Latest / The Paul Barron Crypto Show / Time To Buy $STRC?🚨How APYX DeFi is Flipping TradFi🚀INTERVIEW

Transcript

Time To Buy $STRC?🚨How APYX DeFi is Flipping TradFi🚀INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Stretches exploding and of course all of this is getting
• 0:02
  Speaker 1: into D five versus trad five. We're going to break
• 0:04
  Speaker 1: it down for you today. You guys don't want to
• 0:06
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• 0:29
  Speaker 1: all kinds of additional discounts and some Bitcoin rewards, so
• 0:32
  Speaker 1: check it out use the link down below. Let's get
• 0:35
  Speaker 1: in today. I want to bring on Parker White, who's
• 0:37
  Speaker 1: coming in from Apex. And of course how are you.
• 0:40
  Speaker 2: Parker, fantastic, Thanks for having me.
• 0:42
  Speaker 1: Tell me a little bit about you and your team.
• 0:44
  Speaker 2: Sure.
• 0:45
  Speaker 3: So Apex was launched in response to what we saw
• 0:49
  Speaker 3: going on with Stratch and with micro Strategy. So some
• 0:53
  Speaker 3: of the team behind Apex is the leadership team at
• 0:57
  Speaker 3: DFDV DeFi Develpment Corp. So it was the first non
• 1:01
  Speaker 3: bitcoin treasury vehicle listed on the NASDAK. We launched last April,
• 1:06
  Speaker 3: but kind of as we saw the dat space evolve,
• 1:09
  Speaker 3: we saw what Sailor did, what Strategy did with STRC.
• 1:14
  Speaker 3: It was actually the largest IPO of any kind in
• 1:16
  Speaker 3: twenty twenty five. I think it was about a two
• 1:19
  Speaker 3: two three billion dollar IPO, and then it really like
• 1:22
  Speaker 3: grew from there. Not only grew, but it performed exceptionally
• 1:25
  Speaker 3: well during the drawdown in February. We kind of saw
• 1:30
  Speaker 3: the need for this type of yield on chain and
• 1:34
  Speaker 3: so we rallied the troops, got a couple other folks
• 1:36
  Speaker 3: together and kind of helped start this project and the
• 1:40
  Speaker 3: idea here is a kind of decentralized protocol that we
• 1:42
  Speaker 3: helped get off the ground and then it you know,
• 1:44
  Speaker 3: kind of exists into perpetuity with lots of folks around
• 1:47
  Speaker 3: the table.
• 1:47
  Speaker 1: All right. So there's there's been the love and the
• 1:50
  Speaker 1: hate of this thing that's out there right now, especially
• 1:54
  Speaker 1: when you look at what some of the Bitcoin maxi's
• 1:57
  Speaker 1: have been doing. In terms of talking about this, I
• 1:59
  Speaker 1: want to go to a clip by Matthew from Bitcoin University.
• 2:02
  Speaker 1: That kind of breaks it down, and I want to
• 2:04
  Speaker 1: get your opinion after that. Take a look.
• 2:06
  Speaker 4: Cratters Bitcoin University. Today, I want to talk about Michael
• 2:09
  Speaker 4: Sailor promoting shit coins. I mean, we turn bitcoin into
• 2:13
  Speaker 4: money and then stretch. Let's take a look at the video.
• 2:16
  Speaker 5: And strategy refines bitcoin turns it into stretch. That's what
• 2:21
  Speaker 5: powers my money. Stretch eleven point five percent annualized divin
• 2:25
  Speaker 5: rate paid monthly listed on NASDAC.
• 2:28
  Speaker 4: This ad is complete and utter. Bs also probably not
• 2:32
  Speaker 4: a good idea to smoke in an oil field and
• 2:33
  Speaker 4: toss your cigarette into the oil well. I couldn't believe
• 2:37
  Speaker 4: it when I saw this. Pendle now holds two point
• 2:39
  Speaker 4: four million stretch. If this looks like shitcoining, that's because
• 2:43
  Speaker 4: it is. This is just DeFi at its worse. And
• 2:46
  Speaker 4: to make things even worse, it's a token belt on
• 2:48
  Speaker 4: etherory if it's an ERC twenty token. So many bitcoin
• 2:51
  Speaker 4: heroes slain. I don't know what to say. All I
• 2:53
  Speaker 4: can say is that I miss this guy.
• 2:56
  Speaker 1: They think Sailor has defected when you look at that,
• 2:59
  Speaker 1: What is the argument to a bitcoiner out there that says, no,
• 3:02
  Speaker 1: this is actually maybe a good product for you.
• 3:04
  Speaker 2: Yeah.
