Richard Galvin's Shocking Crypto Predictions for 2025

32:25Whereas we've got others that now probably have the certainty or will have the certainty as we look sort of forward a year to be able to put those sorts of mechanisms in place. Now, it's not always going to be the perfect model to do because you've still got to balance, well, you know, is it right that we return that much capital to token holders or to be reinvested effectively in growth, which is the standard sort of growth decision that people have in equities, be it fast-growth industrials through to tech, right? But for a lot of these apps, they're starting to get that sort of stage of maturity.

32:59They're starting to generate cash flows that are far beyond anything they need to do to sort of fund future development and those sorts of things. So it does feel like the right sort of time to have these sorts of mechanisms in place and start to return some of that capital. You see some really interesting businesses now starting to get much closer to maturity in DeFi, Aave being one of them, for example. I don't know if they sort out their token economics in the end, but it feels that the institutions, the finance industry, others will start using these in a broader sense now because of the regulatory clarity.

33:35That's a big deal probably because most of these are cash flow positive businesses or cash generating businesses. Yeah, in a material way. Aave trades again, the amount of fees generated on Aave, you're talking close to$100 billion. So again, significant revenue assets trading, generating fees well above most protocols and trading that probably 2 % or 3 % of a whole bunch of protocols values, right? So that also goes to kind of, I guess, another sort of underpinning of our thesis. If we look at market share over time, and Aave is a material holding across our funds as well, so it's a good one to talk about.

34:19If we look at cross market share over time, we've actually seen the core apps, you know, the Uniswaps, the Aave's, even some of the ones on Solana like the Radiums and that. We've seen them actually hold their market shares incredibly well. And more importantly for us as an investor, they've held their feats. They haven't had that dilemma that an Ethereum's had where fees have gone up as cash flow has gone up and they've bled users to other chains, so they've had to put mechanisms in place to smash those fees down to remain competitive. The Aave's and the Uniswap's of the world have been able to maintain those fees and maintain market share, which for an investor like us, that's what you want.

35:03You want the investments that you make to deliver utility to users that your users will continue to pay that utility with the perfect outcome that you can grow users and hold fees and grow revenue, right? And then you need to participate in the overall ecosystem growth. And we've seen apps across the space be much more successful at doing that versus protocols, which kind of feeds into our thesis. And we're starting to see, particularly now, across some of those core, I would say, building blocks of DeFi, we're starting to see them start to further entrench their position. They've gone through, they've got three to four years of history now, the Uniswaps and the Arves of the world.

35:49So they've gone through cycles. They've had a whole bunch of competitors throw things at the wall to try and take market share from them, but they've kept their dominant positions. Albeit, you know, there's still good money to be made for others out there that can pick off or try different models, but they've kept pretty dominant positions and they're now in that enviable market segment where people start to build on top of them, which further entrenches their role in the ecosystem and they start to go from, start to also build that kind of B2B type use case versus just a B2C where they started.

36:22And you start to see, as you've alluded to now, is you'll start to see traditional finance come into the space and start to use these apps for what they're good at, which is processing transactions at high volumes, at super low fees, start to build on top of them. You'll start to see them sort of scale that use case and scale that user base and be that sort of entrenched kind of infrastructure at an application layer that's both built on B2B and B2C. And that's where we start to see that explosion and growth on those apps. What's the story of Hyperliquid? Because that's a combination of the two, right?

36:58Isn't that both a layer one and a DEX? Yeah, we'd argue much more an application than a protocol. It's got a protocol that kind of suits the use case, but people are using it for the functionality that it offers to them as an app, right? As an app-specific protocol. So that's probably the one example of an app that trades at a super multiple. and again, controversial. Some of that would be justified because it is a killer Perps exchange, right? It's been an incredible taker of market share and builder of a core user base. Again, that one just comes down to what's that worth as we project longer forward in a highly competitive market, which perpetual swaps are.

37:45But I think today that's been a super successful app at building our close to centralized exchange experience and that's the secret to its success. I think we look at it, when we look at it across the space, we're nothing but rooting for the success of Hyperliquid for a whole bunch of reasons. One, because I think it's just great for crypto when applications succeed. to show the value that applications can generate. Hyperliquid today is trading at a value of$25 billion. We think that's the first example we're starting to see of that correction of protocol versus apps, that Hyperliquid can show that applications can push through that$1,$2,$3 billion level and start to push up and go above what broad use case protocols can be.

