Is Crypto’s Biggest Payments Problem Solved? With Sid Gandhi

Transcript

All of the chains today, including the stablecoin specific ones, none of them have production shipped privacy. All of them have it in the road map and we know what that means. Who are people going to turn to, right? They're going to turn to pay if stable coins go from where they are now in a 10x growth. Who's going to be the biggest winners? Welcome back to the rollup. We are your hosts. I'm Andy. I'm Robbie. And this is your home to learn from the biggest guests, the brightest minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to the real world. Sit back, relax, and enjoy a quick word from

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Learn more at Magic Newton onx. All right, Sid, we're in New York. Uh, happy Friday. Um, happy Friday. I was just telling you that I got back from Stablecon yesterday. Very sudy event. Lots of uh like Mastercard, Ripple type of people there. Spoke to a guy from American Express Ventures who's trying to invest in crossber payments. Kind of came to the idea that a lot of the demand is coming from Africa, Latin America, and then as I was saying, a lot of the supply is coming from the states in terms of USD backed stable coins. So yeah, that was just an interesting event. It was very different than the usual like crypto conferences. Um, but you know, it was a it was a nice change of pace. Yeah, I kind of noticed that when I was

researching it and which is one of the reasons I didn't go. Yeah. Yeah. It was the first time. It was the first uh it was the inaugural one. Yeah. You're here in New York. You're you're building pay. We just had a good Mammo NYC event with with the Celesti ecosystem. You presented pay. Maybe just do a quick TLDDR on on yourself and and what pay is. Cool. So, my name is Sid Gandhi, uh CEO and co-founder of Polybase Labs. We're building pay. And, uh, my background is really in software engineering and product. Um, many moons ago in 2012 was when I first read the Bitcoin white paper. To me, it wasn't a financial tool. Like, the token was cool. I think like it grew over time

obviously from $8 to what it is today. Um but really I was fascinated by this idea of this unlock for humanity which is digital money that you can actually own like cash. Yeah. And like lo and behold like 10 years later in 2022 that idea had not impacted anyone really in their daily life. Right? And so I came back into crypto after 10 years in web 2. I was at Apple. I was working on um iOS. I was working on like cyber security stuff for a while, even autonomous vehicle stuff for a while.

But I came back and I said and I reread the Bitcoin white paper just to like ground myself and I was like, "Oh crap, we have not delivered on this vision." And it's been a very very long time. Yeah. Um, and so at the fundamental kind of principle of what I care about is the idea of fairness and the idea of sovereignty for something that people spend their whole lives doing, which is earning money. Yeah. And I think it's just fundamentally unfair when you don't have control over that money. Uh, when someone else tells you what you can do um, with the fruits of your labor, of the time, the sweat, and sometimes the blood.

um that you've used to earn that. And so that grounds me. Um and what we're doing with pay is taking what we've all wanted so badly for years, for a decade plus of self-s sovereign money, um but adding a small twist to it, which is that you can actually use Yeah. And what does that mean? You can use it to solve the problems in your daily life, right? And so what grounds me is like the stories that I hear, the people that I talk to. Um I talked to a lot of people across a lot of different walks of life and verticals. I talked to my Uber drivers, my Door Dashers. Um I was in Argentina for three weeks last year talking to

people there. Yeah. Um and just really understanding like daytoday, right, from your paycheck to when you spend in the grocery store, what are the problems that you face? And turns out crypto is actually a really good solution to a lot of those things, but you just have to do it in the right way. Let's understand the current kind of payment incumbents a bit better before we can understand why pay is important. So I use Venmo, I use Cash App, uh I use Zel, um and these are all effectively like uh linked to my bank and linked to uh my my dollar accounts. Yeah. Um before these kind of fintech companies came about the the it was very much like a

and wirebased and then we transitioned into into this kind of like fintech realm. What's your what like how do you think about this like dollar supply chain or this payments supply chain as we have it now? Like what does that look like from um you know me sending you money on a fintech app or on a a zel payment etc. And then like how do you think about re reshaping that? Yeah. So fintech is basically lipstick on a pig. Okay. It's all banks at the at the back end and fintech has built good UI um and some abstractions over that but the fundamental limitations still exist which is fees delays uh and

restrictions. And so fundamentally people get a paycheck that goes to their bank account. They use that that money to spend in their daily lives. Maybe they want to send money to people locally around the world. Um I was just talking to this guy uh at the Celestia event actually who was doing like custom swag like a like a leather passport. Um so he's a leather worker and I told him about what pay was and he said, "You know what? I hate Venmo." And I was like, "Tell me more." Um he uses Venmo for his small business. He was traveling around the United States, not even going internationally. Um, and he said that his Venmo account got frozen. It got suspended. He spent two or three weeks

with support trying to get it unfrozen. He had to pay people. He couldn't pay those people. He had to borrow money. Um, and like just had this terrible time with something that should be so simple, which is I'm earning money and I'm spending money. And the same story I've heard over and over and over again in the US with Venmo, um, with other countries and their local payment methods and with international payments. Everyone has a financial horror story. I've realized and people I've become kind of a whisperer for it. So people just start telling me their bad financial experiences and that that's where we get all of our user research.

