DATs: Onboarding the Next Wave of Capital to Crypto | DAS London 2025 | Day 1 | Main
Summary
Investment Theme: The podcast discusses the rise of Digital Asset Trusts (DATs) as a new investment vehicle in the crypto space, drawing parallels to historical financial instruments like REITs and MLPs.
Market Insights: The speaker highlights the recent surge in capital flow into DATs, likening it to a "DAT summer" and emphasizing the potential for these structures to provide access to crypto assets for traditional equity investors.
Company Discussions: Key players in the DAT space include Metanet, Bitmine, and other projects on Ethereum and Solana, with Bitmine noted as a significant success story.
Opportunities and Challenges: DATs face challenges such as market education and managing supply and demand dynamics, but offer opportunities for financial engineering and strategic asset management.
Key Takeaways: The podcast emphasizes the importance of MNAV (Market Net Asset Value) as a critical metric for DATs and suggests that officially foundation-backed DATs could offer asymmetrical investment opportunities.
Future Outlook: The speaker predicts consolidation in the DAT market and suggests that top tokens with product-market fit may successfully transition to public equity markets.
Transcript
All right, it's good to be back everyone. Uh, before I begin, last time I was in London was well over a decade ago, starting off my investment banking career. I was riding one of those Barkclays bikes, as you call it, down Lower Tames Road. Coming from New York, naturally and counterintuitively, didn't understand you guys driving on left side. Almost got hit by two double-decker buses. So, you know, it's a very fun way to wake up in the morning with some PTSD. So, um, why don't we get started? I'm here today talking to you about DATs. So I'm a partner, venture partner at Morirana. We are one of the larger investors in the space. We have LPD into some of the leading funds. Anyone from Polychain or Dragonfly, some of the more direct investments in leading projects such as Athena. We've also invested in multiple DATs. Now, my goal here today is help everyone get caught up to speed on what are DATs, how are we how do we get to where we are today, and more importantly, where are we going in the future. As you can tell, my uh slidem skills have regressed quite a bit. So, fun story. Back in June, uh I was at Khan and giving a similar talk. People were asking, you know, I think ETH was down to like sub 2K. We were wondering how does ETH get back up, right? And I I spoke um one of the stages at Khan and the title was look the road to ADK ETH which we are nowhere near is you need tradi treasuries and trump. We nailed the first two over the summer. We had tradi investment into a ETH DAT namely Tomley's bit mine and Trump was is the icing on the cake. If Trump comes out with the ETH DAT then you know it's become legit. So uh the ABCs of DATs. How do we get started? So let me take a step back. Throughout June to August, we had this amazing burst of energy and capital flow into DATs, whereas Crypto Bros had Defi summer back a couple years ago, Trafi had DAT summer. And it really got kicked off with the likes of Metanet out in Japan, DFTV, uh, Upupexi, Espat, and U, Bitmine on the Ethereum and Salana side. These returns were very juicy and that ushered in a wave of DATs on ETH Salana or even some additional alt coins and thanks to the block works team has an amazing dashboard on treasuries. Where are we now? There's some saturation here, right? I know there's stats out there say there are over 200 DATs that is not true. A lot of those are random op codes that threw in an EOC and called it a day. Those are not real DATs. The ones we'll focus on today are ones who are more pure play focused on just treasury accumulation. So what are DATs? If you ask a crypto bro and try to explain it to them, essentially you're taking one asset, wrapping it, throw it on another chain, and giving access to that asset. If you talk to traditional equity investors, what you're essentially doing is, okay, let's take this token, let's put it inside a shell company's balance sheet that is already trading on an exchange, and therefore we have access to equity investors, as pointed out in this lovely meme. Now, how do people think of DATs? I think they're very well misunderstood, right? People think they're scams. They're going to blow up. Well, first off, most fund financing is uh done with equity, not debt. And so, you won't have these kind of unwinding situations. Furthermore, a lot of folks say, "Okay, well, they're kind of like the spaxs." Maybe in terms of the boom in interest, but in reality, I mean, the spa boom in the 2020s and 2021, those were on tech companies that had little to no real business or revenues. Here, there is a market value of the underlying token. So, in the 1960s when real estate became popular, we had the advent of REITs, right, which allowed people to access that passive income, asset appreciation. In the 1980s when MLPs were generating a ton of cash flow, how do you get access to investors without double taxation? People created MLPS. So the trend is clear, right? The trend is that whenever there are private investments generating outsized returns and the market wants access, the market