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Internet Finance Introduction Our fund thesis is entirely premised on the Internet Financial System. It is our Kierkegaardian idea to live and die for, and we often find ourselves attempting to explain the promise and

HYPE is about to do the funniest thing

We don't deserve this article. It's everything you have ever wanted to explain to smart people about why blockchains matter for financial markets. long live Internet Finance.

Monte Carlo everything. Build a model by thinking through the 3-5 most important variables for valuation and their distributions. If you want to run a Volume x Take Rate x Revenue Multiple model, at least ask Cursor to make Volume, Take Rate, and Exit Multiple Normal Distributions and give you a MC output. Then you can start thinking through distributions. Should volume be a bimodal distribution? It will certainly depend on market conditions. Start playing with it and researching distributions. This is a baby MC produced by Cursor (one of many for this same problem so don't focus on the numbers). I love the additional nuance of adding distributions to everything.

We are close to the end of a >4 year token bear market. This is obvious if you understand why we have been in a token bear market to begin with — over the past few years, tokens have had low-to-no rights and traded at ridiculous valuations. Nobody has wanted to hold those assets in the aggregate (although there have been many good single name opportunities!). Tokens have been getting more attractive every year since — tokens have been getting cheaper on a DCF-basis / bestowed more rights to tokenholders every year over the past four years. The bear market has effectively been a painful and prolonged negotiation between tokenholders and token issuers. We want more rights and better valuations while token issuers want to provide fewer rights and to issue at higher valuations. In 2021 there was a lot of liquid capital / permabulls dominated the market so token issuers had the upper hand and basically gave us a flaming pile of garbage in the aggregate (I repeat that there were many good single name opportunities if you knew where to look). The market has matured one funeral at a time and going into 2026 there is less liquid capital and those who have survived are disciplined. Meanwhile the adoption / revenue opportunity has never been better. I don't know when the prolonged token bear market of 2022-2025(6?) will end but conditions are better today than they have been at any point in the past few years. It's a good setup.

In Defense of Fundamentals I am optimistic about the future of our industry, but I don't expect another bubble like the one we experienced four years ago. I expect good assets — and there are many good assets — to do well over

Unbelievable outcome — 6MV, Variant, and Paradigm have contributed $9.9M to MetaDAO at spot. The team has everything it needs to lead the market out of the narrative sloplands of futility tokens and into the cash flowing promise lands of ownership tokens. Futardio.

This is the last existential crisis for the space. In a few years the global financial system will be built on blockchains, companies built over this period will generate hundreds of billions in annual revenue, and the <5,000 of us who stuck around will be happy we did so.

To the 100,000 startup founders killed by Claude this week can like 1% of you please come to crypto. We are building the Internet Financial System and need more founders / engineers. Best opportunity to competition ratio in the world if you can put up with the industry.

Tokens are Broken Tokens are broken for teams who spend too much time looking at price charts and not enough time focused on customers and product-market fit. Tokens are broken when morale fluctuates with macro and market beta, and for teams attempting to negotiate funding rounds with declining token prices. Teams should not spend hundreds of hours building complex, gamified tokens or thinking about monetary policy. Tokens are broken for VCs that deployed entire funds into "Token is the Product" businesses only to learn that the market had moved on by the unlock. The mentality (and sometimes reality) of "Token as Product" obfuscated lack of product-market fit and directed capital to too many products that never should have been built. Then Low Float / High FDV (LFHF) decimated the unsophisticated token buyer and eliminated the path to exit. Tokens are broken for liquid investors who have to deal with insufficient legal protections. As a liquid investor, you learn to live with the Damocles Sword of additional tokens (can you image Amazon's backers worrying about whether they would receive value from AWS) and equity holders siphoning off value. You learn to understand that founders sometimes sell tens of millions into illiquid markets and check out, or siphon off cash flow through advisory contracts with offshore foundations (and you learn how to avoid these founders). You learn to verify everything ~ the entire practice of liquid token investing is an Indiana Jones dungeon ~ and underwrite to a higher cost of capital. Tokens are broken for M&A. We don't have good precedents on how value should flow, making an already difficult business transaction much more complicated and likely to fail. What do we do about this? We may have invented the best tool for capital formation the world has ever known and a mess of the entire enterprise. The latent potential is an opportunity. A few ideas on how to move in the right direction: 1. We need better standards for token transparency. Markets are wonderful but they don't work with asymmetric information. I believe increasing transparency around core token categories (eg insider selling, cashflow, relationship with equity) will go a long way. 2. We need to completely abandon the idea of 'Token as Product' and acknowledge that tokens derive value from future cash flows associated with the underlying business. This idea has singlehandedly been responsible for the misallocation of over half the resources allocated to us as an industry. 3. Social layer needs to obliterate people who use the grey area to misbehave and siphon value. This type of behavior raises the cost of capital on all companies in the industry. 4. We need better regulations as the market did not, in fact, regulate itself. Good faith regulation has helped many markets overcome some of these early problems and the Securities Act of 1933 was instrumental in building the greatest capital markets in the history of the world. 5. Better governance would go a long way. In particular, I am excited about Futarchy and the ability to build in tokenholder rights directly into the token. It's still early days here. I believe this is the single biggest problem in the market right now, and I also believe we can solve it.