That's where we build features from. Um, you know, and I read the news of people getting dangled by their legs in New York to get a Bitcoin key. Yeah. Private key. That was pretty wild. To me, that is a fundamental failing of product. Right now, if you have a ledger, you know, you can have some there's some weird things you can do where you have like a false password that opens up things, but that is a very advanced user thing. We are building things in pay that are going to make it actually safe to have a non-custodial product today. I would say for most people non-custodial is actually worse than self custody. Yeah, in many ways and that shouldn't be a thing. You shouldn't have to take you

know two steps forward, one step back with crypto. It should be the same interface, the same experience but better in every single way. Okay. So, let's pretend that I'm a a Stripe uh you know seuite person or a Venmo uh you know head of head of head of operations and you're you're explaining to me how this product could help what we're current currently doing. How do you how do you explain to me that that that pay is going to improve my current product suite without basically telling me that you're just trying to eat my lunch?

Yeah, we have a clever way of doing that. We've split Pay up into two main technologies. The first one is Pay Wallet. So, if you go in the app store, you download Pay. That's a non-custodial wallet, right? That wallet stores all the funds on Pay Network, which is a homegrown bespoke blockchain that we built specifically for stable coin payments. And I know that's really popular now in the last like six months. Um, but we've been building this for two years. uh we have gasless transactions which everyone has now but the fundamental thing we have is confidential and compliant payments.

Okay? Because at the end of the day if here's a thought experiment if a billion people come on chain and they're actually using crypto in their daily lives as their bank account. Um what is going to actually happen? What are companies like Facebook or Google going to do? They're going to go and they're going to index that data. They're going to find people that can help them tie that data to IP addresses, i.e. all the wallets that you use. They're going to use that data to tie it to an email address and use it for ads. That's their fundamental business model. These people are really good at indexing data, best in the world. Uh they invented it basically. Um and they have all of these

other data sources, right? So the next billion people come on chain. I'm really afraid for them. And you know what? Crypto is going to have a Cambridge Analytica moment, right? Remember in 2016 where it came out that all this Facebook data was being used for election advertising and manipulation. Yeah. Imagine how much more powerful that is when I know what you've been up to on chain. I know what protocols you're putting money into, how much you've gained, how much you've lost, uh what NFTts you own. Um that's really really dangerous. uh not just from like an embarrassment perspective in some cases, but a physical danger perspective as we've seen in the last uh couple weeks and months. Yeah. And so to me, it's like that's just really

irresponsible to use stable coins for real world use cases on public blockchains like Ethereum or Swana. It's just a very very bad idea. And just like social media, no one gets it until one day everything blows up and they do get it. And the same thing is going to happen in crypto. And lo and behold, all of the chains today, including the stable coin specific ones, none of them have production shipped privacy. All of them have it in the road map. And we know what that means. Um, who who are people going to turn to? Yeah. Right.

They're going to turn to pay. So, let's talk about the privacy aspect then on like a how does a when you when a transaction happens on pay, right? like I was I was at the event and I I paid for some swag. Yeah. Um where does the where does this ZK technology come in and like what is the transaction life cycle for a pay transaction for a just like a typical send that is like pretty much an emulation of like a like a Venmo send or like a or like a cash app send. How does that transaction life cycle look like? Yeah. So it's like fundamentally and foundationally different from something like Venmo or Cash App, right? So uh in pay wallet um the first thing that we do when you send

some money is we generate a UTXO proof. So pay network um that I mentioned is a is a UTXO based uh blockchain similar to Bitcoin um the UTXO data that actually represents your money never leaves your device. Right? So unlike all public blockchains where you sign a transaction, even Bitcoin, you sign a transaction and then you send the full data on chain to be verified, in pay, the only thing that you send out of your device is a proof that you did this UTXO transaction correctly. So that transaction basically says, I'm moving money from my wallet in Pay to an ephemeral wallet, which is the link that you send to the person you want to pay. And we

