're just alive to take advantage of them, then you're kind of naturally kind of drift up in terms of P and L. So, yeah.

• 1:03Speaker 00

  In terms of capturing P and L though, upside, is it more about being statistically correct? Or is it like, is it one single trade that you held on for size over a long period of time? That climbed up the P and L leaderboard the most? Or is it more about just like the consistency on smaller wins, like singles or home runs?

• 1:26Speaker 01

  Um, it's, it's, it's a, it's a good combination of both. I would say this year in particular, I've had a couple of big home runs on, on some like actual spot tickers more so like, like derive or kinetic or some other things. As far as like the perps, you know, go funnily enough, like a lot of the perps P and L on hyper liquid specifically is actually like different times of hedging hyper liquid on perps while still like holding some on spot. And a lot of those are just like, there wasn't really any like massive short that I hit on hyper liquid. It was just kind of like, you know, generally identifying local tops hedging and then like buying back and, you know, closing it out lower. So yeah, there's, there's not really any one big, you know, huge perp trade. Like I know that there's a couple of guys on there who have like massive like near and Zek, like they just have one massive trade that they just became almost associated with and known for.

• 2:09Speaker 01

  Definitely not my style. Kind of the same thing there is, I would say on perps especially, it's much more singles, whereas like on spot, kind of like long-term holdings, it's, it's a bit more home run.

• 2:18Speaker 00

  You think the, like the perps leaderboard itself is signal at all? Or is that kind of actually just like a noise based on like who's ahead in the moment, but doesn't actually give any sort of like unique insight?

• 2:31Speaker 01

  I've actually done quite a bit of analysis. No, no, no, no, definitely. Yeah. I've done quite a bit of analysis in this actually specifically of like, what is, what does it look like the copy trade guys? There's, there's a little bit of signal, like it's good, it's obviously good to know if you're in a position and there's some massive hyper liquid whale who's long, you know, 30 million of near or something like that, like what they're doing with it, obviously. You can go kind of stalk them. But as terms of like actual like long-term, like who makes sense to copy trade? The problem with it too is that you just don't know what's going on across the board, right? Like for you, no, no idea of knowing that like, oh, I might be long 50,000 like hype on, on there, but I might be short somewhere else. Right? And so it's one of those things where it's pretty difficult to separate out some guys who are doing like delta neutral. Like it's, it's always funny to me, like guys will point out, it's like, oh, there's this massive whale who's short $200 million of Bitcoin.

• 3:14Speaker 01

  And they don't know that that's just like a Braxis capital, because this delta neutral like funding rate or arbitrage fund. And, and so like a lot of guys will kind of like whale watch and see like, oh, like the biggest P and L of today was this guy. And it's like, dude, that guy was just, you know, farming funding rate essentially. And so it's, it's, it's difficult to tell guys who are doing that from actual like taking directional trades. But I definitely think that you can get a decent bit of signal by curating a good list of guys who, you know, consistently win, kind of looking at what they're doing, understanding what they're doing, contextualizing what they're doing, I think is important too.

• 3:44Speaker 01

  So yeah, I think there's some signal, but you, you definitely have to contextualize it and say like, okay, is this actual like delta neutral or are they actually taking directional trades? And then also kind of understanding their worldview, like how they trade, like seeing like what type of style they have as a trader and to see if that fits your, your style as well.

• 3:59Speaker 00

  How much time would you spend, uh, would you say actually kind of going through other traders on hyper liquid or lighter or ever who have positions open? How useful is that? Like, how much time do you spend doing that activity to just ascertain what people are doing in the market? And like, how, how do you fit that into it's like a broader, broader like pattern of behavior in order to like make a position happen?

• 4:22Speaker 01

  I, I did one pretty big deep dive where I wanted to go actually see, um, like for example, uh, hyper dash is pretty interesting for like, they have a pretty good UI. Where it's nice to see like, it'll show you like very profitable guys, like they'll give them like a copy trade rating. And so I like, I looked at some of the analogues on there to see. And when I, when I figured out that there's not a tremendous amount of signal that you can glean from it consistently, at least like broadly, like I said, maybe on like a per ticker basis you can. Then I, I don't spend a ton of time, but like I said, like if I'm in a huge trade on any particular single ticker, it's like, I'm definitely going to be watching what the biggest position holders on that are doing. Um, and so for that, it's more of like a live updating, just making sure, you know, no one's doing some massive T WAP out. And like, that might influence my like limit orders or something like that, right? To like, you know, with catch.

• 5:06Speaker 00

  Right. So it's better, it's better to inspect these things when you have exposure to a particular trade and you know exactly what to look for. But it's not necessarily as informative about making a trade or entering a position. It's more after the facts. Is that what you're saying?

• 5:21Speaker 01

  Definitely. Yeah, exactly.

• 5:23Speaker 00

  Yeah. Maybe can you give us, uh, me and the listeners a little bit of background on who you are? As I said in the intro, you're a Kool-Aid man on Twitter, so you're semi-anonymous. What's your perch in the crypto industry? Like, what do you focus on? Uh, how have you sharpened your stick?

• 5:39Speaker 01

  Oh, sure. Yeah. So, um, I've, I've, I've given like a background. Um, it's kind of, kind of the same thing as, as I've said before on, on other appearances. Like I was just very early to crypto, mined Bitcoin quite, quite early on. Ended up getting very deep into DeFi very, very early on, really, really enjoyed the fact that it felt like a really big zero to one jump in terms of like the actual use case of crypto going from just like, okay, cool. This is like pet rock hedge against inflation type of, type of, you know, tokenized gold type of, type of asset. And so like, oh, this is actually useful. We can trade, we can borrow, we can lend all these different things. And so, yeah, very, very big into DeFi very early on.

• 6:18Speaker 01

  And then I ended up starting a fund a couple of years ago to, to kind of long the expression that like, oh, I think DeFi is going to actually, you know, somewhat change the world. And I was, I was extremely early and wrong actually on, on the revenue meta. Like I thought the revenue meta was going to happen a lot earlier than it ended up. So, you know, I kept trying to say like, you know, tokens like GMX, for example, it's like, oh, they're so cheap on like a PE ratio back when people are like blasting billions of dollars in the meme coins. And so, um, my, my like frame of reference for a lot of crypto right now is, is more of from the point of view of, of like, you know, revenue meta, DeFi, et cetera. But I don't actually have like any real trad5 background. Um, like I never worked traditionally in any sort of, you know, banking or trading setting.

• 7:02Speaker 01

  Yeah, exactly. Yeah. Entirely self-taught in crypto. Um, and so like, I've been close to a lot of that side of the industry, like increasingly more so over the past couple of years of seeing like what institutional trading like ends up looking like. But never, never really had any experience in myself beforehand.

• 7:16Speaker 00

  Yeah. For Big Station, it's more and chronically online on Twitter, revenue meta is this meme where there would finally be a rotation into revenue generating assets. And we would like leave this era of like fake value capture tokens, meme coins behind, and people would buy, would rotate into quality. I would say lately, at least 2026, that has decently happened. Uh, you know, pump generating a ton of revenue, hyper liquid generating a ton of revenue. Do you think there is more revenue meta rotation ahead of us? Have we kind of completed that? Like revenue is actually valued as much as it ought to be in crypto? And where do you think we are in the expression of the revenue meta?

