thoroughly enjoyed this episode. SO ILLUMINATING

I’m somehow always holding tokens that everyone hates. Perpetually waiting for a “heated rally”

since announcing CTO Creator Fees yesterday, we've already heard a ton about how this changes the game this was just the first step in a long line of plans to accelerate communities on pump fun my #1 priority moving forward is boosting the organic communities that make pf great

If pump has a million supporters, then I am one of them. If pump has ten supporters, then I am one of them. If pump has only one supporter then that is me. If pump has no supporters, then that means I am no longer alive

Kuru is excited to announce our $11.6m Series A round led by @paradigm This funding will help us scale our team and bring our vision of a fully on-chain orderbook to life on Monad.

I know everyone is really bulled up on the Robinhood announcement and tokenized equities, and not to be a bear, but the conversation seems to lack a lot of nuance. I'm a long term bull but I expect near term expectations are WAY too high. So lets take a critical look. So, how do these products actually work? Using xStocks as an example (and this looks to be how the HOOD product will approximately work too), you have an SPV out of Jersey that is regulated in Lichtenstein. To mint/redeem you have to be KYC'd with Kraken (and soon other exchanges) and that token gives any holder who KYCs the legal right to redeem for the cash value of their equity token at the OFFCHAIN price (not what it trades at on chain). Dividends are reinvested in kind / token doesn't rebase and voting rights go to the SPV. Once you have the token you can send it to any wallet / use it in defi / etc. Notably, when you mint the token the SPV then goes and acquires the share as collateral. They can (mostly) only acquire shares during market hours. So all after hours / weekend trading will require a market maker to hold the price risk (which will be very hard or impossible to hedge) until they can mint/redeem - but even then redemption fees are at a quite high (for MM standards) 25bps. It's also true that there is a lot of regulatory risk for any defi protocol and market maker who may end up serving a US user who buys this onchain (far more than your other coins). This means a few important things, most importantly - Market makers, because they will have to take massive amounts of weekend and after hours price risk, will have to blow out spreads that will make trading these things outside of market hours untenable for most professional traders and firms. Those firms will also, likely, pull liquidity in times of market stress on weekends and after hours. Which, if these things permeate defi lending and derivs, will create major cascading liquidation risk. Also, because you only have legal right to the cash value of the offchain price less 25bps redemption, you will see quick convergence back to the offchain price when equities markets open. That means when people buy in times of that low liquidity euphoria on weekends/after hours but the equities market then opens lower than token buyers expected, you will see quick rapid losses at open which will primarily be born by retail (also potentially gains, but less likely due to sophisticated actors). Functionally, that means these are just not good products. They absolutely serve a use case in terms of providing access to otherwise underserved markets. That includes crypto native traders who don't want to kyc/aml (for whatever reason) at a brokerage. Also ease of transfer, fractionalized shares and better reconciliation. But only for a small subset of retail. They cannot serve a sophisticated, real, and global equities market. And they likely won't even serve the needs of the professional crypto traders who know they can get significantly better pricing and less risk elsewhere. This will be especially true on the weekends (after hours a bit easier to figure out) and onchain vs. in Cefi. Long-term, as primary markets come onchain, collateral mobility moves to tokenized products, and traditional takers can fix their (pretty outdated) tech stacks, you'll see equities move in real size onchain and liquidity increase dramatically. There will be lots of headlines, but these existing products are likely going to be a disappointing speed bump in the trajectory we are on.

Drift's immediate plan is to be the best decentralised derivatives platform. Built on @solana at the L1 level to harness the global atomic state machine. No rollups or isolated environments. The benefit is asset availability. Drift is the only cross-margin perps DEX and this is only possible because of the L1. Products built on the L1 are directly downstream of asset issuance. You can expect an L1 like Solana to dominate in this area in the coming years. To date, Drift has $1 billion in TVL across multiple types of collateral over SOL, BTC, ETH and a myriad of Solana tokens that can be natively supported (JITO, JUP, KMNO, DRIFT, CLOUD, etc). With the rollup debate and CLOB discussions taking place, we've conveniently forgotten composability. My belief is that in the long term, composability is king. CLOB Debate CLOBs are a means to an end; whilst there is a lot of merit to the discussion taking place, I would argue that HL's success is due to their liquidity model, rather than the choice of a CLOB. There's been a long history of dead CLOBs and I will happily bet against any newcomer that don't have clear or existing GTM. Most build some great piping that never get used. So unless your environment is exceptional, it is very difficult to convince users to bridge assets into an isolated environment. TLDR: Takers like CLOBs since it gives them the last look at the price. Makers hate on-chain CLOBs as they are ripe for the picking. Drift's Design Drift is fully on-chain today. No off-chain matching engine or any part of the stack off-chain. Hence, a slightly different design under the hood with a distributed limit orderbook (DLOB) alongside just-in-time liquidity (JIT). When you build on share blockspace on the L1, extractive activities can take place. Drift cannot re-order, prioritise or slow-down specific transactions that take place on Solana. Trust me, we'd love to give makers priority cancels where we can - but we can't. This is why JIT was introduced. Unlike CLOBs, JIT allows the maker to have the last look at the price (just-in-time) before electing to fill them. It is a novel mechanism designed to protect makers. The disadvantage with this model is the inability to show resting liquidity - since there is no "resting" inventory. We have done our best to work with makers to provide indicative liquidity quotes but I understand that it isn't the same as seeing thick quotes on the orderbook. We are working on some big updates that will be release in a few weeks to continue improving resting liquidity. The Current Narrative We're cooking with @solana & @jito_sol to deliver something exceptional on the L1. Stay tuned for some big updates. The experience on Drift should have improved significantly today so if you haven't tried Drift for a while, give it a shot and let me know how it feels. If you experience remotely unacceptable slippage, DM me and I'll personally compensate you for it. h/t @SebMontgomery for asking the question in the first place!

Infinity is inevitable ♾️

Proud to be supporting @albusdumbledapp & @dill_sl

Pendle Finance @pendle_fi : 10x Growth, Stablecoin Tailwinds & New DeFi Primitive Why We Believe Pendle is on the Path to DeFi Dominance 👑