embed the private key of that new ephemeral wallet in the link as well. So when you get the link, let's say you text someone the link or you put it on Signal if you're really privacy conscious, uh or you post it on Twitter, uh the first person to get that link now has UTXO data and the private key to spend it. Now when they tap it, they essentially generate a new transaction which moves it from that ephemeral wallet into their pay wallet. Right. Okay. And so that that aspect of the of moving it into the ephemeral wallet and then out of that is the there's privacy baked into that component. Yeah. So there's a couple things. First, the privacy happens because the value of the transaction. Yeah. Uh and the sending

and receiving addresses never leave the device. Um and actually the the link has some level of conceptual privacy in it, but really like it's just another transaction, right? It's just a a middle state for that money middle wallet to that money to stay into before it goes into your wallet. Um, but what that fundamentally allows us to do is to not have a new uh essentially social layer for payments. What what do I mean by that? So, today on Venmo, it's a new social layer, right? You have a Venmo address, right? Um, even on chain, you have an address. It's a new layer that connects people. We said, "Actually, you already have 50 social layers from all

the apps that you use to communicate. Why build another one?" So, what what the link does is allow us to overload all of these existing layers, but you get to choose which one you want to use, right? Yeah. Do you want to use WhatsApp to send the link? Do you want to use Signal? Do you want to use email? Do you want to use fax? Yeah. To send that link. It's your choice. And and that that's really really powerful. But doesn't that just seem like it's going to be more work to send payments? Like wouldn't it be easier just to click like a username within the app and then go there and send you that rather than have to send it a link and then other person has to click the link like like the act of claiming the payment on the on the recipient side seems uh seems kind of

counterintuitive to like the entire idea of it being seamless. So if you look at the number of taps so this is the UX studies that we do in pay. We look at number of taps to accomplish a goal. uh using pay has like less than 50% sometimes around 20% of the taps that it takes you to send money on Venmo or Cash App or even on Chain, right? And if you do if you use a pay experience, you'll see why that is. You don't have to type in anything other than the amount. Yeah. Exactly. Right. And then you just send it send the link to who? You don't have to scroll and find a username and then be like, "Wait, does this username actually match the person I'm trying to send it to?" I see what you're saying.

Oh, is that is that profile picture? Wait, that doesn't look like that person's profile picture. And then when you have to like verify the last four of their of their phone number sometimes and stuff like that. Even people that I pay monthly, they don't show up in the list because I've paid other people or there's some weird algorithm of ranking. Anyways, these are all problems that come with trying to create a new social network just for payments. It's useless. It's futile and it creates more problems because then you have to have login. Yeah. You have to have recovery around that. You have to have all these things in pay. You open the app, we generate your wallet, you literally don't log in.

It's so magical that most people don't even realize that it's happening. Yeah. People that do are like, "Wait, why didn't I log in? Why do I have a wallet already? Why is there no screen between downloading?" Yeah. You download you just get like the immediate payment thing. It's like shocking, but like that's really what we believe is the future of money, which is if I give you a dollar bill, right? There's no login. There's no KYC. There's no looking you up or using a username. I hand you a dollar. Can we build a digital experience that is as close to that as possible? There is simply no other product or protocol or platform that does this. If you can find a way to send

money to anyone in the world with less taps, it's not possible. I've looked at all of them. Yeah. That's an interesting framing for the ex problem. Period. Is taps. Yeah, I've never heard that before. Taps is because taps signifies time. Yeah. It signifies complexity, decisions, right? Cognitive load. Yeah. You don't want to make more decisions. Decisions. Exly. Every tap, every screen, every element on the screen is a decision that we have to make. And we are overloaded. Yeah. And like when I use cash now, sometimes like if I'm buying a dollar slice or whatever and they don't accept uh card, it's actually way more fun experience. Yeah, you just pull it out, you give it to them, you're done. So, we had um some community

pretty near and dear to the Ethereum group uh Tornado Cash unfortunately were uh building something different than pay quite different ended up being a mixer for uh basically like funds that were exploited from different exchanges etc. But but but the core idea was around this immutable privacy idea which is strikingly similar to what you guys are trying to do from the payments perspective. H how do you guys avoid a different outcome uh from the regulatory side than some of these previous privacy companies that have been basically completely shut out by um different countries and legislators around the world? Yeah, I think it comes down to the DNA of the people that are working

on specific projects. For us, we are not anti-govern. We are not, you know, like cipher punk. We are practical in terms of unlocking those daily use cases. So, Tornado Cash was built from a principled and frantic like like pretty pedantic perspective, which is good because that's how you build these truly decentralized protocols, which you need at a fundamental layer, but you have to have some level of practicality when you build these things. And so, pay fundamentally can't be used as a mixer. And when I tell this to people, it creates kind of an

oxymoron. Like you have this transaction privacy, but how is it not a mixer? So I have to explain some like cryptography to explain like why this works. Hopefully it's not too in the weeds. So what we shield and what we keep confidential is the sender, the receiver, and the amount. In our white paper, we describe what we call proof of transaction lineage, which is we keep some data, some metadata around the lineage of a particular UTXO note. Now, this gets into the details of how UTXO works, but essentially in your wallet, let's say $100, that's represented by one or more UTXO notes.

