Mert's entire investing approach distills to two variables: does the chain's architecture fight physics (Ethereum's L2 approach), and do the ecosystem incentives align (sum of parts > whole)? If both check out, everything else is a solvable problem requiring builders — not a thesis risk.
"There's only two things that are fundamentally important. One is physics and two is incentives. And what I mean by that is assuming a blockchain is structured such that it doesn't fight physics. So, for example, I would argue that Ethereum's L2 approach fights physics because if you don't scale the core engine, then fundamentally, you're limiting the scaling of everything else." — 18:40
"If you have an ecosystem where the sum of the individual parts is actually greater than the whole, that's really what you want. Because the alternative is for example, Ethereum L1 loses value capture to the L2s, but then the L2s don't benefit from one of the other L2s succeeding, and so they're in this knife fight against each other." — 19:17
"I don't do this game of what's everybody talking about and then maybe let's do some rotation games. It's more like, does it have the physics? Does it have the incentives? Is it a distressed asset? Is it slept on? Is there asymmetrical upside given that basically nobody knows what they're talking about? If the answer is yes, then that's your edge." — 30:16
The historic criticism — "why hold SOL if the chain is useful?" — gets answered by two concrete upgrades arriving this fall: a 50% inflation reduction and a burn mechanism tied to compute usage. Combined with block times halving from 400ms to 200ms and all-time-high transaction activity, the "economy as asset" thesis becomes investable.
"Solana's inflation will reduce by half, much faster than before, in half the time. And then we're also now considering adding a burn mechanism in proportion to how much compute you're using on the network. So, okay, you want to place a very complex trade, that's okay, great, you pay for that, but some percent of that gets burnt." — 40:37
"Fundamentally, Solana is an economy. And the word economy, or the study of economics, is literally about the allocation of scarce resources. Blockchain is never going to — block space is never going to be infinite, which means you will need the native currency in order to be able to allocate block space accordingly." — 38:27
"Block space is not a commodity. I hate when people say this. Is it? Okay, so why don't you go do your trades on Cardano then? It's also a blockchain, it has block space. Why aren't you doing it there? Liquidity is extremely sticky, state is impossible to replicate." — 38:51
The "Zcash is down" scare was block explorers failing to update nodes after a security patch — the chain never stopped. The actual story is that Zcash proactively audited with frontier AI models, found a counterfeiting bug, patched it, and is now formally verifying the Orchard pool to mathematical certainty. In a world where AI makes exploit discovery cheaper, "space flight-level" security becomes the differentiator.
"I open up my wallets and I do a transaction, goes through. I look at the node, I look at the mining stats, everything is live. What's happened is like a few of the block explorers just didn't update their nodes yet. So, the block explorer itself is not updated, but the chain is working fine." — 51:21
"Crypto has been built — a large part of it at least — has been built using the Facebook approach versus the space flight approach. And with AI, that just won't cut it anymore." — 56:51
"The Iron Wood and the Orchard pool have actually been formally verified. They've also been audited using Mythos and the latest GPT model to show that mathematically speaking, which is the highest possible guarantee you can get in software, that the same class of bugs cannot exist again." — 57:12
10% of Bitcoin's market cap (~$150B) is the "conservative" first target. Mert's argument: once formal verification proves supply integrity, there's no rational reason to prefer transparent Bitcoin over shieldable Zcash. Fungibility, surveillance resistance, and the "Swiss vault on the internet" narrative compound as governments tighten — the "antidote to AOC is ZEC."
"I think that 10% is a very conservative target. I think once you get people used to this idea of formal verification and provable soundness, then why would you not want your Bitcoin to be private? What do you gain in a world where you have mathematical guarantees of supply? What do you gain by simply not having the option to shield your funds? It's strictly inferior technologically speaking." — 59:53
"There is no sense. Once the communists are in charge, the antidote to AOC is ZEC. And you're seeing this all over the world right now — wealth seizures and taxes and big brother kind of just coming in on all sides." — 61:34
"You click pay, you select Solana USDC as the currency. That's it. Nobody knows where that money came from. But you just paid for it on a different chain in private. It's composable using Near, settles on Solana, using Zcash as privacy at the core." — 64:11
Lower conviction than SOL or ZEC, but Mert flags NEAR as "one of the only things that stands out for how undervalued it is compared to the things above it." The thesis rests on Illia Polosukhin (Transformer paper co-author who can go toe-to-toe with Anatoly technically), a sharding architecture Ethereum abandoned but NEAR shipped, and a team that operates like a "Navy SEAL unit."
"Illia is the only guy I know in all of crypto that can go head-to-head with Anatoly in a technical battle. He's also one of the authors of the LLM paper. All that AI that you use today, guess who was one of the authors of the work that made it possible." — 65:37
"If you look at crypto as a whole, it is one of the only things that stands out to me for how undervalued it is compared to the things above it. Now, you might also say the things above it are overvalued. Okay, sure, but you really only have so many tools as an investor." — 68:00
"When I work with the Near guys, I'm like, these guys are pros. They're in there like a Navy SEAL team. They know what they want. They have deliverables. They work with you and then it gets done. Just operational excellence." — 71:03
The recurring pattern: CT declares Solana dead at $60 while builder pitch flow hits all-time highs. Traders make money following waves, but the deep conviction plays — SOL at $8, ZEC at $18 — come from ecosystem insiders who see the physics and incentives before price reflects them.
"CT is dominated by traders. And what do traders know? A trader can always make money by following the wave and maybe seeing certain things earlier than others. But fundamentally, the people who are actually deep down in the ecosystem are the ones who can get enough conviction at $8." — 28:09
"Everybody's saying everything is dead. But what I look at is one, the developer numbers because I own a developer platform. And then two is the number of startups. The trader mind does not see those deals. They don't see that Mert got pitched 50 times this week on different startups. So they have no idea that there is tremendous builder interest." — 24:47
Mert's framework is deceptively simple: physics (does the architecture scale without fighting reality?) and incentives (does the ecosystem compound rather than cannibalize?) filter out 90% of crypto projects. The remaining bets — SOL, ZEC, and conditionally NEAR — are distressed, slept-on assets where the market is pricing trader sentiment, not fundamentals. The Zcash formal verification story is the most non-obvious alpha here: in an AI-exploit world, mathematical proof of soundness becomes a moat no other chain has yet built. Whether that translates to $10,000 ZEC depends on narrative execution, but the technology is being shipped regardless.