E74: Ethena Founder: Growing to a $10B Protocol Valuation in 1 Year

27:17it's really a constraint around how much outside leverage is there or demand for leverage to be long crypto on perps. We can never be bigger than that amount, right? So the constraint is how much are people using perps in crypto? We sort of think about it as like a very rough number of roughly 30 % of like open interest within the market is a bit of constraint and ceiling for how big we can get. Roughly at the moment you see around$30 billion of open interest for majors. so like at the moment if the market didn't move at all I think 10-ish billion is where USD starts to come into some real constraints So basically you're able to control the cap of USD and saying hey like sorry we can go higher than that as long as the market is not higher to limit the risks Yeah we as a team we can't like ever fully cap it because it's going to be a free market of people sort of coming in and out but it does have an interesting sort of like self-regulating way of making sure it doesn't get too big itself because the larger that USD gets, the more we push down funding rates as a protocol.

28:22And so when the interest rate, I don't know if you look in Athena, when it first came out, I was like 35, 60, like that crazy level. Obviously, as Athena grows, we're putting more and more short interest into the market, which brings that interest rate down through time. And naturally, as that interest rate comes down, people find the product less and less attractive, right? So I think as Athena grows, we're going to be pushing down the interest rate, which makes it less attractive for people to come in. And so I sort of view these things as markets at interest rates that we don't want to be stepping in and trying to control in any way, which I think was like a huge mistake that we saw with Anchor specifically around Terra.

28:54And we're just putting the infrastructure in place so that we're allowing the market to just find out what is that clearing level of interest rate. And that's also where you test whether people are here for the product, the synthetic dollar that they think is really useful or they're there for the yield, right? Yeah, yeah, exactly. Yeah. Mark Twain said, and this really resonated with me after the Luna crash, because I was a big Luna holder, actually. It ain't what you don't know that gets you into trouble. It's what you know for sure that ain't so. What do you know for sure that might not be so?

29:31Yeah, I think specifically with the Athena risks. Actually, let's do it both for Athena and then in life. The life ones, that's too difficult. So on the Athena one, I think we do generally have our arms around what we think the, call it, four to five key risks are. And obviously, we've had a lot of people chiming in from the outside in to express their views on what that actually looks like. I think the one which is maybe a little bit under-discussed or less understood is actually the idea that when we're short on those contracts, you need someone on the other side to actually pay you out. your counterparty can't go fully bankrupt and this is how a centralized exchange is sort of managing the risk engine internally as well.

30:12Something that we did used to see before the last cycle was back in 2018, like ADL events where actually you don't get paid out on the contract in the same way that you thought you would this sort of happens when you see true market completely wipeouts across the board and you can't actually collect the PML that you thought you should be getting on the other side that's one thing which we haven't seen for five years in crypto and I think people have sort of forgotten about it because exchanges have got bigger, better capitalized, the assets are lower volatility and that kind of stuff. But that is one thing where we haven't sort of seen an ad scale on B2C and an ideal event, and that's sort of something which would be quite concerning for Athena.

30:54Ladies and gentlemen, I'd like to take a short moment to introduce our partner, Mentor, who helps us make this show possible. Mentor was created to hyperscale the Ethereum network with what we call a layer two that helps users like you and me transact much faster and at a fraction of the cost of the Ethereum network. Mentor has over$2 billion in total value locked, has a mega treasury of$3.7 billion in Bitcoin, ETH, and stable coins, and has the largest eco fund of the industry with more than$200 million to invest into new projects that want to join the MENTAL ecosystem. The team behind MENTAL are extremely smart people who are personally trust with some of my money and who I personally know outside of crypto.

31:44We actually had Ignace Ternus and Jordi Alexander on this podcast, who both are key figures in the MENTAL ecosystem. So I invite you to watch these two very candid and in-depth conversations to develop your own opinion. And please, please, please, if you enjoy this show, hit the like button, leave a comment in the comment section and subscribe to this channel. The more subscribers, the better the guests. Thank you so much for your help. And now on to today's episode. What do you think would happen if we had a COVID crash? Like, you know? Yeah. So even on the COVID crash, we didn't see ADLs even during that.

