Latest / The Starting Block / Unpacking Bitget’s $350M hack, DoubleZero ships real-time Hyperliquid data service

Transcript

Unpacking Bitget’s $350M hack, DoubleZero ships real-time Hyperliquid data service · The Starting Block

• 0:07
  Welcome back to the starting block.
• 0:08
  Happy Friday to you.
• 0:09
  Wherever you're joining us around
• 0:11
  the world, we've got a big show
• 0:12
  today. Really looking forward to it.
• 0:14
  Some big news to cover overnight
• 0:17
  with the massive BitGear
• 0:19
  $350 million breach.
• 0:21
  We'll be talking about that in the
• 0:23
  upcoming block briefing, which is
• 0:24
  our breakdown of the top news you
• 0:26
  need to know in the last 24 hours.
• 0:27
  And then it's gonna be a great
• 0:28
  pleasure to welcome back Austin
• 0:29
  Federer, founder of
• 0:31
  Double Zero, to talk to us about
• 0:33
  the launch of real-time
• 0:35
  data on hyperliquid.
• 0:37
  We've got him coming up in the hot
• 0:39
  seat. So that's what you can expect
• 0:40
  in today's show.
• 0:41
  Just a bit of housekeeping before we
• 0:43
  get into the flow of things.
• 0:44
  If you missed our broadcast last
• 0:46
  week, we were in New York City Live,
• 0:48
  broadcasting from Avalanche Summit.
• 0:50
  We had some really great
• 0:51
  conversations with big names in the
• 0:52
  industry, including Mr. Wonderful
• 0:54
  himself, Kevin O'Leary, had
• 0:56
  a great conversation with him about
• 0:57
  Clarity, his investment thesis
• 0:59
  on infrastructure in the Industry.
• 1:01
  He also gave a pretty candid.
• 1:04
  Take on his history with
• 1:06
  SBF and FTX, which,
• 1:08
  yeah, I thought was really great
• 1:10
  to hear him talk so openly about
• 1:12
  that history and what he'd
• 1:14
  experienced.
• 1:15
  And we also had some other
• 1:17
  shakers in the industry,
• 1:18
  two former heads of the CFTC
• 1:21
  in Caroline Pham,
• 1:23
  as well as former Commissioner
• 1:25
  Chris Giancarlo.
• 1:27
  So if you missed out on any of those
• 1:28
  conversations, go to the block's
• 1:30
  YouTube channel. First things first,
• 1:32
  subscribe if you don't already.
• 1:33
  And then click on the live segment
• 1:35
  and you can go back and watch those
• 1:36
  live broadcasts.
• 1:37
  We were live roughly three to four
• 1:39
  hours on both days and all
• 1:41
  of those conversations can be find
• 1:42
  there. Alternatively, if you wanna
• 1:44
  go and look for those interviews
• 1:45
  themselves, I posted them on my
• 1:47
  personal social media at Gazza
• 1:48
  underscore Jenks right here on
• 1:50
  X if you're watching.
• 1:51
  You can go and check out our
• 1:53
  interview with Chris Giancarlo, our
• 1:54
  interview with Kevin O'Leary
• 1:56
  as well as Caroline Pham, I've
• 1:58
  been uploading those and I will be
• 2:00
  uploading a few more full length
• 2:01
  interviews.
• 2:02
  Over the next few days if you wanna
• 2:04
  go and catch those conversations.
• 2:05
  And of course, there's a wealth of
• 2:07
  content that we have on the YouTube
• 2:09
  channel as well. That's the Block
• 2:10
  Co. On YouTube.
• 2:11
  Please go and subscribe.
• 2:12
  And if you're joining us here today
• 2:14
  on X, please like and retweet
• 2:16
  the broadcast so we can get more
• 2:17
  people joining us for today's show
• 2:19
  and set a reminder on your clock.
• 2:20
  We broadcast every day at 8.30
• 2:22
  a.m. Eastern time.
• 2:23
  You can do the rest of the
• 2:25
  time zone conversions.
• 2:26
  We're gonna jump straight into the
• 2:27
  Block briefing to give you
• 2:29
  the top stories you need to know.
• 2:32
  Our first headline, a fast moving
• 2:34
  story out of BitGet, which has
• 2:36
  grabbed headlines across the world
• 2:37
  in the last 24 hours.
• 2:39
  The exchange confirmed a $351.6
• 2:42
  million breach after an
• 2:44
  attacker compromised a critical
• 2:46
  backend system.
• 2:47
  It started when on-chain sleuths
• 2:49
  spotted hundreds of millions in
• 2:51
  Ether, USDT, USDC,
• 2:53
  AVAX and BMB draining from
• 2:55
  BitGet labeled hot and cold wallets
• 2:57
  into single fresh addresses
• 2:59
  or a single.
• 3:00
  A fresh address that immediately
• 3:02
  began swapping those assets.
• 3:04
  A big shout out to the block's
• 3:06
  internal research and data teams
• 3:08
  who picked this up in real time as
• 3:09
  well and were sharing information as
• 3:11
  we went. We were our own source,
• 3:12
  which I think is a big
• 3:14
  green check of approval for
• 3:17
  the quality of the team that we have
• 3:18
  here at the block.
• 3:20
  BitGet says the attacker did not get
• 3:21
  its private keys, but withdrawals
• 3:23
  remain suspended while it
• 3:25
  investigates the situation.
• 3:26
  And of course, this is one of the
• 3:28
  larger exchange security incidents
• 3:29
  of the year.
• 3:31
  And a reminder that back end
• 3:32
  systems can be just as vulnerable as
• 3:35
  the keys themselves.
• 3:36
  Of course, there's still pales in
• 3:38
  comparison to the Bybit hack of
• 3:40
  last year, although $350 million
• 3:42
  is certainly not a number to scoff
• 3:44
  at. We'll keep you updated on that.
• 3:46
  And if you are looking for more news
• 3:47
  and information, you can check out
• 3:48
  the block.co website for more
• 3:50
  information on this story.
• 3:52
  Our next headline, the Federal
• 3:53
  Reserve is tightening the screws on
• 3:55
  stable coins. On Thursday, the
• 3:57
  central bank proposed new rules and
• 3:59
  to the genius act.
