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[SMART MONEY] - Bitcoin + Yield: How To Put Idle BTC To Work.
Recorded: May 8, 2025 Duration: 0:58:00Space Recording
Short Summary
In a recent discussion, crypto enthusiasts explored the evolving landscape of yield generation on Bitcoin as it approaches the $100K mark. Key insights included the challenges posed by regulatory uncertainty, the importance of risk management, and a growing trend of investors seeking sustainable yield opportunities in the DeFi space.
Full Transcription
Thank you. Thank you. Thank you. Around the land. Around the world. Thank you. Around the world. We'll be right back. around the world GM, GM, everybody.
Welcome back to another banger show with Bracket. Bracket platform infrastructure provides key services to securely scale both on and off chain yield vaults. Today
couldn't be a better day to have the conversation we're about to have, which is Bitcoin plus yield, how to put idle BTC to work as we creep around the 100K mark.
Of course, you want to keep it. Of course, you want to hold it. You don't want to be dropping
those bags when it could go to a million, a billion, a trillion. I don't know. This is just
my bullishness. But I will say, we also want to earn a little bit from it, right? So it's going
to be a fun conversation to have. We've got some banger guest speakers to jump into the conversation with.
We have Omniti Network, the BTC5 Hub with BTC, ETH, SOL, AppChains, L2s, and more.
We've got Jack Binns with us today, Christian, husband, father, DGEN, writer, podcaster,
Spaces host also with us on the show.
We've got Waggle with us today, the growth lead at Goat Rollup,
and we've got Stake Stone with us, Stone and Stone BTC, Omnichain Liquidity Infrastructure
Liquidity Pad. Really, really, really excited to jump into this one today. Genuinely, it's
something that I've been thinking about quite a lot recently is like, am I earning the most that I can be with my Bitcoin, but also am I doing it
safely? So I think that's some really big topics to discuss today. Listeners, if you're excited
for this one, let's get the likes, let's get the retweets of the show out. It's going to be super,
super fun, but also it's going to give you a ton of information to go off with. And I think it's
a ton of information a lot more people will need. So get them in here, likes and retweets out if you've got any individual questions hit us in the comment
section bottom right hand corner in purple and i'll read through those before the end of the
show and see if there's anything that sticks out that's worth asking our amazing panel mike we've
got you behind the microphone behind the pfp on bracket side today want to get the microphone
straight over to you.
How is it going?
Are you excited for the show?
How do you feel about the conversation today?
Hey, guys.
Good morning.
Yeah, feeling good.
I think to set the stage,
Bitcoin is clearly just rocketing away as this institutional collateral.
And I think it'll get there really quickly.
And that means that, that you know as far as
Interest is going I think we're gonna see this is this game this points this rewards game, which you know is what it is
I think that's gonna start melting away into something real and the
profiles of the users that are going to be
starting to look for these types of
products is going to change.
And they're probably going to look for some legitimate partners.
That is going to throw a wrench, I think, in the DeFi space a lot because there's global
regulations, banks, asset allocators from especially the Western markets are going to have to go
with a different set of individuals than what we've seen come to market in Bitcoin.
I think a lot of the Bitcoin world right now is dominated by miner-backed projects who
sit on a pile of Bitcoin as a kind of like a lure.
on a pile of Bitcoin as a kind of like a lure.
And then that lure is used to basically print a reward system and then sell a token into
I don't love that.
I don't think that's going to work long term.
I think that's going to fade away.
I think that that liquidity is going to get, you know, it's going to get attacked by the
larger institutional guys who are going to go to the miners directly.
And they'll offer maybe a little less yield, but more sustainable yields. And I think navigating
this is a really interesting topic. And I'm interested to hear what everyone's thinking
about from the respective markets that they're in. Yeah, thank you so much, Mike. And look,
Bracket definitely becoming a staple
for me when I'm like, oh, I just really need to understand this topic on a deeper layer from
people actually building within that ecosystem really is the place to be for just an hour of
your time. You get so much information out of it. And you know, this is someone who does this for a
living. So I absolutely cannot wait to jump into this myself. Listeners, if you're excited, likes,
retweets, and just welcome to the show if it's the first time you're in for a good one. That is basically
guaranteed with that PFP up on stage right now, especially with all our amazing guest speakers as
well. Speakers, if it's the first time you've been on one of these shows, quick TLDR about how we try
and run these, and then we're going to go off to the races. So a really quick TLDR is organic
conversation. I think honestly, you're all
going to have your own thoughts. Try not to hide them. Just hit me up. If you want to speak,
if you want to come in, could even be with your own question. It doesn't even have to be a take
and you don't have to be a hundred percent right. This is not a financial advice show.
This is people building in a space, excited about a space and wanting to contribute their thoughts
to it. It is thought it's not future predicting on all of that to be said, how do you do it when there's just a bunch of PFPs I'm seeing?
How do you let me know that you want to come in on the conversation? Very simply, there is a hot
plus symbol at the bottom of your screen right next to the comment section in purple. There's
a little hand raise function, but use that at any point in time. We'll get the mic straight over to
you. That isn't incentive enough as we're talking about these random worthless point systems that are coming
out in crypto right now, I have one of my own. They're called Jackpoints. Now, Jackpoints are
the most worthless point system in the entire crypto space, maybe even the world. But you do
get 10 Jackpoints for every time you raise your hand in the air. At the end of the show, we will
tally those all together and the winner will receive absolutely nothing for doing so.
