E178: Tushar Jain, Multicoin CoFounder: The 3 Coins His Multi-Billion Dollar Fund Is Bullish On This Cycle

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31:45Check out my Treasure link in the description down below. Let's take Zcash and Hype as examples because they're very volatile, and you entered both over the last year.

31:58How do you know when it's the right, at some point, I want to enter this asset, but it's so volatile. How do you know when you should go and get in? For example, the hype, because I mean, I don't know the exact entry price, but from what I remember, like you pretty much nailed like the last bottom of hype to buy and like, how do you do this? you you have to average in i think that's that's really the uh the answer uh trying to time the exact bottom say like today is the bottom maybe you get lucky all right and you do nail the exact bottom but that is not a repeatable skill uh so you have to average in i actually i have a framework I'll share.

32:48Here's how I think about it when I make an investment decision. I break it into thirds. Let's say I want to put$100 into whatever token, XYZ token, right? I will buy a third immediately. I will then buy a third on a defined schedule. So I'll say I'm going to buy, you know, the next third over two months or one month or, you know, something like that. And then the last... So you DCA'd over two months? Or you say in two months, I'm getting... No, no, no. DCA'd over that period. And then for the last third, I'm opportunistic during the DCA period. So I come in and I say, okay, well, it's down 10 % today.

33:31I still like it. I'm going to use my pool of opportunistic capital. I'm going to put some of that to work today. And by the time I'm done with the DCA, I want to be done with the opportunistic bucket as well. How did you build that framework? Is it based on different things you did in the past and you see this works better? Or you just say, oh, actually, I feel good. I feel better at night if I use this framework. It's a combination of that. It's experience. I've been doing this for almost 10 years now, professionally and longer personally. So we've been through some cycles, right? So we've been through it.

34:08And that has taught me a lot. And one thing I think about, and I mentioned this earlier, is regret minimization. I think about what would make me feel really dumb. And so if I like an asset, I'm like, I don't want to buy it right now. I want to wait for a better entry, but I never get a better entry. I'm going to feel like an idiot. I'm going to feel like I was right about the actual decision that I wanted to make, but I let my emotions take over. So that tells me, okay, put the third in when you make the decision. But I also know that I'm not going to time the exact bottom every time. That's an incredibly difficult thing to do.

34:53So put a third in with DCI. And that gives you at least the average price over some period. And that last third is you feel like an idiot if you bought it, the price comes down, you still love it, you want to buy more, and you don't have any cash to buy more. And now you regret that as well. So this framework of a third, a third, a third, I think reduces regret significantly. You said we have the most volatile, we've been through cycles, we have the most volatile hedge fund in the history of hedge funds. Yet you also said before, we don't trade. and that for me is like there's probably the biggest lesson that people should learn is you can't trade these markets it's too hard but yet most people when they come into crypto I think about my dad for example I mean they bought Bitcoin 2019 etc but like their first thinking or thought and even now it's so volatile I just need to buy and then sell and then buy back lower.

36:03Because it's more volatile, people make the assumption that it's more tradable. Yes. But you're not saying that. You're basically saying we have this massive multi-billion dollar fund and we go through the crazy volatility because you can't trade this stuff. Let me give you another framework. This is one of my favorites. So I only want to invest where I have edge. If you don't have edge, just go buy the index and move on. Go to the beach, go to the gym, go do whatever you do for fun. You need to find your edge. And fundamentally, there are four sources of edge in investing. The first one is access or information.

36:51Can you call people and do they pick up the phone? Do they call you when there's a deal or something's going to happen? And so you can have an edge there, and that can help you drive timing. If you have an idea of what's about to happen, that can give you a sense of timing. The second edge is analytical. It's how well do you actually understand the asset? Do you understand, in the case of, let's pick on hype because we talked about hype. Do you understand the cash flows? Do you understand where they're coming from? Do you understand what the multiple should be? Do you understand the risks? And you can have an analytical edge.