32:23So really what we're talking about here is like even orders of magnitude worse than that and the market's obviously more mature than it even was back then in the beginning of 2020. What was the worst event than a COVID March crash? Yeah, I wasn't even around for this stuff in 2018. Because that was pretty bad.

32:47What's the absolute worst thing that could happen to Athena and USD? Yeah, I think it's actually the same sort of risk that you saw with USDC with SVB where we haven't got two bills sitting in a bank. We've got crypto assets sitting with custodians. And if there's fraud or like just a loss of the underlying assets in those custodians, that's like how you like truly lose like the backing of USD. I think the other risks are like more on the margin where there could be issues like, you know, 98 cents, 99 cents versus a dollar. The one where you like truly see a wipeout of like the collateral backing is always going to be if like the actual underlying assets are sort of affected.

33:23but this is the same as a smart contract for any DeFi project if you have a smart contract hack that's basically the end of what you're doing I think it's basically the same kind of risk that's just here probably the smart contract hack is still higher if you look at all the hacks that happened in the last couple of years 100 % yeah again to be very practical yes centralization is not great you're basically giving your trust to some people but there's been so many hacks in the decentralized space that DeFi space that definitely... We're still at this point where we're not really... I mean, we're criticizing centralized parties, but what's the other alternative, right?

34:10You said you were pretty underwhelmed with the level of innovation we've seen in DeFi in years. And I had Darryl Wong from Tangent on the podcast maybe two weeks ago. One of a few early investors who said also the same. He said that the lack of innovation in crypto is actually what led us to the meme coin mania. What are your thoughts on meme coins? I think they're good and they should exist. I think it's not only a response to a lack of innovation on more serious projects, but I also think it's a response to the market structure changes in the way that VC funding and the way that launches have been going recently as well.

34:48I think the way that the market is set up now, and there's a bunch of regulatory reasons for why this is the case, but it's sort of progressively got worse, I think, over the last few cycles, where now it's quite difficult, I think, for retail to get any exposure to something before it's like a multi-billion dollar project on a centralized venue. That's something that there's been a few new projects that are coming out to do, like, call it compliant ICO type things, and I think that's actually a very helpful change in market structure if they can do that right. It'll be one of the most important things that comes out of the cycle if we can get back to that.

35:21But I think actually the meme coin response is also just a response to I don't want to be buying a VC's bags at a huge markup from their investments the whole time. I want to participate in something that's early and it feels like more of a level playing field. What does the holy grail look like for Athena? Yeah, I think for us it's pretty simple Well, and I mentioned earlier where I think creating our own form of money is always the holy grail of anything within crypto. It's always like even BTC sort of started out with that original vision and then sort of landed on something that was a bit more narrow as like a store of value.

35:55But like money was like the original thing that I think got people excited around that. Even ETH, if we think about like the monetary policy around ETH and like the meme now of ETH is money, all of these things converge to money at the end because people recognize that that is the holy grail in and of itself is becoming money in some way. and I think we just have a recognition that we can talk about these things as money but people don't use BTC, they don't use ETH as money, they use dollars as money and we think that creating our own form of money within crypto is one of the most powerful things that you can sort of work towards.

36:26You said you were willing to share some of the roadmap with ETH. What's your vision for the next 12 months? Yeah, I think for us the initial rollout was very much focused on apps within DeFi So you might have seen us like integrated on a few of like the money markets, different stablecoin projects, that kind of stuff. I think the next phase is actually something that's ignored by previous projects who have done stable like assets on chain before, which is actually thinking about CeFi as a distribution channel and like a big area for growth. So a lot of the like a DAI and Maker and stuff, for example, have never really pushed into CeFi in any material way.

