Is ETH Going to Outperform for Longer?

30:56In terms of the next thing to bring up is we have seen a couple of very large airdrops this week and last week, which was Layer 0 and ZK Sync. Multi-billion dollar airdrops. ZK Sync is an L2 and Layer 0 is kind of like a bridge. You use it to take protocols and move funds across various different chains. Interestingly, both of them were met with a lot of criticism on the timeline. And Kobe, who's a relatively well-known trader in the space, came out with a thought-provoking tweet, which was, if you're a founder, in my opinion, you're probably thinking about not doing an airdrop at all these days.

31:46The downsides are much greater than the upsides now. You just give away 20 % of your tokens to extremely low value users with likely zero retention, over half of which farm to be instantly sold and all with cost basis close to zero. You need high FDV for the airdrop to be considered good, creating weird incentives for float FDV. If you do anything slightly wrong, then you get massive backlash. The last two big airdrops, CK Sync, Eigenlayer, both had CK Scam and Eigen Scam trending in the days after the airdrop checker was announced. Plus a leading project that did no airdrop did pretty well on the market recently.

32:22So if you have a good example of a different path working well, maybe it's over for airdrops after Layer Zero. Now similarly, Layer Zero ended up with some fad as soon as it launched. and all of these tokens haven't been done well as soon as they've launched. You get a lot of people instantly selling them and just kind of moving on to farming the next airdrop. What is your view on this? Because I think it's been very, very clear that airdrops have not performed well this cycle. I don't think, apart from maybe Jupiter, most, if not all, are now kind of below where they first came, at least the major ones.

33:00Do you have a way, a solution for this? because I think it is one of crypto's critical problems right now. Yeah, I don't think stopping airdrops should founders stop airdrops. I think the answer to that is no. Because part of crypto is participation, getting people to use your dApps and the models and everything you build and rewarding them for it. One of the great things I think about Web3 is this idea of being able to consume to earn. and that has worked well in many different requirements i think it's been done well in the past but because that model perhaps has been overused i think people have gotten too aggressive with it and the issue we've had is as you mentioned is like low flow high ftv um a lot of vcs getting involved investing heavily in it and then dumping straight away so i don't think the answer just to take the other side a little bit from from what kobe is saying i don't think the answer is just to stop doing airdrops and his point on the community will be angry with you, whatever way you cut it.

34:03I mean, that's just the case of starting any kind of business to any kind of consumer, right? Like you're always going to have people who will complain. You're always going to have growing pains and you're never going to be able to make everyone happy, especially people who know if they can act entitled, it may grant them access to further rewards down the line in the future. So I think as a founder, I think you have to be much more headstrong and just be like, this is what we're doing this is what we're building this is how we're going to reward people and either you like it or you're not that's that's that and there's an element of founders actually not doing anything wrong but people who are farming these rewards and spending a lot of time and effort in using the protocols and farming all that kind of stuff um having this view or this expectation of x amount of money whatever it is i should get a five figure airdrop or should get a six-figure airdrop and they're not getting it but the only people that created those expectations really was were themselves not the founders there is an element of like expectations being mismatched between founders and users but i don't think stopping this model is the right answer i think this is one of the best things about web3 this idea that you can use things and earn whatever token governs someone's or underpin someone's protocol and that's something that's very unique and powerful to economic behavior in web3 and i don't think it should be stopped how i do think it could be improved is don't fill your whole round with feces that you know are just going to take the 50x or 25x and dump your token afterwards and now that's easier said than done because if that's your only source of funding you have to go out and build this thing then it's a difficult thing to say no like where else do you get funding from so i don't know you know beyond that it's difficult to judge what the perfect solution is maybe improve the tokenomics you know maybe just have the whole thing dropped at the beginning and just get the selling over and done with and then grow from that i don't know that could be an interesting way to do it well some of the fun for these past couple of airdrops was to do with the idea that they actually did bring in quite a lot of bot protection so they they went after so-called civil accounts so accounts which are basically bot farms which go on there and and try and farm the token and that caused some fud i think that's good like uh my i agree with you there in that we um it does make sense to to reward users but actual users you know if it's just bots then you're not rewarding users and and that is it is i think tristan on even this post has actually gone into some of the things about that.

