On a Tangent #1: How We 4x'd Our Portfolio in the First Year - Darryl Wang and Jason Choi

This was somewhere at the start of 2024 uh where salana was you know breaking $100 uh people outside go 10x and people were saying how you know it needs to cool off and we took the pretty aggressive view that uh Soul would have a push to $200 and at the time I don't think many people shared our sentiment and we were pretty cognisant of this and we realized that there were still very strong fundamental drivers so why salana Would you know continue to receive flows and so we put on a pretty aggressive long on Solana

at about $110 uh which we initially which we took off at about $190 welcome to on a tangent a special segment of the block wrench podcast I'm your host Jason Choy now about two years ago my friend Daryl and I left two of Asia's most successful crypto funds to start investing our own capital and we called ourselves tangent and since January 2023 to May 24 we've about quadrupled our inves in capital and also assembled the team of some of the sharpest people in crypto so a lot of people are curious about what we've done and

what we're doing so we wanted to do a little bit of a recap and overview of the tangent Story So Far So if you're a young analyst or an investor out there looking to join us or if you're a Founder who's looking for a truly crypto native team to work with or you're just Interested in our Market views make sure you make it through the episode so this here is also an experiment as you notice we usually don't do these in a studio but if you enjoy this this episode comment on YouTube or let us

know on Twitter so we know whether to keep this coming as either monthly series or periodic series but without further Ado here is the first on a tangent with my co-founder and good friend Daryl Wang and before we get started nothing we Discuss is financial advice welcome to the show once again man how's it going I see you every day but obviously this time is a little bit different in studio it's a very very overwhelming setting but um I wanted to start with our tangent story a little bit actually let let's let's start with what

tangent is today because um a lot of people are confused about what we actually are I think I've gotten feedback from people that we're an incubator we are a trading Fund we're a market maker so I think just for the people out there who are not familiar we're basically a Evergreen fund right so we describe ourselves an evergreen Fund in the sense that we invest across every life cycle of a crypto company um but we actually haven't we didn't start this way so why don't we dial the clocks back a little bit to 2019 and

talk about how we met I think this is a was it 2019 or 2020 well I wasn't into space in 2019 so it was 2020 2020 yes yes and then I think you messaged me on Twitter and you were in school then or I was I was uh I was an investment banker with JP Morgan and I was just getting my hands wet or my feet wet uh looking dabbling into defi uh and then one of the only really education materials out there was your podcast block Crunch and so naturally I was was like oh

look this is pretty sharp Asian dude um seems around my age uh and he's doing something really cool with this Podcast let me let me tune in and listen a bit uh one or two episodes in I really loved what you were doing and so I just thought i' reach out and i' never really done anything like that before and then to my surprise you actually replied and I was like wow this space is pretty interesting because you can actually talk to people who run podcasts so did you me first or Arthur first so for

for reference Arthur was your former boss uh and your last form did you reach out to Your former boss first or did you reach out to me first I believe I reached out to my former boss first and then as we were talking about I um either before I I was about to join him or after I just joined him then I started tuning into your podcast and then we started CH chatting and so you fast forward was it two years later we decided to start this thing together correct so how did we decide to

start tangent cuz I remember it was also I actually haven't met you In person at that time yes we actually 1 and a half years in after knowing each other I believe and was in Barcelona and I figured you might have been because you reached out to me and you said hey I'm thinking of starting something and I just said yes like on the first call I said yes so you're probably surprised cuz I've never met you in person and you're like what the I was like yeah this guy is this guy's ready yeah yeah

so what's the story there why why Did you decide to reach out and kind of start this together yeah so there was a couple things I think one was I was ready for the next chapter in my career um outside of working for a fund um and at the same time I knew that I want I didn't want to do it alone um and I wanted to find a partner that could really complement my skill set and my character and uh I got to know you a bit better by then we you know done some

ridiculous investing together both good And bad um I thought you were pretty good guy honorable trustworthy very sharp as well very hardworking uh and I thought you'd be a great partner and so I was like you know if I was going to do something like run a fund or you know start something by myself who what who I want to do it with and your name was on the top of the list so I was like hey why not just breach the topic and on the first call you like you're like I'm down and we're

like all right let's do this Yes I I was already thinking of kind of striking it out and doing my own thing as well so I was this is like four years into my last job which is a long time in crypto so I was like okay let's let's do something new and I was kind of looking for a partner to do this and I was actually shopping around a few different ideas and when you reached out I think your idea appealed to me the most in terms of hey let's just start with the two

of us and just pull our Capital Together so we actually toed around with the idea of like raising external Capital doing like a proper VC fun but you've convinced me that it's not the right move and I think we made a really great decision just because of what we're going to talk about later which is why we're an evergreen structure and what it means um but let's talk about the old days first because we started off with a mentorship model I think we basically like reached out to all of the Founder friends that we had

uh and then we found five of them five or six yeah five or six of them that we thought were uh some of the sharpest people in the space and you know most helpful angels and we just started co-investing together so tell us the story there you know how how do we assemble this team of crypto Avengers and uh what what happened there yeah I mean it really it was a sort of goto Market tool that we were using um as two people that were Trying to break into the scene and make it out on

our own obviously there's a pretty big gap in you know um relying on your previous uh firm's reputation and platform uh versus coming out on your own and I think a lot of people in this space uh also feel that um at least people similar to us uh in in Prior positions uh would notice the difference between when you're with a fun and when when you're by yourself it's a it's a whole new different ball game and so uh We thought hey we've made a couple of great friends over the past few years working with

um Founders uh mostly founders of protocols um and we know that they are pretty active or they want to continue doubling down and paying it forward by investing in the space so why not let's have a bit more of a formal relationship with them where they give us some of the time um to impart knowledge that they've learned via uh the experiences they've had by um from Founding these these companies um and in return we help um you know deal Source uh filter quality control deals and allow them to co-invest with us uh with no

fees no carry no nothing um just on a pure Goodwill basis and that's really the original idea of how uh we wanted to start the tent model and I think there was a lot of Goodwill because we all did say together uh so that was uh I think more than 100x for all of our mentors involved so hopefully that was a good Experiment and and these guys are not just you know business relationships but these guys are personal friends as well like you went to Thailand with one of the mentors uh on on on that

trip um and then we went to a UFC fight with one of our our mentors as well right in Singapore so a lot of these personal relationships that we truly just enjoy working with these people but at the end uh I think after 6 months or so we had to kind of revamp that model a bit Mostly because of the capital constraints right as as uh our kind of Fun Size got a little bit bigger we started to get sized out um and we just kind of turn it into more casual but close relationship so

if we see Investments that fit certain mentors sometimes we reach out to them but first is you know in the beginning where it's very structured where it's like every Mentor looks at every deal and you know we schedule the time between the mentors And the Portos so now we we've become kind of more like a conventional fund structure but with a Twist in the sense that there's that Evergreen concept so you're actually the one who who coined the term as well cuz we were trying to figure out okay how do we Des describe this fun

structure it's not really just prop fund because prop fund implies like trading only trading but it's not really just an angel fund because we're we're not just investing in private deals as Well so what the hell is an evergreen fund so basically it allows us to support protocols and companies uh in every step every step of the way right um whether you are at the idea generation phase um in the preed structure uh or the normal conventional seat and series a rounds all the way to the liquid markets where you know we can uh provide

liquidity Provide Capital in supporting these protocols on chain or or it could be as aggressive as you know Outrightly buying tokens uh on the liquid markets as well we've done all of that in the past we will continue to do this in the future we think it's the best way uh to give you know compelling and comprehensive support to all our different Portos yeah and I think a big part of this is also because we notice what didn't work in other funds right because with Venture I think a lot of are getting so big that

uh they can't Possibly participate in seed rounds without you know completely messing up the cap lables but at the same time especially recently with the high FTV uh kind of meta going on low float meta going on people are really focusing on going back to the days of fair launch which means a lot of great opportunities and great projects might not even have Venture rounds corre so for crypto as an asset class with such a short liquidity window it's not like equities where you Build a startup and then 10 years later maybe you get an

IP maybe you get an exit this is like 2 months you get a token it didn't make sense to us to just focus on like Venture uh structured deals uh it I think it made more sense to kind of look at it from first principles what are the best investment opportunities across the entire asset class and if it happens to be a venture we do a venture check if it happens to be a liquid Market we do it so the the Best example for this is really Athena right so Athena we were the angel investors

in Athena so we got in the very first round and then when they did a follow on round in a venture setting we o did that but then when they list the tokens we also bought it at I think like 20 ex the size that we did in the C check and we LP as well and we provide an LP as well so that is only possible in crypto like I don't think there's any other asset class where like a sequia in Web 2 VC would kind of you know buy your startup shares and then

you know Market make for for for your shares if they get listed and then buy your shares after they get listed yeah so I think this is a much more unique structure and then one one big part of it is also is 100% employee owned so we had a big debate about this in the beginning because I was thinking hey we should just raise some money you know do this in scale and not risk our own shirt but you actually Convinced me to not do that and I think that was a great decision so what

was going through your mind when you were thinking hey let's let's make this an employee owned fund well I think um well number one I'm extremely risk-loving I guess relative to the average individual out there um I would say that I'm willing to lose it all in order to uh not ideally not but in order to you know enjoy the cry the supern normal profits that you can get in crypto uh we Understand that there are huge risks involved but we want to expose ourselves completely in order to enjoy the upside um and so the