• 7:57Speaker 01

  It's, it's actually like a really interesting question that kind of goes into like a broader theme, which is the fact that especially with like recent midterm results, for example, you're actually kind of potentially going to see a rotation out of the revenue meta tokens. Because they're a little bit more sensitive to regulations. Um, and then people are kind of more so long, the more store of value tokens. And so like Bitcoin and Zek are kind of positioned, like you, you saw gold rally, for example, like with the midterm results. And so it's this presumption of like, okay, like, you know, rates down, spending bazooka to infinity back on. And so that's more favorable and more supportive of the store of value assets. It does, it's not to say that the revenue meta is over. I would actually say quite the opposite. Like I do think that there's still going to be a very, very pronounced like, you know, flight to fundamentals in crypto.

• 8:42Speaker 01

  And a lot of that just does come down to like, you know, does your token actually generate revenue? But I will say that it's like, yeah, from, from a regulatory perspective, those tokens tend to be more under threat than the store of value tokens. And so we might see an interesting rotation out of some of those revenue meta tokens into more of the Bitcoins and Zecs of the world.

• 9:00Speaker 00

  You're in the camp that like, there's a store of value coins, Bitcoins, Zek, and there's revenue generating coins, hyper liquid, pump, derive, and that's it. It's like, if you're anywhere in the middle of those two things, you're in a bad spot and you need to pick a direction.

• 9:15Speaker 01

  Kind of like the tulip king, either you are money or you make money type of thing.

• 9:19Speaker 00

  Yeah.

• 9:20Speaker 01

  I would say to an extent, yeah, like I, I think, I think that it might be a little bit of an oversimplification. I think, um, I think ETH is a really good example of something that kind of falls in between. I don't, I don't necessarily know that it's fair to value Ethereum either as, as it, you know, makes money or as it pertains to like being considered money. I think there it's like, there's this kind of concept of like Lindiness with regards to like, how broadly can a like credibly neutral settlement layer be adopted? And like, how do we value that? And if there is a really good precedent for it? And I'm not really sure that it just fits into that binary framework, but either is money or makes money.

• 9:56Speaker 01

  But I would say, yeah, generally speaking, it's like, if your token is not generating very attractive like PE ratios and, and is, is trading at like a relatively favorable amount of, of revenue compared to float. Yeah. You better hope that there's some external like, like value that's being placed on that, on that token. That's not just like, you know, sentiment based, right? It, you, you kind of need it to have the Lindiness of Bitcoin, for example. I think that's even kind of like a problem that Zek has right now too, where it's like, it's kind of different, like it wants to be a store of value token.

• 10:28Speaker 01

  But it's just, it's, there's just such a gulf between it and Bitcoin with regards to how it's perceived. That it's, Zec, I still kind of think trades almost closer to a meme coin, not to say that it is a meme, but it just trades closer to a meme coin with regards to sentiment and momentum as an expression as opposed to Bitcoin, which has a lot more lindiness and backing and support and just kind of time hardness to it.

• 10:51Speaker 00

  Go into that a little bit more, where it contributes to the gap between Bitcoin and Zcash. It's just like Zcash is younger and doesn't have the same sort of recognition? Or like, what goes into why Zcash is so far away from Bitcoin?

• 11:03Speaker 01

  Yeah, I mean Bitcoin is synonymous with crypto, right? You know, when you talk about crypto, that's what most people kind of like minds jump to. And so like, if there is an argument to be made that there could be this globally accepted store of value token, you know, Bitcoin is orders of magnitude more likely to be adopted than something like Zcash. I think the problem with Zcash too, is that it fixes a lot of problems that I guess like normies or non-crypto natives don't even necessarily know to think about or exist. It's like when you, when you talk about the fact that it's like quantum resistance or all these other things. It's like, it almost just educates people to the fact that quantum is a problem for Bitcoin more so than it, than it promotes the benefits of Zcash.

• 11:39Speaker 01

  I think the interesting thing with Zcash too, right now is that it is such a crowded consensus crypto trade because of the fact that it is the perfect environment for it. It's like, if your worldview is that quantum is going to be a problem, it's that even, even if on a more political level, like socialism is going to be, you know, on the rise in the United States over the next couple of years. And there's going to be more flight to assets that are private. And I guess private, somewhat of air quotes for Zcash. But, but you know, as, as more of a narrative, it has kind of like the privacy, it has the quantum resistance narratives going for it. It's the perfect setup, right? Like you couldn't ask for a better setup for, for Zcash right now. The problem is though, is that it, as with all assets that are too crowded in crypto, like you need some external capital coming into it.

• 12:24Speaker 01

  And you just don't really have like a sailor for Zcash right now. Like obviously there's a debt or two forward, but it's just not nearly like the same level of size. And so you really need people to come in and like actually bid Zcash externally. If everybody in crypto is sitting in it, they're kind of like hiding in their Zcash lungs, you really, really need a lot of other people to come in. And the issue is that the way to get a lot of other people to come into that trade is by just price action. Like you need price to go up. And so if everybody's already quite long, that's, that's kind of when you run into a bit of an issue. And that's, that's the same with any crowded trading in crypto. I think another part of that too, is just the fact that like the whole selling point of Bitcoin and also the problem with Bitcoin is the ossification of the code. Like people know exactly what it is. It's the most predictable schedule of, of, you know, happenings, et cetera. Like, like these are, these are terms even like regular people kind of are familiar with.

• 13:09Speaker 01

  The problem with Zcash and what makes it beneficial is the fact that the code isn't really as ossified. Like they are, there's an actual dev team, right? That's working on it. There's, there's, you know, updates that are, that are being planned for it. And the problem is like, that also increases the attack surface area for potential hacks or exploits. And so you kind of saw that with the whole Orchard fiasco where people are like, oh my God, like, you know, are these like infinite minting on shielded tokens? And so the problem is like, as a store of value, you can't necessarily have that level of uncertainty with regards to what it will be in the future. And so when people go back and they look at like a Bitcoin chart, yeah, sure, they see massive 60, 70, 80% drawdowns in the past, but it's, it's been holding up like relatively well recently.

• 13:51Speaker 01

  It's kind of difficult to look at a Zcash chart recently and say like, oh yeah, this is a predictable store of value. Right? And so that's kind of the issue there is the volatility as well.

• 13:59Speaker 00

  Let me, let me throw some thoughts your way and, and, because I have some opposing views where I take the point where external capital out of crypto is not readily coming into like Zcash. But I wouldn't necessarily say like, that's my thesis behind Zcash. Now, I also think that there is evidence to suggest that that is also partly not true in that like, there is at least some external capital that is skipping over Bitcoin and going into Zcash. And I think that's kind of why like Naval has become this like shadow main character where like, he doesn't really go on podcasts and do circuits, but like, he's very into Zcash. And he's very into Zcash specifically because of the privacy. Uh, and you know, like Naval circles are outside of crypto, external to crypto.

• 14:42Speaker 00

  And in fact, they're like wealthy, so you only need like, you know, a few handful of billionaires outside of the circle of crypto to like, understand the value of uncensorable private money. And so it doesn't take like a social zeitgeist for that, in the same way that we had in 2021. It doesn't take too much of a big public awareness of crypto adoption to really move Zcash in the same way that it moved Bitcoin in 2021. So, so that's one thought. But also when I, when I hold Zcash, I'm more looking at it as a percentage of Bitcoin's market cap because the, the buyers of the cash are going to be Bitcoiners who defect from Bitcoin. And very rarely does this ever happen. You know, Bitcoiners are known to like lock arms and never break ranks, only buy Bitcoin.

