The Duopolies of 2026: Ethereum & Solana, Coinbase & Robinhood, Polymarket & Kalshi | Ryan, David & Arnav Pagidyala

Arnav:
[0:00] One, I'm very bullish on Solana from the perspective of pretty much every founder I meet and consumer. That is where they just default go to build, right? And on the other side of the spectrum, I expect to see like a very strong reversal in Ethereum sentiment. I think we've already begun that with Genius Act, Clarity Act, improvement in REV and TVL, DAT bid, institutional bid. I think everything is just going to go Ethereum's way this year in particular.

David:
[0:30] Bankless Nation, I want to introduce you to Arnav Pagadiala. He is an investment partner with us at Bankless Ventures. Also one of the sharpest minds I found in crypto when it comes to meaningful, intelligent investing. We recently had him on the show not too long ago to talk about Bankless Ventures' investment focus for 2026. That episode will be linked in the show notes if you're curious. And in this episode, we're going to talk about everything else. The Ethereum-Solana duopoly, Coinbase versus Robinhood, Polymarket versus Kalshi, investing in ICOs and whether or not tokens will suck in 2026, does Hyperliquid further entrench itself, or does it get a competitor? Big questions and topics that guide liquid market investing in crypto. Arnoff, welcome back to Bankless.

Arnav:
[1:10] David, Brian, thank you for having me.

David:
[1:12] I'm excited for this conversation. There's just a smorgasbord, a charcuterie board of relevant topics that I think really guide investment decision-making, as I kind of just alluded to, for this year. And we're starting this year off fresh. I think everyone has maybe some chips that they would like to place on the table. I am not fully deployed. I don't think Ryan is fully deployed. And I think there's a lot of people like that who are just confused about how

David:
[1:35] to invest in 2026. So I want to go through some of the big topics that I just mentioned. Let's start with Ethereum and Solana duopoly. This is something that you wrote, something in the Bankless Newsletter about the duopoly of Ethereum and Solana will become clear in 2026. Ethereum is the slow risk DeFi chain for real world assets, money markets. Solana is the home of consumer crypto and moving towards the decentralized NASDAQ vision with Fire Dancer and Appenglow. I think what you're kind of alluding to, Arnav, is that.

Arnav:
[2:07] This is kind of it.

David:
[2:08] These are the chains. It's Ethereum and Solana. They are pointing in different directions. They are targeting different markets. And that's this duopoly is going to entrench itself and make it very hard for a new smart contract change to come into the market. Explain a little bit about what your reasoning is and color in this idea that you have.

Arnav:
[2:26] Absolutely. So I definitely don't want to give the idea that I absolutely do not believe Alt-L1s or L2s could have their day. They absolutely can. And definitely application specific chains can. But if we're talking just about general purpose chains, I think in 2025, it's become abundantly clear that it's incredibly difficult for an incumbent to disrupt the network effects already achieved by Ethereum and Solana. And especially these general purpose, all L1s and L2s, I believe they're going to continue to struggle to attract new liquidity, new users without blasting incentives, right? We've seen a number of alt L1s throughout the last year run on these really aggressive deposit campaigns. You get nine figures in deposits, they pay out a significant amount of incentives and the capital immediately leaves. And maybe one of the more recent examples of this is Unichain, you know, back in July, they were at roughly $1 billion in TVL with the incentives. Fast forward to today, they're at circa $100 million in TVL. And it's just this very common playbook that's been run. And the reason why is like all the capital ends up going back to Ethereum or Solana. And I think beyond that, If you were to ask me a year, two years ago,

Arnav:
[3:34] Will PumpFun or Polymarket launch their own chain? I would have bet strongly, yes, both controlled, you know, the front end. They owned all the users, the eyeballs, and they didn't, right? And that really begs the question, why didn't they? And if they didn't, who should, right? So even for these application-specific chains, it's come into question that these companies actually really, A, not only value the network effects of their underlying network, but B, they can't really justify launching a chain because before the reason to launch a chain was you could really establish this large L1 premium. And by and large, again, outside of the really big winners, that doesn't exist today. And again, you're abandoning the network effects of the underlying chain and you're introducing a lot of friction. The last two things I'd probably say here is, one, I'm very bullish on Solana from the perspective of pretty much every founder I meet and consumer, that is where they just

Arnav:
[4:27] Default go to build,

Arnav:
[4:29] Right? And two things they've nailed is A, again, everything consumer is happening there right now. And B, they're nailing a lot of the microstructure required to build low latency on-chain order books and become the home for a lot of spot trading. And on the other side of the spectrum, I expect to see like a very strong reversal in Ethereum sentiment. I think we've already begun that with Genius Act, Clarity Act, improvement in REV and TVL, DatBid, institutional bid. I think everything is just going to go Ethereum's way this year in particular. So at a high level, that's kind of why I believe like Ethereum and Solana's duopoly, for lack of better words, could strengthen.

Ryan:
[5:06] Let's talk more about Solana because for me, the more surprising thing is how durable Solana has actually been to some of these forces. Say, you know, there is an idea in kind of Ethereum circles that an Ethereum L2 can do everything Solana does, except better. In fact, we have some pretty strong L2s, not just from a tech perspective, but also from a go-to-market perspective. I mean, something like Base, that's Coinbase, the world's largest, or the US's largest exchange, you know, 100 million plus users. They have a go-to-market with an L2, that's general purpose. And then you also have some, you know, app chain type of things that might start to nibble on the edges. Like, can a Solana on-chain perps, you know, app outperform something like the L2 lighter, right? Maybe that gets divided up. But in the face of that, it has been surprising how durable Solana has been, at least so far. And why do you think that is,

Arnav:
[6:06] Arnoff? Yeah, it's a great question. there are a number of factors that kind of play into this. One of them you could argue is like the Solana Foundation, they are very different than the Ethereum Foundation. They do take a much more hands-on role in onboarding institutions and supporting builders in a different facet, right? So that kind of is one of the big reasons why it has such a flourishing ecosystem. Beyond that, it really is They've just nailed it from like a culture perspective as well. Like I was at Solana Breakpoint. You go around, you have so many people vlogging, so many people, you know, creating YouTube videos, so many wacky new ideas. It's also just a culture thing, especially because PumpFun is on Solana as well, right? So I think just a number of these factors kind of contribute to why they've crushed it.