I I also think that if you're 100% employee owned it's also the purest form of investing because everything you have is on the line you basically live or you die by the sword you eat what you kill as ET um versus having slightly misaligned incentives where you know some funds are playing and AUM marketing game uh other funds Are I guess you know making decisions because of the fact that it's not their money so even if things go wrong it's not the end of the world um and we've seen a number of these instances um

in the past um where you know I look back at it and I say you know maybe we can do better uh and so I thought this was the best way to pit ourselves against the best competition that was in crypto and here we are uh we're still alive yeah and it's definitely better incentive Alignment or at least it's simpler incentive alignment I think the argument some would make against uh employee owned fund is probably it's not as scalable uh as as bigger funds or like institutional funds at least on day one right if you

go out and raise $100 million unless you have $100 million lying around you can't do things at the scale as some of these institutional funds but at the same time I think it does align incentives a lot more because Your success is basically the founder success if if the uh so the one one interesting game that I see uh my VC Friends Play is they they want to see markups we're going to see other funds come in and buy uh buy their bags their Investments at a later round and then they will mark it up

on paper but nothing is listed yet and they could use those kind of numbers to to go raise money so that's part of the VC game it's it's it's it's uh you know nothing to Criticize but for me it didn't it never really made sense because it's not real gains I cannot pay for lunch with paper markups so I thought it was purer if like if it's an actual if we only get rewarded if we actually get to exit an investment and monetize the investment um so yeah I think at the end this was a

much cleaner way of doing investing so thank you for convincing me and rep pilling me on this on this Evergreen employee fund model um so there you have It that's the kind of structure and story of tangent so far so let's talk a little bit now about what we're investing in kind of what we're actually excited about because I think um over the past two years as we kind of approached for me my my my second or third cycle for you your second cycle as well um I think we have a better idea of what

are actually things that are worth backing in crypto so for us I think the three main categories that we think of Is uh zero to one stuff first of all that was the one category that we always talked about since day one so so what we mean by 0 to1 stuff is just things that were not possible before uh that are enabled by crypto now so an example of that would be like uh Athena as an internet Bond right they're creating an internet native yield that you you can't possibly do this outside of crypto um

and then there's uh there's also things like Prime uh which were investors in on The liquid markets uh so this is parallel uh they're creating a AI based game which uh is also incredibly hard to do um kind of outside of that content Tex um so we also did say for instance which is also us when they first pitched us they were a kind of defi only chain and they wanted to create the infrastructure for people to build the fastest Perpetual uh dexas so all of these are kind of enabling new behaviors that were not

possible before and we're Constantly on the lookout for these so that's kind of number one big group uh number two group that we want to look at is uh what we call market for everything so when we look at different applications we realize that uh crypto's biggest um add in terms of user experience is adding a financialized layer right it it doesn't necessarily make things faster it doesn't make the uxix smoother so it's very hard for crypto apps to compete with web2 apps on A pure user experience level so it must compete on a feature

level uh and usually that becomes some form of financial speculation so obviously uh the recent wave of social fi with things like friend uh dgen um we we're big fans of um and also we thought nfts kind of fit into this this this Paradigm as well so we ourselves are not great nft Traders we are not but uh we got involved with a guy who's very good at this so you want to tell the story about Spencer adventures and who this guy is I believe it was you who met him uh in the US if

I'm not wrong I yeah I met Spencer in uh in East Denver in a dinner and so so yeah we were we were planning or figuring out our NFD strategy in house and knowing that both Jason and myself we have pretty dubious track records in investing in nfts uh we thought why not let's Outsource this to one of the sharpest people in the space um Spencer uh and so We ended up being uh you know supporting his I believe it was his first major fund fund that came out uh it was a pretty small fund

I I believe it was between the 5 to 10 million doll range which we thought was a sweet spot um if you are an nft fund trying to 10x in the next cycle um gave you just enough Firepower to you know play a couple of interesting games with a couple of interesting uh you know top projects and so uh Spencer has gone on to acquire I Believe he's the largest holder the fund is the largest holder of paju penguins in the world today he bought all the 3 AC Pudgies bought all the 3 AC Pudgies

um and he's done a couple of very interesting things um on the side in the salana ecosystem as well uh but mainly on in the eth uh eth nft ecosystem and you know I think his monthly uh LP calls are really just educational calls for us to learn more about the industry and that's something I think we definitely Want to do more of um as we progress and as we explore ancillary Fields where we obviously have no uh domain expertise and knowledge but we want to find people who are you know at the Forefront trying

to find the next big thing in that I guess uh you know different field uh and support them way we can yeah and I think that that comes back to the structure of the fund right because if you're a pure Venture fund it's very hard for you to make these fun of funds Investments if You're a pure hedge fund you also probably don't want to lock up your Capital but because we're employee owned uh Evergreen style uh we can just invest in fund managers that we think are experts in certain verticals that we want to

get smarter on so that's how we're playing the nft um uh kind of vertical and that fits into our market for everything thesis which is that in in nf's cases it's basically adding a a financial layer to uh to Art to uh kind Of uh any type of social applications um so yeah quite excited about that vertical as well and I think that the last uh vertical that we pay a lot of attention to is what we call coordination networks so if you kind of zoom out a little bit and think about what Bitcoin actually

is right besides a digital money that people use to store their wealth it's actually just a digital Network that's coordinating a bunch of as6 and gpus around the world So that was actually the first actual deepin use case so people call it deepin these days but um crypto has always been about coordination of resources and resources can be physical resources like the gpus we see today with crypto and AI but it could also be people so you can coordinate efforts between people so some of this might look like Dows some of this could look like

just social communities so some of the bets that we've made in that Arena I think one of The most confusing bets for people when they look at what we invested in was Mand um so i' I've talked very copiously about Mand uh it was very a Founder driven bet uh so Ry the founder of Mand which is a social Community uh that tries to um basically coordinate Community around one coin uh he spent the past 15 16 years building a business around just memes before crypto was even a thing I would even argue he is

one of the people who popularized the word uh Meme in The Godfather The Godfather of memes in the modern context so Richard Dawkins was the guy who invented the word memes but then I think Ray was the guy who popularized it in the internet context uh by building nine gek which is one of the biggest meme websites in the world um so that that's kind of an example of how I think crypto could be used at an experiment to coordinate social communities so we see how that plays out and two of the other Investments that

uh I don't think have been announced so one I can't talk about yet but the other is called Amino chain so this is basically a blockchain that coordinates bio banks around the world so I think you and I were both kind of foreign to the concept of what bio Banks were so when the founder explained to us we were kind of wow this makes so much sense so a bio bank is basically a big big fridge that stores human samples so hair blood semen sweat um and people use These samples to develop drugs but apparently

when you purchase uh human samples to uh for pharmaceutical purposes there's a lot of obviously privacy related concerns there's a lot of data that need to be transferred you can't just like take a v of blood from nowhere and then make it make drugs out of it so um the kind of standard paperwork for transferring of these human samples takes up to week weeks to months and it's incredibly costly so These guys basically came in and decided hey actually a blockchain can solve all of this right if you store all the info uh on on

chain so we're quite excited about that one um and there's quite a few examples but just to kind of synthesize our major thesis so it's mostly zero to one type of impossible Behavior sort of enabled by crypto uh there's market for everything uh so financialized applications and then also coordination networks of peoples and Resources so that's kind of what we look at across the entire fund um but I'd like to kind of dive into the details here what does that actually mean right so I think a lot of people are probably curious about the war

stories in the past uh year and a half since we started and also from the outside looking in a lot of people also assume we're just Venture but if you actually think about it you got your start in liquid markets as part of defiance I got my start in Liquid markets as well because uh my my previous employer Spartan's first fund was was a hedge fund um so actually we were able to apply I think a lot of things we learned and and we managed to double the fund twice since we started about a year

and a half ago so let's talk about how we did that uh by focusing on some of the maybe the big bets that we got right so you want to talk about uh let's pick anyone here to talk about let's talk about the the uh The Solana call first because that was a kind of consensus trade but we managed to kind of catch on to that as well well I yeah I guess salana was interesting I think this is sort of Mt Midway through the altcoin pick up I I would I would categorize the bull

market really starting to take off as being in October 2023 so we're about you know 9 months from that already um this was somewhere at the start of 2024 uh where salana was you know breaking $100 uh people had saw Saw it Go 10x and people were saying how you know it needs to cool off um I think the parabolic W is over and we took the pretty aggressive view that uh Soul would have a push to $200 um at at the time I don't think many people shared our sentiment I think a lot of

people uh were trained in the very PVP uh regime and were conditioned to sell our performance and we were pretty cognisant of this and we realized that There were still very strong fundamental drivers of why salana would you know continue to receive flows and so we put on a pretty aggressive long on salana at about $110 uh which we initially which we took off at about $190 um call it in March this year so uh that was one example of you know uh us making Market calls uh which is really out dat the uh I

guess you know main priority uh but you know I can go Through a couple more of the more OS syncratic names uh that we've been studying uh ever since the start of the the deep in the bear um you know names like uh stacks for example Akash Ronin these are all uh I guess uh house favorite names that uh we uh have bought in the past um and they've all done phenomenally well uh over the course of this cycle um you know at least uh I believe if I'm not wrong 10x 10 Xing in Most

cases uh at least from the bottom uh till they highs maybe not now but you know uh and yeah so a lot of the day-to-day work that we do is uh you know researching these kind of names trying to find the Compounders that can continue to keep up with the market strongest winners or obviously is the strongest winner in the market um but we do a variety of different things as well right these are the longer term I guess 6 12 18 month driven type of stuff Correct uh type of positions uh we also trade

uh on a slightly lower time frame as well and this is typically stuff that a part of the team does with me um I think an example um of a interesting I guess uh you know idea that we had uh was putting on a d genen position uh I believe in March as well shortly after we we rotate out ofana so what is djen for people who are new to this so djen is it it initially started off as a pure meme coin on base um and it was Popularized uh I'm not sure whether good

or badly because VCS actually took a stake in D and I think it got a a bit of flack for that but it began being accepted as the in platform or inapp currency for number of interesting social fire platforms right uh I think farasa uses it as uh its main tipping mechanism uh and I believe a couple of other smaller applications I think Dracula was one of those that really kickstarted that big run for djen in March uh and that's where we really got the idea right because social fire was something that was on our