Because as I've just said, completely worthless.
But you will get my love and admiration for contributing a ton to the show today.
The audience will love it too.
So there is that.
But still, otherwise, entirely worthless.
Okay, that is it.
I want to dive in straight away.
I want to hear from you guys up on stage.
So get ready to get those hands up in the air.
Why has, and this is the
question by the way speakers why has earning yield on bitcoin traditionally been such a challenge
let's start at the challenge for a change because obviously everyone wants it if they're holding it
but why is it such a challenge what do you guys think jack bin straight over to you fellow jack gm gm everyone um well basically i think at least for
the u.s it's it's been a matter of regulation um there's been so much you know just uncertainty
in this space when you hear people kind of who've been crypto native for a while and are kind of
bearish and they're like man none of this stuff is doing anything. Like, why is this space moving so slow?
Well, first of all, it's really not in reality.
But second, we've been really hamstrung by regulations.
And so the reason why you're seeing this, you know, we had no idea where things would
go, where they could go.
You're building blindfolded with a hand tied behind your back.
You know, so it looks like that's changing.
And this is the new meta.
And so I think the way I look at it is we saw a lot of DeFi primitives come up over the
years since DeFi summer on Ethereum.
And we've had some pretty good models that have come out of that.
And we've had some pretty good models that have come out of that.
And so now in the crypto space, it looks like we have a chance to not just utilize those models to create real yield with real value, but we can even evolve on those some.
And so TradFi is ready.
And you're right, TradFi is going to do everything they can to make the best deals and everything.
But we're going to be able to outcompete them ultimately, I believe.
But it's going to come down to being able to provide decentralization, security, and real yield.
And I think we'll be able to do that.
Absolutely love to take Jack straight off to the races on the Jack points now.
Guys, anyone else got any further takes on this?
Omniti, I can see your hand raised for those Jack points, not wanting to be left behind.
Over to you.
We're definitely a fan of those Jack points.
Good morning, y'all.
Great to be on the show again.
I think there's a pretty linear connection of taking on risk in order to get some kind of reward, right?
Like Mike was mentioning, there's usually kind of an easy upper hand for folks who are already
doing the mining because they already have risk frameworks. They already have, you know,
entire systems to manage risk and be prepared for changes in difficulty, to be prepared in
changes in the market of hash rate. So I think it makes sense that miners would be the
sort of easiest party to be the ones to, you know, sort of superimpose their maturity on risk
management on someone who's got less mature risk management and say, hey, you know, user,
would you like some yield? Don't worry about where it comes from or here's where it comes from.
There's part of this that's in our reasonable business scope that we're not going to disclose
or, you know, we will disclose, but it's still underpinned by other, you know, business operations that we have.
So I think there's a pattern of this in the industry, and I think it makes sense to some degree.
But I think we're also trying to do this from scratch in a way that traditional markets don't.
Like if you've ever been a part of a SPAC or if you've ever, you know, like invested in a fund of funds, there's this layering of risk that is, you know, it has some ability to be reviewed.
You can do some digging. You can try to analyze your risk that you're taking on to some degree.
But in crypto, we've got a very different sort of model for transparency, right?
A stock issuance is very different from a token issuance. So for that reason, I think we're still going to see a lot
of those same patterns for quite a while, where folks who've got the upper hand on risk management
will take advantage of folks who just really don't have risk management frameworks or who don't
have the time and energy to dig into stuff and kind of want to trust a socially enriched third party to say,
hey, we're doing some stuff already. Don't you see the cool stuff we're doing? We're a successful
business. Won't you take on a little risk with us? So I think if you look at it as a risk
management framework, you can see that it's not just where the yield comes from, but how the yield
is managed in consequence with the stuff that, you know, makes it possible,
whatever that may be. But I think we're getting into a better framework of that now because of
the sort of lack of patience for regulation, whether that's going on in micro-jurisdiction
like the EU or the kind of like new Trump era, you know, U.S. crypto markets. Those are, you know,
the more structured environments where I'm seeing more projects pop up
and try to manage that risk on paper or dilute some of that risk on paper. And, you know, it's
a little bit unfortunate that we keep sort of reliving the same theses, but on-chain vaults,
on-chain, you know, assets and asset management, completely, you know, end-to-end verifiable
handling of assets. Like we are, I know, end to end verifiable handling of
assets. Like we are, I think, diluting the old narratives on this, but we're also starting from
scratch in a really frustrating way that is going to take some more time to get stable.
Yeah, I definitely want to lean into that at some point during the show as well. Do we really need
to reinvent every wheel? Like, you know, starting from scratch, always the way is the not stuff we can
just be like, you know what, traditional had this bit, like they may have sucked in a couple of
different ways, but this wasn't one of them. But Waggle, we've got your hand raised as well,
would love to hear your take on all of this. Yeah, I mean, and you know, thanks guys for
having me back. You know, I love joining the show. I love the conversation that goes on.