38:42so if anything we'd say that's kind of one of the first examples of sort of breaking the ceiling in that kind of reversion of sort of value valuation accrual now moving across to apps or investment pretends moving across to apps for protocols and when you're looking at apps what else is interesting you outside of the defi or even within defi but just what else is interesting to you yeah i think when we looked across where we've got exposure uh across apps it's the core defi native applications which are just showing just insane growth rates that sort of crazy what we'd say is their industrial sort of brick manufacturing multiples i think the other thing we were getting super excited and i don't know where your head's at currently but is across ai right i think that's probably the key thing to come out of december you know price actually was kind of disappointing from a disruption and development perspective, probably one of the most exciting months we've seen in the last five years in terms of just that explosion of activity around AI and use cases and just that overlap between crypto and what I'd say is Web2 drive into AI, which I just think is just probably just the most exciting place to look over the next 12 to 24 months for like killer growth in crypto.

39:58Yeah, my view on this still, I'd like to get your thoughts, is that what we're seeing is not really AI. It's kind of chat wrappers. It's kind of a bit forced. But I understand that this is the seeds of ideas. We can see where it's going, right? It's fucking obvious that these things are all going together. but I just don't think what we're doing now is really it. You know, setting up a pump.fund for a bunch of chat GPT wrapper AIs doesn't feel like that is really agentic AI that is going to completely transform this space. Not until you can say, you can operationalize some of the stuff you do in the fund to an agent and say, hey, listen, what I want to do is I want to find the top three of these with this kind of valuation.

40:47I want you to execute that and stake that and do this, and it can go and do it. That's agents. Yeah, I think we're starting to see the early stages of that in the execution level, you know, projects like Biconomy or Synapse building sort of those AI-friendly execution layers. Now, it's still super crypto-native in their examples. It's right, you know, instead of, you know, logging onto a platform and entering contracts and that sort of thing, It's using AI as effectively an overlay to go and buy me this many tokens at this price. And that's a massive incremental improvement for the native crypto applications because you start to offer a whole normal people that have much less familiarity with crypto can start to use that, right?

41:35Because you start to put an AI functionality over the top of it, right? So that's a huge leap forward just for crypto. When we look across more broadly around how AI moves and interacts, some of it forced, but even the less forced stuff, it's moving at speeds and moving at such digital native type aspects. It's impossible to see it not using crypto, either as a transactional layer or communications layer or development layer or whatever it may be. And even things like Goatsy, which started off not as a crypto thing, naturally found their way to crypto, right? So that's not forced in any way, right?

42:25That's two digital ecosystems, two solely digital ecosystems finding themselves together and finding use cases or finding things that they can do that are efficient and fast. I mean, the reality is it's impossible to see AI agents or AI entities, whatever they may be called, going forward in the future, interacting in the traditional transactional rails we've got today. It's just not going to happen. And it's just so obvious that crypto is going to be those interactions. And it's not just financial interactions. I mean, the reality is if we look forward, and Marc Andreessen did a great summary of this.

43:06If we look forward to future elections, if you look forward to the speed of AI, generative AI media, right, the ability for people to create fake media at this point is just exponentially growing day on day, right? So the reality is we've gone from what sounded like an insane use case 12 months ago, which is using crypto to effectively validate that you and I are both real in this interview and you're not just an AI replication of yourself and I am. which sounds like some bizarre concept for 10 years time even 12 months ago to today that being absolutely real right and and the reality that people are going to have to prove that they are real and not fake and that's going to be a real use case that crypto and cryptography can stop in 2021 i went round and tried to get a meeting together with the web3 teams of google facebook Microsoft, LinkedIn, Amazon to say AI is coming.