37:04A big sort of like key vision of what we want to do here is actually provide neutral infrastructure for all the centralized exchanges in the space. to feel like they want to push this product to their own users as well and just set up the right incentive structures around the product so that they feel incentivized to do it. Because I think there's generally a feeling amongst centralized exchanges that they provide all the rails and the success for something like Tether and Circle, but they don't see any of the return that sort of comes through in terms of the revenue sharing and that kind of stuff.

37:32And I think that there is a big opportunity there to basically align the exchanges with incentives and actually have them distribute their users on the other side. What does that mean? Does it mean it's more of a kind of marketing and incentives push effort or also on the product side? Hey, we're going to offer this and that and some new things. Yeah, it's 100 % on the product side, less on the marketing. So one clear example here is there's about$20 billion of Tether used to margin linear perpetuals on centralized exchanges. So that is an opportunity just by itself. is like enough for Athena to just target that one use case, which is putting down USDE, collecting a yield while you're trading a pair up on the other side to sort of offset your funding costs.

38:16And if you go to like the biggest trading firms in the space, that's a really big deal that you're missing out on like 10, 15, 20 % on the collateral that you have down. So we see that as like a huge opportunity there to basically use USDE as perp margin collateral. And we'll have a pretty cool announcement on that basically next week with one of the major sectors.

38:37As you said in the beginning, you built a pretty controversial product, controversial because it's a mix of the things that blew up in 2022. A synthetic dollar, which Terra tried to build as the UST stable coin. And you're doing this through centralized exchanges, which one of the biggest ones was FTX and also blew up, right? why would we go back to stable coins and centralized exchanges after being completely traumatized a year and a half ago yeah i think uh it maybe gets back to the same comment i was making around the um like vc mindset where you sort of dismiss things from the past that haven't worked and don't try and re-evaluate it like going forward um i think the reason that people got behind the idea of like terror and luna in general was it was a big idea right and something that clearly people want to see succeed.

39:30And I don't think it should put people off if someone has done it in the wrong way in the past. Doesn't mean that you should sort of like give up on the idea going forward. So yeah, that was just my view that it was an important product that should exist. And even though previous iterations hadn't worked, didn't mean that it wasn't like worthwhile pursuing again.

39:52Ladies and gentlemen, as you probably know, we are teaming up with Astar Network on this show. ASTAR Network is a decentralized blockchain platform that aims to bring billions of people into Web3. And the ASTAR team has a very specific strategy to make this happen, to partner with the biggest conglomerates in Web2 and help them onboard their customers into our world, the Web3 world. If you want to check out for yourself, I invite you to watch the candid podcasts I recorded with Sota Watanabe, the founder of StarTail Labs and ASTAR Network. And please, please, please, if you enjoy this show, hit the like button, leave a comment in the comment section and subscribe to this channel.

40:30The more subscribers, the better the guests. Thank you so much for your help. And now on to today's episode. I have a question from Yatsu, the founder of Animoca Brands, who was on the pod two days ago. Here's a question for you. Okay. From him. Why would a stablecoin need to be backed by ETH? Yeah, it doesn't need to be. I think there isn't like a specific reason around the actual backing that's sitting in there. It's really because we're neutralizing the price of BTC or ETH or whatever goes in there, could be Solana. All we really need is a deep derivative market that sits around it. And so obviously ETH has the second largest open interest in the market.

41:09And yeah, it's nothing like driven specifically around ETH itself that sort of needs to sit in there. What's another architecture for a synthetic dollar that you could think of that could potentially work? Yeah, I think it depends how you define the CDP stuff that you see with Maker. But I think that there is more experimentation that you can see around that, where essentially what you're doing is putting down collateral and then borrowing against it to create the stablecoin into existence. That actually isn't that different to what Athena's doing, but instead of hedging the ETH that comes down as collateral, what they do is they leave a big buffer between the collateral value and the debt, so that when the price falls, there is a bit of a buffer.