will create specialized rappers to access that asset. And that's where we are here today with DATs. So how do DATs work? This is a very oversimplified structure, but there are three ways to do it. RTO, spack, shell, uh, a zombie company for all intents and purposes. We started out with RTO's, but then realized, wow, this takes a really long time because you actually have to go through the merger process. Then we went to spaxs. But the problem with spaxs is you generally have to raise close to a billion dollars or more because the economics of the sponsor really eat into your ultimate fully diluted economics at the end of the day. So most folks have opted for the shell route. Shell meaning a kind of zombie-ish company operating on NASDAQ primarily is the focus that has, you know, has has seen its days. And the goal here is to acquire this company, ideally sub$15 million market cap, raise a pipe, maybe three 500 million bucks in cash to then go buy the token and slam it into this company's treasury. And because the treasury is bloated now with nav of this token, you can do away with the operating company and then value it based on a nav basis. And the flywheel is very similar to micro strategy, right? You're essentially if you trade at a premium, you use an ATM to sell additional shares to fund raise. You buy back your token. Flatwheel rinse and repeats. Does well in a bull market uh in a bare market when you're trading at discount. You're probably going to sell tokens to to sell down some treasury to raise cash to buy back your shares. What's more important are what are the key elements of a DAT, right? If you understand if you had the fortune of speaking with multiple bankers and lawyers on this, uh you kind of understand what makes a DAT work. If you understand what makes a DAT work, you understand kind of more the investment and long-term implications of uh where DATs are going. So there's a couple key points, right? One, you need majority control because if you're doing ATM, you're essentially issuing a ton of shares and diluting yourself. If you don't have enough control, you're going to lose it over time and you cannot execute that flywheel, right? More importantly, a lot of these guys want an active S3. What that means is the ability to take and issue uh shares and raise money off the shelf immediately right after the DAT launches. More importantly, you need a line management, right? Because naturally, you would think, okay, well, you're taking 500 million bucks of X token, slamming into Y company. How is that not a change of control? Well, it's not a change in control because it's not. It's this management company that magically is coming up with a new business idea that over 12 months will move towards that business idea. And so if you give a long enough time for the legacy op code to exist and operate that the SEC and NASDAQ will see it as normal course of business. And so that's how these DATs are operating today. Lastly, you obviously want low opex and liabilities because you don't want that to eat away at your NAV. All right. So uh one important distinction right folks have made this comparison between DATs and ETFs. I won't get into the specifics but the key elements are look in a past life I've had the misfortune of launching 40 products in the US. Um it is probably death by a thousand cuts over a two-year period as worse experience. I wouldn't do it again. And the learning here is look, ETFs are great for institutional flow because it's highly regulated and good for majors. But anything else beyond that, the time it takes to launch, the time it takes to get listed on brokerages, warehouses, you try to market it, but you have one hand tied behind your back. If you guys have done these, you'll know it's it's it's horrible. It's horrible experience. Whereas DATs are talking about in 8 weeks you can take X token, slam it into a publicly traded equity that the $120 billion of asset center custody of users in Robin Hood can one click buy tomorrow. That's a pretty obvious trade-off, right? So uh one last thing, MNAV is king. This is the metric which all investors are looking at today. And the simple way to explain MNAV is look if you buy one Bitcoin today, a year later you have one bitcoin. If you buy one share of Micro Strategy and it's trading at 2x MNAV, you're buying essentially half a Bitcoin. Why would you do that? Well, because through financial engineering, Micro Strategy can increase that token per share by 50 75% such that a year later, you actually own more BTC on a per share basis. Great. So, uh, how did we get here with DATs? Funny story. So, I read a lot about DATs on Twitter. A friend gave me the moniker the dotfather. And the funny thing is, right, when you look at all these old DATs, what exactly is happening? What exactly is happening is you're essentially taking a dollar of NAV and selling it to private investors for 99 cents, 90 cents, 80 cents, right? So essentially, I'm giving you an offer you can't refuse, right? Because if you're a venture investor in crypto, if you're doing OTC deal, you're buying these tokens 40 60% discounts. Fantastic. But the problem is you're locked up for three to four years. Here in a DAT, you're locked up for 30 days to 45 days. And so, okay, would you buy an asset for 10 20% discount for 30 to 