This episode unpacks the surprising ETH pump, dissects cautious market sentiment despite bullish signals, and explores Solana's burgeoning ecosystem alongside the controversial rise of the new 'Internet Capital Markets' meme meta.
Podcast Introduction and Team Updates
- The Hivemind podcast convenes with Jose (leading Delphi Labs) hosting Cedus (Head of Institutional Research), Jason (Head of Markets/Macro), and Jan (Managing Partner of Delphi Ventures).
- The team congratulates Jan on the birth of his new child, Leo. Jan, despite the recent arrival, joins the discussion, sharing early fatherhood experiences.
Market Sentiment: The ETH Pump and Cautious Optimism
- The discussion kicks off with the recent market upturn, particularly focusing on Ethereum's (ETH) significant pump. Cedus notes ETH's ~44% rise since their last podcast, outperforming Bitcoin (BTC) at ~10% and Solana (SOL) at ~20%.
- Cedus expresses uncertainty about the ETH pump's drivers, highlighting a large on-chain entity accumulating ETH and leveraging it, contrasted with minimal ETH ETF inflows. He states, "This is either a good thing or a bad thing, right? The optimistic way to look at it is that the institutions haven't bought yet and the bad way to look at it is the institutions aren't buying."
- Jan, from Delphi Ventures, attributes the ETH rally primarily to a "positioning pump," suggesting it was a favored short leg in many trading pairs, leading to a significant unwind.
- Despite the pump, Cedus remains skeptical about ETH's long-term prospects of flipping BTC, citing the immense fresh capital required for such a move and viewing the current rally as a short squeeze opportunity.
- Actionable Insight: The recent ETH surge appears more related to market positioning and short squeezes than new institutional demand via ETFs. Investors should be cautious about extrapolating long-term strength solely from this specific rally.
ETH's Long-Term Strategy: L1 Scaling and L2 Ecosystem
- Cedus questions the long-term impact of ETH's Layer 1 (L1) scaling efforts, noting that even a 100x improvement over several years would yield around 2-3k Transactions Per Second (TPS). TPS (Transactions Per Second) is a measure of how many transactions a network can process in one second. He points out that networks like Solana and Sui already achieve or exceed this.
- Jan remains bullish on ETH's fundamental economic model (being net deflationary) and its Layer 2 (L2) strategy. L1 (Layer 1) refers to the base blockchain (e.g., Ethereum), while L2 (Layer 2) refers to scaling solutions built on top of L1s. Jan believes, "The history of technology is that if you have something that has traction, the value capture tends to figure itself out."
- Jose adds that ETH is better off with L2s, as they help retain activity that might otherwise migrate to competing L1s. Cedus observes that Ethereum seems to have learned from Solana's experience, where rollups are emerging despite Solana not explicitly optimizing its L1 for them.
- Actionable Insight: While ETH's L2 strategy is crucial for ecosystem retention, its direct value accrual to the ETH token remains a key question for investors, especially as high-performance L1s continue to innovate and attract developers.
Jason's Cautious Market Outlook: Hedging and Red Flags
- Jason, providing a markets and macro perspective, expresses caution. He views the current Bitcoin price range (referred to in the transcript with figures like $90k-$105k, which may represent an internal index or hypothetical levels rather than direct USD prices) as a logical area for profit-taking or hedging.
- He notes that an all-time high breakout (e.g., "$108k" as per transcript) would invalidate his cautious stance. Jason highlights declining BTC ETF inflows despite the price grind and the Federal Reserve's "no rush" approach to rate cuts as reasons for his caution.
- Jason observes, "Everybody's super super super super bullish. And obviously everybody gets more bullish the higher you go with price." He also points to speculative excesses in "trench onchain stuff" like the "Mudang" meme coin as potential warning signs.
- Actionable Insight: Jason's analysis suggests a tactical approach of de-risking or hedging at current Bitcoin range highs, given the confluence of euphoric sentiment, waning ETF inflows, and macro uncertainty.
Broader Macro Concerns and Strategic Positioning
- Jan echoes Jason's caution, suggesting much of the recent good news (like MicroStrategy's continued BTC purchases) might already be priced in. He points to macro crosscurrents, such as Chinese shipping issues versus the strong bid for AI-related investments.
- Jan believes, "I think we've had all the good news that's come through. So, it's it seems less likely that we'll just blast through all-time highs in the first try." His strategy involves some hedging, aiming to buy a potential market dip that clears out late leverage, while maintaining a longer-term bullish outlook.