But what I've seen from Bitcoiners is they're really anti-yield. People buy Bitcoin, hold their Bitcoin in a cold wallet and don't want to put it on chain, don't want to put it on an exchange,
don't want to do anything with it. And I've said this before on the show, like if you don't know where the yield is coming from, you are the yield. But, you know, I think Bitcoiners, you know, of the past and, you know, I think people are starting to become more risk on with Bitcoin.
But of the past, you know, people didn't want to move their asset anywhere but their cold wallet.
And, you know, that didn't give many people an opportunity to earn yield.
many people an opportunity to earn yield. But like Jack said also, massive regulation really
hurt the Bitcoin yield space. And hopefully with the new administration and where Bitcoin is now,
we'll see a change. Yeah. Another great question that I would like to lean into as we dive further into this show but
i do think and this is just my two cents like fairly heavy into at least elements of the
bitcoin communities if you don't know like the pfp as well as is an ordinal which is part of
the btc framework but it it does feel like the thes, the cold wallet guys,
that's still a big, big part of the space.
Some ordinals literally have TLDRs
and how to make sure nobody knows how much Bitcoin you own
and how to do it very, very securely.
But at the same time, I do think with the further adoption of Bitcoin
as it circulates around that 100K mark even today,
there are a growing presence of people who are just like, look, it doesn't need to be cold. It just needs to be safe in a way
where I've operated in the crypto space for years now. I know it can be done safe. I just need to
know who I can trust and how much yield is actually going to come from somewhere I can understand.
Like as mentioned by Waggle,
as we often mention on this show, if you do not understand where the yield is coming from,
it is most likely coming from you. That definitely, definitely equates to those bigger
yield opportunities, like the 20% plus that we saw in previous markers and what happened
to those projects that were offering that yield. I think we should all know if we've been in the space for a minute, but basically TLDR
didn't end well, didn't end well for anybody and actually sort of hit the whole crypto
space in its inception, even those who didn't get involved in it, just like the 2008 crisis
affected everyone even though we went all trying to get subprime mortgage bonds through
the roof. Okay, guys, reallyprime mortgage bonds through the roof.
Okay, guys, really, really great start to the conversation. Mike, I want to get the
conversation back over to you here after we have heard our takes from our original speakers. I
think we've heard from everyone except for Steakstone. So Steakstone, I will come for you
after Mike as well. I definitely want to hear your take on this. But all of this being said,
Mike, to start off, how are you feeling on this
conversation do we do you feel like we have hit a point in time where the risk or this idea that
all bitcoin should be kept in cold storage and therefore there shouldn't be any yield from it
because you don't want to risk losing that asset do you think that sentiment is shifting slightly yeah i think it is but it's it's still split 70 30.
i think there's the 30 that that kind of already that that have or like that you want yield on
bitcoin have pursued it in many ways but there are there's a split between the new big corners
who are saying oh or even existing big corners who are miners, who are like, you know, this is a relatively riskless thing for me to do to just quote unquote stake
I mean, that's lame as fuck.
You know what I mean?
It's just like park it somewhere to earn some fucking points.
Like, fuck you.
You know what I mean?
Like, this is stupid.
Like, if you're going to do something, fucking stack up and do it.
And that's going to be a lot less though.
You know, Bitcoiners are a lot more sensitive.
They're a lot more butthurt about potentially losing it because they were early.
You know what I mean?
So they don't want to get sniped by some centralized exchange.
But, you know, real money is way different than a bunch of guys who were just fucking early.
You know what I mean?
Like, real money wants to make money.
And it's just the way it is.
Like, that's what I'm saying about TradFi.
Like, you guys don't – like, I don't know if people are really fully digesting what's going to happen like this is such small ball you know what I mean what's
what's going on in DeFi and these desks that are being set up now to do lending to do to do bar
they have sales teams that are like you know 50 deep in some you know they're they're huge they
have relationships so yeah I think we have this opportunity, as Jack said, to to outcompete on certain areas.
Like we're all better at tech than these guys are lame as shit. Right. They don't know how to do tech.
They don't know how to do anything on chain. They don't know. They don't know. They don't understand any of that.
So this this move to, you know, create these these Bitcoin layer twos while ostensibly is kind of like a points and token grab.
these Bitcoin layer twos, while ostensibly it's kind of like a points and token grab,
I think there is a value to it, like real talk.
There is a value to it that, you know, pegging Bitcoin and having it on chain
in a way that like gives it some utility is useful in that it can actually start moving it around on an EVM.
But we still have to see those lending markets mature and a reason,
and Bitcoiners have to have a reason to do it and feel like they're not going to lose their money.
Because ultimately, where is that Bitcoin?
It's sitting in some fucking multisig, right?
That's where it is.
And then they mint out some other token.
So that could be somewhat safe.
And people want to earn yield on Bitcoin in a relatively safe way.
But I think up until now, the risk appetite has very much been like, yeah, I'll park it.
Can I get it out quickly?
Yeah, you can. There's no lockup. Okay, cool. But in the real world, that's been like, yeah, I'll park it. Can I get it out quickly? Yeah,
you can. There's no lockup. Okay, cool. But in the real world, that's not how it works, right?
You park Bitcoin in a fund, that fund locks you up for at least in many cases a month. And a lot
of times it's a year and you earn over that year X amount, right? And you go based on track record.