Ryan:
[6:56] D o you have any take on how this impacts the way the market should value these assets? This has been a recurring theme on Bankless since the very beginning, right? So just because a chain maybe creates all sorts of value doesn't necessarily mean the token itself is going to capture that value. And there's a big question as to how should layer one assets be valued. So something like Bitcoin is app chain, monetary premium, store of value. Solana is not that. I mean, it was really emphasizing revenue that is generating basically on-chain GDP and its cut of that, its tax of that. This is similar to other L2s. Ethereum is maybe somewhat in the middle in that the market, like if you look at Ethereum and Ether valuations, some value at like $80, right? If you base it on future revenues, maybe that's a valuation for Ether, the asset. Others say it should be worth like $30,000. If you value it as a store of value and say it's kind of the next Bitcoin or something similar to Bitcoin, then maybe commands that type of value. And the market has not really figured this out yet. Do you have a take on that? And do you think that's important going into 2026?

Arnav:
[8:04] I don't have a very strong take on exactly how we should value L1 tokens. And I don't think I'm the best person for that. But what I can say is I strongly believe that builders and activity and liquidity and users are going to converge very, very clearly on these two ecosystems. And by extension of that, I imagine the assets will perform well. That's the extent, I believe.

David:
[8:26] So do you think that Solana is not really going to have to work too hard to fend off some of the newer, shinier chains like MegaEth and Monad, which have generated at least a ton of interest at the very least, and they've done their public token sales to get more people into the fold and kind of fly their respective flags. But you kind of understand what you're saying is like, Solana is not going to have to work that hard to really fend these people off. It's not really going to be on their radar. Is that kind of what you think?

Arnav:
[8:54] Yeah, I'll start by saying I do like MegaEthan Monat. I think it's very talented builders in each ecosystem. And I'm definitely not saying Solana doesn't have to work hard. They're working very hard. Again, with Fire Dancer, the type of work that's got on Alpenglow, the work that Jitto and Harmonic is doing to improve microstructure. I would say they're crushing it. And again, on the Solana Foundation side, they're taking a very proactive role in growing the ecosystem. So they definitely do have to work hard to maintain their position. But on the other side of that, you know, MegaEthan Monad kind of serve maybe their own special function in that, again, they are tabbing more into the network effects of the EVM. So it's maybe not one to one competitive. But no, it's definitely going to be a very competitive battle.

David:
[9:32] Yeah, yeah, yeah. This is starting to align with a prediction that Mike Ippolito had, not even this year, but maybe even two years ago, that has kind of stuck in my head of, you know, The dice have already been cast for Ethereum and Solana. And, you know, what is Ethereum? Ethereum is the real world asset tokenization Wall Street chain. And what is Solana? It's the consumer good UX consumer crypto chain. And it doesn't really matter. Like Ethereum still has its drawbacks. You know, it's only so scalable on the layer one. You know, there are cracks starting to show in Solana's microstructure because we saw what we're seeing is like the streaming blocks paradigm time being kind of like being backed into normal block times with timing games. And so maybe some of that is invalidating some of the original thesis of IVRL. But it doesn't matter what you're saying is that the network effects are just so large that no one cares. Consumer goes on Solana and tokenization goes on Ethereum. And that both of these trends will continue to grow independently of any other outside influence.

Arnav:
[10:36] Exactly.

David:
[10:38] Let's talk about the, since we're going to, we're going to talk about some duopolies or some rivalries. So we talked about Ethereum, Solana, Coinbase versus Robinhood, who wins here? So Robinhood has shipped a bunch of new products and they're growing immensely in their market price in the trad market. I think it started last year, about a year ago, pretty equal to Coinbase, like $60 million each, I think is what I remember. So 50 or, excuse me, billion, 50 or $60 billion each. which Robinhood has taken the lead in terms of market valuation. Robinhood is currently at $106 billion to Coinbase's $70 billion. And each one of them are starting to reposition themselves or position themselves as like a financial super app. You.

Arnav:
[11:17] Have a take

David:
[11:18] On who gains more of a lead in 2026, Robinhood or Coinbase.

Arnav:
[11:25] I think it's very consensus that it's likely to be Robinhood, but that's not to say Coinbase couldn't be a dark horse here. And to kind of break that down, you know, Robinhood has had a phenomenal 2025. They've shipped 11 new products crossing over $100 million in run rate. They were the second highest performing stock in the S&P. And they've shipped a lot of cutting edge crypto and non-crypto products. So it's very hard to not believe we're going to see a continuation of this moving forward. The other very interesting thing about Robinhood is I think they're very intentional. About their product design. I'm personally a power, you know, Robinhood user on the credit card side. I think their product is great. What I mean by that is they're taking this credit card app and banking app, they're kind of merging it. So you're going to have the basically Robinhood banking app, which has checking, savings, credit card on one side and a whole separate application, which you're going to have maybe options, perps, prediction markets. This is actually very smart in my opinion, because the moment that you have your checkings and savings account right next to the perps button, you're going to churn a lot of users, especially when you consider their user base skews very young and continues to skew younger. So I don't know. They're very thoughtful and they ship very fast. So very bullish on Robinhood.

David:
[12:40] I got access to Robinhood banking just because I'm just trying, I hate Wells Fargo and they have fantastic UX. So I got some early access Robinhood banking. And it's not like, All it is, you put your money in there and you can send your money around. But the UX of it is so good. It's so simple. I can log in Face ID into Robinhood. It looks just as cleanly and polished as the normal Robinhood app. And there's something about that just fits with millennials and Gen Z, where this is just what I've always wanted. I don't have to go to my boomer bank anymore. I know Robinhood is basically, there's this white labeling a bank. There's a bank in the back end. So this has nothing to do with any sort of bankless values, but I do appreciate good UX in 2026 and nothing else comes close in terms of the financing world, financial, like personal finance world as to like the UX of Robinhood. And I even got a Robinhood debit card. It's amazing.

Arnav:
[13:35] Yeah, it's, again, I have to tip my hat to them. They've done a good job. And then on the Coinbase side, I think Coinbase, this is more of a prediction, but I think they're going to abandon these, the content coin narrative and overall just reevaluate the North Star of base and how and if to use the base token as a lever for growth. And more broadly, I think from a company direction perspective, I think Brian Armstrong has explicitly stated that, you know, he wants Coinbase to become a bank replacement for people, which is an awesome North Star to have, right? In order to become a bank for people, I think A, moving away from content coins is just smart. But B, probably taking a page out of Robinhood's playbook as far as probably can't have options, perps, meme coins right next to the checking and savings account. Probably better to create almost two apps. So that might be another one of predictions. It's very possible we see them come out with two apps as they move towards this bank replacement for people.

