Compiled & edited by: Vernacular Blockchain

Broadcast date: 2025.07.26

Original podcast: Hive Mind

【Anchor】

Jose Madu , host of the Hive Mind podcast, is active in the cryptocurrency and fintech fields and is good at digging out industry insights.

【Permanent Guests】

Clefus Paribus , Chief Analyst, Institutional Research, focuses on macro analysis and data-driven insights into the cryptocurrency market.

Jan Lieberman , managing partner of Delphi Ventures, is a veteran in the venture capital field, focusing on blockchain and decentralized finance (DeFi) projects.

Duncan Zhang , a venture capital researcher at Flood Capital, invests in early-stage crypto projects and is good at evaluating technology and market potential.

【Special Guests】

Guy Young , Founder and CEO, Athena

Athena founder and CEO guested on the Hive Mind podcast to discuss the dynamics of the crypto market, focusing on Athena's USD assets (US$360 million, 72% in cash) to solve the problem of capital flow. The annualized yield of USD stablecoin is 18%, leading Circle through basis trading. The Genius Act helps Athena comply with regulations, and Tether may launch a US version of USDT. Market momentum is driven by treasury strategies, Layer 1 valuations are too high, and MEW's market value fell to 2.8 billion after financing 1.8 billion, and socialized speculation innovation is needed to revive.

1. Athena’s Stablecoin Innovation and Market Insights

Guy Young: You made a major announcement this week about USD assets, officially entering the Treasury-related business. Can you give us some background and why this move is so significant?

Guy Young : Of course, Jose. Athena started planning this business at the beginning of this year, around December or January. At that time, the market was far less enthusiastic about this type of asset than it is now, and similar projects emerged almost every day. We observed Circle's strong performance in the public market and realized that the traditional financial market's thirst for such assets far exceeded the supply. Traditional investors, especially institutions that manage large amounts of funds, are eager to find investment themes that can combine crypto characteristics with stable returns, which provides us with an excellent opportunity. From a more macro perspective, I have been deeply concerned about the flow of funds in Altcoin in the cryptocurrency market over the past 18 months. The peaks of the total market value of Altcoin in 2021 and 2024 are almost flat, hovering around $1.2 trillion. This is a strong signal to me that the scale of funds willing to invest in high-risk, speculative tokens is limited. The crypto industry needs to mature and present assets to investors in traditional equity markets in a more standardized and transparent form. Even providing token exposure at 1x net asset value (NAV) is more attractive than not being able to enter these markets at all. The USD assets we have created not only cater to the high demand of the traditional market, but also effectively alleviate the long-standing bottleneck of capital flow in the crypto market. It can be said to be a win-win strategic match.

Jose Madu : That makes a lot of sense. Sorry, I forgot to ask you to introduce yourself. Could you please briefly introduce yourself and Athena? We may edit this to the beginning later.

Guy Young : No problem. I'm Guy Young, and I founded Athena two years ago. Athena focuses on issuing two types of products: synthetic USD and regular stablecoin USDTB. USD is our core product launched 15 months ago, and it has grown rapidly, with supply surging from zero to $6 billion in less than 12 months, and now close to $7 billion. USDTB's supply has reached $1.5 billion, a record high. Our goal is to provide efficient and stable value storage and transaction medium for crypto and traditional markets through innovative financial engineering.

Jose Madu : Haha, sorry for the messy hosting. I just came back from a music festival and my brain is not fully online yet. I may cut this part back or keep it, depending on my mood. Back to USD assets, this project is exciting. When will it start trading? How much funds have been raised? Athena Labs' tweet mentioned that this is the project with the highest cash to asset market value ratio. Can you elaborate on it?