Those have blown up too. So I
think a lot of funds that are like scratching their heads, they're like, well, we're stuck at
X million. And it's like, that's the reason is because the Bitcoiners that hold Bitcoin today,
we've kind of exhausted the amount of Bitcoiners who are like, I want to earn this kind of yield
and lock it up for a long amount of time. That will change very, very soon because the businesses that have formerly been relying on staking and some other things, those margins are super small.
Like they're not going to scale.
They have huge headcounts.
I'm not talking about people in this room.
I'm talking about like institutional guys who are doing like e-staking and other things.
Like they're going to have to start moving, man.
They're going to have to start going somewhere and getting new businesses.
And it's like there's Bitcoin out there, right?
There's treasuries out there.
And that's an institutional game.
It is not a retail game.
And who plays best institutional?
It's the TradFi guys who have the relation.
They already either fund these guys.
They have backroom deals, whatever.
You know what I mean?
So I think the perspective I'd rather have, and I'm going to be boots on ground in Vegas too if anyone's going.
Hit me up. But the, the perspective I have today is Bitcoiners are gun shy.
There's a lot of money there.
They are somewhat seeking these opportunities, but are still very gun shy about actually deploying the money.
That will change soon, both from them because they have to, to just to keep parity with everything.
both from them because they have to to just to keep parity with everything and from the
institutional guys who are using Bitcoin from their network as a as an asset, not some sort of like,
you know, security blanket. Oh, I was early. Oh, you know, I need to hold this. You know what I
mean? It's like, give me a break, dude. You got to make some money. You know, Bitcoin itself is
very valuable. We're like, let's go. You know, it's just it is it is kind of funny that a lot of a lot of people in this space are, especially on the Bitcoin side, are kind of are kind of just holding on to it and clutching it.
But the the reality is once once Tradify comes in, they'll start they'll force buy it.
You know what I mean?
They'll get their claws in somehow.
But we'll beat them in the long term.
I think everyone in this room is a fuck ton smarter than those people those people you know they just are early in the game they're playing so it's all about
cabals what cabal are you part of you know that's that's where we got to be yeah we're in the
earliest one and also the one that made most sense i think you know it's just uh it like look we even
seen it though recently like the timeline was saying very, very different things,
even a couple of weeks ago. I think fundamentally, Bitcoin's the place you put your money even when
the world is upside down, as it can be right now with the trade fights and everything else that's
going on. Mike, I'm just so with you that people at a certain point in time, yes, the upside to
Bitcoin and just holding it is fantastic. But if you never want to sell it, unless you're already
really, really in the green, like unless you're already based, you know, unless you're retired.
Yeah, 100%. I mean, there's going to be a balance point, right? I think that's what you're getting.
Yeah, yeah.
There's going to be a balance point where it's like, okay, I don't want to go and try to get
20% of my Bitcoin because you're not going to fucking get that. Maybe a few
funds out there are doing it, but they're locked down and they're closed. But if you
can get high single digits or even lower single digits and it's pretty safe and liquid, you
don't have to deploy your whole stack. And you just cut Bitcoin
in half and say, okay, those people are not going to do anything. And then 30% of the
half are going to do something. And so you get the stratification where you're going
to have people working. I mean, right now, most of the Bitcoin business to business stuff
is all unsecured lending. So that's very very risky. You know what I mean? And if you introduce somewhat riskier, somewhat less risk, and I think that'll kind of just
kind of find its natural balance point where it's like, okay, the risk is acceptable and
you'll start to see the Bitcoin come in.
But they have to trust the counterparties because at the end of the day, I don't care
what anyone says about decentralization.
I've been around right since the beginning of that shit.
It's great.
And I would prefer to use ave over a desk but
when it comes to b2b relationships unless those markets exist today that are you know deep they're
going to go with their trusted counterparties that's just what happens right in when it comes
to huge amounts of money until we can build something that's worth them using you know what
i mean it's up to us really to figure that shit out because they're not gonna go into something awesome until it is awesome like just like abe took forever and then
eventually boom right it's like just this super solid platform that everyone and their mother uses
yeah absolutely facts and um look i i love how unhinged we get on this show and it's just like
look this is gonna take some time and people need to stop being dumb in certain respects as well
but like 100 like 100 agree with all the takes so far. Love the
transparency. Love just where all our speakers are going with this. I want to keep this one
cooking. Waggle, your hand is raised. I just want to get over to Steakstone first. So hopefully
we can hear from Steakstone before we then hear second takes from our speakers. Steakstone,
where are you at with this conversation so far? Do you feel like we are shifting towards, you know, actual BTC yield in terms of, you know, safety, but also
in terms of like, oh, actually people are going to, are going to use this? Yeah. So, uh, I've been
here, uh, so basically I think that, uh, I think the previous speaker spoke about like, you know,
like, um, the people are just going to trust, like, you know, which, which, which provider that you go with. So we have a lot of trusted, I would say LPs or, you know, institutions that put their PDC with us. But also, we are also constantly on the lookout for like, Bitcoin U out there. and also like um you know i think one of the
speakers will mention like you know previously bitcoin you was like at a ridiculous level
where i think most of it is just really like the protocol giving out their points or tokens
to sustain that kind of you which is obviously not very sustainable and definitely you know we
are here at six and we're always always looking for sustainable EU going forward as well.
And in terms of EU-wise, we have our stone BDC which is our EU buying asset on EVM, on
Ethereum.