Ryan:
[14:35] So Arnav, Coinbase has always had the advantage of being more crypto native than Robinhood. Sometimes you can clearly see that's an advantage. Sometimes that could be a liability. Maybe you're making the case that it's somewhat of liability when it comes to content or creator coins, which is really Jesse is really doubling and tripling down on. Jesse, of course, is one of the executives and leaders of the on-chain base layer two, the Coinbase supports. And you could see that influence in the design of the new Coinbase wallet. It's very creator Ford, let's say, creator coin Ford. It's less finance-y from the boring DeFi stuff, giving you yield and that sort of thing.

Arnav:
[15:14] Do you think that was a mistake?

Ryan:
[15:16] Like, would you rate Coinbase's on-chain strategy below Robinhood's on-chain strategy at this point?

Arnav:
[15:23] Yeah, I would say in relation to Robinhood, Robinhood is still very early, but with Robinhood, they're moving towards tokenized stocks, tokenized pre-IPO. Intuitively, that makes a lot more sense versus going towards the more social route. I certainly don't think creator coins were inherently a mistake in and of itself. I have a lot of empathy for anybody who tries weird new things in crypto. So I think it's so necessary for us to go from zero to one. That being said, I think at this point in time, the smartest move moving forward is to go more the institutional route, if you will, and serve just the average user who wants a bank replacement.

Ryan:
[15:59] This is another duopoly. So you mentioned the Solana and Ethereum duopoly. This is another one. Is this what we're stuck with? I suppose that's in particular to the US market. Of course, Binance looms large outside of the US, but is this what we get? All we get is two major crypto bank exchanges?

Arnav:
[16:18] It's a great question. Definitely not. I think right now, obviously, they're two Hallmark players, but you will definitely see some challenging incumbents, I expect, over the next year or two. I think specifically the barrier of competition is reducing in the sense that there's been a lot of regulation passed that makes this stuff a lot more, I would say, it makes it a lot more favorable for startups to compete. So a great example of this is we have this trend of open finance. So this is essentially sharing open data, right? And that is a great equalizer, if you will. Another great example is Apple was mandated to open their NFC chip. So it's no longer just Apple wallet. All of these things kind of add up to allow a new player or a new neobank to build a better experience from first principles. So that's not to say it'll just be Robinhood and Coinbase. I expect others to come in and many are here. I think one in particular could break out and capture the younger audience and maybe even specifically leverage a token as a growth lever because that hasn't been done well before.

David:
[17:20] Interesting. I do know that a lot of Asian exchanges are looking at the U.S. Market a little bit more hungrier than usual. And this is just based off sponsor conversations with Mantle slash Bybit, same, same, and also BitGet. Like there, for some reason, the Asian exchanges are looking towards the United States a little bit more aggressively than they have in the past. I don't know what the timing is with that other than maybe just like, you know, all the regulatory clarity and approvals that we've been getting domestically. But I do know that that is something that they are eyeing on.

David:
[17:47] There's a third duopoly that we have to talk about. Kalshi versus Polymarket. Who wins the prediction market wars in 2026? The volume of where people, participants, like prediction market participants, where they're placing their money is very different. If you're on Kalshi versus Polymarket, Kalshi is like predominantly sports betting. and Polymarket is a little bit more diversified. Kalshi is a little bit more United States, domestic. Polymarket is a little bit more international. Who do you think is better set up to make grounds, gain ground in 2026? Do you have a take there?

Arnav:
[18:20] Yeah, definitely. I strongly believe that Polymarket is better suited over this next coming year. And I expect them to end with materially higher open interest than Kalshi.

Arnav:
[18:34] There's a few reasons for this, right?

Arnav:
[18:35] I think the most obvious is that you have FanDuel launching a prediction market in partnership with CME. You have obviously Robinhood launching in partnership with SIG. You have DraftKings launching a prediction market. So what's abundantly clear is that if you are a prediction market predominantly servicing sports, that is just going to become an infinitely competitive landscape in 2026. And if you go on Dune, you check out what call she's doing, over 50% of their open interest is on sports and over 90% of their volume is on sports. Polymarket also has a decent amount of volume in OI and sports, but nowhere close to the same as Kalshi does. And even beyond that, you actually do have individual players like Nobig, for instance, who are, for lack of better words, unbundling prediction markets. And they're creating a prediction market just for sports. And there's others doing that as well. So again, people know that sports betting is super lucrative. Parlays are even more lucrative. And pretty much anybody, I believe, who has existing distribution capabilities and licensing, they are going to go launch a prediction market if it proves to have meaningful margins. The last thing I'll mention on this note is I also don't think Polymarket will launch a token in 2026.

David:
[19:45] Do you think Calshi will?

Arnav:
[19:46] No, I don't think so either.

Arnav:
[19:48] Okay, so no prediction market token. Actually, well, Cauchy's a little bit more up in the air. I'm not sure. And I'm also not as knowledgeable about their business. But Polymarket, I really don't think so. The reason why is because this year they're waiting for a lot more regulatory clarity as far as like, are these derivatives or is this gaming, right? Because the way that these things would be enforced are wildly different. Of course, they want this to be derivatives. And I think Shane is probably just going to wait. And the reason why is like, you look back on like the 2024 election when Polymarket's OI was crazy high and they had like a billion eyeballs on their front end. 99% of founders would have probably launched a token in that scenario. If Shane didn't launch one then, I suspect he won't launch one now.

David:
[20:31] I mean, I think it makes sense that there's no Polymarket token when prediction markets are growing, you know, month over month, quarter over quarter in volumes anyways. Like why distract yourself with a token? you're doing the growth thing focus on growth, focus on doing what you need to do to focus on your core competencies. It seems too early while both of these traditional markets are in more or less their hyper growth stage, Do you really need a token to like even add any more jet fuel onto that fire? Like maybe there's an argument that it could, you know, it could really, you know, you're already doing the growth thing, but maybe you could do even more growth. But I don't know why a whole company would want to distract themselves by introducing a financial asset into the market at a very early stage in both of their respective lifetimes.

