WOYM: ETH Denver Debrief 2024

Ram Ahluwalia & Nick Rygiel, Ishan Bhaidani

Thank you for Listening this Episode!

Support our podcast by spreading the word to new listeners. We deeply appreciate your support!

Episode Description

Episode Transcript

Ram: [00:00:00] All right, we are doing a what's on yourmind special edition ETH Denver joined by my friends Ishan and Nick. Ishan justgot back from ETH Denver. Every time I go to ETH Denver, I wind up writingangel investment checks. It's bad. It's like Vegas. I don't bet on anything in Vegas. Like I have been to Vegas, Dozens of times, there's always like a random conference there.

I don't bet on anything cause I like positive expectation games, right? I go to eat Denver andI blow money on angel investments. Basically is what happens. So I didn't gothis year, a lot of travel thus far, although it's one of my favoriteconferences. I really enjoy it. I think the developer, the builder community,you got, Ishan and I met there last year.

We talked forthree hours, one night. I wouldn't let you peel away. And, we also had apermissionless debrief in September. And remember the tokens we talked aboutthere, like up and to the [00:01:00] right, youcould have bought anything that had a pulse in it. It went up into the rightthough. I'm joined by my friend, Nick Reigel as well.

And Nick and Ihave some exciting news to share. Next Monday. Stay tuned for that. But we'rereally thrilled about that. And, Nick, was a Merrill turned crypto native,investor. So has seen both sides. Let's get right into it. So what was thevibe, energy takeaways, highlights, eat Denver alpha.

Let's dig intoit.

Ishan: Yeah,I think I could probably start there. Yeah, Denver's really interesting. Iheard numbers upwards of 40, 000 people were in attendance. It feels like we'reback, a lot of, interesting conversations, a lot of interesting narratives. Ithink if I were to boil it down into.

Three majorcategories, I think it's restaking, and, I'm one of the bigger restaking bullsyou'll meet. I just think the concept of being able to take a decentralizedtrust and export it to other application forms [00:02:00]is incredibly interesting, but that There was the talk of the town becauseeveryone was like, there's new restaking primitives coming out.

People arebuilding these actively validated services that come out of restaking. And justgenerally what are the risks? Are we thinking about these things? What are thedifferent opportunities coming out of restaking? So that was probably, thenumber one most talked about thing.

Number two,and arguably number one is the Bitcoin scaling space. And so mostly BitcoinLayer 2s. There's a ton of capital going into that environment. And a ton ofexcitement, right? I don't think we've seen real excitement around the Bitcoinecosystem in a while, but now we have, there's BRC20s, there's the Runestandard coming out, you have Ordinals, and just now people are like, Oh, whycan't we just, I think the, Progression of ZK tech in the space and justgenerally, with Plancky3 and like some of the stuff Polygon has been doing andthen you see Succinct Labs and some of the things that they're coming out with.

I think just the progression of ZK tech hasmade it a lot more realistic to be able to have like faster proof generation.And so with that, people really think there's an [00:03:00]ability to create like smart contract layers using proofs and attestations.through the Bitcoin ecosystem. And so that's something like, there's just a tonof excitement there, a ton of capital going into that area.

And then thethird one is, like the one that I probably know least about or understandleast, but is the talk of the town and the bell of the ball is like the AI,crypto AI intersection. Which is, frankly an area I haven't spent enough timeto do the due diligence on understanding, but, just everyone's talking aboutthe different ways that crypto and AI intersect.

And, A lot ofit feels like Coke to me personally, just like, how can we take a piece of thisnarrative? But I do think there are interesting use cases, but if I were toboil down like the three major takeaways from EatDenver, I would say, a lot ofAI, a lot of Bitcoin scaling, and a lot of restaking.

Ram: I loveit. Great summary. And Nick, feel free to get in there. I have some reactionsto that, but what are yours?

Nick: Myinitial reaction, I think AI and crypto is going to be, you're dealing with thetwo trends now where it's very easy to get the narrative just out running asfast as possible.

And peopleknow in this space that you can have the fundamentals and then you can beright, or you can [00:04:00] be wrong. But ifthe movement is going, then just either you followed it along and you just playalong or you just recognize, okay, how do I look at this from a, Investablestandpoint.