So we are still trying to use BDC liquidity in the EVM ecosystem to reward our users from
there. But I think moving forward, there will be a couple of
campaigns that we do that is using our liquid index, PTC instead as well. Yep.
Absolutely. Absolutely love that take. And look, I guess, Waggle, I'll get the mic over to you
because you had a take. And then I'd love to talk a little bit for our audience.
Okay, for me too, I'm being selfish.
But for the audience as well around this idea of like,
we're talking about sensible yield, but what does that look like with Bitcoin where,
you know, it's not Ethereum.
Like there is no like general like funds coming in here.
So what should that look like?
Is there just a figure?
And where does that figure come from?
Would be really, really interesting to hear.
But before that, Waggle, I'll get the mic over to you.
And then I saw Jack with the hand raise.
Yeah, I just wanted to add on to Mike's point.
I think TradFi also is winning because they understand how to create yield on Bitcoin without getting illiquid tokens, right?
getting illiquid tokens, right?
You know, there's no whale that's going to put 5,000 Bitcoin into something
because all they're going to get is a bunch of, you know, illiquid altcoins.
You know, once we really figure out how to shift the narrative to real BTC yield,
to, you know, things that are liquid immediately, you know,
instead of having to put it in for six months, a year.
Take a look at what unfortunately Barachain did
where people locked up 50 ETH
and ended up getting 100 Barachain.
Once we kind of move the needle to more real BTC yield
is where we're going to see you know the crypto
uh community kind of beating trad by
absolutely yeah it's so interesting hearing you guys with these like dual perspectives come in on
this because look i i have no traditional background in this i just knew very quickly that there were some very, very, very bad indicators
for basically the whole of my adult lifetime since 2008. And when I saw what Bitcoin and what you
guys were talking about, I was like, okay, yeah, this interests me quite a bit. But like hearing
the traditional side to this and how these guys are going to come in and utilize it is super
interesting. I hope the audience are enjoying
this one too audience if you are by the way likes retweets and do hit us in the comment section for
any questions or even just the gm you know it's a thursday bitcoin's nearly at 100k it's a good day
it's a good day jack mike over to you yeah concerning your your most recent question i think
that the the most obvious answer is that yield needs to come
from a real function in the marketplace, whether that yield is a percentage on a return that you're
getting from whatever DeFi protocol or TradFi institution because they're actively working with Bitcoin. Or you have Hermetica's USDH model, which is a Bitcoin-backed
stable, but it's a yield generating stable that generates yield from a delta neutral position
that is held in spot Bitcoin in the futures markets. So in this way, you're always going
to wind up in a market in a situation where longs pay shorts or shorts pay longs.
And in Hermeticus case, when longs pay shorts, that's when the yield is transferred to the stakers who are actually in the protocol.
in the protocol. So I think things like this, where you actually have a use and a real market
dynamic at work that gets you away from the, the, the kind of like DeFi giga yield Ponzi's.
And obviously that being the case, you're not going to see, you know, a hundred percent,
you're not going to see, you know, 100%, 300,000% APY or any of that nonsense.
You know, you're going to ideally, you know, be low double digits in a best case scenario.
So I don't think this will be a hard sell either.
You know, because for crypto natives, we already know that the giga yield Ponzi's don't
work. And people coming in now, if, you know, especially people in the US who are used to
getting, you know, very low interest rates on, you know, any of their investments, and they're
bullish on Bitcoin and are like, wait, I can get 8% yield. I can get 10%
yield, you know, very low risk. I'm all over that. So I think that this is an instance where
as more people come to the market, this won't be a hard sell for them. And yeah, I think as long as
we're creating real yield from real use case case from real market dynamics, that's probably the most sustainable way to do this.
come from somewhere right like is there a figure for you guys like is there any figure that just
you know should give people a sense of okay these guys are doing it the right way is there a figure
that you know if you are working directly with bitcoin or if you are working in a way that we
believe is like genuinely effective and sustainable that like yeah you know four to six percent that's
that's achievable that's something that probably implies this project are doing it the right way.
Or is that just the wrong way to look at it?
Because then do other projects who aren't doing it the right way just know they need to, you know, live within that yield field to just be seen as somebody who's doing this reputably?
Like this, this is my big concern.
I just want to see a figure.
And look, like this is just my perspective as someone who does hold Bitcoin and does want yield from it. I want to see a figure and be able to do maybe
one or two steps to just verify that figure in a way where you guys like, yeah, that's probably
safe. That's probably reasonably safe. And I would love to know what those steps are for our audience
and for myself. Omniti, your hand came up. We'd love to hear your take on this. Well, I'm happy
to be shot down, but I want to say that while I don't think there is one number, I think that there is
a recent memory in the market that sort of should set a ceiling for what's reasonable.
20% is kind of not reasonable unless there's some freaking catch, right? Like, I think we all
remember that UST was successful because of its 20% auto compound promise. The auto compounding
didn't come till closer to the crash. And we could talk about Terra Luna and how that was
maliciously done. And there's all kind of public information about it being an attack on the chain
and not just the DeFi protocol. But that 20% level led to a whole bunch of unnecessary risk,
not just in the management of governance, but in governance actions themselves.
And, you know, if we have to pick a number, I feel like that's the appropriate one to start with because of that cascading effect that happened in the market from UST.
