but yes go ahead and short btc at range lows
max fiege retweeted
ONyc is the second-largest asset by deposits on @Loopscale, behind only USDC, per @BlockworksData.
$36.9M in deposits, representing over 26% of total assets across Loopscale's lending markets.
Real onchain demand for reinsurance-backed collateral.
max fiege retweeted
I've enjoyed Jake's coverage on Pearl. Even though I am bullish I think his criticisms are fair, I also think we have more common ground than it appears. Specifically:
-Pearl's emission schedule is the number 1 bear case. A key aspect of a SOV asset is that price goes up, which is harder if you have indiscriminate sellers.
-Concerns around transparency are also valid. Without a "fundamental" business / revenue line, narrative is the main driver of price. An absence of clear communication leads to uncertainty and doubt, which is detrimental to an asset that derives its value from social consensus.
However, on the actual nature of the raise I disagree that it's bearish or leads to a conflict of interest:
To me, token-equity concerns arise for revenue generating protocols, where value accrual is unclear as it is either diluted or completely given to equity holders that act as a senior tranche, with token holders suffering.
Pearl Labs' equity raise causes no conflict of interest since the distinction is clear: Pearl is a SOV asset, while Pearl Labs is an AI infrastructure company that develops Pearl's proof-of-useful-work technology and commercializes inference services. Pearl Labs' success is accretive to the Pearl ecosystem but never extractive, since Pearl is not intended to accrue revenue. If anything the equity raise means 1) Pearl Labs is not reliant on selling PRL to fund operations, 2) it signifies there are powerful forces behind the success of PRL and 3) the raise will add hashrate to the PRL network.
Very strongly disagree that Pearl Labs should introduce PRL buybacks. It would be the quickest way to add a token/equity conflict, as it immediately creates the question of how much value accrues to Pearl Labs vs the token. It also instantly reframes Pearl from an asset trading at 1/30th of ZEC's valuation to an overvalued 1000x P/S token. This is the counterintuitive thing about SOV assets: Flows >>> buybacks, even for huge revenue generating projects like HYPE (although buybacks matter a lot for narrative). Removing a business and letting an asset trade purely as an expression of an idea (e.g. AI BTC) removes company specific and execution risk, stops anchoring the token to a business that needs to grow in line with the price, and also removes its ceiling.
The second controversial point is around centralization and the team mining 5% for themselves. Controversially, I think centralization matters less than people think, even for SOVs. Take MicroStrategy / Bitmine as examples. What matters is centralization among team/VCs who are going to sell. If the team mining a significant amount of tokens means those tokens are effectively out of circulation, I view this as bullish rather than bearish. Of course, this only holds true as long as they don't sell.
Lastly I think it's important to contextualize that a lot of my bullishness comes from a regret minimization framework. Pearl is a nascent SOV, and the concerns around emissions / transparency are very valid. However, it is also one of the most exciting narratives. Just like there is a future where Pearl is insta dumped by institutions that mine it at a low cost basis, there is a future where powerful BTC miners and connected entities rally behind PRL as a new way to monetize their compute through inference, while hashrate increases and fears continue to grow around BTC's security budget.
Thats why, while I see the same risks as Jake, I think that potential of exponential upside does justify a small position, even if just as a hedge to existing BTC/ZEC holdings.
not officially confirmed, but @TheMarker, israel's main business paper, is reporting that @prlnet's lab raised $130M from lightspeed, ribbit capital, and square peg.
$55M in equity and $75M for a fund to build out GPU infrastructure.
ribbit and lightspeed are also named as pearl backers on its profile in greenfield partners' disruptors 60 list.
if this is real, the $PEARL bear case gets a lot worse. here's why:
1) $PEARL traded on a "no VCs, fair launch" story.
pearl's code doesn't allocate tokens to founders or investors, and that part is probably still true. but the lab behind pearl is reportedly VC-backed, and nobody corrected the narrative while it pumped.
2) the value goes to the equity, not the token.
the lab sells inference and gets paid in USD, and the VCs own the lab. $PEARL holders don't get any of that revenue, just diluted by new supply.
so the investors can do well even if $PEARL goes to zero.
3) it goes against the "sovereignless bitcoin" pitch.
part of bitcoin's monetary premium is that no company controls it. pearl's upgrades are drafted by a VC-backed lab, including the FP8 fork that would tie mining more closely to inference, the same business the lab sells.