36:41So the idea that we actually have real users who are complaining, it's not really that. It's a bunch of people who are bot farming. ZK Sync, although is a relatively well-known L2, there's not a lot happening on there. It's kind of less than a billion TDL. I think most people who are talking about ZK Sync were talking about the idea that they were farming it. And I think that there's something to be said there in that There was a lot of bot activity going on there and that perhaps caused some of the backlash. And even for Layer 0, I think similarly, there was a lot of bot activity and they've kind of been after it.

37:17I do think there was a rush to a token sometimes in Web3 because of those incentives around VCs. I think how a lot of VCs are incentivized is kind of this double dip method where they get taken at, they get the token and they also earn the equity in the company. So they kind of protect themselves, which you could argue they may need in crypto because it's so unbelievably volatile. But it does sometimes harm the business over the medium term, I think, to rush to produce a token. I don't think often these tokens are even beneficial. Sometimes it can lead to FUD against the actual protocol itself, particularly on poor design.

38:03If we just end up with a DAO governance token, we have so many of those in DeFi and they're all trending towards zero because there's still not a way to do the fees correctly. And then similarly, I think they are used as a trick to try and increase initial adoption. But then when the token comes out, it leads to you are inviting short-term users onto your platform rather than actually building a better product. So I think I would kind of side more with Sobe on this, so with Kobe on this one, in that we don't always need a token. I think there are great apps out there which don't always need a token.

38:44And I think over the medium term, founders will be thinking more and more, do they need, they really need to think of why they need this token. Why in a month's time are you buying Layer 0 token? Let's put that out there. I think it's out there to a certain extent. It's got a multi-billion dollar market cap, but we really do need to have a strong fundamental about why we need these. And if it's just, oh, it's a DAO who manages some of the revenue of the protocol, that's not even getting back to users in the way that we want it to. So maybe until we get better clarity in some of the regulation even around that, we should delay some of these tokens.

39:22Yes, you might not get amazing initial adoption, but you get adopters like this. You get farms. And maybe it's not good for you as an entrepreneur to be inviting that sort of thing on. So I think it's a lot of short-term money grab, and it's leading to bad outcomes for pretty much everyone. It's leading to bad outcomes for users and even the protocol owners. If your token is down only, that can often decide how people view the success of your project. And that's often not how it should be. It's down to things like tokenomics, like you said. So I hope there is a slowdown in this sort of stuff because I think we do need to slightly question that model.

40:08There will be a slowdown in it because they've performed so badly and there's been so much negative press on the low float stuff. So there definitely will be a slowdown on it. And I think new tokens that come to the market will either airdrop a larger amount to holders and try and get the float more in line with the FTV. We'll have different vesting terms that maybe don't create this perpetual sell pressure for the next three years, whatever it is. It's hard to get alternative funding, but VCs won't fund something unless they can make money on it and then monetize it. So it's hard to combat those mechanics.

40:53and the difference really now from now compared to maybe 3 or 4 years ago compared to 4 years before that is that there's just tons more supply, there's loads more deals so people have more things to choose from and that's a big difference as well, I guess oversupply of tech how many different L2s do you really need how many different roll ups do you need you know what I mean so there's that element to it as well but I think if it gets to a point where all these tokens are not successful people will find it hard to raise money from them unless, until someone figures out a way to do it in a way where real value actually gets driven to these tokens and they're not just a quick 100x for the VCs and then everyone else just sits in this descending pool of nothingness, yeah.

41:51Jupiter, like you said, is one of the better performers and that didn't really go after VC. So maybe it is a VC thing and we'll see slightly better tokenomics from those. One thing that has also not had a great week is meme coins. We've seen all of the major meme coins head lower. Pepe is down about 30 % from its highs. Whiff is down about 60, I think, 60-70 % from its highs. Similarly for Bonk, Floki, all of the mid-caps. That has been one of the biggest trends in crypto. And in terms of altcoins all going lower, memecoins have generally had a better last 12 months. Do you think we're now approaching the end of this?

42:32Do you think memecoins are, the memecoin season is now over or at least maybe just over for a short term? i don't think we are approaching the end of this you have to remember meme coins are really high beta right and we've seen bitcoin have difficult price action in the last couple of weeks you've seen the same across majors you've got alts alts have been destroyed like many alts down on the year now right meme coins are not down on the year in most cases they're still up a lot on the year in most cases so i think um you have to remember they're high beta and when you have these moves like this, they will move a lot lower than the rest of the market, just like how they moved a lot higher than the rest of the market on its uprising.