• 15:26Speaker 00

  Everything else is a shitcoin. But in, there's this clip from, uh, an interview that we did on Bankless to Suzu in 2021, where he was talking about like, oh yeah, I know Bitcoiners who are like flying around the world to go retrieve their cold storage so they can sell Bitcoin for Ether. Because Ether, this was like May, April, May 2021, and Ether was like the coolest thing ever. And so like, every once in a while, the stars align and like Bitcoiners like decide that like, hedging their massive Bitcoin exposure by like 1, 2, 3% into the cool new thing, it actually does happen. Like the last time it happened was E, potentially is happening now, and it is happening now to some degree. And so it actually doesn't take too much external capital to get Zcash up to like 3, 4, 5% of Bitcoin.

• 16:10Speaker 00

  So these are my kind of two theses. How do you take those?

• 16:13Speaker 01

  No, I actually agree with a lot of that. I want to clarify too, that it's like, I know I was kind of painting like the bare case for Zcash, but I'm not, I'm not bearish Zcash because I, I, I think those exact same things too, that it's not that hard to see a couple of, you know, a couple of percent of Bitcoiners saying, you know what? Like, you know, just in case, right? Just in case quantum's a problem, like just in case I kind of need this privacy feature. I think the problem there though, that I would push back a little bit is it's difficult to say to what degree that's already happened and priced in. Like, you know, if I'm playing at some like poker games and there's like a billionaire that, you know, there who's like shilling Zcash already, you know, part of it does make me feel a little bit like, oh, is this kind of like that? Like, you know, Uber driver who's talking to me about like, hey, have you heard of like X? Yeah, no, it is actually, no, you're, you're a hundred percent right that, that billionaires and, and, you know,

• 16:57Speaker 01

  multi-deca, centimillionaires, they, they are actually, yeah, you're like, like Zcash is actually one of the first exposures of crypto that a couple of them are taking on right now. And you're absolutely right that, well, you know, once again, it does not take a ton of money externally from them to say, you know what, just in case, I'll go put 1% of my couple hundred million into Zcash. The problem is like, to what extent has that already happened? Is, I would say probably more so than some people would necessarily expect. But it's actually kind of a similar argument that people used to make as well with Bitcoin even, where it's like, you know, I remember talking to a fund manager a couple of years ago, and he was super anti-crypto in general. He was like, this is bullshit, this is all upon thee, this is a scam. You're just like, you're typical TradFi guy, right? And then he asked me, he was like, you know, it was like, oh, like what percent of like global wealth is in, is in Bitcoin right now?

• 17:41Speaker 01

  And I think at the time it was like maybe 30 or 40 bips. And he was like, you know, and it kind of, you know, like a light bulb kind of went off in his head. He's like, you know, if nothing else, just to not be wrong, a bunch of guys are going to be like, I'm just going to put 1% of my money in, just, just in case, you know, essentially. And I think it's kind of like a similar argument there where like, you, you are going to get this ratio that guys will just be like, you know, just in case I'm wrong, I'm going to put this amount into, into Zcash. But all, all the, all the edge there is kind of figuring out like, what percent is that, right? It's like, are we already at that point? Is that point, you know, another couple multiples away from here? But I will say that it's like, yeah, you, you are, you are definitely betting on like the big fundamental driver there is ultra, ultra wealthy, ultra high net worth individuals who value that, that privacy. And so, yeah, like if, if you think that that's not really fully played out yet,

• 18:25Speaker 01

  then Zcash is in a ridiculously good setup right now, amazing long to have. And so I think, and it's also like such a great trading asset as well. Like it trades so purely based on momentum and sentiment. It's kind of the nice thing. It's like the whole Silicon Valley meme where it's like, oh, if you have revenue, that, that's also like a limiting factor, right? It's like hype's never going to trade at a 500x multiple on his revenue. Where Zcash has nothing, so it can trade like a meme coin. And when I say trade like a meme coin, I don't mean it like disparagingly. I mean, it can actually just go to whatever valuation, right? And so it's ungated by the revenue meta. So yeah, like I said, I think Zcash deserves a place in most people's portfolio. It's just deciding whether it's too crowded right now and you're going to be able to get to bid quite a bit lower. Or if you think it's going, you know, many multiples higher, that's kind of where all the edge is. So it's not very useful, but that's just the, the situation.

• 19:08Speaker 00

  Yeah, I guess I can imagine, uh, like Bitcoin, of course, is Bitcoin. And so if you are like one person trying to shill another person, be either just like a, you know, a normie retail person outside of crypto or a billionaire outside of crypto, and you're telling them about Zcash, it's harder to differentiate Zcash from the sea of shit that is the rest of crypto assets than it is Bitcoin. And so like, to them, it's just like, okay, you're, this is just another ticker that is a crypto asset.

• 19:37Speaker 01

  It's another shitcoin.

• 19:39Speaker 00

  It's another shitcoin.

• 19:40Speaker 01

  Exactly.

• 19:40Speaker 00

  Right? And so granted, there are people like the Winklevi and like I said, like Naval, actually like legitimizing this thing. It has like an ETFs, and so there's something there, but it's still like, I can imagine like people not inside of crypto just don't want to be shielded tickers, crypto tickers. Like that's like an unpalatable thing.

• 19:58Speaker 01

  There's this natural aversion to, to like alternative assets in crypto as well. Like altcoins have performed so poorly over the past, and especially when, when you're trying to like, there was at least, like I made some inroads with talking to some more institutional guys about the fact that it's like, oh, like if they hear something's trading at like a two or three XPE ratio like Pump was, for example. They're like, you know what, that's interesting, right? Like you kind of have to contextualize why, like is this, is this revenue as durable, as predictable as like other forms of revenue? But it's at least kind of like stokes their interest. Like why are these crypto assets trading at such low multiples relative to their revenue? When you try to present to them like, oh, there's this alternative store of value asset that's not Bitcoin and it's an altcoin, it, it sets off a lot of like alarm bells and red flags with them where it's like, oh, this is the flash in the pan, like what's the difference between this and a meme coin?

• 20:40Speaker 01

  Like you'll kind of run into, and it's not, once again, it's not to say that these are real arguments, but it's like, this is kind of like the pushback you'll see. There's also one like other slight issue with it, which once again, it's kind of like, Zcash is to Bitcoin almost as Bitcoin is to a lot of like TradFi assets where. Some Bitcoin maxies, almost kind of like their bull thesis for Bitcoin is very much like this king of the wasteland type of thing where it's like, oh, when the dollar goes into hyperinflation and the world is melting down, people are going to want our Bitcoin. And it's like, that's a bit of a tenuous thing to think because all risk assets kind of tend to sell off when you have this correlation goes to one moment. And so it's one of those things where it's like, the really big bull case for Zcash would potentially be some black swan events in Bitcoin specifically, right? That proves the fact that the quantum resistance is necessary, that proves that privacy, like

• 21:24Speaker 01

  the government's coming and seizing people's Bitcoin, Satoshi's wallet gets exploited. Like, these things would be like this massive attention gathering onboarding event for Zcash. The problem there, though, is that, like I said, you're kind of this like king of the wasteland situation where you really think that if Satoshi's coins move, that Zcash isn't also potentially plummeting down with it. Now, would it be the fastest one to rally outside of that situation? Almost definitely. But in that moment-

• 21:46Speaker 00

  That's how BlackRock identifies Bitcoin. The BlackRock has like a report about Bitcoin that went just into this moment, where like, yes, in the moment, correlations all go to one, but Bitcoin historically has rallied the most coming out of those events. There's like an after BlackRock before talking about this.