• 3:04
  Speaker 3: Look, I think ultimately it comes down to what you
• 3:06
  Speaker 3: want bitcoin to be. If you would like bitcoin to
• 3:09
  Speaker 3: go back to the days the you know, the twenty
• 3:11
  Speaker 3: ten days, twenty eleven days, where it was kind of
• 3:13
  Speaker 3: a pet project amongst some cipherpunks, some nerds that kind
• 3:17
  Speaker 3: of you know, mind in their basement and stuff, Yeah,
• 3:20
  Speaker 3: then yeah, this is all bad and we.
• 3:22
  Speaker 2: Should get rid of all this.
• 3:23
  Speaker 3: We should get rid of the black rock ETFs. We
• 3:25
  Speaker 3: should you know, get rid of the exchanges. You know,
• 3:28
  Speaker 3: we should go back to local bitcoins. Some people like that,
• 3:30
  Speaker 3: and there's plenty of projects for that. But I think
• 3:33
  Speaker 3: for most bitcoiners, you know, and I myself would consider
• 3:36
  Speaker 3: myself a bitcoiner, you know, the idea is to have
• 3:39
  Speaker 3: all of global finance built on top of bitcoin.
• 3:42
  Speaker 2: That's the vision.
• 3:43
  Speaker 3: That's how you get to tens and hundreds of trillions
• 3:46
  Speaker 3: of dollars value of value you know, stored within bitcoin.
• 3:51
  Speaker 3: And the only way to do that is to proliferate
• 3:53
  Speaker 3: it and have it be everywhere at all times.
• 3:56
  Speaker 2: To say, you know, ethereum is evil.
• 4:00
  Speaker 3: You don't have to like ethereum, but what you can
• 4:03
  Speaker 3: like is the fact that people on the system are
• 4:08
  Speaker 3: effectively buying bitcoin.
• 4:09
  Speaker 2: I mean it's making a couple hops.
• 4:11
  Speaker 3: It goes through US and it goes to Strategy and
• 4:14
  Speaker 3: then they buy the bitcoin with it. But it's essentially
• 4:16
  Speaker 3: value being moved into bitcoin.
• 4:19
  Speaker 2: That's great.
• 4:20
  Speaker 3: You know, maybe you don't like ethereum, but you know,
• 4:22
  Speaker 3: I'd say maybe you shouldn't like the NASDAC, you shouldn't
• 4:25
  Speaker 3: like the NYC, you shouldn't like banks, you shouldn't like exchanges.
• 4:28
  Speaker 2: It's just another kind of platform, if you will.
• 4:31
  Speaker 1: Well, I think Sailor has kind of gone on record here.
• 4:34
  Speaker 1: This is an evolution in you know, creative finance to
• 4:37
  Speaker 1: really kind of solve the bigger problem which he is
• 4:39
  Speaker 1: trying to do, and that is buy more bitcoin. I'm
• 4:41
  Speaker 1: looking at your website here. This is apex dot five.
• 4:45
  Speaker 1: If you guys want to kind of follow along here,
• 4:47
  Speaker 1: apex USD and ap y us D. All right, the
• 4:51
  Speaker 1: yield wrapper won the dollar. Explain how you're utilizing these
• 4:55
  Speaker 1: two in apex.
• 4:57
  Speaker 3: So in very simple terms, apx USD is kind of
• 5:00
  Speaker 3: a standard stable coin. Now I should caveat that. You know,
• 5:03
  Speaker 3: it may deepeg a little bit. Obviously, Stretch can move around,
• 5:08
  Speaker 3: the price can move around and so you could expect
• 5:10
  Speaker 3: the price on apx USD to move around. But other
• 5:13
  Speaker 3: than that, it's a very standard. You know, stable coin
• 5:16
  Speaker 3: doesn't pay yield. It's in ARC twenty, moves around whatever.
• 5:20
  Speaker 3: But then from there you can stake it or lock it,
• 5:23
  Speaker 3: and when you do that you get ap y us D.
• 5:26
  Speaker 3: It's like your staked token, and that pays We target
• 5:31
  Speaker 3: about a thirteen percent yield.
• 5:32
  Speaker 2: It can fluctuate.
• 5:34
  Speaker 3: It typically kind of drifts down as more people come in,
• 5:37
  Speaker 3: and then we top it up each month, so say,
• 5:39
  Speaker 3: you know, between eleven and thirteen percent for just holding.
• 5:43
  Speaker 3: So that's the ap y us D, you know, staked
• 5:46
  Speaker 3: version of apx USD.
• 5:47
  Speaker 1: Explain how the dividends get paid, because that was a
• 5:50
  Speaker 1: little bit different than I had seen before.
