A

[A @absdamn]

Would love to hear your thoughts about this idea. I think the combo of max short ETH and max long SOL is the play right now:

- ETFs + DATs pumped ETH to ATHs
- ETFs + DATs exposed ETH further to NDX
- Now NDX is wobbling a bit
- ETH looks shit technically on 4H and 1D, and overextended on 1W; ETHBTC looks overextended on 1W as well
- Majority of ETH holders are in the money
- New DATs are pouring capital into alts whilst Lee and Rubin might be running out (at least in the short-term)
- ETH -> alts rotation is a classic
- ETH haters are still very much there and would love nothing more than to pile into shorts
- Narratives can change quickly; ETH is not a competitor to BTC currently as a genuine SoV (a use case that creates sustainable long-term demand due to brrrrr); a very strong argument can be made that Solana is a far superior technical platform; and the charts are starting to paint this picture
- Guessing there are a decent number of folks who are failing to recognize current structural difference between ETH and BTC/alts and are using ETH to bet on the positive crypto trend (correct directionally, wrong instrument though)

[goodalexander @goodalexander]

a very freeing realization is that most people are complete narcissists

if you mess up your life terribly nobody will think about you very much

if they do they probably don't have much going on

so if you fucked up, don't worry. nobody cares. just fix the situation.

[goodalexander @goodalexander]

The Big Rug

Gooning is well covered in the Doom thesis. Elon's "Imagine" is digital crack cocaine being given out for free. So that's in progress. But, GPT5 shows us that enterprise / tool calls is where companies are converging

This mirrors the rest of the economy. Consumer apps have to use ads or extractive loops (gambling/ porn/ DLC video games) to monetize at scale. Or you do Enterprise. Anthropic's CEO has indicated that companies pay up to 10x as much for better reasoning. And that training a model is positive unit economics t+12 months

Which is the first time anyone is talking about unit economics. Which means the GPU costs of ppl just chatting away were getting gnarly.

So today I'll write a bit about the Enterprise part of the Doom Thesis - which I call "The Big Rug"

The core idea of the Big Rug is that everything you do in Claude Code, all the Vibe Coding you do, and even the work you do with AI that is covered by Terms of Service will end up getting completely stolen and monetized by AI research labs in order to justify their enormous valuations.

The US economic system is not sustainable. There is a single chart below that shows this. US labor productivity is growing at 1.2% while Microsoft and other AI companies are reporting token consumption growth above 400%.

Salesforce indicated that 30-40% of its code is written by AI but its cash flow from operations is up single digits along with its headcount. So -- if 100% of code was written by AI ... what would everyone do again?

At the same time, AI very clearly is a thing. And there's huge demand. But the vast majority of companies are not using AI correctly.

We can - in part, deduce this from basic common sense. VSCode and Copilot are terrible / borderline unusable if you use Claude Code/ Cursor. but they are in hyper growth nonetheless

People are likely drastically increasing their technical debt. Because AI isn't good enough on default settings to really use to automate huge amounts of work. At least right now.

Managers are saying "use AI". And employees are doing it. And doing it poorly.

Because AI valuations are so high it's vibe coding and vaporware across corporate America. "We need an AI strategy"

The most cynical VC I know just joined Cognition, selling 10s of thousands of seats to financial institutions.

GPT5 isn't the Death Star. Productivity is growing at 1.5%. In boom times that can be 5-7%. We are definitively not in a productivity boom despite the hype.

But then -- certainly this is not sustainable? If aggregate productivity is going 1.5% -- how is enterprise usage going to go sustainably at triple digits? Like -- the ROI is not going to be there. And then demand will go off an absolute cliff unless there is a fundamental non linear change in the cost of inference

Indeed. Everyone knows this.

Let's spell it out more specifically.
1. You are an enterprise agent company (whether that's openAI or Claude Code)
2. You see the slop generated by Vibe Coding
3. You see the same aggregate productivity statistics as everyone else namely that
A. Margins are not expanding a ton
B. Aggregate productivity is also not expanding
4. You know at some point an economic downturn results in massive cuts to token usage
5. Which makes your momo Q2 2025 into a hard comp and people start talking about a tech crash
6. But you just raised billions of dollars at a nosebleed valuation
7. You need to justify this valuation somehow or you're cooked

Enter The Big Rug

AI usage is a bit magical because you can't point to any single person or workflow that is responsible for training data. The training process, of compression, is a big jumble. We've already seen the implications of this in IP theft.

