LIVE: MEGAETH LIVE, SAYLOR SLIPPAGE & TEMPO | 0xResearch

Hey, hey, hey. What's up, guys? Welcome back to another episode of Zerox Research. Today, I'm joined by my co-host and one of my favorite people in Zerx Research, Danny. Danny, how are you doing?

Good. How are you doing today, Bach?

Good. It was a big day for the burgers. Did you enjoy the Super Bowl?

I did not watch the Super Bowl. I'm not a football guy.

Okay. Well, that is then our Super Bowl section for this episode. That was a great discussion.

If you didn't attend or watch the Super Bowl, there is one other event coming up that you should be watching or attending, and that is the Digital Asset Summit in New York.

Danny, I'm assuming you'll be traveling to New York?

I will be at the Digital Asset Summit in New York this year, March 24th through the 26th. I think those are the correct dates. Could be wrong though. I think those are the correct dates.

If you haven't bought your tickets, I'm sure there was already an ad at the beginning and you heard my lovely voice say, "Buy DS using code 0x 200. If it's not 200 yet, wait two weeks and it might be or it might not be." So, you're taking a massive gamble. We don't know how the discounts are going to go.

Yep, I am. My producer confirmed 0x200. Use code 0x200 to get $200 off of your DS tickets. Javitz North Center, New York City, New York, March 24th to 26. That is going to be a good one. Very institutional, increasingly more institutional.

I don't think we're even doing permittence this year, Danny. I don't think so.

I do think the lineup for D New York is pretty crazy relative to the industry, right? I know people from we're going to have folks from the SEC, the CFTC, but also Tether, Binance, Coinbase, Black Rock, we have a Fed governor coming, Mr. Moran. I'm hoping I'm saying that right as a foreigner.

Moran. That one. Binance. Lots of people coming. It's going to be a big one.

We have also Ethereum Foundation's Thomas Stanzac joining, which I feel like I haven't really seen anybody from EF at the D before. So, that should be a good one. Should be an interesting one. Feel like they don't really do a lot of conferences at the EF. So maybe a signal shift from the Ethereum guys to show up to a big conference.

Buy your tickets using Xerx 200 and every time you do that, I get a dollar. So if you buy a lot of them, I might actually have money following the market crash.

You know who doesn't have money following the market crash, Danny?

Who who doesn't have money actually? probably a lot of people, but I guess like the first one to talk about is Michael Taylor who ended up Bitcoin is sitting at what 69K something. It was at 60K. I feel like a lot of people bought at 65K and we're like okay this is the bottom now and it went down to 60K.

Do you know where Michael Sailor bought?

Higher than whatever the current price is. He bought at 78.6K, which to me seems ridiculous. I feel like he always gets these kinds of fills though, right?

Yeah. I don't really understand the strategy. It's very consistently we see the post the announcement from them of their average purchase price from a prior time period and then you go and you look at the Bitcoin chart and he's like top ticked one hour of the trading window of the past week and it just makes you wonder like why and how and how do you keep making that decision over and over again.

Surely they've surely they've missed out on a significant amount of potential coins just from the fact that they seem to ape it all into like a five minute window every time.

Yeah, maybe just to like show this chart as well. This is pretty ridiculous. He bought at 76K and I think this price is right. I'm pretty sure we're just like going like this. But it's pretty ridiculous like how he managed to I guess like he has an announcement delay, right? But even with that, it doesn't make a lot of sense to me.

It's almost like he's trading at those airport currency exchange desks where the spread is like 40%.

Yeah, it. I'll just buy as much as possible. He definitely needs to fix whoever is executing his orders.

Yeah. I mean, the other consideration could be like I don't know. Is there enough value like chain leak such that he's like people the market is always bidding up into his orders by the time they hit the market? I don't know. But yeah, either way they like they could certainly improve on execution. I don't think that's a surprise to anyone who's ever seen his average price per coin announcements post a purchase from strategy.

And like for reference that is like 12% higher than what the Bitcoin price is at right now like what he bought it at which I think typically he gets like 3 4%. And I I kind of give that the benefit of the doubt. It's a lot of size to get in, you know, whatever. He's going through regulated entities. However he's doing it, I don't know. I'm sure he has like strict regulations on how we can execute buys and stuff, but 12% seems a bit much.

