On Ep. 18 of Tokenized, Simon Taylor, Head of Content & Strategy @ Sardine, and Cuy Sheffield, Head of Crypto @ Visa, are joined by Kyle Samani, Managing Partner @ Mulitcoin Capital to discuss crypto venture investing in 2025.
On Ep. 18 of Tokenized, Simon Taylor, Head of Content & Strategy @ Sardine, and Cuy Sheffield, Head of Crypto @ Visa, are joined by Kyle Samani, Managing Partner @ Mulitcoin capital to discuss crypto venture investing in 2025.
Timestamps:
This episode is brought to you by Visa
A world leader in digital payments, Visa is bridging the gap between traditional financial institutions and innovative blockchain networks, helping players in the payments ecosystem navigate the ever-evolving world of tokenized fiat currencies with confidence and ease. Learn more at visa.com/crypto.
This podcast is also supported by BVNK.
BVNK is the leading provider of stablecoin payments infrastructure—helping businesses move money faster, settle globally, and even launch their own stablecoin products. Head to BVNK.com to learn more!
***
We’d also like to remind you that the views or opinions of our contributors today are their own and do not necessarily reflect those of the companies they are representing. Nothing we say should be taken as tax, financial, investment or legal advice, do your own research!
Sy Taylor 0:10
Welcome to token iced. My name is Simon Taylor. I am your host of the tokenized podcast, author of FinTech brain food and head of strategy at sardine. And joining me is my friend Kai Sheffield, head of crypto visa. What up? Kai, how are you?
Cuy Sheffield 0:22
I am fantastic. I'm excited for today. We've got Kyle. Kyle Somani, one of the best investors in the space, one of the deepest first principle thinkers. We're going to unpack a lot of things with him. So let's get into it.
Speaker 1 0:35
Hey Kyle, thank you so much for being with us. Hey Simon, thanks for having me on the show and Kai, good to see you again. Pleasure to be here.
Sy Taylor 0:42
All right. Kyle, thank you for being with us, my friend. Let's start with the origin story. How does multi coin come about? How do you get into this space, and how do we get to where we are today?
Speaker 1 0:52
Obviously, I heard a Bitcoin, 2012, 13, whatever. Did not find it interesting in the slightest. Still don't find it interesting in the slightest. 13 years later, I got into crypto because of Ethereum in 2016 I had exited my last startup, which was in the healthcare space, had nothing to do with crypto or fintech. I had studied finance in college, and I was programming when I was a kid, and I discovered this thing called Ethereum in March of 2016 and I realized fairly quickly that I was like, Oh, I can program this Ethereum thing to do anything with with value transfer or value movement. We now kind of call that term today, or that concept permissionless finance. The term provisionless Finance did not really exist in 2016 but as I understood what I could do with Ethereum, I understood the seed of that kind of core idea, and it struck me as quite powerful. And so that's kind of how I fell into crypto. Is via theorem. Over the course of 16, you know, dove deep in the history of the space, obviously, the history of Bitcoin, cryptography, distributed systems, consensus, all these kind of mechanical things that make these systems work. And, you know, by early starting 17, I realized, Hey, I'm not thinking about anything else other than crypto. And so made the decision to launch multi coin in May of 20. 17. We launched our hedge fund on October 1 of 2017 today, we're one of the oldest and largest crypto focused investment firms in the world, with about three to 4 billion in assets, depending on the day.
Cuy Sheffield 2:14
I think I remember, I'm pretty sure we met at a Chipotle in San Francisco in like 2018 and you were one of the first crypto investors I talked to that was like, bearish on Bitcoin. You're like, Bitcoin is boring. I don't care about Bitcoin. And so I think you've got a really good way of describing what is a blockchain, just from first principles. For someone who hasn't been in the space, how do you think about the purpose of a blockchain and what it actually does?
Speaker 1 2:38
Blockchains are asset ledgers, and they are not more than that. I use the term asset ledger intentionally to piss off my crypto brethren, because it's a boring accounting term, and at any moment in time, the current state of the blockchain tells you who owns what assets. Those assets could be anything it could be Bitcoin, could be dollars, could be commodities, it could be meme coins, it could be a debt obligation, it could be a futures position. It could be a collateral you've deposited into a borrow and protocol. But fundamentally, on your balance sheet, you've got assets, you've got liabilities, and blockchains track those assets. That is what they do. If you boil it down even further, well, obviously I can send you $5 and that's a payment. And like, well, what is a trade? A trade is just two atomic payments. I send you $5 you send me one apple share, and that core primitive effectively captures everything in payments and finance,
Sy Taylor 3:35
pretty primitive when you talk about it. There's some other stuff going on in the logic layer, but that's happening in the software layer. Talk to me about you'd been involved in Ethereum. You'd seen that space. You'd programmed in it, you'd launched the fund. But then Solana comes along. So how does that come about? And what is your thesis when you first saw Solana?