• 5:53
  Speaker 3: Sure, we pay out the yield kind of in real time,
• 5:56
  Speaker 3: you know, on an hourly basis, you know, throughout the day,
• 5:59
  Speaker 3: and so so people are able to accrue the yield,
• 6:02
  Speaker 3: accrue the dividends you know, over time. And this is
• 6:05
  Speaker 3: different than say STRC, which right now pays monthly they're
• 6:09
  Speaker 3: pivoting to buy monthly, or even different than SATA, which
• 6:12
  Speaker 3: pays daily but only during you know, business days. And
• 6:15
  Speaker 3: so we essentially take the yield that we get and
• 6:19
  Speaker 3: then we spread it out so we kind of you know,
• 6:22
  Speaker 3: even and out. So whereas the yield on these on
• 6:24
  Speaker 3: the underlyings is pretty lumpy, we make it smooth so
• 6:27
  Speaker 3: that people can come in and out and get yield
• 6:30
  Speaker 3: for you know, just the time that they're in.
• 6:32
  Speaker 1: They are talking about when we had their CEO or
• 6:34
  Speaker 1: their president on a couple of weeks ago, he was
• 6:36
  Speaker 1: talking about they were trying to go to where they
• 6:40
  Speaker 1: would have this twice a month potentially versus what is
• 6:43
  Speaker 1: now one you know, one time monthly, which is usually
• 6:46
  Speaker 1: around the fifteenth on this So do you think that
• 6:49
  Speaker 1: would make any difference in terms of how your your
• 6:52
  Speaker 1: product would be viewed if we start to see more
• 6:55
  Speaker 1: frequency coming out of the traditional asset.
• 6:58
  Speaker 2: Sure, and I hope we do.
• 6:59
  Speaker 3: I mean, you know, SATA or Strive rather has kind
• 7:02
  Speaker 3: of the other major preferred in the market, and they
• 7:05
  Speaker 3: just announced they're switching to daily dividends, which is historic.
• 7:09
  Speaker 3: Daily has never been done before, and so I assume
• 7:12
  Speaker 3: Strategy is going to follow suit and eventually go to daily.
• 7:17
  Speaker 3: And that certainly makes our lives easier because right now
• 7:21
  Speaker 3: we kind of like collect the dividend and then we
• 7:24
  Speaker 3: pay it out over the following month, and it creates
• 7:26
  Speaker 3: a little bit of operational issues for us, and so
• 7:29
  Speaker 3: this would certainly make it easier. It would also make
• 7:31
  Speaker 3: the instrument, the underlying instrument, less volatile. So on a
• 7:34
  Speaker 3: daylight today, you know, two days after X dividend, you know,
• 7:37
  Speaker 3: the price down a little bit, right, right, And if
• 7:40
  Speaker 3: you had dividends being paid every day, then I think
• 7:43
  Speaker 3: you would have even less volatility and you would kind
• 7:45
  Speaker 3: of smooth out and be pegged more right at one hundred.
• 7:48
  Speaker 3: You know, hopefully they do it, because it would certainly make.
• 7:50
  Speaker 2: Our lives easier.
• 7:51
  Speaker 3: But our product is you know, fundamentally different and not
• 7:55
  Speaker 3: contingent on just the you know, daily smoothing thing that
• 7:58
  Speaker 3: we provide.
• 7:59
  Speaker 2: That's you know, not really the core value proposition.
• 8:01
  Speaker 1: How do you think this is going to be the
• 8:03
  Speaker 1: case where we see this mostly being traded on DeFi.
• 8:06
  Speaker 1: You think that's where the growth could potentially go?
• 8:09
  Speaker 2: Not really.
• 8:10
  Speaker 3: I think there's going to be a lot of growth
• 8:11
  Speaker 3: in DeFi for sure, but traditional markets are just far
• 8:15
  Speaker 3: larger than DeFi. I mean, there's only you know, three
• 8:17
  Speaker 3: hundred billion of stable coins total, globally in DeFi where
• 8:23
  Speaker 3: this would be a fit. And sure, maybe there's some
• 8:24
  Speaker 3: new dollars that can flow into the space, but largely
• 8:27
  Speaker 3: what it is is people rotating out of existing stables
• 8:29
  Speaker 3: into this. So three hundred billion is like the top
• 8:32
  Speaker 3: top max versus the TAM for global credit markets is
• 8:36
  Speaker 3: in the you know, tens or hundreds of trillions, right,
• 8:39
  Speaker 3: I mean you look at all the capital of the
• 8:40
  Speaker 3: stored in private credit, in you know, more traditional credit,
• 8:44
  Speaker 3: fixed income so on, even like real estate, all these
• 8:47
  Speaker 3: different high single digit and low double digit yield instruments
• 8:52
  Speaker 3: that can all flow into stretch. It'll take time, right
• 8:55
  Speaker 3: as with any new instrument, it'll probably take you know, four, five,
• 8:58
  Speaker 3: six years.
• 8:59
  Speaker 2: Maybe a decade.