A friend (thoughtful, academic type, reads the newspaper) recently asked me why I preferred to talk about topics where I was on the wrong side of expert consensus (like BTC, Internet Finance). His point (probably true) is that while experts can often be wrong, you are likely to be right >50% of the time by starting with expert views and then adjusting from there. I told him that markets people make the best returns when they are contrarian and being on the wrong side of expert consensus is usually correlated with low consensus / high payoff opinions. You want to max Edge i.e max the sum of log2(your probability/market probability). It's pretty hard to max edge by finding 80% probability opinions that you think are 85%. You want to hunt in underpriced markets / low consensus opinion space. The interesting thing is that most people are not attempting to max Edge at all but min Brier i.e. (your probability - outcome)^2. So if you say there is an 80% that it rains tomorrow and it rains, your Brier Score is (1-0.8)^2 = 0.04 and had you said "No Rain" it would have been (0-0.8)^2 = 0.64. Lower is better. If your relationship to predictions is basically [saying your opinion to friends / going on TV / writing articles] then you just want to be right pretty often especially when you say you are confident. That directly translates to min Brier. That makes a ton of sense! Who wants to be the guy who is edge maxxing by betting on 5%s he thinks are 20%s but is basically wrong about 80% of everything he ever says? The guy who wants to make money, that's who. Min Brier is a disaster for returns. Portfolio growth is directly proportional to edge and orthogonal to brier. here is a 1000 sim monte carlo comparing a min brier guy who is right 85% of the time (consensus 80%) and an edge maxxor who is right 20% of the time (consensus 5%). min brier: mean final portfolio: $1.07m mean return: +6.6% win rate: 85% max drawdown: –3.6% prob of loss: 10% edge maxxor: mean final portfolio: $19.9m mean return: +1,889% win rate: 20% max drawdown: –14.4% prob of loss: 0%

Hurupay is a better quality startup than 99% of token projects, the token is an ownership coin so you actually own the business and its revenue, and you can buy it at $3M market cap (= cash on balance sheet).

Internet Finance Introduction Our fund thesis is entirely premised on the Internet Financial System. It is our Kierkegaardian idea to live and die for, and we often find ourselves attempting to explain the promise and

Home alone for a few days and need action movie recs. Criteria is basically min distance from Mission Impossible series (already seen too many times). Some ideas Terminator II, Bourne series, Apocalypto, Wick series, what else?

Pump should relaunch on MetaDAO - contribute all cash to a closed ICO raise - distribute ICO ownership tokens to Pump tokenholders pro rata - link up revenue to a treasury controlled by Futarchy I believe this would trade at a higher valuation than Pump’s existing token on day one. Right now Pump trades at a discount because outsiders like me don’t know exactly what is going on with the cash raised / how much of the revenue will go to buybacks vs equity going forward. You may believe this is not an issue at all (and you may be completely right! The point is that I don’t know) but I promise the market is haircutting valuation based on these concerns. Why not send those concerns to 0.00 with haste. Embrace the Futarchy

my only prediction for 2026 is that the three MetaDAO cohorts of ownership coins (2024: MetaDAO // 2025: Avici, Umbra, etc // 2026: TBD) will outperform Crypto VC results for the same periods on — (1) DPI and TVPI versus Market Cap relative to USD invested (2) Revenue relative to USD invested This is a high edge / low Brier bet. I don't think the probability that MetaDAO cohorts will win is >70% (and it might not even be higher than >50%) but if they do then capital markets have changed forever.