Those notes have parents. Those parents are all the people that have sent you money in the past. Or if you've onrampmed from fiat, it's wherever that note came on initially from the fiat side. If you've bridged in from another network, it's wherever that came in from the public network side. Let's say you bridged in from Ethereum, right? What we do is we store metadata around the original depositing address or in the future some fiat side ID as part of every UTX. So note that gets passed down as you send from person to person, right? What that does is at the time of off-ramp, let's say you're off-ramping through Bridge or you're offramping through

Coinbase, what do they want to know? They want to know that this money didn't come from some hack, from some North Korean group, from uh a theft. Um, and so at the very fundamental, they want to do some blacklist checking. Yeah. What we allow them to do is to send a specific function, a circuit, a calculation over your UTXO notes that are private that they can send to your device. Your device can generate a proof that says, "Yep, my none of the parents of my transactions have come from these blacklisted addresses." Yeah. And you can send that proof at the time of off-ramp.

Now this sounds similar to privacy pools in some way but it's very very different when you look at the implementation. Uh B it's uh it's practical and it works and we've built the idea of this infrastructure layer on top of that that allows us API access to fiat on and offramp providers. Now this is not implemented yet and we're talking to partners on what exactly that final version of the API looks like but it's extremely flexible. You imagine you go to other countries or other institutions, they have different rules that they want to apply. So all of those rules can be encapsulated within a ZK proof within a a circuit and sent real time at the time of off-ramp. So there's

no depositing into a pool and then proving something to pull out. There's no idea of like there's some pe, you know, you want to make sure the only the good people are in the pool. There's nothing like that. You get to prove for yourself based on your transaction lineage. Got it. So, it's almost like this this uh you know like ancestor.com, right? It has like all your ancestors. Yes. It's like this tree of of like where where you came from. Yep. It's like a similar That's a really good way to put it. I'm going to use that from now on. Okay. So, it's like ancestor.com for where you're when you're trying to offramp. Then it's then we you can basically prove that that this has not came from any you know malicious sources. And then that allows you to navigate the legal kind of framework as

you whatever happens in the future. Right. Right. Yeah. Yeah. Okay. So the the the next, you know, kind of problem that that I'll present is is getting people to use this thing. Yeah. Um that's going to be that is probably proven to be difficult thus far. Um I'm curious like like who's using pay now? Why are they using it? Where are they using it? And then how do you plan to like 10x this? Yeah, I think it's a really interesting question because in crypto you have basically two fundamental reasons to capture markets. The first one is provide real value to people. Um the second one is like incentivization, right? The incentivization unfortunately is usually not very longived. And so we really care about providing real value to people in

their daily life. So what we're building is a suite of products that essentially allow you to replace your bank account. Now, there's a lot of features along that journey. So far, what we've shipped are all the features required to be, let's say, a crypto Venmo. Yeah. So, peer-to-peer payments. Now, all of my friends and pretty much everyone I meet at crypto conferences and events when they want to settle some payment, let's say at dinner or Uber or whatever with some friends, they use pay. It's simply the easiest way to do that. But that's just crypto people, right? Now, we're expanding outside of that. How do we build a seamless experience that replaces something like Revolute or Wise or your Chase or Bank of America bank

account? Yeah, that requires some fundamental features. The first one is fiat on and off ramping. Now, this is not the same fiat on andoff ramping that something like Moonay does, right? Because Moonay specifically is used for the use case where essentially you want to like use your credit card, get some money on chain quickly, and buy a memecoin, right? That's where they make most of their money. Um, when there is such a big upside that people are looking for, they're okay paying 5% fees to on-ramp funds. When they're trying to move funds from their bank account to another bank account, i.e. pay onchain, there should be no fees because you're not going to pay 5%. Yeah. And that's actually a fundamental reason why nothing like this has ever worked, right? No one in their right mind is going to pay money just to move dollars

into USDC to basically just sit there and be not used for a 10x kind of scheme. Uh so you have to make on-ramping free. Now we've negotiated contracts with fiat on and off ramping providers and we haven't launched this yet but I'll mention it first time publicly here. We're going to have zero fee instant on and off ramping via a in the US. that's coming very soon. That is fundamentally new. It's not subsidized directly the way, for example, an exchange is. So, when you move money in and out of Coinbase, they subsidize that transfer because they make money on your trading fees. Now, a lot of people have started just using them as fiat on and

