SOL vs HYPE: Forward Industries and Hyperion DeFi Debate the Treasury Company Playbook

0:00Kinsa Durst Thank you for joining Panoramic Content Suite, Singapore edition, alongside Token2049, MBS In the backdrop. We've got exciting guests today. This is the debate podcast. We've got Garrison, CMO of Forward Industries here, and Hyunsu, CEO of Hyperion. So two super exciting companies join us. And debate, you know, why Forward Industries, why Hyperion, and we'll get into the depths Of it. But yeah, well, thank you for joining us. Super excited to have you guys here.

0:31Garrison Great to be here.

0:33Kinsa Durst Likewise. To kick things off, just wanted to go straight into it. I wanted to ask you each, but the public company's balance sheet on one chain, Forward on Solana, Hyperliquid, Hyperion on Hyperliquid. So yeah, make the case that why, you know, you guys made the smarter choice between the Two.

0:56Hyunsu Yeah, for us, it was pretty straightforward. When the Hyperliquid team implemented the assistance fund buybacks mechanism after the TGE in November Of 2024, we saw that they were taking value accrual probably the most seriously that we Ever seen in the industry. And at the same time, Hyperliquid was just starting to generate, you know, its meaningful Amount of substantial recurring revenue month over month, day over day. And annualized last year, I believe it was around $750 million. We're on track for that or a little bit more, which includes [unclear] or the fees generated From stablecoins, USDC stablecoin available on the blockchain. So that annualizes to almost a billion dollars or more revenue per year. And that's all going back to buying back the HYPE token off the open market.

1:41Hyunsu So it was a kind of marginal buyer that is always supporting the amount of supply Available on the market. And it made a lot of sense to us to add that to our balance sheet. And more importantly, HYPE has a lot of utility and being able to stake it for trading fee Reductions or launching HIP-3 and HIP-4 markets, it actually allows us to build an operating Business around the token, which is what Hyperion was intending to do from the beginning.

2:08Garrison For us, the reason why SOL is our treasury asset of choice is because SOL has a level Of leanness to it that I think a lot of other ecosystems do not. And for Forward, our vision is to build what we call SOL++. And so the idea is that we want to deliver a vehicle for public markets investors that Outperform SOL when price is rising and outperform SOL on the way down. And SOL++ effectively represents the SOL we hold plus the yield that we earn in both SOL-denominated yield as well as US dollar-denominated revenue. And then the investments that we can make to give our shareholders unique access and Upside to the SOL ecosystem as it grows. In order to do that, right, to deliver the SOL++ value proposition, you need an extremely Robust ecosystem, right?

2:57Garrison For us, we look at SOL and Solana broadly and we see incredible growth in things like Tokenized real world assets and things like OnRe. We see a very vibrant DeFi ecosystem that has obviously been around multiple cycles. And we see really different pockets of activity in things like meme coins, on-chain trading. Now we're seeing tokenized equities grow. And this diversity and vibrance in the different things that people are building allows a vehicle Like Forward to have a lot of optionality and ways that we can build value and create value For our shareholders. It's something that has a lot of room to work with. And then you have an underlying asset that represents that growth.

3:42Kinsa Durst Amazing. So I think I'm kind of seeing a little bit of the main topics that are being touched here, Which is yield and revenue, which seems like an important approach from both sides of the Parties here. I think that initially we saw as a holding company just for digital assets, underlying Digital assets. But now just doing that isn't enough. You got to make assets productive, utilize it, earn yield or revenue. And then ideally that goes back into the company and ideally the holders benefit from it as Well. And second part is part of this yield strategy or revenue strategy, I guess differs between Solana and HYPE because of the different ecosystems you guys reside in.

4:29Kinsa Durst Maybe it'd be interesting to dive a little deeper into some of the opportunities you guys Are seeing in terms of your respective ecosystems and why is it a better ecosystem to generate Revenue with assets you hold?