Arnav:
[21:16] I completely agree. I mean, it's shocked me how quickly both Colesha and Polymarket's OI has grown like relatively organically. Mind you, they're both spending a lot of money on customer acquisition, but even the retention metrics on prediction markets are actually quite good. So I definitely agree. No need for a token right now.

David:
[21:35] From what I heard you say, it sounds like Paula Kalshi has more domestic competition with Robinhood, with FanDuel leaning into prediction markets. And their customer acquisitions are all kind of more natively U.S. customers. And that environment is going to be more competitive where Polymarket is kind of privileged in the sense that it's a little bit, it's like the tether, you know, it's not USEC, it's tether, it's offshore, has fewer rules, has a little larger audience that can go on to Polymarket and trade on Polymarket. And for that reason, it's not in that same competitive pressure that Kalshi is in. Would you agree with that statement?

Arnav:
[22:12] Yeah, I wouldn't say because of regulation anymore, because Polymarket has actually moved onshore, so that's no longer the case. But generally speaking, probably the better mental model is that if anybody wants to structure an exotic bet on anything, I feel like intuitively the first thing I think about, let's spin up a poly market on this. And that's a very valuable piece of mindshare to own.

Ryan:
[22:32] Arnav, since we've talked about three duopolies, I have another like duopoly idea for you. It's not kind of on your list or anything that you've been talking about lately. But this is the store of value duopoly. Maybe this isn't just me, like not being able to kind of let go of a thesis or a narrative. But at some level, I still think it's somewhat true that there is a two horse race. Some would say there's more than two horses. Some would include Zcash in there, et cetera. But there's some sort of race going on for store of value. Now, people don't agree with me, say, no, that race is already over. Bitcoin has won the store of value type race. I still think that even though it's lost ground over the past five years, Ether, the asset, is still in a duopolistic race with Bitcoin for crypto store of value. And they can both play at this game, but there's things coming up like quantum, which I worry about. The ability that Bitcoin not having any sort of on-chain privacy, for example, whereas Ethereum, you can kind of get that at the smart contract layer and L2s. There's, of course, the security budget, which has been talked about to death, which is a longer term horizon thing. You have things like Tom Lee and he's doing a DAT and that's kind of similar buying pressure of a Michael Saylor. I don't know. I just don't think it's over yet for the store of value use case here. And I think there's still a duopoly running there. And Ethereum has fallen back a little bit, but it's still in the game with respect to Bitcoin. What's your take on that?

Arnav:
[24:02] Yeah. I mean, to be very frank with you, ETH is money or store of value is not something I think about too heavily. I more so think about where users and liquidity are going to converge. But that being said, could ETH become the canonical store of value at some point in the future? I think it would be naive to potentially think otherwise. It's very possible. And that's definitely not something I would bet against.

David:
[24:28] Let's talk about tokens. There's two topics here, tokens and how investable they are, and also ICOs, since people seem to be investing in tokens regardless.

David:
[24:37] Tokens, do they still suck in 2026? I think we all know the importance of this conversation. We're watching the Aave story unfold and hopefully come to a solution between the misalignment between the DAO and the labs. We're watching the unification happen, and we're watching the Uniswap labs go under the foundation, which is therefore under the token, which is also good to see.

Arnav:
[25:00] This is a fundamental pillar that we need.

David:
[25:03] We need to have investable assets. Our assets need to be competitive with traditional securities in terms of their investability. Do you think that we solved this problem this year?

Arnav:
[25:12] I strongly believe we solved that problem this year because the space is pushing for it. I think in particular, you nailed it. How do we make tokens investable assets? And the answer is we have to reach parity with equities and even surpass it in many ways, right? And we can't surpass it in many ways because we have things like on-chain verifiable cash flows and on-chain reserves, right? So there's a few things that I think will come up this year that will be very important for us to reach parity. I think more mature legal structures, token rights. So people understand that when I buy this token, I have ownership in this company unequivocally. There's no question, right? Things like standardized accounting, things like prioritizing investment relations, having quarterlies, stuff like that. And essentially just making it easier for large allocators to actually justify purchasing individual alts, right? And I think that's super exciting. And maybe the second thing, which is maybe a bit less talked about, is that in 2025, crypto's institutional bid got caught in DATs, ETFs, and actually crypto equities, right? Look at Galaxy, Circle, BullX, Robinhood, Coinbase.

Arnav:
[26:17] And maybe one of the questions to ask is, why is that? And I believe a major reason is just because we've had this market full of lemons problem. And without the proper token rights, without the proper reporting, institutions are just better off buying equities instead. So if we are in a world where a lot of that capital finds its way to alts instead, I don't think we'll have an alt season, but we'll have a number of individual high quality assets that perform incredibly well this year.

David:
[26:47] Arno, do you have any idea as to like the mechanism as how tokens and equity find alignment or how tokens become equivalent to equity? Or are you just kind of saying... The lawyers are going to figure it out. The whole industry is trying to solve this problem. The market is going to find a solution and it's going to take 2026 to find that solution. Maybe that, do you have any opinions as to how this actually happens? You're just saying that this will happen.

Arnav:
[27:09] I think definitely the latter. The market knows this needs to happen and it will happen. There's also many credible attempts at this so far, right? Or even successes, you could call it, right? I think Morpho's token is a great case study. I encourage everyone to check out how that works. MetaDAO doing a great job. ERCS is an interesting standard. Yeah, there's just a number of people working on this problem. And I would be shocked if we didn't solve it by this year. Again, pending, obviously, there is regulatory clarity that's needed to do so. But other than that, we'll have it.

Ryan:
[27:42] Well, how much of this does depend on regulatory clarity or like the actual Clarity Act passing or some sort of market structures bill passing in Congress?

Arnav:
[27:51] Yeah, I mean, clarity is obviously going to make a huge difference here. But beyond that, again, So we need to have the infrastructure set up beforehand. So when it does pass, and hopefully it does pass, we'll be in kind of that golden era.

David:
[28:04] What do you think about MetaDAO? I'm watching MetaDAO with interest and it seems to be growing in attention. So founders, I'd be worried about the level of constraints that MetaDAO imposes upon startups. That's kind of the whole deal of MetaDAO is we are going to set up some walls, some guardrails, some constraints upon what founders and teams can do with the money that they raise from the MetaDAO platform. And why do we do this? So that we can offer investor protections and investor assurances that their money is going to actually be put to good use and actually invest in the company. And so it's solving kind of the investor protection side of things, but it's doing that by constraining founders. This is kind of like my query concern about MetaDAO scalability. What do you think about that?