40 day lockup? Absolutely. Especially when what's happening is when these deals go live, we see a large runup on the token before the DAT is launched. And so, the NAV automatically appreciates, you're in the money, and you hope to exit within 30 days. A lot of these guys are funding it with a mix of uh equity warrants. Your mileage may vary. Here's just like slap together spreadsheet on how some of these deals were done. But how have these uh performed? Ignore the spikes because a lot of that was just due to float scarcity when these things launch. Um more importantly, you have to look at trading volume, right? The question is, is there actually enough organic bid on the other side to offset all the sell pressure? Well, one of the challenges some guys like Sharpling had was when they raised the pipe, it was something like north of 70 80% of float all unlocked at the same time and after they had a quick short squeeze, everyone ran for the doors, right? So, you have to balance you have to balance your supply with your demand naturally. So one interesting insight here is okay well which DATs work so far the biggest success case truly is Bitmine today right a lot of big names came out and built on the Salana side including Calamani uh more wellknown on the crypto side than Tradfi but his forward industries are still only trading sub million shares on a daily basis the demand is just not there yet so where are we today well MNAV is compressing quite a bit um the problem is education on the underlying right bitcoin has had well over a decade to season in the markets people understand what it is people are familiar ETH maybe 5 to 8 years but if you're telling Salana or if you know another alt like u IP or sooie nobody knows what that is right and you only have four to six weeks to educate the market before the pipe investors unlock how are you going to educate retail or new flows what these products are before they face a massive sell wall and so that's where this mismatch in structure comes into play and why a lot of these DATs have stumbled a little bit out the gate and so you're kind of in the doghouse where you have to tell the story and get rid of all the overhang in uh cell pressure and supply. Great. Where do we go from here with DATs? Uh in my opinion, there are actually three types of DATs. There's Bitcoin in its own league and then there are non-foundationbacked and official foundationbacked or what I like to call more monopolistic. So the Bitcoin ones, there are a couple of flavors, right? You have pure plays like Micro Strategy, uh, Nakamoto, you have Metanet out in Japan, you have spaxs, which have yet to launch like Procap, the Caner Fitzgerald one, and you have OPC codes where you have a business doing XYZ throwing Bitcoin on its balance sheet. What do these guys compete on? Well, truly, if you're a Bitcoin, um, macro strategy really is kind of like in a whole position. So it's really hard to compete against them. So how would you get a competitive edge over micro strategy? Well, like MetaPlanet, you find a new market, Japan. Like Nakamoto, you try to change your business model where you're investing other BTC treasury companies globally, right? There's different ways to tell the story and add value to shareholders. The second type are nonofficial foundationbacked ones and uh there are a couple, right? So Ethereum, there's none uh Salana. None of these are officially foundationbacked, but there are multiple players playing for it, right? So like on Ethereum for example there's Bitmine, there's Ethzilla, there's like three or four other ones and same with Salana. Now the problem here is if you are an investor first you have to believe in the underlying asset. Ethereum great Salana great but who do you pick right? Why do you pick Bit Miner over uh uh Ezilla? Why do you pick Ford Industries over DFTV? Today people are making that trade-off due to what I like to call return on attention. Who yells louder, right? Tomley does well because he's well known in trad circles. He's on CNBC all the time. People have built trust with him and so he's done well. If you can't compete on return assets over time, you have to compete on return on sorry return on attention. You have to compete on return on assets, right? No, no, no. Don't don't worry about MNAV. It's because I am generating more validator uh annualized revenue based off staking rewards. My yield is higher. It's a tough sell. I don't think the market is there yet and it hasn't aptly priced that in. So the last one are these official foundationbacked ones and I think these are the more interesting ones because all you have to do is if you understand the telegram thesis or with ton or Athena and there's only one vehicle out there for you to get a proxy exposure on the equities markets you're going to buy right you don't need to yell louder than this guy because you have the full backing and support of the foundation these in my opinion are the truly the asymmetrical bets to watch in the future and these guys are still in the early adopter stage. So here's a great slide from the syncrey folks and they walk you through and I agree with this three phases of where we are in DATs. Uh the first phase is the bootstrap and accumulation phase, right? You raise a pipe, you buy the asset, you throw on your balance