• 22:02Speaker 01

  Yeah, as I'm saying, and so it's like, in the same way that like TradFi views Bitcoin, it's kind of the same way that more crypto natives use Zcash relative to Bitcoin. And so it's one of those things where crash insurance zoomed out might be a really good way of putting it with regards to like, okay, like what if Bitcoin fails to some degree? But if Bitcoin fails, you know, you're probably going to get a chance to bid Zcash significantly lower than whatever it is at that point in time as well. And so there's that interesting dynamic there. But once again, like, none of this is to say bearish Zcash, is that I see so many people kind of putting out the bull case of Zcash, that like, there is also kind of a commensurate bear case to it as well. But that's also why, like I said, it's such a pure trading asset. It's such an amazing asset to kind of like have in your portfolio, different weights, different prices, different times. I think options for Zcash too is also extremely interesting right now.

• 22:44Speaker 01

  Because like, if you have these massive swings and like, your worldview of Zcash is going many, many multiples higher, or crashing, you know, back down to $200, like, options are the best way to express that. And so I think, I think trading options on Zcash is kind of how I've expressed some of those views now.

• 22:58Speaker 00

  Yeah, going back to the whole, Zcash is a pure trading asset, like, in the same way that the best advertising for Bitcoin is its price, the same rule applies for Zcash too. And so ultimately, like, we don't know the future, but if just like the herd mentality gets sparked by Zek, and Zek does the next leg up, like, the fundamentals are literally improving as price goes up. And I know that's a meme on Twitter, but that is how it works for things like Bitcoin and Zcash.

• 23:26Speaker 01

  Yeah, it's only, it's only more attention, it's only more adoption, it's only more acceptance. So, yeah, it has this massive innate reflexivity, and that's kind of what I'm getting at, where it's like, Zcash can't, can't really just kind of go up at like, you know, a 10% CAGR, right? Like, it's kind of just either going to like step function up, like massive, you know, bouts of, of adoption and price, beginning more adoption, beginning more price increases, or it's just kind of going to bleed out as it kind of has in the past. And so it's one of those things where it's like, yeah, like, that's why to me, like I said, like, being in just like a perps long on it is not necessarily the most like interesting way to express that view. Like, Zcash is one of those things where it's either going to, like, if you zoom out in a year, it's going to 200, or it's going to 5,000, right? It's kind of difficult for it to just chug along necessarily, so, yeah.

• 24:11Speaker 00

  Can you go into that a little bit more about like, why the, because of the nature of Zcash, why you prefer options over perps? Just like unpack that more basically for me.

• 24:19Speaker 01

  Yeah, I mean, it's, when I see guys talk about these like price targets of like, oh, Zcash could go to 10,000, Zcash could go to 20,000, Zcash to going to like 5%, you know, Bitcoins, like, you know, these, these types of things, it's like, the problem is that like, in the process of going there, it's not going to be a straight line up, like, you're going to get multiple 60, 70% drawdowns. Like, people have to look at like early Bitcoin fractals, right? Where it goes from, you know, 8 bucks to 400, and then back down to 20, and then back up to, you know, 1,200, then back down to 200. It's going to have that same type of adoption curve. And so it's incredibly uncomfy to be in just, and sure, like, if you just want to put Zcash

• 25:00Speaker 01

  into a hold spot, zoom out, you know, log off for 10 years and come back, and, and it could be, you know, many, many, many multiples higher, and you completely forego a lot of that liquidation risk. But if you're trying to do some sort of, like, I want the maximum exposure to Zcash going to a price target that's many, many multiples above right now, it's difficult to, like, you, you, you kind of have to have a level of self-awareness to say that it's like, okay, did I get pushed out from like the orchard, like exploiter, you know, being quotes of like what people thought it was, right? Like, did I sell my Zcash then? Or would I have been liquidated in my, in my position in a 60 or 70 or 80% drawdown potentially? And so what's nice about options is like, you kind of avoid that liquidation risk, but you also get to lever up on the exposure of, oh, I think this is going to many, many multiples from right now.

• 25:43Speaker 01

  So like, if you do genuinely think that, you know, like, if, if your whole thesis is, oh, AOC is going to win, socialism is going to be on the rise, and we're starting seizing billionaires' money, this is going to get so much adoption, your price target should be astronomical, right? They should be many, many multiples above what they are right now. And the best way to get like levered exposure to that, that's not going to be liquidated, is through options. So I think Zcash is a, and to be fair, like, the volatility of Zcash is built into and priced into those options as well. And so it goes both ways as well. Like, if you, if you're someone who thinks, you know, Zcash is not that interesting for a time period, and you hold a bunch of spot, like, selling calls against it is extremely interesting because of the fact that they trade so rich relative to vol. And so options on Zcash, I think is going to be a really, really big point. That's going to pick up quite a lot of adoption, kind of like the same thing happened with hype as well.

• 26:27Speaker 00

  So when you are interested in an asset, and you're trying to either do, you're doing a derivative, either options or perps, how do you make that choice? Like, when is options the right call, when are perps the right call?

• 26:39Speaker 01

  To be honest with you, the answer is kind of always both. Like, there's always circumstances where I would be trading both. The nice thing about options relative to perps is just the fact that there's almost always a view that you can put on. With perps, it's pretty much just either your long delta, your short delta, like, that's price up, price down. You can kind of put on a sideways view by going like delta neutral and funding, and like, you know, farming funding, but that's not extremely attractive.

• 27:01Speaker 00

  Whereas you're more of just a yield optimizer at that point, right?

• 27:05Speaker 01

  Yeah, exactly. Yeah, yeah, yeah. Whereas with, with options, there's always a trade to be had. You can be long vol, short vol, you can be, I want to get levered exposure to this tiny bit of upside, I want to get levered exposure to this very deep out of the money, you know, massive gamma squeeze type of upside, I want to be, you know, short this kind of like pocket of price. And so I think options are just a lot more flexible. You can always express a view through options, and there's a lot of views that you can express through options, you can't express through perps. At the same time, though, it's like, if you are trading options correctly, you should probably be hedging a lot of that exposure in and out via, via perps. And so like, the way I kind of see it, is I will put on these more longer-term overarching theses through options trades, but then on a day like, you know, yesterday, for example,

• 27:46Speaker 01

  you know, Bitcoin at 75.2 might have been a really interesting perp long, just for a quick scalp up to back up to like 76. And that's not necessarily a trade that I want to go in and like cross the spread on options as much for. And so I'm always trading in and out of some of the delta that I have from my options via perps. And so I would say most people should combine both of them.

• 28:03Speaker 00

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• 30:15Speaker 00

  And then there's also like the AMM versions of these, so the Uniswap, the Arrows. Like, broadly- What are the categories of assets that you're generally like looking at on a daily or weekly basis?

• 30:26Speaker 01

  So I mean, truthfully, everything in crypto is getting a look from me. Like, I'll look at, I'll look at pump, I'll look at cards, I'll look at, you know, near, like, everything I will at least look at. I just find the most edge for me to express is kind of in more of those Dex revenue meta things that actually have multiples. I think the really big reason, and this is

• 30:46Speaker 00

  Because they just have more data to look at?