41:52Conceptually, they're not actually that far apart. I think there is an interesting design space between what Athena's doing, which is essentially $1 of collateral comes in and one stable asset comes out the other side, where Maker is$2 go in and then you borrow$1 on the other side. I think that there's an interesting middle ground between the two where we will see some experimentation going forward. So you're building a controversial product and obviously it doesn't come without a healthy or not so healthy dose of criticism, right? And you are handling these sometimes really harsh comments in a very chill fashion.

42:28Why? I just have confidence in my own that my heart is in the right place basically. So I think it stresses you out when people are calling you a scammer and stuff when you think that you are. but I sort of have confidence in the way that we've been transparent around the risks and stuff from the beginning and I think my approach to this whole thing has always been we shouldn't shy away from these criticisms and the engagement that people have I think was one of the biggest mistakes that we saw from some of the founders of last cycle which was basically dismissing people that were actually like raising valid concerns and it's just an approach that I've always had which is I actually always want to listen to people who think that I'm wrong because actually if I do think I'm wrong I want to work that out early and make a change early rather than something happening when the problem is much bigger further down the line so I've always just actively sought out criticism and it doesn't mean I always listen to it but I think it is like a healthy thing to do.

43:24How do you deal with FUD? We had the there was Meow on the podcast today and you know the Jupiter launch was very controversial so and he was very affected by it and he said for example for him was like man if i see like massive thud i just go to sleep because if i'm not in a good mental space i can't handle you know i don't make the right decisions and i i'm going to start to be maybe more aggressive or so how do you handle that you just go like smash a workout or do you just go to sleep or you just like build different high testosterone it's fine i'll just answer chill no i'd like to pretend that's the case definitely not um I think that I definitely had a bit of a shock on the first week because we'd sort of done a bit of a pre-testing with the product, actually, with like 100 people before we fully opened up to the public.

44:12And your first 100 users are all fans, usually, right? It's like, oh, this is a cool idea, a cool product, which is nice feedback to hear. But then the second you fully open up to the public and you move from 100 people to 100 ,000, and half of those 100 ,000 think that what you're doing doesn't make sense, that was pretty difficult, actually, to hear on the first week because you just weren't used to people not liking the idea. But yeah, I think you just get used to it and I'm not that affected by it now. When I see criticism out there, I think just try and find the ones where you think it is valid and you come back and give people reasonable responses and then just try to block out the stuff that you think isn't sort of fair.

44:54And back to what you said before with the ego thing, right? If you have the ego or the audacity to think that something that people, basically we're going to build a business that the majority is not built yet because the majority of people don't believe in it. You can't expect that from one day to another if you bring it to life, everybody's just going to agree with it. It's part of entrepreneurship in general. There's always going to be people who kind of hate. It's life. Yeah, exactly. It's life. of doing something new because everyone wants to start on the assumption that it doesn't make sense or that it shouldn't exist because it's new and they haven't seen it before.

45:39You're creating a synthetic dollar and you kind of came out of the blue within a year, right? And launched a protocol worth tens of billions of dollars. So there's a lot to be admired about that. About these achievements. But there could also be a lot to be feared as a founder. And I have a lot of founders on this podcast who maybe they just say, some days just say it on the podcast, some days say, you know, after the podcast that there is a risk to be a crypto founder. And even more so if you're trying to build a synthetic dollar, when you have the USA and the authorities that are basically, I mean, it was not on this podcast, but Doc Kuhn, he was saying, I think he was on the Delphi podcast.

46:26He was saying, oh, I'll just own a... He was joking about it. He was like, oh, you know, I just own a bike, but they can come after me. I don't care. We're ready for the war. But obviously, you don't want that. And the day it's happening, you're not as chill about it as he was, right? How much do you think about this personally? And more generally, how risky is it for crypto founders who are bringing big innovations that might fail? and make people lose a lot of money. Yeah, I think just more generally, that is one thing that looks different with financial applications versus infrastructure. If you're building a piece of infrastructure that no one uses, and they're memeing about eight users on some chain or something, everyone just laughs, and you're like, yeah, that's funny, it's a ghost chain, and we move on, but no one's lost money, and it hasn't affected someone's life.