37:31I might understand an asset better than you do. The third one is behavioral or psychological. And that is how well do you know yourself? How do you manage when you feel like an idiot at the bottom of the market? And how do you manage when you feel like a genius at the top? How do you manage when something else is going on in your life, not related to the market, something personal, and that messes up your psychology, right? And this is, I think, the hardest one to actually have an edge on. But this is where the people, like you're mentioning, think they have an edge. They think, oh, I'm going to buy low, sell high, not because I have analytical edge.

38:12I don't understand Bitcoin better than someone else. I don't have information edge. I have no idea what's going to happen next. they think they have behavioral edge in the hardest one actually that's the hardest one to have edge in right and then there is a fourth source of edge which is structural edge right if you have a long duration fund versus a short duration fund if you have you know your own capital versus other people's money you have you know let's say an insurance company with a bunch of float like you have this long duration very cheap capital to go invest that one most people can't change.

38:48Most people are investing their own money. Or if you're a professional, you have the fund structure that you have. So that's not worth focusing too much on. There are other types of structural edge too. Like, oh, I have the best HFT infrastructure or something. But most people can't change that. So I think those are the four sources of edge. And unless you know which source of edge is driving the decision that you are making, you shouldn't be making that decision. So whenever we make an investment decision, I think to myself, am I doing this because I think I have some access or information edge?

39:23Am I just seeing something that is out there, but people don't realize yet? Is it I have some analytical edge? I understand this better than everyone else. or is it some behavioral edge? You know, I see everyone is crashing out. Everyone's sentiments are in the gutter. They feel like they need to, you know, everyone's leaving, right? People are leaving the industry and they're saying like, what am I doing with my life, right? And okay, well, maybe that's a behavioral signal right there, all right? So every decision that we make, I think about what is the source of edge that is leading me to make that decision because if I don't have a source of edge, I don't want to do it.

40:09Can you give me three examples? Source of edge for Zcash, Hype, and Athena that you invested in last year. Sure. Okay. So I would say it's a combination for these, right? Like Zcash, I mentioned, you know, there was some access edge in that called up a bunch of the people who were excited about it last year and was able to confirm that they were still excited about it. That was actually a major piece, right? So excited means, hey, did you sell anything? Do you still hold it? How do you judge? I don't ask people, did you sell? I think that's personal, right? And I don't want to ask people for what their trading plans are because if you asked me, I would not ever answer you.

41:07That's a forbidden topic to me. It's more judging their emotion about it. Do they still feel attached to it? Do they still want to talk about it to their friends? That's a different story. At that point, because who knows, maybe they sold because they wanted to buy a house or something else happened in their life. I'm not thinking about that. I'm thinking about do they still like it. There's some, I think, limited analytical edge on Zcash, right? Just there isn't that much to analyze, right? We understand the privacy model, but so does everyone else. I don't think I understand the asset better than anyone else.

41:51But I think the biggest thing was the behavioral or psychological edge on the Zcash decision. It was seeing that sentiment peaked, crashed out, but still held fairly strong, seeing the strong tailwinds, seeing the very clear, easy to understand narrative around it. And that was the key piece in that decision. What does Athena represent to you? Because you guys took a sizable position last year in Athena. Athena and a bunch of these other DeFi protocols are all converging. So I think Athena is converging with Aave, is converging with Morpho. Like all of these things, their job is they have lenders who want to earn some yield, and they have borrowers who want leverage.

42:49That's it. That's what they all do. In the case of Athena, there are lenders who have USDE, and the borrowers are the derivatives traders who want to go levered long, and they're paying funding in order to do that. With something like Athena or Morpho, you have the lenders who are depositing into the pool, and of course you have the borrowers who post their collateral, they borrow, they lever up. But these are fundamentally the same product, because it's the same job to be done. And so Athena is not the only one we own in that category. We own Aave. We own Camino, which is the biggest and I think most secure on Solana.

43:32And we own some of the others too. We have some Morpho. So I think about it probabilistically. I love this market segment of providing leverage because there are clear returns to scale. If I want to put on a large position, I have to go to the largest lender. And why would anyone go to the second largest or third largest? Why would a borrower go there? Why would a lender go there? There's clear returns to scale. And I don't know which path leads to the ultimate winner. Is it you start with the borrow-lend on spot? Is it derivatives funding? Is it a bundle of these things? Is it building the platform and letting other people come up with strategies like Morpho does?

