Podcast: Bankless
Translation: Yuliya, PANews
Recently, the crypto venture capital RockawayX, after acquiring the crypto hedge fund Relayer Capital, is now raising funds for its newly established $150 million liquidity opportunity fund, which will be led by Relayer's founder, former CoinFund partner Austin Barack, focusing on identifying undervalued crypto tokens and related stocks.
In the latest episode of the Bankless podcast, Austin Barack thoroughly dissected his “growth and value” investment philosophy. He pointed out that the core opportunities in the crypto market have shifted from infrastructure to applications, and he emphasized why 95% of his efforts focus on the secondary market. Through a rigorous fundamental valuation model, Austin deeply analyzed the true growth potential and valuation logic of assets like Venice, Pump, Hyperliquid, and EtherFi.
Finding mispricing opportunities in the crypto market from the logic of “growth and value”
David: Welcome, Austin. Today we are here to talk about tokens. First, let’s discuss your investment perspective in the crypto space; what is Relayer Capital's strategy?
Austin: The crypto market changes so quickly, and effective methods in 2017, 2021, and 2024 may not persist. But I’ve noticed a replicable theme—the intersection of growth and value. Nobody enters crypto to find companies with a 10% annual growth and a 4x price-to-earnings ratio; they might as well buy utility stocks. Of course, now due to the rising demand for AI data centers, utility companies have become somewhat interesting, but that’s not the focus.
The real allure of the crypto market is that sometimes you can find projects like this:
Business growth is very rapid;
Users and revenue are expanding;
But the price the market gives it is still low.
The capital flow in the crypto market is quite cyclical; during bull markets, many things become overpriced, and during bear markets, they are often struck down to prices that are too cheap. Because of this, you often find projects where the fundamentals are improving, but the price hasn’t reflected that yet, creating opportunities.
I founded Relayer about two years ago and was previously a partner at CoinFund. We do liquidity and venture capital, but recently 95% of our focus has been on liquidity tokens because there are more opportunities. The two sectors I am most interested in are crypto + AI and 24/7 tokenized trading, which include Venice, Pump, Hyperliquid, EtherFi, etc.
David: What about venture capital? How do early-stage bets align with your liquidity strategy?
Austin: Here, I need to differentiate. When I spoke about “growth and value,” I was mainly referring to liquidity tokens. Because these tokens are already trading in the market, we can see data on price, revenue, buybacks, burns, user growth, etc., and then determine if the market has underestimated them.
On the venture capital side, the best projects are usually not cheap; you have to pay a premium to get in. But if you can enter early (seed round, pre-seed), absolute valuations are still attractive. I'm still focused on new brokerages, on-chain DeFi, tokenization, AI, etc., but the emphasis is on team and execution capability.
David: So for you now, which part of Relayer's two businesses—liquidity tokens and private venture capital—attracts your attention more?
Austin: In the first three quarters of the 2024 fund's operation, it was about 50/50. But now, I spend approximately 95% of my time on liquidity tokens. The reason is that many projects in the primary market, although good, are already in growth-stage companies, more akin to traditional payments or fintech companies. I find them interesting as crypto-related assets in the public market, but I’m not that excited about them in the primary market. So currently, I am focusing mainly on tokens that are already publicly traded.
David: Does this have to do with the cycle position? After all, Bitcoin just surged from $62,000 to nearly $80,000.
Austin: Not entirely; liquidity tokens have been my core focus for about the past year. It’s because we’ve experienced a very deep and prolonged bear market that the market has shown clear differentiation. Previously, people might look at 100 tokens, but now you might find that only 10 or even 5 are really worth serious study. These projects share common traits:
They found product-market fit;
Business growth is very fast;
Revenue or user data is showing significant improvements;
But the price is still not expensive.
Of course, some assets have recently increased in price and are not as cheap as before, but overall they are still attractive. For example, Ethena and Pendle. I have always viewed them as “third-stage assets.” If the market bottom is the first stage, and the initial rebound of the asset is the second stage, then when on-chain yield rises and the market heats up, on-chain yield protocols like Ethena and Pendle will significantly benefit. In fact, Ethena recently rose about 40% in approximately 30 hours; this logic is already starting to manifest.
