Circle’s CCTP: Revolutionizing Multichain Infrastructure

Transcript

it's interesting what's happening but it's not great for ussc right we don't want liquidity fragmentation we don't want develop any user confusion so how can we tackle that welcome back to another episode of Xerox research we have a great interview today with Zhao reginato from Circle discussing all things cctp so of course this episode was recorded prior to the Meltdown we've seen of what have been the last three days but where you have we're joined today by Xerox pibbles and effort Capital to kind of discuss what exactly that meltdown was what triggered it what were the implications for uh the broader economy as well as the crypto industry itself and there are some interesting aftershocks that really

rippled through D5 as a whole that we can you know have the ability to view on chain and really dive into what exactly happened um but like I said the uh the interview itself was recorded to prior to this this whole event but we are recording this on Monday March 13th so we've got a pretty good picture of what happened uh Sam why don't I throw things over to you to kind of give us a breakdown of what the last 72 hours have really contained yeah it's been a crazy last uh three days I didn't get to enjoy my weekend as much as I would have liked to but we saw basically the three largest banking Partners from the US for crypto companies go Kaboom so that's unfortunate basically signature went out last week or the week before and then

Friday it was announced that Silicon Valley Bank was going to close which is a huge bank for all things VC Tech startup industry and we saw the uh the big names like Bill Ackman and many others kind of advocating for a bailout and then Sunday what do you know the FED came out they announced the signature would also be closing which was the final crypto bank and they would also be standing up a facility called the bank term funding program where Banks can lend their assets at par value at pretty favorable terms if they are met with a liquidity crunch due to a bank run so that really eased the worries around usdc and the 3.3 billion they had parked at Silicon Valley Bank because they knew that everyone would be made 100 100 full

sorry um but yeah there's a lot of interesting ramifications I'm sure everyone's heard about it a ton uh so we're gonna do a little hot seat cool throne with just a rapid fire list of items that we have here because there's a lot of them this week I guess we can start with uh usdt buyers would you guys throw them in the hot seat or the cool Throne they're easily on the hot seat um so like Sam like like you mentioned at one point usdc was down as much as 89 cents I actually think I saw a binance US it went as low as like 35 cents I like a scam Wick to the downside uh it was absolutely massive panic and people were just flocking to what they felt were the safest assets at the time which is funny because we don't even

understand usdt's or tether's counterparty risk but at that moment everyone knew that tether was the flock to safety usdc was at least partially unbacked uh and on chain and even on centralized exchanges people were buying usdt at a 20 premium to usdc and we're paying somewhere on the order like a dollar three a dollar for uh during like the peak Euphoria or our fear uh during the market yeah I think I would convey this with it depends when you became a usdt buyer right so uh for those that capitulated at the 86 87 88 Cent range uh flipping their usdc yeah that's that's a hot seat there's no doubt about

it um especially because you know the redeemable value let's assume the circle lost that 3.3 billion uh that's about seven and a half percent or eight percent of their total usdc reserves so you know an eight percent haircut would mean you're still redeeming for 92 cents on the dollar presumably so that really just goes to show uh with that Wicked down you know Sub sub 89 cents it really goes to show that this was a truly a panic fueled crisis and also it goes to show the shortages some shortages of on-chain liquidity right like uh uni swap you know the largest decks by volume uh the uni V3 range has got blown out right because all of these stable swap pairs on the uni swap they get

these very very tight tick ranges which maximizes the the amount of liquidity um for stable times but when things get blown out you know sure there could have been 20 million dollars in this uni V3 pool uh but a very small percentage of that was actually in range when when asset prices really blew out so you know that and if you look at the curve pool the deepest source of unchain liquidity for usdt and usdc uh we see that really it was a crazy crazy mismatch of tokens in that pool right so there's three different assets all pegged to a dollar so ideally in Perfect Balance you have 33 percent of each asset in the pool uh well usdt's balance got as low as 1.4 percent and the balance of usdc in the

pool got as high as 90 percent of the assets so you really just see everyone was in a Mad Dash to dump usdc um and you know we we're looking at it today uh we're looking pretty close to repegged I think last I checked we were like 99.5 um so yeah if you if you were an unfortunate seller of usdc in that lower 90 range then you're in the hot seat this week the curve is another one you could throw on the the cool throne here because I mean geez that volume what was it 6.4 billion I think it doubled the the next closest high on daily volume so they were definitely raking in the fees there's no doubt about that yeah I've actually got this pulled up in front of me I'm writing a quick flash note here on on all the things we saw

that happened on chain um and since Friday the three pool has seen over 8.3 billion dollars of volume uh in the usdc usdt pairs on uni swap uh which is two pools on two different features I have seen 6.4 billion so um two two more billion dollars of curved through pool volume and that's just churning out fees so uh V curve lockers another one in the cool seat this week yeah I'd say another big hot seat was definitely any D5 protocol that denominated debt in usdc which was way too many like you take this further to even dydx like people were in a rush to withdraw from dydx because it's like all right what does it matter if I'm trading

you know freaking toy coins when I'm gonna pull off this usdc and it's not gonna be worth anything uh it kind of points back to that paper that Arthur Hayes dropped uh maybe a week ago about the Nakamoto dollar when he was proposing a delta neutral Bitcoin backed stable coin that obviously wouldn't scale right now with what we have that this kind of takes me back to the terror situation it's like man what they're building was such a cool idea like actually a decentralized stable coin but its time just wasn't ready and it probably won't be for the foreseeable future but uh you could even throw like Dow treasuries in the hot seat this week because I know I'm an investor in a lot of different dials who hold the vast majority of their token Holdings in usdc

so I was like man like if I own the equity of this you know Treasury and usdc is is the pegging then that's directly affecting me so I think it's a good uh a good lesson to be learned by D5 protocols to actually diversify their treasuries into eth or whatever the native asset is in that chain and kind of put their money where their mouth is and don't hard code usdc to be equal to a dollar because we saw a lot of D5 protocols doing that that's not Kosher um and another hot seat actually related just to explain like how much of a mass panic there was um one address leveraged kyber swap which is like a um an aggregator a DEX aggregator and they tried to swap two

million dollars worth of three curve uh you know the lp position that represents the um you know that person's ownership of the three pool two million dollars to three worth of three curve through Kyra swap they ended up getting five cents of usdt they applied from two million dollars to five cents I got me beat that badly in mass panic so um I thought there was a a tweet from the kyber team uh regarding like how the situation unfolded but just to kind of that person had a really bad Friday night you hate to see that one but I guess that one is a perfect segue into another another cool Throne which would be anybody in that's involved with eth staking so they're validator if you're an LSD token holder you printed the the actual numbers were pretty insane so

