Token 2049 Summit Dialogue: Arthur Hayes and Tom Lee Debate DATs, Ethereum, and the Next Market Trend
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Token 2049 Summit Dialogue: Arthur Hayes and Tom Lee Debate DATs, Ethereum, and the Next Market Trend
In the cryptocurrency world, "being stupid" is a good thing.
Navigating Web3 tides with focused insightsSource: Unchained
Translation: Baihua Blockchain
Editor's note:
At a high-profile panel hosted by Dragonfly during Token 2049, the clash of views between Arthur Hayes and Tom Lee became the center of attention.
Tom Lee painted a grand vision of an "institutional supercycle" led by Ethereum, while Arthur Hayes pushed back sharply—warning of brutal consolidation looming over the DATs market and revealing for the first time his real reasoning behind selling Hyperliquid. As the Perp Wars heat up, where are their eyes turning next?
Below is an excerpt from the interview.
01 The Institutional Wave of Ethereum and the "Tom Lee Effect"
Host: Tom, many people call you the "savior of Ethereum." How do you feel about that label?
Tom Lee: Yes, it's a heavy responsibility. I think Ethereum itself is already in excellent shape. The Ethereum Foundation has prioritized the right things this year, and of course, the emergence of stablecoins truly ignited demand for blockchains. I think Bitmine was just lucky to be in the right place at the right time.
Host: It feels like you're now Ethereum’s chief marketing officer.
Tom Lee: Alright, I can add that title to my list.
Host: Arthur, what do you make of the DAT (Digital Asset Trust) frenzy sparked by Tom Lee? How has it propelled Ethereum forward?
Arthur Hayes: I mean, people love hearing this guy on CNBC, so whatever. If he wants to bang the Ethereum drum, let him. Go ahead, brother. Let’s go. So I actually love it. We need more Tom Lees. Every [altcoin] needs a Tom Lee.
Host: Tom, what did Bitmine get right that other imitators haven’t?
Tom Lee: Well, I think Bitmine, first, has been very thoughtful in communication. You know, we’ve kept our message extremely simple: Ethereum is in a supercycle. We convey this through our website, presentations, and videos from the chairman. I think Bitmine has strong connections with the institutional world. Cathie Wood made a major public investment in Bitmine early on. It’s now one of Arc’s top ten holdings. That attracted other institutional investors in, and I think this process created a flywheel effect. That’s why we’re today the 26th most traded stock in the U.S., and as you pointed out, we and MicroStrategy are really creating liquidity for DATs.
Host: You've recently expanded beyond Ethereum too, such as providing seed funding for Worldcoin’s DAT. Can you talk about that part of your strategy?
Tom Lee: Well, I think Bitmine wants to play a role in helping Ethereum move into its next 15 years. This includes helping identify projects critical to Ethereum that will use more ETH and consume gas. It also includes helping seed other payment rails coming onto Ethereum. Of course, we’re working closely with the Ethereum Foundation to truly identify and prioritize upgrades.
So part of it is also investing in projects that truly stand out. For example, Orbs 8co, the parent company of Worldcoin. As a16z pointed out, among the 11 things AI genuinely cares about, one is proof of humanity. And Worldcoin is indeed one of the first projects, with nearly 17 million people verified as human. I think safeguarding humanity on the blockchain is an important priority.
02 The Future of DATs: Consolidation or Extinction?
Host: The hype around DATs seems to be cooling down, with net asset value premiums shrinking. What do you think lies ahead for DATs?
Tom Lee: Yeah, someone told me today there are 70 Ethereum DATs—that’s a lot. If you look at traditional public markets, investors can support two or three, maybe four. So in this universe, there could be multiple winners, but institutions can't buy 70 DATs. I think those trading below NAV face survival issues. I don’t think DATs should trade below net asset value. I don’t know whether they should convert into ETFs or be liquidated. They could consolidate. But they shouldn’t trade below NAV—no ETF trades below NAV, so neither should a DAT.
Arthur Hayes: Yeah, I absolutely agree with consolidation. I think Solana’s DAT has consistently sent that message: “We’re going to consolidate. There can’t be 20 DATs.” But what baffles me is that people are still launching DATs for lower-market-cap tokens—say, $1 billion to $3 billion market cap. I don’t understand how these things stay alive. Because if the baker earns 5%, who even cares?
Tom Lee: Yeah. That might undermine reflexivity. You want reflexivity where the DAT is a permanent holder of the token, but you don’t want it so large that the power law creates negative effects. That’s why Bitmine really doesn’t want to hold more than 10% of Ethereum, aiming for 5%. So if it’s a small-cap coin with limited float, I think a DAT might help promote its merits, but you don’t want it becoming the bag holder.
03 Challenges and Opportunities in the Ethereum Ecosystem
Host: Tom, how do you respond to skepticism like “Banks and institutions will use Ethereum, but they won’t want to pay high gas fees”?
Tom Lee: As you know, in the crypto world, being “stupid” is a good thing. So take that as a compliment.
Host: Then, will dedicated stablecoin chains become a new trend and hurt Ethereum’s value capture?
Arthur Hayes: I guess that might just be a function of mining, right? If they can offer positive mining yields, you’ll do it. If afterward they can’t create value, then everything comes back—just like all the other games you’ve played over the past decade on all these tokens. It’s a mine, right? It has to evolve beyond mining before we see if there’s real value there.