off ramping. If too many people use that, they're going to stop that because they want to make that 6% spread when you buy Bitcoin, right? So, we're doing that in a pure form directly from your bank account to pay. That means you can put your direct deposit directly to go into pay. No, no slippage, no loss on that transfer. Yeah. Um and now you can start using pay as your bank account. Yeah. Um so where is this being used today? Um our biggest user group right now I mentioned is crypto, Twitter, privacy focused people. Recently we've done a soft launch in Argentina. Uh we can connect to Argentine Argentine bank accounts. we can move pesos into USDC in the cheapest, fastest and simplest way

possible today that exists for them. Uh and then uh they can then use that crypto in their use that USDC in their daily life. So is your plan to expand maybe more globally than than in in the states or is it is it more of a USA kind of focused path? The question is what problems can we solve for people? Right. Right. So when I talk to people in the US, um, one of the biggest problems that they have is around these peer-to-peer payment apps that everyone loves to use, but if you're a power user, they become quite annoying. So let's let's think about that, right? The example I gave earlier of that person that's like a leather craftsman, he fundamentally has a problem where paying vendors or receiving payments is a challenge. If he

wants to do that, he needs to use like Stripe or something like that. Now he's paying fees. There's delays and getting paid out from Stripe. Uh and then fundamentally like those are platforms that can be frozen and they can get debanked. People can get debanked from that. So that's a problem we want to solve. Now if you think about replacing Venmo for paying friends um maybe possible, but the draw is much less. And so we need to think about what fundamentally that draw is going to be. We have some ideas um and some campaigns we're going to run around that. But really it's just these fundamental problems with money that we have today um in any country. As I was saying prior to the recording, there's uh there's a lot of private banks that wanted to launch their own stable coins at the stablecon event um yesterday. And and it

was interesting like the way that they were thinking about it because some of them were operating with a lot of foreign national clients that wanted to uh you know that would be using these stable coins either way. Um and you know they basically didn't want to get their business left behind. Some of them are offering uh chance to offer yield back to their clients and such. I'm just curious like you know hypothetically what would it look like for pay to launch its own stable coin like like is that viable from your unit economics and perhaps this is a good time to kind of get into like how you guys are thinking about uh you know revenues and and business model kind of like more mid to longer term innovating finance global institutional and onchain deep liquidity

to drive capital efficiency now maximize yields on institutional ate liquid staking with me. Unlock trillion dollars of capital via Fitbitcoin. All of this secured by Mantle's treasury of billions in stables and ETH capital pools. This entire ecosystem is coordinated by a vast network of seasoned VCs that are aiming to create the next generation of banking and financial technology. This is Mantle. Tired of multi-chain headaches?

You need Omni. Omni makes being onchain feel like you're online. Perform any action on any chain in less than 2 seconds. It's all powered by SolverNet. Omni's breakthrough SDK for crosschain speed, scale, and cost. To kickstart adoption, the Omni Foundation is offering $10 million in rewards for solver powered apps. Start earning today at omni.network. Another thought experiment. Yeah. What happens when every bank has a stable coin? Sounds fragmented. Sounds fragmented. Now you have liquidity problems. Maybe there is some version of this where you can have zero slippage transfers between these tokens. We've

already seen some version of this happen in crypto. Uh but then you have all the chains as well. Essentially, what happens is consumers will no longer care about what stable they're holding. Yeah. They just want it to be stable. They just want to be stable and they want some level of trust around it. In fact, even that is shaky. People use USDT. Most adopted stable coin outside. I was telling some people that stable con thing like in 2016 2017 USDT was totally unbacked. Like it was completely even now like it's unclear hot take. Uh well you can go on go read circles transparency reports. I think every month or every two weeks they publish like a EY audited report. or I don't know if it's EI but yeah legit audited

report that I can trust and that institutions can trust right if you go look at circle's transparency uh uh Tether's transparency report I did this six months ago it may have changed all I'm just going to give my experience of what I actually did uh I went on there it was spotty some months they put it up some months the link is broken some they just skip some months right like February is missing we don't know why but it's just not there this is my experience again I'm not trying to fud I'm not trying to like say anything. I'm just trying to give the facts of what I experienced. Um that kind of thing fundamentally is going to cause problems. Yeah. Um now all the US backed stable coins and even like maybe the EU backed uh like Euro C type uh stable