4:45Garrison Yeah, I can take that one first. So obviously Solana is one of the ecosystems that has, I'll say, a relatively higher base Taking yield today. And as we know, with the recent SIMDs that passed, that sinking rate is actually going To... The disinflation rate is going to increase. So we'll hit terminal inflation rate a little bit faster, which ultimately is a tailwind For the asset price rate and ration market. But even besides base staking yield, one of the reasons why we find Solana very interested In yield perspective is that, again, the diversity of businesses and companies are being Built on Solana means that there are a lot of opportunities for a company like us to not Only generate Solana-denominated yield, which is, again, ultimately a double down On the trajectory of SOL price as the underlying asset, but more importantly, diversifying our Yield with US dollar denominated non-correlated yield.

5:42Garrison As a public company vehicle, our goal is not only to accrue SOL per share, to deliver absolute SOL growth for investors, but also to make a vehicle that doesn't have an inherent drag On us just simply holding these. So I think this goes back to, regardless of what ecosystem a DAT is investing in or pushing Forward, the concept of a DAT is really interesting in terms of ways that we can deliver differentiated Value to investors. I know this is a bit of a tangent, but if you're an investor and you're thinking about Getting exposure to an asset, whether it's SOL or HYPE or what have you, the question You have to ask yourself is, what is the price that you are paying for that exposure?

6:29Garrison And how does the shape of exposure change from vehicle to vehicle? And so there are some vehicles out there that are effectively just leveraged with the underlying. And for that leveraged, you are paying up extra because the DAT has fixed costs, they're Paying salaries, whatever. For an ETF, you're paying a fee, a management fee, both of these vehicles get you access To staking yield, typically like a [unclear] staking yield. And if you want leverage, there are other products as well, options and perps. So for DATs, what's most important is that the goal is that differentiated value rate, The U.S. Dollar general yield, the SOL yield, the investments, the goal is to create a package Of things that most investors would typically not.

7:22Garrison So that could be capital markets access, that could be our advantageous cost of capital. We're borrowing at around 3.4, 3.5% of the average for our borrow with institutional lenders And then redeploy that capital in a way that is using our balance sheet and deploying it Into tokenized RWAs to earn yield, that is investing in ecosystem companies using our Access and relationships that most investors might have access to. And again, bringing it back to the original question, we think Solana is a really great Ecosystem for driving that yield, because it is very robust, it's been around for a Very long time, there's enormous diversity of builders, it's a much more mature ecosystem, Relative to some other ecosystems and chains, and that gives for the opportunity to deliver Something that is a little bit more, how do I put this, a little bit more unique and a Little bit more nuanced than just simply holding an asset.

8:26Kinsa Durst You just see what the best in class team is doing on Solana with Solana.

8:30Garrison 100%, right, 100%. I think for us, there's this really unique idea, especially on the private investment Side, right, that at our scale and our size, and with our access, being backed and sponsored By both Galaxy and Jump, as well as Kyle, who's been very involved from Solana from day one, We often have the opportunity to be a catalyst for our own investment. So you know, OnRe is the example that we frequently use, but when we invested OnRe, I think their TVL was maybe in the low 100 million. After our investment, their TVL grew more than two million, right, and so you can see That for Forward, we both made the private investment as well as the LP deployment, right, as an allocator, And that in and of itself can drive value to our investments while also driving value For the protocol and for Solana.

9:24Garrison And so for investors, when you think about total yield, for investors, when we think about This idea of total yield, when you think about what you're getting back and holding the shares, To be holding shares in a company that is making these investments, but also Having levers to pull to impact these investments, I think is a really interesting and valuable

9:50Kinsa Durst Proposition. Yeah, you guys do have a lot of SOL to make those impactful decisions.

9:55Garrison We do have a lot of SOL, but that is very true. We have a lot of SOL.

9:58Hyunsu So I would say we operate pretty similarly. We knew from the beginning that being a passive Vehicle for any ecosystem is not really additive. So as I mentioned previously, HYPE has a lot of utility within the HYPE ecosystem. So currently to date, we've diversified across Five different business lines, which covers validator operations, DeFi monetization, Which encompasses the HYPE Asset Use Service and being able to deploy HYPE directly to Teams that are building on the ecosystem, such as Entropy and Skew, which covers HIP-3 and HIP-4. We earn ecosystem rewards. So similarly, being able to invest or participate in building Institutional products with our partners, not only getting a share of the revenue, But having equity and or token upside to their growth over time. We think it's substantially More important in the Hyperliquid ecosystem because a lot of these projects are much more Nascent or earlier. We've seen the trend again and again, where the lead token continues to accelerate.