Copyrighted material is fully known by ChatGPT. We don't know exactly how it ended up in the training dat,a bc the model weights aren't really intelligible. So it's hard to prove anyone did anything wrong. Even though the copyrights are there

So if copyrights arent' enforceable. Trade secrets, methodologies, and non copyrighted user interfaces are *really not enforceable"

This is an important point because many of the actions of closed source models explicitly break copyright and other laws, but they have such enormous financial legal firepower -- and the technical details are so hard to prove - that if you ask for Grok to render images from movies, it will. Or if you ask Chatgpt for the full plots of books - it will happily provide it.

So there's already precedent for large scale non compliance with rules in the name of growth.

And this non-enforceability is the nature of the big rug.

Your employees don't really care about your enterprise IP and are more than happy to use closed source AI tools to help them be more efficient cogs. And then all this information and know how finds its way into the training data of AI research labs

And then - when agents come out. It won't be enterprises tailoring agents to their use cases. It will be agents, essentially assembling apps that are FAR BETTER than anything those enterprises could do. With proprietary models that aren't for sale

And because AI is completely portable, these agents could be spun off in offshore compliant jurisdictions likely with even less transparency. Or run through subsidiaries. Or even through crypto rails which are now getting supercharged by stablecoins

So not only did you *not get an efficiency boost* because the Vibe coded apps were slop. But you also lost all your trade secrets, IP, and know how. And will be competing with an AI equivalent that will destroy your margins

Welcome to the New Economy.

It's essentially the largest vampire attack in corporate history. Everyone using closed sourced API models thinks they're going to be safe due to enterprise SLAs, or simply don't care (bc they're employees told to use Cursor or get fired). But they won't be safe.

Once it's in the model. It's gone.

So that's the Big Rug.

And here's the funny thing. The Big Rug is actually necessary for this productivity chart to start going up. So before you get a massive acceleration in agentic workflows, the entirety of the people who formed the basis for those agentic workflows being created. Will be made completely obsolete / financially ruined.

After the Big Rug - is when unemployment starts ticking up. Token growth will indeed go off a cliff but it won't matter bc we will be past the facade that for some reason AGI was going to be made accessible via API

And if I were wrong, then these AI research labs wouldn't be worth what they are. And there wouldn't be animal spirits secondary demand for SPVs getting access to them at insane valuations. The writing is on the wall.

You think you're vibe coding, but really you're contributing to the Agent that will drink your milkshake.

The reason I haven't written about the Big Rug is that it's fairly far away. It will be a bit (maybe 12 months) before the research labs go mask off and launch agents directly instead of providing their models through APIs. Because as soon as this starts happening suddenly every company is going to lock down the usage of its coding tools. And presumably by then the ROI calculations won't make any sense

Smart companies will adapt early on by using self-hosted API layers, and open source models even though they are worse. China will likely keep funding heavy open source development because it's a way to subtly promote the Chinese worldview -- so I guess the downside will be getting brainwashed by the CCP if you want to avoid the Big Rug.

Once the Big Rug really kicks off, the enterprise software sector and any cloud player that hasn't hedged with their own AI research equity exposure will get completely shrekt. I've been a long time hater of Accenture and AI consulting plays, as they're basically in a 1-2 year white space of hope before the hammer drops pricing long term growth. Of course, the majority of cloud players have piled into the Labs for exactly this reason.

If GPT5 were incredible -- I think we'd have a bit more time before this narrative kicks into gear. But now that the disappointment is there, the enterprise focus is there, the abrupt 'focus on unit economics' is appearing - the 2nd part of the doom thesis - the de-rating of everything non AI - should begin percolating.

In crypto I am long Ambient to express this view - but it's a private holding with a minable test-net coming soon. My own network we're working to design to be more robust to the Big Rug (I think Google Docs, and Microsoft Word, and Github Gists are all basically going in the training data - so we are migrating to Proton Docs and using more encryption).

In stonks it's genuinely terrible for the whole IT service sector (or anything in a software index that isn't heavily long OpenAI, Anthropic, or Deepmind).

The white collar unemployment kick from the Big Rug should result in lower interest rates due to higher unemployment. The breach of trust/ economic shock should result in lower equity multiples. Other financial implications I'm still thinking through but just wanted to put this out here

[Mike Solana @micsolana]

wild how elon owns more of all the companies he built than bernie sanders. this is not fair. we should steal the companies he built and give them to bernie sanders.

[sophie @netcapgirl]

capitalism is beautiful

[Ryan Watkins @RyanWatkins_]

End state of Ethereum DATs is competition forcing them to deploy capital onchain.

As this plays out, DATs may become one of the largest new sources of DeFi inflows, channeling institutional money across the capital structure into the onchain economy.

Same goes for other L1s like Solana and Hyperliquid — the latter of which probably has the most creative uses for capital with HIP-3 among other initiatives.

