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The New Economics of Crypto Tokens | Austin Barack

1h 7min

Austin Barack, founder of Relayer Capital, discusses the new economics of crypto tokens, focusing on assets at the intersection of growth and value. He highlights Venice (VVV), Pump, Hyperliquid, and EtherFi as prime examples of application tokens that generate real revenue and return value to holders through buybacks and burns, contrasting them with infrastructure tokens. The episode argues that the next cycle will be dominated by application tokens and money tokens, not layer-1 infrastructure, as apps now generate two-thirds of crypto revenue.

Summarized by Podsumo

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✨ Key Takeaways

1

Austin's strategy focuses on the intersection of *growth* and *value*, finding tokens that are growing rapidly but priced reasonably – a rare combination in crypto's cyclical markets.
2

Venice (VVV) is a standout: its *$1B FDV* is considered materially underpriced, with a model projecting a $43.90 price target by 2027, driven by credit purchases and a new 'Mines' product.
3

Pump and Hyperliquid are capitalizing on *reflexivity* – their revenue surges with crypto market activity, making them leveraged plays on the broader bull market.
4

EtherFi is transitioning from a liquid staking to a *neo-brokerage* business, with 65% of revenue now from credit card usage and borrowing, yet trade at a discount due to market perception lag.
5

The next cycle will be defined by *application tokens* and *money* (like Bitcoin and Zcash), not infrastructure, as apps now generate ~two-thirds of crypto revenue.

💬 Notable Quotes

"I think we're going to find the most enduring tokens be applications and money. – Austin Barack"
"Venice has created one of the most elegant balances of token and equity... the majority of free cash flow goes into the token. – Austin Barack"
"Pump is still incredibly cheap at 5x buybacks... it's crazy to me when similar businesses trade at 30-40x. – Austin Barack"