• 4:00
  The federal stablecoin law President
• 4:02
  Trump signed last year.
• 4:03
  Issues would have to fully back
• 4:04
  their tokens with short-term
• 4:06
  treasury bills or other highly
• 4:07
  liquid assets and meet standardized
• 4:09
  capital requirements.
• 4:11
  It's another concrete step toward
• 4:12
  building, putting federal guardrails
• 4:15
  around dollar pegs tokens.
• 4:17
  Not everyone's on board though.
• 4:18
  Fed Governor Michael Barr flagged
• 4:20
  concerns about money laundering
• 4:21
  oversight.
• 4:22
  The takeaway here is that Washington
• 4:23
  is moving from writing stablecoin
• 4:25
  rule book to actually
• 4:27
  enforcing it.
• 4:29
  Then our next story, Kelpdow is
• 4:31
  taking Layer Zero to court.
• 4:33
  Evercrest Technologies, the company
• 4:34
  behind KelpDow filed a
• 4:36
  civil claim in the Supreme Court of
• 4:38
  British Columbia against Layer Zero
• 4:40
  Labs and co-founder Brian
• 4:42
  Pellegrino at the center,
• 4:44
  April's exploit of 100,000,
• 4:48
  116,000 rather,
• 4:50
  RS ETH worth around $292
• 4:52
  million at the time.
• 4:54
  Evercress alleges negligence,
• 4:56
  negligent misrepresentation.
• 4:58
  And defamation claiming Layer Zero
• 5:00
  reviewed and endorsed the
• 5:02
  one-of-one verification setup that
• 5:04
  got exploited.
• 5:06
  In its word, quote, the exploit was
• 5:08
  not a failure of CalpDAR systems,
• 5:10
  it was a failure of Layer Zero's own
• 5:12
  security infrastructure.
• 5:14
  Moving on to our next story, New
• 5:15
  York wants Polymarket out.
• 5:17
  State Attorney General Letitia James
• 5:19
  and Governor Cathy Hoshel
• 5:22
  sued the prediction market platform
• 5:23
  on Thursday.
• 5:25
  Accusing it of running an illegal
• 5:26
  gambling operation and asking a
• 5:28
  court to block it from the state
• 5:30
  entirely.
• 5:31
  James said Polymarket is skirting
• 5:32
  New York laws and targeting the
• 5:34
  most vulnerable, while Hoshel
• 5:36
  warned it's putting underage New
• 5:38
  Yorkers at risk.
• 5:39
  It's New York's latest move to rein
• 5:41
  in prediction markets which have
• 5:42
  exploded in popularity.
• 5:44
  Polymarket now faces a direct
• 5:46
  challenge in one of the country's
• 5:48
  biggest states.
• 5:50
  Then Cathie Wood's ARK Invest is
• 5:51
  going on chain.
• 5:52
  The firm is tokenizing its ARK
• 5:54
  Venture Fund, the ticker ARKVX,
• 5:57
  through Securitize, the first ARK
• 5:59
  fund to make the jump.
• 6:00
  This is a $1.3 billion actively
• 6:02
  managed fund with stakes in
• 6:04
  some of the biggest names in tech,
• 6:06
  OpenAI, Anthropic, Stripe,
• 6:08
  and Databricks.
• 6:09
  The tokenized version will be
• 6:10
  available to eligible investors on
• 6:12
  Ethereum while Securatize
• 6:14
  handling issuance, with rather,
• 6:16
  Securitas handling issuitance and
• 6:18
  access. It's not changing the
• 6:19
  portfolio. Just the rails that it
• 6:21
  runs on.
• 6:22
  Wood said tokenizing the fund puts
• 6:24
  ARK's conviction in the revolution
• 6:25
  of capital markets into practice.
• 6:27
  It's another marquee name betting on
• 6:30
  tokenization on chain.
• 6:32
  And JP Morgan has a bullish signal
• 6:33
  for miners. The bank's analyst says
• 6:36
  Bitcoin's recent move above its
• 6:37
  estimated production cost, around
• 6:39
  $85,000 could ease selling
• 6:41
  pressure across the mining sector.
• 6:43
  Bitcoin had 280 days below
• 6:45
  that level before pushing above
• 6:47
  it in this week's rally.
• 6:49
  The analyst led by Nikolaos
• 6:51
  Panetsourzoglou note
• 6:53
  that production cost has
• 6:54
  historically acted as a soft floor
• 6:56
  for the price.
• 6:57
  When Bitcoin trades below it, miners
• 6:58
  are often forced to sell to cover
• 7:00
  their costs.
• 7:01
  The catch here has already slipped
• 7:02
  back slightly, trading around
• 7:03
  $84,100.
• 7:05
  So the relief only holds if
• 7:07
  it stays above the line.
• 7:09
  Our final story of the block
• 7:11
  briefing.
• 7:12
  Ondo Finance is teaming up with the
• 7:13
  world's biggest asset manager.
• 7:15
  Yesterday, Ondo launched three
• 7:17
  on-chain portfolio products built on
• 7:19
  model strategies developed by
• 7:20
  BlackRock, covering income,
• 7:22
  diversified growth, and high growth.
• 7:24
  They're branded as Ondo Intelligence
• 7:26
  Portfolios, available to eligible
• 7:28
  investors outside the US.
• 7:30
  Instead of juggling a basket of
• 7:31
  positions, investors mentor redeem a
• 7:33
  single token with holdings, weights,
• 7:35
  and every rebalance visible
• 7:37
  on chain.
• 7:38
  Plenty of RWA tokenization
• 7:40
  news coming out in the last 24
• 7:42
  hours. That's it for the block
• 7:43
  briefing. If you're interested in
• 7:45
  more of those stories, you can go
• 7:47
  and check out the Blocks website
• 7:49
  that's at the BlockCo or
• 7:51
  follow the Blockco on Twitter.
• 7:54
  We are posting all of this content
• 7:55
  in real time, thanks to
• 7:57
  our hardworking news team and you
• 7:58
  can keep up to date with the latest
• 8:00
  news in the cryptocurrency industry
• 8:02
  by giving us a follow there.
• 8:05
  We're gonna move on swiftly to the
• 8:06
  hot seat. It's a great pleasure to
• 8:08
  welcome back to the show, Austin
• 8:09
  Fadera, he was with us
• 8:11
  just a few weeks ago.