4) the $75M GPU fund.
we don't know if those GPUs mine $PEARL. if they do, the company is collecting a share of ~85% supply growth this year, on top of whatever insiders mined early.
remember that about 1/3 of today's supply was mined in the first 6 days.
5) zcash had investors too (20% of its early block rewards went to founders and investors) but that was public from day 1. everyone knew who got paid and how much.
pearl hasn't disclosed any of that.
holders deserve to know:
> who invested
> whether any investors or insiders hold $PEARL
> whether the GPU fund mines $PEARL
a fair launch shouldn't need a newspaper to tell you who's behind it.
i was a $PEARL bear on friday. i'm a bigger one now.
If the midterms do represent the starting pistol of a new leftist decade, companies have an incentive to cut staffing prior to the roll out of pro-labor policies which are bound to be the ESG of the AI era
even well before AI systems could reliably replace that human labor
$MSFT - MICROSOFT OFFERS BUYOUTS TO 60,000 WORKERS AMID AI SPENDING BOOM
Microsoft is offering voluntary buyouts to approximately 60,000 employees as it restructures its workforce and redirects spending toward AI.
Key details:
🔸 60,000 workers eligible across the US, Canada, India, and UK.
🔸 223,000 employees globally as of June.
🔸 Data center teams are among those excluded from the offer.
🔸 Eligible employees will receive severance-style benefits.
The key takeaway: Microsoft is tightening labor costs while protecting critical AI infrastructure investments, highlighting how AI spending is reshaping Big Tech employment.
max fiege retweeted
Thanks Jake for the reply. Want to provide more color from my perspective as well on your updated positions.
1. The team doesn’t talk about price, token, etc. It is true but it is also purposeful. If you look at their public comms it is entirely related to technical developments and project progress. Transparency is important no one is arguing this. This is a bottom up adoption thus far with the team relying on tokenholders to help with adoption and information. This is very similar to other enduring PoW networks where the community and various factions do a lot of the heavy lifting to help the network grow. Regardless, team has stated clear disclosures are coming imminently which should address most of your transparency concerns.
2. Team mined less than 5%, I assume you are referencing my reply here. Good detective work can also verify this, team also mentioned they will confirm it shortly.
3. I doubt the GPU fund buys H100s, it will likely want to rent/buy B300s, so you need to revisit your math here. I understand concerns around centralization of hashrate, but even ~1,000 B300s would only represent low single digit % of network hashrate today. Compare that to Cypherpunk’s 16% hashrate share on Zcash. So this isn’t as centralizing as you think, and less even a method to bootstrap more hashrate, considering they are already well on their way there. In my view, it is moreso a way for the lab to further align themselves with the token.
4. Pearl is an L1 blockchain, it is not meant to represent any exposure or interest into a business entity. The only thing Pearl Research Labs can be to the blockchain is net positive imo. It is not siphoning cash flows away from token holders, etc. It is a completely separate business / investment.
5. Same comment as above. An equity/token split is mores a concern with something like Venice, where the team is actively deciding whether to allocate cashflows to token holders vs equity holders. This is not even close to the situation here.
I like your suggestions to improve comms and good ideas on additional token value accrual, they are constructive. Some of them make more sense than others for the reasons I lay out above.
While I disagree with the overly bearish posture, I do greatly appreciate the continued public debate, because open conversations like this need to continue happening if Pearl is ultimately going to succeed
got some good pushback on my $PEARL fundraise post. here's my response to the main points, and how i think the team could fix them.
1) "this fundraise has been known for months."
no it hasn't. it's been a rumor, and an unverified one.
one of israel's largest business papers, @TheMarker, published the exact details yesterday ($55M in equity and a $75M GPU fund). that's the first time we’ve gotten actual numbers on it, and the team still hasn't confirmed it.
this goes back to transparency. why isn't the team announcing or confirming this? why do holders have to find out through rumors and business papers instead of directly from the team?
2) "pearl's whitepaper clearly states that difficulty was lowered for the first 10% of supply to fund operations."
the issue is again transparency.
that's 210M $PEARL, ~59% of today's circulating supply, or ~$380M at today's price.
we don't know how much of that the team mined, how much they still hold, or how much they've sold.
one reply says the team mined less than 5% of the network. maybe, but the team hasn't published anything that lets holders check that.