Why is Venice possibly undervalued?
David: You tweeted that the Venice token VVV was severely undervalued at a $1 billion FDV, with a target price of $43.9. The price is higher now, but please break down this model in detail.
Austin: My background is in traditional finance, and I built the model from scratch. Venice's business is private, uncensored AI access, aggregating various cutting-edge and open-source models. The revenue mainly comes from two sources: subscriptions (monthly tiers of $18/68/200) and additional credits purchases.
They raised equity and token financing at a $1 billion valuation in July. Venice has achieved an elegant balance between equity and tokens. Because Venice's main business is actually off-chain. Most users use it as a regular AI application, paying with credit cards, and using it on computers or mobile devices. To acquire computing power, establish business relationships, and operate a company, fully going on-chain would be very complex. So it requires an equity company entity.
But at the same time, the VVV token also has its own value capture methods:
Venice will use part of its revenue to buy back and burn VVV;
VVV also has some utility, such as being related to tokenized computing power;
In the long run, the company plans to return most of its free cash flow to the tokens.
Currently, Venice has two programmatic burning mechanisms:
When new users subscribe, a certain number of VVV will be burned according to the subscription tier;
When users purchase credit limits, a certain number of VVV will also be burned.
So when I built the model, I started with business revenue, then estimated gross margins, inferred costs, marketing, customer acquisition, labor, and other operating costs. Because Venice is not the kind of business with nearly 100% profit margins like Hyperliquid.
Assuming a business gross margin of 50% while still in a rapid growth phase, if the EBITDA margin is only 10%, if they spend 8% of their revenue on buybacks, they are effectively using most of their free cash flow for token buybacks and burn. So you can't simply see “burning accounts for 8% of revenue” as a very high value capture.
What I am really concerned about is: after continued investment for growth, how much cash flow is left for burning.
According to my model, by around August 2026, Venice's annual revenue will be approximately $107 million, with annual burns of about $8.3 million.
By 2027, I expect revenues to reach about $336 million, with burns reaching $70 million.
If we consider the token buyback relative to market cap as the P/E ratio of a traditional company, I think a company that can grow 5 to 10 times year-on-year should have a valuation multiple of 50 times, which might even be on the low side. $70 million multiplied by 50 times gives a token valuation of $3.5 billion. Considering the token supply at the end of 2027, we can arrive at a price of about $43.89 for VVV. At the time I updated the model, the price of VVV was around $12. Now it’s about $16. I still think it is attractive.
David: What is the biggest assumption in this model?
Austin: Of the $70 million burn projected for 2027, $29 million (about 40%) comes from their yet-to-be-fully-launched “Minds” product. This is a very significant assumption. However, I did not make this assumption without basis.
Venice launched the points purchasing feature earlier this year, and now its annual revenue run rate has reached $60 million. Considering the team’s strong product execution, predicting that the Minds product will generate $30 million in burns by 2027 is reasonable.
David: I have a different opinion. While points purchasing is a new feature, it is essentially an extension of the original product—they are just selling more AI usage credits or making users pay for higher usage of existing products. But “Minds” is a completely new business line (similar to the App Store for AI products). Points purchasing is unlikely to be a failed product since it fundamentally sells existing products that already have demand; but Minds is an entirely new product dimension where we don't even know if users and developers will truly buy in.
Austin: That rebuttal is very reasonable; if we compare points purchasing to a new product innovation index of 2/10, Minds could be regarded as 5/10.
The core of Minds is: it allows ordinary users to use AI like professional users. Whether it's prompt engineering, automated workflows, or coding tools, Minds allows developers to build structured AI combination applications for one-click user access.
This may also mean: I may have overestimated the burn revenue directly generated by Minds but underestimated its huge pull effect on the main site subscriptions and points consumption—because Minds makes AI better and easier to use, thus feeding back into the overall usage frequency.
David: The most exciting aspect of Minds is that Venice has the capability to reach end-users directly. This is also the biggest difference from generic model aggregators like OpenRouter. On Minds, Venice's super users can create high-quality AI combination paradigms, share them with other users, and earn revenue shares from them. This kind of bilateral network effect, similar to the Apple App Store, is Venice's extremely unique bullish logic.