Speaker 1 3:55
Yeah, so got into Ethereum March 2016 and obviously through 2017 ICOs are launching left and right, and the gas fees are starting to spike, and the network's becoming unusable. And all of this was known ahead of time. I mean, if you go look at the public discourse, documents, blogs, videos from the core Ethereum people before the network launched, they all were like, we have to solve scaling. Otherwise this is going to happen. So all of the scaling problems were for castable and understood two years later. So it's 20 that they launched blockchain, July 30, 2015 plus or minus a day or two, and by middle of 2017 it's been two years absolutely like not even an attempt to solve the problem. And that's why gas fees start spiking left and right. I start getting pretty frustrated. I'm like, Guys, what are you doing? Like, we got to fix this thing. Fast forward, November, 2017 it is Ethereum annual developer conference, DevCon three. It's in Cancun, Mexico. Multi coin is five or six weeks old at this moment in time, like we had just launched our hedge fund a few weeks prior. The story of 2017 and in all of tech, was Ethereum. Ethereum was up 100x year to date, eth was the fastest asset in human history, to $100 billion in market cap. And obviously ICOs left and right, like it was just, it was bananas. And you know, you have this problem, and you know you've known you've had this problem forever, and it's your annual developer conference. Obviously, this is the venue at which you here being Vitalik and the core Ethereum foundation leadership will unveil the like grand plan to, like, solve the scaling problem. Literally nothing. I mean, they had some like, workshops on, like, different ways we can scale. But like, there was no definitive concrete plan. Hey guys, hair on fire problem. We know we need to solve this now. This shit is going to be solved in two months. You know, that's what I was expecting, and that did not exist. And I remember I left DevCon three, and I was just like, how can you not understand where you are, you know? And I was just so perplexed. That was the moment that I completely wrote off Vitalik. I completely wrote off the Ethereum Foundation, because I was like, culturally, these people do not live on the planet Earth. There is no other organization in human history that could have this degree of success and be this clueless to like the world around them and the expectations of the world around them. And so at that moment, I began looking for alternatives to Ethereum. Because I was like, this is atrocious. We ended up putting on a position in our hedge fund in our hedge fund in December of 2017 so a few weeks later, in an asset called EOS. EOS famously flopped, and we lost a lot of money. Had a big egg on our face. Eos, I would say, is spiritually similar to Solana, and that they're like, I'd say general ideology was like, bigger machines maximize resource usage and make it go faster. The EOS team was way over capitalized, had a bunch of other problems mechanically. There were a bunch of actually bad design decisions in the tech. Ultimately, all those things caused it to flop to flop, and we had a nice big egg on our face. We did not put all of our eggs in one basket, meaning EOS. We were obviously looking around. At that time, every distributed systems engineer in Silicon Valley was looking at Ethereum at $100 billion in market cap, saying, This is architecturally dumb, I can do better. And so tons of people go out to raise money at the q4 2017, and all through 2018 I mean, it must have been at least 20 or 30 teams that raise venture money. Algorand, near dfinity, Thunder, Solana. There was a whole bunch of them, and we invested in about three or four of them, but Solana was by far the biggest we put on and the one that we like, cultivated the relationship with the team and got involved. And what stood out to us about Solana was two things. One, Anatoly, the founder and chief architect. He is the only l1 founder who had a product focus. The title slide for the pitch deck for Solana seed round, said NASDAQ at blockchain speed and Anatoly was very clear, from day one, I want to put a central limit order book on a distributed, global blockchain. And all of the other l1 founders were like, we're going to build a blockchain that scales, and we're going to make web three big. And like, there was no product focus. It was just like a generic tech statement about some notion of performance, but no product vision. And that stood out to us. The second thing that really stood out to us was Anatoly was very clear from day one that he refused to solve any unsolved computer science problems. Earlier in his career, he had attempted to solve some unsolved computer science problem, and it fell on his face, and he's been like, face. And he spent like, two years working on something, and, you know, went nowhere. And he's like, look, we know there are tons of tricks and distributed systems that you can use. Android was a high performance engineer at Qualcomm and a Dropbox prior to founding. Solana, he's like, I'm going to take every single trick I learned in operating systems and virtual machines and networking and distributed systems, and we're just going to apply all of the known basically, optimizations to a provisionalist database, and we're going to call that thing Solana and all of the other founders I get out of the fortune of talking to every single one of them, were like, we're going to solve all these new problems. And I was like, this guy sounds funny, and the product focus and the explicit refusal to take on science risk really stood out to us. Now. There was a tremendous amount of execution risk. They almost ran out of money several times. They, quite frankly, took on more than they could chew, like building a VM, a networking protocol, consensus, all of these things was like, is an extreme amount of difficulty, but all known problems, so we got a lot of luck involved. But those are really what stood out to us about Solana in the
Cuy Sheffield 9:26
early days, when you think about that vision that the NASDAQ on a blockchain, and kind of working backwards from how to get there, has the path surprised you at all, like did you expect when you were making the early investment there that meme coins would be an area of product market fit that would drive adoption this infrastructure, like what was kind of your expectation then, in terms of how assets would be traded on this new asset ledger that could move at the speed of the light versus what you've seen since then, and how do you think about the path towards that vision? Today? Yeah.