Yeah. I mean, the interesting thing too is if you were if you're consistently moving that much, like my expectation would be you'd be widening out kind of like your buy windows to just even, you know, move that kind of size into the market without impacting, you know, the price at the venues that you're trading at.

The man and the company's a bit of an enigma on why on why the execution is this poor continuously. Perhaps it will always be like that.

It almost, this is a conversation I've had with James Kristoff before. It almost feels like kind of like um on purpose in the sense that it's like, well, it doesn't actually matter if my execution is so bad because as long as I buy and hold Bitcoin forever, it will be higher than my average purchase price.

I think probably a bit silly no matter what, but it's sailor for you.

Yeah, I don't know if he cares a lot. The thing is that when the market's going up, people are like, "Oh, like who cares? He he bought X amount of yards in Bitcoin." And then when the market's going down, everyone likes to laugh at him.

Then everyone wants to figure out what the I guess that's the other thing from the other week was they mentioned on an investor call that like around 8,000 per Bitcoin is when they mentioned it would become noticeably difficult to service their debt payments.

But that would be at some point in time in the future as well, like whenever those first conversions.

$8,000 per Bitcoin.

$8,000 per BTC was like sort of the number quoted.

Okay. Well, we should be fine hopefully. We don't know. Did you see that article? $69,000 too expensive. Yeah. And then they have to change it to 70K.

I think last cycle everybody wanted to liquidate him as well. They were like, "Oh, we can't go up until we liquidate Michael Sarah." It was just bidding insane amounts at that point.

But he does up is it's just kind of crazy to me because I feel like if I have exposure to like a token, let's say hype for example, like hype went up on a big rally over the past month, month and a half. Well, the entire market went down, but I had exposure. So, if it's like rallying a lot, I'm like, "Okay, well, I don't have to FOMO into this. I can, you know, relax a bit, see where the market is going, etc." But to him, that's not really the thing.

He'll almost like buy not a lot at like low prices like and then like Q4 25 or 24 he bought a ridiculous amount. I don't know if you like he bought billions like more than 30 40% of his all-time purchases he bought he almost fomos in as higher the price goes. So because he's like oh the train is leaving without me. Meanwhile, he has like a meaning a lot way too much probably Bitcoin exposure.

Yeah, it's interesting because it's probably very different from like the way that the business operates in terms of like when MSTR has traded at a premium comes at the periods when Bitcoin is obviously going up a lot. And so basically, you know, those ATMs and ability to raise cash to put into the asset come at the periods when it's more expensive than when it's not.

So yeah, like discretionarily deciding to spend all of it right then at that moment probably doesn't make as much sense, but it's also like, you know, it's like that meme about the guy buying millions of egg futures and then when he says, "Okay, like I want to sell all my egg futures." It's like what do you mean you're the guy that buys all the egg futures?

So, you know, a little bit of like he he's kind of also playing into the reason that it that it runs up so heavily during those periods. But yeah, I I would agree that there's kind of like an inverse like it would make more sense of course to be buying even more heavily when price is going down than when it is like been going up for two years straight.

Yeah. Or but like you said, if he wasn't buying a lot like sometimes Taylor is the only person in the market.

Yeah. And often times that's when things start getting a little scarier.

Yeah. And probably the other thing is like the you know the more thought out way of like adding leverage I guess if we want to call the way they operate leverage would not be you know when you're setting you can make something in terms of to say like about wanting to play the momentum but certainly like double topping at 125k and then like maybe trying to put on a bunch of leverage like at an all-time high maybe doesn't make as much sense as like trying to put on some leverage at like potentially a low and then ride it up from there.

I don't know. I I I think a lot of the like maybe typical logic that someone would would have in like their personal kind of investing portfolio does not really like fly the same way with with strategy and the way that they operate the business.

Yeah. I wonder how much money Sailor would save if he would just like write out objectively like what he's doing. And I was like, you know what? Like maybe like write it down on paper and like read it back to himself. Like wrote it down to like reflect on it for a second.