- Actionable Insight: The current market environment, characterized by priced-in optimism and unresolved macro questions, may warrant a cautious short-term stance. Investors could consider hedging or awaiting clearer confirmation before expecting a sustained breakout.
Solana's Edge: Innovation and "Internet Capital Markets"
- Jose shifts the focus to fundamental developments, highlighting Solana as a hub of innovation. He mentions the rise of "Internet Capital Markets" (ICM) and platforms like the "believe.xyz" app (associated with pump.fun) and "dev.fun" on Solana.
- A significant development discussed is Superstate, a project by Compound founder Robert Leshner, launching on both Solana and Ethereum. This platform handles KYC (Know Your Customer) – a process for verifying client identities – at the asset level.
- Cedus emphasizes the importance of this: "If you can actually just kind of do this compliance right at the asset level, then D5 protocols and the underlying protocol don't need to worry about it. Like that seems like a pretty big deal to me." This model could be a major win for general-purpose blockchains by simplifying institutional access to DeFi.
- Actionable Insight: Superstate's approach to on-chain compliance could lower barriers for institutional DeFi adoption on public blockchains, potentially diminishing the drive towards siloed, institution-specific L2s and benefiting versatile L1s like Solana and Ethereum.
Tokenizing Real-World Assets: The Metallicus Example
- Jose expresses excitement for Metallicus, a Delphi-incubated project focused on tokenizing startup shares. He envisions it simplifying fundraising through on-chain SAFE agreements and fund transfers, potentially evolving into a "Carta-like functionality on chain."
- Jose contrasts this with the purely memetic nature of many ICM tokens, preferring the legal protections and tangible value offered by tokenized equities. He states, "I think if that becomes super easy like you can just set up a company in one click and raise raise money that can facilitate an actual like pump fund or dev fund but based on equities."
- Jan views the "Launchpool" phenomenon (related to ICM on Solana) as a rapid, albeit messy, way to test new ideas, acknowledging that while the current iteration may not be final, it accelerates learning.
- Actionable Insight: The tokenization of real-world assets like startup equity, exemplified by platforms like Metallicus, offers a more fundamentally grounded path for on-chain capital markets, providing clearer value and legal frameworks compared to speculative meme tokens.
The "Solana Strategy": Public Companies Accumulating SOL
- The discussion turns to publicly traded companies adopting a "Solana strategy," acquiring SOL for their treasuries, similar to MicroStrategy's approach with Bitcoin. Examples mentioned include "AXI" and "Soul Strategy" (potentially referring to entities or specific investment theses).
- Jan explains that the ability to purchase locked SOL at a discount (often from sources like the FTX estate) and the yield generated by staked SOL are key attractions. This creates an "idiosyncratic bid for soul," which Jan believes could favor the SOL/ETH trading pair. Jan notes, "I think Soul is in a unique position there."
- The team ponders why a similar "ETH strategy" hasn't emerged. Jose suggests the existence of ETH ETFs and their relatively weak demand might be a factor, as the original MicroStrategy BTC play was partly driven by the absence of a BTC ETF.
- Actionable Insight: The trend of public companies acquiring SOL, driven by unique factors like discounted locked tokens and staking yields, provides a distinct demand source for Solana that is not currently mirrored for ETH, potentially supporting SOL's relative market performance.
Celestia (TIA): Data Availability and Future Growth
- Cedus remains bullish on Celestia (TIA), a modular blockchain focused on DA (Data Availability), which ensures transaction data is accessible for L2s to verify state. He notes continued adoption with more rollups and projects like Initia utilizing Celestia.
- He believes TIA has "low-hanging fruit," such as launching its own DeFi-focused rollup, to drive value. Cedus also mentions TIA's relatively aggressive two-year vesting schedule, with investor unlocks concluding in October.
- A key point raised is the need for greater TIA utility within DeFi. Cedus suggests, "It's going to get to the point where the writing will be on the wall. Like this thing's going to zero if you don't pivot a bit from just being this like neutral DA layer."
- Actionable Insight: While Celestia's core DA service is gaining traction, the TIA token's long-term value may depend on the team's ability to expand its ecosystem, potentially by developing its own execution layer or fostering more direct DeFi utility for TIA.