• 30:48Speaker 01

  Um, I would, yes, but I would also say that it's because of the fact that a lot of people don't know how to contextualize that data properly. Like, a really good example is this, is that, like, why does, why does lighter and hyper liquid and pump all trade at radically different multiples on their revenue, right? It's like, especially hyper liquid and lighter. They should, they should, you know, the logic would be that they should trade at like relatively close multiples. You know, is it the, and in TradFi, you know, if you have a higher growth, typically lower cap, stock is going to trade at a higher multiple, right? And so like, why does, why has like lighter, like historically traded at some lower multiples relative to hyper liquid? And so it's important, I think, to understand how to contextualize that as to, as to say, like, oh, okay, like in crypto, perhaps, you know, like,

• 31:31Speaker 01

  lindiness gets rewarded more, like the front runner gets rewarded more because of the fact that people assume that when TradFi money comes in, or if, even when it comes in, they're going to crowd into the number one asset and they're not looking to go much further out on the risk curve than that, right? And so things trade very differently in crypto relative to TradFi, and they trade at very different multiples for specific reasons. Pump being another good example because of the fact that a lot of people just, you know, can't underwrite that there's like meme euthanasia roller coaster is going to go on forever. And they all kind of assume that it's like, oh, like the revenue it's generating right now is almost at the detriment of future revenue that it could. Like, there's only so much that they can kind of like suck out of the industry, for lack of a better term.

• 32:06Speaker 01

  And so I think some people will look at multiples in crypto and say, like, oh, this is trading relatively cheap to its peers. But you kind of have to do a lot of contextualizing as to like, why should it potentially trade cheaper to, to its peers? And so like identifying, you kind of have to look at individual assets and say, is it trading cheap relative to what it has historically and what has potentially changed historically? Another really good example of this would be like, for example, with hyper liquid, with the AQAV2 USDC revenue coming in, that's extremely durable. Like, that's like ARR at that point, right? That is just treasury yield essentially, and that trades very differently and should be priced at a very different multiple potentially than trading revenue, which is a bit more cyclical. And so because of the fact that lighter doesn't have that very predictable ARR that's coming in through treasury yield,

• 32:51Speaker 01

  it kind of gets assigned a different multiple there. And so like really kind of deep diving into like, what are the actual fundamental levers of growth for these assets? I think has like a lot of edge to express in it.

• 32:59Speaker 00

  Were you to be right in your analysis here, like you're just looking, looking at all the data and trying to reason about, well, hyper liquid's revenue is more durable than lighter's, like all this stuff. Do you ever worry that, like, there's just not enough people like you, thinking like you in order for you to be right? Because it requires other people to also come to the same conclusions as you, and there's only like seven of you in all of crypto?

• 33:24Speaker 01

  That's, that's a phenomenal question I ask myself a lot, actually. And, and, you know, I will say, this year has been very gratifying for me because of the fact that I, like, I said in other things, like, I was putting out these investor letters at times, trying to tell people, it's like, oh, there's so many fundamentally undervalued assets in crypto, and they were just getting zero bid and nobody gave a shit. And everybody was just piling into meme coins, right? And so like, you know, quarter after quarter after quarter, I'm like, okay, these fundamental assets are mispriced. And, you know, they're gonna, they're gonna reprice aggressively. And so this year has been amazing for that thesis. And so it's been gratifying to know that, you know, maybe I was early to some things, but eventually I was right. I will say that a lot of the tokens that I'm long, the nice thing about them is I don't actually really need other people to identify that that's the case.

• 34:07Speaker 01

  With, with, you know, hype derived lit arrow, like these tokens that do pretty aggressive buybacks relative to their revenue. If they're trading cheap relative to revenue, it's just going to get manifested into the chart naturally, right? It's like hype is buying three times as much hype back when it was trading at, you know, 30 bucks than when it's trading at 90 bucks, assuming that they're still doing two or three million dollars a day of revenue. And so it might not have this immediate pop where, yeah, you still need a little bit of people to actually come in and speculate on that. But if the revenue is, you know, it does have this fundamental floor, and the same thing as equities. That's kind of where like your store of value assets don't necessarily have that fundamental floor. And so it's one of those things where, I mean, if hype is still trading, or if hype is still generating, you know, two, three, four million dollars a day of revenue, and it's trading at 30, 40 bucks,

• 34:48Speaker 01

  it's a much comfier time to say, you know what, I might be wrong for a couple of months, but eventually this is going to kind of manifest into the chart. Whereas with, yeah, exactly, like something like a Zek, it's like, well, you know, if it starts going down to 200, you can't really say, it's, it's like we were talking about before, it has a kind of reflexivity in both directions, right? Where price goes up, it becomes a much better store of value to people. But price goes down, there's not really that fundamental floor setting feature that these tokens that have like revenue buybacks have. I will say too, that when you are looking at technical indicators, for example, right? You kind of do want to be looking at the same thing everybody else is looking at, like, everybody's going to bid the 50-week moving average, the 200-day moving average. And so I think some people make this big mistake is that they'll try to find this like really esoteric and generally overfit

• 35:31Speaker 01

  technical indicator of like, oh, if I look at the 22, you know, session, two hour, you know, moving average, and I like put two standard deviations away from it, it bounces at this, and it, you know, and it, and it bounces at that. And it's like, yeah, sure, like in a regime, that could fit a couple of times and you can try to trade that. And I think what a lot of people realize when they try to like backtest some of these strategies with like Claude, it has like no predictive power. It's all just back, it's all just overfitting. And so you do want to be looking at the same things everybody else is looking at. It's actually kind of as much of a joke as they are, like the Fibonacci retracement numbers. It's like, there's enough people looking at those that there is at the very least a tiny bit of predictive power, right? Like, you, you can make the argument that some people are bidding this silly level or whatever.

• 36:13Speaker 01

  I would actually say it's kind of the opposite with fundamental data. Like, you do kind of want to be seeing stuff that nobody else is seeing ahead of time. And so whereas like with technical indicators, I want to be looking at what everybody else is looking at, just to kind of see like what levels are likely to be hit and what levels are likely to bounce. Fundamental data, I think there's quite a bit more edge to be seeing what other people aren't really seeing yet, because eventually they will. And so I think there, I'm okay being early for a couple of months, if I think it's going to get borne out in the price automatically anyway, through these like automated buybacks. And I think that's like a big regime change that hyper liquid really ushered into crypto is that now that's kind of like the expectation of that. It's like the marginal buyer of your token is your token essentially.

• 36:52Speaker 01

  And that's what kind of I think really kicked in the outperformance for me personally in the last like year or so, is that that really changed the whole game for everybody else.

• 37:00Speaker 00

  Interesting. Which do you think of the faster horse from here on out, hyper liquid or lighter?

• 37:05Speaker 01

  I would, it's tough. The way, the way I've put it with other people is that I think lighter is a better hold for the next three to six months. I think you can maybe even make the argument that the recent like political events might even have a little bit more favor towards later. Like, I got some like flack for it, but you know, whether people want to accept it or not, like hyper liquid was at least a little bit of a trump bet. You know, he said it in his press conference, Zelig was like openly, like the CFTC is openly like quite pro hyper liquid. All the lobbying money that they've spent through the hyper liquid, you know, like law foundation, like, you know, they're, they're, they were at the very least like slightly Trump aligned, or Trump was aware of their existence, right? I think that that is obviously going to change.