I need to talk to somebody about their newest offering is like well not new anymore because it's been months, but I think the more I don't want to say desperate. I don't think he's getting desperate, but I think the more kind of in a difficult situation he's put in, it's like the more it might become flawed is the one where he's talking about it as if it's a stable coin.

Do you know which one I'm talking about?

Yeah, I don't know if it's Stretch or one of the other products that I don't I don't know if it's STRC or if it's STRD, but anyway, I need to get.

Yeah, it's STRC. I need to get either Noah or James on to talk about that a little bit because that's something that I that really interests me and I feel like it's now is the time for that to like not do very well at some point, right?

Yeah. And let's not forget Satrini's thesis of long BTC short MSDR. So, a lot of stuff that could that could go wrong from Okay.

Less sadness about Mr. Michael Sailor and more happiness about normies hate crypto. Still, did you see the reaction? the Super Bowl Coinbase ad was at least there's one clip that's going around that I saw but kind of this classic example of people being people were excited about just like you know a song a nostalgic song and then at the it's got no basically reference to crypto and then at the end of the ad it's just Coinbase and the I don't know millennial zoomer crowd still has negative connotations to crypto, Coinbase, all related.

I don't think it's Zoomers. I think it's millennials that don't like it. But anyway, yeah, they still don't like crypto. I don't think they will ever like crypto. Is that a hot take anymore or no?

I think we missed the vote on making them liking it. I think that there's a weird it's like a weird conversation because like do people do regular people like finance? Do they like fintech companies? Like I don't I don't know that they really like these things. It's more of just like do they use them or do they not use them?

But no one's like, "Oh, I hate the Fed wire or like I hate VMO." Like they don't boo when I mean some people boo when like Powell goes on stage I guess notably but no one's like booing ads for like Venmo and stuff. I don't know Venmo does that by the way but like I don't know if I met anybody who would be like oh I hate Revolute just seems.

I think there's a difference there too though like of because Robin Hood has had this in the past where they had the whole GME craze and like they had they couldn't keep the market on that open due to the kind of issues with back and liquidity and whatnot requirements. And they've had a lot of f like there's certainly a lot of people who would probably say like oh Robin Hood like that's they're like a a scam business like they're going to take your money away and they'll turn off the buy and sell button and you won't know it.

I think there's probably a difference between just like a payment platform. Like if if I use Venmo, I just I get to send money to people and they get to send money back to me. There's not like any real like inherent chance of losing money on an investment. I I think some of these platforms like a Coinbase or Robin Hood are more open to that potential of like, you know, they definitely went on big marketing campaigns in like 2021 and then the markets went down a lot into 22 and so you probably just have people who have negative sentiment there around, you know, they still think they think crypto is a scam. They think these exchanges like promoted it and like tried to prey on retail or something like that.

Yeah, I get what you mean about Robin Hood. I feel like that illusion, that impression is also kind of gone now at this point. Like I feel like nobody's although I was never like huge into WSB and stuff. So I I don't know. But I feel like no one's super still like angry with Robin Hood and Blood and stuff. I know like at some point they hated them and there was the movie that came out which I can imagine only like reminded people of it but I feel like vast portions of society don't hate Robin Hood or the.

I think like I think a lot of regular human beings hate artificial intelligence. But I think part of that is because they're just afraid of like I also am quite concerned about like ramifications of AI. Because it's like they're it would be ignorant to say you're not.

I get like when they hate that, but even then I feel like I don't know like some number like 30 40% of people are like distant towards AI versus with crypto it's like 90% are like actively against it and then maybe 5% are like don't care and then the remaining 5% are just like you and me.

Yeah. I think part of that probably in all of these examples is sort of a result of like often the positive examples of these things are maybe harder to feel or notice. Like if if you use Google search now like the results and like the auto autopop populated results are like enhanced by AI but like you you probably like don't really like associate that with oh this is an AI thing as like a normie but when you see like shitty AI generated art or like a shitty AI generated ad you go oh wow AI is terrible like that they took away they like got rid of artists a real artist to make this ad and paid AI to do it instead.