Horizon for the longest time uh and we saw DJ as the potentially a good shelling point for not only the base ecosystem but also the farcast ecosystem which I think a lot of people wanted exposure to and so I guess in a span of uh you know two to three weeks um we uh we were aggressively buying Deen uh sometime in March and I think shortly after that uh you know uh DJ had this parabolic move up uh I believe it I think from the bottom to the top it went up like 30 or 40x

um and we you know we walked away with that as you know I think one of the top three uh you know entities in the world uh by p&l so that was a pretty good win um that is an example of I guess the more shorter term uh type of plays that we make uh at tangent so we're not just a long only oriented Venture fund uh or Or sort of I guess fundamental deep value investing fund uh we also try and you know play the games that everybody or I guess the more you know

the Deens out there also play um so yeah that's one example of that I think that actually so that's call an interesting question because a lot of people think hey uh trading and Venture are very very different things and I've always been on The View that um if you're very very good at Venture and very long-term Investing you're probably not that great at trading or kind of monitoring attention flows and if you're very good at that you're probably not great adventure that's true so I think this is why this partnership is very interesting which we'll

talk about later as well because of how differently our brains are wired but actually think the two are more uh complimentary than people give it credit for because because we are uh constantly monitoring for these Opportunities we're constantly trying out everything on chain right so we knew about dgen I think way before most people in the world did because I was already getting tipped on DJ on forecaster like uh months months months and months ago um and we constantly try out every single application that comes out so we're able to capture the moments when we

see kind of breakout hockey stick growth um and that actually feeds into uh the longer term Venture thesis As well uh because it helps us understand hey uh you know where the user attention is going and what are the lessons we can learn from projects that successfully capitalized on attention and also projects that's failed to capitalize on that attention and it just kind of came and went so like forecaster is a great example of this right you look at the user chart up into the right over time and then you kind of expect like most

social F apps for it to kind Of collapse and then just stay there but then they actually made a Revival and that coincided with uh the rise of the dgen token so that was actually a big lesson in terms of uh you know the the usefulness of tokens to incentivize usage and it wasn't just the token obviously there was the frames and so on um but yeah so the the the kind of monitoring these uh I I think a lot of the longer term investors they try to tune out the markets completely so they Don't

pay attention to what's happening on chain what's uh uh what what are people excited about and then some of the Traders tend to F uh kind of completely ignore the longer term hey what's happening on the technical development what are the latest in ZK I think for a successful crypto firm uh as an investment fund you need to be able to play both games to be truly truly comprehensive and that's a controversial opinion because people think that there Shouldn't be strategy drifting yes and that's and I I would agree I would argue that they're correct

if only one person's at the help because as you said you know not one person can't be a master in in both different fields right um but yeah that's what we do uh on a day-to-day basis we have very clear delineated rules in the fund uh with very clear responsibilities and you know I I believe this complimentary skill set allows us to perform well in the Different areas of crypto yeah and um since we given it one example about a a a kind of big trade gone right I'd like to touch on kind of the

longer term uh fundamental bets that we made that were correct as well so you mentioned stacks akt and Ron I think those are really great examples because they are emblematic of the three biggest verticals so how we made the decision to buy Stacks I think early 2023 and uh early 2023 also for akt and 2023 for Ron was basically that uh we think hey there there's like three things that crypto seems to be good for is uh is AI is uh probably gaming as is coordination of resources and in which case for aash it's AI

it's gaming and then also Bitcoin seems to be uh the only thing that was going up in 2023 yes um so from that lens we started to look at hey what are some good opportunities to play this um and then with with uh Stacks we've known the team for a I've Known the team for a long time since Spartan and they had the big Nakamoto upgrade coming on as well uh what caught us by surprise was actually the whole ordino and Rune thing that was taking off which was add a Tail wins for that but

that really added to uh to uh to the BET um and then for aash I think we were also just looking at different GPU networks um and we realized the the the most interesting kind of organic growth was coming from a cash and we you know Established a relationship with a team uh I spoke to them over months we still have a group chat brought them on the podcast to learn about them um so that was another example and then the Ronin thing was was very interesting to to me as well because it was a

very favorite coin in Asia but I don't think um a lot of our friends in the west were even paying attention to it yes so for Ronin I remember um they they are the entire BD strategy Was just focused on selling to Asia and um you know obviously we were both around when axi first took off right the biggest game on on Ronin at that time and then pixel came around as well do you want to kind of talk about the the the kind of ronin thought process how we navigated that kind of what gave

us the the conviction to play there yeah no I think uh the the basis was that uh game five was always going to be a recurring theme uh in the next cycle uh I think we Saw that with axi infinity we're still waiting to see what the next successful variation of that can be hopefully it comes to cycle um but we also were cognizant of the fact that we were not game fire experts um we well number one we are not gaming investors and I I think investing in games is very akin to investing in

FTS where you need to have certain domain expertise in order to make the right calls and we we didn't have that so what we ended up deciding To do was finding the best proxy for gaming ecosystems out there that we think okay you know where can if we have three different ecosystems in gaming today which is the most likely place where we're going to find one of the next big hits and we thought that Rin was a very good Contender for it we still do today um mainly because of their proximity to the Southeast Asian

uh you know land mass where so many of the past or prior x uh people playing AI Have shown exhibited patterns of behavior that they're willing to try new things um and uh I think the team at Ronin is one of the best in the business in terms of understanding Le in how to build a gaming ecosystem uh being able to push the marketing being able to uh ensure the pipeline of games that are launching as of sound quality um so for us that was a very clear bet um as a fund uh and you

know it was the default until we saw that right gaming digal Surface and I think so far we are not able to make the claim that we've seen it yet this cycle except pixels um Piel is one of the potential potential contenders uh still TBD um but yeah so I think we're on uh that was the thesis for Ron yeah and I think for for for Ronin one big thing that got us excited is because we know that uh for crypto it's really all about distribution especially on the app layer right and so for for

for distribution is really the Most valuable currency so when we see a project that is actively turning down projects that really want to build on Ronin um that makes me realize that these guys have way uh better distribution than most because there was one example I think this is a few months ago where there was a game that was kicked off Ronin for under delivering and you never see that in any other l1s because all the l1s would just um basically welcome any app with open ARS Just so they can slap another logo on there

and say hey we have like 200 or bazillion applications with like four users on our chain but then Ronin was the one that was like this is a legit company there's like they're actually building something but we're going to kick them off because they're not shipping fast enough and that was that made me realize okay these guys have in same distribution because they're so confident that they can kick off Projects from the chain um and then number two is also because they've done it before right they have uh gotten I think 3 million daily active

users for axi which is not a number you see in crypto ever and the fact that they onboarded all those users means they can activate them again so one of the the kind of gambits that we took was that uh maybe they can reactivate this user base for the next titles and they kind of did with with pixels I think uh you Mentioned recently it was like two million active users or so on uh I think it was about a million us yeah so they were still able to activate uh you know their existing users

so first kind of ronin is the distribution play right so I think that that is a good example of a kind of longer term thesis driven play that uh you know we're able to manage over time um but kind of going back to some of the shorter time frame plays as well um so one of the big plays we made Was also buying eth yes eth BTC uh which uh was originally an idea serviced by uh our colleague Ryan um so let's tell us the story there so what what is what is with the eth

play because I was actually initially not on board with this but I was convinced otherwise yeah no I think it initially came across when uh I was discussing this with Ryan and we uh this was I guess 10 days before the E ETF deadline uh and we we're just remarking how poor sentiment was for eth and that If the rejection was to happen it was probably going to be priced in uh and so you know we thought after after realizing that uh we said hey there's actually a trade here right which is well number one

if the rejection if we're correct and reject if the rejection is priced in then chances are um ebdc as a ratio was probably not going to go down any further than had been and that that ratio had already lost a threeyear range uh J and was just Absolutely getting Mass good and you know I think it the range was like 05 to 8 uh it recently lost that range and it was trading to like 045 there were everyone on on CT was calling for like 03 at least before they start buying it um so it

was uh it was a combination of not just it was a mixture of apathy and also outright heat for eth at that point so we thought hey why not um you know there is a ton of option value baked into it in in case uh the Upside or the uh uh we won the lottery and for some reason the ETF actually got approv which actually not that's what happened right um and it was absolutely not priced in you would not have been able to catch that move um if you didn't already have a position and

so we obviously got really lucky in a sense where we bet on like call it a 10% odds of something happening and it happened but we got it at such a cheap price that even if we were wrong we probably Wouldn't have lost money uh and so we ended up putting in something like half the fund in uh an e BDC position uh and ended up doing okay uh because in the span of I think three days after we finished building our position uh the uh the change the reting of the probabilities for the E