• 37:50Speaker 01

  And, and hyper liquid is completely capable of being neutral. Like, there's no reason that there should, like, there's no inherent reason that Democrats should have anything against hyper liquid necessarily. Like, they didn't like throw in with, with, with Trump to the same way that like Elon did, for example, where it's like Elon is probably just going to be persecuted for the foreseeable future. And so like, I'm not trying to say that there's any sort of like persecution is going to happen towards hyper liquid. But basically, all else equal, if the, you know, slate is, is blank. Yeah, I think lighter might have a faster, cleaner path towards regulatory clarity than hyper liquid. I also think it's kind of like part of their bull cases. I think they are going more aggressively after the US market than hyper liquid is. And I think hyper liquid is kind of going more aggressively after the global market, right? And they're a bit more agnostic to the US market. Obviously, the US market is a big prize for both of them.

• 38:36Speaker 01

  I just think that lighter is leaning in a bit more heavily to that. I would even say too, that there's an interesting case to be made that, that could be where lighter is wrong. I've heard some other like funds and analysts talk about like, how untapped is the US market currently? And you kind of see that play out with some like, you know, Kalshi or polymarket data of like, oh, like, you know, everybody was already accessing polymarket via VPN. And so everybody thought like, oh, with some like US regulatory clarity, like there's this massive untapped consumer base, and there might actually not be. And so that's like an interesting bear case for lighter potentially is that the people who want to be trading perps in the US largely already are.

• 39:11Speaker 01

  But I, yeah, I would definitely say over the next three to six months, almost just by virtue of like recent price action too. I think, I think lighter probably can do a better multiple than hyper liquid can in the same regulatory environment. Like all else equal, they both get CFTC clearance in three months. Yeah, I think lighter pops a couple, you know, a couple multiples, whereas hyper liquid might just pop, you know, 20, 30, 40%, right?

• 39:33Speaker 01

  But at the same time, I trust the hyper liquid team more long term. Like I would rather go into a coma for a year or two, holding all hype than all lit. So I see, I see lighter as a bit more of a trade that's really attractive for the next couple of months. Whereas I see hyper liquid is like, okay, yeah, I know this, this could potentially be a multi-year hold type of asset where it trades. Kind of like, oh, a B and B is a good example of like the price actually potentially see where it just goes just basically up in the, in the long run. You know, quite, quite nicely and trades at many multiples higher from here. So, yeah.

• 40:03Speaker 00

  Yeah, yeah, I go back and forth on this, on the same subject where hyper liquid just fits the mold of what's this, it's, it's Binance, right? Binance is quarters of magnitude larger than Coinbase. Lighters trying to do the onshore trusted regulatory thing and win the US market. But man, Binance is just clearly where the value is because crypto is inherently an offshore phenomenon. Like that's what we are. It's in our DNA is like crypto is offshore. And granted, at the same time, the untapped retail audience who just deposits on Coinbase and or on a Robinhood and trades on Robinhood. That market, I would say is firmly untapped. The people who won't be bothered to turn, turn on a VPN to go trade.

• 40:47Speaker 00

  But also at the same time, like perps are a retail oriented instrument. And so the massive institutions out there are probably going to stay in options land. And so the perp penetration in the onshore compliant world is probably just the retail audience. And it's probably why the Robinhood partnership is so important to letter. Yeah, uh, these are, these are all kind of my thoughts. Granted, like lighter will also be doing options and it has some like novel technical infrastructure with the whole like zero knowledge circuits. It's probably going to be in terms of actual exchange execution, the number one most performing exchange of all time ever. Like inclusive of all the other exchanges, New York Stock Exchange and NASDAQ.

• 41:33Speaker 00

  And so it's nice to have an asset that is technically superior. I don't know how far that takes it. These are all kind of my thoughts.

• 41:40Speaker 01

  No, no, you're, you're exactly right. It's like, it's like that escape hatch functionality. It's like, these are types of things that like eventually you would imagine regulators and massive institutional, you know, allocators and, and traders will, will care about, right? Eventually, right? But now the question there is, is like, it's almost kind of what we were saying before. It's like, if nobody else is looking at these things, doesn't really reflect the price, kind of hard to say there. I would also say too, that liquidity is so much more of a moat than people realize. Everybody kind of hand waves it away, which is like, oh, like, you know, like they have these better features or there's this new perp techs that launched. That's more performance or all these different things. And it's like, nobody cares at all. Like as, as a trader, I can, I can accept the fact that like, I've said this in the past too, like lighter, in my opinion, has a better UI and a better UX than hyper liquid.

• 42:25Speaker 01

  Like they, they've had features earlier than hyper liquid. They have allow you to cancel and select certain types of orders better than hyper, hyper liquid. But I still do most of my trading on hyper liquid because of the fact that it has so much deeper liquidity. That's slowly starting to change. You are starting to see better fills on lighter, on the major specifically. But if you want to trade all coins, hyper liquid is still generally, you're going to get a lot better fills at size. And even then, you know, people have to realize too, that it's like the altcoin markets on hyper liquid are only fractions as liquid as on Binance too. So you still have all these like stat arb guys and guys who are trading like large baskets and market making on all coins that still don't, you know, are not there on hyper liquid. And they're only doing on Binance because even then it's like an order of magnitude, deeper liquidity there.

• 43:08Speaker 01

  I would also just like stress to people that it's like, TradFi markets trade and settle in the quadrillions. So it is one of those things where it's like, I fully expect both to capture multiple percents of that, which is like orders of magnitude higher than what they're doing right now. And so I, I do genuinely believe that both can be trading at many, many multiples higher than they are right now in the future. And so it's not to say that it's like, oh, like, you know, I would never express this view as a, I'm in a long lit and short hype. Like I, I hate the concept of, of being short either in this market.

• 43:39Speaker 00

  And that seems like you are way too online on crypto Twitter, if you're trying to make that trade.

• 43:43Speaker 01

  Right, exactly. But I did, I did post that I really, really like the concept of like, if you hold, if you hold spot hype here, selling some calls against it at like a hundred bucks makes a lot of sense to me and buying some lit calls because of the fact that I think in the next couple of months, you might see a much bigger pop on lit than you, than you will on hype. So trading some upside of one to the other, I think is fine, but betting on downside of one versus the other, I, I would be afraid to take that bet. Cause hype could just put in 20, 30% candles regularly, like you saw with the recent Druck and Elon situation. So, yeah.

• 44:11Speaker 00

  Yeah, yeah. So there have been some people who have gone back and forth on just like, what is the total like cap? That's a fair valuation for hyper liquid and it gets put lighter in this, in this camp too of just like, and it's an exchange business. And if you comp it to all the other exchange businesses out there, it's already pretty fully expressed. The upside has been fully expressed just because it's fairly valued versus like the other gargantuan exchanges that exist. And so like, this is actually just like, assuming further revenue growth from here is actually just like not, not a given. Do you have a, I mean, a take of just like what the actual like upside constraint is on hyper liquid? Like the full, fully diluted valuation in the fullness of time? Or you think it's actually relatively unconstrained?

• 44:55Speaker 01

  No, it's, that's a, that's a great question. And, and this is kind of what gets back to the thing we're talking about earlier about like, you really have to be able to contextualize the differences between this and like an ICE, a CME. You know, a Binance, like they, they trade so differently. I think the other thing that people have to realize too, is that because of the amount of buyback and burn that happens on hype, like hype in five years can be trading at the exact same market cap as it is right now and be trading at multiples higher on, on the current price. And you're, you're along the price, right? You're not, you're not long the market cap. And so hype in five years at a, you know, a hundred billion market cap looks at very, very, very different price than it, than what, what it is right now, just because of that mechanic. And it's like, obviously the same thing as, as lighter to a degree as well.