• 8:12
  And again, another big announcement,
• 8:14
  Double Zero launching real-time
• 8:15
  hyperliquid data
• 8:18
  on Double Zero Edge.
• 8:19
  That's what we're gonna be talking
• 8:20
  about today.
• 8:21
  First things first, Austin, welcome
• 8:22
  back.
• 8:23
  Hey, thanks for having me back.
• 8:25
  Talk to us about this news.
• 8:27
  Just a few weeks ago, you were
• 8:29
  announcing a big launch with
• 8:31
  a couple of other big names in the
• 8:32
  industry. Now you've got hyperliqua,
• 8:34
  arguably the biggest perp decks out
• 8:36
  there.
• 8:37
  Tell us what our listeners need to
• 8:38
  know.
• 8:39
  Yeah, certainly.
• 8:40
  So this has been a
• 8:42
  long expansion of kind of one
• 8:44
  of the visions of the double zero
• 8:45
  network. So at its core, this is
• 8:47
  a blockchain protocol that runs a
• 8:49
  large global permissionless fiber
• 8:51
  network that's really designed to
• 8:53
  accelerate all types of new finance
• 8:55
  systems and really anything anyone
• 8:57
  wants to build on it above what's
• 8:59
  possible on the public internet.
• 9:01
  And you know, every large company in
• 9:03
  the world runs on private dedicated
• 9:05
  networks, They don't really run on
• 9:06
  the public Internet.
• 9:07
  You might think of Facebook as a
• 9:09
  public internet company for a lot of
• 9:10
  reasonable reasons.
• 9:11
  They're actually the world's largest
• 9:12
  operator of private fiber networks
• 9:15
  because the public internet just
• 9:16
  isn't fast enough for what they want
• 9:18
  to do. So one of the big spaces
• 9:20
  in traditional finance, it's about a
• 9:22
  $50 billion industry,
• 9:24
  is high-speed market data.
• 9:26
  And that high-speed market data is
• 9:28
  all distributed over custom-built,
• 9:30
  high-performance infrastructure.
• 9:32
  That's never really been available
• 9:33
  in the new finance space, whether
• 9:35
  it's on blockchains where you don't
• 9:37
  necessarily want to trust a single
• 9:39
  party. And so a blockchain protocol
• 9:41
  like double zero is a really good
• 9:42
  solution there.
• 9:43
  Or it's that, you know, all of these
• 9:45
  exchanges, whether it's calcium,
• 9:47
  which we announced, uh, you know,
• 9:49
  last step last month, or whether it
• 9:51
  is, you know, centralized crypto
• 9:52
  exchanges like finance, they
• 9:54
  all run on basically web to
• 9:55
  infrastructure and the cloud
• 9:57
  is an incredible place to build an
• 9:58
  application, it's not a great place
• 10:00
  to build a. Financial application.
• 10:02
  And so there's a lot of penalties
• 10:03
  that you pay in sourcing
• 10:06
  data. And so our whole thing is
• 10:07
  that we want to make accessing all
• 10:09
  of these new financial markets as
• 10:11
  easy as traditional financial
• 10:13
  markets are from a data
• 10:14
  infrastructure perspective.
• 10:16
  If you want, you know, up to the
• 10:18
  microsecond data from NYSE and
• 10:20
  NASDAQ, there's a place you can go
• 10:22
  and get that. And yes, it costs a
• 10:23
  lot of money and you've got to run a
• 10:24
  server in New Jersey, but it's
• 10:26
  available to That doesn't
• 10:28
  exist in Web3
• 10:30
  or new finance today at all.
• 10:32
  So when we look at something like
• 10:33
  Hyperliquid, right, they've got
• 10:34
  lightning in a bottle.
• 10:35
  This is an incredible team that's
• 10:37
  built a product in an exchange and
• 10:39
  a layer one blockchain that's really
• 10:40
  caught on and gotten sort of
• 10:42
  everybody's attention.
• 10:43
  Pulling data from that system is
• 10:45
  still quite difficult.
• 10:46
  Even if you are a professional
• 10:47
  market maker and you're in all the
• 10:49
  sort of right channels and the right
• 10:50
  access programs, this
• 10:53
  is still a network that's run by,
• 10:55
  you know, 27.
• 10:57
  Validator sets, and those are all
• 10:59
  running largely in the cloud in
• 11:01
  Tokyo.
• 11:02
  And getting data out of that system
• 11:04
  is actually quite difficult.
• 11:05
  And so what we offer for traders is
• 11:07
  the same type of what's called like
• 11:09
  a protocol native binary feed,
• 11:11
  the same wire format
• 11:13
  that you would expect if you were
• 11:15
  trading in a traditional exchange.
• 11:18
  And So double zero will stream to
• 11:19
  you the full book data.
• 11:20
  So this is not just the
• 11:22
  price and how much liquidity is on
• 11:24
  the buy side and the sell outside.
• 11:25
  But every order on the buy side,
• 11:27
  every resting order on the sell
• 11:29
  side as well.
• 11:30
  So if you are a trader, a market
• 11:32
  maker, someone who's just even
• 11:33
  momentum trading based on how things
• 11:36
  look in the market, you now have
• 11:37
  the most complete picture of what's
• 11:39
  actually going on in hyperliquid
• 11:41
  as fast as you can possibly
• 11:43
  get that.
• 11:44
  And so for sophisticated traders,
• 11:46
  high frequency trading firms, this
• 11:48
  is the exact product that they
• 11:50
  want. But we're seeing a
• 11:52
  really interesting new application
• 11:53
  of this too, which is AI trading.
• 11:56
  That you can have an AI agent now
• 11:57
  subscribing to these data feeds on
• 11:59
  double zero.
• 12:01
  And AI is still too slow to actively
• 12:03
  trade. Like you don't want it
• 12:04
  deciding what to buy and what to
• 12:06
  sell by sending the prompt out to
• 12:07
  Claude or Croc or something like
• 12:09
  that. But it can build you trading
• 12:11
  strategies that then it just runs a
• 12:12
  program and automatically responds.
• 12:14
  And so it's weird to say,
• 12:16
  like we're democratizing access to
• 12:17
  high-frequency trading, but that
• 12:19
  really is what AI has enabled.