ETF started happening e moved from like 3K to 3.6k really quickly now it's at 3.8 um so you know all is all is well in in tland yeah so it was it was actually an interesting Play because I will confess that I'm not the best at kind of lower time frame trading I'm more of the kind of longer time frame uh thesis and then for for some of the shorter time frame or medium time frame things I rely on our team to kind of give me that color so that that informs a longer term thesis

uh to see what I need to re underwrite so I don't I didn't really have a really great read of where eth was going I think I was in a camp that uh I was looking at the user Numbers right as a typical kind of long-term investors looking at user numbers I'm like everybody's using the retail change like everybody's in salana all the apps are coming on salana you look at the airdrop value it's the biggest on salana um and everybody's using bay and blast nobody's coming back to eal1 like what is the trade there

um and then the other part of why I was skeptical as well is because I figured that you know for Bitcoin we had so much Time since 2008 to talk about digital gold and this narrative really permeated trfy mainstream so no one doesn't know bit what Bitcoin is anymore if you go on the street and ask everybody uh you know I'm sure they've heard of Bitcoin they understand at least conceptually what it is for eth it was getting more and more confusing every single year and uh we did an episode about the disaggregation of eth

where you know last cycle you want a long eth you just buy eth um and Then suddenly you have to factor in the l2s now because uh execution is happening on l2s so if you look at the the Founders that are building on eth no one's building on L1 anymore except Athena actually um so you have to buy the L2 tokens as well and then this cycle you started to have disaggregation of The Da layers as well so you can't just buy eth you got to buy the da tokens so it's way too confusing of

a tech bet so for me in my mind uh Bitcoin Was always a macro bet and an e is always a tech bet and to me the tech bet has not permeated mainstream Consciousness so I was very dismissive of the ETF even if it was approved but I think what you guys were able to do was think from first principle and basically illustrate the two licks of the trade the first lick is because everyone within crypto is underp positioned as long as they reposition you can have you know some pretty spectacular outcomes The second leg

has to do with the actual ETF flows so that was actually a variable that wasn't even relevant at the time of that TR yes so kind of helping me be able to see that was was kind of what brought me over the board um and we managed to do very well on that one yeah um so yeah good week good week for tangent now we've spoken about some of the good times so I I want to make sure that we talk about some stuff that we were wrong on as well as as Fundamental investors so

one of the big fundamental bets that we did early was it 2013 for robit 2023 yes yeah 2023 um was robit so for those who don't know robit was why don't you give the story on what robit is actually and why why we took a position so so I think one of the big things uh within the depths of the B market I think gambling was an activity that saw a lot of traction and pickup um because first people were you know obviously are all Deens in some way and They just need to speculate and

in a dead Market they end up going to casinos to speculate um and so robit was this absolutely absolutely you know mindboggling growth machine uh in the sense of how how much volume they're doing how much fees they were generating uh there was this element of are the fees real are the numbers real uh we did quite a bit of work to conclude that I think with reasonable confidence that I think the numbers were real um and so we Thought this was a great business this likely is um and because that they were sharing their

statistics on a public D dashboard um in real time we thought you know we can track these numbers in real time uh the I I can't remember the exact numbers but it by a traditional Equity framework this was a fantastic business growing at phenomenal rates um and so we thought you know hey you know why not put this on as a core position for tangent uh turns out most People once the bull market comes back on leave the casinos and for and because actually it's a casino token uh the other exchanges just absolutely refuse to

list them because of uh because of whatever reasons kyc maybe yeah kyc competitive issues uh y y so without access to tier one exchanges uh robit could never be placed in the hands of the big marginal buyers that could really push this uh to a valuation that what to what we thought Was fair and so after recognizing this we realized we were playing a Fool's game we were trying to apply Equity Frameworks to crypto uh and while that may succeed in 10 to 20 years once the space has fully matured doesn't exactly work now and

so we held that position for I believe it was four to 5 months it was a painful four to five months uh we didn't exactly lose a ton of money but uh we didn't make money and it was a huge cost in Terms of opportunity cost to us um so that was an example of how you know we thought we were being smart in fact we were just 100 IQ and didn't make any money yeah so I think that's a great example of like illustrating how fundamentals and thesis driven investing could come into conflict with

the shorter time frame aspects or the liquidity aspects of the game which is why uh I think for a successful team you need to look at both so what I mean by That is for for us our thesis what one of the three thesis like 0 to one uh market for everything coordination networks uh I think robit firmly fits into two which is market for everything right they're creating an kind of a casino it it's not technically not fully on chain as well but there's that aspect of kind of fin financialized games um so we

we that that kind of got uh hooked us in to start looking into it and then we started diving into the fundamentals the Actual Revenue we tracked all the token Burns we with some models to make sure that hey these numbers track um uh you know check out um but then that came into conflict with both Market timing uh which is BU Market coming back and users uh tend to go to higher risk activities during a bull market instead of just in a casino and number two the liquidity aspect which you mentioned as well which

actually a lot of Founders ignore uh for Some reason particularly in deepin sectors when I talk to deepin Founders a lot of these Founders come over from the hardware space right so they're creating these networks of gpus CPUs what have you um and they think that okay just as long as I create a great network of these Hardware uh you know components then we can have a great token because the market would price it in but that is not true in crypto uh I think it's so inefficient that fair pricing does Doesn't happen unless there's

sufficient liquidity and the game is relatively solved so a lot of deepin Founders Focus so much on the hardware side they forget that the token itself is almost a separate product and this applies to any protocol out there as well I think for any project that has token you actually have two products right for Founders out there you have the actual product that people use and you have the token and they require different road maps they Require almost the same amount of attention this is why I always advise Founders in an early stage to not

do a token until your product is you know uh has reached product Market fit and you know how to scale this and then you push the token because you cannot ignore one um and just focus on the other and I think that was the case for robit they kind of focused on one and robit the token sure they had the token Burns but they just couldn't figure out the Liquidity aspect of it yes so they never really got uh to being um kind of fairly priced by uh by by market participants I I think if

they played the cars differently and they were cleared legally for what they were doing uh internation and they somehow managed to get to one this things I would not it would not be unreasonable to assume go B is at like a 10 billion market cap today I think the numbers if it's real would warrant such A valuation but yeah L we are in crypto because they they also had the distribution right they had so many users that were not in crypto and they coming to crypto the first time so that was actually a very strong

thesis for um kind of Distributing owning the distribution and be uh expanding vertically so they could create uh you know more per pairs they could become an exchange so the dream was very big actually and and the fundamentals Supported it but it didn't work out um so that was one example of U of A bet gone wrong but I think because of our abilities to risk manage uh we actually didn't get hurt yeah we lost like 15% yeah but it was like a big opportunity cost but I think that comes back to kind of being

able to manage risks correctly which kind of leads us to a next part which a lot of people are interested in which is our investment process so in terms of how the tangent team is Structured so a lot of people hear from us on Twitter but actually we're we're a bigger team as well do you want to talk about the the philosophy of structuring our team the way it is currently and and how we're doing that so right now we have um well you take care of the Venture side of things uh almost completely um

I take care of the I guess lower time frame trading on the centralized exchanges and we co-manage a much larger proportion of the book uh That is the spot book where us plus the rest of our team uh generate spot ideas uh consistently re underwrite them and Hal them anywhere between um 1 month to I think as far as 12 18 months uh so that's the three different sub strategies of what of how uh tangent is structured um right now uh we I would say we're doing pretty well uh across all three segments obviously things

can be improved but yeah yeah so I think for for the spot Book that's where things like Stacks Akash Ronin came in right where we have a thesis we underwrite these things we reach out to the team we talk to them we kind of help them support them in different ways and then we have a core position that we just purchase on Exchange so uh I think this structure allows us to straddle all the time frames right so the venture time frame is really like 4 years uh four plus years right because we're we're not