43:19So I don't think it's over, number one. Number two, you have to understand where this meme coin phenomena comes from. And it comes from this left curve behavior, kind of comes from this antithesis of, this is how you should invest. This is how you should have your 60-40 portfolio. And this is how you should operate With risk management, all this kind of stuff, the meme coin left curve idea just completely throws all that out the water. It's the GameStop phenomenon, right? It's like if loads of us can all be brain dead about something and just go for it, then you can affect price action, especially in crypto where market capitalizations relative to traditional stocks are so small.

44:00So I don't think it's over because that's like saying the left curve behavior of humans is over. and I don't think it is. I think it will come back and people get more left curve when markets do well, when markets rebound. And so I think we will see that when the market rebounces from here. It's just a tough time for the market overall and as a result, New Coins are struggling but I don't think, I'm not writing off left curve behavior of humans. I think we will see more and more of it and I think New Coins is just perfectly suited and built for it. They're just volatile and we're just seeing that volatility now.

44:35Yeah, I'll play devil's advocate slightly here because I also am a big believer in memes. But I do think what we are seeing is a shorter term life cycle for memes. Mainly since Pump.Fun came in and you're seeing 500 ,000 meme coins every single month, you are starting to see, particularly on Solana, it's very easy to churn into a new coin. And also holders are kind of expecting their memes not to last as long. They kind of have the life cycle of a normal meme. We've spoken about this before, but they feel more like attention coins. than they do necessarily around meme coins. And sometimes people recognize that the attention is not going to last that long.

45:13So it is a game of hot potato a bit more, I think, on things like Solana. And when you have this many new tokens every single day and not that many inflows, you're starting to see a lot of the major Solana coins particularly head lower. Interestingly, Pepe's held up the best, and that's obviously on ETH. But there's far fewer coins, it feels like, at least daily coins on ETH mainnet. I know Base has been having hundreds of thousands of coins. but I thought it was very interesting this week that even Pepe wasn't the best performing ETH beta coin. That went to some of the ETH DeFi coins this week.

45:51Someone asked this question actually on the Real Vision website. I thought it was a good point to throw it in. Would you add to your Pepe or your whiff bags given this big backup? You mentioned Pepe down 30%, whiff down 60 % or 70%. would you be adding risk to meme coins here? That question was from Melvin on the Real Vision website. No, no. I have Pepe and I have a low-cap Solana coin, which I created. But no, I think we could be here for a medium-term period where we need some consolidation here in memes. I think out of the majors, Pepe looks the strongest. You can even see that on these charts.

46:30like it just feels as though it has the um has the best relative value story in that a lot of the other meme coins are kind of related to pepe even if you look down you know brett on this on on this book of meme these are all to some extent pepe derivatives and i think there's something to be said about that whereas i think some of the others it's easy to switch out you know dog with hat was created in november uh it's it's it's quite easy to think that you know oh i'm going to buy another one. There was another one even this week, like another cute dog meme that ran up. And that's quite easy to do on Solana.

47:06So I think people are quickly able to move their attention to something new. So I think we could have seen the short-term highs for some of these major sole meme coins. I'm not putting a downer on left-curve behavior. I think we'll come rip-roaring back, but I don't think it maybe is for the next month or two. I'll take the other side of that. I'll take the other side of that. I'm not adding to risk here because we just have a lot of it already, but I think we will see them come back. And you just know as soon as they show the slightest bit of bouncing, everyone just runs in and fomens in because they've experienced that crazy price action before.

47:54So I think we will I think we will see it yeah look I love my Pepe bags like I'll hold that until I until I die I guess I'm just working out when relative outperformance is going to happen it does this was interesting this week that ETH I think outperformed Pepe this week which I thought was kind of wild because that doesn't normally happen and that said told me a lot about where the like the market is at least for memes right now because it's no longer you buy them as the beta play. It feels like they're slightly outperforming the majors there, which I thought was interesting. We've got just under 15 minutes left.

48:33Should we do the audience questions and get some of those in? Yeah, sure. I think we're largely kind of done. So we can kind of go on to the audience questions. Alright, let's do that. This one's from Turbo Goose on the Real Vision website. With fears that the UK will raise capital gains tax to 40 % do you see a risk of this happening across the world and completely killing the market in this cycle and of course Canada very recently increases capital gains tax to match that of your marginal income tax rate and in the US your short term capital gains tax also is your marginal income tax rate so do you think that happens in the UK and do you think that's a big headwind for crypto this cycle well you tell me, you actually made some moves about this, this exact thing.