And like, you know, they they get a a negative connotation to it from that. And I think what you have with some of these financial products is the same thing like in the crypto conversation. It's like, you know, there's maybe a few things that, you know, Bitcoin is up over the long term, but then it's like probably most people have heard of insert memecoin or insert this token that crashed and went to zero or FTX. like they think of the very strong like bad negative examples and that sticks in their mind more so than maybe like the relative growth of the industry over over time.

Yeah, I agree with that. And like another thing here is I guess when you lose money on something. I think probably most like technologically capable millennials have lost money on crypto to some extent. And maybe some of them come back and then they make money in the long term. But I feel like like they've dabbled in it, got rugged, lost money on Bitcoin because they bought the top in either 2017, 2021, or 2025, 2026.

Versus AI, you don't really get to get exposure to it. So there's no like financial repercussions for except on the long term like job safety and whatnot. But in the like the short term, there's no like active, oh, I had like x amount of dollars, I lost 80% of it because Bitcoin crashed.

I was going to somehow tie this into Catrini's the broken promise thing. I don't know if you read it. It's like about how a lot of private companies don't go public anymore. Not a great tie, but maybe that is a good thing for some of the like I'm sure the AI companies would actually go up. And it is a shame that if you want to get exposure to anthropic, it has to be through like a fifth layer SPV and it's a 350 bill.

Yeah, you get the point. I think that's a great piece, by the way. I really liked it. I agree with him quite strongly. Very much a public markets supporter myself. So would love to see a shift back towards more businesses going public.

I think as well like within crypto what probably what we need more of as well is like this you know fixing of of structures basically like we need to stop having these like dual entity um you know associations around you know protocols and like this disconnect between token and equity and we just need to have whether it's one private entity or one public entity that's like tied to a thing and just like more clarity around that.

We had some lively discussion with Noah in the chat around TTF and like the, you know, it's hard to understand the connection sometimes between like, you know, token and the foundation and then like also the labs team. Hopefully, we can see some more progress there. I think I don't know metadata stuff from metadata like that's that's it's a good example like getting everything aligned under one token.

There's some teams that are like really gleaning in the right direction, right? like you know aligning all of the structures like under one one business or like under one kind of structure within the token or something along those lines. But that's probably also where I think just a lot of the I don't know we we've had these discussions for the past couple years of like everything's a memecoin. Okay, no not everything's memecoin like some things are whatever. But I do think that a lot of the external perception of the industry basically comes down to like basically it's all kind of gambling for the most part and like most of it's all memecoins. And and I think people probably like largely don't take much of it seriously for that reason.

Yeah, I think that makes sense. I will say on that Noah thing is like I I very much agree with him. I don't really agree that Metad I like Metadow a lot and I think what they're doing is very cool, but I just kind of disagree with the fact that they're going to make it work purely because that would mean that like one company essentially owns the entire back end for it.

Does that make sense?

I'll agree with you like I'm not I'm not like entirely convinced that like metadal will be the final answer or anything along those lines. Like I think if you ask me my real view, I would just expect that regulation. It's a regulation problem and we'll just tokenize equity and everything will just be tokenized equity and this concept of tokens just goes away. Like there's just no point to have this de this different thing that's different from equity.

Especially if all equities become tradable on chain, which seems to be the like where everything else is going. they'll just require the same disclosures from token teams. That's but I'll but I'll give credit like where I think it's due because I I say this a lot too around you don't want to be an endstater when it comes to things and like there's when it comes to regulations like there's probably I don't know I mean maybe they'll drop a bill this year next year like clear regulation around tokenized equities and like it could happen very quickly or it could happen over 5 to 10 years who knows you know that's just kind of how regulation goes and that's Washington goes in the US.

So, it could be short, it could be long. I think with that in mind, like there is often room to make a lot of money sort of like in the meantime on the way to the end state of things. And I think this is like a discussion that always comes up in terms of like trading frontends and exchanges of like, oh, they're going to their fees are going to get compressed. They're not nobody's going to make any money doing this, so therefore you should make XYZ product now instead. It's like no, there's actually a lot of money to be made right now and so therefore people will compete over that.