10:50Hyunsu People get more attention on the ecosystem and those ecosystem projects also move as Kind of like beta to the leader. We also have yield enhancement strategies, Which covers volatility on the base asset in addition to other assets that we hold. And we're able to use that in tandem with partner protocols like Rysk or HyperLend. So being able to take collateral, potentially borrow or lend against it, Use those assets and generate yields. So kind of building a carry trade into the DeFi system On Hyperliquid. And of course, the portability between Hypercore and HyperEVM means that All these assets are able to move across seamlessly. So being able to support the Perps, the binary and scalar markets in addition to institutional credit, Vault strategies, private trading, RFQ, is something that we see as a very cohesive Financial system. And Hyperliquid has kind of evolved from being like an app chain for finance And also being a mechanism for financial infrastructure that can be distributed Through front ends like Phantom and MetaMask and so forth. So we think that the trend will Continue to accelerate with like major exchanges such as [unclear] and Kraken getting involved.

11:48Hyunsu And Hyperion's role is to continue to build products and services that can Aid and actually accelerate these use cases as they move more into the new world.

11:56Kinsa Durst Amazing. Yeah, I think these utility revenue all super important. But in the end, What's the most important thing is the price of the token. We don't want to speculate on The price too much, but I think given the trends this year so far, HYPE has been The talk of the town, the blue chip to invest in hitting over $90. Also getting mentioned by Trump As well, which is an interesting feat. That said, I think the market is efficient and we will Continue to see how the markets develop. I wanted to see your take on will HYPE ever flip SOL or which coin will outperform in the coming few years? Yeah, sure. I think obviously anything

12:48Hyunsu Is possible. The list of top 10 or top 20 tokens has changed every cycle. But you still see some Tokens that despite not having so much utility or users or fee generation, there's a lot of Mispricing that I think still exist. Hyperliquid in both its own benefit and potentially its own Headwind is that because it generates real revenue, you can do a discounted cash flow model And say this is the fair value of the token just based on the amount of revenue that it generates. On the other side of that, I think that there are still a lot of meaningful catalysts such as The expansion of HYPE 4. Does it deserve to add the value of Polymarket or Kalshi to its Existing market cap? Further integrations on the institutional side, then obviously being able to Enter the US market and what does that mean for real like RIAs or other kind of pension funds, Firms that require regulatory clarity to participate in Hyperliquid and what does that value addition Mean to the value of the token? We look at those components and then on the other side of that, You just have unique mechanisms underlying the HYPE token. Net today, it is deflationary. I Think it's one of the few deflationary Layer 1 blockchain tokens. In addition to that, The buyback mechanism, the existence of other DATs, ETFs, and those kind of flows as Hyperliquid Is still relatively unknown outside of crypto from the conversations that we've been having.

14:12Hyunsu I think that there is always a moment where if we are heading into a bull market and there is Animal spirits and there's only so much capital that can go to few tokens that are understood And generate revenue and call it legitimately able to continue to grow and expand into Incumbent financial markets, we think that there's still a lot of upside remaining. I mean you have to say that. From our view, yeah, I would say so. I think it can even be On track to getting close to where ETFs value as well. Is Tommy watching?

14:53Garrison Yeah, so I think that you bring some really fantastic points and I think this idea of Revenue generation being able to run a DCF and having people understand How things can be valued is both a tailwind as well as something that could be a headwind. For us, we ultimately think that all this extremely early innings and then to his point, He said that in a bull market, you see a lot of things that are mispriced, Rationally priced, temporarily rationally priced. I mean, we saw XRP flip a bunch of Things late last cycle as well. And so I think the most important thing that we think about is Solana as an asset from a price perspective and as I said, has demonstrated a true level. We've seen Solana make new highs and then make some serious lows between cycles and then come Back and retest highs. And this cyclical nature of price and being able to survive through that A couple of times allows for the holder base to grow stronger, creates better market structure And ultimately means that other players can feel a little more comfortable coming into this market.

