The rise of new sovereigns (Tether) and other holiday readings
Tech eroding state power, Chinarxiv, PFASs, and more!
On the heels of our thesis on depopulation, we have continued to think about how to position our investing as we follow the data and anticipate the changes brought by these unstoppable trends.
A couple of things we’ve been thinking about for quite a while are portable sovereignty and the rise of new sovereigns (same word, very different if somewhat interlaced ideas).
We’ll discuss the former another time, but we just published a post outlining an example of a new sovereign, and what they can look like.
The rise of the new sovereigns: the Tether dark horse
The main thesis is that new sovereigns won’t look like the current ones, and that there will be a transition of sovereignty.
States are getting their powers eroded by Mag7 companies at an alarming rate, think about it:
World mapping is offered by Google
Taxi services in towns are now offered by Uber (and soon by Waymo and Tesla)
Worldwide internet access is now provided by a supranational entity: Starlink
Global communications now happen on Whatsapp and similar apps
Data storage is an Amazon and Mag7 exclusive
Nothing happens without Nvidia chips
AI will be all privately-owned
there are even companies building physical infrastructure, like tunnels and ~rail
and so on
This is now happening in defence as well, with Palantir and Anduril becoming key players on which nation states will have to rely more and more - not too hard to plot out that an Anduril will be dictating military policy. They already have removed state planning from military equipment, that’s the next step.
But some dark horses like Tether and Strategy also fit the bill.
As a small recap, Tether today:
is the issuer of almost $200B worth of USDT.
makes $15B in profit each year.
has at least $200B in cash.
owns more than 100k BTC (~$10B).
spent more than $300M this year buying stakes in precious metals producers.
owns $100B of US Treasuries.
is the largest holder of gold outside of central banks (and bigger than a lot of those).
An entity like this, that issues its own currency, sounds a lot like the base of many nation states - without all of the burdens. Add a small plot of land..
Read the post here.
Some other holiday reading
Invisible Ingredients: Systemiq explores phthalates, bisphenols, pesticides, and PFAS, and how they are everywhere.
Dexterous Hands 2025: latest commercial, open source, & humanoid hands by December 2025 by Merphi.
The Making of a Techno-Nationalist Elite: a review by of Alex Karp’s The Technological Republic: Hard Power, Soft Belief, and the Future of the West.
Chinarxiv: fully translated preprints from the Chinese arXiv (ChinaXiv).
Measuring AI’s capability to accelerate biological research in the wet lab: OpenAI and Red Queen Bio optimized a molecular cloning process in wet lab tests by 79x.
GDP is inevitable: I have been a critic of GDP but Cremieux makes a good argument for it.
European pensions are in dire need of reform: something we all know, but with more charts on pension expenditure against the background of the larger economy.
The VI edition of the SoTA Letters, a bunch of topics to think about over the holidays, from genomic instability to hardware-based TEEs.
And a couple of books
Critique of Liberal Reason, by Andrea Zhok
Pathwork, by Mencius Moldbug (Curtis Yarvin) - linking to the goodreads so you can see that it’s a quite controversial piece of writing, something we very much try to find here. For what it’s worth, it’s the first really interesting new governance system I’ve encountered in a while.
There is no Antimemetics Division, by qntm. Finally, a new hardcover release of the novel that many people call life changing. Reading soon!
Thank you all for sticking with us as we ramble on every now and then on these weird topics. We have a lot of fun thinking about all of this, and your feedback is always very appreciated.
Hopefully you’re able to take a break over the holidays, if you read something super interesting please send it our way!
Yeah concentration is a big, big worry - sadly decentralized governance hasn't really yielded anything and has just proven how ineffective it is for now. I think shareholder control is not that bad as long as exit scenarios are still available.
As of now I'm not forced to use any of these new sovereigns products, but I am forced to used terrible government products at non-market rates.
But definitely one of the most interesting areas in which to spend mental cycles
Love this piece - but there's a pattern here worth flagging.
You're tracking the dispersal of state power to entities like Tether and Mag7, but it's really a consolidation story - both infrastructure ownership AND decision-making power concentrating into fewer hands. Without different ownership structures, we're just swapping one centralized system for an even tighter one.
The data's pretty wild: extreme wealth concentration consistently precedes social and political instability. We're approaching Belle Époque inequality levels, and that era didn't end well. The bet that educated, digitally-connected populations will accept some sort of neo-feudal arrangements feels... ambitious.
Traditional states were flawed but at least theoretically accountable to citizens. Your "new sovereigns" answer only to founders and shareholders. Zero structural accountability to the people using the infrastructure they control.
Here's the interesting bit for your thesis: distributed ownership models (platform cooperatives, steward ownership, DAOs with real governance) might be the antifragile play. They show better resilience to economic shocks. If your depopulation thesis unfolds alongside rising inequality, these structures could be the ones that actually maintain legitimacy and stability.
Worth exploring how distributed ownership frameworks could fit your investment strategy. History suggests concentrated power without accountability corrections violently.