• 12:22
  This is all just part of a
• 12:24
  transformation and getting rid of
• 12:26
  little men in the process.
• 12:28
  Austin, you made mention of in
• 12:30
  the past having to have physical
• 12:31
  infrastructure or a data center or
• 12:34
  a server in a very specific
• 12:36
  geolocated place in
• 12:38
  order to take full advantage of the
• 12:40
  speed that you would
• 12:42
  want trading on these markets.
• 12:44
  Can you talk a little bit about the
• 12:46
  technical specifics of this
• 12:48
  launch?
• 12:49
  If I was to
• 12:51
  buy access to this data that you've
• 12:52
  now launched for Hyperliquid, could
• 12:54
  Bye! Get access to that anywhere
• 12:56
  around the world, or does it
• 12:58
  actually also matter where you are
• 13:00
  physically in the world if you're
• 13:01
  looking to really like unlock
• 13:03
  the benefits of this data.
• 13:06
  Yeah, some of the most
• 13:08
  profitable uses
• 13:09
  of high speed market data is
• 13:11
  actually to move it outside of
• 13:13
  the city, the venue,
• 13:15
  the exchange you're trading on, and
• 13:17
  actually take that data as alpha
• 13:19
  signal and use it somewhere else.
• 13:21
  So this is where we have
• 13:23
  a lot of advantages and we work with
• 13:25
  great validator partners, including
• 13:26
  the folks at Kinetic and Mayven.
• 13:29
  On sourcing data on the hyperliquid
• 13:31
  side for distribution in Tokyo,
• 13:33
  because most major traders who
• 13:35
  are trading on hyperliQUID are
• 13:37
  co-located in Tokyo.
• 13:39
  Because while a double zero can
• 13:41
  solve a lot of problems, the speed
• 13:42
  of light is not one of those
• 13:44
  problems.
• 13:45
  But let's say you want to consume
• 13:46
  the data in Chicago because you're
• 13:48
  trading against CME, or you want
• 13:49
  bring that data to Columbus where-
• 13:52
  the Cauchy matching engine is, or
• 13:53
  you want to bring that to London
• 13:55
  where the Polymarket International
• 13:56
  matching engine, or if you want
• 13:58
  bring it to Virginia
• 14:00
  where the US market is, or you wanna
• 14:02
  bring it the Solana blockchain,
• 14:03
  which is all over the world.
• 14:05
  In all of these situations, the
• 14:07
  speed at which you can move that
• 14:08
  data from where it's generated
• 14:10
  in Tokyo to where you wanna consume
• 14:12
  it and trade against, that is your
• 14:14
  alpha. As a trader, if you can
• 14:16
  be smarter than your competition or
• 14:18
  faster than your competition, you
• 14:20
  should always pick faster.
• 14:21
  Because smart people get things
• 14:23
  wrong, but if you know what the
• 14:24
  future is, it's very hard to
• 14:26
  be wrong.
• 14:27
  And so Double Zero, like we use
• 14:29
  the global fiber network produced by
• 14:31
  our contributors as a transport
• 14:33
  layer for this as well.
• 14:34
  So if you want to subscribe
• 14:36
  to Double Zero data at your trade
• 14:38
  server, co-located with the
• 14:39
  Coinbase order book, and you're
• 14:41
  an institution, you can do that.
• 14:43
  If you are an individual trader who
• 14:45
  trades across many different places
• 14:47
  and... You want the fastest feeds
• 14:49
  of what's going on in the
• 14:50
  hyperliquid perps market, because
• 14:51
  you think there is an arbitrage
• 14:53
  opportunity to lighter or to
• 14:55
  Binance perps or something like
• 14:57
  that, you can do that as well.
• 14:59
  And the beauty of this, as you
• 15:01
  mentioned, is you don't need a
• 15:02
  cable. And I know that sounds crazy
• 15:05
  in this world, but if you are going
• 15:07
  to the New York Stock Exchange
• 15:08
  or a major data broker,
• 15:10
  you need a physical cable.
• 15:12
  Like their system plugs into your
• 15:14
  system. The beauty of the Double
• 15:15
  Zero Network is we already have this
• 15:17
  global fiber network and we can
• 15:19
  use the internet for like the last
• 15:21
  mile delivery because it adds
• 15:23
  some latency, but we're talking a
• 15:25
  very small amount of latency.
• 15:27
  And so it makes it very easy for
• 15:29
  you to just sign up, connect your
• 15:30
  agent or connect your existing
• 15:32
  trading system in and start
• 15:33
  consuming Double Zero's data.
• 15:35
  When it comes to Hyperliquid,
• 15:38
  how hard was it to do this before
• 15:40
  the launch of what you have now?
• 15:43
  As I understand it, people that were
• 15:44
  looking for machine-readable
• 15:46
  data or fully sequenced
• 15:48
  data from HyperliQUID had to build
• 15:50
  it themselves and now they don't
• 15:51
  have to do that.
• 15:52
  Yeah, and there's a lot of data
• 15:54
  providers that have been working in
• 15:56
  hyperliquid for a while.
• 15:57
  They've done a very good job at what
• 15:58
  they do. They tend to serve
• 16:00
  something that looks more like an
• 16:01
  RPC product.
• 16:04
  And so that's really good if you
• 16:06
  want to say, hey, what's the price
• 16:07
  of this thing? I want to make a
• 16:08
  trade. But the way that like the
• 16:10
  most sophisticated traders work is
• 16:12
  they don't want to do that call and
• 16:13
  response. They don't wanna send in a
• 16:15
  request and say, can I
• 16:17
  get a price on this?
• 16:18
  Okay, now I wanna make a treat on
• 16:19
  it. They want a streaming fire hose
• 16:21
  of all the data.
• 16:22
  So when their system decides,
• 16:24
  I think there's a trade to be made
• 16:25
  here, that data is ready to
• 16:27
  go.
• 16:28
  And that transaction can be formed,
• 16:30
  delivered to how Hyperliquid
• 16:32
  processes transactions.
• 16:33
  And then.
• 16:35
  Hopefully, they win the trade
• 16:36
  because they have faster access to
• 16:38
  data.