3) "they raised capital to build a GPU farm to add hashrate to their own network!"
yes, more hashrate is better. i agree.
but if that fund mines $PEARL (which it almost certainly will), it centralizes the network around the team even more than it already is.
the team ships the code and the upgrades. $75M buys roughly 2,500-3,000 H100s, which could make the lab one of the largest miners on pearl.
as someone put it, "whoever controls the majority of the network's hashrate ultimately decides which chain gets secured..."
so we're comfortable with the dev controlling a growing chunk of the hashrate, without disclosing how much? that takes away a lot of the credible neutrality and decentralization that make blockchains, and especially SoV assets, valuable.
4) "trying to accrue value to the token would invite additional valuation frameworks, which can only result in a lower valuation ceiling."
i disagree. $PEARL is a lot less credibly neutral than other PoW assets like bitcoin, zcash, or even monero. it's also missing what monetary assets need:
> low inflation (supply grows ~85% this year)
> deep liquidity (~$8M of daily volume)
> transparency from the team (undisclosed holdings + fundraise)
> years of evidence that it works (it's 6 months old)
so right now, the SoV case is weak, and a second source of value would help, not hurt.
look at ethereum. it's valued as an infrastructure token (it returns value to holders thru staking and burns) and as a monetary asset (it's the main collateral across DeFi, it's the gas currency for ethereum and most of its L2s, and ~$18B of it sits in spot ETFs).
a claim on value accrual gives a token fundamental support. monetary premium is the most fragile part of a token's price. when zcash's orchard bug was disclosed in may, $ZEC fell ~50% in two days even though nothing about its fundamentals changed.
5) “there is no equity/token split. pearl research labs is an equity business AI lab, completely separate from the token."
this isn't accurate.
they are not completely separate. the lab ships the code, the early low-difficulty window was set up to fund its operations, and its GPU fund will likely mine $PEARL.
and the part that is separate is the part that makes money. that's what an equity/token split is. here is the test i use:
> does the lab make money without the token? yes, it sells inference in USD.
> does the token share in that revenue? no.
> are any buybacks programmatic? no.
> could the lab keep growing while $PEARL falls? yes.
so the business and the token have to be valued separately.
if $PEARL went to zero tomorrow, the lab would lose its mining subsidy, but it could keep selling inference on its own GPUs.
the counter is that the team holds $PEARL, so their incentives are aligned with holders. but that only goes so far.
the team also owns equity in the lab, and so do VCs who may not hold any $PEARL. when the token and the business want different things, like whether inference gets sold for USD or $PEARL, the lab will answer to its equity holders. and we still don't know how much $PEARL the team holds, whether any of it is locked, or how much they've sold.
there are ways to fix this though:
1) TRANSPARENCY. disclose how much $PEARL the team and investors mined and hold, how much they've sold, who invested, and what share of the hashrate the lab controls. for a SoV asset, this is the most important thing a team can provide. it's why @blockworks has a token transparency framework.
2) FIX TOKENOMICS. accept $PEARL for inference, and burn the $PEARL that comes in instead of selling it. that adds demand for the token and helps offset miner selling. (i know. i know. "this is a SoV token, it doesn't need utility bro!!" but as i outlined above, it can/should have more than one source of value).
3) USE THE REVENUE FOR THE TOKEN, NOT THE TEAM'S AND VCs' POCKETS. most or all of the lab's inference profit should go to buying back and burning $PEARL. make it a fixed policy with burns sent to a published onchain address, not a verbal promise or something left to discretion.
4) CAP THE LAB'S HASHRATE. commit to keeping the lab's own mining under a set share of the network, and report it publicly.
5) TIME. supply growth drops to ~33% next year, ~18% the year after, and ~12% after that. by then the team could prove it's a credibly neutral dev, and $PEARL could have a real case as a SoV. bitcoin is 17 years old. zcash is 10. $PEARL is 6 months.
if the team addresses the first four, i'll revisit my bearish view.
max fiege retweeted
MAGA data guru Data Republican says the early vote data is so depressing for the GOP, she can’t share it with her audience.
I've been asked about early voting analysis.
The dilemma I have is that my platform is big enough such that being too blunt can have an effect on morale. I'll push out new states and tools out to my website soon, but won't announce them here on 𝕏.
I will be giving @realJeremyCarl my predictions a week in advance so he can hold me accountable after Election Day.
You MUST turn out and bring their friends, and brace yourself on election night. Even TX is going to be a fight.
max fiege retweeted
1/ A common critique of $PEARL: some of the GPUs mining it aren’t doing useful AI work.