there was five thousand a little over five thousand each of Mev distributed to stakers which absolutely shatters the the next recent High I think it was somewhere in around one and a half two thousand uh eth and now if you look at the value of cash flow flowing to eat stakers so burn the burden the priority fees and the Mev that's actually flowing if you look at quarter over quarters so Q4 of last year compared to the expected values of q1 this year we're looking at an expected value of an increase in 36 percent in each terms and 61 percent in USD value so much of that's driven by the heath burn itself just the uptick in volume has led to more youth being burned and

of course that flows to all token holders including stakers but a lot of that is indeed driven by Mev so we've really seen this uptick in on-train activity uh really drive more value to uh to some some of these ecosystem participants and that really Flows In With the Curve thing as well right like if you are a protocol that has the ability to turn like fud and panic into fees and revenue you're sitting in a good place in this industry because there is plenty of fun to go around yeah definitely another winner there along with curve with synthetics and Quinta they topped out their their 24 hour volume exceeded 100 million which kind of explains why synthetics rallied so

heavily yesterday but it's a great look you love to see it especially when you have people like Andrew Kang getting liquidated and just wrecking GMX how do you guys think uh coinbase plays into this I'd actually take the contrary intake we've been gassing up coinbase a lot the last few weeks so I've got a gotta bash on them a little bit but why tweet out on like 11 30 p.m on a Friday night that usdc to USD conversions are no longer supported until Monday like that I think that's kind of what started it all because you know we saw the three pool getting in Balance throughout the day on Friday but usdc didn't actually depeg until midnight on uh Friday night I believe so I don't know I was shocked that they would do it that way I think

it is really around the concern not just with uh with Silicon Valley but but at that time signature was still operational we think we don't really know because they got shut down on Sunday officially but we didn't really know the status of their financial well-being Friday night going into Saturday and they were really the only um operation that could do 24 7 off Bank hours mention redemptions in partnership with circle um so I'm sure it had to do something with signature and just you know out of a cause of concern not swapping usdc for one dollar because again we didn't really know how much of the contagion was going to spread uh come Monday morning and I think everyone was really just on edge waiting to see what the

federal government was going to do on Sunday yeah I know they have that new banking partner too I think it's called cross river bank and they're looking to do automated settlement for minting and redeeming of usdc David I think you mentioned earlier that that would be 24 7. um but I I haven't read that anywhere do you know for sure if that's going to be around the clock 365. no honestly that that's an assumption by me uh just because I'd have to imagine I think we were talking about it internally um all one of our morning chats about a week ago but it kind of it doesn't necessarily have to be 24 7 um Redemption system but I'd have to imagine off Bank hours uh from five to nine uh Eastern Standard Time if

you're a market maker or if you're a user holding usdc and you can't redeem at a dollar in in you know in the liquidity crunch event or liquidity need event um what do you do uh does usdc depech now uh even partially just for having that inventory risk from from five to nine off Bank hours or even on a bank holiday like on Christmas day is usdc gonna start deep packing just because there's no 24 7 system so I think Circle knows and understands the need for this kind of payment always on system you know to to work in parallel with with crypto being a 24 7 Marketplace so um that's that's my assumption that that it is 24 7 but uh no official word on that yet does anyone have an opinion on

maker like they seem like you know the dies of lie actually grew over the the weekend and I I that's still Beyond me if anyone understands why that happened please tell me because I don't get it but regardless um they've got a lot more uh die slash usdc reserves to deploy as um treasury bills so I'm curious what you guys think there yeah I can partially like my understanding and I didn't really even think about this but in the need in a crisis event like this a lot of people like the joke that die is just wrapped usdc and while that's partially that is relatively true I mean at that time when the d-peg events occurred die was only backed I believe 50 55 usdc and the other backing was

through non-usdc right ethereum or sorry eth uh State rap State teeth um real world assets right so like it is partially wrapped usdc but I think in a flight to safety event and you couldn't really get a sizable volume and tether because of how much liquidity was drained from the curve pool um die was like this next area for a flight to safety now with that being said die depeg just as much as as usdc did because I think the market still aligns die with just being 100 back by usdc which is not the case but um in this event I think people just flocked to die as his potential area of um of safety and you know to your point the die Supply grew 20 30 percent over

the weekend and now what maker can do is take this usdc that's on their PSM and then leverage their Partnerships with coinbase in which uh money tells Clydesdale like some of these uh real world asset Originators and then take that I don't know I think it was like two billion dollars worth of die I'm sorry with the usdc I take that two billion dollars with the usdc and actually invest that into yield uh I'm sorry uh into T bills to generate yield for die holders so maker like even though there's a lot of fun going around in the moment they were actually a big winner in this and growing their PSM expanding the dye Supply and ultimately going to be able to create like yield generating opportunities for their holders um so big winner yeah I would agree with that that they

they're a winner here and I think frax also applies to this next statement as well in that like we learned today that frax and die aren't pegged to the US dollar they're pegged to usdc um you know we saw they both tanked pretty equally uh in line with the price action of usdc um and you know if you have to like stop and ask yourself like is that a good thing or a bad thing um you know ideally we do get those decentralized dollars but today like that's just not something we have the ability to to generate and Sam kazimian has actually talked at length about this recently and just that if you like we need a Fed master account enabling on chain dollars and like you know I'm personally not sold that that'll be a decentralized protocol being the one

doing that like surely that will the first participant in that will be usdc and like and then at that point then you do have like risk-free dollars right those are almost equivalent to treasuries um there's no intermediary Bank risk that we've seen is in is indeed an issue right like this is exactly what happened with svb um and that I think will be the big the big unlock at that point and like you know is that a cbdc is that not a cbdc is up for open debate but like to me like usdc really almost already is a cbdc and like I don't necessarily think that's like a horrible thing no one's being forced to use usdc um and like yeah like it can already be blacklisted and if the government wants

to Blacklist you with usdc like they can and they will um so I I just like the optionality and if you want like the most risk-free untrained dollar that will be a Fed master account enabling an on-chain provider like Circle uh creating this so um personally I I would be excited at that I think I'd remove another step of risk from the system and you know in a perfect world I think we get multiple uh fed Master accounts providing on chain dollars to again even you know distribute that and promote competition amongst the providers yeah 100 agree there you can actually it's kind of tailing off that another cool throwing could be Caitlyn long she's the founder of custodia bank I highly recommend following her on Twitter because she's like a wall Wall Street veteran knows way more about this stuff than probably all of us combined

um so she's like perfect for this but she applied for a Fed master account and just got denied like a week ago so the timing is really convenient it's like why are you doing this she's trying to start a crypto that a crypto bank that kind of helps crypto companies that's always 108 collateralized by cash and cash equivalents in the form of T bills so this would be the perfect solution for us and she's been working on this for like for five years and she finally got word back that no it's it's not happening so I think I'm in line with you Dan I think we do need someone with a Fed master account who can settle these things like as they should be but I think we're a little ways away from it yeah also agree there what's everyone's

take on the market cap change to usdc it shed about three or so billion dollars um worth of usdt or usdtc sorry uh circles usdc stablecoin um it kind of feels in line with what I would have expected like you know we got that late Sunday announcement that all deposits will be covered by the federal government that kind of give you that safety blanket I think that really like slowed some of the the rush to the exits like okay like what's the point of really going and battling this um especially if you were like a large fund that held a significant amount of usdc you already have a vested interest in the space and you basically need usdc to to continue advancing um you know effort and I were just talking about that before this call and so