Arnav:
[28:49] Yeah, everyone always references the founder constraining as like the number one piece, the number one basically counter argument to not just MetaDAO, but futarky generally, right? I don't disagree, but one maybe caveat I'll add, it's not like founders are having to approve every single micro decision on MetaDAO. If they're literally just going to the forum once every few months or once every six months to increase their spending from the treasury and to hit XYZ goal. I don't think that's a terrible thing. But the bigger issue I see with, I guess, just launchpads in general is there could be this adverse selection problem where actually the upper echelon founders, the upper echelon projects, they're just going to go raise plenty of capital from VCs and probably not ICO. So there's kind of that issue where you're left with projects who wouldn't have raised otherwise. So that's something I do think about.

David:
[29:44] The other half of this conversation is ICOs. Now, we have seen a huge surge in ICOs, especially led by MegaEthan Monad, which had some pretty gargantuan raises and some pretty pricey valuations. But that has continued on. And now we've kind of seen just a splattering of ICOs across different valuations. The $20 million valuation from Ranger on the MetaDAO platform and the $100 million Infinex token sale. So some pretty reputable projects are raising some decently sized valuations, all with public token sales. Now, I have fallen into the trap of wanting things to be true and therefore making predictions that those things are going to happen. But I want ICOs to happen. I believe that they are a logical conclusion of capital formation. We have ICOs in the trade world. They're called IPOs. Do you think, Arnav, that this fad is sticky and this actually just becomes the new paradigm? Or might ICOs kind of just hit a wave and then teeter off because, I don't know, we haven't solved investor protections or some other reason. What do you think about this?

Arnav:
[30:45] I'm incredibly bullish on ICOs for a few reasons. I think one, it just gets the community involved, right? And especially if your community is, you know, the users of your product, it could drive, you know, volume, TVL, etc. It's actually very high EV to do an ICO. The bigger challenge is these launchpad or ICO platforms, they're going to have to continue to do a very good job curating exactly which companies they allow to ICO and at what price these things ICO. The reason why MetaDAO has really garnered a ton of attention lately is because a lot of the ICOs have done well and a lot of them have traded above the ICO price. And that creates this flywheel where you get a lot more attention, a lot more liquidity, et cetera. So as long as these platforms continue to do a good job curating better projects to actually ICO and these things trade above the ICO price for the most part, I'm very bullish on ICOs in 2026 and beyond.

David:
[31:43] I want to turn to Morpho. Morpho is something I think a lot of the industry is at least keeping one eye on. It's seen a lot of growth in the last two years, especially with the integration on base and Coinbase, where you can use your Bitcoin and now also Ether. You can put it into Morpho. Coinbase will put it into Morpho for you and give you a loan based on the market rate. Pretty cool integration, huge win for Morpho. Extreme validation of the DeFi wallet thesis, I will also say.

David:
[32:07] And it's led to a lot of Morpho growth, especially on base. Like the base integration of Morpho is very much larger than the Ethereum layer one version of Morpho, which is pretty cool. It's kind of hard to see Morpho grow from here because it's already grown so much. And like Aave is still a very sharp competitor too. Where do you see Morpho going from here in 2026?

Arnav:
[32:29] Probably the most interesting thing about Morpho is that they've really nailed the architecture in B1, right? So a good example of this is in contrast to Aave, where things are a lot more interdependent, for lack of better words, Morpho has very, very clean risk isolation. Each of these markets is an independent market, and you have curators which basically deposit into these markets and manage users who want to lend to these markets. And this very clean separation and management of risk makes it very, very compelling for institutions and makes them the prime candidate for lending newer assets or spitting up markets on newer assets, like more long tail RWAs. So it's very hard not to be bullish from that perspective. Beyond that, you know, there are a lot more, I would say, corporate minded almost in the sense that they are, you know, they nailed the Coinbase Morpho integration. I wouldn't be surprised to see at least half a dozen more fintech unicorns implement a similar playbook after seeing how well it's gone for Coinbase. And again, Morpho is just very well set up to do that versus other lending markets. And then maybe the last reason why I think they're very compelling is if you look at it since January 2024,

Arnav:
[33:43] Both Aave and Morpho's total active loans were pretty much directly correlated with the price of ETH. That's actually still true or largely true of Aave. That is not largely true of Morpho. And it's actually decoupling more by the day, right? So that is, you know, they're just very well positioned to absorb a lot of these institutional capital inflows. And my prediction is, I suspect right now they're 10% of total active loans issued. I suspect that'll grow to maybe 25 to 30% this year.

Ryan:
[34:16] Arnav, I'm wondering what kind of pattern that you see for the successful DeFi protocols these days, because there have been many teams, many startups, maybe many seed rounds and beyond for Morpho type entities previously. Yeah, Morpho is the one that has really emerged, right? So look at Compound, Aave. Aave was much more successful, right? You look at Morpho, and there was Rari back in the day that was doing something similar. Now that's gone, but Morpho has remained. is there some sort of pattern recognition that you have for the types of teams or founders that are able to actually deliver and execute on the promise? Because this primitive is nothing new. What Morpho is doing is at some level, it's just some variation of Aave. We've known about it the entire time, but it really took Morpho to kind of take it to the next level. What's special about that team and what they're doing?

Arnav:
[35:14] Yeah, the one thing that Morpho has really nailed is that the risk isolation there is very, very compelling for institutions. And if you look at any individual morpho market, it's very, very clean and simple. Every market is made up of just five things, a collateral asset, a debt asset, a liquidation value, an oracle price, and an interest rate model. It's very, very simple and clean, and that's just what institutions want.

David:
[35:39] And a curator too, like an actual person that manages the actual market, right? Right.

Arnav:
[35:44] Exactly.

Arnav:
[35:45] And if you think about it, let's say I'm a fintech like Nubank and I want to implement an earn feature like Coinbase has for my users. I don't want my users to be exposed to the entirety of a given lending market. I would like them to have exposure to just individual markets because, again, that is significantly higher EV than having exposure to probably a lot of long tail assets you just don't want exposure to.