Speaker 1 10:00
I mean, look what tokens are people launching in 2017 and they were Ico white papers were switched. Were garbage. They don't even seen an Ico white paper in 2017 and a meme coin is the white paper and but like, I was able to fool myself to think that, like the white paper mattered for the bottom 99% of endeavors. Now look for the top 1% of endeavors, the white paper, or, like, the deck or the business plan does, in fact, matter, but for the bottom 99% it empirically doesn't. But look, it's fun. People want to try stuff, like, let them go try stuff. I'm all for capitalism. Go have fun. You want some investor protections in place, but, like, generally, pro pro capital formation, my expectation was that the types of assets that would launch on Solana would be Ico white papers, because that is what I could see at the time. Did not think nfts Were going to be a thing again. The term defi would become coined in about October, November of 2018 but like, why I got into crypto and Ethereum was like, I understood permissionless finance or defi, although the terms didn't exist, what I could not forecast was, Oh, we're going to have these independent modular protocols, the ability to do bilateral swaps, the ability to do borrow and the ability to do perpetual protocol contracts, the ability to do CDSS options as modular protocols, all of which you could then use the collateral in each of those things and plug them into the others. That I couldn't make that jump in 2016 but I understood that conceptually, you could build all of these things, and so I was excited for seeing financial primitives, and in fact, like the first position we put on in our hedge fund when we launched it on October 1 of 2017 was a protocol called 0x which is mostly forgotten these days, but it was, at the time, the leading way to trade assets on the Ethereum blockchain, because that was the only chain that was around at the time. So we were pretty focused on finance. We could not have envisioned AMMS. We could not have envisioned liquidity pools. So the mechanical ways in which the protocols played out like we had not the slightest clue. But we expected people to try and raise money to go try and do novel things, which obviously has turned out to be correct, but it's been funnier and wonkier than we expected.
Sy Taylor 12:06
It certainly has speaking of funny and wonky as well, like there's the term now deep in or decentralized physical infrastructure. You guys were quite early in some of the projects there, like helium and others. What was it from a thesis standpoint that you saw about those projects, and how do you describe them to people today? And it might be worth describing, like Hive mapper and helium three.