44:13You guys are going to get sued into existence by the US government like a cash machine because of the spread of false information and you need to have digital identity. And what was interesting is they're like, yeah, we all agree. I said, let's all get together and see if we can decide what that should be. And they said, we'd love to get together and talk about it we will never agree we said why not because amazon will not allow microsoft login it's as simple as that they won't accept a token exchange on that so it's like wow and then seeing world coin which is a fascinating much hated project but sam altman knows what he's doing and the fact is he can see where this is going as you desperately need not only proof of proof of humanity but you need proof of ai too and we're starting to see that on twitter now where you've got it's listed as a bot automated we have to do this yeah or proof of yeah as you as people's as your revenue start to skyrocketing what people are paying for in ai proof that their model you're paying for is the one that you're using so the ability and you know we've got an investment at the you know the vc level in a in a project called inference labs which is if focused entirely on that basically providing proof to me as a user that the model that I'm paying for is a model that's actually doing the work that I'm paying for and it's not some cheap imitation or whatever it may be.

45:38Now, again, when we made that investment, that was a pretty big leap of faith, but it feels a hell of a lot realer today than it did when we first started deploying capital. Because if you look at perplexity, they've got like 10 different models and you can choose and you don't actually know what you're getting. You're taking for granted. Yeah, and that's fine in the early stages, but you start to move more down a compliant, commercial, business-driven user base of people that are saying, well, hang on, my budget for AI spend is$10 million this year. I need proof that the models that I'm spending$4 million of that on are the actual models that are doing the work for me and delivering the results, not some sort of cheap imitation, right?

46:22And so you start to see use cases again, and this is why, you know, being in tech is and particularly in crypto so exciting you start to see these things take shape literally over a month and you start to see things go from these kind of bizarre concepts that would confuse most normal that would confuse 99 of the population to one where you can really latch to a use case kind of now i'm also thinking and i could be wrong but somewhere in my head it feels that there is obviously going to be a battle over what governments will try and allow for AI and what they don't want. And there's the battle between centralized and open source.

47:02It feels that model weights might, or the algorithms themselves could go on blockchain as a way of cementing them, securing them forever. The mutability of that might well be very important. um yeah i look and it's a little bit of a tangent and probably controversial one but unfortunately you know as banks have kind of shown as banking industry has kind of shown unfortunately we're in industry structures now where um regulatory regimes and regulatory moats are a real business protector right and a real profit driver for those that can be inside the moat right um and i fear that ai is moving down the path of seeing that model and yelling for more regulation as a way of effectively protecting itself from new incumbent entrants and for people that like innovation and for people that like you know low fees and those sorts of things that's the last thing we want to see happen and you know with the greatest respect to my former profession and you know banking is not an industry that's high on anyone's list for innovation and you know that's partly because the regulatory modes are so insane the cost of launching any new application or any new concept in banking is so vastly high that you know only the biggest balance sheets can effectively do it and that stifles innovation and that stifles change and that's partly the reason we're on this talk today that crypto filled some of that void in terms of a new sandbox for people to throw stuff at a wall and see what can be done when you sort of remove some of those limitations and allow innovation and technology to sort of take their own sort of paths unconstrained from these huge regulatory barriers.

48:59I fear that AI might go down that path, that we might see, and I hope it doesn't go that way, that we might see, you know, governments sort of step in from a regulatory and a fear perspective and start to provide those sorts of moats. Now, the good thing is that we've got things like crypto that already exist and have been efficient at providing that sandbox outside that system. And so we'll probably start to hopefully start to see that kind of that approach you're talking about, because I think the genie is out of the bottle now. And crypto can become that kind of sandbox if that is the case.

49:32And that can be where that sort of competitive. Well, also, crypto is so good at coalescing instant capital around ideas, testing it, blowing it up or growing it. you know crypto is pretty good with that massive kind of capital formation rapid cycle that that's why it kind of is a super massive black hole for anybody in the end and i think that's um yeah that's one of the benefits of token models right like you can we have we've talked a lot about valuation but the valuation trying to value tokens and those sorts of things today one of the other things to talk about is they've actually been super successful what they were meant to do which is build communities and rapidly scale and bootstrap things.

50:14I guess that's another part of our portfolio that we think is kind of super interesting at the moment is around Deepin, right? And the ability for people to use token models to build out infrastructure and infrastructure or user bases at speeds that are just unfathomable from a Web2 or traditional perspective, right? And using those token incentives to get people to do things fast at scale, that would be the envy of anyone in sort of Web 2 or traditional markets. You know, we've made an investment recently in a project called Geodnet that's built effectively an RTK, which is a more refined GPS network.

