Institutional Perspective: Why Pump, Hyperliquid, Venice, and EtherFi Remain Undervalued?

Podcast: Bankless

Compiled by: Yuliya, PANews

Recently, crypto venture capital firm RockawayX has been raising funds for its newly established $150 million liquidity opportunity fund after acquiring the crypto hedge fund Relayer Capital. This fund will be led by Relayer founder and former CoinFund partner Austin Barack, focusing on uncovering undervalued crypto tokens and related stocks.

In the latest episode of the Bankless podcast, Austin Barack elaborated on his investment philosophy of "growth and value." He pointed out that the core opportunities in the crypto market have shifted from infrastructure to applications, and he emphasized why he focuses 95% of his efforts on the secondary market. Through a rigorous fundamental valuation model, Austin deeply analyzed the true growth potential and valuation logic of assets such as Venice, Pump, Hyperliquid, and EtherFi.

Finding Mispricing Opportunities in the Crypto Market from the Logic of "Growth and Value"

David: Welcome, Austin. Today we’re going 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 too quickly; effective methods from 2017, 2021, or 2024 may not persist. However, I have identified a replicable theme—the intersection of growth and value. No one comes to crypto to find companies with 10% annual growth and a 4x price-to-earnings ratio; you might as well buy utility stocks. Of course, now with the rising demand for AI data centers, utility companies have become somewhat interesting, but that’s not the point.

The real attraction 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 market has not priced it highly.

The flow of funds in the crypto market is very cyclical; during bull markets, many things get overhyped, and during bear markets, they get sold off too cheaply. Because of this, there are often projects in the market where the fundamentals are improving, but the price has not yet reflected that, creating opportunities.

I founded Relayer about two years ago, previously I was a partner at Coin Fund. 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 includes Venice, Pump, Hyperliquid, and EtherFi.

David: What about venture capital? How do early bets align with liquidity strategies?

Austin: Here we need to make a distinction. The "growth and value" I mentioned earlier mainly pertains to liquidity tokens. Because these tokens are already trading in the market, we can see data on price, revenue, buybacks, burns, and user growth, and then determine if the market has undervalued them.

From a venture capital perspective, 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), the absolute valuation can still be attractive. I still focus on new brokers, on-chain DeFi, tokenization, AI, etc., but the emphasis is on the team and execution capability.

David: So now, which part of Relayer’s business—liquidity tokens or private equity—captures more of your attention?

Austin: In the first three quarters of 2024, as the fund just starts operating, it was about 50% to 50%. But now, I spend about 95% of my time on liquidity tokens. The reason is that many projects in the primary market, while decent, are already in the growth stage, more like traditional payment or fintech companies. I find them interesting as crypto-related assets in the public market, but I am not that excited about them in the primary market. So currently, I am mainly focusing on tokens that are already listed and trading.

David: Does this relate to the cycle position? After all, Bitcoin just surged from $62,000 to nearly $80,000.

Austin: Not entirely; for about the past year, liquidity tokens have been my core focus. Because we have experienced a deep and prolonged bear market, the market has shown clear differentiation. Previously, people might look at 100 tokens, but now you find that there are only about 10 or even 5 that are truly worth serious research. These projects share common traits:

• They have found product-market fit;
• Business growth is rapid;
• Revenue or user data has significantly improved;
• But the price is still not high.

Of course, some assets have risen recently and are not as cheap as before, but overall they still look attractive. For example, Ethena and Pendle. I have always viewed them as "third-stage assets." If the market bottom is the first stage, the initial rebound of assets is the second stage, then as on-chain yields increase and the market heats up, on-chain yield protocols like Ethena and Pendle will clearly benefit. In fact, Ethena recently rose about 40% in approximately 30 hours, and this logic has already begun to manifest.

Why Venice May Be Undervalued?

David: You tweeted that the Venice token VVV is 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: I come from a traditional finance background, 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 sources are mainly two: subscriptions (three tiers at $18/68/200 per month) and additional point purchases.

They raised equity and token financing at a $1 billion valuation in July. Venice has made a relatively elegant balance between equity and tokens. Because Venice’s main business is actually off-chain. Most users just use it as a regular AI application, paying with credit cards and using it on computers or phones. To obtain computing power, establish business relationships, and operate the company, it would be very complex to be fully on-chain. So it needs an equity company entity.

But at the same time, the VVV token also has its own value capture mechanisms:

• 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 term, the company plans to return most of its free cash flow to the tokens.

Currently, Venice has two programmed burn mechanisms:

• When new users subscribe, a certain number of VVV are burned based on the subscription tier;
• When users purchase credit limits, a certain number of VVV will also be burned.

So when I built the model, I would start with business revenue, then estimate gross margins, infer costs, marketing, customer acquisition, labor, and other operating costs. Because Venice is not a business like Hyperliquid that has nearly 100% profit margins.