Speaker 1 12:30
Uninitiated, yeah. So deep in stands for decentralized physical infrastructure networks. And we were definitely the first VC to, like, lean into that hard and kind of help make it a thing. Full credit to Amir, the founder of helium. This is his baby, his brain child, but we were the primary capital backer of that in the earliest days. So what is helium? Helium is a new business model for deploying and managing wireless networks. The Ice kind of helium is, hey, if there's somewhere, whether it's your house or your small business or wherever, and the seller cover sucks, you can buy a hotspot, yay, big. And you can put in your window, plug it in the electricity, plug it in Ethernet, and there's got an antenna, and it'll make radio waves. And any device walking around nearby that wants to access those radio waves can pay you as the hotspot owner per byte of data that they access. Very straightforward concept, very intuitive, and it's like, in the pure sense capitalism, pure bottoms up, laissez faire capitalism applied to the problem of put radio waves everywhere. You don't need to depend on the Verizon gods or the AT and T gods to, like, decide, Is your house worth? Like, covering? It's like, no, well, if I want coverage in my house, then, like, I'll put up the hot spot. And if my neighbors want to pay me like my neighbors will pay me too. Great. It's like, truly, one of the most capitalistic endeavors, you know, you can imagine at global scale. So that's the vision for helium. And obviously you remove a tremendous amount of physical cost. Land cost goes to zero, labor cost goes to zero. Bandwidth cost goes to zero because you're piggybacking off the consumer's home ISP connection. So you're actually physically removing the three largest line items of cost in the deployment of the network itself. And so Amir, when he pitched us, he's like, look, I can do this cheaper, because, like, he just had a line item, you know, in the deck of like, here's the cost that it takes Verizon to put up a tower, and here's the cost it takes for me to put up a tower. It is, like, very clearly, like, 97% cheaper, just like, not even without you don't have to think it's just obvious that's the case. And then the other part of deep end that is actually much more subtle and actually have more importance is the risk component, which is as follows, if you are building a telecom network, there is a minimum amount of scale necessary to make the network useful. If you have a telecom network with one hot spot or one tower, the value of that network is $0 because no one is going to bother to like, integrate with your network that has one hot spot. Maybe the minimum threshold before anyone will bother to integrate with your network, maybe it's 20,000 nodes. Maybe it's 50,000 nodes. Maybe it's 433,000 Nodes. I don't know. No one knows what that number is precisely ahead of time. And so the beauty of the deep end model is that you can actually dynamically allocate risk to the network participants. The first guy who buys a hotspot is taking more financial risk, meaning, like that $300 hotspot that he buys, the probability that it ends up producing $0 of revenue is quite high because, like, Who knows if the network's gonna get big enough to be useful, whereas the guy buying the 48,000 hotspot clearly, is taking on a lot less risk than guy number one, and Guy number 333,000 is taking on way less risk than guy at 48,000 the early hotspot deployers, obviously, on day one, there's no demand on the network at all. And so the way you incentivize the people to deploy the hot spots is by minting tokens, in this case, HNT for the helium network, and you give those tokens out to the early people who do this for the early believers. And obviously the earliest hotspot deployers should get more tokens than the later hotspot developers, because they took more risk. And it's a beautiful risk allocation mechanism, whether you're an idiot, whether you just believe in IoT, or, you know, in decentralized networks, whether you hate Verizon, or whether you just do the EV math and you just think it's like under priced and you should go for it. It doesn't matter what your financial calculus is, as an individual, you can say, I am going to buy into this thing. I'm going to try and be early, and if it works, I'm going to reap the profits. And that risk component for permissionless global capital formation did not exist prior to Helium, full stop. Helium is the pioneer in this front. It's still like very underappreciated, and what they did was pretty incredible. And that model that helium pioneered is now being replicated for all kinds of different verticals. The next vertical that I'd say is that the second largest scale is what's called hive mapper. We were fortunate to be the seed investors in hive mapper. And hive mapper is put a dash cam in your car, and when you drive around, the Dash Cam takes photos and videos and uploads them to build a map. Obviously, Uber drivers and Lyft drivers and FedEx drivers should clearly have this in their car, like, given how much they drive, the idea that Google has a $250,000 car that they pay people to drive around is obviously stupid. Again, when you think about it, it's just like, no questions asked. This is the correct way to solve the problem. You know, it's 99% cheaper, obviously. And hive mappers is about two years old now and has mapped over a third of the roads in the world. There's about 64 million road kilometers on the planet. About 20 million road kilometers have been mapped, and obviously in major metros, whether you're in Austin or LA or, for that matter, in Seoul, Korea or in London or in Paris, even, like kids like Cannes, France, the refresh rate that the hive mapper network has is 100x higher than Google. Yeah. Like some customers don't care about that, but if you're FedEx, you care about that. If you are Uber or Lyft, you definitely care about that. If you are Redfin or Zillow, you want map, fresh maps of the street. There's tons of people who want fresh map data, and hive mapper is a 100x improvement over Google in a lot of cities. And so this model of D pin is now being applied to energy markets, drone markets, GPUs for AI inference. There's all kinds of different ways you can apply this deep in model.
Cuy Sheffield 18:17
Super interesting. I wanted to switch gears and talk about payments and stable coins and so in the context of Solana, how do you look at payments as a use case, and what are you seeing today around stable coin use cases and and ways that companies are looking to leverage Solana as a payments row?
