Scaling Ethereum, Part 1: Optimism

Transcript

Hello. I'm Kido Kim, co-founder of Nonce Classic, which co-hosted today's event. I'm today's moderator. Today's panel covers the full tokenization value chain, from asset issuance to distribution and onchain infrastructure, with players who represent every part of it. Today's session will be held in both English and Korean. Nice to meet you guys. I'm Kido Kim, co-founder of Nonce Classic. And for today's session, our panel covers an entire value chain of tokenization from issuance and to the global onchain infra.

So before we dive in, let's do a quick intro about yourselves in 30 minutes. So Kyle, do you want to go first? Kyle, COO of Optimism. I'm Jaeman Park. I lead AI and digital at KB Securities. Hello everyone. I'm Tony. I'm the Senior Director of Product at Kraken. I lead both Kraken Pro as well as the onchain initiatives at Kraken. Thank you, guys.

Yeah, let's start with some recent news. Kyle, Optimism, Securitize, and KB Securities announced an MOU five days earlier. So what was that for, and why did the partners do it? Yeah, so we're really excited about our partnership with KB Securities, a great partner of ours. And what we've seen is a tremendous amount of momentum in Korea, specifically over the last six months.

And what we're seeing right now in Korea, but also globally, is that companies are looking for visibility and clarity about what's going to happen regulatorily. And there's two positions they're taking. Position number one is they're investing ahead so that they'll be ready to win when they get the clarity they need. Or they're waiting to see. And one of the really exciting things about KB is they're investing ahead. They'll be ready when regulation is there, and they'll win because of that. So we're really excited about the partnership.

Kyle explained the background of this partnership well from the protocol side. Now let me ask from the financial institution's side. Mr. Jaeman Park, why does KB Securities make asset tokenization a strategic priority? Yes. At KB Securities, security tokens, tokenization, is a major strategic focus for us. With Kyle and Securitize, we signed an MOU, and what we want to get from it is, of course, partnership and success

in the US market, but through that, the improvement and advancement of Korea's own securities ecosystem. … … Let me give you a simple example. In Korea, we have same-day delivery in e-commerce. Order today, and it arrives today. At first, people didn't realize how big a deal it was. But as people got used to same-day arrivals and their habits began to change, same-day delivery e-commerce now holds a very dominant position.

Now, when security tokens start delivering same-day cash, I think the whole ecosystem of the security token market, user experience, and user behavior will all change. In that respect, with Securitize and Optimism, we signed an MOU on the retail security token market, and I think collaborating on technical talent and building hands-on domain knowledge is very important.

Thank you. Your same-day delivery example really hit home. I use it several times a day, so it resonated. To briefly summarize for our English-speaking audience, Jaeman's point is that tokenization is not just about lower cost. It's like the same-day delivery services. We can't go back after we experience those services. Once people get used to instant, there's no going back.

That shift is exactly what's happening in global markets. Anthony, Kraken has been expanding into tokenized stocks, with recent news from both Nasdaq and the London Stock Exchange. For those who may not be familiar, Ink is Kraken's own Layer 2, built on the OP Stack. So where does Ink fit into Kraken's own chain strategy for tokenized assets?

assets? Yeah, great question. So first of all, I would say that Ink is a sandbox for tokenized equity experimentation. With the xStocks team, we work very closely with that team. And as you see, the tokenized majors is where we start. But then tokenization will progress to the long tail. So smaller market-cap equities, then commodities, then private market assets. And so those assets will be available at the start on Ink, and will give builders interesting ways to compose those assets into new financial primitives and to build new types of applications.

So it's quite important to have a breeding ground for innovation and new ideas in a place that is closely connected with Kraken and Payward. So the second reason is that, you know, rolling out your own chain through the partnership between Payward and the Ink Foundation allows for really high-quality, fully integrated experiences, kind of like the way Apple serves a very fully integrated product. So from exchange on- and off-ramping, to token issuance and redemption, to onchain swaps, and all the way to borrow-lend protocols, you can kind of build a very integrated experience.

experience. And so, Tydro is an example of that, which is a borrow-lend protocol that exists on top of Ink. It uses a ton of the existing Payward infrastructure, and relies on that upstream to allow users to deposit, earn, and borrow against equities, which is a very cool innovation. And then lastly, I will say that Ink is a portal to other chains. So we think about xStocks supporting multiple chains, not just Ink.

So it is a place where Ink can be that home base of liquidity for new chains that come online. So for example, new OP Chains that come online, or places that require a deep source of liquidity, Ink can be that place where you can bridge to Ink, you can make a swap, you can come back to your chain. And so we also hope to be a place that helps interoperability. Awesome. Thank you for explaining the structure of Kraken and Ink. How does it work collaboratively? Ink runs on the OP Stack.

So, back to Kyle. What makes the OP Stack different for institutional asset tokenization? Yeah. So large financial institutions, when they're choosing a chain, they're usually looking for three things. Number one is they're looking for trust and they're looking for a track record. On OP, in our history, we have the second most uptime of any chain. The only one that beats us is Ethereum, and we're very proud of that.

The second thing they're looking for is a developed partner ecosystem. ecosystem. And on OP, we have an incredibly developed partner ecosystem, and we can bring that global distribution that many of the financial institutions are looking for. And then third, these financial institutions, they want to have control and make the decisions about what happens with their infrastructure, especially when it comes to privacy and when it comes to compliance. And I guess I'd say as a side note specifically to Korea, as they're selecting infrastructure, they want a partner who has people on the ground here in Korea, has their engineers on the ground here in Korea, and has incredible partners like Nonce here in Korea.

And so that's a value prop that we had as well. Thank you for explaining. Since today's event is in Korea, many Koreans have joined us. I'd like to ask KB Securities' Jaeman Park an additional question. The RWA market has been growing rapidly. We see a lot of related keywords in the news. Why do you think this trend is accelerating now, this year? I think I can answer in two ways.

One is governance, and the other is productivity. Let me explain. At KB Securities, in the short term, we're focusing more on tokenizing standardized securities such as bonds, stocks, and funds. But as you said, the day will come when all real assets are tokenized and traded. So why is it gaining so much momentum now? Of course, the first is governance. There was a big boom in Korea in 2022, but it didn't bear much fruit.

That's because the system and the law didn't support it. Now in Korea, legal and institutional support is well underway, so an enabling environment has been created. That's the first point. The second is productivity. Here's how I see it. When we take the world's many things, such as art, gold, real estate, and music, and tokenize, value, and trade them, how many smart contracts and how much code and work would that take?

I think we've reached the point where that's possible. To do all of that, we'd need 10 to 20 times today's productivity in securities operations. Many securities firms are now going through AI transformation, and much of the work is being replaced by AI. So, as a result, I think RWA is showing real feasibility. Thank you. Today, with Kyle Jenke, Jaeman Park, and Anthony Xie, head of onchain product at Payward, we looked at what L2s unlock for institutions. Thank you,

Kyle, Jaeman, and Anthony. What stood out to me today is that institutional tokenization is no longer a question of technology. It's about the first step coming together, like regulated issuers, compliant platforms, firms, and Ethereum's security infrastructure. So please give our panelists a big round of applause. Please give them a round of applause.