Compound Thesis - SoundSage

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Our guest is AJ Warner, Chief Strategy Officer at Offchain Labs. Offchain Labs is the original developer of Arbitrum, one of the largest L2 scaling solutions for Ethereum, and is now facilitating The Arbitrum Foundation in its technological developments.

The growth of the Arbitrum ecosystem, and why certain projects couldn't thrive on Ethereum mainnet
The technological differences between their two chains - One and Nova, and examples of its application-specific usecases
Onboarding the next generation of non-Solidity developers into the ecosystem with Stylus

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Labs or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest is Jay Jog, Co-founder at Sei Labs, a general purpose layer one blockchain specialized for trading. Sei recently raised at an $800M valuation and has over 150 diverse projects building on their ecosystem ahead of their mainnet launch. On the show today, we explore the "trading trilemma" that web3 applications face on existing blockchain infrastructure, and Sei’s unique approach and implementation in their native L1:

Sei's fundamental thesis that the clearest use case for crypto is trading - whether that's DEXs, GameFi, NFTs, etc.
Tradeoffs between decentralization, capital efficiency, and scalability for exchanges on existing blockchains
How trading-focused optimizations on Sei translates to efficiencies for user experience, traders, and institutions

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Labs or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest is Austin Diamond, Co-Founder and CEO at Alongside. On the show today we explore bringing passive index investing to crypto, traditional index structures versus how Alongside is structuring radically more transparent and efficient on-chain indices:

Why passive index investments have not taken off in crypto, despite its popularity in TradFi
How traditional indexes are structured, and how Alongside is creating more efficiency and transparency in its on-chain structure
Future use cases and applications for AMKT in thematic strategies and composable, decentralized finance

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Labs or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest is Rebecca Rettig, Chief Policy Officer at Polygon Labs. On the show we unpack the flurry of events in crypto legislation and regulation, implications for builders in the space, and how Polygon is navigating these developments:

Why the US is taking a drastically different regulatory approach compared to rest of the world, and its implications
Real-world use cases already deployed by major brands and organizations on Polygon
The path forward to regulating tech-driven financial innovations

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Labs or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest is Morgan Krupetsky, Director of Business Development, Institutions & Capital Markets at Ava Labs. On the show we discuss how Ava Labs is digitizing and tokenizing the world’s assets, and how the Avalanche blockchain is advancing institutional DeFi:

How to collaborate and build business cases with digital asset champions at enterprises & institutions
Unpacking the interoperability and segment-specific advantages of Avalanche's Evergreen subnet architecture
Why RWA tokenization technology is commoditized, and the use cases in the near future to unlock value

"The initial interest has definitely been on facilitating trades using blockchain rails and Defi applications to facilitate traditional financial services types of trades. So think rather than trading crypto assets in the first instance, trading things like FX.

And then as more institutions come on board, as different applications come on board, we'll start really exploring tokenized equity or credit issuance, administration, trading and finally putting pen to paper as it relates to real world asset tokenization... actually operationalizing it in a way that we can actually start to quantify what some of those benefits and efficiencies might be."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Labs or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest is Lesia Marchenko, Head of Institutional at JKL Group. JKL is a Hong Kong based digital assets firm, providing solutions across asset management, quant trading, lending and BTC mining. On the show today we explore:

The latest Web3 trends in Hong Kong and the potential for Asia to lead the next bull market
How demand for mining has started to recover
JKL’s new proprietary AI-powered crypto trading strategies

"The latest regulations that have been introduced in Hong Kong, some people believe they will be able to open this magical funnel for China capital to flow into exchanges, into the crypto industry. And the reality is that the new regulation does not increase this channel in any way. The new innovation regulatory-wise here is that now suddenly trading platforms, exchanges, have the right to get licensed in Hong Kong, and potentially show more trust to users in using crypto assets. So in the context that US is actually tightening its regulatory policy around crypto, at that same time, Hong Kong opening up the regulation to regulate crypto exchanges might be another catalyst to unlock the Asian market for crypto players."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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We chat with Pat White, Founder and CEO of Bitwave, about how their platform helps enterprises account for millions of crypto transactions across dozens of chains, and the unique challenges companies face when managing digital assets on their balance sheet. In this episode, we cover:

Accounting for the massive scale of transactions crypto enterprises grapple with
Strategic finance and planning for businesses dealing with crypto payments and expenses
How the velocity of transaction volumes are increasing across crypto and traditional businesses

"I kind of am of the theory that this is a trend across the universe. I don't think it's just crypto companies that are doing more transaction volume...Because of the blockchain in that existence, the cost per transaction is just gonna plummet. And I don't mean BPs or like paying 7 cents to do a transaction, I mean how easy it is to programmatically do a transaction. We haven't really gotten to the true world of high velocity programmable money that some of us thought we'd already be in now. And so the high level for us, we think that the transaction volume of the world is gonna explode and we have designed our whole system to be able to handle that."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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In this episode, we explore crypto's role in the broader financial markets, and how the how the latest changes in the macro picture impact crypto with Noelle Acheson. Noelle is the editor of the Crypto is Macro Now newsletter, and former head of research at Coindesk and Genesis Trading. We cover:

Crypto's role as a risk asset, and how the volatility in rates affects macro vs crypto liquidity
Why Bitcoin is the most liquidity-sensitive asset
Alternatives to the traditional financial ecosystem, and Defi's resilience to the current stress tests

"Bitcoin is arguably the most liquid, sensitive asset to macro liquidity that exists in the market today. And by that I mean it's a risk asset, so therefore it is, along with other risk assets sensitive to increases and decreases in liquidity, decreasing liquidity, less money for risk assets... What makes Bitcoin the most sensitive? It is not at all sensitive to cash flows. It also is not economically sensitive except through the vector of macro market liquidity, so therefore it doesn't have the externalities that stocks and bonds will have, or commodities for that matter. So it makes it the purest liquidity play available to macro investors. Crypto liquidity is what at the moment is going to be giving Bitcoin it's volatility."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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We discuss the current state of liquidity in crypto markets from the lens of a crypto trading & market making firm with John Pennington, Head of Business Development at JST Capital.

How liquidity is fragmenting across the crypto ecosystem, and the structural trends driving this
How the risk-off environment is affecting volumes, trends in spot vs derivatives markets, and potential trading opportunities
Sourcing credit following the collapse of major crypto lenders

"We saw the rise of the multi chain world in 2021... as a result on chain liquidity started really fragmenting last year and that trend has continued. Folks have been building different DEXes on different chains... solving a novel use case for crypto traders, providing venues for exchanging assets without relying on the central trust that may have been violated. But as a result, if you're trading on one venue, on one chain... it's not necessarily straightforward to have DEX on chain A be able to interact with DEX on chain B. And within those ecosystems having different pools of liquidity."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest is Henrique Centieiro, Senior Research Manager at Hashkey Capital, one of the largest web3 VC firms based in Asia, having recently raised $500M for their new fund. We explore how the web3 venture landscape has shifted in 2023 compared to 2022:

Hashkey's holistic research process, applied to over 3000 potential opportunities resulting in 100 investments last year
Deal flow, check sizes, velocity, and healthy momentum in early 2023
Highlights from Hashkey's 2022 DeFi Ecosystem Landscape Report, and why DeFi is an asymmetric opportunity
2023 outlook on new products, narratives, and developments across web3

"There is less hype in the market, there is less...FOMO, generally speaking right? During peak of bull markets, projects are like, "hey, we want to close these funding rounds within a week, and we have 10 VCs that want to invest." So if you want to invest, you have a week to decide. And at the moment things are slower. It doesn't happen like that. So at the moment the investment process is a little bit more rational with more research, with more due diligence. But again, we continue to invest and support good projects."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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We discuss fundamentals in crypto with Seth Ginns, Managing Partner and Head of Liquid Investments at CoinFund:

As a crossover fund, how their Venture and Liquid investment teams cross-pollinate ideas and strategies
Institutional appetite for digital assets in the current market, and why more institutions are primed for this asset class
Why the underlying crypto technology and developer ecosystem currently drive the fundamental metrics in crypto

"We did a presentation a few weeks ago and one of the things that we pointed out was, so Electric Capital had a great developer report 297% growth in monthly active developers from the peak of the last bull market in 17 to today. 5% growth over the course of 22, despite prices being down a lot. And that's the lifeblood of the industry, right? That's what's sowing the seeds for the next bull market."

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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We chat with Leigh Drogen, GP and CIO of Starkiller Capital, a quantitative-driven liquid token fund, to unpack

The differences between crypto funds and traditional long / short equity funds, and structural inefficiencies unique to crypto
How to think about an appropriate benchmark for actively managed liquid token funds to measure alpha
Starkiller’s investment process, and the inputs they use to inform their decisions
Why the current rally is a temporary anomaly and insights from Starkiller’s latest research report “Cross-sectional Momentum in Cryptocurrency Markets”

“What we judge ourselves is really against two things. One is an equally weighted portfolio of all the liquid tokens in our universe, which we rebalance weekly. We follow that index and, can we beat that index? The second thing that we judge ourselves against is, if you took…a really simple incarnation of 550 [tokens'] exponential moving averages on top of Bitcoin (as a signal of when to go in and out of cash)...the top quintile of that cross-sectional momentum universe, every week you rebalance to the tokens that are basically the top fifth and running the hottest… And we ask ourselves, can we beat that?”

Find all episodes of Compound Thesis at compoundtreasury.com/thesis

This content is for informational purposes only. No communication by Compound Prime, LLC or any of its affiliates, through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing in this content is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

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Our guest today is Fabian Astic, Managing Director - Global Head of DeFi and Digital Assets at Moody's Investors Service.

We chat with Moody’s on their outlook for digital assets in the upcoming year:

The digitalization of financial markets - more efficient settlements infrastructure, new digital asset types & mechanisms for increased exposure
Balancing the benefits of blockchain transparency vs cybersecurity risk and privacy needs for institutions
Enhancing financial inclusion by reducing barriers to entry for businesses and individuals
How regulators are progressing to implement frameworks across the globe

“If all the values of a given report are in compliance with pre agreed amounts… settlement times can be reduced from several days to just a few minutes or even a few seconds, which can in turn improve customer service and reduce the cost of counterparty risk management and also ultimately a bunch of other costs. So banks and other financial institutions and other institutions really can use all of that. They can set up immutable and transparent data records, which facilitates reporting and compliance efforts.”