44:21Is it some other mechanism of providing this leverage? So we just own a variety of these as a part of the broader thesis. How much do you look at the founder, for example, for Athena? You look at, oh, this guy is actually amazing, and therefore I'm betting big on that, versus just looking at the product itself and attraction? Absolutely, we consider the founder. So I'll give you another framework that I like to use, and it's something that we use in this case. It's three numbers that we try to figure out. One is the total market size, and we're typically looking a few years out on what we think the market size will be.

45:07The second number is margins in the long run. so that is where we ask are there returns to scale because if there are not returns to scale then margins get competed away and so you can have a huge market but you make very little margins and that's not as exciting and the third is execution risk and this is where the founder comes into play we think Guy is an amazing founder and he's one of the most competent founders in DeFi and his team is great. And so that reduces the execution risk, right? And so what we do is we, and once again, I don't want to give false precision, but we multiply these three things together to give us a rough sense of what should this be worth, right?

45:57And lower execution risk obviously increases what we think it should be worth. When do you lock in some profits? Because you said before, I need to see if I'm euphoric, I need to lock in some profits. But if you have this big picture vision of like this thing can become so big, it's so hard to just lock in profits if you think that you're, yes, you're euphoric, but we're 10 % there because I have a 10-year view. How do you think about that?

46:34That's a tough question, right? And so the question is, first, what do you mean by lock in profits? Is it sell to dollars? Dollars. Is it sell to Bitcoin? Is it sell to... Does multicoin own Bitcoin? Today, we have a very small position, but practically no. The way we think about it is we use Bitcoin as cash in the fund. So if we get new money into the fund or we sell something, we'll buy Bitcoin with it. And when we want to invest in something else, we spend the Bitcoin in order to buy something else. And given where we are in the market cycle, I want to own higher risk things. And so the way I look at it is when you feel euphoria, you want to lower the beta.

47:21So selling some of the higher risk things, but still buying Bitcoin or the index. You can put the index in if you want, but the index is mainly Bitcoin and ETH. And that way you still maintain exposure in case you were wrong about the timing. but you are taking some risk off the table, right? And same thing on the inverse, right? It's when the market draws down dramatically, you take that asset that's cash and you then deploy that into opportunities that you really like. So I tell our investors that we only sell for three reasons. One is we like something else better. two is the thesis has become invalidated something went wrong or three is the market has really overvalued this thing and given it credit for many years into the future and it's gotten exuberant and so we want to exit so one of those three has to be hit but then for our fund what we do is we stay fully deployed at all times because that's a product that we've promised our investors.

48:38So 3D point would mean cash is Bitcoin? Correct. Okay. What's your thought on Ethereum?

48:50That's a tough one. I don't know what their plan is, right? They had this plan with layer twos and heterogeneous scaling environments that were all going to settle down to the base layer. and now they seem to have abandoned that. They want to go scale the L1 again. They're increasing the gas limit. They want people to use the L1 after they spent six, seven years telling everyone, use L2s. So it's hard to know what exactly is the plan. And this is also a trade-off with the decentralization. Who can say what the plan is? Absolutely. There is no one who can actually say this is what Ethereum is. This is what we're going to do.

49:37The foundation doesn't have that much power. They don't want that much power. Vitalik doesn't want that much power. They want to let the market kind of figure it out. But the market is not a great leader. The market is a great follower. And so I think that puts them in a really tough position. I have been genuinely surprised at the resilience of the market cap. despite all of the setbacks that they've faced. Most of the spot trading volume is on Solana now. Most of the derivatives trading volume is on Hyperliquid now. Ethereum has a bunch of TVL, but that's like old TVL that existed from a long time ago.