• 8:59
  Speaker 3: But for this thing is a multi trillion dollar asset
• 9:02
  Speaker 3: and asset class. But I think it's going to grow
• 9:05
  Speaker 3: pretty significantly and the majority of the dollars are going
• 9:08
  Speaker 3: to come out of trad FI.
• 9:10
  Speaker 2: You know.
• 9:10
  Speaker 3: I think the reason Sailor's so excited about it right
• 9:12
  Speaker 3: now is because DeFi capital is typically more you know,
• 9:17
  Speaker 3: has a much higher risk appetite.
• 9:20
  Speaker 2: This is I would say a.
• 9:21
  Speaker 3: Short term pool for him where he can get you know,
• 9:25
  Speaker 3: let's call it a few billion of additional capital, maybe
• 9:28
  Speaker 3: it's like ten billion of additional capital over the next
• 9:30
  Speaker 3: you know, twelve months. But beyond that, he's really I think,
• 9:33
  Speaker 3: going to tap out the DeFi market, and so he's
• 9:35
  Speaker 3: going to need more of that trad FI capital to
• 9:37
  Speaker 3: come in. But these guys want to see an instrument
• 9:39
  Speaker 3: in the market for you know, quarters years even beyond
• 9:44
  Speaker 3: that before they really pile in, So he just kind
• 9:46
  Speaker 3: of needs to build that time.
• 9:48
  Speaker 2: And so in the meantime he can.
• 9:49
  Speaker 3: Rely on the DeFi capital to continue to grow well.
• 9:52
  Speaker 1: And if you look at the side of things, I
• 9:55
  Speaker 1: mean can kind of see the growth is pretty accelerated here.
• 9:58
  Speaker 1: So I don't know, man, this looks it's very intriguing
• 10:01
  Speaker 1: to me in terms of where this could go. But
• 10:03
  Speaker 1: I agree with you. Granted, once we get institutional capital
• 10:07
  Speaker 1: or even trad you know, traditional finance coming into these
• 10:10
  Speaker 1: I guess the question is is when would the appetite
• 10:14
  Speaker 1: take on Because some investors who are maybe seeing stretch
• 10:18
  Speaker 1: for the first time, the ones that understand it, I
• 10:20
  Speaker 1: think are the ones that probably understand DeFi a lot,
• 10:24
  Speaker 1: and that's why we're seeing so much growth here right now.
• 10:26
  Speaker 2: So if Stretch moves to a daily dividend.
• 10:29
  Speaker 3: I think that'll be a real interesting kind of wake
• 10:32
  Speaker 3: up call because again it's like bitcoin or otherwise, it's
• 10:36
  Speaker 3: very unique to have something, an instrument that pays a
• 10:38
  Speaker 3: daily dividend. It's never been seen anywhere else in finance before.
• 10:40
  Speaker 3: I don't know, maybe look at like money market funds
• 10:42
  Speaker 3: or something. So I think that'll catch some raise, some attention.
• 10:45
  Speaker 3: And then I think, Kennidy, you just kind of need
• 10:47
  Speaker 3: the bitcoin bowl market to come back, and you need
• 10:49
  Speaker 3: you know, global eyes on the space, and when they
• 10:53
  Speaker 3: start looking at the space, they'll see Stretch and you'll
• 10:56
  Speaker 3: start to see more adoption. So, you know, for better
• 10:58
  Speaker 3: or worse, I think bitcoin price is you know, kind
• 11:02
  Speaker 3: of needed to go up.
• 11:02
  Speaker 2: Here.
• 11:03
  Speaker 1: You're you're mentioning ten billion in the DeFi Marcus, that
• 11:06
  Speaker 1: would double stretches, you know, position right now.
• 11:09
  Speaker 3: Slowly and then kind of all at once, Oh okay, right,
• 11:12
  Speaker 3: all right over the next let's call it twelve months.
• 11:15
  Speaker 2: Maybe we can get ten billion in on the.
• 11:17
  Speaker 3: DeFi side, but on the trad file side, that probably
• 11:20
  Speaker 3: means Stretch has raised another forty billion maybe outside so
• 11:25
  Speaker 3: maybe it's like a total of fifty billion, and then
• 11:28
  Speaker 3: at that point, you know, I think traditional financially starts
• 11:30
  Speaker 3: to wake up. You know, once it crosses a fifty billion,
• 11:33
  Speaker 3: maybe it's a hundred billion mark, then it becomes a
• 11:36
  Speaker 3: really you know, an interesting instrument.
• 11:38
  Speaker 2: Right now at ten billion, it's interesting.
• 11:40
  Speaker 3: But you saw what Bitcoin had to get to before
• 11:43
  Speaker 3: the sovereign started to get interested, giant corporate started to
• 11:46
  Speaker 3: get interested. So you need kind of some of that
• 11:48
  Speaker 3: to happen here, and that's just going to take some time.