coin competitors uh they're going to be regulated now through the new regulations that are coming out. So that's going to be much better. But even then like we're not going to care what stable coin we're using in pay. If you look carefully, we don't mention the stable coin. It's just a dollar sign, right? The ticker is dollar sign. Yeah. Yeah. Yeah. Yeah. But is it USDC underneath? It's USDC underneath right now. Um we've built a a configurable model. Yeah, it is just a dollar sign. You just get It doesn't matter. That's the whole point. Okay. So, let's go back to the Okay, so every bank launches stable coin. We're getting into kind of like this thought experiment about whether it make economic sense for pay to launch a stable coin or you know and that and it's also peing my interest as

to how you guys are going to make money and like be you know build something sustainable longer term. Pay stable maybe maybe not. Yeah. Right. Um we can easily launch that today right there's so many providers to do that. Um does it fundamentally benefit us in any way? Um maybe right we get some yield etc. Um, but until you're at like massive scale, you know, we're not trying to earn like a little bit of yield here and there to add extra risk or complexity to the architecture um to where we can move in the kind of features we can build, right? USDC is the most liquid um you can we can use anywhere we can do all kinds of strategies with it. So, let's

keep that right now. The question is pay network itself, right? As a sovereign network, where do we generate fees? All the transactions are gasless. All the fiat on and off ramping is free or basically pay network does not take any additional fee on top of what ramp providers charge. The revenue for pay network comes from future features in yield or investment strategies uh that users will have access to. So if you can imagine the first one that we are going to launch is treasury yield on chain y but make it accessible and democratized for anyone in the world to instantly get US treasury yield that does not exist today. So in Argentina I'll be able to

download pay hop on get get some dollars in there and then get it into a yield vault essentially. Number of taps including typing your name for KYC and all that stuff. I was going to say you have to do KY KYC then, right? For any fiat related function, you have to KYC. There's really no way around that. So, if you want to move money from a bank account anywhere in the world, you have to KYC. Um, so if you do that in Argentina, number of tabs is going to be the least that anyone has. What does that mean? It's the fastest, simplest, and easiest way, and it's also going to be the cheapest. Once that money is in pay, it's literally three taps and a swipe. Yeah. To get treasuries. Yeah.

Right. How do you make that happen? That's the secret sauce. How do you make that that happen privately? Because you don't want people seeing how many treasuries you own. Yeah. Yeah. Um that's a that's a question we're answering. Uh and then of course pay network takes a cut of that. Now when we have advanced yield strategies, you can start, you know, borrowing, lending, lping, staking, looping. uh as you build up your sophistication as an investor, we'll enable more and more features for you and pay. Um and then there's more and more money for pay network to be made at that point, right? Um we'll also have other tokens on pay, so you can swap into BTC, eat, soul, uh alts, memecoins, whatever. Um and you know,

really that's where the most of the the the money is made. Um and so really like what does that start looking like? It starts looking like a real decentralized exchange. Now, I don't mean a DEX, right? A DEX today is like onchain contracts and a UI to use them. What I'm talking about is Coinbase or Binance end to end everything that they do fully on chain. And of course, Coinbase wants to do this on base. Yes. Um, and so there's obviously going to be competition there. You have Robin Hood coming in. Vlad is always now talking. He's like shilling stable coins in crypto now suddenly, which is great. They've always loved crypto, but like now they're really into it. Um I recently got invited to their event in Khan um where they're going to

be launching some of their new crypto products. Okay. So excited to see what they're going to do there. Um but uh fundamentally the question to Robin Hood will be let's say they use OP stack. I don't know I don't know anything about what they're going to do for their infrastructure. Um but let's say they take an existing stack and they put Robin Hood users funds on there. Now it's great. You can do 247 settlement. Super easy. Send it anywhere. Uh except now everyone in the world knows how much money Robin Hood customers have. Yeah. How they're using it, when they're using it, how much money they're moving in and out. It's fundamentally broken. Yeah.

And they cannot launch something like that. Right. So when Robin Hood wants to launch something like that, the question is posed, what infrastructure are they going to use? Later this year, we're going to open up pay network for others to build on top of. You can put two and two together there. Yeah. So that's really kind of like the the plan for pay is to be the best place for anyone whether that's crypto companies, fintexs, banks, whatever to come and build a truly non-custodial uh onchain experience um but not basically make it all public. Yeah. I'm curious on that lens like kind of in the Robin Hood uh you know theme there has your has your roadmap or kind of

personal and business plans change as the you know more positive legislation has happened over the last three three to six months in the states and then also just the rise of institutions wanting to come into the market. Whether it's those two things or is just something more broadly is is there an example of some kind of uh external circumstances that have uh changed your direction and focus at pay in the last 6 to 12 months or so? Like fundamentally no. Okay. You just been like tunnel vision for the last two and a half years. The only thing that I've cared about is being able to close my Chase bank account. Yeah. and bank onchain and just slowly and surely and linearly