50:20When you look at the growth in stablecoins, Ethereum on a percentage basis is not winning. And so I have been surprised at the resilience there. and the best explanation I have for that is people think it's a store of value. They think it's a better Bitcoin. Your co-founder and long-time partner, Kyle, left Multicoin and pretty much it seems he left the industry. Maybe I'm wrong, I don't know, but I saw on his Twitter it's saying figuring out what's happening next. Talk about the bottom signal. I mean, it was pretty much a shock for a lot of people and kind of like emphasizing on people's kind of depressed vibe because, I mean, everyone was saying, if this guy's leaving, what the fuck are we doing here?

51:12What can you tell us about that?

51:17What I can tell you is I have a lot of respect for Kyle. We had a great partnership for many years and we built something really awesome together. We got to fund a lot of companies together. And Kyle made the decision for his own reasons and I wish him the best for what he's going to do next. I don't know what that is. I don't know if he knows yet either.

51:51And everyone's on good terms. so looking forward to see what it does. Quick shout out to the legendary team at Jupyter, the DeFi super app. Anything you want to do on chain, from trading to earning yield, you can just use Jupyter. Personally, I recommend getting the Jupyter wallet on either your phone or your laptop. 10 times faster and 10 times cheaper than the competition. You're going to love it. Thank you to the awesome team at Athena for backing today's conversation. Athena is one of the fastest growing projects in DeFi with over$7 billion in stablecoin supply and an average 11 % APY on SUSDE.

52:31And importantly, zero DPEGs since launch, which is exactly what you want from a stablecoin. Go check them out by following the link in the description down below. Why are you still here when some key people in the industry, like a co-founder, have left because they don't believe in crypto early promises anymore? So that's a really good question. And let me give you a peek behind this whole process. Because look, I will be honest, I was surprised when Kyle wanted to leave. That was not something I expected at all. And I had to really think about it. And I went back to what motivates me. I went back to what do I want to do, all right?

53:21And I have a framework that I use for this as well. You know, people say live every day like it's your last. I hate that framework because if today was my last day, I wouldn't be here with you. I'd be with my kids. I would be at home with my family. You know, that's who I care about the most. I would never do anything other than that, all right? And then also sometimes people think way too long term. They think they have forever. But I promise you, we're all going to die. Every single person dies. Maybe we've got some life extension technology. Maybe something will happen. But eventually, death is guaranteed.

54:00I think that's a part of the human condition. So I don't like that framework either. So what I think to myself is, what if I have 10 years? Because if you say one year, then probably not going to work either. right you're probably gonna be very focused on short-term enjoyment but 10 years is a long time all right you have to really think about what do i enjoy doing where do i get meaning where do i get satisfaction where do i get pleasure all right and so i went back and i used that framework and i thought to myself okay if i had 10 years left what would i want to do right now and I want to have an impact on the industry.

54:44I want to win. I love the game of trading and investing. I love trying to find the non-consensus thing. I like being right when other people are wrong. I wanted to say, what does winning mean? Does it mean a number? or it's more like I want to be right when people are wrong? I want to be right when people are wrong. People say, actually, I think people say the best drug is being right. I told you so. Yeah, well, I told you so is even better when it's backed up with numbers. Right? Because then there's no debate about it. Right? And so I thought about that and I was like, okay, where do I get meaning?

55:33Where I get meaning is I think this industry is going to change the world. I think that blockchains are the first principles correct way to think about what capital markets are going to be in the future. This is what AIs are going to use to transact with each other. This is what humans are going to use to interact and transact with each other. The old models of the economy are all built on the printing press era. All right. Literally, when you buy a stock, there is a paper stock certificate sitting at DTCC that is the actual stock. And you just own a receipt of it through many layers of intermediaries.

56:08hilarious, anachronistic system. And so I think there's a lot of meaning in helping drive the future there. There's a lot of satisfaction in being right when other people are wrong. And there's a lot of enjoyment in working with a great team, working with great founders, and just getting to show up every day and interact with these people. just gives me a lot of joy. And so after I went through that framework, I thought, I was reminded of an actual pretty famous quote from Mark Zuckerberg when there was an acquisition offer to buy Facebook for a billion dollars. I think it was Yahoo who made that offer.