• 11:51
  Speaker 1: The accelerant. So you've got this breakdown here of what
• 11:56
  Speaker 1: they call what you guys call senior tranch, which is
• 11:59
  Speaker 1: a protect yield, and then the junior trench, which is
• 12:02
  Speaker 1: a higher risk premium. Explain these two on my yield
• 12:07
  Speaker 1: strategy with what you guys are doing.
• 12:08
  Speaker 2: So to be clear, this is a separate protocol.
• 12:11
  Speaker 3: Royko one of our partners, but they are you know,
• 12:14
  Speaker 3: entirely separate, and they can do this with other assets
• 12:16
  Speaker 3: and they have done this with other assets. But the
• 12:18
  Speaker 3: general idea behind these trenching protocols and Royco in particular,
• 12:23
  Speaker 3: is that you take a yield bearing asset and you
• 12:26
  Speaker 3: split it up into two assets, and you have a
• 12:29
  Speaker 3: senior trench, and you have a junior trunch. Okay, and
• 12:33
  Speaker 3: the senior tronch is going to give up some of
• 12:37
  Speaker 3: the yield. Let's just say the yield is ten percent,
• 12:40
  Speaker 3: and the senior trench, let's say the senior trench is
• 12:43
  Speaker 3: going to be ninety percent of the kind of split.
• 12:47
  Speaker 3: So you'll take one dollar and you do ninety cents
• 12:51
  Speaker 3: into senior tronch, ten cents into junior. But then the
• 12:53
  Speaker 3: senior tronch, let's say rather than getting ten percent yield,
• 12:58
  Speaker 3: ninety cents worth of yield, let's say they cut that
• 13:01
  Speaker 3: in half. I'm going to use some exaggerate numbers here,
• 13:03
  Speaker 3: Let's say they cut that in half. So now the
• 13:05
  Speaker 3: senior tranch is only getting five percent. So on their
• 13:09
  Speaker 3: ninety cents, they're now only getting you know, that would
• 13:12
  Speaker 3: be like four and a half cents.
• 13:14
  Speaker 2: So then you say, okay, well what happens to.
• 13:16
  Speaker 3: The other you know, I guess that would be five
• 13:18
  Speaker 3: and a half cents of yield that comes off the
• 13:21
  Speaker 3: kind of overall bucket. Well, that would all go to
• 13:24
  Speaker 3: the junior trunch. So now, if you're paying attention, the
• 13:26
  Speaker 3: junior trench is getting five and a half cents of yield,
• 13:30
  Speaker 3: but there was only ten cents put in there, and
• 13:32
  Speaker 3: so that's a fifty five percent yield. So the senior
• 13:36
  Speaker 3: trunch is getting five, the junior is getting fifty five,
• 13:40
  Speaker 3: all right, But what happens is if the underlying goes down,
• 13:45
  Speaker 3: the junior is first completely consumed and deleted. And so
• 13:50
  Speaker 3: if you're sitting in that ten percent junior position, then
• 13:55
  Speaker 3: you need the asset to go down by more than
• 13:58
  Speaker 3: ten percent before the senior start.
• 14:00
  Speaker 2: It's getting impacted. And so these different these trunching.
• 14:03
  Speaker 3: Protocols can be set up in different ways ten percent,
• 14:05
  Speaker 3: fifteen percent, twenty percent, whatever split, and then different yield
• 14:11
  Speaker 3: sharing as well. And the idea is for some investors
• 14:14
  Speaker 3: that like the product, they like the you know, apy
• 14:18
  Speaker 3: USD product, but they're like, hey, stretch my dpeg a
• 14:21
  Speaker 3: little bit. You know, early on in the interview I
• 14:23
  Speaker 3: talked about, hey, it's not exactly a stable coin, right,
• 14:25
  Speaker 3: it's more of a yield coin. It can fluctuate a
• 14:27
  Speaker 3: little bit. If you say, hey, I don't want any
• 14:29
  Speaker 3: of that fluctuation. I think Stretch is going to depeg some.
• 14:32
  Speaker 3: I think it's going to go down five percent or
• 14:34
  Speaker 3: ten percent too scary.
• 14:36
  Speaker 2: I don't want to lose my money.
• 14:38
  Speaker 3: You could say, Okay, well I'm going to go into
• 14:39
  Speaker 3: the senior trunch and I'll give up some of my yield,
• 14:42
  Speaker 3: but I'm going to have that protection built in there.
• 14:44
  Speaker 2: And so just another way for folks.
• 14:46
  Speaker 3: To get access to the product, get access to the yield,
• 14:49
  Speaker 3: but express a different kind of risk return profile and
• 14:53
  Speaker 3: view than they, you know, would on the underlying.