47:17That is a negative piece actually around building financial applications, which is it's real people's money that's in there, and you need to take that seriously, take that responsibility very seriously. And so it is something that you think about as a founder where you feel an immense amount of responsibility to make sure that you've done everything that you can to make sure that people aren't losing money. But as you said, the nature of innovation, which is we're trying new things, we're on the frontier and trying to push the boundaries going forward, sometimes even with the best intentions, that doesn't sort of work out.

47:50I think the key difference though is, have you been honest with people and you're not fraudulent in the way that you've actually presented these things? I don't think like even Luna, for example, you can try this experiment. If it doesn't work, we go, it doesn't work. I think the real core issues is when you're lying about chai and you're lying about like usage, you know, fraudulent investors, fraudulent to users when you're saying that it re-pegged with like natural market forces rather than what was going in the background of market makers. That's actually the core piece of like fraudulent behavior which is like not acceptable.

48:20I personally think that like experimentation around designs and stuff, if you do it in the honest way, in an honest way and it doesn't work, it isn't something that should be sort of like frowned upon in the same way.

48:35You said on another podcast attention is the only scarce resource in crypto. Can you explain what you mean by that and how you used your understanding of the attention economy to perform one of the most successful token launches in the last few years? Yeah, I think it's just because so much of crypto is never really embedded in fundamental analysis or tied to anything that's fundamentally real, like all of the valuations, all the way that things trade. It's really just around mindshare and how much mindshare you can capture from people. Now that there's so many different pockets of crypto, whether it's like NFTs, AI, there's so many different areas that are constantly trying to grab your attention.

49:14It's like, how are you going to stand out and be at the top of people's mind the whole time, which is kind of like the valuable piece, I think, to get people interested in what you're doing. Yeah, I don't think there was like a specific approach or strategy that we had around this, I think. Because the product was actually quite controversial and divisive, people sort of did your marketing for you, right? Because everyone had an opinion on Athena. Like the whole peanut gallery, it was either like, yes, I think it makes sense or no, I don't. But no one didn't have an opinion on Athena. And so we're sort of sitting back and people are talking about it constantly.

49:47And I think if you're responding to it in the right way and just saying, I understand your concern here, your criticism or whatever it is, what else can you do on our side other than doing that? And so I think it was really like the controversy of the product itself, which forced other people into sharing their views and sort of grabbing people's attention without us having to do, I think, that much on our side. Another thing about this super successful token launch is how do you create a big hype around your token launch that is sustainable and doesn't result in a big pump and dump, especially when you launch at such a high, fully diluted valuation, right?

50:27Out of the gate. Yeah, so to be clear on the valves when they come out, we obviously have no control around that as a team. That's obviously set externally by the market when it does come out. I think the only bit that we can do, and I think the bit that we're actually very focused on which people did recognize was actually not dragging things out with your users and sort of like farming your users. I think one thing that we've seen recently with this whole points meta and like basically just developers like allowing this thing to go on for like a year or two years without giving any clarity to users around what's sort of coming at the end.

50:59People I think are just so fed up with this now where they were completely shocked that we came out and we said we're going to do this quickly for like a month or two and if we hit like a certain amount of TVL that's going be the end of this whole thing. And we just did what we said and everyone's like completely surprised. And I'm like, is that the standard that we're sort of going for in the space? Which is like, the team didn't lie to me as like the base level of expectation. So I think it was basically just not screwing over your users and that sort of your supporters from day one, which is like the most important element of that launch.

51:32You did a pretty generous airdrop. Want to talk a bit more about that? Like, was it completely planned or like how is the how did you think around that or you were again just thinking oh man everyone is i mean now is the points right a few years ago it was other things there's just always another invention in the industry to basically get your liquidity um you're just thinking oh man like everything is so confusing everywhere let's just do something very simple and reward people handsomely just because they trust us or what's the the approach there yeah i think and this is just another conversation that I had with Kane before in the past where I asked him how he built such a cult following around synthetics, what was it that actually got that community going in the beginning, and his response was basically just like, you need to make people really rich, and then they sort of get behind your project.