56:55I forget exactly who. And he turned it down. And one of his board members asked him, why'd you turn it down? He said, well, if I had a billion dollars, I would just start another social media company. So why would I leave this one? And so it reminded me of that. And it increased my conviction, not only in the industry, but also on why I'm here. Amazing. Wow. Thank you so much for doing this. That was awesome. Thank you for all the framework, the alpha, and for giving a kick to people when they need it. in terms of optimism and conviction. Absolutely, yeah. Look, you have to be excited about the future.

57:42And I think that's healthier for you. Probably. Being a pessimist, it's just no way to go through life. Amazing, thank you. Hey everyone, Kevin here from When Shift Happens. Thank you for watching this conversation. We're doing something today that we usually don't do, which is a little bit of a compliment to the episode that you just watched. I got Tushar remotely for another 10 to 15 minutes to talk about two things that happened between the day that we recorded this podcast that you just watched and today. These two things are first the Zcash drama. some people thinking Zcash is dead today whereas Multicoin and Tushar actually bought more Zik token after this Zcash drama that happened recently and another thing that happened since my conversation with Tushar is that Multicoin released a report on Hyperliquid where they're saying that the hype token could reach more than$600 in the next two years and I wanted to ask him a few questions before we release this episode so please now enjoy this complement with Tushar amazing so we're doing something today that we're usually not doing which is a little bit of online podcasting and the reason for that is because we recorded an amazing conversation a couple of weeks ago there was two main events happening in between the first one is the Zcash drama and the second one is a multi-coin publishing hyperliquid report that sent the hyperliquid community crazy.

59:22So let's start with Zcash. Can you tell us in a nutshell what happened and what you did? Yeah. So at a very high level, what happened was the Zcash core dev team made an announcement that they were reviewing their code for bugs using an AI tool, and they found a bug in the orchard shielded pool. And as a bit of context or reminder for some of the listeners, in a ZK shielded pool, when you send a transaction, you use a zero-knowledge proof to demonstrate that you are not double-spending some Zcash. And the bug that they patched would have allowed you to double-spend Zcash within that pool. And initially, the market's reaction was, okay, so what?

1:00:35Like, what big deal? They fixed a bug. But then the market's reaction grew more panicked and people started worrying that was there an infinite mint in the pool? Did someone double spend a million times and basically owns all the coins in that pool? There are a number of protections against this. First, transparent Zcash addresses act just like Bitcoin. coin that is using transparent double spend verification. So there's no risk to those. And the reason why Zcash has these shielded pools rather than being shielded at the base layer is because they want to be auditable at the base layer. And then each pool is self-contained.

1:01:25And there's something called a turnstile, which counts how many coins have gone into the pool and how many coins have come out of the pool. No more coins can come out of the pool than have already gone in to a pool. And when you look at the behavior on that turnstile, if someone had taken advantage of this bug, we should expect them to be draining the pool in order to monetize their Zeke and sell it. But we're not seeing that behavior. In fact, the pool is actually fairly steady. There There were some withdrawals, but an attacker would have withdrawn the whole thing by now. So what I think happened is, I think it's very unlikely that the bug was exploited.

1:02:14I think that the team just patched a bug. But I think the market was pretty heated on Zcash at the moment. there was some leverage a lot of people with stop losses in place and all of that got wiped out based on this event i don't think anything fundamentally has changed about ccash in fact you can see tweets of mine from back you know years ago talking about how the trade-off between auditability and privacy exists and uh you know monero for example is private at the base layer so you can't audit anything at all. And that was, I think, a very deliberate design decision by the Zcash team to make the base layer auditable.

1:03:08So let me now just quickly cover what they're doing next. They patched this bug. They have run through the code base again with some advanced AI models. I believe they used Mythos for this in partnership with Anthropic. and they found no evidence of any other bugs. But just to be very, very safe, they are launching a new pool called Ironwood. They're expected to launch that in July. That pool will be formally verified. So formally verified means you can mathematically prove that there are no bugs. And they are going to deprecate the old pool such that you can only migrate out. You can't do any transfers within that old pool anymore.