we've been cranking away at the feature set that requires that to happen, right? I wish we could do that today, right? I wish I could have a bank account on Ethereum. I wish I could just use some L EVML2 and just be like, "Yep, I'm going to move all my money on chain and and use that." And people have been wanting to do this for over a decade. Yeah. Yeah. And granted, it's a graveyard of projects that have tried to do this and failed, right? And so for us, the question is how are we fundamentally different? How are we approaching both product and marketing? Um, but no, like nothing has changed in the last two years. Like dude, last year, you know, when we talked to people about a payments blockchain, they were like, really, really, one more payments chain,

stable coins is so cooked. Yeah. No one cares. Yeah. Right? And like that's crazy to think that that was just like maybe eight months ago, maybe even six months ago, right? Just January, February is when that conversation started changing with the change in administration and a few other things. Um, and who knows, that pendulum may swing all the way back. Yeah. No, that's not going to change what I fundamentally and what my team fundamentally cares about. And like we will make onchain banking a thing or die trying. People are saying that we're going to have a a you know maybe a 10x here in stable coin supply. I think it's we're we're around like 250 billion total outstanding and people are calling for 1.5 trillion to

two trillion um maybe by this time next year the end of 2026. Um like where do you think there are going to be clear like so winners are often found by finding inefficiencies in in markets creating a product for that and then you know dominating some market share if stable coins go from where they are now in a 10x growth who's going to be the biggest winners and whether they're companies or brands or what parts of this kind of stable coin supply chain or actually heard a guy call a stablecoin sandwich the other day at the stable convent which I had neverard heard about which which parts of this kind of payment infrastructure stack are going to be the the winners or which brands are going to win big? It's a good

question. I think all the big brands so far um are first movers and so they're going to have staying power because of that. But if you think about it like why would someone like let's say let's take circle for example um want to keep giving circle all the yield right that is being earned on stable coins. Yeah. Right. So as the uh more people move in and more banks start to think about this more businesses that's going to be a hard market to be in. Now circle of course is strategically doing a lot of things to combat that. So, Interop Seamless moving from chain to chain. Um, they recently just last week in mainet

launched circle payments network. Uh, so it's a network of on and off providers so they can move to fiat easier and things like this. So, I think they're doing great stuff and they're really smart like awesome team, right? And they've been in the space for a very long time. Others, it's going to be hard. A lot of like yield bearing stables are going to have a challenge uh of competing, right? We're competing on like BIPS here. Yeah. Um, and the the moat is actually not that big if you can have low slippage slippage swaps and move them from chain to chain. So that's that's a hard like vertical in this space. Um, what I believe will have the most staying power is people that find a very specific use case and solve it end

to end. So recently obviously trade finance um is really important. It's a quite a simple use case in many ways because you just need to maintain two accounts on two sides and as trade happens uh reconcile and balance those accounts. There's complexities. I'm oversimplifying. Um but if you can have instant settlement and trust on those two things that's already a move up from the way they do things to using swift network or whatever. Um then it becomes okay what are the off-ramping and on-ramping challenges for that? Can we do that at scale in bulk with very very low fees?

Um, and the answer is yes. That's that's being worked on as well. But those providers are going to have a problem with a race to the bottom in terms of fees, right? Maybe like a year ago, people were competing at, let's say, like 20 bips. Um, now that's gone essentially across the board down to 10. Uh, even five at scale. Uh, and even less. So people are going to be competing on like that one bip of moving money on and offchain at that point like your scale has to be bank level in order to make any kind of money and even then it's like might be kind of annoying to have this business unless you have value added things around it. Um so that's going to be tough at the end of the day it's like go solve something for a

person or a business that you can point to and say this person is getting a benefit because of xyz reason. Um what we're doing at pay is methodically going hearing stories from people and now starting to see small businesses as well exactly what problems they have and then solving them one at a time. It doesn't feel like this super hype thing, you know, as like, you know, I could be out there being like, "Oh, use pay network for aentic AI and and all this stuff, which at the end of the day is just exposing pay network on an API and now you have actually the best agent AI payments network cuz it's private." And I bet agents don't want everyone else to see what they're doing. I don't know the mind of a transformer LLM what they're thinking, but they pretty probably don't

want other agents to see what they're doing, right, in in the dystopian future. And so I think all of the narratives are great but fundamentally need to be able to point to someone and say why are they going to benefit in their life in their business from this payment. If you can do that I think there's tremendous opportunity as the space grows to you know one trillion and and more. If we can't do that then it's never going to grow because why why would I want stable coins if I'm not solving a problem? It's just annoying to go from fiat to to onchain sometimes.