I would say that I would rather not pick a number, but I feel like the more that number increases from one, the more you're scaling up whatever risk management attitude you're taking on for this thing, because there is, you know, a very obvious race above 5%.
If you're not familiar in the American markets with banking, you know, there's lots of entities that will offer you 3%, 3.5%, 4%.
It's because they think they can beat you out with money market funds. It's because
they think that they can afford to give you that return while earning more on your dollars or
Bitcoin than you otherwise would have without taking on that extra risk through their authoritative
decision-making, whatever black boxiness, right? So I think there's a pretty overt target between
the 5% and 12% range where you're going to see a market of folks, you know, trying to encourage people that that's a reasonable range. I would say that
that tends to obscure the sort of risks that are actually happening in a protocol. You know,
if you want people to feel like it's more conservative, you can err on the 5 percent side.
Does that mean that's actually, you know, 5 percent equivalent of risk? Absolutely not. It's
completely moment to moment situational. But I think that that's actually, you know, 5% equivalent of risk? Absolutely not. It's completely moment to
moment situational. But I think that that's the reasonable ceiling that we should be discussing,
because anything above 20% should be left out of the room, just transparently. Like, you know,
if you're if you're offering more than 20%, you have to show a lot. And also, like I was saying
before, that the nature of this sort of risk management, it does lead to black boxes and it does lead to some, you know, hey, don't worry about it.
This is our responsibility. Is the business taking on the risk here? And, you know, that
means that ultimately, even at that five percent, if that Bitcoin is no longer in your wallet,
if you're no longer holding the private keys that control that Bitcoin, then, you know,
that's the risk is you're at risk of losing 100% of the amount you're putting down. There's no FDIC coming to save
your butt because there's no depositors insurance for Bitcoin. So I think that if we look at the 5%
to 12% range, we will see some reasonable attempts. But there's also lots of very unreasonable things
that are going to happen in that range that sort of prey on the expectation of, oh, hey, this isn't too much risk, right? This is fine. So I would aim to the lower part of that,
but only because I'm usually more comfortable, you know, researching those risks, getting to
know where my black box is, you know, identifying the point where I'm like, okay, I'm comfortable
with Billy Bob Thornton being the one who manages my fund for X, because whatever reason, I love this guy.
You know, it becomes very social when you really rip apart all the extra layers on top.
Yeah, look, really, really valuable insights there.
Absolutely love that take from the Omniti team.
Waggle, your hand came up during that take as well.
Would love to hear any extra nuance from you.
I really think that in order to know where
the yield is coming from, people need to be transparent around it. Something that we're
doing on Goat Network is really showing people where the yield's coming from so people can
calculate it in real time. I think the more transparent protocols and chains and people
are with the yield is how you know, how you can do your
own research and figure out if it's safe for kind of what your risk appetite, you know, without
knowing where the yield's coming from, even, you know, four to 6%, you know, there's still a risk
there if you don't know exactly where it's coming from. Yeah, that's's that's really sort of the consensus i i've got to as well i'll
probably just ask you guys on the next show you know i'm uk based these are the opportunities for
me which one's safest and you guys can you know you can do that work for me you can do my own
research that's that's that's the thing i can do right like that's that's definitely not a waste
of everyone's time sorry we missed that i was. I was talking over you. Come back in.
I said, you know, absolutely a hundred X leverage long.
Yeah. Jack, Jack, Jack needs a 5,000% return just to feel like,
eh, he'll get out of bed today.
Yeah, exactly. Exactly. And by the way, I won't sell that either.
You know, that's the problem with me is I'm like,
oh, well, if it's when 5,000 X, it can probably do 10,000, right? Like history dictated it got
to 5,000. So I'm such a degenerate. I swear, guys, I'm never going to make it in this space.
But as long as I get to just chill and talk to you guys on a regular basis, I'm sort of okay with
that. I don't need to retire. Like I'm i just this is my retirement just getting to chill with the homies
and just really talk about this stuff to hopefully give people with a little bit higher iq some
valuable information to work off because look there's no saving me but i'm sure there's a
couple of people in the audience we can still save and guys look we're 40 minutes into the
show it's been a banger let's get the likes and retweets off the room out. Definitely follow the people up on stage if you feel that they are
providing you value as well. If there's any moment in time during the show where you've been like,
oh, I need to make a note of that. That is also an indication for you to show some support to them
and get the follows in, especially with our main account bracket who've put this show together,
always providing value, always interesting takes.
And yeah, absolutely love these shows. Guys, okay. As mentioned, 40 minutes in, we've got about 15
minutes left to play with here at max. What are the other things that we should know about yield
for our audience today? How should investors evaluate the trade-off between yield and custody
and security? Let's talk about the 70% who right now, at least,
don't want to touch their Bitcoin. They don't even want to take it onto a wallet that's touched
the internet ever, ever, ever. Is there any words of wisdom, any things that you should just be
doing to ensure you're comfortable with that trade-off between, look, I do actually want
yield. I need it. I'm not a millionaire. I need my Bitcoin to work for me as I put more and more of my salary into it
because I believe in it. But I also want that custody and that security. What are the lessons
we need to learn here? Jack, your hands up. Mike, over to you. Transparency. One word is transparency. That's the first step. The second step, and it's sad because a lot of the maxis that you're talking about who just, they're early, they've never used Bitcoin, it's just sat in a cold wallet.