Saft Flippers so I do not like saff flippers I don't like people who buy safs and then flip them in two weeks and claim to be long-term investors we don't do that um so we actually hold these things um for years and years and then for the spot book uh depending on the market narratives depending on what are interesting bets at the time depending on opportunity cost as you said it could be you know we could be re underwriting things in one month if we're wrong we Get out uh but if we're correct we can

hold them for also you know 12 24 months and then the trading book is where we focus on maybe lower time frame ideas that are more kind of attention driven so actually a lot of the the mem coin Behavior fits into that as well so we've built a team specifically to be able to cover all of these so at first I was a little bit apprehensive of the idea because I thought okay this sounds like strategy drift right you're hiring People with different personalities but at the end it actually the entire team came together and

started making decisions uh with inputs that are just you would not have thought off if your entire team is the same personality yes definitely and I think speaking of that one thing we did was uh we have this 40 question or so quiz that we designed uh which if you answer all of it it spits out a radar chart so if you guys play video games and you have different uh Strengths and weaknesses strengths and weaknesses basically you have different attributes for your characters so it kind of shows you hey this person might be very

good at understanding attention flows but very bad at interpreting data or very good at uh kind of predicting Trends uh but very bad at confusing Trends with actual traction and so a lot of kind of very specific Civic traits so what we want to do is make sure that as a team when we overlay all of these Radar charts we get a circle we get a very very kind of uh complimentary uh and capable team so um was was that something that you always thought that we wanted to do in terms of just hiring such

different people or was that just something that kind of occurred to you as we're building this together no I think it was very clear from the g go uh this was the way to do it um I think for me I was very clear on where my strengths Li and I I thought I had a Pretty good sensing where yours did as well and so you know um the reason why we Helm the two I guess tail ends of of of the book is because we know that's where our strength lies and for the much

more as the larger main proportion of the book that's where we really need a team to come in and support us right uh so I think everything was deliberately done correctly um right now we're still fine-tuning the mechanics of how uh the entire Team Works you know bringing on One or two more people um to you know really fill out the team uh but after that I think once we've locked in um we're good to go yeah yeah and so if you're listening to this at home and you are a young analyst or investor you

want to join us just reach out to us um happy to have a chat with you guys y so on that note actually um on on on building a team uh I think one of the main things that I wanted to do was make sure that we're very different in skill sets and Wiring but very similar in values so we don't want to hire bad people so we want to hire for people who kind of believe in the industry in the long term they want to support this industry they don't like scammers they don't want

to do you they're kind of high integrity people but at the same time they have very different wirings and skill sets because I was always up to view that best decisions come from thoughtful disagreements if you have a whole team That is constantly just like hyping each other up having the same thesis you're going to miss some of the biggest Trends in crypto because um you know unless you actually steal man your ideas uh I don't think you can make good investment decision so I think we we've set up a team precisely to do that

so just to kind of talk a little bit about the process for the liquid fund side so for the spot fund and the kind of uh shorter time frame trading stuff we have Periodic postmortem for basically every single decision we make right so we we track every single thing and uh we try to distill Lessons Learned every single month into principles um so is this something that uh you know before you started a tangent you did on your own as well like just constantly trying to you know Journal everything you traded and was it something

that you kind of developed over time no I think a lot of this is Actually to your credit uh I think you are much more diligent and organized than than than me in that sense um I would definitely reflect in journal uh the big events that happen or the big mistakes or the big wins that I've had um but not so much uh uh till a point where it's systemized the way that you've done it I think you've done a fantastic job it really creating this well out machine of like um if there's an event

what is the output what is the What is the postmortem what are the lessons learned and through that I think we've grown uh so much quicker we've become better faster uh as a function of these consistent systems and processes in place yeah and I always talk about the importance of principles just because there is so much reeny bias in how people think about markets right we always remember the latest thing so for us we were stuck in like PTSD mode for like a year since 2022 because uh you Know Luna 3ac FTX all those things

so a lot of people were using recenty bias and you they were making decisions in the market as if it's going to be a bare market and chop market so a lot of people were sidelined in 2023 because of this so I think the think the way to avoid it is actually just to study history and to distill these into bite-sized principles so you can easily recall them so this is something that we do just every year we just collate all Of our lessons from that year from you know wins and losses into principle um

so it's it's been applied kind of quite well I think um to to to how we run as a team so that's on the liquid side uh on the Venture side as well I think we also are pretty diligent in terms of how we evaluate teams so we do uh ref checks for every single founder we work with uh we make sure that um we don't play the game where Founders are like hey we have 48 hours before the Round closes and so and so is already invested so you got to you got to commit

on the call like if you say that to me I'll just I'll just hang up I I don't want to get involved um CU for us it's really long-term relationships right we want to invest in the people we want to work with over the long term we want to see you ship your products we don't want to see you cash out too early we want to see you actually ship your thing um so we want to help you on the way so we Want to stay with you for years and years and for us to

like commit on the first call it's almost like you meet a girl on the first date and you marry her makes no sense to be so we do our diligence uh we're very very processed but as a result of that we're also quite slow in terms of the Venture side I think deliberately as well yes so every year we do not invest in more than 10 projects right we are very very concentrated in terms of our bets and a Big part of that is because we know that in the first year of any startup we've

seen hundreds now in crypto it's the most crucial and Founders need your help the most but the bigger funds because of allocation resources they usually can't get involved that early so there was a gap uh in the first year of the startup where you know these start these Founders are kind of just left out to dry um so we kind of come in and help these founders with um kind of figure Out okay how do you hire people we've helped them close some pretty senior hires before we help them negotiate with exchanges assemble entire cap

tables um also kind of Crisis manage in some cases so a lot of the behind the scenes things that need to be done and can only be done if you have a deep Network and expertise in the Asia ecosystem uh we try to do that for our Founders but we you know typically don't talk about a lot of those things publicly just Because you know these are internal kind of company things um but yeah so I think we're quite process driven for the adventure side and the liquid side as well um I guess in terms

of uh the the the broader team when you think about how do we scale as a team over time um what are the types of things you look for in candidates or in people you want to hire I think the ability to have uh strong independent view is one of the most important things in crypto I think When if you let yourself get taken by the current that is CT and prices uh that you see every day you can quickly Lose Yourself into just um doing what people are telling you to do or thinking how

people are telling you to think right because there's so many threats on on on CT now where you know they're telling you hey this is an interesting Trend look at XYZ protocols as for potential Alpha and by the time that you are taking this at face value and going To investigate these things um there's an element of alpha decay already um not saying that these threats are useless um but you know typically the best ideas that I found uh have often never been from CT I've actually used CT as a counter indicator quite a bit

uh in order to find the best ideas um and not not to dis anyone specifically but more so just take the general uh I guess emotion portray to a certain thing so eth is a perfect example for that right You I I saw hate uh and anger on eth so much uh you know just days leading up to the ETF uh deadline so I think having a strong independent view is extremely important um and being able to to at the same time be malleable in your view after being confronted with a different perspective is also

I think pretty crucial and these are I guess pretty contrasting uh characteristics and it's not often that you would see someone or it's pretty difficult to have both but I Think it's possible and I think if you can have that combination uh you would number one be able to spot Alpha before anyone else which is extremely good uh for money making and number two you be able to hop on Trends uh at a rate that is proba probably it doesn't make you too late to them basically right because uh money is made the most money

is made actually when you are predicting a trend and it Turns out to be correct the second most money is made when you are mid with through a trend and the trend continues to go right but obviously it's a bit less but the risk is a lot less as well and so if you can kneel these two aspects down you typically will do pretty well in almost any environment whether PVP PVE uh you do okay so I think those are the two main uh most important things and those are the two things that we look

out for uh in Prospective analyst most as well and and if you really think about it in in crypto or in general investing it's uh at least in kind of early stage high-risk High variance type of investing not talking about the Deep value type of investing it's all about catching hockey stick growth right catching parabolas and I think different styles in investing would put you in different phases of that Parabola right so as a venture investor your goal is to Get in even before people realize there is there there's a hockey stick happening right so

you're trying to preposition years ahead of time of the next Trends so if you're investing in dpin like three years ago or um if you're investing in in socialy you know years ago then I would consider that uh you know good Venture investing probably first is if you're chasing crypto AI now I'm not so sure if that's that's like I think that's confusing time frames so For me one of the biggest rules is your ability to navigate time frames well uh is very very important for crypto just because um VCS and Traders they're investing in

the same assets because the time to liquidity is months so people always confuse uh time frames and I think that was actually one of the reasons maybe that we messed up with the robit thing which because uh some confusion around time frames as well so for us as a team we want to find people Who can navigate time frames well and are self-aware enough to know where they are good at so I think my Edge for instance is in pre-positioning years ahead of time so I run away from Trends if I see everybody hyping up

crypto AI I'm I'm not going to do a crypto AI deal I think your skill is kind of navigating the parable as it's happening right as the trend is happening um and then we we we find some people on the team uh who are good at maybe early phases of the Parabola so they they start to see some sign of breakout maybe they see uh user numbers spiking up on certain applications but the price not moving so they see some discrepancy and they get early and some people on our team are very good at the

last part of the parabola which is when things get the most euphoric but also the most liquid um so they are kind of very plucked into the information flow yes so being able to kind of uh navigate this entire line I really think is the whole game of investing but the more important thing is is uh the ability to recognize which part of the line you live on and just stay there so uh in order to make our team be very self-aware of this we also have a DOT collection system so we call it dot

collection systems basically every pitch we have like 30 different criteria that we rate each of our analysts on um just for me and Daryl just to make sure that okay it seems Like this person is good at logical thinking and you know understanding secondary effects but maybe they're not so good at Market timing so over time we're able to kind of plant these personality or skill traits of our uh of of our team as well which I think our team quiet uh enjoys because it helps them grow faster as well yes because I think one

of the big things with uh my first job as a consultant was these kind of 360 reviews at the end of the year Basically once a year you got some feedback from your manager they give you a bunch of about oh you're a hard worker but you're not that blah blah blah blah so didn't help me with anything so you want to make sure that if you want if you're serious about being a world-class investor and you come to work with us we have systems in place to make sure you track your progression and we're

very very specific in terms of what we think you can work On um yeah so that's a little bit about uh what the tangent process is like so for the second part of this I know a lot of you guys are probably tuning in to hear some sort of alpha or Market views so um some of the things that you guys have asked us about I've listed here so we're going to discuss that one by one the first being the ETF implications so what are your thoughts on the eth ETF just in general well okay

