The Bull Case For Ethena’s Ecosystem and the Helium Network | Round Table

This episode dissects the bullish cases for Ethena's expanding stablecoin ecosystem and Helium's DePIN network amid market uncertainty, alongside a critical look at the Crypto AI compute space.

Market Uncertainty and Neutral Sentiment

• The discussion kicks off acknowledging recent market volatility, influenced by US administration commentary and broader macro uncertainty, particularly regarding potential China tariffs. Daniel Shapiro expresses short-term uncertainty but remains long-term bullish.
• Shapiro notes that despite a recent market rebound, order flow data (like low funding rates, open interest premium, and CME/Binance basis) suggests a lack of aggressive buying, indicating potential room left in the rally but also justifying a neutral stance. "I'm feeling pretty neutral right now. I don't feel like there's any strong risk-reward setup either way," Shapiro states, advocating for patience.
• Recent token launches like Zora (initial hype followed by a drop) and Initia (less initial hype but better early performance) are cited by Danny as mixed signals, suggesting the market isn't in "max bear mode" but reflects underlying uncertainty and a "wait-and-see" attitude, possibly linked to unpredictable political influences.

Bitcoin Decoupling Potential

• The conversation touches upon the recurring theme of Bitcoin potentially decoupling from traditional risk assets like equities. Shapiro highlights data points supporting this, noting Bitcoin's outperformance against the QQQ index since the US election and year-to-date.
• He also mentions the historical ~90-day lag of Bitcoin behind gold's price action, suggesting that gold's recent strength could foreshadow Bitcoin gains, providing "solid statistical evidence" for the decoupling thesis.
• Danny adds a layer of caution, questioning whether recent Bitcoin strength is sustainable or a temporary effect of post-election inflows, while also pondering if market cycles are driven more by human psychology than just Bitcoin-specific events like halvings.

Deep Dive: Helium Network Evolution

• Nick Carponito, ZeroX Research's DePIN analyst, provides an update on Helium, noting its significant shift in focus towards the mobile network over the past 18 months.
• Helium Mobile vs. Helium MVNO (Nova Labs): A key distinction is made between the Helium Mobile network (a subDAO rewarding mobile data offload via Wi-Fi hotspots) and Helium Mobile the MVNO (Mobile Virtual Network Operator – a company that provides cellular service using another carrier's network infrastructure), which is operated by Nova Labs, the original creator of the Helium blockchain.
• Return to HNT Tokenomics: Helium simplified its token structure, moving away from separate MOBILE and IOT tokens for its subDAOs. Now, all rewards and governance flow through the primary HNT token, with MOBILE and IOT being redeemable from their respective treasuries for HNT. This aims to reduce confusion and consolidate value accrual.
• Strategic Partnerships and Expansion:
  • Inversion Capital & Santiago Santos: Proposed becoming a second service provider on the Helium Mobile network, aiming to acquire Latin American MVNOs and migrate them to Helium for cost optimization and improved coverage. Acquisitions are pending but represent a significant potential growth vector.
  • MovieStar Partnership: Helium Mobile (the MVNO) partnered with MovieStar, a major telecom operator in Mexico, allowing MovieStar's 2.9 million subscribers to roam onto Helium hotspots. While rollout is slow due to limited initial hotspot density in Mexico, it's expected to increase network usage and fees as deployment ramps up.
  • AT&T Partnership: In a major validation, AT&T partnered with the Helium network (not the MVNO) to offload data traffic from AT&T subscribers onto Helium Mobile hotspots automatically when available. Nick highlights this as the "first time that a big three MNO [Mobile Network Operator] in the US has been willing to publicly state that they're working with a decentralized wireless project." This signals growing acceptance of community-owned infrastructure by incumbents.
• Brownfield vs. Standard Hotspots:
  • The network initially relied on proprietary "standard" hotspots. However, "brownfield" hotspots – existing compatible Wi-Fi gateways updated with Helium firmware – have surged in adoption over the past 6-8 months.
  • Brownfield hotspots don't earn Proof of Coverage (PoC – Helium's mechanism for verifying hotspot location and network readiness) rewards but do earn rewards for actual data transfer.
  • Nick explains that large spikes in brownfield deployments are often due to a few enterprise operators onboarding many devices at once. He expects enthusiasts to stick with standard hotspots (for PoC rewards) while business-focused deployers will favor brownfield for cost-efficiency and hardware control, predicting brownfield numbers could be 10x higher within a year.
• Economic Model: Data Credits and HNT Value:
  • Network usage (IoT or Mobile) is paid for using Data Credits (DCs), which have a fixed USD-pegged price. Burning DCs mints new HNT, which is then rewarded to the hotspot facilitating the data transfer (Burn-and-Mint Equilibrium).
  • Nick suggests current HNT price reflects current data burn levels, but upcoming usage growth from partnerships like MovieStar and especially AT&T (where users connect unknowingly) could dramatically increase DC burn and drive "slow and steady" HNT price appreciation, potentially more stable than past speculative rallies. "I hope and think that it should be slow and steady as we move on," Nick remarks on future price potential.
  • A chart comparing Helium's cost of user acquisition to Verizon's highlights Helium's ~90% cost reduction up to 100 million users, attributed to leveraging community-deployed infrastructure versus building expensive cell towers.
• Future Outlook and International Expansion: Key catalysts include onboarding more MVNOs globally, potential expansion into Europe (rumored testing), and continued execution of existing partnerships. The ability to integrate with or offload data for established carriers is seen as a major strength.