I don't know yeah what's everyone's take on like we lost three billion in market cap like Simon par under reaction overreaction my take here would be had the FED not come out Sunday and and done what they did that usdc's market cap would be between 20 and 30 billion right now and that hole would have gone from seven and a half to eight percent to what would that be like 15 to 20 I don't know that's tough Math on the Spot but you know what I'm saying so I and I think they would have done it like I think they would have honored one-to-one redemptions to appear like everything's fine when in reality all of that cash was really kind of in the hands and and of the fed and the actions that they would take so I think it could have been

a lot worse and I'm still surprised today to not see more of a market cap retraction but that's a really good sign for the the the hopes of people and belief in usdc moving forward doing mental math on a live recording like that's bold I'll be honest but um but yeah no I agree with you and like that was my expectation too right uh you know we just published the usdc monitor dashboard live on Dune you guys should all go check that out we'll throw a link in the description to that uh but you know I was building that yesterday at like six o'clock and I was five hours in when we get this announcement and yeah I was basically like ah well this definitely isn't going to be as useful as it would have been had people been rushing to the gates but nonetheless

um it does give you a great oversight of kind of the liquidity and price action that we saw uh throughout this this event you also got to think about like if there was a 3.3 billion dollar hole let's assume every dollar that U.S debt Circle had on Silicon Valley Bank was written off to zero obviously that wasn't the case but there's also a lot of usdc on chain that is in protocols that that usdc is not moving like anytime soon so prior to the dive Supply expanding over two I think it was like 2.2 to 2.4 billion usdc we're in makers PSM so yes there was a 3.3 billion dollar Hole uh you know on on circles balance sheet for a temporary time but

there also is like billion and that's just one uh D5 protocol there's like billions of usdc like maker does PSM that probably was not going to come in and go to redeem uh you know one for one for one at any time soon so um I think there's a lot of like locked usdc inherently in the D5 ecosystem um that really wasn't going to move just because it is not easy to to move that size anytime soon especially by D5 protocols that they can't just like redeem uscc one for one uh without maybe selling governance process to do that yeah I really want to know how much usdc has lost too like it's got to be a pretty high number realistically

speaking it's like you know you always hear those stats about companies and why they sell gift cards still it's like why is this still a thing like apparently they make a ton of money because there's always like a dollar and 25 left and it actually adds up to a significant amount it's kind of like the same story there um but on to another hot Cedar cool throw on this one's pretty obvious but what do you guys think about CZ binance I think it's interesting um specifically I'm curious if there's further action coming from the government against binance that he's looking to move this billion dollar fund out of stable coins and uh you have to wonder like if he's splitting that in Bitcoin Ethan B and B if he's buying that much BNB and your

regulator is coming after binance then perhaps he's giving exit liquidity two early investors in binance so there's a lot of shady stuff going on and uh will be lots of fun to watch it's conspiracy uh Conspiracy Theory season then um I guess the other the other conspiracy theory is like this was part of like a coordinated attack uh against crypto Banks right like the Signature Bank happened on a weekend uh late at night when just kind of felt out of place and you know I'm not a not a bank balance sheet expert but my understanding is it had uh didn't quite have the same level of risk as svb did and yet it still kind of got gotten brought down in the crosshairs of this

all um and I I guess that would throw Nick Carter on the cool throne for calling this this madness out uh gosh that's probably like already two months ago and he was really all over operation choke point and as you know continually flagging things uh related to to the effort to kind of control or constrain the amount of capital flowing into this industry yeah I agree um to your point signature was not in great financial standing really no Regional Bank was uh heading into the weekend um I think as of end of 2022 on their balance sheet they had about six billion dollars in cash and about seven billion dollars 17 sorry 17 billion dollars worth of available for sale Securities

that they can liquidate in the event of a bank run um so that in total and that's obviously as the end of year but in total they had about 23 billion dollars in in available funds technically that could liquidate uh and inventification a bank run and they only supposedly saw 10 billion dollars worth of withdrawals on Friday so they technically should have had an additional 13 billion dollars give or take a billion probably about 13 billion dollars of liquidity left um and CNBC announced a report uh and commented they got comments from Barney Frank uh who wrote Dodd-Frank one of the like the landmark bills of the 2008 financial crisis and he's a board member of signature and he explicitly stated

that to their knowledge heading into Saturday Signature Bank was still in a decent enough standing to survive and that they were pretty much told on Sunday that they had to shut it down meanwhile there's Banks like First Republic uh they were able to I guess get a liquidity injection from JP Morgan uh but they were not in good Financial standing and there's a handful of banks that are you know this morning on the on the stock market that fell 50 60 or 30 plus on the day just because of this this mass panic um it really does not make sense for Signature to be the sole Bank to be shut down in these events and it's just really odd timing because the same like within the same five minute window that they announced this new federal program

they announced that Signature Bank was getting closed uh they did not make like a big thing about it so I'm not one for conspiracy theories of wearing a tinfoil hat but this one feels a little shady yeah and then you add to that that all these funds based in the US like a lot of them used signature and now they have to go through the whole process of finding another bank and there's there's a good likelihood they won't get approved anywhere and then they have to go to Offshore Banks so um really terrible move by regulators and that's just uh kind of pushing crypto further away yeah I buy the theory to be honest I don't think this whole entire situation was stirred up specifically just to get rid

of crypto and make it harder in the US but I do think it was a convenient outcome I mean we had a Fed official last week saying literally as silver Bank was being or sorry Silicon Valley Bank was being kind of like run on say how much better off FDIC insured banks are when he didn't even realize at the time that he was speaking like there was literally a banker on the occurring and then you also have like uh members of Congress like Elizabeth Warren like kind of like provoking these Bank runs like it's just really weird none of it adds up why did signature get picked at all the banks I'm definitely on the Nick Carter camp and throwing them in the cool throne for calling this one out well in advance I do have one more cool thrown and that's why 2K Finance on

arbitrim the the Exotic stablecoin Peg Market I shouted this out in the newsletter a few weeks ago when all there was another other wave of usdc fed but people who were deposited in the risk Vault like I mean if you deposited one ethereum and the usdc DPAC Vault you just got paid out 50 ethereum and I think they had like four or five stable coins deep AG this past weekend so people who were gambling on there got paid huge is there a way to use Y2K to bet on repegs or is it only DPAC Insurance yeah so there's a risk and a hedge fault and