• 16:39
  So, you know, one of the things to
• 16:40
  also, like I would say, highlight
• 16:42
  here is this is an uncapped service
• 16:44
  and it's a complete book service.
• 16:46
  So with most of
• 16:48
  the existing services for
• 16:50
  everything, whether it's, you now,
• 16:52
  Solana, Robinhood, Hyperliquid,
• 16:53
  Kalshi, these types of things, you
• 16:55
  are both your rate limited in how
• 16:57
  many requests you can make and how
• 16:59
  many markets you can watch.
• 17:00
  So we have every native
• 17:02
  hyper core market every
• 17:04
  hip three market as well with
• 17:07
  full depth.
• 17:08
  And so what that means is you have a
• 17:10
  complete picture of the entire book.
• 17:11
  And a lot of stuff is correlated
• 17:12
  that you may not expect.
• 17:14
  Obviously, we all understand if
• 17:15
  Bitcoin goes up by 5%, most
• 17:17
  things trade to some type of data to
• 17:19
  Bitcoin and may go up by more
• 17:21
  than 5%.
• 17:22
  But then we have these sort of
• 17:23
  isolated things, like Zcash kind
• 17:25
  of moves on its own, but it has a
• 17:27
  lot downstream effects
• 17:29
  of what might be dragged up or down
• 17:30
  based on that.
• 17:31
  And so having that total picture of
• 17:33
  liquidity and total picture of what
• 17:35
  the book looks like for
• 17:37
  any place that people might wanna
• 17:38
  trade is a really big advantage
• 17:40
  now that data analysis has become
• 17:42
  functionally free with the advent
• 17:44
  of AI.
• 17:46
  How are you able to just give
• 17:48
  the unrestricted
• 17:50
  data access
• 17:52
  as opposed to other players that
• 17:54
  don't do that, right?
• 17:55
  Like they throttle you.
• 17:56
  So this is really key.
• 17:58
  The business model of the cloud
• 18:00
  providers is largely to charge for
• 18:02
  bandwidth.
• 18:03
  If you look at the margins
• 18:05
  on different types of products, they
• 18:07
  make money on compute.
• 18:08
  They make money in storage.
• 18:09
  They make most of
• 18:11
  their margin on data transit.
• 18:13
  And the reason for this is pretty
• 18:15
  simple. If you're building a
• 18:16
  vertically integrated centralized
• 18:17
  business like AWS, and AWS
• 18:19
  is an incredible business.
• 18:20
  I own a bunch of Amazon stock
• 18:22
  because of it. But
• 18:24
  They want you to stay in their
• 18:25
  ecosystem.
• 18:26
  We don't care.
• 18:27
  We don't have a landing service.
• 18:29
  We're not selling you trade servers.
• 18:31
  If you wanna take data
• 18:33
  from Hyperliquid, transport it over
• 18:35
  double zero and dump it into a
• 18:37
  trading system that you've built
• 18:38
  in-house internally,
• 18:40
  perfect. We love that.
• 18:41
  We wanna just be involved in that
• 18:43
  network transport layer and market
• 18:45
  data sourcing layer.
• 18:46
  But what that means is we
• 18:48
  have a network that can run
• 18:50
  technologies that are not available
• 18:51
  in the cloud and are not available
• 18:53
  on the public Internet.
• 18:54
  And one of these technologies is
• 18:56
  multicast. And the beauty of
• 18:57
  multicast is it replicates
• 18:59
  data in hardware as close to
• 19:01
  the user as possible.
• 19:03
  So how much bandwidth does it
• 19:05
  take to send out 1,000 copies
• 19:07
  of hyperliquid data?
• 19:08
  Well, if you are a traditional
• 19:10
  infrastructure provider, you need
• 19:12
  1,00 copies of the data sent out
• 19:14
  to each one of your customers.
• 19:16
  This is why it took us so long to
• 19:17
  figure out how to stream the Super
• 19:19
  Bowl in the United States.
• 19:20
  Is because when there's a million
• 19:21
  people watching the Super Bowl on
• 19:23
  streaming, there's a million copies
• 19:24
  going out.
• 19:25
  There's a billion people watching
• 19:27
  the Super Bowl on satellite TV.
• 19:29
  There's just one signal from the
• 19:30
  satellite. You don't have to send a
• 19:31
  million separate signals.
• 19:33
  And so multicast works this way.
• 19:35
  You send it once, and then that
• 19:36
  data is replicated at the edge.
• 19:39
  And what that means is we can have
• 19:40
  much more efficient use of
• 19:41
  bandwidth. And so there's simply no
• 19:43
  reason for us to have to impose caps
• 19:45
  and rate limits on people because
• 19:47
  we don't have a marginal cost
• 19:49
  per customer.
• 19:50
  Measured in bandwidth,
• 19:52
  which is a really big differentiator
• 19:54
  in terms of the business model.
• 19:55
  Our goal is for you to consume as
• 19:58
  much data as you'd like to,
• 20:00
  not because we're going to make more
• 20:01
  money. We make the same amount of
• 20:03
  money if you're watching just the
• 20:04
  Bitcoin USD market
• 20:06
  or if you are watching every single
• 20:08
  market on hyperliquid.
• 20:09
  We think this is really aligned with
• 20:11
  the evolution that traders make and
• 20:13
  also, quite frankly.
• 20:14
  Bringing more liquidity and more
• 20:15
  trade activity to places like
• 20:17
  hyperliquid and calcium and Solana.
• 20:19
  Because if now you can watch
• 20:20
  everything at the same price as
• 20:22
  watching one or two things, you're
• 20:24
  much more likely to start exploring,
• 20:26
  well, yeah, maybe the anthropic
• 20:28
  pre-IPO is interesting.
• 20:29
  Should I get into this?
• 20:30
  How much liquidity is there?
• 20:31
  What has the market been like?
• 20:33
  You can suddenly ask all of those
• 20:34
  questions without being like, man,
• 20:36
  this is gonna run up my bill.
• 20:38
  Yeah, I mean, that
• 20:40
  just speaks a lot to the innovation
• 20:41
  and moving forward and
• 20:43
  not trying to
• 20:45
  max extract value given
• 20:48
  the restrictions of the
• 20:50
  actual infrastructure that
• 20:53
  existed before.