Guy Young : I totally understand. The afterglow of the music festival does make people feel a little bit dizzy. Regarding USD assets, the total size of the project is about 360 million US dollars, of which 260 million is cash, and the cash ratio is as high as 72%, which is far higher than the industry average. Many similar projects are essentially just tools for exiting liquidity. Investors invest in tokens and quickly sell them on the open market. Our goal is to introduce fresh capital and solve the liquidity pain points of the crypto market. The funds raised by Athena account for 8% of the project's circulating market value, which is used to purchase tokens on the open market, which is much higher than the second-ranked Hype project (less than 2%). This ratio is extremely prominent in the market and reflects our strong support for underlying assets. The strategic deployment of cash will have a significant reflection effect and enhance the overall value stability of tokens. For example, $500 million in cash has limited impact on large-cap assets such as Ethereum, but for our target assets, it is enough to drive positive changes in market dynamics.

2. Competition in the stablecoin market and Athena’s differentiated strategy

Jose Madu : Great. The success factors of this project are very attractive, especially the structural design, which is obviously more streamlined than many competitors. You quickly redeploy cash into spot assets, creating a flywheel effect, making the value appreciation on the equity side very attractive. In addition, the demand for stocks is amplified by increasing the number of tokens per share, just as MicroStrategy creates "yield" by increasing the number of Bitcoins held per share. In the current environment, you can also purchase assets from the foundation at a discount, which is indeed a highlight. There is strong demand for pure equity exposure in stablecoins, and the regulatory environment is becoming increasingly friendly, such as the passage of the Genius Act, and Circle's hot performance in the market. Can you talk about the challenges faced by Circle, such as the impact of falling Treasury rates on your business? When the Fed cuts interest rates, funding rates in the crypto market tend to rise, and I think this may trigger a rotation of funds from Circle to Athena. How do these three factors - structural optimization, regulatory tailwinds, and fund rotation - work together to shape your investment attractiveness?

Guy Young : This is a very comprehensive question, covering the core competitive landscape of the stablecoin market. The use cases of stablecoins are extremely diverse, ranging from trading collateral on centralized trading platforms to US dollar payment channels in developing countries, covering multiple scenarios such as payment, remittance, and savings. I believe that the future trend is that each issuer will delve into a market segment and pursue a 10x advantage over its competitors, rather than trying to be a one-size-fits-all solution. Athena's strategy is very clear: we focus on areas where we can significantly outperform our competitors, such as savings rather than payment scenarios. As a structurally higher-return US dollar asset, USD is more attractive than non-yielding assets in savings use cases. This advantage can also be extended to other scenarios, such as being used as collateral for perpetual contracts on centralized trading platforms, or embedded in DeFi protocols to create new financial products. This is Athena's differentiated positioning and the cornerstone of our rapid growth.

In 2024, the average annualized yield on USD reached 18%, four times Circle's interest income. If the asset size is adjusted for income, Athena's $7 billion supply is equivalent to $28 billion, which is comparable to Circle's size. This shows that you can compete with giants through efficient income mechanisms without a large balance sheet. Regarding competitors, we view Tether as a strategic partner rather than a direct opponent. Many people may not know that 70% of the perpetual contract market in centralized finance (CeFi) is denominated in Tether, and Athena's $1 collateral translates into about 70 cents of Tether supply growth. The reason Tether does not provide income is that the market pays for it through futures and basis trading. Athena's innovation is to productize Tether's basis capture use case and create a yield-enhanced product. The collateral we hold is mainly Tether, which not only helps Tether's growth, but also strengthens our market position.

As for the headwinds facing Circle, falling Treasury rates do compress its yield space, as its USDC is mainly backed by Treasury bonds. When the Fed cuts interest rates, the financing rates in the crypto market tend to rise, which is good for Athena's basis trading strategy and may attract more funds from low-yielding USDC to USD. The improvement in the regulatory environment, especially the passage of the Genius Act, has created a clearer compliance framework for stablecoins, further enhancing our appeal. The synergy of these three factors - optimized project structure, smooth regulatory environment, and the potential for capital rotation - makes Athena an ideal choice for traditional and crypto investors.

Jose Madu : Listeners may be interested in Athena's revenue mechanism. Can you briefly introduce how you generate revenue?