52:21So I've always been of the view that if you are someone, like a user who did the thinking, did their own work around Athena, when everyone was flooding it on the timeline, you believed in us and you put your money into our protocol and gave us your trust. and I always felt that you just should be rewarding people who are sort of there in the beginning to help and so we took Cain's advice and just did what we can to make people hilariously rich in the beginning. Why do you think there's so many other projects or founders that are not following that? Is it because they're struggling? They don't have the luxury of doing that or is it because they don't really know what they're doing so they're like, oh, let's just keep this liquidity as long as possible so let's just invent this point system and these things or is it another reason?

53:01Yeah, I'm quite strong of the view actually that like there's like a strong negative correlation between your own confidence in your product and how long you're sort of dragging things out with your users. Because a lot of these like teams are basically using these points meta as like a way to get inorganic traction and then go raise another round and raise another round with VCs. And like there's this whole sort of like game in the background that's going on where I think if you don't have confidence in your own product, the scary bit is like you drop the token and then everyone just leaves and goes and does something else.

53:30and you realize this wasn't product market fit, it was just points farming. So yeah, I was just strongly of the view that we needed to learn quickly if we had product market fit or not. And the quicker you ripped off the band-aid to sort of work it out, I think better. So for you, this point thing and this kind of gamification of usage of the protocol before the token launch is actually a red flag, right? In most cases. Probably not all of them, but... I think it's actually extreme. It is actually really useful in one respect, which is you can actually get feedback from your users as you're doing it to iterate on the product.

54:04So if they're responding to something in a way that you'd like, you can adjust that going forward or in the opposite direction as well. I think the only bit that's just we need to do better as teams is just be clearer with people up front in terms of roughly how long we're expecting you to be part of this, which I don't think is an unreasonable thing to be communicating to people. And I think just being a bit clearer with users where you're not constantly feeling like you're extracting as much as you possibly can from them and just trying to I think lay things out in a in a more clear way. We have a part of this podcast I call Crypto Alpha where ask builders about the two or three teams in the space so we're not talking about hey what coin should you buy but more who are the teams or projects that you like the most and why?

54:53Yeah I think two probably come to mind. One, Pendle, I think is a really good example of a team who... Can you explain what Pendle is, what they do, and why you like them so much? Yeah, so at a very basic level, it's like an interest rate trading protocol. That was the original idea, but it's sort of morphed a little bit now to essentially you can buy points from people who want to sell it, and they're getting a fixed yield in return, while if you're buying the points off someone else, you're taking what is an extremely speculative look, sort of forward view on that project. And so you can just think about it as an interest rate swap protocol basically between fixed and floating yields um the reason i like them a lot is basically i think uh they'd struggled in the beginning to get product market fit like at the back end of last cycle and um they're just one of the best examples i think of a team who just continued grinding at like the bottom of the bear market like despite not having um that traction until they did find it and i think it's like if you just look at the chart of handle it's one of the best sort of reflections of that where it's sort of down and then just this incredible hockey that sort of came back through time.

55:54So I've always just looked up to them in the last few months as just a team who just had the right attitude of continuing through the bottom of a bear market to find product market fit on the other side. What's the other one? Yeah, I think the other one that I've just been impressed with is the professionalism and approach that they have as a mantle, the layer two. Interesting. I mean, interesting now, because I know you did this big partnership. Ignatius is the one who introduced what do you like about the mental team and what they're doing there with the layer 2? I think it's just their approach because I think some of the new layers that are coming out now have got this ultra-aggressive way of getting to market as quick as humanly possible and taking some shortcuts I think just the approach that they've had which is quite thoughtful through time to say this is actually the type of application that we want to see come onto the chain we want to support them in multiple different ways.