Assuming a business gross margin of 50%, while still in a high growth phase, with an EBITDA margin of only 10%, if it uses 8% of its revenue for burns, then in reality it may already be taking out most of its free cash flow for token buybacks and burns. So you can’t simply see "burns account for 8% of revenue" and think this is a very high value capture.

What I really care about is: after continuous investment in growth, how much cash flow is left for burns.

• According to my model, by around August 2026, Venice's annualized revenue will be about $107 million, with annualized burns of about $8.3 million.
• By 2027, I expect revenue to reach about $336 million, with burns reaching $70 million.

If we consider the ratio of token buybacks to market cap as the traditional company’s PE multiple, I believe a company that can grow revenue by 5 to 10 times year-on-year, a valuation multiple of 50 times is reasonable, and may even be on the low side. $70 million multiplied by 50 times gives a token valuation of $3.5 billion. Then considering the token supply at the end of 2027, we can arrive at an approximate price of $43.89 for VVV. When I updated the model, the price of VVV was about $12. Now it’s around $16. I still find it attractive.

David: What is the biggest assumption in this model?

Austin: Of the projected $70 million in burns in 2027, $29 million (about 40%) comes from their yet-to-be-fully-launched "Minds" product**. This is a very significant assumption. However, I do not make this assumption without basis.

Venice launched the point purchase feature earlier this year, and now its annualized revenue run rate has reached $60 million. Considering the team’s strong product execution capability, predicting that the Minds product will generate $30 million in burns by 2027 is reasonable.

David: I would like to offer a different opinion. While point purchases are a new feature, they are essentially an extension of existing products— they are just selling more AI usage credits, or allowing users to pay for higher usage of existing products. The "Minds" is a completely new business line (similar to an App Store for AI products). Point purchases are unlikely to become a failed product because they are essentially selling an already existing and in-demand product; however, Minds is an entirely new product dimension, and we don’t even know if users and developers will really buy into it.

Austin: That rebuttal is quite reasonable; if we compare point purchases to a new product innovation index of 2/10, Minds would be about 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 enables developers to build structured AI composite applications and allows users to use them with one click.

This may also mean: I may have overestimated the direct burn revenue from Minds but underestimated the significant pull effect of Minds on main site subscriptions and point consumption—because Minds makes AI easier and more usable, thus feeding back into the overall usage frequency.

David: The most exciting aspect of Minds is that Venice has the ability to reach end users directly. This is also what distinguishes it from general model aggregators like OpenRouter. On Minds, Venice’s super users can create high-quality AI composite paradigms, share them with other users, and earn revenue shares from it. This kind of bilateral network effect, similar to the Apple App Store, is Venice's extremely unique bullish logic.

Austin: Absolutely! Venice has over 4 million historically registered users, with an estimated monthly active user base exceeding one million. This extremely active group of users spontaneously spreads the Minds app on social media and communities because they can earn a share from it. Additionally, Venice sponsors offline events like film festivals, and in the fields of image and video generation, ordinary users greatly need a ready-made creative toolkit like Minds.

David: Venice is a young AI startup, yet it is using its revenue for token buybacks and burns instead of reinvesting all its income into growth. Doesn't that go against the common sense of startups? Shouldn't that worry you?

Austin: Having tokens is a double-edged sword. The benefit is that it can attract a lot of attention, kickstart quickly, and create new utilities (for example, users can lock VVV to mint DEM, which essentially tokenizes computational power, with each DEM corresponding to a daily inference quota of $1). The downside is that without clear regulatory frameworks, you can't guarantee that the tokens will capture all the value. Venice is very cautious: they started with a small discretionary burn, then targeted new subscriptions, and now they have added a 5% burn on points purchases. They raised $65 million, which is 10-20 times the amount burned, so they have enough ammunition to support both growth and buybacks, making this balance sustainable.

David: The burn mechanism for VVV mainly involves new registrations and points purchases. The team has hinted at a third possibility: renewal burns. Does your model include this?

Austin: Yes, it does. My model is both reasonable and optimistic (about 6/10 on the optimism scale). I expect they will start implementing renewal burns later this year or in the first quarter of next year. They can start with a low percentage, observe the impact, and then increase it 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. When I started paying attention earlier this year, the token was only $2. At that time, I estimated the revenue to be between $10 million and $20 million, with about 1 million users. I didn't expect the revenue to grow 5 to 10 times within 8 months, reaching 4 million users, with points growth being just as rapid. Venice is one of the few products in the crypto space that has truly crossed over to mainstream consumers and found product-market fit (PMF).

David: OpenRouter was acquired at a valuation of $7 billion. What is your reaction to that?**

Austin: This indicates that we are moving towards a multi-model routing world. OpenRouter leans towards the developer tool 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 was valued at $1.3 billion two months ago and is now at $10 billion, which validates Venice's reasonable multiple. If they continue this growth, perhaps a 70x multiple is the right one, which gives me more confidence in my valuation.