Speaker 1 18:37
Yeah, so it's hard to answer this definitively with data. Like, there's a lot of data out there, but the data is hard to parse. The headline number that matters is number of stable coins issued. Solana today has roughly 10 billion in stable coins. I think they just crossed 10 billion, like a week ago. I think they're at 11 or 12 billion right now. And the question is, well, what are people doing with those stable coins? So we know how many stable coins are there. That's transparent, that's easy. Question is, what are they doing with them? A lot of those stable coins are being held by crypto traders, for sure, and then a lot of those stable coins are being held by people who are choosing to escape their fiat currencies. I don't think there's any Americans who are like, Oh, I hate my Bank of America account, but I really like USDC on the blockchain. That person doesn't really exist, but there are a ton of people who live outside the United States, whether they're in Mexico, whether they're in South America, India, China, Southeast Asia, who absolutely want dollars, and they do not want local fiat currencies, and they are definitely holding their stable coins on blockchains. There's roughly 150 to 200 billion in total stable coins outstanding today across all chains. And I think I can't prove this, but my suspicion is a more than half of that is people explicitly escaping local fiat currencies. The challenge, of course, is those people are not raising their hands and writing Twitter blogs and news articles saying, like, Look guys. I. Successfully escape my local government. So it's very difficult to reason about it. You can make some probabilistic assessments by looking at like the type of payment flows to and from those addresses. I'm surprised. Actually, this isn't more out there, but you could use some ML to probably figure this out. But my intuition is that more than 50% is that once people have stable coins, there's two things they can do with them. One is they can hold them for savings, and two is they can spend them. So, you know, I think we're just now getting to the point where, at least in emerging markets, there's a lot of people who are starting to pay for goods and services in stable coins. Again, I suspect that's the case. It's hard to prove, because these people don't raise their hands and tell you that they're doing this stuff. The other area you see stable coins growing really fast right now is in cross border and says it's both B to B and B to C. There's a company focused on the US Mexico corridor called Felix pago. And I can't disclose their numbers. I've seen them, but I can tell you, just like spectacular growth rates, multi 100% year over year, and the business is crushing it. They have a whatsapp bot that you like text, send 50 bucks to grandma or whatever, and it sends money from your bank of america account through a service called Bridge. Stripe. Just acquired bridge for a billion dollars onto a blockchain, sends the tokens over the blockchain, and then, I don't know exactly how the conversion works to get pesos to grandma in Mexico, but they obviously are working out the backside. There's tons of written services now using this that are crypto native. I don't know if companies like wise are doing this today or that Wells Fargo Western Union, but like they're all thinking about it, and I suspect a lot of these guys are. If they haven't started, I bet you all of them will start this calendar year in ripping out their rails in the background and using stable coin rails, because it is faster and cheaper. They don't have to tell the world they're doing it. I just think that they probably will. And then on the B to B side, there's now tons of companies focused on cross border B to B again, remittances, and that's growing pretty, pretty fast.
Sy Taylor 21:54
You know, in the past week, I had four Chief Product officers of FinTech and payments companies say, hey, Simon, where do I get started with stable coins? So I think you're absolutely right that it's definitely coming. But if you were to speak to some of those institutions, how do you answer that question? Like, hey, I'm from the tradfi world. I'm trying to understand this space. Do you get that question, and how would you answer it?
Speaker 1 22:19
Most of the FinTech guys don't call me. If you're an established FinTech business, you just don't call a crypto hedge fund manager. It's just not, just not a thing that they do. I wish they did. I was a thought experiment. I'd love to talk to them. I'd answer the phone if they called. But, you know, sadly, they don't. If you're listening to this and would like to call my email address is Simon. You can put it in the show notes. Kyle at multi coin dot capital, where would I tell them to start? Pretty straightforward. Go look at bridge. It's straightforward. API. Can plug it in. There's a bunch of companies that build even on top of bridge now, companies like borderless labs and others that leverage it for different flows. And all of the APIs are there and like, start plugging them in. I am biased, and I would tell you, use this on a blockchain. It is the fastest, it is the cheapest, the other ones are objectively slower and more expensive. But otherwise, just go hit those APIs. That's it.
Cuy Sheffield 23:07
How do you think about the decision to like, how to choose which blockchain to use from an institutional perspective, and where Solana is now, compared to a year ago, it seemed like, anecdotally, when you had banks and other large asset managers trying to come into the blockchain space. For the first time, they'd start on Ethereum. Biddle was on Ethereum, and it was kind of like the lowest risk place to start. But then they're starting to recognize that Ethereum doesn't scale. And so then there's the question of, do you keep the EVM stack that you're on? But then do you go to a layer two? And if so, which layer two or do you take the leap and say, Okay, we're going to go build on Solana. But there are fewer engineers inside some of these institutions that have experience with Solana programming and rust and so how do you think about like that institutional adoption of Solana and the competition between Ethereum and Solana? I feel like it's clear Solana has been winning. On the retail side, I think the institutional side, it's still early, and it's a lot slower moving different considerations for large institutions to decide which blockchain they want to issue an asset on or start using for payments.