• 14:56
  Speaker 1: Okay, that's a good explanation, I think. Okay, so let's
• 14:59
  Speaker 1: talk a little bit about lending and potentially looping. I'm
• 15:02
  Speaker 1: looking at your lending page here, and this is just
• 15:06
  Speaker 1: showing back to your point. This is on Morpho. I
• 15:08
  Speaker 1: think let me kind of zoom in on that so
• 15:10
  Speaker 1: people can kind of see it there that's on Morpho.
• 15:14
  Speaker 1: Explain the strategies that people might use on this.
• 15:17
  Speaker 3: So there's a couple of different things you can do here.
• 15:18
  Speaker 3: We've got two different types of markets. We've got markets
• 15:21
  Speaker 3: where you could lend APX USD and then there's markets
• 15:24
  Speaker 3: where you can land USDC. So the markets where you
• 15:27
  Speaker 3: can land USDC, those are nice and easy for folks
• 15:30
  Speaker 3: that don't want to leave USDC. Maybe there's a vault
• 15:33
  Speaker 3: that already has USDC, they can just lend in.
• 15:36
  Speaker 2: It's nice, nice and easy.
• 15:37
  Speaker 3: But for people that want to take the other side
• 15:40
  Speaker 3: and want to borrow USDC, there is some liquidation risk, right,
• 15:44
  Speaker 3: so stretch could drop the price of apy USD can
• 15:49
  Speaker 3: go below one, and then if it goes far enough,
• 15:51
  Speaker 3: you could be liquidated. So some folks don't want to
• 15:54
  Speaker 3: take that risk, and so they would rather borrow apx
• 15:57
  Speaker 3: USD and apx USD shares the same collateral basket as
• 16:02
  Speaker 3: APYUSD and so therefore basically can't get liquidated. I mean,
• 16:06
  Speaker 3: you could have a liquidation due to an interest rate differential,
• 16:09
  Speaker 3: but that's a slow liquidation over time, and you should
• 16:12
  Speaker 3: have many many days, weeks, months even to kind of
• 16:16
  Speaker 3: unwind the position if you want it. And so if
• 16:19
  Speaker 3: you're looping, the safest way to do it is to
• 16:22
  Speaker 3: borrow apx USD to then loop more apy USD or
• 16:27
  Speaker 3: pt you know, one of the pts there. So what
• 16:29
  Speaker 3: that means is people that are doing the APX to
• 16:32
  Speaker 3: APY loop are going to take a higher LTV most
• 16:35
  Speaker 3: likely because there's no real liquidation risk, it's just the
• 16:37
  Speaker 3: indestrate differential. And so what that should mean is that
• 16:40
  Speaker 3: for people for lenders on the other side, they can
• 16:43
  Speaker 3: make more money lending the apx USD than they can
• 16:48
  Speaker 3: lending the USDC, and that would make sense because they're
• 16:53
  Speaker 3: taking on a little bit of that deepeg risk the
• 16:56
  Speaker 3: apx USD. And so you know, like you highlighted there
• 16:59
  Speaker 3: on the side, right now, you can lend apx USD
• 17:02
  Speaker 3: against one of the markets and make sixteen percent. That's
• 17:04
  Speaker 3: actually more than you can make just holding APY the
• 17:08
  Speaker 3: staked version. So this market's a little upside down and
• 17:10
  Speaker 3: like people can make kind of free money here, but
• 17:13
  Speaker 3: that's not always the case, right and probably long term,
• 17:15
  Speaker 3: steady state, the yield lending apx USD is probably going
• 17:19
  Speaker 3: to be a little below the yield from just staking it,
• 17:23
  Speaker 3: but they'll probably be somewhat similar. And so there's a
• 17:25
  Speaker 3: bunch of different ways to play this. Hedged unhedged. People
• 17:30
  Speaker 3: that really think stretch is going to depag and don't
• 17:33
  Speaker 3: want to take that underlying risk. There's actually many different
• 17:36
  Speaker 3: ways that you can play this and still capture yield.
• 17:40
  Speaker 3: And in fact, if you want, you can just borrow
• 17:43
  Speaker 3: apx USD and sell it and you could go straight
• 17:47
  Speaker 3: short the whole basket, so to anyone's like, this is
• 17:50
  Speaker 3: a dumb idea, this is a shitcoin. It's all going
• 17:52
  Speaker 3: to break.
• 17:53
  Speaker 2: Awesome. You can come in and short it.
• 17:55
  Speaker 3: We would appreciate that because that's yield that flows back
• 17:58
  Speaker 3: into the system for the lenders.
• 17:59
  Speaker 2: But you can express a view, which is pretty.
• 18:02
  Speaker 1: Cool, and you can kind of see we've drawn these
• 18:04
  Speaker 1: green lines in here. Each one of these are distribution dates.
