WARNING: Crypto Must Prepare for Bunker Day | Santiago Santos

Ran (0:00)

When I read your tweets during the bear markets, I felt that crypto had lost product market fit, that protocols would never ever work.

Santiago Santos (0:07)

No, listen, there's nuance to what I was saying. I was saying, you gotta focus on fees. Like narratives are no longer working as much when you have a very select group of protocols and projects that are cranking a lot of fees and revenue.

Ran (0:18)

Is this the revenue cycle and revenue going back to token holder cycle?

Santiago Santos (0:23)

There's just crypto growing up, for sure. But when you think about what is the real prize for crypto, it's financial applications. When you think about perps, option protocols, like all that is working, tokenized stocks, that has found really good product market fit. The only reason you want to be investing in crypto and belong to spaces, if you truly believe in a world not too distant from now, where there's vastly more assets that are traded on chain and fees generated on that, that are not crypto native. I think it's going to be a major theme.

Ran (0:51)

I think it's the next big prize.

Santiago Santos (0:53)

We've talked a lot about financial use case and applications. And everything we've talked about here relies on you signings.

Ran (0:59)

What Santi referred to now was a treat by Justin Drake, which is the one that you're looking at at your screen right now.

Santiago Santos (1:04)

His point is forget about quantum permanent. Maybe we don't need to wait for quantum. All of these cryptographic primitives that we've relied on to secure, create private key generation, the randomness and all that. We might be in a world where maybe this can break. If you've signed a transaction, then you are at risk.

Ran (1:24)

Santi, I'm going to be honest with you, bro. When I read your tweets during the bear markets, I felt that crypto had lost product market fit, that protocols would never ever work.

And I'm kind of wondering, like now, the sentiment everywhere seems to turn. You're here at a crypto conference, does that mean we've got our old Santi back?

Santiago Santos (1:41)

You know, every time I try to leave, they pull me right back in. Now listen, there's nuance to what I was saying. I was saying, you got to focus on fees. And, you know, we've invested 100 billion in venture. Like, I was just on a panel talking about the beginning, like the end of the beginning. Like, we're not, my point was, this technology is sufficiently advanced now, that you can't just throw spaghetti at the wall and say, hey, like narratives are no longer working as much when you have a very select group of protocols and projects that are cranking a lot of fees and revenue. And that was my point. I'm like, I don't want to own anything that has not produced revenue, doesn't have product market fit. In a world where you have protocols that I've, you know, I've had the good fortune of investing in that are hugely profitable.

And I think that's just, that was my point. Unfortunately, people took that as saying, oh, you're super bearish, blanket safe.

Ran (2:34)

Is this the revenue cycle and revenue going back to token holder cycle?

Santiago Santos (2:39)

There's a script of growing up for sure.

Ran (2:41)

That's it?

Santiago Santos (2:41)

And the sheer magnitude of fees. I mean, look, I think we're going, I think most people, the sentiment here is something that I, in the early days, I was investing in DeFi before it was called DeFi. And my view was, I've certainly invested in gaming and NFTs and other stuff. But when you think about what is the real prize for crypto, it's financial applications. That works really well. When you think about perks, option protocols, like all that is working. I think it's early innings, tokenized stocks.

That has found really good product market bit.

That doesn't mean that some of the other stuff might not come back, but that's a huge market in its own right. So I think that's something that I was very focused on, and I've been very focused on.

Ran (3:22)

What about L1s? So the reason why I said it is because for me, for a protocol to have value, it's got to be extremely scarce, or there's got to be a mechanism to give revenue back to token holders. So when I say extremely scarce, Bitcoin, Zcash, that's a scarcity narrative. Token back to token holders is everything else. They can't buy VVV, da-da-da-da. What about the L1s, like a Solana, or an Ethereum, or a Sui?