• 20:54
  And I would imagine that you're
• 20:55
  probably moving
• 20:57
  and shaking and
• 20:59
  putting some pressure on incumbents
• 21:00
  that business models
• 21:02
  was that,
• 21:05
  but such is capitalism.
• 21:07
  I wanted to chat to you just a
• 21:09
  little bit about your thoughts on
• 21:11
  the evolution of these
• 21:13
  very successful
• 21:15
  marketplaces or trading platforms
• 21:17
  that have really
• 21:19
  grabbed mind share in the last few
• 21:21
  last couple of years.
• 21:22
  I mean, obviously, you worked at
• 21:23
  Solana a couple of years ago,
• 21:25
  so you understand that
• 21:28
  protocol and that sort of ecosystem
• 21:30
  intimately. But we've seen the rise
• 21:32
  of hyper liquid Robinhood
• 21:34
  chain has grabbed a huge amount
• 21:36
  of activity. It's generating a load
• 21:37
  of fees, both
• 21:39
  thanks to RWA tokenization
• 21:41
  and, I guess, a bit of a
• 21:43
  meme coin comeback.
• 21:45
  What are your general thoughts on
• 21:46
  the current state of these new age
• 21:48
  marketplaces?
• 21:50
  Is it a sign of the times?
• 21:52
  And do you think it is a little bit
• 21:54
  of a threat in the future to
• 21:56
  centralized exchanges and what they
• 21:57
  offer people?
• 21:59
  Yeah, you know, there's a really
• 22:00
  interesting thing that's happening
• 22:02
  in the market where
• 22:05
  we've seen for a while
• 22:08
  forces of
• 22:10
  centralization in
• 22:12
  new finance in general.
• 22:14
  And you know those centralization
• 22:15
  forces, like that can be seen as a
• 22:17
  very bad word and I don't
• 22:19
  necessarily mean it like in a
• 22:20
  judgment sense. Hyperliquid has
• 22:22
  a diversity of operators, but
• 22:23
  they're in the same geographic
• 22:24
  location.
• 22:25
  And then you have things like
• 22:26
  Robinhood, or Base, where
• 22:28
  it is a single sequencer run by
• 22:31
  one company and those sorts of
• 22:32
  things. And then, you've got
• 22:34
  Ethereum's of the world, which is
• 22:36
  like maximum decentralization,
• 22:39
  depending on how you look at it.
• 22:40
  And then we've got Solana.
• 22:41
  And Solana's still in its
• 22:43
  own lane of trying to do a
• 22:45
  large validator set located in
• 22:47
  many parts of the word and
• 22:49
  be high performant.
• 22:51
  And so, looking forward to, I
• 22:53
  think, the Alpenglow, which is the
• 22:54
  new.
• 22:56
  Consensus system upgrade just
• 22:58
  hit test that today or yesterday
• 23:00
  for Solana, like very interested to
• 23:02
  see how that rollout goes, that
• 23:03
  things a little late, but you know,
• 23:05
  everything in crypto ships late.
• 23:06
  That's kind of the role of the
• 23:07
  industry.
• 23:08
  As any timeline you see at a zero is
• 23:10
  a generally the the joke.
• 23:13
  But I think when we kind of look at
• 23:15
  a look at this stuff, is it
• 23:17
  the question really is like, what
• 23:19
  wins out of the long term was
• 23:21
  decentralization in crypto.
• 23:23
  A regulatory defense play,
• 23:26
  right? Did the industry over index
• 23:28
  on decentralization because
• 23:30
  it had an administration that was, I
• 23:32
  don't mean this hyperbolically,
• 23:33
  trying to kill the industry.
• 23:35
  Genuinely did not think the industry
• 23:37
  should exist.
• 23:40
  Or do we see a
• 23:42
  sort of, and do we a sort
• 23:44
  a give and take there where we say
• 23:46
  like, look, maybe you don't actually
• 23:48
  need like hyperliquid.
• 23:50
  You can sort of view it two ways.
• 23:51
  It's a.
• 23:52
  More centralized blockchain,
• 23:55
  or it is an extremely decentralized
• 23:58
  exchange.
• 23:59
  And it's the same, it's the same
• 24:01
  thing. It just depends what frame of
• 24:02
  reference you're looking at the
• 24:03
  thing through.
• 24:04
  I have much more like
• 24:07
  integrity when I
• 24:09
  sort of look at a system like hyper
• 24:11
  liquid than when I look at like your
• 24:13
  average centralized exchange, they
• 24:14
  do a better, I have more assurance,
• 24:16
  I have more cryptographic assurance,
• 24:18
  I have more asset assurance.
• 24:20
  On funds I have on hyper liquid than
• 24:22
  I do on your average exchange,
• 24:24
  because, you know, we all
• 24:26
  remember the FTX story of the
• 24:28
  proof of reserve that was quite
• 24:29
  literally a random number generator
• 24:31
  to prove how much money
• 24:33
  they have. You can't do that when
• 24:35
  you have a blockchain because we can
• 24:36
  verify the data and see what it is.
• 24:38
  Now, obviously, blockchains can
• 24:40
  still get hacked, right?
• 24:41
  You don't solve all of the risks.
• 24:43
  You always still have counterparty
• 24:44
  risk whenever you have the
• 24:45
  counterparty. Of that counterparty
• 24:47
  is a global piece of software.
• 24:49
  But I think we're in a very
• 24:50
  interesting spot and
• 24:53
  we're gonna see a lot more
• 24:54
  innovation over the next few years
• 24:56
  in this space.
• 24:58
  I think that's a net good.
• 24:59
  I think the sort of meta question to
• 25:01
  your point though is like, why do we
• 25:02
  have so many new trading venues?
• 25:05
  And I think this is sort of like, we
• 25:06
  had L1 season back in like
• 25:08
  2020 and 2021.
• 25:11
  I think, we're kind of just in venue
• 25:12
  season at the moment and we'll
• 25:14
  probably see something similar to
• 25:16
  what happened in the fintech space.
• 25:18
  Of a massive over expansion
• 25:20
  of trading venues.
• 25:23
  If inflation and treasury
• 25:25
  rates start going up, cost of
• 25:27
  capital from market makers becomes a
• 25:28
  serious burden.
• 25:30
  We'll probably see a lot of
• 25:31
  compression in that industry.