49:21If they're going to increase taxes after the end of this election, maybe now is the time to lock in some of these gains. I mean, I don't know. They haven't said... Labour have said we're not increasing taxes and then they've further gone to give more detail as to the fact that they're not increasing income tax and they're not increasing VAT and I think council tax. But there's no mention of capital gains tax and of course, they keep we're not going to increase taxes on working people and capital gains tax is kind of like the rich person's tax if you just you know sit there and clip your gains and stocks and crypto and whatnot um as your main source of income um that's some somewhere they could very easily attack so i don't know if it like i personally don't think it kills the market like i don't think when you see when you're worried about tax your initial reaction isn't oh i'm going to invest less it is maybe I'm going to take some money out prematurely so that could be the case or the other thing that you think about is okay I'm going to move to a different country and then take it out there and pay no tax no points your fingers here

50:36I don't know why you're still there man I don't think it will be a market killer but it will have some impact it's not a market killer but if you do have crypto gains right now It might be the right move to lock in the current capital gains. I don't really know how quickly they'd be able to enact a new policy around that or how aggressive they would be. But I would be unsurprised if capital gains tax goes up at some point over the next five years. So it might make sense to lock them in if you've had a good bull market so far. All right, next question from Mark on the Real Vision website. What would you both do to preserve your assets if Russia and NATO start the next world war living in Europe is slowly becoming a concern to me world war 3 what do you do to preserve your assets in world war 3 it depends if you're in like direct line of conflict I think just kind of get out of there I guess I don't know which assets do well in a world war 3 scenario I actually haven't looked at what assets do well in like world war 2 for World War I.

51:45I would guess like defense stocks probably do, are probably one of the only things that do well. I think gold and people have said, you know, Bitcoin might do well in a crisis there. It probably goes down a lot at first and then maybe rallies afterwards. So I think Bitcoin is probably a decent thing to own, but prepare for volatility. I guess owning treasuries might not be a bad move there maybe US treasuries they normally rip whenever there's a big uncertainty in the world so it's difficult to say that I don't think we're headed to World War 3 in fact I think the next moves will be some form of de-escalation but I would guess things like gold would probably be my number one asset to own if you're really, really scared about that?

52:38I personally would liquidate everything into Bitcoin. I'd create a new Bitcoin wallet. I'd memorize my seed phrase and then just destroy any evidence of it or whatever. And I'd put all my money into that wallet and that would be it. And then no one can touch it apart from me, basically. I wouldn't even have the wallet installed on my laptop with the money in it. I'd just nuke my whole laptop and everything and just have it memorized in my head. That's the beauty of Bitcoin and I guess to an extent crypto as well. But you can just do that and then I just have this 12 or 24 word seed phrase which gives me access to all my pennies in Bitcoin.

53:23Have you looked into bunkers around the UK? I look at them around Portugal. They haven't really reached Portugal yet. But disaster recovery is a big thing in the US. It's less big, it feels like, in Europe. maybe that is a business business idea I mean you should get into go up to North Holt oh yeah god yeah that's where we we used to have to go when we worked in the city alright next question last week you highlighted the potential for Toncoin can you share your view on what you think would be a good entry point how's Toncoin doing now I'm curious to see a chart of it yeah I mean the best entry for Toncoin was last year the second best entry is probably now it does feel as though they're getting they're getting a lot more integrations particularly with Tether Tether, interestingly Binance is now allowing Tether withdrawals and deposits on Toncoin huge users that we've already spoken about potential and particularly through this gaming angle the one thing there is the tokenomics and the idea that they've still got 50 % of the token still to be vested and we've seen a lot of that sort of flood with other coins It's just a stable coin isn't it?

54:37It's barely moved like if you, over 5 days it's down what like 15 % or something I think we have to zoom out here slightly Zoom out a little bit yeah, but like year to date It's done pretty well I would say As far as altcoins go, it's a massive outperformance I don't think that does more than another 2x, let's say, near term. That would take it to around Solana's market cap, and it doesn't really feel like it's there yet. But I do think it's going to be a big outperformer. If you own altcoins, I still think Tana is going to be a big outperformer there. All right. So the conclusion there is now is the second best entry point since last year.