1:03:54And they will ask users to migrate to this new formally verified pool, which will provide much better guarantees about bugs. So overall, from my perspective, this was a non-event. This was a team found a bug that they patched that no one seems to have exploited. and they have a very credible and near-term path for how to make sure such a bug never happens again. So I think it's a non-event. I think the market overreacted. The market does that kind of thing. So we actually increased our Zcash exposure after that event because we saw it as market irrationality rather than a fundamental change to the thesis.

1:04:45How long did you need to decide to buy more? Because I remember in our last podcast about a year and a half ago, you were saying when there is one of these big crashes, we were talking about the COVID March crash in 2020. Do nothing, right? And so what did you do that day? Because Zcash actually went down 50 % or 60 % in a day, which is very similar to what happened in March 2020 to the market in general. Did you do nothing? And how long did you need to build the confidence to actually say, okay, this is an event, let's just buy more? So on the day, I did nothing. I don't like trading on days of extreme volatility because liquidity is thin.

1:05:34It looks like there's a lot of volume, but actual liquidity is often thinner because people are scared to trade. I am very reluctant to trade emotionally. I don't want to let the heat of the moment drive a decision. Either it needs to be a predetermined plan that we are sticking to, or it needs to be something where I can analyze the information, I can sit with it, and make sure that I am not making a rash decision. For example, I like to make sure I get at least one workout in between making a decision and executing the decision, because it clears my mind. It allows me to get some distance from the decision and then come back to it.

1:06:24So, in this case, it took several days because my thought process was if someone has exploited the pool and exploited this bug, we should see evidence of that in the very short term. we should see that attacker withdrawing zeke from that pool which we can watch the turnstile and we would see the pool size shrink dramatically in that first week and when that did not happen that is what gave me the confidence that no one had exploited the bug and gave me the confidence that uh it was a good time to buy because the market was overreacting multi-coin recently released a report on hyperliquid and hype.

1:07:16You disclosed that you've been accumulating hype since February. Actually, we talked about that a few weeks ago already. And you published this report in June. By definition, you're talking your book. What stops me from discounting the entire valuation framework as self-serving rationalization? Oh, you can discount it. look we are talking our book uh and you should make your own decisions we are just laying out what we think is a defensible argument and a framework on how we think about the valuation but you can implement your own numbers we took readers through the calculations of where we expect dex market share to go what do we expect per volume growth to be like what do we expect stablecoins on platform to be.

1:08:05We took them through all of that logic and then we came to our own conclusions, but I think readers should come to their own conclusions on that, not just take our word for it. Don't just look at the headline number, you have to look at the methodology and then you have to test each one to make sure it's something that you agree with. And that's something that we did internally. Obviously we don't publish all the stress testing and all the scenario analysis. We published three scenarios, a bull, base, and bear. Just kind of standard in order for it to be more digestible to the audience. But we have many more scenarios that we considered internally.

1:08:47It just is too long for a report. The base case is$319 per hype, so a bit more than$300. So about 5x from here in the next two years. and you mentioned four assumptions that you described as conservative, a 35 % compound annual growth rate in crypto derivative volume, decentralized exchange rising to 32 % of the derivative market, hyperliquid holding a 30 % share, and USDC balance is growing. I think some people might say that these are actually pretty aggressive assumptions when you call them conservative. What do you say to that? And what do you think is the joint probability that they all happen favorably together?

1:09:37So let's talk about each of them. First, let's talk about the crypto derivatives volume growth. If you look at derivatives volume growth from 2020 to 2025, we saw about 45 % per year compounded growth in derivatives volume. So we're actually toning that down and saying it'll only be 35%. And as a reminder, this is only looking two years out, right? We're not making a projection for 10 years out and compounding at this rate. I do think the law of large numbers kicks in. It's hard to compound at very high rates for many, many years, which is why we decreased that rate. but I think it is reasonable to say that a rate about 75 % of what we've seen over the last five years is something that we can project forward for the next two years, right?