• 18:08
  Speaker 1: Just had one thus Friday, we saw them. What typically
• 18:11
  Speaker 1: happens because people, you know, sell into those market dips
• 18:15
  Speaker 1: slightly again bitcoining down slightly. But the point is is
• 18:18
  Speaker 1: market dip, when is the best time to buy stretch?
• 18:22
  Speaker 1: Do you think?
• 18:22
  Speaker 3: It's a great question. So there's a couple of different
• 18:24
  Speaker 3: ways to play this. You can buy the day before
• 18:28
  Speaker 3: x dividend and you'll be guaranteed to get you know,
• 18:32
  Speaker 3: let's call it one percent roughly, right, If the dividend
• 18:34
  Speaker 3: was twelve percent, then you'd be getting you know, one percent,
• 18:36
  Speaker 3: And that's one way to play it. And then you
• 18:39
  Speaker 3: just basically have to hang on until potentially all the
• 18:43
  Speaker 3: way to the end of the next month, you know,
• 18:45
  Speaker 3: potentially for thirty days for the price to like recover.
• 18:48
  Speaker 3: So that's one way to do it, and that's kind
• 18:50
  Speaker 3: of the nice set and forget.
• 18:51
  Speaker 2: It way to do it.
• 18:52
  Speaker 3: The other way to do it is you can wait
• 18:54
  Speaker 3: to buy until X dividend. So you're going to skip
• 18:57
  Speaker 3: out on the dividend, but you're going to potentially be
• 19:01
  Speaker 3: buying at a discount.
• 19:02
  Speaker 2: And so if you'd bought.
• 19:03
  Speaker 3: On Friday or on a daylight today, actually you can
• 19:06
  Speaker 3: get a little bit more of a discount than the
• 19:08
  Speaker 3: dividend would suggest. So right now it's trading at you know,
• 19:12
  Speaker 3: if you bought today, you could generate you know, a
• 19:16
  Speaker 3: little more than a one percent yield by holding for
• 19:19
  Speaker 3: the next thirty days. And so sometimes it drops more
• 19:25
  Speaker 3: than the dividend amount, and so you would be better
• 19:28
  Speaker 3: off waiting and then just buying the dip.
• 19:30
  Speaker 2: And then sometimes it drops less.
• 19:32
  Speaker 3: At which point you would have been better off just
• 19:35
  Speaker 3: buying the day before X dividend.
• 19:36
  Speaker 2: So there's kind of two different ways to play it.
• 19:38
  Speaker 3: And the goal though, over time is as they shorten
• 19:42
  Speaker 3: the dividend, they go to buimonthly and then hopefully daily.
• 19:44
  Speaker 2: Some of these games kind of go away and it.
• 19:46
  Speaker 3: Just becomes a more friendly product where like you can
• 19:49
  Speaker 3: just go to your brokerage account, buy it any day
• 19:51
  Speaker 3: of the week and you get the same returns.
• 19:53
  Speaker 2: That's kind of the end goal.
• 19:55
  Speaker 1: I'm looking here at the x stocks points that you
• 19:59
  Speaker 1: earn on the on the Apex reserve, and then pips issued.
• 20:05
  Speaker 1: Explain how this works.
• 20:07
  Speaker 3: So pips are our point system. So we are offering
• 20:11
  Speaker 3: points and these at some point will be convertible into
• 20:15
  Speaker 3: governance tokens the ap y x token, which is you know,
• 20:19
  Speaker 3: going to be the standard governance token for the project.
• 20:22
  Speaker 3: But then through our relationship with x stocks. You know,
• 20:26
  Speaker 3: an x stox is owned by Kraken and basically the
• 20:28
  Speaker 3: entire team at apex is x cracking, so we've got
• 20:31
  Speaker 3: great relationship there. We are holding a decent chunk of
• 20:34
  Speaker 3: our balance sheet in st r c x, so the
• 20:38
  Speaker 3: x stocs tokenized version of stretch and so they are
• 20:44
  Speaker 3: also having their own points program. They offer points, and
• 20:48
  Speaker 3: so we are the largest points earner for x stocs,
• 20:53
  Speaker 3: and just wanting to highlight to the community that you know,
• 20:56
  Speaker 3: we have all these points and we will you know,
• 20:59
  Speaker 3: win the whenever the x stocs air drop happens, we'll
• 21:02
  Speaker 3: be getting a bunch of tokens and that'll flow through
• 21:06
  Speaker 3: into the reserve. We can potentially pay it out to
• 21:08
  Speaker 3: governance tokenholders, or pay it out as yield. There's a
• 21:11
  Speaker 3: bunch of different things we could do with it. But
• 21:12
  Speaker 3: this is like an extra asset. We've not accounted for
• 21:15
  Speaker 3: it yet in the reserve just because it's points.