55:23You could play the other way to play this is not coin, which is the number one meme coin or gaming coin on Ton. I think it's trading about a$1.5 billion market cap. Given that Ton is about half the market cap of Solana, and Solana meme coins kind of topped out around four, maybe you can still play that, but that's probably only a 2x too. But yeah, that's been the most popular high beta way to play Ton coin is not coin, which is the meme coin. So maybe dance in those streets. That's down, I think, something like 50 % over the last week or so. So maybe that's a better entry. If you want to have some high beta ton exposure, buy Notcoin.

56:13This next question is from RM. I think this is a really interesting question. So USDJPY is about to make its highest weekly close since 1990. What are your thoughts on this? You said USDJPY, what are your thoughts on dollar-yen, I guess is the way I should pronounce it. not an FX trader.

56:33What are your thoughts on this and the potential impact? I mean, I'm just not that bullish on the yen. I think the dollar, honestly, I think will continue to strengthen, although it has its own problems, I just think it will continue to strengthen versus most major currencies, barring maybe like the Swiss franc. But yeah, I think dollar, as will be a flight to safety asset kind of globally over the next 20 years for fiat. So I'm bullish on the dollar versus dollar yen. I think this had a massive impact on US treasuries a few weeks ago, right? Yeah. Because of how much or how many US treasuries exposure Japan has and there was that massive sale or dumping of it.

57:22I think it was like maybe two months ago, a month ago, I think. There was a day when 10 years spiked all the way to like 5 % or something like that. That is the main risk. That's the main risk is that the DOJ, sorry, the BOJ step in to defend this, which they have already to the tune of about 75 billion, I think, so far. Or at least that was at the end of May. I haven't looked at the June figures, but they are defending this. and they are, I think, the number one foreign country to own US treasuries, maybe alongside China. China, yeah. I think Yellen basically had to call them up and say, stop selling.

58:04So you could see a widening of US treasuries on the back of this. And obviously the US has got to finance a gargantuan amount of debt with where it's at right now. and given the interest payments are already in above you know i think they're like 1.2 1.3 trillion right now they can't really see high yields so i um i think that what this may do is force the fed to lower rates that's probably that's probably where we end up like if you if you read through this i don't think i don't think the u.s can continue to um to keep rates as high as they are just globally given the backs are against the wall with who actually owns their debt so that's probably how this plays out and maybe you're starting to see the data point that way anyway so maybe maybe this does speed up to rate cuts this uh this year yeah that's what i think i think it the answer to this or the defense mechanism to this is actually speeding up rate cuts in an environment where you actually in my opinion can now afford to have rate cuts before things get too ugly i think yeah um all right last question from michael on youtube ov are you still balls deep in whiff um i do still own i i think last maybe a few weeks ago we talked about how i bought a lot of whiff i converted all my solana into whiff um i the amount that i converted i sold into fiat actually back when a week or two ago when whiff was around three and a half um but i still kept a large moon bag of whiff since then that i've been holding for all of this year actually and i'm still holding it so i think for me unless i have like a in real life reason to need the cash like buying real estate or something like that then i wouldn't be selling it here i still think despite what i said earlier about eth i do think solana can come back as an ecosystem and just like how we spoke about how pepe has been outperforming and moving strongly with the eth i think with this is the same to sol so for me it's actually a good point to keep holding and just kind of like i don't know days like today and weeks like this week and months like this month to be honest with you it's you count your lucky stars that it's summer you can go out and play golf and do other things rather than sit there looking at your screen and crying so i think um you know if you're confident in your positions you just don't look at them when days are down and look at them when when days are up and you feel happy and that's my my guide to investing what's that response so yes he still holds a big bag but he's less sure about it but it's uh he's gonna go out and play some golf so he doesn't have to look at the chart yes that's basically it um all right well i think with that we can uh we can wrap it up for this friday i think oh the market did once again nuke during the show as yeah bitcoin hits new new loads of 63.6k so um i was going to say i think at least the market didn't nuke this time but it did so we're now four for four four for four the market nuke every time we do the show and us claiming that we're buyers good luck um but yeah thanks everyone tuning in that was ret vision make sure you're following us on x osf underscore ret ret mando and real vision uh also make sure you sign up to real vision crypto that's real vision.com forward slash rvc to access our monthly amas and we will see you next friday at 11 30 a.m eastern time and 4 30 p.m which is summertime have a good weekend everyone we hope you enjoyed this episode at real vision we arm you with expert knowledge time efficient tools and a powerful network to help you succeed on your financial journey get a taste of financial freedom with our free offer at real vision.com forward slash free.

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