Speaker 1 24:13
So I think the human capital considerations are real, but I don't think they're the primary drivers. I think most folks who are trying to do anything using stable coins on a chain, their number one priority is, don't get fired. And the way you don't get fired is you go to the top vendors, Ethereum, being a vendor of block space, so to speak. It's number two in market cap, after Bitcoin. You know, like, it's like, okay, cool, no one gets fired for choosing Ethereum, even though there's obvious technical problems. And I was, I think that was the primary thing that drove most of the decision making. The other major thing that helped was Ethereum was officially deemed not a security, which obviously, just like helped get through legal and compliance. That latter point is about to be reversed as of either yesterday or the day before there was a Solana ETF filing. There's like a seven day window. And they can, like, reject it for, like, whatever arbitrary reason. And the first Solana ETF ever got past that seven day window and was not arbitrarily rejected, all the people reading the tea leaves are like, hey, this means that the SEC is stance is that Seoul is no longer security that has not yet been officially mandated from the gods at the SEC, but I expect in the next month or two, that will effectively become official. So that's about to go away and level the playing field at this point. Solana, obviously is still is number number three after Ethereum. But my guess is, at this point, most folks, they look at Salon and Ethereum at least as like, Okay, well, I need to seriously evaluate both. I think 12 months ago or 24 months ago, people were just like, I'm not even going to bother to evaluate anything other than Ethereum. And just given the amount of press Solana receives, and the fact that look, most of these executives, their kids, are probably trading meme coins on Solana, my experience is that most folks in their 40s and 50s who are like, kind of being forced to get into crypto for some professional reason, their first exposure is via their children.
Cuy Sheffield 26:01
But is that a feature or a bug for an institution? Just take that point of the kids are trading meme coins on Solana, as an institution, does that make you want to issue your assets in the same place that your kids are trading meme coins? And on one hand, it's like distribution, and those are consumers. On the other hand, there's brand risk, and like, this is the chain that's using some weird brand that I don't really like. Like, how do you think about that calculation?
Speaker 1 26:25
People are right to ask the questions, if I were a FinTech or banking executive thinking about this, what I would say is, hey, what can I observe about Ethereum, arbitrum, base, Solana, in performance, real world settings about how these systems are performing. And the beauty of the meme coins is that although they're like, obviously silly, they are the best stress test you can imagine. The Trump meme coin drop a few weeks ago was the single largest trading event in the history of crypto capital markets full stop, and it was on the Solana blockchain, and the network handled it. And there has never been anything like that before. And it's just like, Okay, well, if I'm visa, if I am NASDAQ, if I am BlackRock, if I'm Bank of America, and obviously, all of these businesses run at scale, and you're like, Okay, well, like, Okay, well, like, which one of these is actually gonna work today, without question, the one that has demonstrated the most real world proof that it can work under load is Solana. That statement was objectively not true 24 months ago. You could say was debatably true 12 months ago. But today, ask anyone in the space who's not trying to lie to you, and it's just like everyone knows, like the real world stress tests are happening on Solana and so that, to me, is the most important factor to think about. Because, look, the history of crypto is they get SAT. System gets saturated. Fee spike becomes unusable. Transactions get dropped. You know, like this happened time and time again. Look, Solana, to be fair, had it's probably one day that's crashed like seven or eight times in its like five year history. It has actually now been more than one year since the network went down. It's like 367 or 368 days as of the current moment. But all of the Ethereum, l twos, all of them have gone down in the last 12 months. Without exception, every single one of them has gone down. Amazon, AWS, Azure and Google Cloud, all of it outages in the last 12 months. So at least over the last 12 month period, the Solana network has higher stability than any of the like other things you would kind of logically comp it to and among its direct peers, meaning the L twos and Ethereum, the demand load is way higher, not only Trump spike weekend, but also every single day. Daily Active addresses on Solana are every single day, five to 10 times higher than Ethereum, and all the L twos trading volumes every single day two to seven times higher than Ethereum. And so both the sustain load and the spike load, we have enough empirical data that you can very objectively, say this is now the fastest horse.