Tokens are Broken Tokens are broken for teams who spend too much time looking at price charts and not enough time focused on customers and product-market fit. Tokens are broken when morale fluctuates with macro and market beta, and for teams attempting to negotiate funding rounds with declining token prices. Teams should not spend hundreds of hours building complex, gamified tokens or thinking about monetary policy. Tokens are broken for VCs that deployed entire funds into "Token is the Product" businesses only to learn that the market had moved on by the unlock. The mentality (and sometimes reality) of "Token as Product" obfuscated lack of product-market fit and directed capital to too many products that never should have been built. Then Low Float / High FDV (LFHF) decimated the unsophisticated token buyer and eliminated the path to exit. Tokens are broken for liquid investors who have to deal with insufficient legal protections. As a liquid investor, you learn to live with the Damocles Sword of additional tokens (can you image Amazon's backers worrying about whether they would receive value from AWS) and equity holders siphoning off value. You learn to understand that founders sometimes sell tens of millions into illiquid markets and check out, or siphon off cash flow through advisory contracts with offshore foundations (and you learn how to avoid these founders). You learn to verify everything ~ the entire practice of liquid token investing is an Indiana Jones dungeon ~ and underwrite to a higher cost of capital. Tokens are broken for M&A. We don't have good precedents on how value should flow, making an already difficult business transaction much more complicated and likely to fail. What do we do about this? We may have invented the best tool for capital formation the world has ever known and a mess of the entire enterprise. The latent potential is an opportunity. A few ideas on how to move in the right direction: 1. We need better standards for token transparency. Markets are wonderful but they don't work with asymmetric information. I believe increasing transparency around core token categories (eg insider selling, cashflow, relationship with equity) will go a long way. 2. We need to completely abandon the idea of 'Token as Product' and acknowledge that tokens derive value from future cash flows associated with the underlying business. This idea has singlehandedly been responsible for the misallocation of over half the resources allocated to us as an industry. 3. Social layer needs to obliterate people who use the grey area to misbehave and siphon value. This type of behavior raises the cost of capital on all companies in the industry. 4. We need better regulations as the market did not, in fact, regulate itself. Good faith regulation has helped many markets overcome some of these early problems and the Securities Act of 1933 was instrumental in building the greatest capital markets in the history of the world. 5. Better governance would go a long way. In particular, I am excited about Futarchy and the ability to build in tokenholder rights directly into the token. It's still early days here. I believe this is the single biggest problem in the market right now, and I also believe we can solve it.

meme markets are drying out due to a lack of exogenous capital flows. meme model is basically predator-prey model where retail traders are prey and feed on exogenous capital flows (i.e. new wallet downloads that buy SOL with USD and then buy memes) and entire sniper / bot / industrial meme shop complex are predators. as long as there are new capital flows (WIF up >100x, Phantom top of app store) then retail traders can sell memecoins at a higher valuation. the prey is well fed and so the entire predator complex can charge high prices / create memes with insider allocations / etc. if new capital flows dry up then retail traders start to slowly bleed out as predators take 1-3% every time capital turns over. over time retail starts to die off and puts the predator complex at risk. This trend can turn around if there is another WIF moment where thousands of outsiders bring in exogenous capital flows back into the meme market but it will naturally go to 0 in the absence of an event that brings in exogenous capital flows. That's the nature of these predator-prey models when prey food supply is down bad.

We are close to the end of a >4 year token bear market. This is obvious if you understand why we have been in a token bear market to begin with — over the past few years, tokens have had low-to-no rights and traded at ridiculous valuations. Nobody has wanted to hold those assets in the aggregate (although there have been many good single name opportunities!). Tokens have been getting more attractive every year since — tokens have been getting cheaper on a DCF-basis / bestowed more rights to tokenholders every year over the past four years. The bear market has effectively been a painful and prolonged negotiation between tokenholders and token issuers. We want more rights and better valuations while token issuers want to provide fewer rights and to issue at higher valuations. In 2021 there was a lot of liquid capital / permabulls dominated the market so token issuers had the upper hand and basically gave us a flaming pile of garbage in the aggregate (I repeat that there were many good single name opportunities if you knew where to look). The market has matured one funeral at a time and going into 2026 there is less liquid capital and those who have survived are disciplined. Meanwhile the adoption / revenue opportunity has never been better. I don't know when the prolonged token bear market of 2022-2025(6?) will end but conditions are better today than they have been at any point in the past few years. It's a good setup.