They've missed a lot of education about blockchain in general and, you know, even market dynamics.
So I don't know how precisely those people get onboarded.
For newer people, I think that it's going to be a matter of, you know, people, voices in this space really putting a focus on educating people of how this all operates.
I mean, you know, we, even in, even in a TradFi world, you know, people were giving Bernie Madoff money just because they knew he made other people money and they really didn't know where the hell things were going.
blockchain we have an advantage that every you know things are transparent so if you're using
Blockchain, we have an advantage that every, you know, things are transparent.
this technology make sure that you know you're you know how to verify things on chain and i believe
this will come easier as as crypto natives we take a lot of things for granted um things that seem
easy to us to just sound like you know nonsense to people who've never been in this space.
But I think that as time goes on here, especially with AI, a lot of things will be abstracted away.
And it'll be a lot easier for people to kind of say, this is what I want to do.
How do I do it? And I think that'll help some, but for, for the rest of us, um, transparency is, is key because if you don't know what the catch is, that's how you get caught. So, um, you have to
make sure you understand where your, your, your assets are going, how they're being used. And,
you know, that way you can ultimately manage your risk in the best way
possible for you. Yeah, Jack, I absolutely agree with that. The chain does super, super help in
that regard. Look, X is a little buggy, guys. So if you are raising your hand in the air,
it's like I see it for a second, but then it disappears. So do give it another bump or give
me a little wave emoji as
well that will just capture my attention and waggle i can see your hand is raised omni see you just
said a sad sent a sad face my way as well so if you do want to come in after waggle by all means
just come off mute and you can still cook i was just gonna add what omni said that you know for
people that are bringing your btc on, you know, for the first time ever,
just know like there are risks to this, right? You know, if you put it on new exchange and things
like that, like, there are risks. So if you are going to decide to bring your BTC on chain, just
know that, you know, it has to be good for your risk appetite but there certainly are risks when
working with smart contracts working you know on chain things like that where you know when
it's stored in a cold law there aren't yeah absolutely omnity i did see that hand mike
straight over to you yeah i think there's a number of things that we'll identify in different products that are the kind of appropriate level of black box.
And, you know, some of them are more difficult than others.
But, you know, MPCs and LLMs are great acronyms as examples for this sort of thing.
You know, when you give an LLM the power to control a wallet, what is that thing really going to do? You know, even if you have all of the code that runs that LLM,
also managing the orchestration that manages it or, you know,
knowing that it's going to, let's say, run out of gas
or run out of AWS credits in the middle of a trade or something like that.
You know, that's part of the sort of end of the line of black boxes
that we could possibly find.
So I think that that's a good indicator when you get to something that is kind of buzzwordy
and somewhat industry standard in the way that people tend to go, oh, don't worry about
You know, that's a good moment where you can see either more or less transparency from
someone who's going to be, you know, honest to a reasonable degree about what's happening
degree about what's happening with those assets and with those systems of control.
with those assets and with those systems of control.
So if I see MPC in a project like I do in ICP and like we depend on that Omniti network,
you know, there's a level of transparency that comes with that, which is ideally on
chain.
If you have a level of transparency that comes with triple accounting, that tends to
make me a little bit more comfortable, but it should also raise more eyebrows.
It should lead to more questions.
Question everything, please.
If you're looking for transparency, don't accept it when someone hands it to you on
a silver platter.
Just look at what is on the edge of that platter, because there's a lot of things out there
these days that we tend to go, oh, hey, I'm familiar with this.
This should be fine.
That's not risk framework.
That's not risk management.
That's not reaching the bottom of the line.
That's somewhat assumptive and pretty standard in most industries. But I just wanted
to suggest if you reach the point of an AI or if you reach the point of a black box level computer,
which is common in different forms, that's the point where you want to start poking and saying,
hey, how does this work? What's the limit of what you're willing to tell me about the risk management here?
Awesome stuff.
Yeah, it's so difficult because I think realistically,
this is just something that's becoming more and more popular.
And it is, you know, like black box used to be a word,
like people were just like, yeah, no, that's ridiculous.
And now with AI and the way it functions,
it's like this is just becoming more and more
of like an accepted process almost. But when it comes to your Bitcoin,
I completely understand people want to take those extra steps. Mike, what a great conversation this
has been. I want to get the microphone back over to you here. How are you thinking about this?
What's your take on the conversation so far? And how are Brack you know, opening up that 70% a little bit more to at least, you know, humor the idea of earning some yield on that amazing, amazing Bitcoin?
Yeah, for sure. I mean, I'm not saying that there's not interest there. There's definitely interest. I'm just saying that I think the expectations are out of control from the DeFi perspective, like looking in compared to what Bitcoiners are doing looking out.
And we have to split those Bitcoiners up into categories.
One is the minor cabal that colludes with protocols to launch layer twos and earn whatever, right?
They have special relationships.
A lot of it comes out of China, let's be honest.
So it's a cabal, right? It's just another one. It's just the whole world is arranged this way.
That's one group. Then you have the group that achieved product market fit with BlockFi.
Let's be honest. They fucked up. They blew it with FTX and whatever, but that was product market fit.