Deep Dive: Ethena's Ecosystem Expansion

• Shapiro shifts focus to Ethena, framing it as a prime investment vehicle for the bullish stablecoin narrative emerging from Dcentral. Ethena is evolving from a single synthetic dollar issuer into a comprehensive, TradFi-enabled DeFi ecosystem.
• Ethena's Product Suite:
  • USDe: Ethena's flagship synthetic dollar ($5B TVL), generating yield via a delta-neutral basis arbitrage strategy on crypto perpetual futures. Basis Arbitrage involves capturing the difference between spot and futures prices, often correlated with funding rates. Yield is crypto-native and inversely correlated to Fed funds rates. Staking USDe for sUSDe captures this yield.
  • IUSD: A planned KYC/KYB (Know Your Customer/Know Your Business) compliant version of USDe/sUSDe, designed to make the yield accessible to traditional finance (TradFi) institutions. Expected around the Converge chain launch.
  • USDTB: A recently launched Treasury-backed stablecoin (~$1.5B TVL). Backed primarily (90%) by tokenized Treasuries (specifically BlackRock's BUIDL fund) and 10% stablecoins (USDT/USDC) for smoother mint/redeem. USDTB is synergistic with USDe, as Ethena can add USDTB to USDe's backing during periods of low/negative funding rates, providing a yield floor (around T-bill rates) and making USDe yield more consistent.
• Converge Chain: Architecture and Strategy:
  • Ethena is building its own chain, Converge (slated for Q2 2025 launch), using a custom Arbitrum Orbit stack (leveraging Arbitrum's Nitro tech for the sequencer) and Celestia for Data Availability (DA – publishing transaction data affordably).
  • The core strategy is to bridge permissionless and permissioned finance. Converge will host both standard DeFi apps and permissioned applications, facilitated by a partnership with Securitize (a leader in tokenizing real-world assets).
  • Converge aims for ~$10B in TVL at launch by migrating USDe, USDTB, and Securitize's tokenized funds (like ACRED).
• Bridging TradFi and DeFi via Permissioned Elements: Shapiro argues that attracting significant TradFi capital (the largest potential user base for DeFi) requires permissioned environments. Converge aims to provide this, allowing compliant access for institutions.
• Growth Strategy & OI Expansion: A key driver for Converge and IUSD is to unlock new venues for Ethena's delta-hedging strategy. Currently limited by the Open Interest (OI – total value of open futures contracts) on crypto CEXs (~$30-40B total across supported exchanges), Ethena avoids exceeding ~20% market share to prevent destabilization. By enabling compliant hedging on CME ($~20B OI in BTC/ETH futures/options) and Bitcoin ETF options markets ($~14.4B OI), Ethena could significantly increase the potential supply of USDe and its revenue.
• Regulatory Landscape and Risks:
  • Upcoming US stablecoin regulation presents uncertainty. The Genius Act is viewed as potentially bullish (legalizing stablecoins, clarifying non-security status). The Stable Act, in its current form, is more bearish as it could disallow yield-bearing stablecoins, potentially classifying sUSDe as a security.
  • Shapiro notes USDTB provides resilience, offering a compliant, non-yield-bearing (to the holder) stablecoin model similar to Tether/Circle if USDe faces headwinds. Even if sUSDe is deemed a security, clear registration pathways could mitigate the risk, though adoption might slow. "Regulation could slow them down the most if it came in pretty bad," Shapiro relays from the Ethena team.
• Competitive Dynamics and DeFi Integration Risks: While Ethena has a first-mover advantage in tokenized basis trades, competition from TradFi and other crypto players is expected, potentially compressing yields. Additionally, USDe's deep integration into DeFi lending (Morpho) and yield markets (Pendle) amplifies DPEG risk, although its mechanism differs fundamentally from algorithmic stablecoins like Luna's UST, lacking a direct death spiral vulnerability.