56:51They've obviously got a huge treasury which they actually use to support projects from the ground up, which is a huge boost for someone who's starting from zero. But I think it's actually just around the thoughtfulness that they have looking forward in time and saying, what are the types of applications that we actually want to be here and let's start planning for that now. And I think it's just in a bit of contrast to some of the more aggressive teams who just seem to be wanting to do things as quickly as humanly possible now. I just admire their thoughtful approach to things. Shout out to Mentor, who is a partner on this podcast.

57:31You train six times per week in the gym. You told me five to six times? Yeah. Why? It's actually more like a mental thing I think for me where if I basically don't go it's like just sitting in the back of my mind and it's become just such a routine and habit for me where I find like I'd really struggle to focus on something else if I haven't gone and done that at the beginning of the day. So I think it's less around the physical piece of it now. It's just more of like a tick the box exercise. The physical is a good side I think but there's quite a lot of people who say oh yeah you're kind of narcissistic you go to gym.

58:05Like no I need that otherwise I'm going crazy. Do meditate, do something for your mental health. I don't know. Yeah that's basically it.

58:18What's your biggest prediction for the next 12 months?

58:24I think we're in a super interesting bit of the market where we're lacking that catalyst that we're all looking forward to and can speculate ahead of. So I think the BTC ETF was obviously a huge moment and I think the real risk around that is actually that this entire cycle has basically been built around that single event. And it's quite concerning, I think, to think what happens if we start to see outflows from all those ETFs together. I did think it was probably a good thing that we don't get the ETFs straight out the gates right now because I think the market actually needs something to delay its gratification to stop us basically having a blow off top too early.

59:02So I think the two key things in my mind are when interest rates eventually start coming down in the US, that's going to be a nice kick, I think, for crypto in general. and then around the ETH ETF specifically that's going to be a very interesting time for Athena because we're obviously sitting on the other side of that trade where people are coming in on leverage to speclay on that and I think there's just going to be interesting dynamics that we can sort of capture going into that event. What do you think is going to be the event that marks the top of this cycle? Probably the ETH ETF on the day is probably my guess.

59:37Or maybe the Agune token drop as well. Local top or complete cycle top? I think it's not even a concern with eigenlayer, it's just more so much infrastructure and like projects at the moment. The whole DeFi is basically just a second derivative now of eigenlayer points. And so if you have that single event and there isn't something more to sustain it beyond that, like 90 % of DeFi sort of loses the financial infrastructure that's been building around that. So I think, yeah, it has the potential. it's obviously so much of the forward expectation of what's going to go on the cycle is on the presumption that something like Eigen there is going to be a huge success yeah so it's just that common is more around DeFi I think specifically what are you guys going to do in the bear market with Athena?

1:00:28what's the plan there? yeah I think we want to set up like set ourselves up to be maximally flexible to be able to respond to things so I think one thing that Maker did very well last cycle was give themselves the option if they want to do something else outside of the core CDP piece, which they did with RWAs at the back end of last cycle. That's one thing that I just want to have the option to leave it there for the community to decide if that's something that will directionally where Athena should go. Because Athena's product is going to be very responsive to the cycle where on the way up it sort of grows pretty quickly.

1:01:01And if you haven't got an alternate source of return that's sitting in there, it has the potential to contract quite a bit, I think, in the bear market. And so I know that goes against the core narrative around Athena for being the dollar that sits outside of the normal system. But I'm also practical enough to say that there might be a period in the bear market where someone decides for three to six months you need a different kind of exposure sitting in there. Which would be, for example? Like just RWAs or holding. Do you have an example? Even like projects like Ondo or what Maker have done, basically just holding T-bills, sitting behind the asset itself.

1:01:44Just want to be clear, that's not something that's a definite right now. This is all going to be put up and decided by the community themselves. But do you think it is something you need to think about as a fallback option potentially, if you do get to enormous size and conditions of turn? What's your takeaway from today's conversation? It was a good chat. I haven't gone outside of Athena ever in a podcast conversation, so that was good. Awesome, and thank you so much for doing that. Yeah, thanks for having me. Cheers.