Guy Young : The core mechanism is cash arbitrage or basis trading. We are long spot assets on one side and short futures or perpetual contracts on the other side to capture the speculative premium in the derivatives market. The financing rate in the crypto market can be seen as the capital cost of long positions. The market is bullish in the long term, and investors are willing to long. Athena locks in this premium through sophisticated trading strategies. By analogy, stablecoins are essentially a form of borrowing: holding Circle's USDC is equivalent to lending money to the US government in exchange for low-yield IOUs; holding Sky's US dollar assets is borrowing in DeFi with over-collateralized Ethereum; and Athena's USD is to finance CeFi's long, and the yield is higher due to the risk of the borrowing object and market demand.

3. The evolution of basis trading and the influx of institutional capital

Jose Madu : Very clear explanation. Compared with 2024 and 2025, basis trading has narrowed significantly with the outbreak of Bitcoin and Ethereum ETFs. In the 2021 market cycle, the basis of mainstream currencies was as high as 50-60% for several months. Today, the participation of more liquid futures markets, professional fund managers and ETFs has greatly compressed the basis. How does Athena deal with these changes internally? With the launch of long-tail assets such as Solana ETF and further entry of institutional funds, what do you think will be the future trend of basis trading?

Guy Young : This is a key question that reflects the accelerated integration of the crypto market with traditional finance. The basis trading capital pool of ETFs and the Chicago Mercantile Exchange (CME) is completely separated from the capital pool of the crypto market. Traditional hedge funds like Millennium cannot directly invest funds in crypto trading platforms because they need AA-rated custodians. CME's credit risk is almost zero, which has attracted a lot of traditional financial capital. In 2024, CME's basis averaged 6.5%, 150 basis points higher than the Treasury yield, while Athena's USD yield was as high as 18%, a gap of 1,000 basis points. This is because CME requires full cash collateral, while the crypto market allows portfolio margin, which is more leveraged.

Athena's strategy is to be a bridge for institutions to enter the crypto market. Many hedge funds choose to put their money into Athena because USD is not only used for collateral (sUSD), but also acts as a medium of exchange in scenarios such as automated market makers (AMMs), order books, and the collateralization rate never reaches 100%. This makes Athena's yield always higher than the return of investors capturing the basis themselves. Although the basis will be compressed as institutional capital inflows, we believe that Athena's efficiency advantage will attract more funds. Critics point out that the decline in basis from 60% when we launched is inevitable, but it is Athena that drives this trend. We expand scale while compressing the basis, which is the natural law of financial markets: discovering excess spreads (Alpha), and then tens of billions of capital are needed to suppress it to a reasonable level. Athena's goal is to reduce the cost of capital in the crypto market from 20-30% to 10-12% recognized by traditional finance, creating a more sustainable ecosystem for the industry.

With the launch of new products such as Solana ETF, more long-tail assets will enter the institutional field of vision, and the competition in basis trading will intensify. However, due to the credit risk and custody restrictions in the crypto market, the basis difference between CME and crypto trading platforms will exist for a long time. Athena's mission is to optimize transaction execution and maintain the yield advantage, while establishing closer cooperation with traditional financial institutions to ensure that we occupy a leading position in this evolution.

Jose Madu : Athena’s lower funding rates could mask the extent of speculation in the market, especially on BTC and ETH. How do you view the broader market leverage situation?

Guy Young : You are right, the existence of Athena has indeed made the market hotter than before, especially BTC and ETH. A good way to look at the financing rate of Hyperliquid is to look at the interest rate of about 25%, which is much higher than Binance's 11%. There are two reasons: Hyperliquid has a more natural retail capital flow and low institutional participation; secondly, it does not support portfolio margin and has low leverage efficiency. Hyperliquid is not affected by Athena, reflecting the real retail speculative enthusiasm and is an ideal reference for judging the market heat. Athena indirectly stimulated the demand for leverage by reducing financing costs, but also made the market more efficient. We need to monitor this dynamic closely to ensure that it does not trigger excessive speculation.