50:55You know, GPS has accuracy of sort of one to five meters. if you build a network that sort of aggregates GPS, simplistically that aggregates GPS signals, a land-based network that aggregates GPS signals, you can get it down to one or two centimetres, right? That's super useful for things like agriculture, mining, and particularly consumer, you know, as we're starting to see that, consumer robots, lawnmowers, all those sorts of things that need super accuracy as we build up. Now, there's key players in the space that have had 20 years building those models or building out those networks right and they have okay global coverage geodnet's done it in like 18 months it's built out a network five times bigger than anyone else using those token incentives because it's using what crypto one of the things that crypto is good at which is effectively giving people part ownership of that of that network they'll go out they'll buy their own they'll buy their own that they'll buy the tech they'll deploy it as part of the network and they'll do that for future token rewards and they'll do that super fast and they'll do that at Global's Cup.

51:57How do people hear about these things? Or is it the nerds that start and then tell their mates? I mean, how the hell do people run the heliums and all of this stuff, HiveMapper? Where do they hear about it? Well, I think that's part of the benefit of a digital world, right? You're right. It's the core nerds that learn about it first, and you've got the added follow-through of the economic incentives that the early adopters, and we've got a good track record now. They've seen this in crypto. A bunch of early adopters make a bunch of money, right? So you've not only got the tech nerds, you've got the finance nerds as well looking for these opportunities because the returns can be astronomical if you choose the right networks to do this.

52:39So you've got this nice sort of virtuous kind of ecosystem building mechanisms. And this is one of the things that, again, that crypto, you know, people, crypto gets a lot of negative press, a lot of the positive things that it's developed are these token models have been super successful at nameplate of what they were supposed to do which is building the ecosystems like we're talking about like the concept of trying to do that like i'll give you a small piece of equity um if you go and buy this network but you know you've got to go and kyc and we've got to put you on a register somewhere with bank of new york like it's just not going to happen like it's not going to happen oh we've got to stop all these jurisdictions from doing it it's just not going to happen whereas crypto you can do those sorts of things at speeds that just unfathomable compared to sort of non-crypto world and you're giving people a token incentive which has been proven to be uh successful and they're getting liquidity from day one right so the people not that most of those early adopters want that liquidity straight away the fact that it's there gives them comfort to invest that capital right and so you're starting to remove that risk reward And so people and like, you know, we went out as part of our diligence and, you know, bought the G-Od kit to be part of that network, spend the six or seven hundred bucks to do that and then start to win the tokens knowing that, you know, there's a decent chance of financial return here in a relatively short period of time.

54:04And what other deep end projects are you seeing that's interesting that are either live now or you're seeing in the VC because you've got two sides of your business, either liquid side or non-liquid side? Yeah, I think for us, grass is one of the biggest positions we've got in the firm. I've seen it. I don't even know what it is. So simplistically, it's effectively a network of millions of people now that are effectively, for want of a better way, effectively farming the internet to build a live AI database. Now, you know, there's the nuances around that. But again, they've effectively used a token incentive model to get people to download software.

54:43that allows them to effectively build what, in the short term, is the holy grail of AI, which is a live database of the internet. You remember when ChatGPT and others first launched, they were running off two-year-old models of the internet, which is kind of interesting but kind of stupid because a lot of things change in two years. And as we get to each new iteration, they get newer and newer. Clearly, we're moving into a world now where it needs to be live. building that data set to your point going back to your point about getting web free companies together you know they don't share their data right and so you know the concept of someone just logging into facebook and google applications and snapchat and those sorts of things and downloading data and being able to aggregate that is kind of non-existent because you can just get kicked off right but if you've got millions of users doing it at once you start to sort of break that and that's where grass has been super successful at building what we think is one of the most exciting kind of live databases in crypto live databases in the internet using crypto incentives do you think there's going to be databases where you get incentivized to share your private data sets just random private data sets because obviously we're seeing the ai companies talking about hitting the wall and they're now using synthetic training to create new breakthroughs.

56:09But we know there's, whatever the internet is, there's like that all over again in private data sets all over the place. Yeah, I think people have tried to do it a bunch of times, right? Like even from sort of, yeah, even in the early days of the internet boom, people were trying to monetize individual data. I think two things have happened in the last probably couple of years, even the last few months, that probably make it more realistic to be a short-term thing. The first one is the value of that data keeps going now. As AI starts to show, the value of live data sets and that sort of global reach on live data will be astronomical.