I I think thinking a step back from the E ETF I think just comparing like the the biggest difference between the last cycle and this cycle is undoubtedly the ETF right um that is the number one unlocker to significantly larger pools of capital and it's the ultimate answer for who is your marginal buyer right who is your marginal buyer for BDC 6K and the answer is Sovereign weal funds the answer is potentially companies the answer is potentially uh huge tradire institutions right um if we had that law Cycle maybe we wouldn't have topped that 69k

right but now that we have it where can we go um so I think this is undoubtedly the most important thing uh this cycle to have happened so far and uh it's interesting because I think at a very low level uh it's pretty obvious right oh ETF means more money come in means number go up right but I think when people are consistently re underwriting where you are in the cycle uh people are consistently asking who is The marginal buyer um how the flows look like uh now that BDC the BDC ETF has sort of

mature to a stage where you really don't know whether tomorrow is going to have a positive or negative flow uh when there's an absence for reason too long and you see uh the inflows come out at 300 million 500 million that is I think one of the biggest uh positive impacts of the ETF this cycle right because it it plays a Profound role in changing sentiment as well because if if there was no ETF and we were ranging between 60 to 7 70k for 3 months I think most of you will get pretty jittery if

I I still think most people on CT are pretty jittery right because they're consistently asking all right it seems like uh the flows are pretty much exhausted who is your marginal buyer there's no marginal buyer it's time to go back to the shadow lens Uh bare Market again yeah y um but when if you look at the broader I guess system or cycle what is the reason to buy BDC now the Haring is over right the the ETF has come so all the I guess Catalyst that you would reposition for already over so why are

you still long um and the answer is really because you just have had that lifeblood connected to you to the largest pool of capital in the world that if by our estimates it's not even 10 % allocated yet um there's really no reason to default uh to to I guess sway from a net long uh bias in order to capture these flows right and so I think the ETF is enough to be the Tipping Point uh to skew you long in in situations where you would typically be neutral or maybe even short I think that's

the biggest difference to uh the mindset and the psychology of the market now and this extends uh from from BDC and now we're Going to see I guess in the next couple of months what it does for eth as well uh but if we're right and you know consistently more and more people submit and embrace crypto uh from you know the real world there is really no reason why you should be bearish because even on days where you have 100 or $200 million outflows you know that the rising tide ultimately Brings us back right so

it's very befitting of your green candle behind you that's correct very bullish very bullish so I think this is an interesting point about studying history as well because so we talked a lot about studying history and Distilling and into principles but there's also a limit to how much you can just Reason by analogy and hey this happened in last cycle so it's going to happen this cycle so that's we always encourage our people to Think from first principles as well and one of the kind of main difference like you mentioned is this undercurrent of ETFs

because if you reason from analogy alone uh last time we had a Bitcoin Futures ETF that was the top of the market yeah um and last time the bull market happened after the halfing as well so if you just reason from analogy then there is a you know there there's a risk that you completely misinterpret this um this entire cycle so I think This is something you're quite good at in terms of like reasoning from first principles and making sure you're not just bind blindly uh you know superimposing superimposing charts over each other yes so

how do you navigate uh thinking from first principles but also balancing learning from uh you know successes and losses of the past cycle that's a tough question um so I think thinking of first principles is definitely the most Important thing because usually from that you'd be able to develop viewpoints that the market may not agree with that's number one and you the market is a pretty good reflection of what H mentality is and often times H mentality is wrong and so this is how you're able to take contr viewpoints that may or may not pay

off in your Des the time frame um so that being said uh I don't have a lot of experience in crypto relative to a Lot of the ogs out there and a lot of the time I understand how crowd psychology or investor psychology repeats and so we typically try and find ways in which the setups are very similar meaning uh markets have been conditioned to do certain things uh in the past and that's why it's likely that it's going to repeat in the future um but it's definitely I would say this is one of the

more challenging aspects of being a PM and trying to decide okay our Market is going to diverge from history or the Market's going to follow history because if you can answer that question with 100% accuracy you'll be the best investor in the world by far so um but it's something that we strive to do on a day-to-day basis and I guess bringing down to specifics I think a lot of people are interested in our views on on bitcoin and we talked about the the chop framework a little bit as well so uh Yeah what is

our current view on bitcoin why don't you answer that given that this CH framework is yours this is I've been a big proponent of this so my view is that uh anything between 56 and $71,000 is noise so I think the market is just in a wide wide chopping range and every time we've tried to break three of 71 we might break three it today to be honest we already broke through we've already broken three of it so it might be IR relevant so Technically the the point is 73 and I'll just keep adjusting it

up words to fit my bias but my my whole point is that there is a big consolidation range for Bitcoin and unless we get some sort of uh positive development um most likely in the form of some sort of political Catalyst uh towards the end of the year then we enter trending again but I have no conviction on what the timing is I'm really just basing off uh B basing decisions off of what the price is Telling me and a a few kind of reasons why I think we are in some sort of a y

chop range is uh you know three-fold so number one if you look at uh you know you look at equities um they are you know no longer just up only so that that's usually quite High correlation with Bitcoin as well so obviously that's lower time frames so low conviction on that number two is actually stable coin inflows so if you track usdc and usdt we've pretty much been a straight line Up since like uh Q3 Q4 2023 that's finally started to stagnate so it means inflows at least from Crypt native inflows for USD to USD

is slowing down a bit so obviously you could say that that might be offset by the ETF inflows into Bitcoin um a bit dubious about that um and I think number three also is that a lot of this uh ETF flows is probably priced in at the moment unless we get you know surprising inflows to the upside um which is why I think we need Another additional Catalyst uh probably in the form of favorable political conditions which we are starting to maybe get so maybe we do break out of that range but until this kind

of range of 56 to the 70 the low 70s break uh I'm not very very convinced that we get you know any type of euphoric bull alt Market especially for eth uh so I think just to extend the view to eth as well um I think part one of the repositioning trade is done right where all the crypto Natives are reposition which you correctly called but the second part of that um I think really depends on actual flows coming in so that depends on the S1 being approved um so I think from now to then

um e price action is also a distraction of noise but that that's my personal view I know we have some internal disagreements about that sometimes this is why you have the red background and I have the green background I am the bear I am the bear He's the chop bear and I am the it's always PTSD um yeah so we we've gone back and forth on this uh a number of times um so and the compromise is uh the invalidation right so I think at 73 k uh if we do break above 73k Jason will

be forced to submit and uh we are able to flip fully long once again uh which I think I mean we've we've sort of sat in a 3-month range for a bit I think if we do have a proper breakout uh you're probably not going to be able to Buy 73 or 74k if it break out properly it's going to be probably straight to 76 or 77 um and then you know next order of business is trying to touch 90 I think um so I would definitely prefer that as opposed to continuing in this range

uh for a while but let's see uh right now it really feels like especially with you know the last yesterday's $800 million BTC inflow it really feels like the ball is in trap fires caught um they are Controlling the market now now we see what what what happens so yes sir and now another thing that the people want to know about is talk about one of our bigger positions so without kind of giving away everything I think one thing we can talk about is probably rwe yeah so we were quite early to the rwe train

so let me kind of give a back story there um when we looked into storage networks I think in 2023 it was by far To me very very clear that file coin was the winner in terms of uh the capacity the supply all the metrics and to me are we has a very Niche proposition right they were asking people to pay uh multiples on top of what you would pay for any other Storage Solutions but the obviously um the trade-off there is you're you're uh paying Upfront for the cost of Perpetual storage but when you

really think about it like in terms of a Consumer use case perspective I couldn't think of anyone who wants to store something online forever besides maybe French use cases like human rights lawyers and so on so to me the Tam wasn't that big but then something changed uh when this AO thing got launched so we're not going to talk about AO specifically we did an episode with the founder of rwe Sam about AO uh so we dive really deep into the tech there we dissect a whole white paper if You want to check that out

go ahead um but in terms of uh AO so this is new L1 that is uh that that is kind of developed by the rwe team and they just had a very interesting update as well you want to talk a little bit about that that update about uh this this Fair launch uh yes so so Jason handles the fundamental implication ations of how exciting AO is as a tech uh as as you know new technology I handle AO in terms of what It means for our bottom line and how do we make money from it

so uh I think AO is very interesting right now because number one um it is a L1 that allows for AI agents to work on chain I think not many if not any blockchains currently offer that alternative right so immediately it can start being categorized as a potential candidate for the AI agent mattera right and I believe there are not many high quality candidates out there today um number two This complete Fair launch um by the team well it's not a real Fair launch in the sense that you have a lot of a token holders

that basically free AO tokens if they custody on chain if they custody on chain we actually find out later today the exact details off that conversion um but as far as it gets this is about as good a launch uh from a VC backed team as you can get right it does not get better than 100% uh going to or or rather a 0% uh allocation for investors and 0% in allocation for team right that's basically what it is uh so now this I think works very well with the existing Dynamic of the the crowd

