How Plasma Plans To Win The Trillion Dollar Stablecoin Battle - CEO Paul Faecks

Transcript

what at scale means now I think won't mean at scale in two three four five years basically and so these are kind of going to blend together into this whole broader landscape of this tech stack how do you think the landscape will change the way in which you're seeing these competitive forces evolve welcome back to the rule 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 chain chamber and taking it to the real world.

Here we go with Paul. Welcome. Good to see you. I I don't know. Like I'm I'm looking at my own video and I do look quite tired, but it's good to see you guys, man. Talk to us about the last couple couple days, man. How's it been? It's it's it's been intense. I mean, the the the entire week was was intense, right? because there's so many so many moving pieces in involved in in kind of launching a launching a chain, not launching a network because in in the end you're dependent on like so many external variables that are like not fully within your control. And so it's it's been it's been a very intense week.

Um it's uh knock on wood, so far everything um has has has gone well. Um and and and we're very happy, but um I mean everyone was quite exhausted yesterday night for sure. Yeah. Yeah, man. Well, the most strenuous part seems to be by you now. Is is that how you're thinking about this? No, not at all. Um I think the the the most strenuous part is is ahead of us now. Um, I mean, we um we announced the the the Plasma 1 product obviously pre um pre pre-launching the the chain and and working on on on that and and it feels like I mean this is now basically like the the the beginning of of actually of actually kind of truly building what we've always set out to to

to to build. Um, and and obviously the the chain and the DeFi ecosystem and and the exchange component and all of that is is a is a massive is is a massive component, but but god we have a lot of things to to to do in the next years. Paul, how old are you again? 26. I'm 26. Yes. Yeah. Just like me. Crazy man. Um, yeah. Well, congratulations. We we know the struggles that you know happen in mainet launches. It's not easy. We'll throw you some confetti. We want to kind of understand your vision going forward, how you're thinking about the product line, how you're thinking about the chain. Obviously, there's a lot of activity uh on plasma already due to the pre-eposit setup. Um, and I think one

thing before we kind of move too far looking ahead, why did you guys decide to do the the structure around uh this kind of like XPL allocation to people who who deposited that has gone viral? You know, the whole if you did $1 into the chain, you got $10,000. Now obviously people didn't do that exact thing and ciate you know at scale but a lot of people got rewarded and I think you avoided a lot of the FUD that comes with these kind of mechanisms. How did you guys pull that off and why did you guys choose this way to kind of reward comm uh the plasma community and the plasma collective?

Sure. I mean I think for for us uh and and and I mean I think this is somewhat in line with how we how we've operated generally right where I mean the public sale on on like very clear very kind of transparent kind of parameters basically um anyone could participate um and and and and we like for us it's it's been important to kind of go to market in a in a capacity where like participation is is is possible um basically um and and Um um I mean Nathan, who you also know extremely well, who who's kind of leading the the the stable coin collective um side of things, who's been absolutely killing it on on on that, by the way. Um and and like I think we've

always wanted to like in the end this is a massively communitydriven effort, right? Um, well, like a stable coin chain specifically is is is something that you want people to be excited to to use and and you you want to like actually like it needs to be grassroots basically um for it to to kind of truly work and and have value. And I think um the the the decisions that were made on on on on kind of token allocation and token distribution I think I kind of fall within that ethos basically. Well, I hope you know it's a consensus that this has been the best launch of the year, if not the cycle. So, a little pat on your back for the efforts. And I think people were excited about seeing

the rewards come in and being like, "Okay, cool." Like, they actually thought about strategically how to kind of uh keep even let's call it like the smaller fish happy and keep people, you know, wanting to be a part of the network. Let's talk about some of what's actually happening on the chain right now. There's some amazing yields on a Athena uh Athena's USD. There's looping going on. There's XPL rewards. You know, I think the the main thing people want to know is where are the best places to get yield on plasma now kind of how how does that you know ecosystem looking? I just kind of gave it gave some uh answers there with ALF or with athena.