56:56cycle. And even today, people will pay a lot of money for that or for those data sets. And that's one of the things that we - I mean, traditionally it's been the hedge funds have been the big buyers, right? Yeah, but these AI guys, they're just, they are massive. We're coming back to where we started the band, supply demand. They are massive demand users for data. And we're going to get in this weird world where there's an undersupply of massive data sets, right? So the value of that's going to be huge. The second thing, the second problem people have is how do you return that value to those people that give it up right and you know sending people a couple of cents here and there kind of doesn't make much sense using traditional rails and all those sorts of things and that's one of the other pieces where crypto has provided a solution where you can actually return value to people super efficiently at super low costs and in a grass instance right you're actually giving them part of that network they They can either monetize their value by selling those tokens effectively for cash, or they can keep sharing that network to ride the upside.

57:57And that comes at close to fractional cost for grass as a project. So it's super efficient. So you kind of add those two things coming together that I think make that use case you're talking about, which people have tried to sort of monetize to a degree at a broad scale for years, make it much more sense. And so you start to move to a much more democratized and much more interesting and a much more philosophical, cleaner world where people are monetizing that data as opposed to it sort of, you know. Which is the whole idea of Web3 in the end, right? Yeah. Control over our money, our data, our everything.

58:38Yeah, which is where we started, which is where the internet kind of started, but unfortunately kind of got turned into a vast data capture, covert data capture operation and monetization outside of that by a huge corporation. So Web3 is a chance to kind of recreate what was originally a usage, I guess. So what else are you looking at that's interesting? what are you seeing on the vc side where new things are happening you're like huh that's interesting this this might be something it might be a new area for growth because there's still so many applications you know we've all said for a while that the applications layer has still been under invested and underdeveloped and undervalued and undervalued and you know i'm guessing at vc level you're spending a lot more time in applications layer so what are you seeing Yeah, I think AI in particular, D-Pin, I think probably the more interesting trend stepping back from the actual specific projects is how they get funding.

59:44And I think with the access to market, with the access to liquidity, we're going through what I'd say is kind of a renaissance of what we saw in the initial days of the ICO boom in sort of 2017, 2018, with new close. and the amount of fair launches and the amount of the ability of people just to put a project, put a token up through a liquidity pool at close to zero cost and put models in place that provide them funding to effectively build what they're building and effectively bypass that traditional VC market altogether. So I think what we're trying to, you know, we're obviously still super focused around the traditional VC market and working with founders, pre-token, but we're a crypto-native firm.

1:00:35We can't, you know, we're a follower of models. We're not just sitting there with a dictate that you have to come to us and these are the rounds of funding and this is the way you're going to do it. We love innovation across everything. Use cases to the way people are raising capital or the way people are funding projects. And I think what we've probably seen the last 12 months or even going back the last two years is we've seen probably a trend back towards a less traditional VC market where a bunch of the most exciting things in crypto are happening direct to market without that sort of traditional round after round after round of VC funding.

1:01:12And so we're staying super nimble to sort of chase those opportunities. One of the issues I've got with a lot of those though, the ones that are fair token launches, is that the founders don't own much of these things. They kind of realize the value too early and then there's a misalignment of interest. And we've seen this a lot. Yeah, I think, again, there's a whole bunch of different models. I think the one, we have the same concept. You need a, you know, for us to own a token, we want the people that, you know, and we do a bunch of things on the networks to try and help from a value perspective as well.

1:01:50And, you know, we're big users of most of the things we own. We're big users of Radian. We're big users of Camino, the sorts of projects that we invest behind. But then the people doing the development at the coalface, we want them to own the tokens as well, and we want that incentivization for them to grow and do their part of the bargain as well alongside us, right? That's right. So we've all got those same incentives. We have seen what we think is a pretty interesting model, right? Like something like a banana gun bot, for example, right, where you've got money returned to the treasury and returned to token holders and through sort of initial taxes, tokens given to the teams that are based on usage and turnover, right?

1:02:31And that gives the initial allocation to the token holders, to the team there. And in that example, the team I think has got a much longer vest than we'd ever seen in any traditional VC type deal. But the added bonus is they used that because it was a successful project and part of the revenue is effectively funding their initial slice of the token. And so you start to see these cool sort of variations on a token model that create that incentive model that we like to see. And, you know, get them to market super fast, get a token that can help to bootstrap their user base super fast, and you use crypto what it's good for, which is helping to bootstrap and helping to build communities at speeds we've never seen before across any market.