whichever is the opposite of the d-peg is you just like betting that it won't depeg um so I guess that's the closest thing to it so what a lot of people will do is they'll like deposit into like usdc won't lose its Peg the C Puck so they'll get paid out like 30 percent in my 2k tokens and this Y2K tokens share fees when actual dpeg events do happen interesting yeah and isn't the uh the range on that like pretty tight and don't they like Define a d-peg because 99 yeah it was like 9924 and they use chain link oracles so like the moment that reads on a chain link Oracle uh everyone's paid or rugged I think that's a good uh good spot to end it I'm really

excited for you guys to listen to this interview because despite all the drama with circle over the weekend they are building one of the most uh the one of the most product Market fit bridges that I've ever heard of and you're gonna hear all about it here so here's our interview with Zhao reginato I cannot recommend enough for you guys to all check out blockworksresearch.com if you go over to the research Tab and toggle free research you're going to get access to some of the best free reports in the industry and if you want to subscribe to blockworks research you can do so using Xerox research 10 at checkout in order to receive 250 off and you can also sign up to our free newsletter if you want to just get a little taste where we give Alpha on governance dgen trade ideas Market commentary charts of the day Etc

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creators of usdc so thanks for joining us today Joe I'd love to throw it over to you just to introduce yourself to the listeners and maybe give you a little bit of background on the origin story of circle and how usdc fits into the to the crypto landscape today sure thanks for having me uh Dan um yeah so I've been with circle for almost eight years at this stage and so I have seen uh you know a lot of the a lot of the evolution as a company that we have had in terms of bringing products to customers and and trying to deliver on on the The Vision that we that we have and uh and circle was was one of those companies founded you know 10 years ago in the early days of of uh I think crypto emerging as an industry and the vision has been that you know

how can we how can we bring this technology um to to kind of transform the way that Financial Services you know have been built over the years and and hopefully bring a lot more if efficiency to the system and connect people around the world in ways that they haven't been connected you know financially and economically speaking that and we have tried to do that in many different ways I think for folks who have followed the the industry for a little longer uh circle circle originally was a was a consumer focused company right so back uh back when I joined in 2015 actually we had a product called Circle pay it was a peer-to-peer payments product um uh it was it was a great kind of user experience that we had at the time it

allowed you to do simple things like Buy and Hold Bitcoin but it the main focus was uh peer-to-peer payments so you know leveraging the Bitcoin Network to to kind of transfer War um you know value globally and kind of follow the the steps that I think at the time applications like venmo and and square cash were already kind of trading right so uh so we so we did that and actually the first thing that I did when I joined Circle was to expand that product over to the European region and so I launched that product um in those 28 29 markets you know with support for euros and pounds and uh and one of the things that we were doing at the time was you know we

thought we could use Bitcoin as a settlement layer right so every time that uh there were end users on our platform kind of sending funds across the regions right across the US and Europe or across the three currencies that we supported uh or even if they were using uh that obviously with Bitcoin itself we would use Bitcoin as a settlement Network so if you're sending dollars to somebody in Euro we would you know sell those dollars into Bitcoin use that as a settlement layer and then transform that into yours on the other end and I think I think there are still a couple of companies that kind of utilize that method for cross-border settlement but obviously after doing that for a while we realized that there were a lot of issues with with doing

that it was it was actually pretty cumbersome um you know we we could hedge like exposure to you know the volatile asset uh that that was Bitcoin at the time um you know we we ended up having a trade desk to to kind of perform all of that operation for us but it just it was it was expensive you know while while it meant that you could deal with capital in a more efficient way there were a whole a whole host of other problems and then eventually we actually removed Bitcoin support from the product um and kind of the evolution that we saw on that we started we started researching other ways of kind of implementing sort of those features that we wanted to uh we then this imagine that you know Circa 2016 with the boom around ethereum

we actually started researching all right maybe we need what we need is to build our own token right where we need just to build on a settlement token and we we separated a few folks out in the company to kind of go and research that but I think but I think quickly after that uh we we navigated um you know towards the concept of stable coins then and uh and I think Jeremy Lair our CEO we really owe it to him and and to sort of the vision right I think at the time Jeremy and others they they made this this proposal internally for us why don't we go ahead and build our own stable coin and obviously as you can imagine in any company you know Circle was still a small company at that point um to kind of you know have this this

foresight and imagine well you know let's pause or sort of separate some resources out from the application uh and and consumer product space that we were focusing on to go away and kind of build our own infrastructure because we couldn't find the best infrastructure to deliver those settlement use cases we wanted was a bit of a daunting perspective but um but you know that's that's why Jeremy is who he is and and so I I was super fortunate to be to be the person on the product team that got separated out right and basically my my mandate was um go away and you know build a dollar stable coin because this is going to be super useful for us for settlement use cases and you know look at the success uh that tether you

know was already having at that point in circuit 2017 um and and so I I went away and and did that and started working with uh with Engineers to to to do that obviously beginning with researching the space but I I always thought that I was going to you know go away be separated a bit from the other teams build a stable coin and then come back to the consumer products and you know reintroduce that as a sort of a settlement layer in the consumer products um that was that was what I thought was going to happen uh the rest is history we obviously built uscc and launched that in 2018 and it was it was so successful from the get-go that um that I never had the chance to uh to come

back in and build anything else but I always like to so to tell that story because I think Circle has uh has had a journey into the topic of stable coins that's very different from a lot of Journeys that other companies have right it was it was that classical you know we have we have some products we would love to see exist uh and we have tried to build that in certain types of infrastructures um and now we realize that there's an opportunity to build a better infrastructure and that we never went back to to building those consumer products so that's super interesting I love the the back story but in terms of uh the I guess the primary mission that you guys have had since day one like would you say that's kind of deviated from your original

um mission that you would have laid out a few years back like would you say the primary use case for usdc for you guys going forward is to be used on chain or more so to integrate traditional Financial rails like with things like visa and MasterCard actually settling payments on chain yeah that's a that's a great question Sam I think I think that that's also I think why the DNA of Circle in the DNA of UICC is slightly different uh than other stable coins because we have had that perspective when we started uh thinking about it right but obviously as soon as we started doing you know Research into okay if we're going to build a stable coin what what kind of a stable coin is it going to be right we started researching August table coins feedback stable coins are all the up all

the options and and quickly recognize that our Forte was going to be around dealing you know in this in this sort of hybrid or or line that divides crypto and traditional Finance because I think Circle has always played a good role in kind of you know connecting the two together uh you know so the good banking Partnerships we have had you know the licensing uh infrastructure that we have had so leveraging all that made a lot of sense for kind of a Fiat collateralized table coin um and we and we have as I said we have had that you know super mainstream you know like high growth supporting a number of uh a number of users around the world perspective to things but when we started investigating the space we realized wow you know stable coins are