And then howdo I look at this from more of a speculative standpoint? I think the AI tokensare, I think there will be something that will come out of that. But I thinkthis is the first iteration of just people see AI and they're like, okay, I'mgoing to buy that because if everyone else is buying it, then I'm going to doit too.

But I agreewith you. It's we definitely have to really look at what is a token use casefor AI versus Bitcoin. The leverage of using AI for maybe doing research orthe, more of the backend analysis. Right on. Let's

Ram: gothrough those in turn. So I agree. Like restaking is primarily, it's a primaryETH narrative as I see it.

It's addingstructural leverage to the ecosystem, which I believe is actually bullish forthe ecosystem. It's not leverage coming from, The Grayscale Widowmaker trade,which is not the right kind of leverage. This is decentralized [00:05:00] structural leverage. Maybe it ends intears one day. I don't know.

It's, it'd bea mistake not to recognize that has very little leverage right now. And thatnumber will go up, right? So you have to reassess and be aware of those risks.But, yeah, I think restaking is definitely there. Bitcoin scaling. Yeah. Greatpoint there. And also, DeFi on Bitcoin is a new theme.

By the way,here's another theme for you. Shitcoins on Bitcoin. Have you heard of thistheme? Shitcoins on Bitcoin. It's really funny. I'll, I'm not going toattribute this to anyone. I don't know if they want me to or not, but aprominent Bitcoin, owner. If they're in the chat, they can out themselves ifthey want.

I'll give themhappy game credits, not mine. But their point was like, look, why don't we justenable like shit coins on Bitcoin? It's hilarious. This is the kind of stuffthat happens in a, in the bull market. The phase of it, we can probably get toin a moment, but, and then DeFi on DeFi, I think on a [00:06:00]Ethereum will come back.

Look, stablecoins have product market fit and borrow lend is a. It's a great use case.Payments are working as well in the real world linked to the blockchain. So itmakes sense. You'd have a borrow lend capability there. What else? AI andcrypto. Yeah. AI and crypto. It's you're putting, like a cocktail together,right?

It's like, howdo you take something that's high volatility, high beta? And combine it withthe hottest theme in the land. So I do think there's some real use cases therethough. The decentralized GPU computes a real use case and their businesses outthere protocols, I should say that are, have achieved some product market fitand generating some revenue.


Nick: Ithink when we look at also what could happen, if the government comes down,especially, in America and say, Hey, you're, you want to rent GPU do all thisstuff. And then suddenly there's a decentralized AI processing kind ofcapabilities. There, there [00:07:00] reallyis, I think, a need for that from a global kind of, again, going back to thetheme of a global computer, we have this kind of persistent kind of contractsthrough Ethereum that started it.

But now youhave Solana, you have all these other things that are being built. I think thisis such a small space to begin with that people get so tribal without evenrealizing. It's what are we really being tribal about here? It's enough to beexperimenting and say, whether I agree or disagree with you, let me get abetter understanding so that it's not just the same argument.

And the samearguments that we hear all the time is, Oh, crypto is a scam. Or it's You're soignorant that you don't even know, there's nothing that I can even say toconvince you otherwise, because you know so little, you're not going to evenunderstand what I'm trying to say. So then you end up talking to, but I thinkthat's what's happening now is for, whether, Bitcoin, Ethereum, or Solana tojust discount everything as, oh no, it's just, this is all it's going to be.

I thought ofit with AI, it's the same thing where there's you're going to throw everythingout when there could be like a few diamonds in the rough that are like, wow,this actually makes a lot of sense, but you have to go [00:08:00]through a lot of, what to get to that. There's a lot of, I'll say there's a

Ram: lot ofbullshit in this space.

Yes, but thereis opportunity. And yeah, if you're a skeptic, what you got to do is go to EatDenver. You got to go to Bitcoin Miami. You've got to go to Solana Breakpoint.And you've got to tinker and experiment and playing around with this stuff andmeet people like Ishan and Nick, and dozens of others.

And that mighthelp, you raised a great point, Nick, on the AI theme, right? So there, thereare two responses that have happened in the last few years politically, right?One is the US sanctions on Russia and China's looking at that and saying, gee,how do we protect ourselves from that? And many other countries are too.