David:
[36:11] Do you think there's something similar here? Kind of how we talked about the duopoly of Solana and Ethereum and what is Ethereum good for? It's good for slow DeFi tokenization of real world assets. What is Solana good for? Solana is good for consumer. Do you think there's something similar here where like Morpho is kind of just going to become the fintech backend for a lot of fintech startups? And that's where they're going to be able to get their loans from. They're just going to use Morpho on the backend. Where Aave is a little bit more for the consumer. It's a little bit more for the individual rather than the institution to kind of just like be their decentralized bank, their decentralized money market. Do you think that's a fair comparison?

Arnav:
[36:44] I think it could be. What I will add is that Aavev4 is moving much more towards this Morpho-esque architecture. So that's definitely an important consideration. Beyond that, another thing that I think about is I wonder how lending economics are going to work. The same way stablecoin issuers pass a lot of economics back to the front end. I wonder if the same thing will happen with the lending market as well. And I'll also say the lending market isn't quite a duopoly yet. Like obviously Morpho and Abe are really the big winners. You still do have folks on, you know, you have like Solana, I'm sorry, Camino and Solana. And then probably the one you have to really account for is Fluid actually had a phenomenal year. They kind of came in out of nowhere and took a bunch of market share. And I didn't see that coming. I'm like, there's no way a lending market come in this year in just one year and get to a few billion dollars in loans issued. But they did it.

David:
[37:34] Let's talk about Hyperliquid. Hyperliquid, definitely the dominant perps platform. So many attempts to dethrone Hyperliquid. Some have not succeeded, but they have like nonetheless won some traction. Lighter comes to mind and perhaps a few others. But just this game of the perps winning the perps platform race seems to just be constantly being played over and over and over again. Do you think Hyperliquid retains its position in 2026? Do you think it grows more dominant? You'd think it loses dominance? What do you think?

Arnav:
[38:02] Yeah, I think the dominance stays relatively flat, if not reduces a little bit. The only caveat is if they introduce a season two points program, but they're actually performing phenomenally. Even in the face of like all of these incentives, their OI has remained persistently high and they're charging fees and people are still trading there even though they're charging fees, whereas they could go to lighter where nobody is charging fees, right? At least on the taker side. But the way I suspect this year will pan out is you're going to have many more perplexes, many more points programs, but maybe towards the end of the year, early next year, you're going to see a little bit of a consolidation. And what I suspect that consolidation will look like is I think Hyperliquid is here to stay. The HIP3 markets are here to stay. We could have a zero fee perplex. And the reason why is because a lot of front ends, you know, who want to integrate a perplex in the back end, it's higher EV to basically integrate a perplex that A, obviously has deep liquidity, but B, doesn't charge fees so they could charge their own take rate. So again, that could be somebody like Leiter. And maybe the third type of exchange I could see taking off is an RFQ style platform. This could be somebody like Ostium or Variational. To not get too deep in the intricacies of how it works. They're just better positioned to offer things like RWA perps.

Ryan:
[39:20] Of all of the different applications and projects that we've named, it feels like Hyperliquid has the most potential to kind of break up that duopoly we were talking about earlier, the Coinbase and Robinhood duopoly. Of course, there's Binance, etc. But when I look at Hyperliquid, I kind of see an on-chain version of Coinbase or an on-chain version of Robinhood and it wouldn't take all of that much for them to expand back into some of Coinbase's core businesses just without the custody piece of things. Do you think that's a possibility for an entrant here or like a competitor to the Robinhood versus Coinbase thing that the next thing is actually something that is much more crypto native and non-custodial and on-chain?

Arnav:
[40:10] It's a good question. I don't think Robinhood or Coinbase and Hyperliquid competing is very likely. Hyperliquid is really laser focused on the growth of these HIP3 markets and probably getting more into things like cross margin with different assets and such. So I wouldn't say that's necessarily the case. But related to this, something I am very curious about is the option space obviously is incredibly large, specifically zero day to expiry options, zero DTEs are growing like crazy in the US in particular. And I'm very curious to see whether these traders are going to switch over to perps, whether it's more intuitive to them or not. And the reason why I suspect they will prefer perps over options is because options predominantly give you exposure, not only to the delta, but also to the volatility. But most people, they just want to speculate on whether something goes up or down. Perps are objectively a better asset to do so.

Ryan:
[41:14] One other thing you've mentioned is proof of personhood becoming a requirement. Just before we started recording this, Arnav, I saw something on Twitter just came through my timeline. It was kind of deep fakes of Stranger Things character. So it showed just some normal looking person. And then he could apply an overlay to be each of the characters in Stranger Things. And I mean, it certainly passed the human Turing test for me. As I was looking at the image in front of me, it looked exactly like the real characters here. And the comment, I think, was like, KYC video verification is dead. Can you talk about that and what implications that has on proof of personhood? I know crypto is somewhat innovating here, but what more will happen in 2026?

Arnav:
[42:01] Yeah, Ryan, that's a fantastic point. I think we're in this world now where agents are flooding the internet and it's becoming almost indistinguishable. To determine is this a human or is this an Opus 4.5 agent interacting with my platform, right? It's impossible to know sometimes. And that's why like I'm very, very bullish on specifically privacy preserving either biometric or even using your passport NFC chip KYC. Like of course, nobody wants the KYC. And one of my like personal apprehensions with KYC is you have countless data leaks out there. And, you know, that's like pretty infuriating to think like, okay, I KYC with this platform and my data is now on the internet. I'm never KYC-ing again. The beautiful thing with a lot of the technology we have in crypto, whether it's MPC or ZK or even FHE, probably in the near future, is we're able to KYC without our counterparty actually storing that data locally. Therefore, it can never be leaked. So I'm very, very bullish on this. And probably the last thing I'll mention on this front is it's kind of funny. I remember back in 2021, WorldCoin was announced and I'm like, my immediate reaction was like, I am never scanning my eyeball for this FedChain. Like there's absolutely no chance, right? But that was actually pre-ChatCPT, right? So I didn't really conceive the actual value of this thing.

Arnav:
[43:23] And lo and behold,

Arnav:
[43:24] Like now with all of the agents that we have, like you could actually make a very strong case for what WorldCoin is doing among other privacy preserving, you know, or biometric style protocols. And then the last thing maybe related to crypto itself is I think this privacy preserving KYC will become a standard across a number of emerging applications. Like imagine points program gated by this or an ICO or earning rewards in a deepened protocol or to be a voter in a DAO. Basically all of these applications which are very prone to civil attacks, well, this is one of the better conduits to make it civil resistant.