And then I mean my question is kind of like how are you thinking about the sustainability of the of the yields on plasma with regards to XPL token rewards? Uh how do you want to kind of turn this into something where this isn't just like a farm and dump scenario. This is a kind of a longer term uh community who wants to participate in DeFi on plasma. So maybe you could just unpack the the kind of uh current happenings and and how you're thinking about it. Sure. Absolutely. I I think that that that's a very that's a very valid question, right? I mean, I think you do have plenty of examples of of these kind of very large private deal TVL for higher uh massive default DT5 kind of pre-committed TVL and and then kind of

nothing happens. And I think we're very conscious uh of of of kind of that and entire complexity of it. I think for us we we always know that like distribution is is is absolutely key to to actually getting getting kind of basically omniresence which you kind you need omniresence as a as a stable coin uh network right because I mean the word network is like you need as many nodes in in the network as possible for for for it to have value right I think one thing that actually people may may have missed because it was right right before launch um is is our kind of pretty substantial um and and and expanded Binance earn um partner partnership where um users in Binance um which we're doing together with a who we love

working with and they're valued and fantastic partners of ours um and and and I mean Binance has 280 million users and and they can now deposit into a on plasma um basically straight on on on exchange which I think for us is a is a massive unlock and so in general we're looking for ways to kind of get to very large scale distribution to kind of make onchain money markets basically usable um for for for anyone that kind of sees sees value in it. And I think that to to an extent you need to kind of branch out from just the cryptonative mercenary pharma com community uh because that doesn't scale infinitely well and then they're quite fickle and then so you

can't really build an entire strategy just around that and then so um that's something we spend a lot of time on. something that actually sorry I'm I'm um don't want this to seem like I'm answering a fully different question than than to bring to bring this back to to to Fasma DeFi and and how and and why it's sustainable. Um I think a big component of of that obviously is you need true organic usage, right? that that that isn't that isn't paid for and then that that isn't um that that that isn't just pure incentive farming, but but you do need wide distribution and kind of real demand to to to use to to to use um the chain to to to to an extent and and then so I think that is

uh that is something we we've done pretty well at um and and it's something we continue to be very focused on. It's been a unique strength like th this is something that chains go live and they launch their token then they start thinking about their ecosystem they start using their token as a way of incentivizing liquidity you guys were able to do that before the token launched it I guess what what did you guys have that others don't and the best team in crypto and and so that's a moat like my next question was do you expect other teams to now try and replicate that But they can't get your team.

Yes. I mean, look, I would hope so. Um but uh um otherwise I would need to have some certain conversations. But um um in in in the end, I I I tr I mean, I truly believe that we have a like truly incredible team. Um and and and um I think whoever I name here wouldn't do kind of because I couldn't name everyone basically. Um, but I mean specifically Lucid who's the best crypto co on on on planet earth and and um and and and Nathan is fantastic and Vinnie is killing it and um like I'm sorry I'm starting to name people here um um because I'm definitely going to miss some but um I I truly think that is a massive massive mode. Um, and and and and I think having incredibly sharp,

very long-term oriented people that actually kind of want to build something of value, I think is is truly the greatest mode any company can have. Beautiful, Paul. Well, Paul, then uh on the on that note with regards to thinking about how others are playing in this game, I had Jeremy Aair on the show last week and we were talking about how circles think about ARC and their chain as well as just the broad USDC distribution strategy. Um, you know, there are now, uh, several other players from the likes of Stripe, from the likes of Circle, from from, you know, also within Tether that are trying to basically attempt to be this stable coin uh, transfer layer for the world. I mean, when we look at comps, we're

thinking about Visa, we're thinking about some of the largest payment processors in the world who have market caps of, you know, 50 plus billion dollars and, you know, process trillions a day. And so when I was talking to Jer Jeremy about it, he thought about this in the lens that you he wants USDC to be everywhere. He wants it to be in every in the same way that Netflix is on smart TVs, smartphones, smart, you know, fridges. He wants USDC to be everywhere. Now I assume Paulo clearly has that same philosophy and has executed on it extremely well in a global setting. when it came to ARC and the chain thought process, he mentioned that he looks at this as the evolution of kind of uh web 2 technology where you can use Google

Chrome on your Apple computer. You can use it on your Apple TV, you can use it on your iPad, you can also use uh you know a streaming service on a LG TV or a Samsung TV or a uh you know a Google Chrome Chromebook can use Apple products etc. So he kind of made this analogy and an about how these are kind of going to blend together into this whole broader like landscape of this tech stack and he had this really grow the pie mentality. So I want to pass it to you. When you're thinking about this stable coin chain wars, if you will, how are you thinking about the competitive landscape when it comes to plasma being the category leader, being the first to market, you know, what is your edge and why why in