4. The Genius Act and new regulatory opportunities for stablecoins

Jose Madu : This week, the crypto world ushered in a milestone event - the passage of the Genius Act, the first federal law specifically for stablecoins. You announced a partnership with Anchorage, which seems to be the first stablecoin project to comply with the bill. Can you talk more about the Genius Act, the details of the partnership, and what it means to Athena?

Guy Young : The Genius Act provides a clear regulatory framework for the stablecoin industry, marking a key step in the United States' acceptance of crypto assets. Our collaboration involves transferring the issuance of USDTB from an offshore British Virgin Islands (BVI) entity to direct issuance by Anchorage. Anchorage is the only crypto asset custodian in the United States with a federal banking license, and their "Genius as a Service" product provides issuers with compliance solutions. Athena adopts a dual-track strategy: USDTB is issued through Anchorage, complies with the Genius Act, and can be used in US payment scenarios; USD continues to serve the offshore DeFi market and is not subject to US regulation.

This strategy reflects our insight into the global market. The U.S. market has great potential, but fierce competition. Traditional digital payment tools such as Venmo and PayPal have been deeply rooted in the hearts of the people, and money market funds are also competing with stablecoins for profit space. In contrast, the use cases of stablecoins in the offshore market are more extensive, especially in developing countries, where U.S. dollar stablecoins are the first choice for payment, remittances and value storage. Tether's success proves the feasibility of an offshore strategy. They never directly serve the U.S. market, but have become the world's largest stablecoin. We are excited about entering the U.S. market, but offshore DeFi remains our core growth engine. The partnership with Anchorage gives us an advantage in compliance and market expansion, laying a solid foundation for the long-term development of Athena.

Jose Madu : Will Tether enter the US market due to the Genius Act? They have made it clear in the past that they will not.

Guy Young : I recently saw reports that Tether may issue a version of USDT that complies with US regulations. Although it has not been officially confirmed, this is consistent with our dual-track strategy: launching compliant products to serve the United States while retaining the advantages of core products in the global market. Tether's cautious attitude stems from the uncertainty of US regulation, and the passage of the Genius Act may cause them to reevaluate this position.

Jose Madu : Will the new token lead to a split in liquidity? Will the US and international markets be completely divided?

Guy Young : Differentiation is inevitable. US users should not trade on offshore platforms and may use local tokens on compliant trading platforms such as BN US. Similar situations have already occurred in the European Union, where Binance launched a "futures credit" mechanism to automatically convert user funds into compliant assets. Although the operation is slightly complicated, this is a trend driven by regulation, and the global market will form a binary structure of the United States and non-US.

Jose Madu : The stablecoin market is booming, and both big companies and startups have their own strategies. Which areas do you think are overvalued or undervalued?

Guy Young : I am skeptical about the prospects of new issuers challenging giants like Tether and Circle. The stablecoin market is highly commoditized and requires three conditions: dollar denominated, ultra-high liquidity, and sustainable returns. It will be difficult for new issuers to reach Tether's $100 billion daily trading volume on the first day, and stablecoins backed by Treasury bonds face a race to the bottom in terms of profit margins. Circle has exacerbated this trend by sharing revenue with Coinbase. Tether has built a moat due to early market gaps, and its business model cannot be replicated. New issuers claim that the strategy of sharing 90% of the profits is unsustainable and requires a scale of $100 billion to become an attractive investment target. In contrast, infrastructure projects such as Tron have performed well, with daily trading volumes of millions of dollars and a solid model. New projects such as Plasma are trying to get a piece of the pie, but it is extremely challenging to shake Tron's position. An underestimated area may be compliance solutions, and institutions like Anchorage will play a key role in the regulatory wave.

Jose Madu : The Genius Act could allow banks to issue stablecoins with the Fed’s $3.3 trillion to $3.5 trillion in reserves to enhance liquidity. What do you think?