are huge right now in crypto Capital markets and in fact at that point crypto Capital markets were they they had just kind of gone through this switching phase you know from going from uh being Bitcoin denominated right remember back back then like you know pretty much all all pairs all trading pairs around the world in any crypto exchange they would be the the major ones would be bound to bitcoin right so you would trade ethereum against Bitcoin and anything else against Bitcoin and and all of a sudden there was a transition there and they all became dollarized right and primarily through through the the growth of tether everything became dollar denominated right and so we we saw that as also a huge opportunity to kind of onboard additional use users through

stable coins into into all those scripture use cases and and we didn't want to you know be be a niche stable coin so we wanted to participate in those markets where things were already where our product Market fit was already found so so we started we started with this dual perspective right when we got to the point of effectively building the product and launching it we we had this dual perspective we wanted to follow these uh you know potentially in the future more mainstream use cases we wanted to use stable coins as a way to connect to uh to traditional Finance but we didn't want to to let go of of these uh you know segments where there was already product Market fit and so we we have always played this dual role and I think I think I think that's part of why

ussc had the success that it had as well because then you know we we have seen a fairly quick adoption of ussc in crypto Capital markets um especially starting with centralized exchanges and a lot of other crypto applications but then sort of 2021 when when you know the 2020-21 when the D5 boom kind of had happened you know there was a lot of adoption of ussc in in kind of D5 applications but we but the immediate thing that I think also it's it's worth telling the story the immediate thing that we focus our attention almost like the minute that we launched USC in 2018 was was this idea of of apis right and and uh and circle has has brought to Market a lot of

products that were developer focused uh and API driven to allow you know any developer in in finder in more traditional Finance but actually any developer in any application to connect with uh with you know circles infrastructure you know spin up wallets that could host UICC um do on and off ramping from uscc to Dollars and back um and and actually we have had traditionally then uh you know a whole host of customers that utilize uscc for for some of those more either mainstream use cases or perhaps some use cases where people actually didn't know that they were dealing with ussc um right the like Dapper labs for example built a lot of infrastructure around wallets and how people could

participate in their nft Marketplace and most of the users did not really know that they were using SSC at all uh and and sort of that was part of the vision that we thought you know that there is a way for us to like deliver more efficiency in all those use cases through something like your SEC but it was but it was always kind of this dual perspective and I think we we still continue to have this dual perspective that's why we have I think you know a good relationship with the VISA and the MasterCards of the world right and they they are experimenting with having ussc as this additional and first digital currency on their settlement layer uh it will make things so much easier if people instead of uh you know internally between issuing Banks Visa um you know acquiring acquiring Banks

can instead of be sending dollar wires back and forth can be sending uscc transactions right it just makes it much more efficient so I think I think we we always have had this this interest in making sure that we can cover for both yeah that makes a lot of sense and I appreciate the the background there as well and you know stable coins have really been this killer use case of crypto it's pretty undeniable to see the growth especially when you look at things like market cap outs of of some of these stable coins outstanding uh namely the Fiat back ones like usdc and usdt but when we look at the distribution of where these stable coins live right so what chains that they're on uh we see circles have this pretty consistent uh distribution around 80 to 85 percent uh of usdc has been on

ethereum whereas someone like usdt you see that migration kind of Shifting away from ethereum and onto Tron so with the release of the cross-train transfer protocol cctp um how do you think about where the most the most valuable location for usdc to be distributed on and how how does that how does the chain that it's on help you know increase that spot demand or monetary premium for the asset yeah I think uh I think we the the the evolution of of multi-chain that we have had in the last three years has been super interesting right and I think a blockchain like Tron was one of the was one of the earliest blockchains where you could have really really fast settlement and you know super super

cheap transfers and so I think I think I think it emerged as one of the the contenders and then and then particularly it's it's very big in Asia in Asian markets in particular right it's very popular over there um so I think it was it was a way to kind of facilitate um first of all like a sort of an intra crypto exchange kind of settlement use case and then and then I think these days it is actually supporting a lot more mainstream and and peer-to-peer and dollarization use cases again specifically in Asia we see that it is very strong in Asia uh uscc also has a pretty pretty major component um of of its Supply on on Tron despite

what you said despite traditionally you know 80 or 85 or sometimes even more of the outstanding supply of uscc being on ethereum I think I think it's always a journey it's always an evolution for example as I said what happened with you know D5 summer and everything that happened in defying General has contributed to a lot of that concentration of capital for ussc on the theory room right um for and and you know because there's still a tremendous amount of capital allocated in in all those those markets you know have a compound you look at you look look at those blue chips and they hold so much of of uscc deposits from from customers um but then the other thing that we notice as well I think uh I think uh uh

the the safe uh product from from gnosis um which is a very successful product as a treasury Unchained treasury instrument for for businesses right um I think I think it has I think the last time that I saw I had like over 4 000 uh kind of active customers holding uscc on on that product with with the aggregate uh deposit like you know being over 4 billion dollars worth of uscc so that that just means that all these companies um a lot of them are drows but a lot of them are just you know startups and crypto startups or or startups that perhaps don't see them as crypto but are crypto native in general uh that are also holding their treasury in the form

of a non-chain wallet in the form of UICC which is which is super interesting right so those are obviously more of the on the early adopting uh side of of businesses but uh but it's super interesting to see the use cases that they're conducting there's a lot of you know B2B payments and and Payroll use cases there a lot we see a lot of VCS investing in companies and and that first kind of wire payment uh to the businesses is a uscc transfer um so that that happens primarily on ethereum potentially I think because of the the how mature those products are and especially because of the security of the theorem but then so that that's also in like an evolution of what we have seen but then I think more recently than the world is also changing again

right so we we see now like a lot of a lot of interest around uh layer twos and and Roll-Ups on ethereum and then and then you know beside besides drawn which we refer to as as one of the earlier um kind of super fast and cheap Alternatives in terms of layer ones we have now then seen Solana and Avalanche and a lot of those chains that are extremely interesting as well so we started to see a lot of a lot of interest for uscc use cases on those the things the things that uh right now are are extremely interesting for us um and I think particularly comes from from the the strength of the dollar you know High interest rates is uh is this

dollarization use case uh you know last week I was at East Denver uh you know I heard so many people from Latin America and some other Emerging Markets talking about how they are holding how you know not according code normal people are now holding on to uscc uh balances and stable coin balances on a wallet as a way to you know uh you know allocate part of their of their uh capital in something that is not depreciating super fast because of inflation or something like that um and and that's that's really interesting to see as well and that could be that could be one of the other cycles that we see in terms of uh you know getting crypto to be more adopted um by mainstream customers um but you know as I said it always