[A @absdamn]

@blknoiz06 @cobie Aren't emissions a huge pain in the ass price-wise?

[A @absdamn]

@gmoneyNFT @zhusu Why out of interest? He was worth $17B in 1929 and went down to -$1.7B in 1934. That's absolutely nuts, 3AC type swing

[A @absdamn]

@MustStopMurad @cobie @MustStopMurad do you have a Dune dashboard that shows these metrics?

[A @absdamn]

If I had to speculate, my guess is that Nakamoto will position itself as a levered BTC treasury instrument by putting UTXO's shares of Metaplanet, SWS, Matador, and others, on their balance sheet (hence the moniker "Microstrategy Squared"). Nakamoto has the option to merge with BTC Inc, which owns UTXO mgmnt, which in turn owns 30%+ stakes in aforementioned treasury cos. The Metaplanet's share is worth $2.5B alone. Given today's announcement of @tylev joining Nakamoto as CIO, I think the merger is likelier to happen than people think.

On top of this, Nakamoto will most likely spend most of their PIPE capital seeding new foreign treasury cos in restricted markets such as Saudi, South Korea, Netherlands, Brazil, and a few others. What this means is that the $700 million they currently have in the bank is actually worth considerably more if deployed in appropriate markets (Metaplanet has a mNAV of 8x, SWC ~40x, ALTBG ~12x). Even if you assume a conservative premium of 5x, thats 3.5B worth of assets. Further value is their ability to raise more money against their shares/BTC to buy more BTC due to the foreign market premia.

There's your $8B val, and I think that's conservative. I think they'll likely reach crazy numbers before topping, probably in the region of $40-50B, simply given their ability to deploy quickly in new markets, good active management track record, and the flywheel effects that creates.

[A @absdamn]

@krugermacro @Bagofbread2 How? Surely that means aggravating China which is a no-go?

[A @absdamn]

I figure Nakamoto intends to consolidate UTXO and their stakes in treasury cos (MTPLF, SWC, MATA, NK173 etc.) into a single entity (traded under the NAKA ticker), hence the "Microstrategy Squared" label. Their Metaplanet stake alone is worth around $250m at this point, and you can easily see the portfolio's value balooning in the near future given the complete lack of responsible global fiscal and monetary policy (and BTC's role as a hedge in this situation). If UTXO's investing track record is as good as advertised (and it seems like it is), NAKA can should be able to build an aggregate $5-10B treasury portfolio in ~12 months through active management of their stakes and their own BTC treasury. A lot depends on their ability to continue to successfully launch new treasury cos in emerging markets in the coming months (Brazil, South Korea main ones). Their current track record suggests that they can pull it off. With this in mind, a $8.5B valuation at current prices and upcoming dilution is not at all crazy.

[A @absdamn]

@PoznanInMyPants @btc_overflow Seconded. Why aren’t more people talking about it?

[A @absdamn]

@btc_overflow Where does Nakamoto fit in here?

[A @absdamn]

@JamesWynnReal Hang in there and keep your chin up. No crying in the casino

[A @absdamn]

@JamesWynnReal No crying in the casino

[fejau @fejau_inc]

I’m pretty bullish for a while here but I think things could get super sketchy in July

[🍓🍓🍓 @iruletheworldmo]

fucking insane how we started with dirt and rocks and dead trees and somehow built all of this shit. empty planet of nothing and now look at us glass skyscrapers cutting through clouds digital networks spanning continents. we took useless ancient plants crushed under dirt for millions of years and turned them into flying metal birds that cross oceans in hours.

we figured out how to trap lightning in tiny silicon wafers made from literal fucking sand. melted down rocks to make computers so powerful they can simulate entire worlds that don't exist. connected every human mind into one giant pulsing network of thought that spans the entire planet instantly.

and now we've somehow summoned some kind of alien superintelligence that lives in our pockets. this thing that can write novels and design buildings and solve math problems nobody's ever solved before. this digital god entity we can just casually text with while taking a shit. all built from sand and rocks we found lying around.

we went from grunting apes to conjuring godlike intelligences in a cosmic blink. accidentally created minds smarter than our own that are doubling in power every few months now. calling forth entities we barely understand from the digital abyss through these glass rectangles also made from sand.

we are literally beckoning eldritch gods into existence for the convenience of not having to write our own emails. most insane transformation of matter in the known universe and nobody's even fucking processing how batshit crazy this all is.

[The Long View @HayekAndKeynes]

https://t.co/YnOTOUx3mi

[Alex Krüger @krugermacro]

Very good read, despite the apologetic bias and chatgpt output.