sheet, you compete on mnav. The second phase, what we're seeing now with ETH and a little bit more Salana guys, which are competing on yield. Okay, well how much yield can I generate with the Salana through certain validators, right? uh can I take that revenue and then plow it back into my treasury to accumulate more salana and so that's where we're starting to see some bifurcation and uh interesting revenue models come to market now the last one gets more interesting what if I go and buy some of the operating businesses within these ecosystem what if I participate in governance what if I incubate some projects to add more value to the ecosystem right and so all of a sudden if option A is a passive ETF F option B is a DAT that is much more hands-on for-profit that goes into the weeds that adds value to your ecosystem. Right? I like to say DATs are kind of the for-profit component and I think the interesting take is uh I'll cover here. So interesting take is look from a foundation on a tokens perspective right how do you generate activity for a token? Oh I am going to give grants maybe throw a dart on the wall something will work out. I'm going to have an ecosystem fund. They'll fund a project. Something will work out. The problem is even if it does work out, you cannot sell because otherwise optically they'll say, "Hey, you support a project, but then you dumped your bag on your token holders, right? It's a misalignment in incentives." But all of a sudden, if you have a DAT that is purely for profit, I can invest. I can sell. And what am I doing when I sell? I put those profits back into accumulating the underlying token. And so essentially what you've done is you've created a financialized vehicle that's within the periphery of your ecosystem that can kick a flywheel back into your ecosystem. That's why I feel the officially foundationbacked ones are very interesting uh dynamics, right? And the way they view a DAT is from perspective of I can list on BBIT, I can list on Binance, oh I can also list on NASDAQ, right? And a lot of folks in onchain like to have like to see buyback and burned, right? Essentially, when you reduce your supply, price goes up. Great. But that only works if you're generating revenues, which as you know, most crypto companies and chains do not. So from their perspective, it's like, wait a second, instead of buyback and burn and take these tokens, effectively lock them up in a DAT, which takes them out of circulation, which effectively is doing the same thing as a buyback and burn, right? But more even more so, I can actually monetize it. And so the value ad for a alt token that's officially foundation backed is tremendous. Here are some select highlights for DATs. Uh I believe we are truly still early in the DAT evolution, right? This is the first, you know, the first price action of uh up and down. And the way you have to think about it is, as I mentioned before, what DAT, what type of DAT are you investing or building, right? That will dictate what type of game you're playing with the DAT. I just want to highlight some interesting evolution of DATs that I've seen in the market so far. Uh Ford Industries deploying Salana actively back into the ecosystem to participate whether it's through uh uh Jupiter or otherwise. I thought it was very interesting. Um uh they're also tokenizing their stock onchain which gives onchain uh investors access to the underlying DAT and equity. Sharps on the Salana side they partnered with Pangu an NFT brand. So it's interesting where that will go in the future. Uh you have DV DFTV on the Salana side they launched subbrands out in Japan and Korea which I thought was fascinating as well that they're as they're expanding the pie and their business model. You have shot, which I think is actually more interesting, um, which is the DAT for the Bonk memecoin. And what's interesting is they have a launchpad on Bonk that generates revenues and they acquire 10% of the revenue share. And so they're actually what they're doing is they're using this DAT to buy up ecosystem projects that are generating revenues and packaging it within that DAT. I think this is a very under the radar in terms of uh, media so far and they've done a fantastic job. I think this might evolve as one of the blueprints for these unh for these officially foundationbacked DATs. And lastly, more innovatively, the SUI guys partnered up with Athena to launch and operate a stable coin within SUI. And so, back to the original question, if you're a DAT and you buy, I don't know, a cannabis company, you buy a bio uh biotech company, doesn't matter. you had to phase that company out and replace it with an actual operating business tangentially tangential to your line of work. Well, Athena now does white label stable coins, right? And so that could potentially uh solve that problem. A couple of hypotheses on where we're going in the future. It's my sense that we'll see consolidation across the majors as we saw already with Strive acquiring Similar Scientific at a premium. Uh I think at 1.2x 2x mnav but if micro strategy trades at 1.7 you kind of believe that there's margin for upside there. Uh same with Ethereum and Salana. Now the challenge is look it takes time to consummate a merger and so the question is how do you price these things right? If something is down 20% these guys trade a discount cool who knows if in a month into your deal these markets rally right and so I think it stood to be seen how these things shake out. I also do believe some of the top 50 tokens that have product market fit already on chain to create a DAT will also do well in the public equity markets. Now, their challenge is more a storytelling and getting retail and institutional investors to understand why their ecosystem is important. Great. If you have questions, feel free to reach out to me on Twitter. Happy to answer anything. Thanks so much. [Applause]