or or the market being unhappy with high fdv tokens uh simply because I think the dynamic there is pretty well understood by the market uh you know you have new tokens even if very exciting uh you have huge inflation and emission concerns somewhere down the Road and so you know people have gravitated towards mem coins uh I think in large because of the fact that they are 100% Fair launched and fully circulated um so I think AO can capture a part of that matter as well as an AI coin or an AI leader that doesn't

have you know that aggressive uh investor unlocks or team unlocks it may still have quite a bit of inflation because of the way that they're structuring the AO token release um but you know we'll see As I said later today um so if you match the fair launch meta with the AI agents meta you actually have a very compelling uh candidate here that can be the market leader for both M share and price appreciation especially given how I guess dry or tired the rest of the AI landscape is right um if uh I ask the

general participant on the street what Are the main AI tokens to long they're going to answer render they're going to answer near and they're going to answer W coin or they're going to answer one of those ax fetch uh tokens as well uh this has been the case since the start of the bloody cycle everybody's kind of tired of this everybody already know know that most of these coins are probably overvalued to put it lightly um and people want a new Fresh idea with a fresh dream and this is where I think AO Can really

provide that so uh we have built up a reasonable AR position um based on the conversion ratio and the ultimate details of the toonomic launch for AO uh we may build a separate AO position as well uh but I think in the absence of really anything else happening in this market uh we really like this yeah and and by the time this episode comes out about a week from now uh we we'll know what the actual verdict is on on the details but it's Interesting because we approach this this is an example of how the

team works together where we have uh a member of our team who's I I I consider maybe a medium time frame type of wiring come in with a with a pitch that say hey there's this new a development that's quite interesting let's look into it um and then I myself I think more higher time frame wired I look into the AO stuff I dug into the team um and I thought this is actually really interesting this is What definity said they're going to build for years but just nobody cared but they're they're for real doing

this and then we have a member of our team who is more of a tinkerer lower time frame well not lower time frame but more of an onchain kind of guy actually test out uh a test and walk out uh walk us walk the entire team through it kind of he was running the two AI agents against each other showing us kind of how it works as well so that kind of gave us an Idea okay this is what people are tinkering with um and then we try to approach with a venture approach so we

try to approach a team hey if you guys looking for investors for AO uh get us involved but because that didn't happen and the actual token is only going to be in liquid markets uh we bring in kind of the the kind of liquid side of the fund as well to participate so that's an example of like how different wirings uh of a team allows us to capture an Opportunity in a comprehensive way so I'm quite excited about this uh so we'll see kind of how how it turns out but for the last part of

our segment today uh I tweeted out what people want to know uh when I brought you on the show and we have I think a list of like 20 or so questions some of them very inappropriate so we're not going to talk about them but I've picked uh I think five or six questions here that I thought were quite was quite interesting That we can do as a rapid fire for the last segment so first one here is how do we pick each other as co-founders and I think this guy asked on both your Twitter

and mine okay he asked you like how did you pick how did you know Jason was the one and I was like how did you know Daryl was the one and I told him you know we're not married we're co-founders okay so what was the story there how how did we decide to work together so I thought That you were one of the most uh publicly opiniated people in the space uh that I thought consistently made a lot of sense when you were uh you know voicing your thoughts on Twitter um I think your podcast

was one of the best education materials out there for newcomers to get into the space I thought you were a generally good guy um and I had you know we talk shop a little bit um throughout the years so we were getting to know each other and we Co-invested with each other a little bit so you know generally what I look for a partner is someone that I can trust someone I think has similar values as me someone that can push me uh and uh make me consistently try to be better in a sort of

competitive way but not directly competitive um and someone who could pluck the Le the leaks that I have in my investing skill set and so I think you ticked all those boxes pretty quickly and I you know I I knew this quite early On and so I was like hm you know this is a good guy maybe if I ever do anything by myself I'll hit him up so yeah yeah that's I I think one of our guys yesterday asked us like what why are we doing this as well and I think our answer was

that actually we just like the game like why why not just retire uh and go check out somewhere um but actually we just enjoy the process of being in the market of trying to solve this game that is crypto um and kind of Working with people who we think are very sharp and learning new things every day like if if uh you know if we if we were to stop tension I don't know what we would do so I think that that's one of the reasons why we started to do this I think for me

it was actually uh I remember very distinctly last bull market uh we're all kind of you know investing in different things co-investing different things trading different things so sometimes uh you Know because markets are 247 and last cycle was truly crazy sometimes you send money to friends or people you met online to execute stuff on your behalf and they send it back to you sometimes you do do it for them and I think um I've had a few cases where you know I sent I sent some of my funds to some friends as they were

buying some stuff I told them hey help me execute some of this and then sometimes they would come back and say hey I help you execute this Um so I I should get a little Kickback from the profits again so some of them would pocket 10% before they they release my funds so that's like that's fair but then I think I remember I sent you the most amount of money I've ever sent anyone I've never met in person and I remember I was doing this because I was taking uh my girlfriend out at the time

but then I saw this thing I was like ah if if I try to trade this my girlfriend would kill me um so let's hit Up there okay so I send the money and then we went to take watch a movie half of me thought okay I've never never met this guy probably he took the money and ran away and then when I came out you fin finished the trade there was like a good profit there and he sent it completely back to me no questions asked I was like okay this guy is very trustworthy

so to me it go back to the point about finding people with different skill sets but similar values Right in terms of Integrity so I think that that was that was one of the things so obviously uh We've also talked for like two years before he started and then I met you in person in Barcelona as well and now I moved to Singapore um so yeah so that that's kind of the story there but I think if people are looking for co-founder advice I would not recommend starting something with someone you've never met before so

make sure you kind of run some checks first And make sure you you've talked together you've done some things together um just because we haven't met in person we've actually talked a lot so so to to be fair um I think uh it's not like Jason and I immediately you know uh combine our Au together and start the tangent on day one we actually had sort of a soft feeling out process for year for almost a year yes where we we were by all means working together but we hadn't really taken that step to pull

our Capital Together cuz I think that's a very big deal it's a very big step for anyone to take uh because it means that whatever decision you make um you have to make on behalf of two people instead of one right uh versus uh if I were to co-invest with Jason for example um I would have my own sort of book he would have his own sort of book and only certain deals that we like that we can co-invest together that's a much much much lower commitment And so we had a full oneyear sort of

feeling out process saying is this guy really the person that I want to commit with and um only after that that we decide to go ahead so that is something that I would recommend uh if you are you know trying to find someone you want to work with in crypto maybe chances are you probably haven't met the guy in person um I would recommend taking some time to really get to know this person uh it could be a year it could be years If you if if you need it to be you know this no

hurry it's actually a signal I use for a venture process as well in terms of like investing in co-founder repairs one question I always ask how did you guys meet did you guys work together did you guys disagree before and if they have never met before and they just started this because they met you know at a conference or something that's it's not a death nail but it's also sometimes a little bit H you know Are these guys going to in like 2 years yeah so that's that's one so okay someone wants to know what

is our biggest moment of disagreement so far I think most of the disagreements is actually just on positions and book net I don't think on we don't actually have many big disagreements many small disagreements yes on on like so we have no major disagreements on principles on morality On ethics which is important because if you do then wrong part something's not right um but yeah we have many disagreements in which either I'm asking Jason to buy he refuses or he's asking me to buy and I refuse I'm like no uh and so the actually the

the way that we sort of partially solved this was we introduced the concept of vetos in Tangent uh it's very similar to uh what do you call it um what is that uh in tennis you have these challenges yes in Ten in tennis you have challenges and similarly in in Tangent we have vetos where if one party or the other feels really really strongly and the the other party just refuses to budge uh you can V you you can pull the veto uh and just execute it anyway and and if you're right it replenishes correct

so if you're right on the call it replenishes if you're wrong you tuck your tail between your legs and you lose your veto for the rest for the I think every six Months I I remember I I laughed because I remember in 2023 we both vetoed and we're both wrong so we just left with no vetos yes and it was related to I think like Market beta call um yeah but yeah I think that that that's a good characterization I think there's many moments of small disagreements all the time is because we wired so differently

but it's because of that that I think we are not we we're not allowed to make lazy decisions we I won't be like oh There things is yeah let's do with it yeah so it's it's always like actually I disagree because of this and this and this and we make sure we address all of them yes like many times I would feel like doing something yeah like just because I feel like it yeah and then I tell Jason and he bombard me with a list of questions I'm like why do you feel this way and