16:02Garrison I think if we think through early L1 cycle, ETH killers, right, professor coins, You guys remember that, we saw a lot of tokens only for their first cycle in their first year. And this is not me, I don't have a crystal ball, right? I'm certainly not saying anything about High, but look, new tokens are kind of the whole tokens tend to go up. And I think that These positive feedback loops in a more challenging market can rapidly turn into Negative feedback loops, right? When you have a lot of concentration holders, when you have a lot of Whales, early insiders, there has not been meaningful distribution and reaccumulation cycles, Price can be very volatile, right? And so I think we may see near term dislocation, A near term, the rational relative pricing on what these assets represent.

17:00Garrison For us, we think that long term, SOL well, that the reality is that if we look at the trajectory of Sold today, obviously it's much more difficult to run like a DCF on SOL because it touches so many Different things, right? But I think for us, we actually see a lot more torque because Solana Today supports a lot of different things. And we are seeing on-chain trading from retail. When people think crypto, your average person thinks crypto, they think Solana. You go on the street and you ask someone what crypto they've heard of and it's Bitcoin. Solana is also moving forward in the RWA space. Solana is moving forward in the institutional Space. There's a lot of work on on-chain AI, right? A lot of these different portions of Solana are Nascent for growing. And I think even if you're doing a naive sum of parts and thinking all the Different things that could happen in that ecosystem, it gives us a lot of confidence And conviction that Solana will outperform in long-term something that is heavily, heavily focused On institutional trading. Hyperliquid is just likely not sure as much value as what Solana can offer.

18:14Kinsa Durst I'd have to say, I think Samsung just announced Solana integration to support USDC payments, Which is very, very impressive. Yeah, congratulations on that. I think that is an example of retail Adoption through institutions, of course. But yeah, we'll see who gets to Apple Pay first.

18:32Garrison Hi, this is a bit of an aside, but I think broadly speaking, when you look at crypto overall, Something that people should be looking for more often is whether or not an ecosystem or a protocol Or the combination of the two is actually bringing marginal stables on-chain that would Have otherwise never had been on-chain. So when I think about Hyperliquid today, Obviously there's this really large institutional push, but the question that I always have is, Are we share shifting from finance? Is Hyperliquid just shifting from finance? And for good Reason, plenty of fantastic reasons why Hyperliquid should be share shifting from finance And Coinbases of the world. But these are dollars that were already destined to make it Into crypto. We're certainly moving them to a better experience and a better product, In my opinion. But this is money that was already going to get to crypto.

19:28Garrison When I think about Solana, and I think about these tokenized RWAs, and I think about some Of these other protocols are being built, these are marginal stables that would not have ended up In crypto. Because tokenized RWAs, for example, reinsurance. This is hundreds of millions of Dollars, billions of dollars in the traditional reinsurance industry that would have ended up In a traditional reinsure. And so when these assets get packaged in tokenized Solana, You're bringing marginal stables on chain. The partnership with Samsung is the same Thing. These are dollars that would have ended up in mobile wallets or FinTech products That are on option. And so by doing these partnerships like what Solana announced with Samsung, you're bringing the marginal dollars for our marginal users that are truly incremental.

20:17Garrison And whether that is a nascent amount today or something, again, like on read, that's more Than hundreds of millions of dollars. It's really that incremental dollar that is super Important, especially when we're thinking about long term value capture and where the terminal

20:30Hyunsu Value of these ecosystems came from. My counter to that would be even if more Dollars are brought on certain chains, it doesn't necessarily equate to, it could result In more activity, but it doesn't necessarily mean that the fees themselves are inherently Profitable or the values return to the base token. I think it's quite similar to Ethereum And the Layer 2s where Layer 2s like Arbitrum are being used for use cases like Hyperliquid And Robinhood, but the value capture has actually gone more to ARB than to Ethereum Layer 1. And so I think that for Hyperliquid, the more USDC that's actually available as TVL, 90% of that interest revenue that's generated that would go to Circle or Coinbase is actually Returning to the assistance fund and going towards buybacks. And so that's another mechanism That where you can see the direct impact of TVL or use cases accelerating the buyback.