Sy Taylor 29:02
I think there's a couple of points between the lines. Isn't there? There's the the ETF looks likely. The regulatory environment has changed. So the risk calculus has changed from an institutional perspective. And then the risk calculus has changed because of the scalability and the performance kind of elements to it. And then the third aspect is the early days of the iPhone. It wasn't seen as a serious business machine. People were still preferring their Blackberry. The early days of cloud, people didn't see it as serious it was for these small startups. And that's kind of a common refrain. Same with the Internet. There was a bank that tried to build its own internet once, quite famously. So there's definitely always that reaction, and maybe, maybe don't look at the meme coin, look at the data. I think is a great point. I'm going to have to pause this here just to very quickly. Thank our sponsors. This episode, if it's not obvious, is brought to you by our friends at visa, a global leader in payments visas, tokenized assets platform. Com. Vtap uses smart contracts and cryptography to help banks bring fiat currencies on chain. Vtap allows financial institutions to issue Fiat back tokens, improving financial efficiency and enabling programmable finance. You can check out the links in this episode's description to express your interest in vtap. This podcast is sponsored by our friends at bvnk, and if you've been listening to this podcast, you've probably heard us say, every business needs a stable COIN strategy, and if you're looking for the best place to start, that's bvnk. Bvnk is the leading provider of stable coin payments infrastructure, helping businesses move money faster, settle globally and even launch their own stable coin products, all with licensing and compliance. So you can build with confidence. We're proud to partner with BV and K untokenized To learn more, visit bvnk.com
Speaker 2 31:00
you thank
Sy Taylor 31:04
you to our sponsors, Kyle. Before we close out today, I just want to talk about some trends for 2025 and beyond. Really what you're looking at and what you're focusing at, a lot of people talking about tokenized real world assets and treasuries and those sorts of markets. What are your thoughts on that space? Yeah.
Speaker 1 31:21
So tons of people are getting in this now. BlackRock really has led the charge, and it's been awesome to obviously have the, arguably the number one brand in the world as it pertains to tokenized funds getting there. I think they have roughly a billion dollars of assets issued on various chains, approximately, and that number is obviously gonna go vertical this year. Franklin, Templeton, city, fidelity, all have announced tokenized products. They're in various stages of launching. I expect there's a bunch of crypto native startups that are also doing this stuff. Ondo super state, again, there's like 20 or 30 more. So people are trying to use crypto rails to distribute tokenized fund products to people all over the world. That for me, as a big investor in Solana. I'm very happy about that. I will be an indirect beneficiary of that.
Cuy Sheffield 32:04
Where do you think the demand comes from? There in your mind, like, who's buying those products today and over the next 12 months? Is it all crypto capital, or do you see, like, traditional institutions coming on chain to buy tokenized treasuries? Like, what's the demand?
Speaker 1 32:19
Yeah, no, the latter you described is zero. If you are today buying treasuries or Franklin Templeton's whatever mutual funds, or you're just gonna keep doing what you're already doing. The play here for all of the large asset managers or fund managers is put your fund products today on chain and then get them to retail people all over the world. I think the biggest challenge most of these fund managers have is they don't really know how to do the go to market. If you have a team of one of our mutual fund, Franklin temple mutual fund, and you got a guy, bunch guys in New York who have made the fund, and you're like, great, we made the token, tokens on Ethereum, tokens on Solana, well, like, Yeah, but now you got to get it in the hands of people and educate them. And again, Americans can already buy that thing through their trob account, or their Robin Hood account, or whatever they have. And so you need to get that thing in front of guy in LATAM, guy in India, guy in China. And obviously the team in New York is, quite frankly, like the wrong team to do that. And so I think that the big thing that most of the Wall Street firms are going to struggle with is the go to market. And I think what they need to do is they need to be cultivating relationships with the various regional go to market teams. And there's like the global players, so like the phantoms of the world. Phantom is the number one wallet for Solana. You should be trying to, potentially, you know, work with phantom on something. And phantom of this moment does not have a tab that says, like, tokenized funds or whatever. Maybe phantom will add that tab, you know, I don't know, but if I was Franklin Templeton or BlackRock, like, that's what I would be pushing phantom to do, to, like, showcase my fun products. The other kind of obvious thing for those folks to do is to go to all of the regional players. And there's tons of regional wallets that focus on Vietnam, focus on China, focus on Colombia, on Venezuela, and going to those teams and trying to distribute through those guys. And obviously, I think those regional teams probably should generally be interested in doing so, both because, like, it's a way for them to sell yields to effectively their customers. Like, it makes their product more attractive and it gives them legitimacy, where, if you open one of our portfolio companies is called El Dorado. They focus in Colombia and Venezuela. And presumably it's gonna give some brand legitimacy to El Dorado if there's like a black rock logo somewhere in there, obviously with black rocks blessing. And so it's a win win for both parties. And so I'm optimistic it's gonna happen. It's probably not gonna happen as fast as I would otherwise want, but that would be my number one piece of advice to token funds.
