LEVERAGE ASSETS

“The combined monetary premium of gold and Bitcoin is approximately 36,000,000,000,000. If Ethereum captured that premium distributed across roughly a 120,000,000 ETH in circulation, the implied price of 1 ETH would be approximately 250,000. Today, it trades around 2,000. This essay argues that the repricing is not only possible, but logically consistent given the monetary properties of ETH.”

“This is the productive money meme, is that Ethereum is a productive asset, which is kind of like the first time you've had a productive monetary good in history. And this was kind of Warren Buffett's whole critique against gold. Because, like, people would ask him. He's like, gold is superior store of value in all these dimensions. Why don't you store your wealth in gold? And Warren Buffett's response was, it doesn't compound. Right? And it's unproductive.”

“You want to do it well, you want to inform people about the token, what does it do, what are the risks, what is the yield coming from, be as transparent as possible, try to curate as much as possible. Because that's how you build a user base that appreciates those things, that invites other people, trusts you, etc.”

“What we observed with Prime is when you have something that is sustainable and that scale, it takes a bit of time, but people start trusting it and then they realize they can do useful things. People with that want to earn yield, they can rely on it. So this was always the promise of defy composable money, but there were no pieces to compose with.”

“But I've been a believer in in the structural value of this, largely because I grew up in Bangladesh, Zambia, where inflationary currencies are the norm. And I think in a lot of circles, there's a lot of comparison between Bitcoin and the value of Bitcoin as an asset class compared to to USD. And I think that's a that's kind of a red herring. Actually, I think the value of Bitcoin is against, you know, the Zambian quaqa and and another inflationary currency, and we can go through many of them.”

“As that clarity has now emerged over the last year or so, we felt more comfortable about building and launching this product. And the third piece is, you know, we wanted to be able to kind of leverage the infrastructure on capital markets and in compliance that we built out over the last few years. And obviously, the technology infrastructure that has come together over the last few years to be able to build, you know, the best in class product.”

“Of all the assets that we you and I can conceive of, the digital asset class is probably the lowest risk asset class to borrow against, for the consumer and also to lend against as a lender. And if you think back to that equation of the cost of the risk is the risk free rate plus the cost of the risk plus the cost of the transaction, the transactional cost should be the lowest and the risk should be the lowest.”

“I think, you made the comment it's gonna replace middle management which I think is, becoming very clear to people. I think, Sequoia and Block, Jack, and Olaf wrote that paper together and and it's becoming clear that it's going to make the smart humans, the intelligent humans, even smarter and more productive.”

“I think we always wanted to get here to have something like quality assets that people can simply hold on chain, self-custody, or, you know, borrow land loop, which is like kind of like a simple way of tranching it, you know, getting the senior trash or the junior trash by lending or by looping it.”

“A quick one liner on the product that we're looking to launch is we're looking to launch what we hope to be the best in class Bitcoin backed lending product, which is a credit card secured by Bitcoin with the ability to draw 10 fixed rate plans with an APR as low as 7.99% interest rate.”

“And that requires them to be highly intelligent, very hardworking, and mission aligned in what we are trying to achieve in the world. These three things are the kind of pillars that we look for. And I know the intelligence piece can be sometimes controversial to some folks, but it is like, you know, uncompromising in how we grow our hiring process and our hiring bar.”

“As we're making our way through this bear market as an industry, there's one part of crypto that's growing incredibly, and that is the institutional side, the Wall Street side, the banks, the people doing the tokenization. And this is where I think really Vivek shines in this conversation where we talk to Mike about his article, and then we go to Vivek and ask Vivek about the growth of education and understanding and awareness of Ethereum.”

“Because there's so much demand to hold this, right now, it's, like, dollars have a lot of monetary premium. Gold has a monetary premium because it's been tested for three thousand years. Because people demand that for liquidity or a way to store their wealth into the future, those assets, those monetary goods store value assets, will carry a premium to the intrinsic value. Gold, for example, maybe 10% of gold's value is in jewelry or industrial demand, and then the remaining 90% of gold's 30,000,000,000,000 market cap is its monetary premium.”

“And we spent an enormous amount of time building out engineering infrastructure that effectively allows our agentic system to say, actually, I don't know. Instead of having a bullshit answer, it says, I don't know. And this is effectively what the fancier way of saying it is that we sacrifice recall for high precision on the recall PNR curve. And we operate at a very high precision point in the threshold of the system.”

“Avan never lends it out. There's no rehypothecation. You stay in control, and guess what? You can lock in a fixed rate for up to ten years. That's 10 times longer than most lenders out there, or go interest only for up to five years. Rates start at 7.99% APR for a product that lets you keep your stack and still access liquidity.”

“I was talking to everyone at BrainPoint that this is going to be really good and big in Solana. Because we always wanted this and we finally have it. And I think although we live in this permissionless 24-7 world, it's still fine and some people still lose money and things break.”

“But there's this weird dynamic on chain, which is I can just issue a utility token to fund my project. And so like what role does debt actually play? And I guess my view would be it largely has been supply and demand for leverage. And so credit cycles on chain, they don't necessarily follow sort of credit cycles in the TradFi world.”

“Right now, if you look at the price of ETH, it's kind of being valued mostly by transaction fees. Right? Like, if you, Fidelity put out a report a while ago, basically doing a DCF on their transaction fees. And they're kind of assuming no monetary premium. It's kind of priced into the market that Bitcoin has already won store value. And that's the only competitor to gold in the blockchain space. And the core argument of this is that ETH is actually better money than Bitcoin.”