21:22Hyunsu And I think that narrative flywheel of, oh, this token is just continues to grind up over time And more eyes are on it. And they say, oh, we need to buy this. We want to launch perp markets. We want to reduce our trading fees. We want to use collateral. That also creates that natural Demand for the HYPE token. The other part of it that I thought was interesting to your point is Solana as a general purpose blockchain, I think is very valuable because it has diversified across Numerous use cases, right, agentic trading, RWAs, institutional and retail push. But I've also seen like, Pump.fun is probably like the story of the year, right? As an application Has captured more of the value of a lot of users and trading activity on Solana than the Sol token itself. As I think for Hyperliquid, as mentioned previously, all of that activity Kind of really focuses back and returns to HYPE. I think that differentiated flow of value Capture is what makes Hyperliquid really exciting and potentially a competitor to flipping Solana.

22:18Garrison I think you're making great points, right? I think this idea that the base token for HYPE, Sort of the destination for a lot of the value that's been created today is truly a tailwind. And I think that one of the reasons why HYPE has done so well as asset And has actually displayed a level of dislocation from crypto overall lately, right, is because of This value accrual narrative that's very easy to understand for revenue better. I think for those Of us that have been crypto for a while, right, we've seen the buyback met up before. And I'm Certainly not saying that it couldn't change. And certainly HYPE has much more durable revenue Than a lot of verticals. But I think we know that at $90 billion today in terms of market gap, That it's probably not the buybacks that are supporting this, right? And I also think it, Off the top of my head, I'm sure the HYPE at current fee generation run rate, the inflation is Actually more, there's net issuance, I think, on high relative buybacks. It's very close, Either a wash or just some net inflation. But anyway, you look at Solana as well, right? Solana Has for a very long time, like inflation on Solana, the economic policy of the token, Has been highly debated. It's one of the reasons why they want to accelerate the disinflation rate.

23:42Garrison But despite the disinflation rate, you could still see positive trending price. So again, I kind of go back to revenue is so important. At some point, we have to think about these Ecosystems, these technologies, these assets as being productive and measuring them on the revenue That they can generate. But in terms of price, especially short to medium term, I think that No conclusion that one token will outperform the other on the basis of value accrual from revenue Alone is, I think just doesn't really, it is part of the narrative, that narrative might drive Incremental or marginal buying behavior, which then might create this self-perpetuating loop That then leads to that token outperforming. But I think functionally, that's not the reason why The token outperformed. You brought up a really great point on protocol versus A player value pool, because you have these really large tokens like PUMP that have existed On Solana. And ultimately, the way that I think about this is, think about the value of a market Overall. You think about the US stock market as an example. The US stock market is the largest in The world because we've created a bunch of different companies in the United States that Are all extremely valuable and extremely productive. And I think that it is probably A more bullish signal that Solana is able to spawn and support applications like Pump.fun that Can have multiple billions of dollars in terms of fully diluted market cap. That's probably more Bullish for Solana price than it is bearish. Although I know a lot of people say, well, If marginal dollars are flowing in a PUMP, are those marginal dollars flowing in a Solana?

25:22Garrison And I think in a vacuum, especially in today's more nascent market, That argument holds water. But I think ultimately, we're chasing something that is significantly Larger. And everything that we're doing today is actually trying to attract a lot of capital that Is not in crypto today. I think the reality is crypto is still just such a tiny, tiny market Compared to other asset classes. And so it really comes back to looking at today's relative price Action value pool is not a good prediction for where things are going in the future. I think if people are really thinking about what asset is going to be priced higher in the future, Certainly there are sort of this long-term consideration of inflation that people think About. Because if you're looking at a 10-year basis, how much issue went to there over 10 years?