DATs: Onboarding the Next Wave of Capital to Crypto | DAS London 2025 | Day 1 | Main
Summary
Transcript
All right, it's good to be back everyone. Uh, before I begin, last time I was in London was well over a decade ago, starting off my investment banking career. I was riding one of those Barkclays bikes, as you call it, down Lower Tames Road. Coming from New York, naturally and counterintuitively, didn't understand you guys driving on left side. Almost got hit by two double-decker buses. So, you know, it's a very fun way to wake up in the morning with some PTSD. So, um, why don't we get started? I'm here today talking to you about DATs. So I'm a partner, venture partner at Morirana. We are one of the larger investors in the space. We have LPD into some of the leading funds. Anyone from Polychain or Dragonfly, some of the more direct investments in leading projects such as Athena. We've also invested in multiple DATs. Now, my goal here today is help everyone get caught up to speed on what are DATs, how are we how do we get to where we are today, and more importantly, where are we going in the future. As you can tell, my uh slidem skills have regressed quite a bit. So, fun story. Back in June, uh I was at Khan and giving a similar talk. People were asking, you know, I think ETH was down to like sub 2K. We were wondering how does ETH get back up, right? And I I spoke um one of the stages at Khan and the title was look the road to ADK ETH which we are nowhere near is you need tradi treasuries and trump. We nailed the first two over the summer. We had tradi investment into a ETH DAT namely Tomley's bit mine and Trump was is the icing on the cake. If Trump comes out with the ETH DAT then you know it's become legit. So uh the ABCs of DATs. How do we get started? So let me take a step back. Throughout June to August, we had this amazing burst of energy and capital flow into DATs, whereas Crypto Bros had Defi summer back a couple years ago, Trafi had DAT summer. And it really got kicked off with the likes of Metanet out in Japan, DFTV, uh, Upupexi, Espat, and U, Bitmine on the Ethereum and Salana side. These returns were very juicy and that ushered in a wave of DATs on ETH Salana or even some additional alt coins and thanks to the block works team has an amazing dashboard on treasuries. Where are we now? There's some saturation here, right? I know there's stats out there say there are over 200 DATs that is not true. A lot of those are random op codes that threw in an EOC and called it a day. Those are not real DATs. The ones we'll focus on today are ones who are more pure play focused on just treasury accumulation. So what are DATs? If you ask a crypto bro and try to explain it to them, essentially you're taking one asset, wrapping it, throw it on another chain, and giving access to that asset. If you talk to traditional equity investors, what you're essentially doing is, okay, let's take this token, let's put it inside a shell company's balance sheet that is already trading on an exchange, and therefore we have access to equity investors, as pointed out in this lovely meme. Now, how do people think of DATs? I think they're very well misunderstood, right? People think they're scams. They're going to blow up. Well, first off, most fund financing is uh done with equity, not debt. And so, you won't have these kind of unwinding situations. Furthermore, a lot of folks say, "Okay, well, they're kind of like the spaxs." Maybe in terms of the boom in interest, but in reality, I mean, the spa boom in the 2020s and 2021, those were on tech companies that had little to no real business or revenues. Here, there is a market value of the underlying token. So, in the 1960s when real estate became popular, we had the advent of REITs, right, which allowed people to access that passive income, asset appreciation. In the 1980s when MLPs were generating a ton of cash flow, how do you get access to investors without double taxation? People created MLPS. So the trend is clear, right? The trend is that whenever there are private investments generating outsized returns and the market wants access, the market will create specialized rappers to access that asset. And that's where we are here today with DATs. So how do DATs work? This is a very oversimplified structure, but there are three ways to do it. RTO, spack, shell, uh, a zombie company for all intents and purposes. We started out with RTO's, but then realized, wow, this takes a really long time because you actually have to go through the merger process. Then we went to spaxs. But the problem with spaxs is you generally have to raise close to a billion dollars or more because the economics of the sponsor really eat into your ultimate fully