I think like you can't just dismiss, you know, a Metadau or any other team that's like building in a something that makes sense right at this moment. Like everyone understands it will change, but there's still money to be made and, you know, progress to be made.

Yeah. The idea of like waiting for the end structure is the same to me as thinking that like all markets are efficient always and it's just like I don't know if that makes a lot of sense.

Yeah, I agree with you completely. I think it's mostly a regulation thing and it just until then I think you have a few avenues to explore. One is like metadata etc. One is just straight up just buying equities only but maybe onchain and then investing in some of those platforms if you're if you have to get exposure to crypto somehow feel like that's a way to do it.

It is tough though because also if you are a team that discloses everything like Daniel let's say you and I started a protocol and we have a lab go and we disclose our opex and our capex and everything of the labs go of like the labs team if everybody else doesn't do it because I feel like crypto people don't read in between the lines and they don't take that extra step to think oh they're going to be like oh these guys just are like spending way too money or something or like it's just going to be convoluted versus the much easier way is to just ignore all of it and show like a topline revenues and fees thing and just go with that.

Do you know what I mean?

Yeah, I understand what you're saying, but I would I would hope and like I think we would kind of have to like hope and have higher expectations of like the investors in the space to say like I mean if you have a team that's great stewards like that and is going to take that step forward that other teams are not taking like you'd probably be more willing you know a you like their vision you like whatever product they're building in but also b if they're willing to do that and like be more transparent in terms of the financials of you know the labs co plus the foundation and whatever the structure looks like, you know, directionally I would like be more willing to like invest money in them than a team that is not willing to be more transparent with me.

So, I guess I would I would hope or expect that like if anyone starts trending in that direction that the industry will sort of be forced to do so as a whole.

Yeah. I guess that makes sense because I think you know if you're incentivizing basically like if bad actors kind of get a get a free pass to like not disclose things that would make their financials look very bad then you just have to if you're an investor you have to view anyone who is like that with some additional skepticism. So any team that's willing to be more upfront with those details you can get rid of some of the skepticism and now you just have the hard data around what their financials look like.

Because right now I think you just have to assume that they're all losing a bunch of money somehow and they're just hiding it.

Yeah, that is probably a safe assumption to make at this point as well, especially now.

One thing that is slightly similar to this like new approach thing is first of all Mega E is live, the rabbit hole. I would not share any link now because I feel like I might mess it up somehow, but if you go to the Mega Eve page, you can see what they're doing. I went through their like the process. I thought it looked pretty cool to onboard people. You can like gives you a list of questions that you might want answered. Where's the best yield? What perks products are live? What farms are live? What can I do? Etc. like 15 to 20 of them maybe.

I don't know any initial thoughts or else I want to talk about the KPI based testing thing.

No, no initial thoughts. It's too early. It's the same five apps you'd find on any fresh chain.

Yeah, I mean to be fair, they have some newer ones compared to the other ones, but I'm trying to pull up this KPI. Do you want to pull it up so I can keep doing my little monologue?

Let me see if I can find it. I will say I think like some of the newer like you know Euphoria is one that gets talked about. The product is still weight list. So I think like the actual the the new interesting stuff may take some time. Let me find their KPI post. No, not their post. Their website chat. I I hope somebody's watching this. Do they have the KPIs on the site?

I'm on the rabbit hole.

Yeah, they have it. Where's the KPI thing? If anybody from Zerox research group chat is listening, can you send it into the I'll click on any link being sent to the Blockworks the Xerox Research chat right now. So if you have it, please click any links right now.

Oh, I found it. Ali sent it an hour ago. There we go. Okay. I am no longer a fraud. Oh, I found Yeah, I see it now. Bam. It's the movie. Okay. Are we good? Can you see?

Yep. Okay. Road to TGE. data is updated daily at 10 a.m. Eastern time.