• 25:32
  There'll be a race to zero on fees,
• 25:34
  just like we saw in FinTech.
• 25:36
  And a few of the best companies will
• 25:38
  survive.
• 25:39
  And this is what's happening in
• 25:41
  crypto in general, right?
• 25:42
  Like you look at like DeFi protocols
• 25:44
  that made it out of like the initial
• 25:46
  DeFi, like
• 25:48
  bull run.
• 25:50
  Are they and Uniswap?
• 25:52
  Basically it right everything else
• 25:54
  sort of faded away you look at layer
• 25:56
  ones that made it out of that second
• 25:58
  layer one cycle and you're like
• 25:59
  definitely Solana
• 26:02
  Not a lot of other ones.
• 26:04
  Mm-hmm really made it out.
• 26:06
  Uh, and so now when we look at like
• 26:07
  these trading venues, the questions
• 26:09
  are who is going to survive You
• 26:11
  know the the the 2029
• 26:13
  bear market, right?
• 26:14
  The 2028 bear market whenever
• 26:16
  whenever whenever that happens
• 26:17
  because it will happen again, right
• 26:19
  Whenever there's a massive
• 26:20
  compression event in the market
• 26:21
  who's positioned well enough to
• 26:23
  survive it from a trading venue
• 26:24
  perspective I think there's almost
• 26:26
  no question hyper liquid will
• 26:28
  survive that they've just cemented
• 26:29
  themselves an incredibly useful Uh,
• 26:32
  you know platform and network
• 26:34
  for this.
• 26:35
  There's going to be others that make
• 26:36
  it through as well.
• 26:38
  But everybody's launching a
• 26:39
  prediction market.
• 26:40
  Everybody's launching perp stacks.
• 26:43
  90% of these things will fail.
• 26:45
  But in that process, it'll create a
• 26:47
  lot of innovation.
• 26:48
  It'll create much better experience
• 26:49
  for retail, much better pricing
• 26:51
  for retail.
• 26:53
  Competition is just a net good for
• 26:54
  everybody.
• 26:55
  Yeah, it's interesting to see that
• 26:57
  happening because I think you're
• 26:58
  right, like prediction markets are
• 26:59
  one thing, but also just the trading
• 27:00
  venues, you know, Hyperliquid's
• 27:02
  definitely got massive first mover
• 27:04
  advantage. You saw the kind of like
• 27:06
  the Binance kind of
• 27:08
  machine try to get weight behind
• 27:10
  Aster and you know give
• 27:12
  Hyperliqid a lot of competition.
• 27:14
  I don't think that really happened.
• 27:16
  But then you've got these more, you
• 27:17
  got Robin Hood chain and then these
• 27:19
  more bespoke kind of Solana-esque,
• 27:22
  you know, platforms.
• 27:24
  FOMO and the pump funds and
• 27:26
  those kind of things.
• 27:28
  I've been playing around with FOMOs
• 27:29
  a little bit, and a lot
• 27:31
  of people were just talking about
• 27:32
  the user experience.
• 27:33
  I think you make a great point about
• 27:35
  the launch of these different
• 27:37
  venues, the iterations,
• 27:39
  the differentiators that attract
• 27:41
  people to the different platforms.
• 27:43
  And then eventually, the
• 27:45
  bigger players in the space, seeing
• 27:47
  the best kind of ideas and
• 27:49
  starting to assimilate those into
• 27:50
  their systems and then eventually
• 27:52
  just like solidify.
• 27:53
  Cement their position in the market.
• 27:55
  What will be interesting to see is
• 27:57
  if the likes
• 27:58
  of Coinbase's base,
• 28:01
  etc., can muscle in
• 28:03
  there and also just solidify itself
• 28:04
  because I do think that that's going
• 28:05
  to be the
• 28:07
  real competition is going to all
• 28:10
  the big companies that already
• 28:11
  have a huge amount of capital and
• 28:14
  intellectual capital as well,
• 28:17
  all the best minds behind building
• 28:19
  the best products, the best user
• 28:20
  experiences getting to that and
• 28:22
  just the The rate at which
• 28:24
  it seems TradFi is
• 28:26
  coming on chain is definitely
• 28:28
  accelerating.
• 28:29
  They're looking for the right partners.
• 28:30
  We were in Avalanche Summit last
• 28:32
  week. It's clear to see there's a
• 28:33
  lot of big financial
• 28:35
  institutions that are looking at
• 28:36
  them.
• 28:37
  Same thing goes for Solana.
• 28:40
  Same thing for Ethereum.
• 28:41
  I mean, Robinhood chain is built on
• 28:43
  Arbitrum.
• 28:44
  So it's clear there are
• 28:46
  a handful of protocols that are the
• 28:48
  backbone of these trading venues.
• 28:50
  But...
• 28:52
  There's only going to be a handful
• 28:53
  of them that can really exist
• 28:55
  in the long run, and that is the
• 28:57
  nature of things. So I think you've
• 28:58
  given us a lot of good thought
• 29:00
  there. My final question to
• 29:01
  you before we let you go today, and
• 29:03
  I do hope that we can catch up
• 29:05
  in Singapore while there will be a
• 29:07
  token 2049.
• 29:08
  Just your general thoughts on the
• 29:09
  markets, a very interesting
• 29:11
  bounce back, Bitcoin went above
• 29:13
  85,000 this week.
• 29:14
  We had a couple of different
• 29:16
  analysts with very different takes
• 29:17
  on why we've seen this resurgence.
• 29:19
  The likes of Benjamin Cowan.
• 29:22
  Telling crypto Twitter, sorry,
• 29:24
  I was wrong.
• 29:26
  Did you anticipate things turning
• 29:27
  around this kind of quickly?
• 29:28
  And do you think the
• 29:30
  bull market is starting or the bear
• 29:32
  market is over?
• 29:33
  Give us your two cents.
• 29:37
  One of the interesting things about
• 29:39
  this year is it seems
• 29:41
  like everybody is looking for
• 29:42
  a reason to be a doomer.
• 29:45
  Yeah. Whether it's AI, whether it's,
• 29:47
  you know, bombing a country,
• 29:49
  whether its the market, like
• 29:51
  everybody's so damn
• 29:53
  twitchy about everything
• 29:55
  going down.