comes in phases right it always comes being driven by a particular different part of the cycle so if we take a step back and and kind of hone in on cctp can you can you start by explaining maybe some of the shortcomings of traditional mint and burn architectures with bridges that we see today in crypto and then uh maybe explain how cctp actually differs yeah absolutely so when we so Circle actually I think we we LED we led the the way from uh you know with this multi-chain view of the world that we have had I think we issued ussc on a second chain starting in in 2019 I believe with uh with algorand and then and then we follow with uh you know now we are going eight chains and and soon we might be in 13 chains you know

because it was our view of the world we thought that you know these these ecosystems they tend to the way that they works is they tend to be orthogonal in nature so you know while there might be a little bit of overlap and the same applications being deployed and all these ecosystems multiple times there's always unique Innovation and unique um customer and user growth that happens in those ecosystems and we wanted to be there we wanted to be you know this digital dollar that's Omni chain and that exists everywhere and so we started doing that and then and then uh I think starting in 2021 this bridge uh sort of segment exploded in crypto right and all of a sudden it was super easy to connect all these ecosystems together but then what we started obviously witnessing uh which was good in many

ways because it would mean that you know end users and there was end user demand and so we could almost see where the demand was in these new ecosystems but we started seeing uh you know a lot of these Bridge Solutions um Coming online and um and the the way that you know traditionally a bridge uh product or or a piece of infrastructure works and actually it's a lot more I'll make a a very an oversimplification here because these are very very sophisticated usually messaging based kind of systems right but but at a high level the way that they work is that you you sort of lock you know some sort of crypto asset on the source chain you know there's some sort of volt there uh and the Locking of that acid on the

source chain emits like a message that somebody can trust uh you know by listening to a set of relayers or whatever on another chain and then and then issue you know a synthetic token on the destination chain this is usually the way that these Bridges work right and so their messaging systems but they involve uh you know locking up assets um which you know which has been risky in some cases and we have seen uh like some hacks uh of some of these Solutions in some cases but the other thing that that's that approach um does is that it also it is also what people call Path dependent right so depending on which chain you're coming from and which chain you're going to uh like the assets need to be locked on the

source chain and an asset needs to be issued on the destination chain if you're coming from a slightly different chain then the assets are locked in a different place and so you know should you not issue a different asset and so some of these solutions they are path dependent and they started in practice fragmenting liquidity in crypto right because then you would have uh I think on Solana exam for as an anecdotal uh thing because I think a lot of bridges you know were connecting to Solana was really popular I think and we ended up at some point having 11 different synthetic versions of ussc which which was really really confusing for users confusing for developers right A lot of people started making these mistakes and we so so as I said circuit 2021 we started looking a lot into that

and thinking wow that's it's interesting what's happening but it's not great for ussc right we don't want liquidity fragmentation we don't want developer any user confusion so how can we tackle that we we started to get really close with most of the bridge uh kind of providers out there um you know thinking about different ways that we could that we could uh solve for this I think I think the the cool thing about crypto is that people are super super open to like have these uh you know debates and discuss you know what what were better ways to to address that but one solution that I think we very quickly got interested in is uh if if Circo actually played a little bit of a bigger role because uscc is a unique

asset right in that all of the reserves are offline they're off chain right so whether you have if you have a dollar in reserve it doesn't really matter whether you have the the digital version of that living on Solana or ethereum or Avalanche right they're they're essentially equivalent and so if you could destroy one on one chain and recreate one on another chain provided that you can prove that the reserves are intact that that is something that you can do with an asset like uscc that you cannot do with with other crypto assets and so and so we started thinking okay hold on a second what if we build some type of infrastructure some type of component that that every every bridge provider can reuse

um so that actually when you move uscc from chain a to chain B you're always going to end up with the fungible version of ussc you're always going to end up with a native version of uscc so everybody has the same quality properties right you you eliminate past dependency and and almost as a byproduct as a good byproduct you also eliminate parts of the risk that is involving these Solutions right because they if you are destroying uscc on source to recreate it on destination then you don't have to lock it up anymore and and us to see funny enough it is the most bridged asset in in crypto just because it's dollars right and it makes sense for that to be the asset that you move the most so we started seeing like all these huge pockets of ussc

around all these Solutions and and you know some of them were hacked I'm not saying all of them would eventually be hacked but it's just a massive massive risk for the ecosystem and so when we realized that we could build that and we got some feedback from you know the ecosystem that that if we built it you know they would be interested in in kind of adopting then then it really made it made it uh easy for us to to go away and research and build that so so as I said cccp stands for cross-chain transfer protocol it's a it's a mix of a non-chain an off-chain solution uh again the off-chain part is because you know if you're using ussc the trust model for an asset like uscc already involves you trusting Circle right at the end of the

day we manage the reserves so we thought that it wasn't going to be any detrimental to kind of also have Circle as as part of the the the flow so the the way that it happens is that you uh so you send us ACO on a source chain to uh to a Smart contract uh you know that receives that and and kind of register you know the the trigger that somebody wants to move that to a different uh to a different chain um Circle has a circle has an attestation service that it runs basically that is monitoring all those smart contracts and uh and it can uh if you come to that service and you ask for a proof that you know a particular transfer has happened on one of those Source contracts Circle can can issue a

an attestation saying yep we we believe that that transfer has happened and we signed that transfer we signed that attestation in such a way that if you bring that attestation then to another chain to the destination chain to another smart contract and you say Hey you know there is a proof here it was signed by Circle that there was a transfer uh on this Source chain then uscc can be re-minted uh on that on that destination chain so it effectively allows you to almost physically move right you as you see from The Source chain to the destination chain that's that's what cctp allows for and as I said the the thing that we have loved is that is that most you know most bridging and messaging infrastructure is you know axelr Wormhole mayor zero like all these

guys aggregators um they're all basically integrating with cctp and and uscc will have that experience for for users of those of those Protocols of those Services uh you know from from the get-go as soon as we bring it to Market I love the analogy you made there um with you know if you have let's say usdc on Avalanche and ethereum like they are equivalent but they they just missed that piece of fungibility right you can't actually hold those two assets in the same hand until cctp and I also love the idea of like removing the bridge Risk by like you know when you're and all these Bridges use LPS and you know LPS come deposit liquidity and that's what enables a lot of these transfers but this model completely strips that because the usdc would be destroyed on

the source chain and minted freshly and newly issued on that on the destination chain and what's interesting there is is the use of these cross chain messaging protocols um as you mentioned uh you know layer zero Wormhole axolar would Circle ever consider like building out that piece of the of the infrastructure as well because ultimately you know my understanding is that is the piece that delivers the message between the chains um so while Circle actually has the contracts that does the minting and the burning it's kind of using like a third-party technology for the actual communication between those two chains yeah no at least not now then at least the the perspective and we you know we have work with with these folks for a

long time and we we were very very careful because we wanted to make sure that uh you know people understood the reason why we were building this I think uh I think very early internally we said yeah but we what are we doing here do we want to be in the business of bridging and I think very quickly we we said no to that so you know you will know you will not see a front-end CCP does not have a front end you know it's not supposed to be a Dap also that can be used directly by consumers we we have we have had a developer first mindset you know for a lot of things that we have been doing for the last two or three years and so we thought that was also going to be the case here that you know we would build actually something that