1:10:33We're haircutting the previous growth rate by about a quarter in that. Then derivatives exchange market share, we are increasing. And this is probably the assumption that is hardest to have certainty about because we have less backwards looking data on this. DeFi derivatives volume really didn't take off until hype. and what we saw is DeFi derivatives went from almost nothing in 2020 or as recently as 2022 to 16 % of crypto derivatives and so reaching 32 % in the next two years is in line with growth and it seems realistic to us but I think this is probably the assumption that has the least data behind it.

1:11:41Then the next one is that Hyperliquid holds its current 30 % market share of the derivatives perp or the perpdex market. I think this one is very conservative because volume is an easily gained number. We have seen other perpdexes is obviously gain volume. You can see that when they have tons of volume and no open interest or no liquidations, which tells you that that's just market makers kind of trading with each other without anyone taking directional risk on that platform. We've seen that game before. Hyperliquid is at 30 % of volume, which is the most easily gained metric, but it is currently at 59 % of open interest.

1:12:33and I think that's a better marker for what long-term market share looks like because that is harder to fake. That requires real capital to be on there. So I think this one is a pretty conservative assumption because I think the fake volume games don't last very long. We've seen this movie before where people subsidize the volume, they give you points or whatever in order to get you to trade, but you can't give people rewards to trade forever and build a sustainable business. It doesn't work. So as those programs start to wane, I expect Hyperliquid's market share to actually increase from here amongst perp taxes, but we held it steady in our model.

1:13:31awesome and then last assumption and this one's uh pretty easy i think is just that usdc balances on hyperliquid grow roughly in line with trading volume i think that's a reasonable assumption we are holding trading volume and open interest the ratio of those to be constant moving forward and so we're not expecting that the traders on hyperliquid are going to start taking more or less leverage than they have historically. We're saying they're taking the same amount of leverage, which implies that you should see linear growth from trading volume to open interest to stablecoin balances, which are used as collateral on the platform.

1:14:16Thank you so much for this. I have a last question, something we very rarely do, but it's timely, basically. Timely things. We rarely do that. But I want to ask you, we kind of mentioned that you were saying that the tide is shifting, right? It's turning. And you were giving a few examples. You were saying when the prices stop reacting to the downside, to negative events, right? Negative news. This is a good sign. Is the crypto bottom in?

1:14:59It's extremely hard to call the exact bottom, but I think we're close. I think we are close in price. It's probably behind us. In my opinion, it is, but that's hard to have a high conviction statement. There's a lot of randomness that can happen. Maybe the war between US and Iran kicks into high gear and all risk assets crash. right like things can happen that make this really hard to have very high confidence in because there's macro shocks that can happen but with the current macro backdrop assuming there's no like kind of extrinsic factor I do think the bottom is in because we've seen peak apathy We've seen a lot of people leave the industry.

1:15:50We have seen people question the core tenets of why they're here. And that tells you that the only people who are left are the true believers who are going to hold through this volatility. They've been through it before. And so that doesn't mean, oh yeah, it's going to go straight up from here. I think we're in for probably a bit of chop, a period of apathy while the market rebuilds a new narrative in order to get excited behind. And that just takes time. This is unlikely to be like a sharp V-shaped bottom. We rarely see those in this market. What we usually see is a collapse and then everyone gets bored and goes away.

1:16:35And we're clearly in that phase right now. Could it go down further? Yes, it could absolutely go down further if something happens. You could see some sort of shock that causes it to go down further. But barring that, I think we've already hit peak activity. Thank you so much, Tushar, for taking 10 to 15 minutes to clarify what happened over the last couple of weeks since we last talked. and it's going to be an amazing compliment to our conversation that was already very good and very exciting and I'm super excited to see that nothing changed on your side if anything you're as bullish as ever yeah absolutely thanks Kevin good to see you as you probably know by now I host some of the biggest names in Bitcoin and crypto on my podcast but a lot of the best stuff never makes it on air The SHIFT newsletter is where I share that raw behind the scene alpha, the insights, stories, and lessons straight from my guests that you won't hear anywhere else.

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