1:03:19One of the things I think you and I talked about in the past was one of the unique things about this space is the imbalance between the size of VC and the size of the liquid hedge fund market or the liquid professional capital market. And what you get is projects that are coming out at super high valuations. They come onto the market. They fall 90 percent. And it becomes a gift to the hedge fund industry because there's so few professional users of capital. There's still a real mismatch within the market, I think. Yeah, there is. And I think that gets filled in two ways. One, growing retail appetite.

1:03:52Two, people allocating more over time to liquid funds like yourself because they see the risk-reward they're stacking up pretty well. And look, Hyperliquid's a good example of that, right? And Grass is another good example of that. They're token launches that have had much more of an IPO-type launch trajectory, which is great for the space, which is early sellers have been punished and that's what you want to see you want to see people be move away from that model that the highest price is the price on day one because that's a terrible dynamic and that fosters terrible secondary market behavior and to be frank that fosters terrible vc behavior because i love it when i see something getting nuked when it comes out because it's come out too high and you kind of get that that low and you're looking for is this a real project does it have demand, those are the ones you can make a shit ton of money from.

1:04:49You get VC-like returns in liquid markets without all of the risk of being very early stage. Yeah, and we've seen that. And it takes a lot of courage. And we'd like to think of ourselves as someone that does that courage. In our liquid fund and part of a fund we're actually raising for at the moment, that's exactly our strategy. We look to buy effectively secondary tokens from either VC looking to exit through a vesting period or even foundations and treasuries where we'll buy those tokens a lot of them in the trajectory you're talking about where we're buying effectively locked up tokens and we're happy to take you know we're happy to take a long lock up for a discount there with the view that we can sort of ride that sort of longer term growth and yeah they've been sold down to levels that don't sort of make a bunch of sense based on the growth that they can offer um now we like that market i don't want you to advertise that too much because we like to be one of the only players in this there's a few people doing it there is a few people it takes a lot of courage and it takes a lot of patience and i think uh you know we're fortunate enough to have a track record over a long period of time and have patient lps that sort of see that as part of our strategy that we look for those sort of inefficiencies and we look for the kind of you know these vesting periods can be two to three years and we look for that sort of patience for those things to sort of work it out and and try to sort the the market noise, which is a dynamic you're talking about, about that super high lifting price that then gets sold down from the actual fundamentals of things that are trading pretty strong.

1:06:20That's right. Having the fundamental framework that you guys have really helps in that kind of risk-taking because you're not momentum risk-taking. It's like, is the market undervaluing this at this stage on a forward basis or not? And doing that kind of work helps. Yeah. I think from my personal perspective, it would be impossible for me to invest in this space without that because, one, I want that underpinnings because I think it actually delivers the best returns. Two, you kind of need it as almost like a security blanket through the volatility that crypto can throw at it because if you're trading based solely on pricing crypto, your mood changes about seven times a day.

1:07:00So you've got to have something that sort of looks through that noise and allows you to be patient because if I look through our sort of six-year investment journey, we've never owned anything that hasn't had near-death experiences. You know, even our Solana position, which we still own a material part of, you know, we entered that position at 22 cents. It's traded between 22 cents to$250 back to$8 back to$220. Right? So if your valuation, if your approach is based solely off momentum, them like you've you've sold out way before and you've probably shot yourself in the foot a hundred times in solana trading through that period don't your normal friends just think you're a fucking insane uh yeah pretty much less insane than they did when i first started this business back seven years ago i know but just if you say to somebody i bought something at 22 cents it went up to 200 bucks i wrote it all the way back down to eight and that's back up 200 something dollars again we did sell a little along the way and we bought some back um some of it well timed some of it not great timed but but i mean you look at solana but this is the but that's the perfect example in crypto right like you take out that short-term volatility and you go from a 22 cent entry to a 220 price today and you go to a chain that was basically some really super interesting tech when we bought it at 22 cents to one today that has some of the most innovative crazy stuff Abeneon on it with millions of users and transactions that are just off the charts, right?