That's a classic misconception. I think that misses what makes the design by @WeinsteinOmri and the @prlnet team so clever.
With BTC, hashrate follows price, as each miner has a unique profitability threshold at which they turn on.
With Pearl, hashrate can grow independent of price, because each inference provider has an underlying revenue function aside from mining.
And the market likes hashrate.
I think this is an incredibly valid critique, but it misses what makes Pearl so interesting. Pearl would not be a good asymmetric opportunity if it was built on SHA512 or some other useless algorithm. We all know we don't need another Bitcoin
What makes Pearl asymmetric is the differences between it and Bitcoin. Bitcoin Maxis decided long ago that picking a useful algorithm opened up attack vectors on Bitcoin, but I don't really know if we ever actually tested that assumption as seriously as Peal is now
Yes, there were projects that were doing merge mining back in the day, but merge mining is very different, I believe, compared to the duplex mining or two-for-one work that Pearl does. From what I can tell, we're running a new and interesting experiment
I think it's actually totally reasonable if your base case is that Pearl goes to zero. But on the off chance that it doesn't, the opportunity is so massive that you kind of need to imagine, instead of "How might this thing fail?", "How might this thing succeed?"
For the specific critique that Sami is making here, I think the game theory is if you could just 51% attack it and print money, everybody would race to do it. Enough compute would come online that you saturate the available GPUs, which is Pearl's win condition anyway. I think they want people racing to 51% attack them. That's what gets it so embedded into the ecosystem and maybe part of why hash is going so exponential
The overhead of mining while providing inference is minimal post-FP8 hardfork and the wink wink nudge nudge of the @flappyairplanes announcement this week is that pearl-optimized GPUs are on the horizon
max fiege retweeted
Frontier tech and crypto are converging.
Crypto projects part of the AI buildout:
$DATA → Licensing and verifying AI training data.
$CHIP → Financing GPU hardware through onchain loans.
$PEARL → Merging proof-of-work with AI compute, letting miners earn rewards while powering compute.
Read more on The Stack by @willhamilogden: grayscale.com/the-stack/bloc…
max fiege retweeted
Thanks Jake for the discussion. There are risks to every investment, and Pearl's path to success isn't pre-ordained, but for me it is still the most asymmetric opportunity of the cycle.
Pushing back on some of the points he makes below:
1. Inflation - Jake says the Pearl market needs to find a full market cap of new buying just to hold price.
This is a poor assumption imo. It should be obvious that 100% of emissions are not sell pressure (0% of emissions is also not correct). The truth is somewhere in the middle. My belief is that the % of emissions set to hit as sell pressure is far below what the market is currently pricing in. There is historical precedence to this behavior (look at BTC miners in 2020/21 or Cypherpunk today, who specifically mined as an accumulation strategy)
2. Pearl has no moat.
Hard disagree here. The moat is the overhead. Just like Bitcoin, Pearl is open source. But they cannot recreate the network effects and they likely do not have the team capable of continuing to iterate on Pearl’s 2:1 kernel, which is the entire gateway to adoption (far more important than % of useful work imo).
3. More hashrate != more security
There is nuance here, my perspective is if Pearl has more hashrate (ie power draw and electrical footprint) than bitcoin, it absolutely becomes harder money and a more secure network. Bitcoin might have dedicated hardware securing the network, but this is exactly what is leading to hashrate loss and security budget issues. Even though Pearl is mined with fungible hardware (GPUs), its security budget can actually be far greater than Bitcoin’s because the system as a whole (combining inference + mining markets) creates strong economic incentives not to attack the network. Rafael Pass talks about this extensively in his “Economics of Useful Work” talk, which you can watch on Pearl Research’s YouTube channel if you are interested in learning more
4. ZEC needed to go through cycles long miner distribution before it became a good investment.
Folks think ZEC underperformance past cycles was due to its initial inflation / having to get past miner distributions, but I could not disagree more. There was no reason for alternative PoW SoVs to attract flows in prior cycles, but given modern risks to bitcoin (quantum, security budget, hashrate loss to ai), now there is. This is the “why now” of the investment. Zcash is already proving there is real demand for alternative SOVs that occupy a niche bitcoin can’t compete in, and the Overton window is opened. This is why Pearl can outperform now, despite it being earlier in its emissions curve.
comparing an xpeng or nio EV to a similar segment euro car will have you experiencing second hand embarrassment
signed, a x9 preorder-er