Sy Taylor 34:42
It's fascinating. It's changing the distribution model that you would have traditionally had and you were just thinking differently about it. The distribution of the US dollar for payments is now well understood. Stable coins have become the killer app. The distribution of other asset classes from the world's largest capital market, the demand is equally solid. It's a helpful frame for I think for a lot of folks. Are there any other trends that are really catching your eye? You talked a little bit about decentralized compute. Is that something that orthodox businesses are going to be taking on? Is that going to be a net new market? Is that going to be bottoms up adoption from the global south like these seem like trends fee Yeah.
Speaker 1 35:18
So deep in is that area a space we spend a lot of energy on, and there's a bunch of sectors of deep in but probably the one that is most relevant to your audience here is the GPU marketplaces. I'm assuming most folks listening to this are thinking about AI and thinking about inference and such. The basic insight here is that there's a lot of GPUs laying around the world that are not being put to use for context. Roughly 45% of all global data center spend is across the three hyperscalers, meaning Amazon, Google and Microsoft. And that means 55% is not across those three. So those three have obviously, 94% of the mind share, but only 45% of the spend. And all these long tail data centers all have excess capacity. And so there's a bunch of teams and two of our portfolio companies. Specifically, one is called io.net one is called io.net and the other one is Kuzco dot, XYZ, K, U, Z, CO. And both of these teams are going to these long there's roughly three or 4000 data centers around the world, quite a few. And basically saying, Look, you guys have excess GPUs. Please make them available on our network, and then those GPUs can be spun up or down on like three seconds notice to run AI inference workloads. Today, just between IO and Kuzco alone, annualized revenue is north of 30 million, and that number will probably finish this calendar year north of 100 if I were to guess and so fast growing their value prop to customer, what they sell to their customers is tokens, whether it's llama or Mistral or whatever, or deep seek. Now tokens per second, and you can obviously pick which geography you want, if you have, like, some latency sensitivity to India versus the United States or something. And so perfect abstraction, and is available globally, and it's way cheaper than the hyperscalers. So like, that's happening globally. Super cool. I'm guessing most FinTech folks are at least thinking about stuff like this. That's a really cool opportunity. The other area I spend a lot of my time thinking about right now is yield on chain. There's so much activity now in crypto native capital markets, between the meme coin, between the derivative protocols, such as drift on Solana, and then among the borrow, then protocols, so things like Camino again on Solana that you can now park your USD on chain into these various vaults and such, your yield will fluctuate pretty wildly per day. It'll go as low as seven or 8% but like it will frequently spike up to 50% or higher. You can earn incredible yield. I can tell you, I have all of my US dollar denominated net worth on a blockchain earning very healthy yields. And I think the demand for capital to earn these yields is pretty high. Obviously, there's risks here. I don't want to in any way call this risk free, or even so for plus 200 bps, I would not think about this in those terms, but it is all fully collateralized, and you can earn incredible yields. And I think selling that to institutions and to retail investors around the world, that the next 24 months, that's good, that's going to
Sy Taylor 38:09
keep on going. Yeah, risk appetite may vary, but risk reward is there for the taking. That's a fascinating frame. Is there anything we didn't ask you that we should have done just before we close out?
Speaker 1 38:18
I mean, everyone, the question people ask me these days is, when is Solana going to flip Ethereum? That's, that's the number one question I get. I put it a 30 to 50% probability that happens to this calendar year. I put it at 90% probability it happens by the end of 26
Sy Taylor 38:36
you heard it here first guys. Well, listen, that process is time. Kyle, where can people find out more about you and multi coin and your port?
Speaker 1 38:44
Cos, yeah, if you have any random questions, you can email me, Kyle at multi coin, dot capital. And then I am very active on Twitter. I have a very colorful character on Twitter. And my Twitter handle is just my name. It's at Kyle Somani. And then if you want to check out multi coin, we have a very widely read blog. I think it's the best blog in crypto. I'm a very biased party, but if you go to multi coin dot capital, there's a subscribe button, and we have hundreds of free stuff out there. Research piece can recommend. How about you?
Cuy Sheffield 39:11
Kelly on x at Kai Sheffield and visa comm slash crypto.
Sy Taylor 39:17
You'll find me on Twitter at Sai Tai la s y Taylor, and you'll find me@sardine.ai or FinTech brain food.com listeners, thank you so so much for listening. Kyle, I really appreciate you being here, man. This was great conversation. Great to catch up. I think the audience is going to love it.