This Week in Startups
01:14:31 · D.A. Wallach, Jason Calacanis
[01:14:31] S1: Well, I think we've got I think the one possibility that maybe hasn't gotten enough heat yet, and it kind of harkens back the tokenization stuff in the crypto world, is what's... What you're seeing with Hyperliquid, you know, in particular. Explain what it is because [01:14:48] S0: I don't know if everybody understands what [01:14:49] S1: Hyperliquid is. Platform, It's a protocol. You know, it's a crypto ish kind of concept where decentralized market participants are basically able to create effectively... Think of it as synthetic securities, whereby you can bet on anything. You can bet on private company valuations, you can bet on individual company milestones. If it were a pharmaceutical company, you could bet on an individual clinical trial, not just need to buy the entire Pfizer stock and their huge portfolio where the one trial you have an opinion on is not gonna move the needle on the overall valuation. And this really marries with what we've seen happen in the prediction markets world. I believe we may be right on the doorstep of this whole conversation we just had becoming totally irrelevant because it's kind of gonna supersede. I mean, it conceptually supersedes the regulated securities market entirely. Just as an end run around the whole thing, it's permissionless. I don't need some SPV hustler to get me into Palantir or rather to Andreessen Horowitz or something. I can just like make a bet on it in some weird synthetic market. [01:16:09] S0: This is, I think this is Hyperliquids market for Anthropic. I'm not sure yet.
01:16:09 · Jason Calacanis, Thomas Tunguz
[01:16:09] S0: This is, I think this is Hyperliquids market for Anthropic. I'm not sure yet. [01:16:18] S3: No, is for, this looks like the USDC market. [01:16:20] S0: Oh, USDC. [01:16:21] S3: Yeah, it's a stable coin backed by a US dollar. But I agree with you. I mean, so tokenized assets, which is what you're talking about, can you take existing equities and debt and move them on chain and then trade them twenty four hours a day? It's growing faster than AI. It's the fastest growing technology market in the world. It allows people outside The US to buy US stocks. It allows US investors to buy Korean stocks if you really wanted to get a stock, a share of SK Hynix, actually really tough. And you should be able to get exposure. The other thing that's really interesting about these markets is there's a new kind of option. For a lot of people, myself included, options are kind of impenetrable. You have all these Greek letters associated with understanding what they do, but there's a thing called a perpetual option or a PERP, which makes it much simpler. I can decide, Okay, let's see what's happening in the Brazil election. I want to short that economy. Here's a really great instrument for me to do it. Many of the major, the largest banks in the world are pushing extremely aggressively into tokenization, both of public and private assets in equities and credit, and it'll be a huge wave. So I totally agree with you, D.
01:17:24 · D.A. Wallach, Thomas Tunguz, Jason Calacanis
[01:17:24] S1: I mean, look at... Jason, you gotta pull up pull up the Kalshi Perpetuals markets. People need to see this. I mean, what Thomas is talking about is crazy. And if you pull that up, you're gonna see... You can bet on anything and the price ticker... I'm sure you've seen this, Thomas, and and Elana. The price ticker's moving in real time. I mean, this is catnip for a gambler's mind. [01:17:48] S3: Well, and then Jason just had the Anthropic, pair up. And what's amazing is two or three weeks ahead of an IPO, you have price discovery happening on these exchanges, which means as a retail investor, can say, like, oh, I think the right valuation for this business is 1.75 or two, and I can make a bet. And all of a sudden now, I have access in a way that I didn't have before. So it's... I think it's a really exciting phenomenon. [01:18:11] S0: Wow. You can put on whatever leverage you want here. [01:18:14] S1: Yeah. You you see that little purple slider over there? [01:18:17] S0: Uh-huh. [01:18:21] S1: Okay. You can just you can just put on a bet, and you're just voting up or down with up to almost seven times leverage. Wow. And they're doing this in real time and you're going to have this at least outside of The US on virtually every asset, including any derivative you can make up. So I think there's a good chance that this just eats a lot of the capital market if it were left to its own devices. Of course, regulators are not going to let that happen. This is going to be heavily regulated in The US. But, you know, we'll see how much they tighten the screws on it.
01:18:21 · D.A. Wallach, Jason Calacanis
[01:18:21] S1: Okay. You can just you can just put on a bet, and you're just voting up or down with up to almost seven times leverage. Wow. And they're doing this in real time and you're going to have this at least outside of The US on virtually every asset, including any derivative you can make up. So I think there's a good chance that this just eats a lot of the capital market if it were left to its own devices. Of course, regulators are not going to let that happen. This is going to be heavily regulated in The US. But, you know, we'll see how much they tighten the screws on it. [01:19:03] S0: And if you're not buying the underlying asset and enough capital moves to perpetuals, then that would make the existing assets go down in value if too many people move over here, this is just crazy No, for
01:19:03 · Jason Calacanis, Thomas Tunguz
[01:19:03] S0: And if you're not buying the underlying asset and enough capital moves to perpetuals, then that would make the existing assets go down in value if too many people move over here, this is just crazy No, for [01:19:21] S3: it's like, I mean, okay, the history of the options market is you had farmers who wanted to buy insurance so they could sell their corn a And year from now at a particular you look at the derivatives markets, which are options or futures on top of corn or stocks, those tend to be about five to 10 times the size in terms of total trading volume compared to the underlying. So if there's a billion dollars worth of corn that's sold every day, there's probably 5 to 10,000,000,000 of derivatives that are sold on top. And, anyway, so those markets tend to be significantly bigger, and it actually makes the price discovery of the underlying asset much healthier, going back to D. A. Point about how there's no... There's a lot less active trading except for hedge funds in in public markets. And so you should actually see a significantly healthier overall private market as a result of a
01:19:21 · Thomas Tunguz, Jason Calacanis
[01:19:21] S3: it's like, I mean, okay, the history of the options market is you had farmers who wanted to buy insurance so they could sell their corn a And year from now at a particular you look at the derivatives markets, which are options or futures on top of corn or stocks, those tend to be about five to 10 times the size in terms of total trading volume compared to the underlying. So if there's a billion dollars worth of corn that's sold every day, there's probably 5 to 10,000,000,000 of derivatives that are sold on top. And, anyway, so those markets tend to be significantly bigger, and it actually makes the price discovery of the underlying asset much healthier, going back to D. A. Point about how there's no... There's a lot less active trading except for hedge funds in in public markets. And so you should actually see a significantly healthier overall private market as a result of a [01:20:09] S0: These are getting very popular in Korea, I understand. People love to bet with this massive leverage and they have stocks. So you can buy an actual stock that's trading at 10 times. So here, if you bought... This, I guess, is The US tech 100. If you buy this at 11.8 times leverage, a 1% move feels like 11.8%. So you're just getting much more action. This is like caffeine to meth. Like, no stopping at cocaine. You're just going straight to breaking bad blue meth. Don't recommend, folks. I don't. I mean, I guess if you just want the stock to move in the next two days, I guess you could. I mean, it's interesting. I'm very good at calling bottoms.