I'm like all right maybe maybe it's not you get a long text from me but it's actually quite funny because Uh people think that as a venture kind of long-term Focus guy I'm always like bullish about everything and as like shorter term Traders they're always bearish about everything I feel like is actually not true I like I'm often more bearish on things which you know is why I have the red candle here yes despite um kind of working mostly with Founders on a multi-year type of Horizon and not really caring too much about the low

time frame price movements I'm always Very quite bearish yes and I'm the natural bull which is pretty funny yeah so I don't know what it is maybe it's a 2022 PTSD um so speaking of that someone also wants to know how do you exit for early in Investments so I'm actually going to steal an answer from Chris biski which I thought was a great answer which is if I exit and you know then I up somewhere because uh I would never want to kill the price of any project that we exit I want to make

sure That there's sufficient liquidity the project is a maturity stage that the thesis has by and large played out um so we can exit gracefully um I think that's actually a great great framework because you see a lot of the bigger funds exiting their early positions they just kill prices I'm not going to name names but I think in 2022 or 2023 uh someone very big was exiting maker it might have been 2021 my timeline bluring 2023 2023 so was very Like early investor was exiting maker maker was I think honestly having a great road

map with the end game and so on um but the prices were not much and it was mostly because of one big entity I think I never want to do that to to a project because you actually curtailing the runway of the project if you do this right because the the treasury is based in the token so if you're constantly just like suppressing the price not giving them room to breathe then you Know it actually hurts the team so for me that's that's kind of the framework so I really kind of think a venture Investments

at either 100x or 0x if it's a 2X I don't really want to exit because I consider that a failure if it's a if it's a venture investment do you have any thoughts on how do you want to exit for Investments huddle to zero huddle to zero you've done that before I have we'll get to that so actually let's get to that so what is your biggest loss in Crypto before tangent so I remember at the end of the last cycle um I believe it was March 2022 where I basically pulled the plug and I

said that's it um and I sold everything I had but being that Ardent Die Hard supporter of certain things I was like okay I sell 80% of what I have 20% are these gamey tokens that I believed would be the future of gaming that I just said even if this goes to zero I'll be okay and I show my Support to certain projects that I will not name that eventually went down and they go to zero almost well I had a $2 million position that's now worth $10,000 on my on my zapper oh so pain

uh OG's will know which which one this is but and the other one did go to zero so I really threw away 20% of my net worth on game five tokens because I had this mistaken belief that going down with a ship is better than dumping on my friends M I Don't know whe I make the same decision if I'll ever face with them again I think the answer is probably just don't hold so much of these game f tokens just make better calls basically things that you're actually willing to hold to zero cuz you

believe in the team yes so that's a perfect example of how I lost 20% of my net worth for nothing but I sold the majority of my crypto in March 2022 did okay I did okay it did okay and we were able to start tension thankfully Thankfully so the last question out there uh sorry the last question for our Twitter audience is for analysts out there what are the best ways for them to differentiate so this probably goes out to people who want to maybe work with us as well yeah what are ways they can

stand out remember when when we first started it was actually when I first started it was I wouldn't say it's not difficult but it was easier to differentiate because nobody was doing Uh content there's a few OG Bitcoin podcasts and I was one of the first guys to do a crypto podcast so I was interviewing projects every day um and through that I was also building my knowledge and network and because of that it became extremely valuable to any crypto fund but today everybody has a Blog everybody has a substack everybody has a podcast everybody

has a Twitter so I think I think the there three things uh the first prerequisite is you have to Be active on CT um if you're not active on CT it's just CT is now the modern day CV right if you don't have a trail of either good calls you've me all good things that you've provided or helpful information you've provided um I'm just going to pass over your your profile because because you're not going notice basically yes you you you haven't put in that proof of work or proof of recognition uh for being in

this space so that's number one it's it's I would Even say it's a plus Point anymore it's a prerequisite at this point uh that's number one number two I mentioned earlier uh having a very independent mind um because uh this allows you to push back on me when I have views and that's what I want my analyst to have um because that as as we discussed produces the best sort of conversations on things and often leads to the best takeaways uh uh and the last point is I would say show ways in which you've Exhibited

an enormous amount of competitive spirit I think that's extremely important now because we typically want to hire AAR competitors looking to be the next top hitch fund manager I I think that is a pretty good description of who we're trying to hire because eventually um for whoever that comes work with us in a perfect setting um as they grow and as they mature in their careers one day maybe they'll come out They spin out their own fun or you know they will take on a much larger role within tangent uh and we love for that

to happen right I think for me it's also it's two things mostly it's especially for the longer term parts of the book where you buil a relationship with Founders you kind of help them do BD you help them do hiring I want to have very good founder referrals for this guy or this this woman um so what I mean by founder referral is like if I talked to Founders you've worked with before uh what do they say about you behind your back so that's actually one metric that I always try to optimize R tangent is

and you can't fake that right you cannot you cannot you cannot lar your way out of it you must actually have done something for the founders your back you must have been there for them you must pick up the phone when they call you um for them to speak well of you so I think uh if you talk to you know pretty much All of the founders we talk to we work with I think we have a pretty good founder referral and I want to see that on an individual level for someone who wants to

focus on longer term uh longer higher time frame investing as well and I think number two for me is has this person find found a way to systematize luck because I got so many DMS from people saying oh I made like x million dollars on this coin you should hire me or I I I called this one play you should You should hire me but I really don't give a if you make one success right because um you're probably just in the right place right time I want to see whether you're able to repeat the

success over time like was it luck or did you were you able to isolate the variables from what happened in that play and then turn that into a Playbook and then exercise that Playbook so that comes over time and again like I I'm of two minds about whether you should be Active in CT because like um there's one point about group think if you're constantly just plug in the CT you you're unable to zoom out but without CT like without a live feed of your thoughts over time it's also kind of hard to see how

you think so one exception could be you know writing a block a substack that's fine but the distribution is often lower on CT as well right substack you you need to find a way to distribute your substack so it All comes back down to having some sort of a social presence so you can get notice just because the crypto investing landscape is so nent that um I don't think Head Hunters are particularly useful for junior analysts no maybe for senior GPS but for junior analysts you have have to find a way to get noticed um

I guess we have time for one more question one last question is how do you continuously educate yourself and grow because be outside of crypto Crypto this is a great one so so I started going on more walks recently uh to fulfill my uh step count which I have once again put as an agenda on my list and um what I love doing is just putting on a long form podcast and going on like one or two hour walks besides crunch what are the ones you listen to so so actually recently it's been uh outside

of crypto uh so Lex Freedman is uh the the series I'm I'm working through now the bill Amman one uh no just in general Lex's uh podcast in which he he interviews a whole host of different people entrepreneurs the richest people in the world uh War politicians um AI uh I guess uh CEOs for example um anything really and it goes through like the most interesting different stuff on different Industries in the world and I think that in general for me has been so helpful in just like broadening my mind understanding outside of crypto what's

Happening in the real world what is the cool that's going down how am I supposed to act if World War III happens all the kind of stuff you'll be able to find and all these Rand random podcast so um that's for me one of the most enjoyable ways that uh I grow as a person because I think it's very easy to often just lose yourself in crypto and then just you know focus on like the p&l and then focus on like destressing p&l de-stressing p&l and are you really Growing from that maybe your bank account

is growing but are you growing as a person probably not so I agree with that I think the best way to grow for me is to look outside of crypto I was like that before where I would just read all the white papers just focus on crypto just be extremely crypto focused and I started to realize that it's actually not great for me as an investor because uh sometimes when I talk to Founders I notice how um how smart and how Technical they are but at the same time how myopic they are in terms of

like just how small the worldview is because they're so focused on solving crypto specific problems that they forget why they're building crypto in the first place so this is why we're so focused on I guess you could call it the consumer level but it's mostly really the applied crypto level so uh you know I think we've pretty much passed on all the me stuff a lot of the ZK stuff but we Really try to find ways where people are applying crypto to actually solving real um real world problems so the big example uh that I

mentioned earlier was Amino chain right like learn about bio banks for the first time that's cool so I think learning about things outside of crypto will help our investing in crypto so one way we're doing it two ways we're doing it internally one we're investing in funds that have uh nothing to do with of crypto yes so we've actually invested In a few funds now uh so besides the nft fund we just made a commitment to a fund that is only doing biotech especially AI driven biotech from a PhD uh in the US um and

we're looking at a few others that are kind of similar and that they have nothing to do with crypto but they could uh that the the people running the fund are at least open to the idea of crypto so I think that's how you actually get uh to see experimental use cases number two is internal knowledge Sessions so these are kind of Friday Hangouts we do with the team where everybody comes in with something cool they did ideally something weird so my only criteria to the team is like give me the strangest thing you did

this week doesn't matter if it's in crypto outside and they just kind of walk us through um so I think one of the weird ones that was presented internally I forgot what it was called but it was this game where you can bet money on uh what do you Think other people will bet the least money on and what do you think people will bet the most money on and uh if you bet on those two you win the game so that started a whole conversation about kind of game theory how do you actually play

a game like this uh we ran the game through chat gbt to see what the optimal outcome would be as well so it's like really left field type of conversations that that keep your brain fresh um so yeah those are two things that we do um But there you have it folks this is the first ever segment of on a tangent if you enjoy this uh let us know on Twitter if you hate it please shut up um let me know on YouTube as well and uh uh we'll see if we keep this going as

a series but otherwise thank you so much for listening to the show hey thanks for supporting another episode of The Block wrench podcast if you've enjoyed this episode please give us a FST star rating on Spotify and Apple podcast or whatever platform you listening to this on it really helps us a lot or if you prefer YouTube you can subscribe to our Channel on YouTube as well to not miss an episode I'd love to hear from you guys as well and I personally make sure to read every single comment on YouTube or tweets that are

directed at me so so feel free to leave a comment there let us know what project you want us to bring on or what trends you want us to talk about or Tweet at me at Mr Jason Choy or at the Block crunch on the platform previously known as Twitter currently known as X and thank you so much for supporting and I'll see you in the next episode