in the scope of this kind of grow the pie mentality, do you feel like plasma is going to contribute heavily? Sure. I mean it's it's a complete meme to to say this but I think stable coins are kind of truly at the at the kind of beginning an inflection point to to an extent right but I think I mean you now have 260 270 billion in in outstanding mm stable coins um we say trillions a lot um I think that is going to be trillions um and and so I think like you do have a kind of massively expanding pie um and and and so I truly think um that like the the vast majority of stable coin growth is is basically in the future and and and not not not not in the past. And I think that that's kind of a a massive component of how we

think about how we think about competition. It's changed a lot how how we think about that, right? Because I mean for us when we started um the the the question wasn't basically how are you going to compete with Stripe? But the question was basically why does any of what you're doing here make sense basically uh and and and why why would stable coins need a chain and and why is this interesting and just use Ethereum? Um and and then so it's it's it's it's been very gratifying to see how how kind of the the perception of what the competitive forces we have to deal with ho how that has changed and I think that that reflects reality right but I mean we we do now compete with um um Stripe which is one of the largest payment

companies in in in the world and I think in the end I think we're going for different things and I think that that there's kind of different approaches here um and and and and so I think that's probably kind of I don't actually even think super competitive with tempo directly. Um and and and and and so um I think it's it's going to be an absolute kind of war to to to really win this at at at massive scale and no one has. I like I I I truly I don't think Ethereum and Tron have have won at scale because I think um what at scale means now I think won't mean at scale in two three four five years basically. And so, um, I do think you will have stable coin chains with hundreds of billions of of

of stable coins, um, on them and like truly kind of trillions moving every day. And I think that is the future we're building for. And then so we try not to get into the kind of pettiness of um, oh, what is Tempo doing? What is Codex doing? What is I I have deep respect for for those for those teams. I think they're very sharp and I think that they're going after different things to an extent. Introducing extended exclusively on Stark, a nextgen ps trading platform live today with 50 plus trading pairs from crypto to tradi. You get the best experience on chain today. Deposit in the community vault for attractive returns EMD compatible and engage in unified margin spot trading lending and

per trading. Another step function change in has been the in in the competitive forces that you're describing has been the acceptance of trillions and and this is part of the the US government having to finance their ch their their debt essentially and leveraging stable coin companies as a as a way and a means to to issue that debt. And so it's been the acceptance now that stable coins will reach trillions in circulating supplies. I'm curious more generally, what are the knock-on effects of of an ecosystem that has trillions of stable coins? You know, there there's been guys like Arthur Hayes that have kind of equated this to some massive multiples in some DeFi

applications, but more specifically to some of the the DeFi apps that are on plasma and the way in which you're seeing these competitive forces evolve, how do you think the landscape will change and what will it look like? what's the point A point B between now and and that trillions state which isn't I'm not even going to call it an end state because it'll probably grow from there but you know that being point B how do you think that landscape shifts from where it is today? Yeah, I think that that that's a pretty complex uh uh question. Um I'm saying it involves kind of so many layers of of of change in in in the end. Um I I have very strong conviction that like the the

the world you describe is is going to come in into reality basically and and I think we're we're very focused on on that. I think the path to to that is is um is is is going to be a complex one to to to navigate. I mean, especially in in the US, I think there's a there's a realization how important stable coins are strategically as a as a country, right? I mean, you have Scott Besson talking about stable coins kind of being one of the key strategic components of of of kind of global USD monetary policy basically because you you do you do need someone who's just a price indifferent purchaser of of your debt. And so I think um I can go into a 30 minute rant here on on like how this all is

connected to global politics and and USD strength and I'm going to sound like a conspiracy theorist. Um but I I do think that is that that is reality and I think stable coins actually do solve a lot of issues and and and provide a lot of unlock in in in many places and and the market seems to take that as a given. Now I I think my question more specifically is how does that affect the onchain landscape as these things become more and more integrated? Sure. I I I think the the lines just get blurry, right? I mean, you're you're seeing this. I mean, it's been it's funny because I mean the two things have kind of been multi-year memes that that that hadn't really happened until I think kind of recently, which is on on one hand the institutions are coming. Um and and on the other hand, the kind of