• 21:17
  Speaker 2: But like we're showing where we are.
• 21:19
  Speaker 1: Yeah, all right, So you look at ONO versus X stocks,
• 21:24
  Speaker 1: who do you think wins retail, especially to what's happening
• 21:27
  Speaker 1: in the market right now.
• 21:28
  Speaker 3: Sure, well, you know I'm speaking a little biased here,
• 21:31
  Speaker 3: but we're certainly bulls on x stocs. You know, we
• 21:34
  Speaker 3: have a partnership with them on the dfdv side. Our
• 21:37
  Speaker 3: stock is tokenized, so dfdv X is out there in
• 21:41
  Speaker 3: the market, So we're certainly bullish on x stocs. I
• 21:44
  Speaker 3: do think there's probably room for multiple players, just because
• 21:49
  Speaker 3: there's so many real world assets out there.
• 21:52
  Speaker 2: Now.
• 21:52
  Speaker 3: Do I think there's going to be two versions of
• 21:54
  Speaker 3: stretch dominating the market? No? I actually think there's just
• 21:57
  Speaker 3: going to be one version of stretch and it's you know,
• 22:00
  Speaker 3: it's going to be Stretch X. But there's so many
• 22:02
  Speaker 3: different instruments, right there's common stock, there's preferred stock, there's bonds,
• 22:07
  Speaker 3: there's funds, there's all sorts of things that need to
• 22:10
  Speaker 3: be tokenized. And so what I imagine is going to happen
• 22:13
  Speaker 3: is ONDO and X stocks are going to carve out
• 22:15
  Speaker 3: their own niches. And you know, if you want to
• 22:19
  Speaker 3: trade Tesla, maybe it's on X stocks. But if you
• 22:21
  Speaker 3: want to trade you know, a treasury bond fund, then
• 22:24
  Speaker 3: maybe it's on ONTO. Again, I'm just making things up here,
• 22:27
  Speaker 3: but yeah, I think you're going to see some bifurcation
• 22:30
  Speaker 3: because I do think one or the other is going
• 22:32
  Speaker 3: to win certain asset categories and dominate because it just
• 22:36
  Speaker 3: makes sense.
• 22:36
  Speaker 2: Right.
• 22:36
  Speaker 3: They're going to have liquidity kind of concentrate around one standard,
• 22:40
  Speaker 3: if you will.
• 22:41
  Speaker 1: Well, and we have seen some of that, you know
• 22:43
  Speaker 1: in TraFi that has gone it. You get specialists that
• 22:46
  Speaker 1: you know, focus in on certain types of instruments versus others.
• 22:49
  Speaker 1: So you might be right there. As far as clarity
• 22:53
  Speaker 1: and the clarity act, what we'll see in this next
• 22:55
  Speaker 1: generation of the market structure. How will this affect you guys?
• 22:59
  Speaker 1: What what does this enable for what APEX is doing?
• 23:03
  Speaker 3: Yeah, so I'd say for our business, clarity really just
• 23:07
  Speaker 3: add some clarity kind of codifies a number of the
• 23:10
  Speaker 3: things that the SEC and the CFTC has already come
• 23:13
  Speaker 3: out with, and so it just makes it longer lasting
• 23:17
  Speaker 3: and rather than a administrative rule which can be overturned,
• 23:20
  Speaker 3: you know, with the next administration, this kind of codifies
• 23:23
  Speaker 3: it into law. It doesn't immediately enable us in any way,
• 23:27
  Speaker 3: but I think longer term, as some of the rulemaking
• 23:29
  Speaker 3: comes out, it will become a long term catalyst for
• 23:33
  Speaker 3: our business because it just provides that clarity, that stability
• 23:36
  Speaker 3: for us to build larger and larger and for larger
• 23:39
  Speaker 3: entities and in sotitutions to come in and participate because
• 23:42
  Speaker 3: they do have that clarity that like, hey, here's the
• 23:44
  Speaker 3: rules of the road, and it's not just going to
• 23:46
  Speaker 3: be completely changed with the next administration. So I think
• 23:50
  Speaker 3: it's a good long term tailwind, but immediate catalyst, you know,
• 23:55
  Speaker 3: not really there you go.
• 23:56
  Speaker 1: Hey Parker, thanks for coming in today, because this has
• 23:58
  Speaker 1: given me even some great education I think around what
• 24:02
  Speaker 1: this market is going to look like in the future,
• 24:05
  Speaker 1: and it's intriguing because you know, obviously as it centers
• 24:08
  Speaker 1: around Bitcoin, with what strategy has been able to do,
• 24:11
  Speaker 1: we watch it really closely. So thanks for coming in today.
• 24:13
  Speaker 1: We appreciate it.
• 24:14
  Speaker 2: Thanks for having me.
• 24:21
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• 24:24
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• 24:28
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