26:15Garrison But what's much more important is if 10 times more money was to come into the industry, Where is that money most likely to flow? And that's the best way to answer the question of Which assets can outperform it. Because Solana, again, supports such a broad, diverse set of use Cases, we believe that it's much more likely that Solana captures the site.

26:37Hyunsu Of course. I've been in the trenches in DeFi for quite a long time. And Solana's ecosystem Playing with it for the first time back in 21-22 was really exciting. Speed, the ability to really Be able to transact fast, very cheaply, change the game for participation in DeFi. And obviously, You had the real first Bitcoin season on Solana, and then you'd be able to use applications like Jito, Jupiter, how they rewarded early users as well, creating these economic incentives to return Back to the chain. And to your point, what I think was really, really impressive was During FTX and Solana, everyone was like, this is really dead. It was hard seeing Solana go from Like 200 plus back down to eight, and seeing it get all the way back to all-time highs. So I think That is a testament to the nature of the builders on Solana, those that have been committed for a Long time, the global user base. I really do think it is incredibly admirable what has been built In terms of all the layer ones and layer twos that exist in the space. At the same time, I do think that there is a need for applications or blockchains that are highly specialized. And I Think that was what personally made me move towards the Hyperliquid ecosystem after being In the space for a long time. And really, the focus on value accrual and infrastructure that can, As we like to say, like the DeFi molded, right? People don't even know that they're using Blockchain. So I think that abstraction being solved for is also quite valuable. But overall, We're really excited to see that the reality is that we are still very early in what all of

28:10Garrison These networks will become in the far future. For us, I think the elephant in the room that We as the Solana ecosystem have had to address is really this evidence that Solana missed the boat On. That's just the truth. And I think that obviously there are teams that are trying to Address this. You have Backpack, Sunrise, Phoenix, a lot of really fantastic companies That are trying to tackle this in different ways together. I think there's a new wave of Launching equities that really could usher in a lot of new activity initiatives, as we've seen. But the other thing that I think is really admirable of Hyperliquid system is truly their Speed. I think that there's an element of this, which is small teams and bear teams.

28:58Garrison Decentralization in terms of a protocol is something that we're all striving for in this Industry. But decentralized development and operation of a company is inherently slow. I think one thing that Hyperliquid has done really fantastically well is their ability to See a demand in the market of that team, which is small, tight-knit, to execute and create Something. We think about development of, one, the perps product to the execution of launching New perps. Silver and crude specifically really captured a lot of attention there because They were able to move very quickly. Whereas on Solana, you have a lot of teams that came up at The same time to try to create a competitive perps product. I think we've seen it.

29:50Garrison Jito has one. There's a number of different perp indexes that are experienced on the day. I think this decentralized approach, multiple teams approach theoretically can end up creating a much Better product because competitiveness breeds innovation. But it also means things are moving More slowly. I think that's something that Solana Ecosystem is going to have to think about on What priorities make sense for there to be a lot of collaboration between teams And what things are a much better approach from a more decentralized type of angle. I will say those. I think ultimately in terms of value capture, it's a double-edged sword. If You're a small team and things are built relatively centralized like Hyperliquid, The value accrues back towards the core team versus the ecosystem. It's a fine balance.

30:40Garrison At some point, if the core protocol is so large and so incumbent and so good at building things, The HyperEVM is going to struggle to become really robust. Because if you're a builder, You know that when you build, you're competing. On Solana, the ecosystem again is really robust And really diversified. There are a lot of people building on Solana's foundation and labs. It's a Huge company spanning hundreds of countries and tens of thousands of builders and users that Often don't even know what each other are doing. There's a lot of localized markets and localize Innovation. I think that again, we go back to this idea of in 10 years, what ecosystem is Best positioned to capture the bulk of the marginal dollars that we all believe are going To flow in. I think the larger your net, the more likely it is going to catch a big push.

31:38Kinsa Durst I have to agree with everything you guys both said, but I do especially agree with that we are Early. We are all early. I'm a believer that all boats rise with the tide and excited to see What type of growth that we achieve in the coming few years altogether. Thank you so much For joining us. It was amazing having you today. It's a wrap up of Token2049 with these Beautiful debates. Thank you.