• 45:36Speaker 01

  I think that with the amount of trading that is likely to come on chain. And like I said, that is like a, a, a presumption that, that, that they are making there. It's like, you are betting that more trading will come on chain. And if you're in this industry, like I would assume that that's a bet you're willing to be comfortable with. I, I, I do think that there are multiples left for hype to eat into the, the, the traditional exchange businesses. I also think there that it's very apples and oranges, right? It's like, to what degree are those businesses have, you know, like fees, for example, kind of compressed already for them? Have they, have they been commoditized? To what degree is this opening up like net new users abroad? Like how much, how much appetite is there for trading perps on US equities in Asia? For example, that is just not really currently being expressed right now.

• 46:21Speaker 01

  There's a lot of moving, a lot of moving parts of that equation and a lot of extra variables that exist for hype. That don't necessarily exist for like a CME evaluation, ICE evaluate, like those I think are much more well understood. Hype is a bit different. And I know that said, I, I agree with, I agree with the sentiment that it's like hype is not this massive asymmetric trade anymore. Like you're not going to put $10,000 into hype and wake up in five years with, you know, two million bucks or something like that. Right? And so like, if people are expecting that level of asymmetry out of the trade, then I would definitely, I would definitely push back on that. That it's like hype can do multiples potentially from here in the longer run, but it's not going to be doing, you know, a 10x here necessarily. So I would agree that a lot of the upside has been captured, but that doesn't necessarily mean that it's kind of capped it to what it is right now.

• 47:06Speaker 00

  Would you communicate the, where we are in the options war? So there a bit has been decently liquid on options for a long time. Derived has really come onto the scene pretty aggressively. I think you were in that trade pretty early. It seems very early in the grand arc of how options get expressed in the context of crypto. Like, how would you explain just where we are on that arc?

• 47:29Speaker 01

  Much earlier than where, wherever we are in perps. I think, I think perps have hit much more of a saturation point than options. You've kind of seen that played out in this last year where actual perp volume is not dramatic. It's nice too, because like we just kind of had the anniversary of 1010 where, which killed a lot of perps ROI in volume. And it hasn't even like fully recovered back on like a lot of those pairs since then. It's not to say that I think like perps is topped out. Obviously, like I still think that there's quite a bit more growth left for, for perps yet. But it's like, yeah, it's definitely hit more of a sticking point, saturation point. Options, on the other hand, is just a straight, you know, hockey, hockey stick, you know, graph up essentially in terms of actual adoption notional. Like when I said earlier too, that TradFi settles quadrillion, like a huge portion of that is, is notional options trading.

• 48:15Speaker 01

  And a lot of other derivatives that are a little more adjacent to options. And, and so, yeah, I think that there's so much more untapped volume to come in. And I actually don't think, I think even the people who subscribe to the derive bull thesis don't even fully, because I myself is one of them. Like I'll, I'll kind of hear like new structured products and new instruments that like, you know, that, that are potentially being built on top of it. And I'm like, oh shit, that's like such a cool idea. This is going to be amazing. People are going to love to use that. And so it's one of those things where like options is such a deep rabbit hole to go down into, but like all the cool stuff that people can build on top of, like using options. Like I said, they're much more flexible instrument. Then I think even a lot of the derived bulls don't really fully understand how much the options market will grow in crypto.

• 48:57Speaker 01

  I think the big bet there though, is that, you know, will that be captured by derive? Will that be captured by other, you know, participants into options? Like you're never really going to have the situation where there's this massive evergreen, huge growth spot that's not going to have a ton of competition, right? So that's kind of why the mental model I put out is that the options space in crypto could very easily five to 10x next year. But if that happens, it's almost impossible to imagine that derive keeps its, you know, 90%, 95% plus market share. Like that's just not really how markets work. So like, there's going to be a lot more competition.

• 49:27Speaker 00

  Really is how much market share derive has?

• 49:29Speaker 01

  Yeah, yeah. Derived regularly is doing, yeah, 85, 90, 95% of daily notional daily fees. It's been that way for an entire, it's actually honestly kind of been pleasantly surprising to me to see how long they've kept that. And it's been like a big part of the thesis there. But it's, it's just unrealistic to expect them to keep that if options is to grow as much as I think it is. And so like, I'm quite long the options market and the best way to express that right now is derive. But it's like you said, it's like lighter is probably going to roll out options in a couple of months here, right? And I expect them to be a competitive product. There's other competitive products out there. There's, there's, you know, Paradox, there's Hypercall, there's a bunch of other stuff, right? There's, there are, there are other options for options essentially.

• 50:09Speaker 01

  But I do still think that, that derive does kind of a special place, almost also by virtue of being like their new architecture being built. Much more kind of like similar to lighter directly on top of Ethereum. I think, I think all the different options protocols kind of have like their own kind of unique value proposition, their unique niche that they're going after. But if we want to talk about the one that's going to be the most readily built upon, adopted, derive is still is like the pretty clear front runner there.

• 50:35Speaker 00

  Hyper liquid is not in this race, is it? They're, they're not trying to build options, are they?

• 50:39Speaker 01

  You know, I try to express this to people all the time. And the problem is like, you really have to get into like the technical weeds as to explain why Hyperliquid's risk engine and architecture and infrastructure is not extremely well suited for building options on top of it. And I think that Jeff recently, when he kind of gave his one speech in Singapore, he kind of said like, oh, I think it'll be cool if people build on options on top of Hyperliquid. Like, I interpreted that as, you know, we've given people the tools with H I P four such that they could try to build what I would consider to be a bit of a bastardized version of options, where it's just kind of leveraging prediction markets to kind of give you a version of a cupboard call or, you know, a version of a call spread or put spread. So I think from them, like, they kind of have this more hands-off approach, which is

• 51:23Speaker 01

  to say that it's like, we technically have something that people could build options on top of. And like, you're kind of seeing that with a hypercall, like, you're seeing that with some of them, like, H I P four deployers, that they're kind of doing like options adjacent stuff. But I don't think Hyperliquid is natively going to put out options anytime terribly soon. I think that's like part of the other bull case of like lighter versus Hyperliquid right now is that like lighter is like very clearly committed to like, we are going to have options live in the next couple of months. And so I think it's very likely that they're first of that market. And if I'm long the options market, kind of like writ large in crypto, like, that kind of involves being also like a kind of check in lighter's column as opposed to Hyperliquid. But that said, I mean, you know, Hyperliquid's team is phenomenally talented. So if they, if they put their minds to it and they saw that there was a big enough opportunity in options, they 100% join that market eventually.

• 52:08Speaker 01

  So I don't think this is a thing where Hyperliquid's never going to touch options natively, but it might just be nine months out or 12 months out as opposed to lighter, which might be two months out or three months out. So, yeah.

• 52:18Speaker 00

  It kind of goes back to what my current understanding is, is really, really the only two assets to buy if you're trying to express an option straight is derive and lighter. And derive, it's because it currently has the trophy of all the options volume and will likely continue to have that. And then you would buy lighter if you think that lighter is just a technically superior platform for exchange and reception broadly, as I kind of mentioned before, and they stated that they are going to be doing, adding options as a feature because they're trying to be like an everything exchange, spot, perps, options, regulatory compliance. But beyond those two things, like, that's it. That was the only two ways that I see actually expressing that trade.

