This episode features Jason Yanowitz and Rob Hadick joined by special guest Sal Qadir, co-founder of EV3, fresh off announcing their $61.74 million second fund focused exclusively on DePIN (Decentralized Physical Infrastructure Networks). Sal brings deep expertise in the DePIN space, having invested in projects like Helium, GeoNet, and USDAI.

The conversation covers EV3's fundraising experience and the evolution of DePIN from speculative token launches to revenue-generating infrastructure businesses. They explore how projects are transitioning from token-based bootstrapping to debt financing through InfraFi mechanisms, with real enterprise customers driving sustainable growth.

The discussion shifts to broader crypto market dynamics, examining the explosive growth of RWA trading on Hyperliquid where commodities like silver and gold are generating massive volume. They analyze whether this represents crypto traders seeking momentum opportunities or genuine demand for tokenized real-world assets.

Finally, they discuss the wave of companies moving on-chain, upcoming crypto IPOs, and the infrastructure needed to support traditional businesses adopting blockchain rails. The episode concludes with content recommendations, including The Making of a Permabear by Jeremy Grantham, The King of Oils about trader Mark Rich, and The Beginning of Infinity by David Deutsch.

EV3's $61.74M DePIN Fund and Market Evolution

EV3 raised exactly $61.74 million, referencing Kaprekar's constant 6174 - a number that any four-digit number converges to through recursive subtraction operations.

"Fund one was such a bear for us. We raised fund one in the middle of 2022... it was basically like Helium has already taken over the space" - Sal on the challenging first fundraise when Helium was at $15.

Fund two was easier because "these deepened projects are actually growing much faster. The multiples now are cheaper or on par with what you would pay sort of like in the public markets for a median style company."

LPs understand they're "basically buying infrastructure businesses when they're cheap and they're growing fast" with defensible moats and gigantic addressable markets.

DePIN Revenue Growth and Valuation Disconnect

Helium generates $13 million annualized revenue from MVNO operations while GeoNet has close to $10 million ARR, yet DePIN represents less than 1% of total crypto market cap.

"You can grow 30% quarter over quarter for several years, for half a decade, for a decade. It's a massive, massive business" - Sal on DePIN's compounding potential.

The market misunderstands valuation multiples for DePIN: "DeFi revenue is not the same as a D-pin revenue. Like, one of these is cyclical and one of these is not."

DePIN miners have different economics than Bitcoin miners - "it costs you $200 for the device, and then it maybe costs you like a few cents a year in electricity" with fixed cost structures.

InfraFi: The New DePIN Financing Model

InfraFi represents debt financing through stablecoin yield products, replacing the 2021 model of "launch a utility token, it gets bid up in speculative value, use that speculative value to incentivize hardware build outs."

USDAI exemplifies this model - "they open up their caps by 150 million in like 45 minutes that it's sold out" paying T-bill yield plus points to stablecoin holders.

Over $300 billion in stablecoins creates "extremely proven demand for people to like ape basically a black box that you put your stable coins into and it pays you yield."

The challenge is safe origination: "with credit, you really can't lose people's money. Like it's very, very hard to build the trust back."

RWA Trading Explosion on Hyperliquid

Six of the top 10 assets by trading volume on Hyperliquid were RWAs, with silver alone doing "a billion in volume in 24 hours" - one-third of Bitcoin's volume.

HIP3 markets with TradeXYZ generated $3 billion in 24-hour volume out of Hyperliquid's total $9 billion, representing about one-third of platform activity.

"Most crypto traders are momentum traders, right? Like they're chasing momentum. Like the asset could be anything" - Rob explaining why traders rotate into commodities.

The appeal is leverage access: "I'm not sure if I wanted to get 25x leverage on gold, how I would do that, other than going to hyperliquid."

Companies Moving On-Chain and Crypto IPO Pipeline

Rob's investment thesis: "companies are moving on chain and they'll reap most of the value and adoption doesn't translate to value accrual in infra tokens necessarily."

Seven crypto companies are currently working on IPOs with underwriters, though "maybe two to three of them are actually good public companies."

Chainalysis likely to go public with "300 million of ARR" and dominance in "U.S. government markets" where "everybody uses them who wants to operate legally."

SpaceX IPO at $800 billion valuation is "oversubbed by 40x" with prediction that "the equities market tops in June or July, whenever SpaceX IPOs."