diluted economics at the end of the day. So most folks have opted for the shell route. Shell meaning a kind of zombie-ish company operating on NASDAQ primarily is the focus that has, you know, has has seen its days. And the goal here is to acquire this company, ideally sub$15 million market cap, raise a pipe, maybe three 500 million bucks in cash to then go buy the token and slam it into this company's treasury. And because the treasury is bloated now with nav of this token, you can do away with the operating company and then value it based on a nav basis. And the flywheel is very similar to micro strategy, right? You're essentially if you trade at a premium, you use an ATM to sell additional shares to fund raise. You buy back your token. Flatwheel rinse and repeats. Does well in a bull market uh in a bare market when you're trading at discount. You're probably going to sell tokens to to sell down some treasury to raise cash to buy back your shares. What's more important are what are the key elements of a DAT, right? If you understand if you had the fortune of speaking with multiple bankers and lawyers on this, uh you kind of understand what makes a DAT work. If you understand what makes a DAT work, you understand kind of more the investment and long-term implications of uh where DATs are going. So there's a couple key points, right? One, you need majority control because if you're doing ATM, you're essentially issuing a ton of shares and diluting yourself. If you don't have enough control, you're going to lose it over time and you cannot execute that flywheel, right? More importantly, a lot of these guys want an active S3. What that means is the ability to take and issue uh shares and raise money off the shelf immediately right after the DAT launches. More importantly, you need a line management, right? Because naturally, you would think, okay, well, you're taking 500 million bucks of X token, slamming into Y company. How is that not a change of control? Well, it's not a change in control because it's not. It's this management company that magically is coming up with a new business idea that over 12 months will move towards that business idea. And so if you give a long enough time for the legacy op code to exist and operate that the SEC and NASDAQ will see it as normal course of business. And so that's how these DATs are operating today. Lastly, you obviously want low opex and liabilities because you don't want that to eat away at your NAV. All right. So uh one important distinction right folks have made this comparison between DATs and ETFs. I won't get into the specifics but the key elements are look in a past life I've had the misfortune of launching 40 products in the US. Um it is probably death by a thousand cuts over a two-year period as worse experience. I wouldn't do it again. And the learning here is look, ETFs are great for institutional flow because it's highly regulated and good for majors. But anything else beyond that, the time it takes to launch, the time it takes to get listed on brokerages, warehouses, you try to market it, but you have one hand tied behind your back. If you guys have done these, you'll know it's it's it's horrible. It's horrible experience. Whereas DATs are talking about in 8 weeks you can take X token, slam it into a publicly traded equity that the $120 billion of asset center custody of users in Robin Hood can one click buy tomorrow. That's a pretty obvious trade-off, right? So uh one last thing, MNAV is king. This is the metric which all investors are looking at today. And the simple way to explain MNAV is look if you buy one Bitcoin today, a year later you have one bitcoin. If you buy one share of Micro Strategy and it's trading at 2x MNAV, you're buying essentially half a Bitcoin. Why would you do that? Well, because through financial engineering, Micro Strategy can increase that token per share by 50 75% such that a year later, you actually own more BTC on a per share basis. Great. So, uh, how did we get here with DATs? Funny story. So, I read a lot about DATs on Twitter. A friend gave me the moniker the dotfather. And the funny thing is, right, when you look at all these old DATs, what exactly is happening? What exactly is happening is you're essentially taking a dollar of NAV and selling it to private investors for 99 cents, 90 cents, 80 cents, right? So essentially, I'm giving you an offer you can't refuse, right? Because if you're a venture investor in crypto, if you're doing OTC deal, you're buying these tokens 40 60% discounts. Fantastic. But the problem is you're locked up for three to four years. Here in a DAT, you're locked up for 30 days to 45 days. And so, okay, would you buy an asset for 10 20% discount for 30 to 40 day lockup? Absolutely. Especially when what's happening is when these deals go live, we see a large runup on the token before the DAT is launched. And so, the NAV automatically appreciates, you're in the money, and you hope to exit within 30 days. A lot of these guys are funding it with a mix of uh equity warrants. Your mileage may vary. Here's just like slap together spreadsheet on how some of these deals were done. But how have these uh performed? Ignore the spikes because a lot of that was just due to float scarcity when these things launch. Um more importantly, you have to look at