DeFi mallet of like CFI in the front and and DeFi in the back. And I think both have kind of been talked about for probably I mean five, six, seven like I've spent all of my life in crypto. So like I'm time time I I've lost perception of time but um um I I do think both of those things are now very very kind of happening in a very real way. Um and and you you're seeing that I mean Coinbase now has a has has a heel product that that kind of routes to to to to an onchain product and um Binance now does w with us and and an together. And I think you'll see more of of those types of things where I think you you'll have kind of centralized kind of trades that

that that are powered by of onchain processes in in the back. And I think that is also truly where the unlock is where I think you'll you'll have of a mix between of onchain only and and then kind of the the combination of of of tradi and and and onchain and then so um that that's something we're quite focused on on kind of um getting getting right as plasma. Yeah. No, I mean I definitely think that's the right way to think about it and that's probably why you guys really put a lot of effort into thinking about this plasma one product, right? Because when you've got this idea of, you know, what's great about this is that it's it's unsexy. It's stable coins. It's crossber payments. It's banking the unbanked. It's giving people access to a strong US dollar across the world when

they need it the most. And crypto is really kind of coming together around these use cases. Again, as we were as as we were promised in 2017, you know, I know you were around then. That that's what we were all focused on. But I think that the kind of the the core tenants of I think why why crypto has has value. I think permissionless money is very high up on on on that list and I think it just took a bit longer than than most people expected but I think it's happening now. So let's you know talk to us about the plasma 1 app and the neo bank. What is the vision here? You know you know if you could go out five years from now and you know read a headline about plasma 1 app you know what would that headline say? What's the vision here for this

app? How do you want to execute this? Sure. I think stable coins as kind of a core rail are the kind of perfect tech stack to to build something consumerf facing and and very tangible around um and and um for us on on one hand is obviously a kind of distribution wedge um and and on the other hand it it um it it kind of truly I think makes for a meaningfully better just user experience um for for someone that that's using financial tooling. I mean, as a longtime user of of stable coins myself, um, and I mean, um, I live in systems that actually have pretty robust banking, right? And that have kind of actually relatively fantastic access to to to financial technology and and and uh and

and and all of that, but I think that isn't true in in the majority of the world. Um, and and so I think you you do you can build kind of a a meaningfully better experience than on chat banking rails if if you if you build things on on stable coins. Um, and and so um that is why we're building plasma one to to to an extent also to kind of show what's possible with stable coins. I mean we work with lots of fantastic companies that that are building on top of plasma themselves and and we we don't like we're not um we're not looking to like not do that, right? because I think that that that that has immense value obviously and then so it's also a a a just kind of very tangible example of like oh you can build truly incredible

kind of products on stable coin rails as as as the core obviously using plasmo could you say a bit more about this distribution wedge because I I I think I understand the concept but I haven't quite heard anyone frame it in the way that that you just did maybe you could explain that concept a little bit and how you guys are applying it sure absolutely I think in the end I mean we're building a stable coin chain and and and that that is highly dependent on on network effects. Um you need to be omnipresent and and you you need to basically have extremely wide reach from the B2B angle to the B2C side of things.

you basically need that's actually something that that that Ton Tron excels at or or has excelled at is is kind of getting true enduser distribution and and so that is something that that's critical for us to to get right and and for us that is like the the path to get there is to have something very tangible to to actually use plasma itself basically and and plasma one is is that that's at least a component of of why we are building plasma one. Yeah, it would you say another part of it is around the UX of Plasma's chain. The way that it was designed is theoretically and you know practically far superior to that of a typical crypto UX from the Plasma 1 app uh user base. Because if I'm

thinking about users in Turkey, in Syria, in Brazil, Argentina, a lot of, you know, Tether's target markets where that's quite dominant as far as USDT being the, you know, the stable coin. you know, these these people aren't going to be wanting to deal with seed phrases and wanting to be dealing with all these different approvals and and the they want free transfers. They want to be able to send it to their family easily uh seamlessly and also safely. Like, you know, there's a part of it where they want privacy and they want to, you know, there's a beauty in maybe being able to like pull back funds.

Like, I know that's not exactly how blockchains work, but the traditional payment system has some advantages. you know, maybe maybe the UX and part of the app design uh is going to be, you know, very much focused on that or, you know, I'm no 100%. I mean, I think you're you you're a fantastic Plasma One pitch. Uh you you got I'm I'm in full support of this. All right, so Paul, I want to talk some comps. I know we just got a couple minutes. I think Visa is trading at, you know, in 50 60 billion. Uh I think if you look at some of the other payment processors uh handling trillions, they're up there. People are curious about uh how how you know XPL is going to have some sort of value acrruel is

going to is going to be able to uh be a active force in the network. A lot of people are excited about revenue and buybacks right now. That's kind of probably a flash in the pan, but still we can see that the the crypto economic systems are evolving and I think frankly for for the better. And so I'm not asking about, you know, where XPL is going to go or just more about how you're thinking about it. How how is XPL going to be a sustainable asset that people who want to comp to circle comp to uh other public stocks as as well as public companies, you know, and they look at XPL as the best way to get stable coin exposure. These are my words, not yours, not financial advice.