Emerging Narratives: RWAs and Hyperliquid (HYPE)
- Jason reveals he has been accumulating RWA (Real-World Assets) tokens, which represent traditional assets tokenized on-chain. He anticipates that tokenizing securities will become a significant narrative if the broader crypto market rallies, mentioning Maple (now Syrup) as a project of interest.
- Jason is also highly bullish on Hyperliquid (HYPE), a decentralized perpetuals exchange, calling it his largest holding outside of Bitcoin. He is particularly excited about Hyperliquid Improvement Proposal (HIP 3), which allows users to stake HYPE to list their own trading pairs. Jason sees this as a powerful feature: "I actually think like there's a real potential for people to build their own exchanges on top of Hyperliquid."
- Actionable Insight: RWAs are a growing sector with potential to attract institutional capital. Simultaneously, innovative DeFi infrastructure like Hyperliquid, offering customizable exchange functionalities, presents compelling investment opportunities for those looking at platform-level plays.
The New Meme Meta: "Internet Capital Markets" (ICM) on Solana
- Jan observes that new L1s and narratives often see the most aggressive price action, citing KTA (described as a permissioned high-performant DAG (Directed Acyclic Graph) hybrid chain) as an example. A DAG is an alternative data structure to blockchain.
- He suggests investors might consider rotating from larger, more established L1s into newer ones like Initia (a Delphi investment). Regarding meme coins, Jan notes the persistent demand but advises patience for better entry points due to their volatility.
- The "Launchpool" or "ICM" trend on Solana, facilitated by apps like believe.xyz, is dubbed the "new trenches." Jason likens it to the previous AI agent/platform meta, comprising a mix of projects with some fundamental basis (e.g., Launchcoin, Dupe) and purely memetic plays. Jose's take is, "99 or 95% meme 5% maybe something cool comes out of it."
- Actionable Insight: The ICM meta on Solana is highly speculative and carries significant risk. While early participation can offer high returns, most projects are unlikely to be sustainable. Investors should exercise extreme caution and attempt to differentiate platform enablers from transient memes.
AI Coin Landscape: Worldcoin (WLD) and Beyond
- Jason inquires about the team's current interest in AI coins, given the recent shift in market attention. Jose reveals his largest AI coin position is Worldcoin (WLD).
- Jose is bullish on Worldcoin's CEO, Alex Blania, and the project's ambitious vision to onboard hundreds of millions of users by leveraging identity verification in the AI era. A key insight he shares is that "identity used to be something a cost for business... and in the era of AI it's going to turn into like a value that a business can offer its its real customers."
- However, significant bear cases for WLD exist: high emissions, regulatory challenges (bans in some countries), and negative PR surrounding its eyeball-scanning orb operations. The connection to OpenAI's Sam Altman is also noted as a factor.
- Delphi Research is currently developing a detailed report on Worldcoin. Jose mentions more excitement for private market AI projects like Prime Intellect and "Noose" (this may be a mis-transcription, Nillion is a known project in private computation) than for current public market AI coins.
- Actionable Insight: Worldcoin represents a high-stakes venture in digital identity for the AI age. Its potential is vast, but so are the risks from emissions, regulation, and public perception. The upcoming Delphi Research report may provide deeper insights for investors and researchers.
Reflecting on Past Cycles: The "Trough of Disillusionment"
- Jose reflects that crypto might have recently been in a "trough of disillusionment," a phase in technology adoption cycles (popularized by Gartner, though Carlota Perez's work on technological revolutions is also alluded to) where, despite disappointment, real building occurs.
- He notes that some projects from the 2017 ICO era, with ambitious ideas like on-chain energy grids (e.g., Power Ledger, which is still active), are now reportedly gaining traction. This contrasts with projects like Golem, which, despite large treasuries, showed slow development. Cedus humorously remarks on Golem, "I was like sir it's been seven years how are you releasing an alpha."
- Actionable Insight: As the crypto market matures, some "legacy" projects from previous cycles that have demonstrated persistent development and sound fundamentals may re-emerge as overlooked opportunities. Diligent research into their progress and current viability is essential.
Conclusion: Navigating a Market of Contrasts
The episode highlights ETH's positioning-driven rally versus Solana's fundamental and speculative momentum, urging cautious optimism. Investors should monitor Solana's ecosystem growth and the sustainability of new meme metas, while AI researchers track identity solutions like Worldcoin amidst broader market recalibration.