Guy Young : I don't know much about the specific terms, but your ideas are very inspiring. Bank deposits are the core of credit creation. If they are all converted to stablecoins, the economic credit system may collapse unless there is a new mechanism to balance it. The dual attributes of stablecoins - they can be kept in banks and circulated as currency - will greatly increase liquidity. The United States uses stablecoins to finance short-term Treasury bonds and ease fiscal pressure, but the European Union and other regions are worried that funds will flow out of banks and impact the monetary system. When the scale of stablecoins reaches a certain level, the national level may be vigilant about this trend and even take restrictive measures.

5. Crypto market momentum and Layer 1 valuation controversy

Jose Madu : If $3.5 trillion in reserves are converted into stablecoins, some of which may flow into Bitcoin, the market will be extremely bullish. The ETH/BTC ratio recently broke through 0.03, and Solana's performance was mixed. What stage of the market cycle are we in? Jan, you go first.

Jan Lieberman : Market momentum is very strong, driven largely by Treasury strategies. These strategies have attracted a lot of money, forming a sedimentary capital pool that is difficult to withdraw easily. The popularity of brokerage accounts has also made it easier for traditional investors to participate in the crypto market. The Genius Act may release $3.3 trillion in bank deposits, and Bessant predicts that future stablecoin demand may reach $3.7 trillion, which is a long-term positive for the crypto market. But short-term fluctuations are more driven by market sentiment and capital flows. I personally think that it is not wise to chase Treasury instruments at a high premium, but the narratives of KOL such as Tom Lee have driven market enthusiasm, and the trend may continue for some time.

Guy Young : I am bearish on ETH and other Layer 1 (L1) in the long term and believe that they are the most overvalued assets in the history of finance. In the short term, the narrative of ETH has shifted from competing with Solana for user activity to competing with BTC for traditional financial funds. As long as the relevant instruments are traded at 2.5 to 4 times the net asset value, the market will not fall easily. But if the multiple slides from 1.5 times to 1 times, it may indicate the end of the cycle. The slowdown of new instruments or the inability of existing instruments to raise funds at a high premium will trigger a market adjustment. At present, a clear group of buyers is supporting the market momentum. Michael Saylor has just announced that the issuance size will be increased from US$500 million to US$2 billion, and market enthusiasm remains high. National-level buyers have not yet appeared publicly, but may be making arrangements in secret, and once they are fully invested, they may trigger a new round of increases.

Jan Lieberman : If L1 is overvalued, will the Altcoin market collapse across the board?

Guy Young : Most Altcoin do rely on the performance of L1, but Hyperliquid is an exception. It drives growth through cash flow, gets rid of the pricing dependence on ETH or Solana, and looks like an equity-like asset. Altcoin need to be liberated from the Beta role of L1 and develop an independent business model. In the future, five to ten projects with real revenue, users, and products will enter the equity market and be priced at standards such as 10 times the price-to-earnings ratio, decoupling from L1 valuations. This is a painful transition. BTC's dominance may climb to 90%, and other L1 valuations should drop to one-tenth of their current value. The success of Hyperliquid, Coinbase, and Robinhood shows that equity-like projects will stand out in the next cycle.

Setters : I partially agree, but I also have different opinions. If Sui performs poorly in this cycle, will the overvaluation argument of L1 still hold? ETH and Solana have rebounded from their lows at the end of 2022, but other L1s generally continue to fall. In the last cycle, there were four or five L1s with a market value of over 100 billion, and only ETH and Solana are left in this cycle. The market seems to be tilting towards the application layer, and the buying enthusiasm for infrastructure projects has subsided. I think the dominance of BTC and applications will increase, and the L1 premium will decrease, but the value may not be transferred to applications, and it may just flow out of the market.

Guy Young : I believe there will be a value transfer. The scale gap between L1 and applications is huge. Even if 1% of the funds flow from L1 to applications, it will be enough to drive significant growth in the latter. The market needs more self-sufficient projects like Hyperliquid to get rid of the dependence on L1 valuation.

Jose Madu : Athena's USDE scale is $6.8 billion. How big can the perpetual futures market support?