is more of a protocol um really focused on collaborating with uh with all these uh you know whether they are messaging services Bridge providers but also aggregators you know sometimes even even wallet providers as well At Large Scale they want to connect directly with these services but the but the point for us is to be like a developer platform that that these folks you know are primarily the the customers off we we don't we don't see ourselves actually bridging you know building the entire kind of bridge solution and and facing facing counterparties directly that's that's not the focus that we have yeah I just always Marvel at how good of a business you guys have because in a rising interest rate environment in crypto that's usually pretty bad but for

you guys it's actually a pretty good so I guess uh my question to you would be um do you think that you will monetize the issuance of usdc like going across different chains with fees uh directly provided to the maybe the dapps that are utilizing your services or is really the ultimate goal just to grow the usdc supply so that way you can make more interest revenue on the back end with your you know cash and cash equivalence Holdings yeah that that's a that's a great Point Sam and and it is interesting right because at the same time right now yes the businesses is a great business it's a very valuable business um but uh but you know when we launched uscc in 2018 in interest rates were were

basically zero so it's it's interesting to see how how quickly things change it's only been five years right I think I think we appreciate that you know yes while while uscc is a super valuable business um you know we we cannot rely just on on you know net income from reserves uh you know there has to be there has to be uh something uh you know different than that as well that's why I think we have so much of a focus on uh also seeing ourselves as a as a platform for developers right we try to we try to provide for everything data developer particularly in a financial service space but also we know in adjacent areas like gaming you know like a lot of other things I I share

that Vision that eventually I think we will see just as we ended up with browsers web browsers on most of the apps that we use on our phones I think I think you will have digital wallets and most of the apps that you have on your phone right if you just think about the fact that there is a dollar sign and a balance in a lot of apps that people don't think of as wallets you know like your your Uber is a wallet your Airbnb is a wallet like you know all of these things are wallets and there's no there's not a lot of reasons there are we know the reasons but uh eventually we think there are going to be good reasons for those to become digital wallets and just be more interoperable with this whole ecosystem um so so I think uh I think we we focus

a lot on that we we want we want that world to to happen but but when that world happens you know hopefully we will be able to monetize other types of services right that can be more transactional in nature to your point you know does that mean you know something like cctp should could have fees in the future you know it will not have to begin with it will not have but you know I I see a world where you know uh interest rates you know change in this way or the other uh you know bridging cost becomes a little bit more standardized or commoditized you know I see a world where that could happen um but but we don't we don't look only at cctp for that I think we as I said we have a a broader perspective you know yes interest rates you know make make

reserves for us to see valuable today but uh but as a business we have to as any other business right we have to to have a more uh varied perspective into the future and and we have a lot of plans for additional developer services that we that we are going to build uh wallet infrastructures additional business services and and all of those would be monetized in and of itself but also being supported by by ussc for sure so is the use of cctp permissionless or if I'm a user or a protocol would I be interacting directly with those third-party providers those axillars wormholes layer zeros I think as a user our expectation and our recommendation is that all users would be much better served by going directly to to those

kinds of services right and uh and even I think you know there's already a lot of aggregation happening on top of of bridging right and then and then even there's there's there are wallets that connect to those either the bridges directly or the aggregation services and so you can actually you see yourself as more of a a wallet user right perhaps you don't see yourself as a bridge user so I I think I think that that will be the case I think you know the the smart contracts and the attestation service those things are permissionless right so anybody can use them uh you know it's it's going to be absolutely um kind of free for everyone to use uh but I think I think those things are pretty complicated it is a pretty

complicated workflow even though it sounds simple you know steps one two and three do you finish those three steps and you get it but actually hooking up those steps you know it requires a little bit of sophistication certainly some some bit of coding um you know so I think I think that's why naturally it will be mostly used by develop and as far as the integration process goes um I I know the original plans were ethereum first and then looking into Avalanche and Solana and I was just curious where the cosmos ecosystem ecosystem fits into this right because I know dydx is launching dydx chain uh an app specific chain on that ecosystem and they really want to use usdc as their base asset for deposits and withdrawals so how do you think about bringing usdc into the cosmos and you know how has the

how is the change in Noble the general asset issue has changed over there how is the change in Noble's use of interchange security played a role in that if at all yeah we we have been we have been super excited about cosmosis and ecosystem for for years now and and I I keep I keep talking to folks on the cosmos ecosystem again last week was chatting to some that um that you know it took it took us a lot longer to figure out the best path to to serve that ecosystem than than otherwise but it's also because I think Cosmos is an ecosystem it it is as as decentralized as it gets right there's there's so many different teams and and you really cannot um you really have to kind of listen to a lot of those perspectives

um and it's so rich in that but uh but so to your the first part of your question yes the plan continues to be we you know the the first route that we have already implemented and we're just finalizing you know security Audits and and all that good stuff is connecting ethereum and Avalanche um and so that's the first route that we're going to bring to Market hopefully um you know at some point in the next uh month or so um and then we we would like to follow very quickly with first of all like you know most of the evm uh compatible chains that we have uscc on because that's that's pretty kind of straightforward once we have built it on ethereum right it's a little bit easier to deploy and if you have compatible chains I think outside of those we we will probably be uh very soon on Solana

as well but but Cosmos by by all means will be will be the next will be will be uh you know uh important and and by being next I don't mean you know we will have to wait necessarily uh I hope I hope we can after a little bit of a of time experimenting and and observing the operation of of cctp on on this initial route I think we'll try to be quick in terms of covering the other versions of uscc but yes then getting to Cosmos uh we will absolutely connect the bridge to to Cosmos we think it's going to be super important in the vision that we have for us to see as part of Cosmos um we have landed we have landed on the the this design after working with the teams there for many many years that you

know there should be sort of this um asset issuance chain to you know it is the term that we have used uh as well in in many of these discussions you know sort of a neutral uh kind of app chain right or at least an app chain where its goal is to basically be the port of entry for for assets um and and in talking to the teams we eventually found this team that also had a similar vision and and they went away and and built Noble and you know it's already in in test net and and hopefully it's going to be be launched on mainnet uh pretty soon um the vision was you know for for obviously to have that Port of Entry on Cosmos and through IBC you know connect that to basically all the cosmos chains

that that's the vision that we have for for how uscc will get to dydx as an app chain as well so cctp will connect to to Noble as the port of entry for Cosmos and from then on you can IVC it into basically every you know the entire Cosmos ecosystem where IBC is enabled um I think I think we're aligned you know between ourselves Noble the dydx team that that is the path uh obviously uh obviously we're all we're all interested in connecting cctp connecting the bridge to to Noble to Cosmos because then because then you know Cosmos can have uh sorry dydx has a pretty interesting upgrade path for their existing users right and how to very very seamlessly