Ryan:
[44:04] Well, it strikes me that the entire world needs this, not just crypto. I'm wondering, it sounds like crypto will be probably from your perspective on the frontier of this though. And then it will filter down to maybe the rest of the world. Are there billion-dollar unicorn types of plays here? I guess you could argue WorldCoin is already one of them if you look at kind of its token valuation. Is there more here? Is there investable surface area?

Arnav:
[44:28] It's very difficult to say because historically privacy hasn't performed very well in crypto. Like we can go down that rabbit hole. But I think it's just still a bit early for privacy, believe it or not. Like as much as, you know, you want it and I want it, we're actually in the minority, probably closer to the cypherpunk crowd. You look at the new, just the marginal new user in crypto, they're not so concerned about privacy. And that's why a lot of these businesses just haven't taken off yet. And then also introducing privacy without adding too much friction is incredibly important. So yeah, and actually, maybe the actual last thing I'll mention on this front is we have a lot of phenomenal FHE and ZK companies, yours, you know, like Sussankt, like Zama. I think they can and will do incredibly well over a longer period of time. It just probably won't be I don't expect a breakout maybe this year

Ryan:
[45:18] Can you talk about a thesis that I've seen having some airplay going to 2026 and seems at least somewhat true, which is the fat wallet thesis, which is this idea that it's actually going to be the wallets, not the protocols that are going to capture the majority of the value moving forward. I've certainly seen some big moves with Phantom. MetaMask has been a little more sleepy, but they're trying to keep up. And there's just a lot of wallet innovation that can happen in integrating some of the DeFi protocols. you can actually make a case even that they could be the disruptors of the exchanges, the Coinbases and the Robinhoods of the world. In fact, Coinbase and Robinhood, of course, they have their own crypto wallets as well. So they are product competitors in that world.

Ryan:
[46:02] What do you think of the continuation of the fat wallet thesis? Do you think that's going to accrue more value in 2026?

Arnav:
[46:11] Absolutely. And I think we could almost call the fat wallet thesis, the super app thesis at this point, I think in many ways they are one in the same. And to your point about, you know, Phantom competing directly with Coinbase, 100%. I think centralized exchanges, you know, will face a lot of headwinds from wallets. And the reason why is you think about historically, why haven't maybe wallets presented a one-to-one competition with an exchange? Well, it's because to get to a wallet, you have to go through an exchange. But if we have better fiat on ramps, what if I can go directly to my Phantom wallet and you know that's that i'm earning interest on my deposits i have access to perps to lending to everything all you know i can trade all assets from one venue and i could hopefully do so with even lower fees than on coinbase because coinbase's spot fees are like egregiously high so absolutely i'm very bullish on this spot on this fat wallet thesis you call it the aggregation thesis and two interesting things to note here is number one

Arnav:
[47:07] The economics of whoever owns the front end are phenomenal. If you look at whether it's Aerodrome or Uniswap for the average spot transaction, you're looking at like just a few cents in fees. Whereas somebody like Phantom is charging like an average of a dollar, right? That's like a 50 to 100x higher take rate. So it's very, very, very lucrative. And there's an extreme premium on owning the end user. The second thing I want to mention is the fact that value will continue to be pushed up towards these

Arnav:
[47:41] Front ends, interfaces, super apps, whatever you want to call them that own the end user. So a good example of this is stablecoin margins, MetaMask wants to own stablecoin. Everybody wants to internalize the stablecoin margins, right? That's very table stakes. But beyond that, internalizing MEV is something, right? And actually enforcing this distribution power on protocols. So let's say, you know, MetaMask wants to integrate a perpdex. Well, why wouldn't they go to that PerpTex and be like, hey, I want an eight-figure kickback if I integrate you within my front end? They can do that. And I expect that to be a very defining trend this year.

Ryan:
[48:19] Now, a dark horse here I want to throw at you for this category, the fat wallet thesis category, Arnoff, is existing social media apps and platforms. In fact, this has always been a back burner narrative that I feel like we've had. Well, wait until meta enters or wait until X enters. You can actually, if you squint, you could see the possibility with something like X entering the fat wallet space in general. And what would they need to do? Well, all they need to do is integrate some decentralized DeFi protocols that the Coinbases and Robinhoods of the world already have. Maybe a Morpho, for instance, and with a few bells and whistles and some product positioning and added features, they too could have some sort of crypto fat wallet. In fact, they already have the social element that Coinbase has kind of been going for with its creator coin push that you saw smart tags being added to X just this week, which is the idea of like social trading. You'd have to squint to see it and it would take some product finagling, of course. but can you see an existing social media company enter this space in 2026?

Arnav:
[49:28] In 2026, I'm not sure, but it is definitely a when, not if question whether X is going to, you know, dive into this space. Like there is absolutely zero question in my mind. They are going to participate, you know, with stablecoin pay-ins, payouts, and how deep

Arnav:
[49:48] They go on the

Arnav:
[49:49] Neobank side, I'm unclear, but we know they want to push towards this everything

Arnav:
[49:53] app vision and the best conduit to do so is going to be on chain.

Ryan:
[49:59] Let's talk about AI a little bit and maybe sort of vibe coding and the possibilities that open up for a small development shops. So Opus 4.5, I know you've been playing a lot with models like that lately. What do you think this is going to do to builder velocity, especially with smaller teams? Does this impact crypto in any way?

Arnav:
[50:22] Totally. I mean, I expect at least one, if not multiple sub five person unicorns this year. Opus 4.5. Wait, what?

Ryan:
[50:30] Sub five, like sub five person unicorn. Totally.

Arnav:
[50:34] And I've seen like the direct impacts in the private market. Like I've seen a few teams or even individuals, like one person teams who have managed to ship smart contracts into production, build the entire front end. And then obviously they're doing the BDE themselves as well. And it's like, it's possible. This was never possible before. Now, like, I'm definitely not saying don't, don't vibe code a smart contract and deployed in a production, please don't do that. But like I've even talked to some smart contract auditors and they've been blown away by how effective Opus 4.5 has been in particular at writing high grade smart contracts. So, you know, it's almost like the technical moat in many ways is diminishing and, you know, distribution becomes a lot more of the edge in many scenarios. Obviously there's edge cases here to do with like privacy and whatnot, where engineering is still very important. But yeah, I mean, I'm super bullish.