And Coinbase is like, we're going to fucking take that, right? So that is a different group of people. And they will start attacking that old
group that is just being sold by protocols and just be the front man for their rewards game,
for whatever. That game is ending. It will end as soon as they do the token drops and they don't
perform. It will end. And all those miners are going to start to think, where do I go now?
What do I do?
What do I do with this?
So either the layer twos get something moving or they're going to get sold by much bigger
entities with much better sales teams that are much more trustworthy.
And I think I agree with pretty much all the points here.
Stakestone, you mentioned it's about distribution, right?
This world is going, this crypto thing is going to go from degenomics – I don't know if that's a word – to – which are – will exist in some – there's always some freaking illegal gambling ring in a laundromat somewhere, right?
Okay, go ahead, right?
There's always going to be those people who want to do that and throw dice.
But the larger group of people are going to have
options, right? These other Bitcoiners are going to have options. So that 70-30 split,
that much larger percentage, that 70, is going to start to say, wow, I do have better options.
They're going to start to realize they can financialize this product. I think it was
Jack in the past or Waggle. Sorry, excuse me if I don't remember. One of you guys were saying,
hey, they're not really financially literate.
100%.
Back in the day when I was doing advisory only, I had to deal with, I won't say who, but a very large derivatives desk who was like, hey, can you help us get into these minors?
I'm like, they don't even understand what this contract for difference is.
They don't even understand it.
They're not financially literate. They are becoming, they're hiring those people.
Those people are on the, on the desks now there's too much money involved.
So, uh, and that's being financialized.
So I think that group is going to go to the more traditional financial
counterparties that have real track records that have,
they'll just acquire and buy the products that are making it safer to get that
yield. Unless people decide to say,
you know what, I really like this Bitcoin layer two model. And I really want to have my Bitcoin
sitting in a pegged asset that basically works on an EVM. That's cool, right? I think it's an
interesting idea. But we haven't seen it at a scale that I think makes sense. Those billions
that you see there are just parked. They're not actually doing anything. So that is still yet to
be known. I think it is a distribution game game though. So whoever has distribution to LPs, whereas distribution on the
exchange side is going to make a huge dent. And the last thing I'll say is to, in order to enable
those people, you kind of have to connect the dots, right? Who are you talking to? Is it, and who,
and who ultimately is going to run the money? Because I think,
I forget, maybe he's Omniti said, 20%, I think is that barrier. There's only a handful of funds
out there that are doing, and I mean, they're really doing like 50, 40, 50% on Bitcoin APY,
like real, real yield. But those funds are closed. They're small groups. They're like the insider,
Jane Street types, you know what I mean? And beyond that, yes, high single digits is market. Maybe even low single digits right now
is market. And if you could be in that range and you could get people comfortable with the
transparency of those yields, which are probably going to come from off-chain to be real at size,
you're talking about where you're starting to crack into the DeFi world, and
that's going to be largely dominated on distribution level by the TradFi entities that are still
in that game trading. So the opportunity zone, like where Bracket's trying to play, is like
we've gotten demand for our product, trying to build a platform, but everyone's like,
I want your tech, or I want your setup, or I want this and that. So we are going to deliver those products, as we said, on our platform, but ultimately,
you know, bracket technology has become, and the way we've been doing things has become interesting
to those people with distribution. It's one of those things that just comes naturally as being
in the market long enough, I guess. And that's the short of it. But of course, we want to deliver that directly.
But I mean, you know, POCs and MVPs are different
than where people see your value.
So it's just something to keep an eye on for us as you guys see it.
But a lot of people in this room are all digging to the same point
from different points with different shuttles, which is really exciting.
Yeah, honestly, these shows always get me super bullish like on the space just as the whole just hearing like honestly just hearing just real
transparency and thought leadership like i think that's one thing this show just provides a ton of
and you too mike honestly on the mic on on the bracket side i always love hearing your takes on
this and look we are really close to end the play basically at it honestly so i just want to thank
all of our
speakers you guys have been absolute goats and basically everyone tied on the jack point side
as well there's moments where everyone had like double takes so massive massive shout out there
if they ever become worth anything which they won't but if they did then you guys definitely
have earned that right omnity jack waggle steakstone thank you guys so much for tuning in
mike on the bracket side,
I'll give the microphone back over to you here. Are there any updates, any broader milestones,
anything else that we haven't been able to share on the show today that you'd like to leave our
audience with before we do close out? Yeah, I think I've pretty much shared it all. Again,
we're still cranking on some of these opportunities and we can't really talk about them too much.
But once they materialize, you'll know about it.
And we're really excited to collaborate
once those things are kind of established
and take it from there.
But we'll give you updates when we have them.
Amazing, yeah.
And I hope to see some of those collaborations
come from shows like this
because you guys are all goats.
Look, thank you so, so much for all of our listeners as well the last people i need to thank
very importantly though i absolutely love that you guys are tuning in love seeing the regulars
as well we're definitely building a little community ourselves with this alpha so if you
are enjoying the show thank you so so much for tuning in not too late this thing is recorded so
get the likes get the retweets out and keep an eye on the main bracket account because we will let you know when the next show is taking
place. Same time next week. That's all we have time for playing this one out now. Thank you. Thank you.
Host
Bracket
from
Bracket Labs