kind of move those funds over into the the new chain and all that and we are absolutely uh committed to supporting them I think I think it's fair to say that one of the key reasons why we have prioritized uh you know bring a new SSC to Cosmos was once we realized and once we learned that that uidx was building their own app chain so that that you know dydx is a huge it's a huge use case for uscc they have always had this huge commitment to ussc and we we have all the intention to continue to to support them in what they want to build um I I think the uh The Interchange security part of what you mentioned you know it is a super complicated thing and I think we we also didn't want that to um

to kind of delay you know the bringing of your sec to Cosmos so we found a path you know we will start with Noble being a proof of authority chain and we we see an upgrade path into eventually leveraging interchange security so we're kind of comfortable with with the roadmap and how it looks and uh and as I said the the main thing is that I I am so excited I think it's fair to say that that it is one of the versions of ussc that I'm most excited about and lightening up that that whole ecosystem and uh can't wait to to see that happening in the next couple of months now yeah Cosmos has definitely like been missing a stable coin that's super reliable that's you know fungible across all of its different chains so that's super exciting to hear uh when I think

about the C cctp design I think about IBC and interchain accounts and other applications kind of building on top of the smart contracts you deploy and then kind of making cross-chain transactions more Atomic if you will so for example um a borrowing and lending protocol on Avalanche but you're a user on ethereum you send usdc into that borrowing lending protocol on Avalanche in order to earn yield is that something that you expect to happen and like what other use cases are you expected to come out of cctp yeah no absolutely Sam I think I think actually it's almost hard to imagine you know the the ways that people are going to be able to leverage

this but I think I I think people I think organically I think maybe we wrote this in some uh marketing material at some point but but it's uh it's it's funny that people started to use that term people started talking about this idea of composable uscc um and and it came from you know when we were writing about cctp and and the fact that all of a sudden uh you know you actually have a like a an objective and programmable way to deal with ussc across chain right because of what you said because I can I can actually write code that expects a deposit you know of your SSC from somewhere else and then I can take action you know once I see like particular Triggers on a per on a

different chain I I think the XLR team in particular has a very good vision for this you know they have just announced more more good developer tools like last week at East Denver as well to just provide developers with this ability to have this you know master master dashboard that is cross-chain in nature and then and it you know allows you to observe all these events across chains I think I think I think what you described you know somebody on some sort of a capital Market on Cosmos uh you know taking deposits from other chains I think that's absolutely something that people will be able to do um I think uh I think a lot of swapping of of assets you know uh like if you think about it the the evolution of

multiple chains has been super super interesting but one one of the not so good things that it causes is the fragmentation of liquidity right if I have one asset on one chain but but I want to swap that for an asset on a different chain there is no market today for trading those assets right I typically have to combine like a hop to another chain and then hope that the liquidity of that asset on the destination chain is also as good as as it needs to be and then perform the the swap on on one chain right but maybe maybe this maybe there is now an opportunity specifically for uscc and I think it makes sense because the dollar is the dollars are the basis of a lot of these markets right so it makes sense for you to like have a have a hop onto

dollars but I think it will it will allow developers to hopefully be a lot more creative you know there's not going to be as much counterparty risk as before right so if you if you trust as I said if you're using your SC in a way Aid you have to trust Circle you have to trust that at least we are managing the reserves so hopefully the you know the hope to using uh cctp for example doesn't impact the you know the perceived price of your SSC due to counterparty risk because you know it's it's it's most mostly the same um and that allows people to kind of build applications that rely more on that kind of infrastructure and yeah I think it will be we that's our whole bet is that by by putting this type of infrastructure in place it will it will

create like another wave of innovation and I think we already see um again last week we're having demos of of some developers you know showing to us what they can do with with cccp and and it's it's mind-blowing it's really really creative so when I think about unlocks from cctp I think this is like a huge potential ux Improvement for wall providers right because you know from my wallet I would love the ability to move funds from you know chain a to chain B and so I've I'm curious if any wall providers are kind of like in early talks with you guys and saying like hey we'd love to integrate cctp to simplify the ux of wallets because you know one of the things I uh you know consistently think about is how can we make crypto easier to onboard users into yes yes we

have we have a lot of wallet providers interested in this we one one I think Evolution that we think can happen is that for some of these assets that are essentially Omni chain like uscc uh because I I have many multi-chain wallets right where because I do all these tests I know it sounds sounds like a sickness or something but uh but actually hold sec in the form of many different chain versions on the same wallet right just to check the user experience and it and it's kind of not great I have to be honest it's far from great because you end up with multiple dollar balances right so you have you can easily have in some of these wallets three uscc balances right because you have sent them from like different chains I think think about it that now

with something like cctp there is an opportunity for you to improve the user experience and say no you have one dollar balance because we support you know at least into the extent that they support they connect to all these routes you know it doesn't matter which uscc you send to you know we will we're going to be holding that version obviously under the hood like that's the asset that you actually have but we can amalgamate those balances right because if you need them to do let's say you have you know 50 usse on Solana and 100 usse on ethereum but you want to send 125 on ethereum right um like there is now the chance for you to build a user experience that sort of abstract away all the all the complicated stuff that's happening behind the scenes and they

could you know they can Bridge it and and do something like that I think I think we have some wallet providers interested in in kind of evolving ux's in that in that way um it might take a while I think the the beginning will probably be you know an evolution of the existing experiences they have so you know maybe now you can you can you know actually intentionally bridge usse in this new way through the through the wallet UI but I think this idea of having a dollar balance that is slightly you know more useful I think we'll see that coming I've got to ask you um just because I know Circle and coinbase have relationships that go back kind of towards the more beginning of of your guys's Inception so what do you think about bass are you excited about

it have you talked to their team about potential Integrations with cctp on on base yeah no we we have uh I think coinbase did a great job with the announcement I think uh I think they they also did a great job in in you know coming to the ecosystem and involving in the ecosystem and and making everybody excited you know and we as the issues of ussc we are we are part of that as well um yeah we're talking we're talking to their team there's a lot of cool things I think we could do together but uh nothing nothing yet ready to to announce but uh but certainly certainly a a good collaboration that we're having great well Dan if you don't have any other questions uh Jazz already been super generous with his time so I don't know if you want to share with the audience

where they can find you on on Twitter or learn more about Circle I'll kick it over to you for that yeah sure no I'm I'm I love Twitter I'm a big uh CD Twitter uh user I um you can find me on on regenato my last name r-e-g-i and a t t o um and uh yeah as I said we have uh we have a strong developer Focus I I'm always interested in talking to developers people who are interested in building applications and connecting to us to see in some shape or form if you guys are interested in cctp as well I'm I'm your name you know please reach out via Twitter or some other channel and we're happy to talk awesome thanks so much yeah we'll have to do this again