Ryan:
[51:28] I mean, doesn't that filter down? If you get more five person, sub five person unicorns, right? What impact does that have on, say, fundraising? I mean, like how much in funding do you actually need to raise in order to achieve that if you have just a five person team?

Arnav:
[51:44] And of course, you definitely don't need nearly as much capital. And that's a good thing. I think crypto is, by and large, over the years, overraised for a lot of things. So it's actually pretty refreshing that people will need less capital to do a lot more.

Ryan:
[51:57] One theme I think we have going to 2026, and this is maybe a marker of a bear market, is this idea that crypto is dead What can you say about that? Or, you know, what do you think will be the life signs of crypto this year?

Arnav:
[52:12] Yeah. So the inspiration for talking about this, a good friend of mine, Dougie over at Fikman Capital, wrote a great piece on this, which went super viral on crypto Twitter. And it was titled Crypto is Dead. And to really summarize it, and I do believe this will be a defining trend of 2026, is we're just going to trend towards moving away from this terminally online points farmer type of persona who's flipping between X, Telegram, and Discord. And it'll be this shift away from that user towards just crypto will become ubiquitous infrastructure and powering cross-border payments and yield and everything in between you could possibly think of. And I think people are just very tired of, you know, the scams, the rug pulls, Eric Adams recently launching the NYC token. I don't know what that was about. Right. And people understand that like, OK, we have, you know, we have that side of things. We have the altcoin market and this market flow of lemons problem, which has occurred. And everybody's just a lot more keen, I feel like, as a whole to move towards this just more proper builder direction, I guess.

Ryan:
[53:17] Is there a new era? I mean, has crypto ever seen anything like that? There's a bit more behind the scenes, a bit more like mainstream, not front and center, not maybe dominated by the Twitter conversation and the crypto natives, but more, I guess, suit coiner. Is this a new era?

Arnav:
[53:33] I do believe it's a new era. Right. And I think a lot of that is driven by regulation. But the other half of it is truly driven by sentiment as well. And this fatigue that's existed.

Ryan:
[53:43] Arnav, this has been great. Is there anything we didn't cover that you feel like needs to be communicated as you look towards 2026?

Arnav:
[53:51] Yeah, there is one more thing that I'm very excited about moving into this year and hopefully even beyond that. And that's the entire...

Arnav:
[54:02] Capital stack moving on chain, right? We have everything from pre-TG perpetuals to hyper efficient DEXs to discoverability infrastructure. And when you have the entire capital stack on chain, I do believe centralized exchanges will lose power. And that's very, very positive for the space. A lot of the space has been beholden to the centralized exchange listing committees. And a lot of the decisions founders have made kind of work backwards from that. Like, what do I need to do to get listed on XYZ exchange?

Arnav:
[54:36] And oftentimes that is completely at odds with how to build a sustainable business. But that's no longer something that founders have to do. Like as we've seen with MetaDAO, like you can ICO, right? You don't have to go after give two, three, four, 5% of your token supply to an exchange. And instead, after you build like a sustainable business, revenue is growing and you haven't listed anywhere, you can go to these exchanges and try to get listed, but it'll be on your terms this time because you have a good asset. It's clearly growing and centralized exchanges are incentivized to list good assets because they also have this, for lack of better words, a survivability problem. If all of their launches and their tokens, you know, do not do well, well, they're going to churn users. And if they see that you have a really good asset, that's likely going to go up, you know, over the next five years, they're going to list you under more favorable terms, hopefully. So it may be a a little bit more of a hot take, but this is something, not only it's more of a wishlist item I'm hoping for, but I think it's quite likely in this new market structure.

Ryan:
[55:35] Well, what's interesting about that is if the whole financial stack does move on-chain, certainly everything that's on-chain will benefit. Certainly it could be the case that centralized exchanges will lose power to some of the things that are more on-chain native.

Arnav:
[55:50] However, what about TradFi?

Ryan:
[55:52] Because it strikes me that maybe the centralized exchanges and the crypto-native on-chain sort of hybrid types of entities like the Coinbase, maybe the Robinhoods of the world. At the same time, they're losing some power to even more on-chain, even more crypto-native applications and Wallis and that sort of thing. They're also grabbing power away from traditional finance. I mean, what does a Fidelity do in this world? What does an E-Trade do in this world? What does a Charles Schwab do in this world? And so they might, in absolute terms, actually be getting better. Like, I guess the question is, if all of this stack moves on chain, what's TradFi going to do?

Arnav:
[56:30] Yeah, I'm certainly, you know, it'll take a long time for us to disrupt TradFi itself. Like, again, you look at the deeply entranched moats, the DTCC of Visa, of Swift, like we're, they definitely understand what we're doing is valuable. And this is something we didn't get to cover today, but I guess I'll touch on it briefly. One thing I'm very curious about this year is, how they're going to come on chain, right? Like, will it be through something like Canton? Will it be through something like Tempo or ARK, right? Or will BlackRock launch its own new chain? I don't know, but my intuition is that this year, a lot of these institutions will understand that specifically... Building on a chain that already has very deep network effects is going to be incredibly important, but it's very hard to come to terms with that because this is a chain that does not care about you. It doesn't care about your business and how well you will do tomorrow. And you have no say in that chain either, right? Ethereum is not going to push a certain upgrade just because JP Morgan wants it. And that's not a world in which they are used to. So I don't know, something that I am very much thinking about as we move into this year.

Ryan:
[57:38] It's going to be fascinating to see this play out. As I look at the kind of TradFi strategy, it seems like they're kind of trying it all. Definitely seems like they would prefer chains that they have more control over. And yet they don't just want to go all in on kind of their own TradFi type chains. They'll play a little bit there, but then they're also actively deploying to the open, more decentralized crypto native chains. And they're just letting it all kind of play out and see which one wins. That seems to be the strategy, though. If they could, I feel like the DTCC would prefer something that is just a DTCC chain. If they could get all of the buy-in and everyone to opt in, they would certainly go down that path.

Arnav:
[58:20] Yeah, and they may very well. I think a very important question to ask is for a set institution coming on chain, how important is composability? How important is global access to users? If the answer to those questions is no, and they're kind of building their own closed loop system that's just more efficient, then yeah, you know, building another chain is totally cool.

Ryan:
[58:39] A lot of things to figure out in 2026. Arnav, thank you so much for joining us and talking about all of this. Of course, got to let you know, Bankless listeners, none of this has been financial advice. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.