Okay, so they went live today and their KPIs are that there needs to be 10 live Mega Mafia apps. There needs to be 500 million USDM and there needs to be 50K in daily fees from at least three projects. I don't think this is specifically for these free projects. I think it can change. Anyway, five are live. So this is cap. I don't know which one these are. I don't know what all of these are, but I know one is Avon. Five of them are like this one is not Kumbaya. I'm pretty sure one of them is Kumbaya, which is a backlaunchpad. I don't know what this is. I don't know what this is. I got to look them up. Anyway, this one I think is an easy one to hit. I'm a bit worried about these. This 500 mil USDM. Let's say that is also fine. They'll figure out a predepositive wall. They'll figure something out.

This one 50k daily fees over 30 days. They only need to hit one KPI though, right? Like they're gonna hit 10 apps and then the and then seven days later the token will TGE.

Is it just one KPI?

Yeah, it says on the left one KPI hits seven days TGE. Oh, I thought it was they had to hit KPI. From my understanding from from the posts and Bred's posts in our in the Zerx Research Telegram chat. Quick shout out to the Zerx Research TG. Brett is in there among many other folks within the yell at a great place to be connected. Generally speaking, you know, you can always ping Brett and other folks in the space in there, but I from what I understand, you they the intention is to only need to hit one of the three KPIs and then the 7-day timer for the TG will will hit. So, like from current POV and I think just generally speaking, like I think 10 apps will go live and then and then that countdown will start.

Okay, that's very good news because if it was free KPIs, I thought it would be very very difficult.

I could be wrong. Correct me if I'm wrong, but I believe that's that's the case. I think Brad in the chat. Brad, please answer. All right, we'll see. But like 50k free apps, I think majority of chains probably don't have that. Like I think if soul base I don't even think like like optimism almost definitely doesn't have it right in daily fees.

I was going to pull up the data really quick right.

Yeah. River confirmed that it's only one KPI that needs to be hit. So yeah, makes a lot of sense.

So, like if we look for today or you know like last week or whatever. I mean on network rev there's like yeah I mean it would be like Tron Salana Hype ETH base barely makes barely made 50k. I guess it depends on the day for bass. Sometimes they hit it, sometimes they don't hit it.

Are you doing application revenue per chain?

I'm just looking at network revenue. Is that based on app revenue?

Yeah, it has to be three unique apps under them that makes 50k a day.

Oh, interesting. For 30 days. I'm trying to I'm pretty sure we have this data on blocks. That's the thing. I know we have like app fees by sector, but do we have it by chain? Maybe we do. I'm just looking at apps. I mean, you'd kind of get to the same like questionable result by just looking at the top apps across all the major chains. And it's like there's there's only like 10 or 20 or so that that are going to cross that threshold by themsel. Though of course if you end up with a couple of apps that are doing you know 5 10k in fees then you know you could like build up towards that.

Yeah I mean that's that's a tough goal out the gate certainly I would agree. Takes time like maybe I maybe you would look to like monad as a comp for example like they've been out for several months now. kind of like relatively similar like high throughput EVM chain focused on higher throughput apps. And I'm not not aware of what kind of app revenues they're doing but well I can tell you they have 24 hours they have one application that has had above 10k in fees which is called Neverland. It's a lender. I need to put this up.

It is Neverland which has 20 18k in fees like unis swap is 9k shmon monad shush monad is 4.3k so it's tough right and it's like I guess this was majority of people this was my worry when they announced this thing I was worried that they would make them hit all three of them even 500 mil USDM I think is relatively difficult Because especially if they don't like turn up the incentives, if they turn up incentives, 500 mil is nothing. But if they don't use incentives to like lure people in, I think that they probably wouldn't be able to hit it for at least a month. My but I don't know that like a lot more work on the back end goes into TVL than I think a lot of people realize. So maybe they already have it set up and I wouldn't be surprised if they do because they are relatively like on top of everything from what I've seen the team.

Yeah. I I think looking to maybe maybe framed a different way like looking to monet as a comp here. If the goal is to hit these goals within a month or so, then they're setting like a relatively high bar for themselves, right? They're looking to have higher TVL be doing basic a little bit more.

Yeah, I mean I don't even looks like Monet is like maybe just barely at that 50k in total app fee revenues. So yeah, like above that watermark. So yeah, they're setting sort of like