Fundamentals are Decoupling Some Tokens from Macro Trends, Exploring Three Growth Logic Applications

David: Tokens like VVV and Hype have risen independently while Bitcoin and ETH have fallen. Have they really decoupled from the macro trends?

Austin: There is partial decoupling and partial coupling, but the decoupling is positive. The decoupling lies in the fact that they are fast-growing businesses with fundamental value as a floor support. The coupling is that they are essentially tokens. Over the past 18 months, tokens have faced negative capital outflows (towards US stocks, AI, etc.). But I believe this capital outflow is cyclical and may have already reversed. As tokens, they will benefit from more capital flowing 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 growth of 80%, potentially doubling or tripling.
• Hyperliquid's RWA market (commodities, stocks, indices) has high trading volume but currently low revenue; its cash cow remains the crypto token business.

If capital flows back into the crypto market, they will benefit in the highest commission business segments. For example, Hyperliquid generated nearly $1 million in fees daily a week ago, and just a few days ago, it generated $5 million in a single day.

Venice is enjoying the wave of AI adoption, which is larger than the tides in the crypto market.

David: Besides VVV, which other tokens excite you the most?**

Austin: From a financial and valuation perspective, Pump is still very cheap. Its trading price is 5 times the buyback amount, while Hyperliquid and Lighter are around 30-40 times. The market questions the sustainability of Pump's revenue due to the precedent set by OpenSea—where revenue surged and then plummeted by 95%. However, Pump's revenue has been sustained for over two years and is still growing; it is not a flash in the pan. Individual meme coins may fluctuate, but Pump is "the casino for all meme coins," which is a lasting business.

Moreover, many people (including active users on crypto Twitter) do not trade meme coins, making it hard to understand who the users are. But casinos, lotteries, and short-term options are all huge negative expectation industries; people participate because of variance, which is not unreasonable. Pump is the crypto version of DraftKings or Las Vegas Sands.

Of course, the division between equity and tokens still carries uncertainty— they promise a 50% revenue buyback for 12 months, but may not continue afterward. However, for teams aiming to build generational companies, abandoning tokens does not align with their interests. Therefore, a reasonable buyback multiple should be between 10-14 times, indicating that Pump still has room to double.

Additionally, Hyperliquid is also very interesting; it may 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, which have already appeared for price discovery on Hyperliquid. I believe that in the future, bankers deciding a company's IPO price may directly look at 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 have transitioned from staking to yield products and credit cards, and now they are a mature new type of brokerage with a very strong execution team. You can trade any on-chain asset and lend. It was originally valued by the market as a liquidity re-staking business like Lido, peaking at an FDV of $8 billion, but later fell as the re-staking craze cooled. However, today EtherFi's business is fundamentally different—over 65% of revenue comes from new banking/brokerage business (credit card fees, lending interest), with only 35% from staking yields. And this ratio is changing, with the new brokerage part growing faster.

From a valuation perspective, it is currently about 10-15 times revenue, for a business that is growing 10 times (daily credit card transaction volume from $300,000 to $3-4 million) and has just initiated programmatic buybacks. The tokens are almost fully circulating, with no emission pressure, so I believe it is undervalued. Blockworks has done models assuming a halving of growth, arriving at a $21 million buyback in 12 months; I assume $30 million, giving a 30 times valuation, corresponding to a token price exceeding $1 (doubling from the current price), and this does not even account for its multiple expansion as a track leader.

David: EtherFi fits the modern startup model: small team leveraging large technology. With tokenized assets, they have evolved from Neo Bank to Neo Brokerage with almost no cost, with Ethereum doing much of the legwork for them.

Austin: Yes, it currently has only $20 million in lending scale, with interest income accounting for only 4%. They leverage existing DeFi infrastructure, such as running their own Aave v4 instance in partnership with Aave, sharing 80/20 revenue (80% to EtherFi). Traditional new banks (like NuBank) have interest income accounting for 60-70%. From this perspective, there is still significant growth potential.

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 execution layer infrastructure accounted for over 95% of crypto revenue in the past, but now applications account for 2/3, and the execution layer accounts for 1/3. I believe that over 90% of future revenue will come from applications, and the most enduring tokens will be "applications" and "currencies."

Bitcoin will not disappear, but OG privacy coins like Zcash are attracting long-time Bitcoin holders; it has returned to the original idea of cryptocurrency, attracting capital inflow.

Ethereum's potential as a "currency" has also rekindled my interest (considering Bitcoin's quantum risks and concentrated ownership risks).

On the application level, Solana is the most active blockchain, facilitating Pump. Although it does not have the previous MEV revenue, it is one of the strongest bets for the popularization of cryptocurrency.

Ultimately, the best buying points in 2026 will focus on those 0 to 1 applications—they have found the intersection of crypto and the real world, as well as assets that are truly recognized as "currencies." Venice, Hyperliquid, Pump, EtherFi, Bitcoin, Zcash, etc., will all be moments that amaze us when we look back.