Guy Young : The current open interest (OI) is about $110 billion to $120 billion, with a yield of 15-20%. The crypto market's annual cash flow of about $10 billion mainly comes from Binance, Tether and basis trading. Athena only accounts for 6-7% of the market. If we can optimize to 20-25% share, the scale can reach $20 billion to $30 billion. When the financing rate was as high as 30% in December last year, I predicted that if it was connected to traditional financial institutions, Athena could reduce the interest rate to 10-15% and achieve a scale of 30 billion. We are building these channels to ensure that we can capture high leverage demand. But the risk is that the revenue of applications such as Hyperliquid and Athena depends on the high trading volume of L1. If the valuation of L1 collapses, these protocols may be affected. However, the MEme coin platform makes profits through the issuance of new coins and is not affected by the fluctuations in the valuation of L1 in the short term.

6. MEW’s financing controversy and the future of the MeMe coin market

Jose Madu : Guy, besides Athena and Hyperliquid, which projects are performing well in the niche market?

Guy Young : Sky and MakerDAO's resilience and innovation in the DeFi field are admirable. Maple Syrup and Oiler rebounded from near-zero TVL, demonstrating the team's execution. Fluid reversed from the bottom by innovating in the currency market by embedding stablecoin circulation in DEX. These projects have become role models for the industry to learn from by virtue of their persistence and breakthroughs.

Jose Madu : MEW’s market value dropped to 2.8 billion, and its ICO sold out in just 15 seconds, which is shocking. What is its current status?

Setters : MEW had impressive revenue in Q4 2024 and Q1 2025, earning $700 million in half a year, and still had $630 million in cash on its balance sheet. The original plan was to raise $200 million and $800 million in public offerings, but it was later adjusted to raise $700 million and $600 million in public offerings, with a total financing of $1.8 billion, and the public offering was sold out in 12 minutes. However, the token fell after listing, Bonk seized market share by wooing issuers, the MEW team kept a low profile, and the recent interview with ThreadKeys lacked a clear vision, triggering a sell-off. The fully unlocked token supply is transparent, but the on-chain sell-off exacerbated market panic. MEW holds $2 billion in cash, the K-Scan acquisition was accused of being overvalued, and rumors of Axiom's acquisition sparked controversy due to excessive costs. The current market value of $2.8 billion provides a valuation buffer, and the decline is due to narrative and confidence issues, not fundamentals. MEW still has the opportunity to revive the market through strategic capital deployment.

Jose Madu : Is the decline due to high selling or other factors? Can enthusiasm be rekindled?

Setters : The sell-off stems from the opportunity cost of rising assets such as Solana, and Bonk's marketing offensive has seized the narrative. The MeMe coin market is highly liquid, and capital is profit-seeking. MEW's 2 billion in cash and industry experience are advantages. The MeMe coin field is not the focus of the market recently, but through incentive mechanisms and project catalysis, MEW can regain its share. The key lies in a clear vision for the use of capital, rather than a cautious official response.

Guy Young : I hold MEW coins and have a good personal relationship with the founder. The circulation of MEW is completely transparent. Unlike artificially controlled projects, price fluctuations are the result of real market supply and demand. The market is cruel and the moat is fragile, but the MEW team has the ability to turn the situation around. They are not only driven by money, but also want to prove themselves. $2 billion can be used to build a social speculation platform, similar to the viral spread of TikTok. MEW has the most valuable retail user base in the crypto market, and guiding them from MeMe coin trading to high-profit products such as perpetual contracts is a natural expansion direction. This requires the team to break through the existing skill boundaries, but the potential is huge.

Jose Madu : The incentive mechanism of equity and tokens worries me. What is the motivation of the founders?

Guy Young : This is a reasonable concern, but the founders of MEW are already financially independent, and their driving force lies in industry influence and innovative achievements. If the $2 billion is used for social financial products or cross-field expansion, it may reshape the MeMe coin market.

Jose Madu : Thanks Guy for sharing! Thanks for listening, and see you in two weeks!

All : Goodbye!

Link to this article: https://www.hellobtc.com/kp/du/07/5987.html

Source: https://www.youtube.com/watch?v=Lnm50xNskKY