trading volume, right? The question is, is there actually enough organic bid on the other side to offset all the sell pressure? Well, one of the challenges some guys like Sharpling had was when they raised the pipe, it was something like north of 70 80% of float all unlocked at the same time and after they had a quick short squeeze, everyone ran for the doors, right? So, you have to balance you have to balance your supply with your demand naturally. So one interesting insight here is okay well which DATs work so far the biggest success case truly is Bitmine today right a lot of big names came out and built on the Salana side including Calamani uh more wellknown on the crypto side than Tradfi but his forward industries are still only trading sub million shares on a daily basis the demand is just not there yet so where are we today well MNAV is compressing quite a bit um the problem is education on the underlying right bitcoin has had well over a decade to season in the markets people understand what it is people are familiar ETH maybe 5 to 8 years but if you're telling Salana or if you know another alt like u IP or sooie nobody knows what that is right and you only have four to six weeks to educate the market before the pipe investors unlock how are you going to educate retail or new flows what these products are before they face a massive sell wall and so that's where this mismatch in structure comes into play and why a lot of these DATs have stumbled a little bit out the gate and so you're kind of in the doghouse where you have to tell the story and get rid of all the overhang in uh cell pressure and supply. Great. Where do we go from here with DATs? Uh in my opinion, there are actually three types of DATs. There's Bitcoin in its own league and then there are non-foundationbacked and official foundationbacked or what I like to call more monopolistic. So the Bitcoin ones, there are a couple of flavors, right? You have pure plays like Micro Strategy, uh, Nakamoto, you have Metanet out in Japan, you have spaxs, which have yet to launch like Procap, the Caner Fitzgerald one, and you have OPC codes where you have a business doing XYZ throwing Bitcoin on its balance sheet. What do these guys compete on? Well, truly, if you're a Bitcoin, um, macro strategy really is kind of like in a whole position. So it's really hard to compete against them. So how would you get a competitive edge over micro strategy? Well, like MetaPlanet, you find a new market, Japan. Like Nakamoto, you try to change your business model where you're investing other BTC treasury companies globally, right? There's different ways to tell the story and add value to shareholders. The second type are nonofficial foundationbacked ones and uh there are a couple, right? So Ethereum, there's none uh Salana. None of these are officially foundationbacked, but there are multiple players playing for it, right? So like on Ethereum for example there's Bitmine, there's Ethzilla, there's like three or four other ones and same with Salana. Now the problem here is if you are an investor first you have to believe in the underlying asset. Ethereum great Salana great but who do you pick right? Why do you pick Bit Miner over uh uh Ezilla? Why do you pick Ford Industries over DFTV? Today people are making that trade-off due to what I like to call return on attention. Who yells louder, right? Tomley does well because he's well known in trad circles. He's on CNBC all the time. People have built trust with him and so he's done well. If you can't compete on return assets over time, you have to compete on return on sorry return on attention. You have to compete on return on assets, right? No, no, no. Don't don't worry about MNAV. It's because I am generating more validator uh annualized revenue based off staking rewards. My yield is higher. It's a tough sell. I don't think the market is there yet and it hasn't aptly priced that in. So the last one are these official foundationbacked ones and I think these are the more interesting ones because all you have to do is if you understand the telegram thesis or with ton or Athena and there's only one vehicle out there for you to get a proxy exposure on the equities markets you're going to buy right you don't need to yell louder than this guy because you have the full backing and support of the foundation these in my opinion are the truly the asymmetrical bets to watch in the future and these guys are still in the early adopter stage. So here's a great slide from the syncrey folks and they walk you through and I agree with this three phases of where we are in DATs. Uh the first phase is the bootstrap and accumulation phase, right? You raise a pipe, you buy the asset, you throw on your balance sheet, you compete on mnav. The second phase, what we're seeing now with ETH and a little bit more Salana guys, which are competing on yield. Okay, well how much yield can I generate with the Salana through certain validators, right? uh can I take that revenue and then plow it back into my treasury to accumulate more salana and so that's where we're starting to see some bifurcation and uh interesting revenue models come to market now the last one gets more interesting what if I go and buy some of the operating businesses within these ecosystem what if I participate in governance what if I