Austin: I completely agree! Venice has over 4 million historical registered users and an estimated monthly active user base of over a million. This extremely active group will spontaneously spread Minds applications on social media and communities because they can earn revenue shares from it. Additionally, Venice is sponsoring offline events like film festivals; in fields like image and video generation, ordinary users are in high demand for ready-to-use creative toolsets like Minds.
David: Venice is a young AI startup, yet it is using revenue for token buybacks and burns rather than reinvesting all income into growth. This goes against the common sense of startups. Does this worry you?
Austin: Having tokens is a double-edged sword; the benefit is gaining a lot of attention, launching quickly, and creating new utility (like users can lock VVV to mint DEM, which is essentially tokenized computing power, with each DEM corresponding to a daily inference quota of $1). The downside is that without clear regulatory frameworks, you cannot guarantee that the tokens can capture all value. Venice is very cautious: they first did a small discretionary burn, then targeted new subscriptions, and now have added a 5% burn for points purchases. They raised $65 million, ten to twenty times the burned amount, so they have enough ammunition to support both growth and buybacks; this balance is very sustainable.
David: The burning mechanism for VVV primarily revolves around new registrations and points purchases. The team has hinted at a possible third method: renewal burn. Is this included in your model?
Austin: Yes, it is included. My model is both reasonable and optimistic (about a 6/10 in terms of optimism). I expect they will start implementing renewal burns either later this year or in the first quarter of next year. They can start from a low percentage, observe the impact, and then increase over time. I also assume that the burn rate for points purchases will increase from the current 5% to 10% by 2027.
David: Has Venice's growth exceeded your expectations so far?
Austin: Absolutely exceeded. When I started paying attention earlier this year, the token was only $2. At that time, I estimated revenue to be between $10 million and $20 million, with about 1 million users. I didn’t expect revenue to grow 5 to 10 times within 8 months, with users reaching 4 million and points growth keeping pace. Venice is one of the very few products in the crypto space that has truly achieved mainstream consumer crossover and found PMF.
David: OpenRouter was acquired at a $7 billion valuation; what is your reaction to that?
Austin: This indicates we are heading toward a multi-model routing world. OpenRouter leans towards the developer tools layer, while Venice is on the consumer layer. People go to Venice for privacy and to choose the best model for specific use cases. OpenRouter's valuation was $1.3 billion two months ago, and now it’s $10 billion; this validates Venice's reasonable multiple. If they continue this growth, maybe a 70x multiple is the correct one, which makes me more confident in my valuation.
Fundamentals are disconnecting some tokens from the macro, exploring three types of application-based growth logic
David: Tokens like VVV and Hype are rising while Bitcoin and ETH are falling. Have they really decoupled from the macro?
Austin: Partially decoupled, partially coupled, but the decoupling is positive. The decoupling comes from the fact that they are rapidly growing businesses with fundamental value as a base support. The coupling is because they are essentially tokens. Over the past 18 months, tokens have faced negative capital outflows (to US stocks, AI, etc.). But I believe this capital outflow is cyclical, and it may have reversed now. As tokens, they will benefit from more funds flowing back into the crypto asset class.
For Pump and Hyperliquid, the coupling is deeper:
- Pump is strongly correlated with on-chain activity and memecoin trading, with a 90-day average revenue up 80%, potentially doubling or tripling again.
- Hyperliquid’s RWA market (commodities, stocks, indices) has a large trading volume but currently generates little income; its cash cow is still the crypto token business.
If capital flows back into the crypto market, they will benefit from the highest commission segments of their businesses. For instance, Hyperliquid generated nearly $1 million a day a week ago, and just a few days ago, it generated $5 million in a single day.
Venice will also enjoy the wave of AI adoption, which is larger than the trend in the crypto market.
David: Besides VVV, which other tokens excite you the most?
Austin: From a financial and valuation perspective, Pump remains very cheap. Its trading price is five times the buyback amount, while Hyperliquid and Lighter are about 30-40 times. The market questions the sustainability of Pump's revenue, due to the prior precedent of OpenSea—revenue spiking and then crashing by 95%. However, Pump's revenue has been consistently increasing for over two years, and it is not a flash in the pan. Perhaps individual meme coins will fluctuate, but Pump is “the casino for all meme coins,” which is a durable business.