Tom Lee: Well, I mean, I think stablecoins will be a massive market. We only have $300 billion now. I can easily see a path to $4 trillion. Treasury Secretary Yellen talks about this. And that doesn’t even account for micropayments being a huge user of stablecoins because, you know, Tether has 12 decimals. I mean, that’s how you do micropayments. Will all of this happen on one chain? I don’t think you can realistically fit all that traffic into Ethereum. So it makes sense for other chains to experiment, and I’m happy to see many things succeed.
04 The Perpetual Contract Battlefield: Hyperliquid’s "Sword of Damocles"
Host: Arthur, you recently claimed you sold Hyperliquid because it has a "Sword of Damocles" hanging over it. What exactly did you mean?
Arthur Hayes: Yes, so clearly there are these token unlocks, right? It’s not a secret. I think starting November, roughly $500 million per year becomes eligible for the team to sell on the market. Now, this either matters or it doesn’t. When Hyperliquid was dominant, with about 60–70% market share (about six weeks ago), these big unlocks didn’t matter because everyone assumed they’d earn more in fees, buy back HYPE tokens—a so-called “bullish unlock,” like Solana in 2020/2021. That was the dominant narrative at the time. I didn’t care about the unlocks.
Then, about a month ago, over a weekend, I checked DeFiLlama to see the rankings. I clicked on it—Hyperliquid was number one, around $4 billion or something. Then Lighter was right behind, around $3.9 billion, Aster around $3.8 billion. That’s not good—that’s competition.
Now, that’s not to say Hyperliquid can’t beat them all—its tech is great, with HIP-3 and Builder Code and so on. But I’m not going to sit and watch the market reprice expectations under my nose. I’ll just sell and wait on the sidelines. It either goes up or down. Either Hyperliquid proves it has a moat and can charge real fees against all these competitors, or it can’t. And I’ll reassess what the perpetual contract landscape looks like—or what new products or services perpetual exchanges launch that customers are willing to pay for and won’t be instantly commoditized.
Host: What are your thoughts on this perpetual DEX (Perp Dex) war?
Arthur Hayes: I don’t think it will stay zero-fee forever. Look at Aster—it has fees, and due to volume, it earns more than Hyperliquid. But it’s clearly operating at a loss because everyone knows they’re dumping tokens via points. So whether you have fees or not, all leading perpetual exchanges are currently running at a loss.
Tom Lee: Yeah, they’re super smooth. And you know, going back to like 2010—if you were an investor, thinking: Should I buy Microsoft, Google, Amazon, or Facebook? The answer was you actually bought all of them, and the market just kept exploding.
Arthur Hayes: But they weren’t offering the exact same product. Perpetual swaps are identical across every platform.
Tom Lee: It’s a commoditized product. You could also say cloud computing is somewhat commoditized. But you know, markets aren’t perfectly efficient, though maybe over time they trend that way. This sounds like capitalism working, right? Because you have a product that really took off, people took notes, launched their own versions. But as Arthur said, it’s crucial for leaders to maintain leadership—if they can’t, then the market truly becomes commoditized. I do believe this is a market whose size will grow.
05 The Next Big Thing in Crypto
Host: Arthur, if you were to start another exchange today, which direction would you take?
Arthur Hayes: Fixed income, not perpetuals. We’d trade CryptoKitties. But we’d make it fun. When you have 1000x leverage, a lot of things become fun.
Tom Lee: But I might add a point—Arthur mentioned a keyword: “betting.” I think that’s exactly where crypto excels. Its core is really that people can hedge, arbitrage, and bet on different ideas. So I mean, that’s the real big market, right? Betting markets. The breakout players have always been Polymarket and Kalshi. There will be micro-betting—on interest rates, fixed income, real estate speculation, whatever.
Host: Tom, how does Fundstrat use Polymarket?
Tom Lee: We use it all the time! Like predicting whether the U.S. government will shut down. Bets on Lisa Cook, and whether Fed Chair Powell will continue in December. All of these give real-time insights. Polymarket was crucial in understanding how the market viewed the last election—it correctly predicted every state in the Electoral College, something no one else did. If you consider how Wall Street will use prediction markets in the future, the betting volume from this election could be 20 times larger down the line. Goldman Sachs now cites Polymarket data on many things, whether Fed moves or government shutdowns. At Fundstrat, we’ve used it for a long time—it’s really helpful, the wisdom of the crowd.
06 The Controversy and Future of Privacy Coins
Host: Monero recently suffered a 51% attack—does this relate to Zcash’s recent surge in popularity?
Arthur Hayes: I don’t know.
Host: Tom, what’s your take on the privacy narrative?
Tom Lee: Well, yes. First, privacy matters. I actually think even government agencies will use Zcash and Monero when they want to make payments. So it does have a real use case. I’d say privacy matters to certain people. Many people don’t seem to care. So I don’t know if everyone needs privacy. I mean, if you look at many surveys, younger people are willing to share more information with tech companies because they trust them more than governments. So I don’t think it’s just about wallet privacy. Of course, in a world of AI and robots, you’ll want other forms of protection. I mean, even proof of humanity, right? Just proving you’re human is important, especially when we’re constantly scammed by robocalls.
Host: Arthur, you seemed critical of Zcash in the past?
Arthur Hayes: I’m not a critic. I just don’t think it really works. I think I attended a dinner a long time ago—maybe six or seven years back—with a lady from the FBI, and we asked her: “What do you think is the best privacy coin?” She said Monero. That was all I needed to hear.
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