1:08:40And so you take out that short-term price move over that, when we buy that in mid-2020 to today, over that sort of four and a half year journey, the actual fundamental changes are just astronomical. And so the 22 cents to$220 looks kind of normal when you sort of stack that stuff up. and that's why you need that safety blanket to keep yourself safe you know you remember back you remember back in well late 2022 when solana was apparently dead and destined to go back to what was the meme the sbs three dollars right and that's right it's just you know if you live day to day in crypto you can go insane and so you've got to have something that keeps you sort of wedded to that longer term conviction that we're in tech that's growing at 44 times in a year and don't lose sight of that sort of vision.

1:09:36Now, you've got to live and breathe a bit of that craziness as well or you'll miss things that sort of pop up super fast like some of the AI stuff we've seen through December. Yeah, and you've traded memes as well. Yeah, and we've traded a lot more infrastructure around memes. We've been super active, And that's partly where our Radian position comes from, right? It's kind of the key beneficiary, apart from some pump-dog-fump, but from a token perspective, one of the key beneficiaries of meme trading and the rise of memes and an ecosystem we don't think is going anywhere, leaving us anytime soon.

1:10:11Yeah, because on my phantom wallet, I will switch Solana into smoking chicken fish, whatever it is, and it's Radian that it normally goes through, right? Yeah, and it's all those tokens on pump.fund that are generated flipping to radium pools, right, once they reach a certain size. So it's got that incredible capture of that meme growth. And Solana, I don't know if you saw yesterday, Solana did more swap volume than Ethereum and base combined, which is just insane levels of activity. But then there's other places, like, yeah, That's the key driver of our holding in BananaGum bot. Again, a platform through a Telegram bot that generates huge utility to users that want to trade first block memes.

1:11:02And that's a project that made$58 million in fees last 12 months. And I don't know, me mentioning it today on your podcast, on this discussion probably 100x times the amount of people that actually have heard of it. It made$58 million in fees. It's staggering. Users made$58 million. And, you know, that doesn't include the fees that it generates for block builders, right, which I think are about$80 million through the year as well. So just astronomical amounts of capital. And I think that's why I kind of sit here today and talk about these apps and get super excited. The amount of people that sort of understand the amount of capital, that the amount of profits or the amount of revenue that's been generated by these crypto applications is extremely small.

1:11:55And we know there's a whole wave of people that will put as much capital as they can into something that's growing at 4 ,000x year on year at 15 times. It's just that the barriers for them finding out are pretty high and you and I have the box seat to buy them before they turn up and these things get repriced to more sort of market normal levels. I mean that's one of the other things that's over the six years of sort of talking to ALPs and crypto and prospective ALPs, there's been three key things that have held people back. It's been regulation and yet we've had a huge step forward in where that's headed over the last three months.

1:12:37I don't think anyone's, if anything, that's turned to a positive for the space as opposed to just mere clarity. tethers being an issue for institutional investors and you know that's now that's been off the table for some time now it's disclosure and it's transparencies and audits and those sorts of things so that one's gone and the third one is around you know well nothing in crypto makes money you know coming back to tether again what's it's probably the one of the top five most profitable financial services companies in the world and then i'm telling you there's applications today making$20 million a month, trading at 15 times multiples.

1:13:14Now, the good thing is there's heaps of that being made. The next best thing is that there's hardly anyone that knows about it or is investing based on it. So we've so far had this playing field largely to ourselves. So final question, anything in AI that's investable for you right now at liquid token level? Yeah, I mean, grass is a perfect crossover for us. So we'd see grass. We think WorldCoin is super interesting. So that's AI adjacent because it's collecting data, but it's also D-PIN, so therefore it has a valuation framework that's usable for you. Yeah, and it's building a data set that's going to be bought by AI users, by these AI, by the models.

1:13:55And so it's a perfect crossover of using Web3, which is what it's good at, to build a database that you can't use using Web2 or any other means at super speed and then delivering it to people that have a lot of money to spend to buy these databases. So also focused around sort of more the traditional metrics that we want that, you know, something that's got utility that they can sell for money. I think in the AI space, we think WorldCoin and those use cases are super interesting. Early days for us there. We don't have a material position there, but we think that, you know, that proof of life. WorldCoin to me is really interesting.