• 52:55Speaker 01

  You're generally right. Yeah, I would push back a little bit too on like lighter being technically, like, I would say that derive by being built as an options first decks does have some kind of built-in advantages over what lighter is currently doing with their architecture. Like, you're getting into like a real technical, like, rabbit hole there that I'm probably not even fully equipped to go down into in terms of like the trade-offs that both teams are making. But yeah, like, you know, and derive, you could kind of make the argument that it's like, oh, are they like a perps decks that's going to be strapped on top of a like options decks that's like more so native and is lighter going to be options, you know, stuff that's kind of strapped on to a perps decks that was like more so intended, you know, in the first place? Yeah, there's probably some like levels of like trade-offs there that like they both wish they could have done something different if they were trying to like build for the

• 53:40Speaker 01

  alternative use case. But no, yeah, I think, I think lighter is going to definitely be a pretty, pretty big power player in the options market by nothing else to the relationship with, with Robinhood is pretty favorable for them there. But there are definitely a couple of other smaller ones. Like I said, there's, there's dime for paradex, there's synapse for hypercall, and they're trading, you know, quite, quite low, quite cheap right now. You know, it's, you know, low eight figures or even I think in like the seven figures in terms of actual market cap. And so like, those are, those are tiny relative to derive and lighter, obviously. And you're probably going to see new ones too. Like, you know, variational pro is kind of going after that options derivatives, O T C, like multi-dealer market there where they're like, they're like, they've actually specifically talked about structured products.

• 54:25Speaker 01

  And I think structured products is it's like this huge niche that like, nobody's really doing enough of a deep dive about crypto right now because it actually fits quite a few use cases very well in crypto. So like I said, yeah, like next year, I think the options landscape will be probably very different. There probably are going to be a lot of new entrants. There's going to be like a lot of shifting of, of market share. And so like I said, the mental model I have is that it's like derive might only be 55 or 60% of the market share next year, but the market share might be five to 10x higher. So it's a much, much bigger pie, but probably a smaller chunk of that pie just by kind of the way things tend to go.

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• 55:53Ryan Sean Adams?

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• 56:40Speaker 00

  Well, this has been a great conversation. I've learned quite a lot. When I let you go here in a few minutes, you get back to your desk, what are you going to be looking at? What's kind of your focus for the last like two months of this year as we round out 2026? What excites you? What are you paying attention to? What are you looking at?

• 56:57Speaker 01

  Yeah, no, I think, I think for me right now, the way I would put it is like, we're kind of at this peak career risk level of crypto allocation. And so like, what's interesting is that you have like peak risk, but also peak reward, where like, you know, for, for people who like, don't have investors, like imagine that you did, for example, and you're like, okay, the AI bubble is clearly to some degree popping, right? You just had this massive regime change, it's like huge swing politically. And they're like, and you longed crypto into that? And the thing is like, that's largely priced in now, obviously. And so you're kind of at this inflection point of maximum risk, maximum risk, maximum reward, in my, in my opinion, as a crypto allocator. Because like, you kind of have to put your mind in the, inside the head of a more like

• 57:40Speaker 01

  institutional whale crypto allocator, right? Like, like, would institutions be looking at crypto favorably here? And I think that that's like a very interesting conversation to have where it's like, the AI bubble popping to some degree, in actually some ways is kind of accommodative of crypto. Like crypto used to benefit from by being seen as this like fastest horse, highest beta asset. And so when, you know, crypto is trading at relatively low ball relative to like semiconductors and AI companies, a lot of money kind of just became apathetic towards crypto. Like, I don't think that institutional guys became bearish on crypto necessarily. They were just like, why would we be here when the clear is like, you know, fastest horse, the highest beta play, that, you know, most tech adjacent thing is, is, is more so AI and semis.

• 58:24Speaker 01

  So if that kind of cools down for a little bit, and also a lot of that, like more risks chasing money wants to find a new home because now they find AIs potentially a little bit less interesting, you actually could have this interesting period in, in regime change for where crypto now kind of gets a much more of a bid. But I think, like, like I said, like, from a careers perspective, like, if you're running a fund and you're like, you know what, I think crypto is going to go broadly and equities are going to continue to go down. That's an incredibly controversial and pretty hard opinion to defend. And so I think you're going to see a lot of guys be pretty reticent to try to put that trade on. But that's kind of why we're at this inflection point of like maximum risk, maximum reward. Like, when people are afraid to step in to crypto and they're afraid to express that view, you're going to have a lot of price dislocations, a lot of things are going to trade quite cheap.

• 59:07Speaker 01

  I also think there's that concept of like crypto is kind of already front run a lot of this. Like, people need to realize that it's like, yeah, like, you know, the AI bubble might be popping to some degree and they're coming down from all-time highs, but you know, crypto's, Bitcoin's trading well, well, well below its, its all-time high. And, you know, crypto already kind of had its massive sell-off previously in this year as opposed to what's happening right now in like kind of tech more broadly. So I think, I think looking at the macro environment and kind of deciding it's like, okay, like, is this basically the beginning of the end or like the end of, of, of the bear market for, for crypto is pretty much what should be on everybody's minds and you kind of have to build out your worldview. You kind of have to have a very like top-down view of crypto right now, which is that it's like, yeah, if you think the 10-year is going to be trading considerably lower than it

• 59:49Speaker 01

  is right now, if you think that war is likely to end kind of abroad, then yeah, you should be just like slamming everything into, into risk assets. And, and maybe then like too, like the next follow-up question you should be asking yourself from that is like, oh, like, have the recent events been more accommodative of like the store value trades as opposed to the revenue meta? Like, has the revenue meta top? Like, that's another interesting thing I think a lot of people should be looking at. Like, I'll be taking like more of an investigative, like, look into is that it's like, oh, like, maybe hype is just kind of a less interesting trade for the next two or three months, right? And maybe it's like more interesting to go be long Z cash. Like, that's, that's like something that could be like interesting for some people to kind of ponder is like, or at the same time, there's also the question of like, oh, maybe Z cash and hype are just perma-toped, right? And everybody's crowded into them.

• 1:00:34Speaker 01

  And if crypto goes down quite a bit, then, you know, those are the last assets that you're going to want to be holding on to. And so I think this is probably the most interesting time to be investigating a lot of those questions and like really building out your three to six months worldview, because there's just a ton of opportunity in the market right now. And like I said, I brought this like really big inflection point where if you're right, you're right gigantically, and if you're wrong, you're also kind of wrong gigantically. So it's an interesting time.

• 1:00:57Speaker 00

  How did you pick a Kool-Aid Man as your Twitter PFP?

• 1:01:01Speaker 01

  The, the guy who, who put me up to like making a Twitter, his like nickname was, was, was cool. And so I was just like, oh, cool. Yeah, I'll just make it, I'll, I'll make it Kool-Aid or like whatever. And then, yeah, like it kind of just stuck or like, or cool crypto, like, was initially kind of started as a good joke because I, I kind of thought the social media in the past was kind of like silly and that crypto Twitter was this like clown's fiesta. And so I was like, oh, I'm going to like pick the cringiest, like silliest, you know, like almost joke on there. And then, yeah, I was like, well, shit, I kind of need a profile picture now. So I was, I just like, might as well go with the Kool-Aid Man. Very little thought was put into it, but it kind of stuck, so, you know, I'll keep it.

• 1:01:41Speaker 00

  All right, I've learned a ton. Thanks for coming on the podcast and sharing with you all of your thoughts. I appreciate you.

• 1:01:46Speaker 01

  For sure. No, no, no, this was a good conversation. So thanks for having me.

• 1:01:49Speaker 00

  Y'all know the deal. Crypto is risky, can lose what you put in, but this is the frontier. It's not for everyone. Glad you're with us on the bankless journey. Thanks a lot.