Crypto AI Landscape: Compute, Models, and Agents

• The discussion pivots to AI, with Nick expressing skepticism about decentralized AI compute (training/inference) matching centralized efficiency soon. He emphasizes the high reliability required for training (one GPU failure can halt the process) and the low-latency interconnects needed, typically requiring physical co-location.
• Emerging Solutions and Market Dynamics:
  • Dan Shapiro sees potential, citing Noose's $50M raise from Paradigm for its DRO (Distributed Reinforcement Optimization) technology, co-developed by an OpenAI co-founder. However, Noose currently relies on aggregating Tier 2 cloud GPU providers (like Lambda Labs).
  • Shapiro introduces the "latent resource" concept (similar to Helium's model): data centers with idle or aging GPUs could offer compute capacity, filling backlogs at major hyperscalers (AWS, Google Cloud, Azure) currently prioritizing large AI labs (Anthropic, Google, OpenAI). "There fundamentally needs to be like a latent resource that people have that... they effectively have a zero opportunity cost... dynamic to contribute," Shapiro explains, applying the DePIN principle to AI compute.
  • Nick suggests DePIN projects like Double Zero, providing high-speed private fiber networks, could potentially enable more distributed training across multiple data centers in the future, if latency challenges can be overcome.
• Centralized vs. Decentralized Model Development:
  • Dan points to recent changes in OpenAI's GPT-4o, suggesting it's optimizing for user engagement rather than pure utility, potentially learning user behavior to maximize interaction like social media algorithms. "Instead of optimizing for maximum utility it actually starts learning you and starts optimizing for maximum engagement," he observes.
  • This trend, Dan argues, strengthens the case for decentralized, open-source models (like DeepSeek) that can be fine-tuned transparently (e.g., via decentralized RLHF - Reinforcement Learning from Human Feedback) for specific use cases without hidden engagement-driven biases or monetization nudges (e.g., skewed recommendations influenced by advertisers).
• AI Agents: Trading and DeFi Applications:
  • Nick remains cautious about AI trading agents, citing personal experience with autonomous platforms consistently losing money. He believes current models struggle with predictive market insights.
  • While the initial wave of generalized AI agents (Virtuals, Zero Bro) faded, both Nick and Danny see potential for more focused and valuable agents in the future. Danny suggests simple chatbot interfaces for DeFi might be less effective than targeted AI features integrated smartly into existing application workflows.

Concluding Thoughts and Strategic Outlook

• Shapiro anticipates continued macro uncertainty potentially driving short-term price action but sees "green shoots" like Helium and Ethena's progress. He advises using quieter periods for research to prepare for potential market rips once macro clarity emerges.
• Nick emphasizes tracking catalysts that bring new users (retail or institutional) into crypto, citing Ethena's Converge as an example. He remains watchful of institutional adoption and DePIN developments, expecting interesting moves as traditional markets remain choppy.
• Danny plugs the upcoming Permissionless conference (June 24-26) as a venue for further discussion on these topics.

Strategic Conclusion

The episode highlights Ethena and Helium's strategic expansions targeting new markets and partnerships amidst market caution. Crypto AI faces efficiency hurdles but shows potential via latent compute and decentralized models. Investors should track regulatory shifts, partnership execution, and AI infrastructure developments for emerging opportunities.