1:14:33I've met them because they're here in Cayman. And we all got the narrative because of the orb, but really it just takes Microsoft to say we will use that authentication and that fucking thing gets re-rated 10x overnight. And that's what's in my head. If Sam Altman's going to push it and he's got – whether Sam Altman ends up with power or Elon has robbed him of it, we don't know yet. but there's some sort of optionality to it. Yeah, and I think if you looked at it, we looked at it in a way that there's two hurdles you needed to kind of get through, right? The first one was, is that even a real use case?

1:15:15And I think that hurdle's now gone, right? Because I think any kind of realistic view forward shows that proof of life, proof of realness is an absolute short-term use case that's here. If we went back 12 months, that was all still pretty kind of nebulous, right? The second one is, are they going to be used and how does the token benefit from that? But look, you've had one of two things kind of drop away in our view which make it a lot more interesting than it was. Yeah. So if we looked across sort of AI exposure across our portfolio, you know grass um we think you know harweave and what they're building in the ao which is launching in february remains super interesting what about tau i know we do have a material position in tau as well yeah because i went to barry's whole event recently and you know he's like all in on tau now yeah which i you know uh which is i think one that we came from a different angle from the vc angle for us that we just had time and time again the most impressive founders building the coolest stuff or the coolest potential stuff in crypto AI crossover while also playing around in the tower ecosystem and we just thought that kind of like that almost like the sort of early days in crypto around if you look back at the sort of the key what became the key kind of foundational personalities in crypto were all around Bitcoin they may not have just been doing Bitcoin but they're around Bitcoin and that became the sort of the ecosystem that drove the key founders that then sort of drove the initial sort of you know growth in crypto from our perspective Tower looks similar in that you know even people building things that are particularly focused on Tau still have some association or super interested or contributing to the Tau ecosystem.

1:17:19And for us, that was the push that kind of got us to take our position in Tau is just that the amount of founders that we saw that were impressive in II, nearly all of them had something to do with Tau, either be contributing in some way, building on it in some way. And so it just felt like that kind of central point where crypto could launch from and continues to be. So I think it's really interesting. Yeah, because it's also utility. It's infrastructure. It's not just following a chatbot. I mean, this is a much bigger thing. It's complicated, though. I sat down with the founders and stuff. It's complicated.

1:17:59A lot of good things in crypto are, I think. I know. They take a while to get your head around. Until you can get it down to a nice memetic, it's really hard. but I think the look one of the biggest early kind of pushbacks against Tower was firstly around inflation but I mean that's just standard crypto models and that's what you've got to do to bootstrap a community and it's been super successful doing that. Second one was yeah there's a bunch of what I'd say super low utility stuff that was happening on subnets and those sorts of things but that's again that's just typical crypto tech. People throw weird stuff at things to see what sticks right and over time you start to see the more utility-driven use cases start to crowd out, those kind of crazy ones, or you see those crazy ones become real.

1:18:44And so, you know, when we see that happening, when we see people experimenting with crazy stuff as well as pretty tangible stuff, that never turns us off because that's what you want to see. Because, you know, you don't want to come into these sorts of, you know, tower super complex and what it's trying to build and what people on it are trying to build is incredibly, incredibly disruptive stuff. The last thing you ought to come at it with is preconceived ideas around, well, this is what's going to work and that's all I'm going to invest in. You want people to be doing weird stuff and see what happens.

1:19:13Yeah, you want to be shocked by something that gets traction that you didn't even think of. Correct. Correct. Richard, super fascinating conversation as ever. Really good. Here's to a great 2025. Let's hope it's the year of the banana. And your banana bot goes up and the banana zone happens and continues to happen. Great. Great to be with you again. All right. See you soon. Cheers. So hopefully you found that interesting. Richard uses this kind of value framework for his crypto investments. And he looks for things that are undervalued where he thinks they should be. So it's not just so much a momentum trade, but he puts some real framework on it.

1:19:55So hopefully you too have learned a little bit about building a framework. You know, my bets are more concentrated. Richard is broader, more diverse in his themes. Now, it's different horses for courses, different ways of making money. But for you, you need to learn your way. You don't copy me, you don't copy Richard, but you build what style is best for you. What's your time horizon? How much volatility can you stomach? Should you have a diverse wide portfolio or should you keep it simple, stupid? I'll leave that to you, but I'm here to help. And hopefully I'm helping you on your path to unfuck your future.

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