Moreover, many people (including active users on Crypto Twitter) do not trade meme coins, so it’s hard to understand who the users are. However, casinos, lotteries, and short-term options are huge industries with negative expected values; people participate because of variance, which is not unreasonable. Pump is the crypto version of DraftKings or Las Vegas Sands.
Of course, the separation of equity and tokens still has uncertainties—they promised a 50% revenue buyback for 12 months, but may not renew afterward. However, for teams looking to build generational companies, giving up tokens doesn’t align with their interests. So a reasonable buyback multiple should be in the range of 10-14 times, suggesting Pump has room to double.
Additionally, Hyperliquid is also very interesting; it might be one of the best cases of "moving the entire financial system on-chain" in the crypto market. Instant settlement, 24/7 trading, and moving all assets on-chain. New use cases are even emerging, such as SpaceX, Cerebras, Unitree, and other IPO companies have started to price discovery on Hyperliquid. I believe in the future, bankers deciding a company’s IPO price may refer to Hyperliquid's trading interface: “How much is the market willing to pay for it?” This could become a new price discovery mechanism.
EtherFi is another one; it is the first venture investment of my fund. They transitioned from staking to yield products, credit cards, and are now a mature new type of brokerage with a strong execution team, allowing you to trade any on-chain asset and lend. It was initially valued by the market as a liquid staking service like Lido, peaking at an FDV of $8 billion, and then declining as the liquid staking craze cooled down. However, today, EtherFi's business is fundamentally different—over 65% of revenue comes from new banking/brokerage services (credit card fees, lending interest), only 35% from staking revenue. This ratio is also changing, with the new brokerage component growing faster.
In terms of valuation, it is currently around 10-15 times revenue, for a business growing 10 times (with daily credit card transaction volumes moving from $300,000 to $3-4 million) and just starting programmatic buybacks, the token is almost fully circulating, with no emission pressure; I believe it is undervalued. Blockworks has done a model assuming a halving of growth, concluding a $21 million buyback over 12 months; I am assuming $30 million, at a 30x multiple corresponding to a token price of over $1 (doubling from the current price), not accounting for its multiple expansions as a sector leader.
David: EtherFi fits the modern startup model: a small team leveraging large technology. Because of tokenized assets, they evolved from Neo Bank to Neo Brokerage with almost no costs, with Ethereum doing much of the legwork for them.
Austin: Yes, it now has only $20 million in lending规模, with interest income accounting for just 4%, leveraging existing DeFi infrastructure, like running their Aave v4 instance in partnership with Aave, operating on an 80/20 revenue share (80% to EtherFi). Meanwhile, traditional neobanks (like NuBank) have interest income accounting for 60-70%. From this perspective, there is huge potential for growth.
The next round of opportunities in the crypto market belongs to applications
David: Looking ahead to 2026-2027, how will this cycle be defined?
Austin: We have completely bid farewell to the “super infrastructure era.” The excitement for new public chains has become a thing of the past. An interesting statistic is that in the past, the execution layer infrastructure accounted for over 95% of crypto revenue, but now applications account for 2/3 while the execution layer accounts for 1/3. I believe that in the future, over 90% of revenues will come from applications, and the most enduring tokens will be those that represent “applications” and “currencies.”
Bitcoin will not disappear, but OG privacy coins like Zcash are attracting veteran Bitcoin holders; it has returned to the original concept of cryptocurrencies, attracting capital flows.
The potential of Ethereum as a “currency” has also rekindled my interest (considering Bitcoin's quantum risks and the risks of concentrated ownership).
In terms of applications, Solana is the most active blockchain, and it facilitated Pump. Although it currently does not have the MEV revenues it used to have, it is among the strongest bets for the proliferation of cryptocurrencies.
Ultimately, good buying points in 2026 will focus on those applications that find the intersection of crypto with the real world and assets that are genuinely recognized as “currencies.” Venice, Hyperliquid, Pump, EtherFi, Bitcoin, Zcash, etc., will be moments to marvel at when looking back.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