And an AI toyour point, right? So they're not export controls. On China. And sodecentralized technology is one of the countermeasures that [00:09:00] some of these countries might adopt. Now,ultimately these servers and GPUs are housed and domiciled somewhere so youhave to comply with law and OFAC and all the rest.

Yeah. But.There's going to be a demand for those kinds of services. It's an interestingquestion, what it means if you own the token and you're an investor or theissuer of the token, all that stuff. But, what else? So Ishaan, what was the,what was the vibe like? So 40, 000 people in Denver. Did you buy the ticket ordid you just hang out at the hotels and go to the parties?

Ishan:Tickets are free. So it's actually, EatDinner is one of the few that all of theconference tickets are worth every year. And yeah, it's you, at that point youmight as well go to the conference. One of the interesting things that I sawwas, RFK actually did a booth.

At the, at themain conference, which I thought was really interesting. It makes sense. Healso did like a couple of activations. He did a kind of press conference typeof thing, not to make it, political or anything like that, but I just thoughtit was very interesting as an independent, to come in and try to like garterthis vote.

Ram: Iforgot he's still running. Yeah. That's, he's raising funds in Denver. Okay. [00:10:00] Yeah.

Ishan:Another one of the interesting things that we've been seeing a lot of is justdeep in. And I know like a lot of people are very,

Ram:decentralized physical infrastructure, like Helium token or Hive mapper onSolana.

Ishan:Exactly. And we find Deepin really interesting, as a firm, just physical realworld use cases. I think, we spend a lot of time thinking about moat in thespace. And like, where are their moats? Where are their natural moats? And I'm,how I got into the space is like through DeFi, I'm one of the, biggest DeFibulls you'll meet, but DeFi does not have a very strong, defendable moat, and,especially where, in a space that, where you need open source, you need opensource code in order to build Battle tested, bulletproof applications, almosttakes away your moat completely, right?

Where then,you see the compounds in the obvious of the world. And, as, as far as borrowlens and, they've built really great applications and then people iterate onthem and build new applications on top of them. And so that kind of reallytakes away the moat that a lot of DeFi has, whether you're a protocol, you're aborrow lens, you're a DEX.

We've seenthis through Uniswap and the SushiSwap era, like it's just a natural. You've

Ram: seen [00:11:00] more vampire attacks. So the Uniswap,SushiSwap is your point. Yeah. But Aave and Kampan are still the leaders andthere's Maker of course, which is this hybrid stable coin and borrow lend.

Justchallenging a little bit. It's have you seen?

Ishan: So Ithink that there's definitely lendiness and, that's generally why I'm prettybullish on DeFi 1. 0. But I think the point that I was going for is that, DeFidoesn't necessarily have a super defendable moat. I think there's probably aworld where some new innovative borrow lend protocol potentially takes a largepercentage of market share.

Think aboutyour radiant capitals of the world, things like that. What does have a moat islike a question that we're constantly asking ourselves, right? And places inthe space that does have a really strong dependable moat is physicalinfrastructure networks, right? Because you can, you can fork a lot of things.

You cannotfork hundreds of thousands of pieces of hardware.

Nick: Realworld interactions.

Ram: Exactly.Definitely. There's a data center somewhere. It's got compute where there areUber drivers linked up to Hive mapper and all the rest. So

Ishan: gotit. And so that's why we find it.

Ram:Interesting. [00:12:00] Go ahead, Nick.

Nick: Goahead.

Yeah. I wasjust going to say, I think you're right on if you can connect it to somethingthat is not just so easily just copy paste, the old pasta code that, that wewent through, especially in DeFi summer. It, yeah, I, it makes a lot of senseto me and I think it's just more of, as more folks get into this space and theystart recognizing, Oh, we need this.

So I thinkit's going to be the second order effects that are going to really drive deepend, which could happen sooner than later. So yeah, I would imagine in the nextyear we're going to see real we're using this type of technology.

Ram: The AIthesis is actually a special case of the deep end thesis.


Nick: I

Ram: do likethat thesis, I'm not sure about the other use cases, like on Helium, we've seenhow the incentives can build out supply on the network, people are motivated toget a Helium miner, but we haven't seen that demand. And I [00:13:00] haven't checked on the helium in a longtime, but I'm waiting for the proof point on the demand side.