You know, how do you think about actually making that a reality for your XPL holders? You know, what do you have to say to them here today? Sure. Absolutely. I mean, that that is something we've we've thought about a lot. Um it's it's it's uh um I think for us it's very clear that like in in the plasma economy um XPL has has to play a very central um role because I think you don't want the kind of unis swap asks is a situation right where you have like a confusing amount of entities that like each acrue some value and like no no one kind of truly knows I think that is in in the end not kind of the the the correct path to to to take um there's a lot of complexity

um in in in this obviously and and it's something we've spent a lot of time on and then we'll kind of um I think elaborate more on on publicly as as well and so it's it's it's somewhat tough for me to kind of give give a very clear very straight answer. Um but I think that the one thing that like for us and I mean we've kind of built this entire um mumm system in a in a very community aligned way, right? And I think we will continue to to do that and and and I think that um obviously also um as a kind of central tenant of of those kind of needs to involve um the the XPL token.

Beautiful. I got one last thing for you and I think Rob might have something as well. Paulo put a a tweet the the C or the co-founder of Tether during an interview. A guy asked me as an entrepreneur my mission is bringing my startup from zero to one. You know he was citing Peter Teal's book Tether is not a startup anymore. At which stage from zero to 100 is Tether? He replied, I feel like we're still at 0.25. Our potential growth from here is limitless. So much more to disrupt through innovation, so much more to build. Once people understand the real master plan behind every single calculated action we take daily, they realize the true unprecedented potential of this company.

That's the way I often define Tether as a once in a century company. Tether is also going out and looking to raise from the rumor mill at $500 billion valuation looking to raise 20 billion. Uh in addition to that, the CFTC has approved stable coins for settlement on traditional American derivatives markets. How important is is Tether to Plasma's vision? Maybe a silly question. And then how important is this broad uh you know relationship that you have with Paulo pushing stable coins forward in the White House? How impactful is that for plasma?

I mean one thing to to say straight off the bat if if if tether is at what point 0.25 then I think plasma is at 0.00001 and we have a lot of things ahead of us and sounds bullish. Um I mean look like the the the guys of Tether have obviously kind of built a truly generational company. Um and and and have done that over many many years with a lot of kind of extremely long-term oriented decision-m and and so I think that that is something that we um we can only we can only hope to to to to emulate um as as as plasma. Um I think in USDT has has very much won the the stable coin game um is is is my view. I'm somewhat incentivized to to have that view. So So

you can you can probably discount that a bit. But um I I I truly think that is that that is kind of the the the reality of it. And so for us it was always very clear that that plasma would also be of built around USDT. I mean, we have a kind of multitude of of stable coins on on the chain and I do believe in a of multi-stable coin world obviously, but um Tether is just so incredibly dominant and and then has this extremely wide distribution mode that I think is is very very hard to replicate and and so um we we we do appreciate them um and and and and and really like working with them. I mean, I have the the deepest of of respect for for Paulo and the entire

Tether crew. Yeah. As do we. Uh Paul, my my last question is, you know, there's so much that happens on a daily basis and in in crypto and across this entire industry. That that someone might be coming across Plasma. It's a super successful launch. What's the one thing that you would want someone who's just coming across plasma to know and and where can they go to learn more? I mean, everyone can go to learn more at at plasma.to. I think one thing that I would want everyone to know is we will win stable coins. Um, and and I think stable coins are going to be one of the largest kind of just markets globally, point blank. Um, the the TAM is global GDP. Um, and and uh we're looking to to to take a chunk of it. Um, and and and

um I think that vision is is very clear on our end. I think um global commerce will move on stable coin rails and and then plasma is going to power it. Boom. Powering internet money. Paul, thanks for joining the show. Good luck. Have a good weekend. All right. Have have a beer for me in London if you get a if you get five minutes off. Take a breath, man. I I'm I'm my plan is just to sleep to be honest. So, I don't think many beers will be consumed. All right. All right. Thanks for your time and uh congratulations on the launch and to all the partners to all the investors to all the you know people in the uh collective and in the community uh thank you for your uh work lot to be done. This is a new day one. This is just the beginning.

I know that's how you're thinking about it. So stoked to see some of the updates from Plasma 1 and everything else in between. And uh we'll see you soon, man. Appreciate it. Thank you for having me on. All righty, Paul. Cheers, buddy. Perfect. Speak soon. Later.