Yeah. So, so these these like niche like whether they're regional communities or uh um uh niche specific industry problems where there are cuz like right now what you're saying is there's these incumbents that are tackling the general problem of stable coins or the general industry but there's tons of like little pockets of opportunity that you know Circle and Tether aren't going to go and like insert themselves in because perhaps it's not even worth their while. But if you can be that person who who dominates that Yeah. you know that niche across you know couple different markets then it's a pretty big opportunity for a small company basically. Totally. Yeah.

Okay. Totally. And and and you and think about the like the actual mechanics of the go to market here. Right. So let's say I want to solve a like trade finance between like two particular countries. Right. Right. Um, I go in, I talk to the companies in that ecosystem, whether that's the actual manufacturers, uh, the middlemen, the freight forwarders, the, uh, FX people. Um, I have to get all of them aligned. They're already all aligned on using dollars. Right. Right.

That was a fun like globalization happened because of the dollar. Yeah. Uh, and other things, but the without the dollar and with a fragmented currency ecosystem, it would have been much more difficult. So, how do I get them to align on dollars on the blockchain? Yeah, it seems like a small uh step. Um, but operationally it's it's very different. Um, and so a that has to do with the UX and the user interface. B, it has to do with building a trusted brand. So, having USDC for example in that case is a very good trusted brand.

um because now these all this ecosystem of companies has heard about USDC by this point or USDT. Um but really you know the bank coins actually have a much better chance here right so a global multinational bank um and their stable coin is actually much better positioned to win that particular use case than circle is. Yeah. Uh which is why that's going to be a tough market. Yeah. But if I can do that, build those interfaces and talk to all of those people, now I can lock them in pretty much forever from dollars to this new platform. Um, so I think a lot about the mechanics of like, okay, actually have to go out and talk to the CFO at this company, right?

What is actually what is it going to take? What are the sentences you have to tell this person that aren't what you're tweeting about? They're not what's on your slide deck. They're fundamentally different from that. And I think a lot of people have trouble going from narrative building, slide building and tweeting to what am I going to say to the CFO of a freight forwarder. Yeah. Or manufacturing business. It's so different. Yeah. Um but if you can bridge that like you will become a billionaire. Yeah. In the next 10 years because so much money is going to flow through that system. So, the last thing for you, what's the uh what's the most pressing items on your uh docket here as far as looking ahead for the next couple

months for pay? Uh we have a couple big launches coming um in the US in uh global crypto space as well. Uh so, just ramping up for a lot of those. Um you will definitely see them. Um they're going to progress our vision of an onchain bank like tenfold from what the features we've shipped today are. like it's going to be fundamental. Um and then we are looking at uh pay network itself. Um we've gotten a lot of inbound recently of people wanting to use pay network um our fiat on and offramping infrastructure. You know people come on and they apple pay and they get money instantly on pay wallet and it's truly the most magical experience people have

seen in crypto in a very long time. Um and a lot of inbound from that. Uh we have not opened that up to others to use yet, but I know a lot of people want to use it. Um the bank ramps are going to be a part of that. So one thing we're doing is building all of the fiat infrastructure directly into pay network, right? So imagine a blockchain. You have all the transaction stuff, account abstraction, gas abstraction. Great, fancy. Now we have privacy. Amazing. But imagine you have fiat on and off ramping around the world built in with a single KYC. Yeah.

So what we do is we actually store KYC at a at the device level and essentially at the account level and you can reuse that KYC across any fiat provider which means any new capability that we create that needs fiat uh fiat or regulatory assistance or support um you don't have to KYC again ever. It just automatically works and every other person that builds an app on pay network will not have to KYC. Yeah. Because those users already KYC. That is a true mode for a blockchain, right? Not just here, I spun up an L2 and there's some tweak that I made and there's some points campaign around it. This is a fundamental innovation on what it means to be a

network. Um what it means to be a stable coin payments network. You don't have to go sign those contracts with a 100 providers. We we're doing that. Yeah. And let me tell you, it's painful. It is like six months, right, to negotiate that contract to validate due diligence, all that stuff. You won't have to do it. That's going to be gamechanging. I'm very excited for that. But there's a lot of work to do. Yeah. Listen, thanks for coming out, man. It's been a pleasure. Um I'm very excited about pay. I've got the app. Been using it for a while. Um, and I'm excited to see this this idea of actually being able to go on a phone app, have the entire capabilities of of a Binance, of a Bybit, or of like a Chase Bank or Wells Fargo allin one, kind of following

the same ethos that we share. Props to you and thanks for Let's do it. Let's do it. Let's go. Thank you. All right, man.