incubate some projects to add more value to the ecosystem right and so all of a sudden if option A is a passive ETF F option B is a DAT that is much more hands-on for-profit that goes into the weeds that adds value to your ecosystem. Right? I like to say DATs are kind of the for-profit component and I think the interesting take is uh I'll cover here. So interesting take is look from a foundation on a tokens perspective right how do you generate activity for a token? Oh I am going to give grants maybe throw a dart on the wall something will work out. I'm going to have an ecosystem fund. They'll fund a project. Something will work out. The problem is even if it does work out, you cannot sell because otherwise optically they'll say, "Hey, you support a project, but then you dumped your bag on your token holders, right? It's a misalignment in incentives." But all of a sudden, if you have a DAT that is purely for profit, I can invest. I can sell. And what am I doing when I sell? I put those profits back into accumulating the underlying token. And so essentially what you've done is you've created a financialized vehicle that's within the periphery of your ecosystem that can kick a flywheel back into your ecosystem. That's why I feel the officially foundationbacked ones are very interesting uh dynamics, right? And the way they view a DAT is from perspective of I can list on BBIT, I can list on Binance, oh I can also list on NASDAQ, right? And a lot of folks in onchain like to have like to see buyback and burned, right? Essentially, when you reduce your supply, price goes up. Great. But that only works if you're generating revenues, which as you know, most crypto companies and chains do not. So from their perspective, it's like, wait a second, instead of buyback and burn and take these tokens, effectively lock them up in a DAT, which takes them out of circulation, which effectively is doing the same thing as a buyback and burn, right? But more even more so, I can actually monetize it. And so the value ad for a alt token that's officially foundation backed is tremendous. Here are some select highlights for DATs. Uh I believe we are truly still early in the DAT evolution, right? This is the first, you know, the first price action of uh up and down. And the way you have to think about it is, as I mentioned before, what DAT, what type of DAT are you investing or building, right? That will dictate what type of game you're playing with the DAT. I just want to highlight some interesting evolution of DATs that I've seen in the market so far. Uh Ford Industries deploying Salana actively back into the ecosystem to participate whether it's through uh uh Jupiter or otherwise. I thought it was very interesting. Um uh they're also tokenizing their stock onchain which gives onchain uh investors access to the underlying DAT and equity. Sharps on the Salana side they partnered with Pangu an NFT brand. So it's interesting where that will go in the future. Uh you have DV DFTV on the Salana side they launched subbrands out in Japan and Korea which I thought was fascinating as well that they're as they're expanding the pie and their business model. You have shot, which I think is actually more interesting, um, which is the DAT for the Bonk memecoin. And what's interesting is they have a launchpad on Bonk that generates revenues and they acquire 10% of the revenue share. And so they're actually what they're doing is they're using this DAT to buy up ecosystem projects that are generating revenues and packaging it within that DAT. I think this is a very under the radar in terms of uh, media so far and they've done a fantastic job. I think this might evolve as one of the blueprints for these unh for these officially foundationbacked DATs. And lastly, more innovatively, the SUI guys partnered up with Athena to launch and operate a stable coin within SUI. And so, back to the original question, if you're a DAT and you buy, I don't know, a cannabis company, you buy a bio uh biotech company, doesn't matter. you had to phase that company out and replace it with an actual operating business tangentially tangential to your line of work. Well, Athena now does white label stable coins, right? And so that could potentially uh solve that problem. A couple of hypotheses on where we're going in the future. It's my sense that we'll see consolidation across the majors as we saw already with Strive acquiring Similar Scientific at a premium. Uh I think at 1.2x 2x mnav but if micro strategy trades at 1.7 you kind of believe that there's margin for upside there. Uh same with Ethereum and Salana. Now the challenge is look it takes time to consummate a merger and so the question is how do you price these things right? If something is down 20% these guys trade a discount cool who knows if in a month into your deal these markets rally right and so I think it stood to be seen how these things shake out. I also do believe some of the top 50 tokens that have product market fit already on chain to create a DAT will also do well in the public equity markets. Now, their challenge is more a storytelling and getting retail and institutional investors to understand why their ecosystem is important. Great. If you have questions, feel free to reach out to me on Twitter. Happy to answer anything. Thanks so much. [Applause]