• 29:56
  And you know I think there is this
• 29:57
  like the sentiment on crypto
• 29:59
  Twitter has been bad.
• 30:00
  It's been bad the entire year and
• 30:02
  there's no reason it should have
• 30:04
  been bad.
• 30:05
  Entire year.
• 30:06
  If you look at the fundamentals,
• 30:08
  everything's going very well.
• 30:10
  If you look the macro economy in
• 30:12
  the world, things are actually going
• 30:13
  pretty good.
• 30:15
  Now, yeah, you can look at treasury
• 30:17
  yield rates, and you can make a lot
• 30:18
  of predictions about those.
• 30:21
  But from an asset perspective,
• 30:24
  I think too often people,
• 30:27
  this is going to be maybe an odd
• 30:28
  statement to make, but they conflate
• 30:29
  the US economy with the
• 30:31
  US market.
• 30:33
  They're not the same thing.
• 30:34
  That like you can have high interest
• 30:36
  rates and you can see a separation
• 30:37
  in equity
• 30:39
  performance from how
• 30:41
  fiat US dollars perform.
• 30:43
  Because at the end of the day,
• 30:45
  like NVIDIA is denominated in US
• 30:47
  dollars, but there's no magic law
• 30:49
  that says it has to be denomicated
• 30:51
  in US Dollars any more
• 30:53
  than Bitcoin has to be denomination
• 30:55
  in US Dollar.
• 30:56
  In fact, like this has always been a
• 30:57
  pet peeve of mine is people are
• 30:59
  like, oh man, we hit the all-time
• 31:00
  high of Bitcoin again.
• 31:01
  And I'm like, well.
• 31:02
  Inflation adjusted, actually, we've
• 31:03
  got another $20,000 to go,
• 31:06
  because you're still trapped
• 31:07
  in this benchmarking fiat currency
• 31:10
  model.
• 31:11
  To your question, I think we're
• 31:13
  looking into a very strong Q4.
• 31:16
  I don't see any reason why any of
• 31:18
  this would stop.
• 31:19
  I think that we've largely seen that
• 31:21
  AI is continuing to grow, and
• 31:23
  that's obviously a huge sector of
• 31:24
  capital investing.
• 31:26
  I would say probably my
• 31:29
  maybe a little bit contrarian take
• 31:30
  here is we are probably not
• 31:33
  going to see Anthropic and OpenAI
• 31:34
  be the ultimate, like
• 31:36
  the frontier AI companies in two to
• 31:38
  three years.
• 31:39
  I think we will probably see a lot
• 31:41
  of that revenue shift into more
• 31:42
  traditional players.
• 31:43
  This is what happens all the time,
• 31:45
  right? Like we've had folding phones
• 31:47
  for a while, like Apple releases
• 31:49
  theirs. It's probably just a better
• 31:50
  product at the end of the day.
• 31:52
  Microsoft is like the dark horse
• 31:54
  in the AI race as like the one who's
• 31:56
  probably gonna monetize and
• 31:58
  capitalize the most on it.
• 32:00
  Alongside, honestly,
• 32:02
  whatever we're supposed to call it
• 32:03
  now, SpaceX, AI,
• 32:05
  Terra, Fab, probably Tesla
• 32:07
  in a few months as well,
• 32:08
  conglomerate, I'm
• 32:13
  quite excited for the market
• 32:15
  of the next few years and think this
• 32:16
  will genuinely
• 32:19
  be an incredible thing for
• 32:20
  innovation. The AI-doomerism
• 32:22
  came to financial assets and I just
• 32:24
  I simply don't understand it and I
• 32:26
  think everyone's wrong and I've been
• 32:27
  counter trading on this entire year
• 32:29
  and it's so far worked out pretty
• 32:30
  well.
• 32:31
  Beautiful, we needed some hope Jim,
• 32:33
  we need an optimist in the room to
• 32:34
  turn things around.
• 32:35
  Austin, thanks so much for joining
• 32:36
  us and yeah, like I said to you off
• 32:38
  air, just congratulations on all
• 32:40
  the growth and the hard work that
• 32:42
  you've been putting in at Double
• 32:43
  Zero. It's been, you know, we've
• 32:44
  known each other in the industry
• 32:45
  quite a while and to see you take a
• 32:47
  leap of faith, go and start your own
• 32:48
  thing and really, you know provide
• 32:50
  really great infrastructure services
• 32:52
  that are clearly in demand is
• 32:54
  a breath of fresh air in this
• 32:55
  industry, so congrats to you and the
• 32:56
  team. Thank you, appreciate it.
• 32:59
  Awesome, Austin, we'll catch up with
• 33:00
  you in Token 2049 in a couple of
• 33:02
  weeks time.
• 33:03
  Thanks so much for joining us in the
• 33:04
  Starting Block today.
• 33:05
  We will be broadcasting the Starting
• 33:07
  block live on day one at Token,
• 33:09
  2049 in Singapore.
• 33:10
  So if you're around the venue, come
• 33:11
  and look for the Blocks booth,
• 33:12
  you'll find us there.
• 33:13
  If you're not gonna be in Singapore,
• 33:15
  you can check us out online and
• 33:16
  catch up with our conversations
• 33:19
  with some of the biggest names in
• 33:20
  the industry.
• 33:21
  That is it for this week's Starting
• 33:23
  Block lineup.
• 33:23
  If you missed any of the shows, you
• 33:25
  can go back on our X timeline or
• 33:27
  our YouTube live timeline.
• 33:28
  To catch up on some of the
• 33:30
  conversations we had this week
• 33:31
  again. If you missed our broadcast
• 33:33
  at Avalanche Summit last week, go
• 33:34
  and check that out.
• 33:36
  Really some fantastic conversations
• 33:37
  that we had there.
• 33:38
  We'll be back next week for
• 33:40
  another full week of the starting
• 33:41
  block before we hit the road to
• 33:42
  travel across the world to
• 33:44
  Singapore. So come and join us on
• 33:45
  Monday. We broadcast 8.30 a.m.
• 33:47
  Eastern time. That's 2.30 p.m.,
• 33:49
  Central European time.
• 33:50
  If you're in Europe like me, have a
• 33:51
  fantastic weekend.
• 33:53
  We'll catch you on Monday