where did all the founders go?

after many good faith discussions over the past few weeks, I believe I have bridged the MetaDAO gap with many 'ownership coin' skeptics. The one criticism that comes up again and again is the idea that you cannot build a company (or fund) with a live and liquid token. It's a fair criticism. The burden of proof should be on the experiment, and most companies (and funds) across time have been built under the shelter of private markets. I personally believe that we will come to appreciate the role of liquid markets in the startup process and laid out my thoughts below but ultimately these are just the words and fallible thoughts of somebody who has not built a big company. I propose the following experiment. At the end of 2026, we should compare the three cohorts of MetaDAO ownership coins (2024: MetaDAO // 2025: Avici, Umbra, etc // 2026: TBD) with Crypto VC results for the same periods on — (1) DPI and TVPI versus Market Cap relative to USD invested (2) Revenue relative to USD invested I believe these two metrics fairly cover (i) results for investors and (ii) value creation for the broader ecosystem. We should track them over time as well because it is possible that some models work better early on and some models work better >3 years. In (1), we should compare Market Cap versus both DPI and TVPI. It would be unfair to compare Market Cap only versus DPI because there are still many good companies that have not returned capital and will ultimately improve results for the VC comp group. It would not be fair to compare versus TVPI only either because the ownership coin investors do provide the benefit of early liquidity, and market cap on a full float token cannot be faked to the same extent as TVPI. I propose using Circulating Market Cap as that is the amount absorbed by the market. This methodology seems pretty fair to me. If Ownership Coins can compete on Market Cap / USD Investment and Revenue / USD Invested then both investors and those of us focused on vale creation can be happy with the mechanism as another option for founders looking to raise capital. If ownership coins fail the test, then we should bayesian update in favor of those proclaiming that companies cannot go 0 to 1 while being public. This is approximately how the ownership coin numbers look today (although I took some liberties on MetaDAO Revenue as they essentially just turned on the fee switch so I annualized then shaved off 60%). Ownership Coin Stats Total Amount Raised: $38M Total Market Cap: $257M Total Revenue: $5M Ratio (Market Cap / USD Raised): 6.8x % (Revenue / USD Raised): 10%

Buybacks without tokenholder protections are insufficient because the team can easily do a 'buyback and sell' attack 1. Launch a token without tokenholder protections 2. Announce buybacks equal to 100% of revenue this year (but don't make any promises for future years) 3. Your…

The reason why MetaDAO can allow startups to raise faster than the traditional VC process at a fundamental level is quite simple: MetaDAO turns diligence into an ongoing process. In a traditional VC process, an investor (and investors as a group) are going through a one way door. You give a team $5M at a point in time (and before receiving a lot of the crucial datapoints that would make this question much easier to solve). If you are wrong, there is no way to remove funds so you need to do a ton of work upfront. In a MetaDAO ICO, an investor (and investors as a group) are going through a two way door. You give a team $5M based on a bit of diligence but you know that every month you will get torrential amounts of valuable information. Can the team build? Let's watch them build in real time and update our views as information flows in. How will the market respond? Let's see how the MVP does; let's see how the initial launch goes; let's see how the team pivots if the market doesn't respond well. Let's see. The market can continue to update its view of a team and idea over time and decide whether to allow a team to continue building. If the market decides that a team / idea is not worth pursuing after 6 months or a year, then it can liquidate the treasury and everyone can move on. Everybody who invests for a living knows that you know >1,000% more about a team and idea after a few months of working with them. The latest information is often the most valuable. This is not cosmetic. It's fundamental to the way information is created during the lifecycle of an investment. MetaDAO took this fundamental insight about information flow during the lifecycle of an investment and designed a system that gave founders something valuable: a much faster way to raise funds.

It’s literally just DCF. It’s amazing to me how many ways people can misunderstand DCFs. Q. Revenue doesn’t matter A. Yes it does because revenue drives future cash flows Q. We should buy this rapidly declining business at 5x P/S A. No you shouldn’t because future cash flows…