Kraken's co-CEO on three shifts coming to crypto markets

Transcript

GM. Good morning. Welcome to the Milk Road Show, the daily crypto show that trades narratives like NBA teams trade draft picks. I'm your host, Jay Hamilton. It's Tuesday, June 17th. Today's episode was recorded on June 10th. We are joined today by Arjgin, the co-CEO of Kraken, one of the OG crypto platforms. They've been around from 2011 and today they are one of the largest exchanges and crypto platforms in the world. So today we are going to get Arjgin's take on the future of finance.

We're going to talk about tokenized stocks. We're going to talk about the convergence of crypto and strati. We're going to talk about IPOs that are happening right now and Kraken's IPO. We're going to talk touch on that towards the end. Just a incredible episode into the mind of somebody who has spent their career in finance and now sees crypto and blockchain in a way that I haven't heard it before. or you guys are really going to love this episode. Before we jump in, I got to tell you guys, the Milk Road team has been cooking and they just launched Milk Road DGEN. This is a new newsletter to help you navigate the trenches every day in a hilarious and very entertaining format. It'll give you alpha on new meme

coins, on new things that you can basically the daily gamble, the daily casino of crypto. Super fun and super exciting. The first drop just happened last week. subscribe. Hit the link in the show notes so you can subscribe today. Also, the Milkro team is going to be at Permissionless at the end of June and we're going to have our own event in New York on June 23rd at 7 p.m. Hit the link in the show notes to sign up for the event. It's free and you you can meet the Milk Road team. I won't be there, but the rest of the team will be there and love to meet you. And if you want a ticket for permissionless, you can get your ticket for $100 off in the show notes. So, check it out. Without further ado, Arjun, welcome to the Milk Road Show. Thanks for having me. Well,

as you mentioned, I am the co-CEO of Kraken and we are one of the largest um most trusted crypto platforms pretty globally. Um in fact, mostly um you know, Europe and US in terms of uh where we are mostly the chairman of Tribe Capital. We're like a ventureback firm. We invest across venture and tech. And most of the career that I've had has been in essentially building, investing, and scaling businesses across all stages, public and private, um, early, mid, and late stage. And over the last 10 years, I've had much more of a focus on innovation and finance and technology, and how those all kind of converge with each other. So, excited to dive in and dig in with you. No. Yeah, me too. Uh, one question I always like

to ask, uh, it's just more of a fun question, is when did you first make your first crypto investment and what did you buy? So, there's there's two there's two stories to that. Um, one is not as as fun, but I'll walk through tell us the fun one then. Um, I'll I'll do both. I'll do both. Okay. So, we um I I used to I used to be in a a company called sorry I started a company called um laughing out loud applications and then used to be in the mobile gaming and social gaming space. And I spent a lot of time in the Asian markets. So, you know, predominantly Korea and Japan. And I was starting to get used to a very specific way in which they they catered

to universal currencies. And the second company I was making was a company called um message me. So this is like you know right at the time WhatsApp had just started. Telegram wasn't out yet. And we were thinking about putting in you know how to send and receive payments within the application of of messaging. So maybe a little too ahead of its time but um a lot of what we were doing was research. By that time the Bitcoin paper had come out and one of my DevOps backend guys had said let's just buy some Bitcoin. So he did with um and and he was mining it, created his own rig and it started his whole process and pretty pretty wild and out there.

Unfortunately, I just thought it was kind of a bag of jokes and I the and he had gifted the the computer with all the the bitcoins on it to me. I'm not sure how much it was, but I think it's like a pretty penny today. And uh I ended up just putting it on the side, leaving it, and then selling I think the whole desktop when uh when my company was sold, we got rid of some of the old equipment because it didn't go with us to Yahoo when I'd sold the company. And so I don't know who has that desktop or those Bitcoin. Do they know that there's Bitcoin on it? No, I don't think so. And I'm sure they like reformatted and everything else, but it's lost forever.

Um so so that's the first foray into losing a ton of money. Um and then the and then the first time that's how everyone starts in crypto, by the way. Yeah, it it's it was brutal. Um, and then the first time I bought Bitcoin again off of one of the platforms was in 2014, the 20 December 2014, if I remember exactly, that was the time frame. Okay. Okay. So, you still you still did well. You're still you still got in quite early then. So, uh, well done. I'm sure that's worked out for you. Uh, okay. Let's let's talk about the as you said you've been spent the last decade on the future of finance and the future of tech and crypto is at the center of all of this and I I want to

focus first on a few specific things that Kraken is doing and one of those is that um obviously Kraken is a leading crypto exchange but just a month or two ago in April I believe you launched stocks on Kraken not tokenized stocks just stocks So, US clients can now invest in I think there's 11,000 stocks that you offer commission free directly in the Kraken app. That's a very interesting move to me because that sells tells me that you are thinking okay the future isn't just onchain. There still is a future for tradi and for crypto users to be able to use Kraken to do their stock investments.

What was the thinking behind this? And can you talk us through what the results have been so far? Are you seeing your users purchasing stocks through Kraken? that a potential big part of your business moving forward. Yeah. So, let me let me take a step back. I think when you in the 70s there was this u you know Michael Milinet famously termed democratization of finance and you kind of saw what that did for the global economy. I think what's more important is when we talk about the future of finance today, what does that actually mean? So the way I think about it is the future of finance um is and will continue to be programmable. Um, and I think will continue to be permissionless and it'll increasingly be more decentralized. Now, we keep hearing this

theme and I think a lot of people have this like push and pull in the ecosystem, right, which is like how do you centralize something or how do you make something safe? But I think you're generally seeing more and more of a shift from institutions being like the gatekeepers and the protocols of the rails where they're not open and it's a and it's a closed environment. And I'll kind of walk you through that. And I think that's really important too, which is that's kind of how we see the future of what Kraken will be in the future is how do how do we continue to make this world um and how can we enable much more programmability, much more per permissionless systems and and making um systems much more decentralized even within internally um at Kraken. And I do think crypto is not not an asset class,

right? A lot of people kind of still define it as crypto is the asset class. It's not, right? when you start thinking about the infrastructure for what it's going to be for global markets already what's happening in the stable coin market in addition to that I I think what's really um exciting is that AI is automating what used to be required of like regular people regular armies of individuals and ops teams um and so it's helping augment exactly what we're talking about things being much more programmable much more permissionless and ideally much more decentralized and then as you had mentioned tokenization is going to change how value is created distributed and owned. I think distributed and owned is really what it comes down to when we talk about being programmable permissionless and

decentralized. And so if that's going to be across everything from treasuries to tokenized equities, the winners are going to be the ones in my opinion that can bridge that legacy trust um with new technology. And that's it's really what the core of what we're trying to do. So so how do you break that down into themes, right? So what's the infrastructure for crypto? It's not just trading, right? It's powering payments. It's identity. It's custody. It's credit. It's governance. Well, we're seeing some of this today. Um AI and finance as well, right? So, you're able to now build systems that are much smarter, much faster, much leaner for everybody, not just institutions, but every individual. So, we use this term or I use it a lot, which is the future is already here in some cases, but it's not evenly distributed. It's from, you

know, from a a few sci-fi books in the past I used to read. And so, you're starting to think about like risk to research, customer experience. customer experience I think is really really key. Um, so those are two themes, right? So crypto, AI plus finance, then DeFi and tokenization, right? We've been talking about it for over 10 years, but it's only just starting to happen. And the reason why that's the case is that we're figuring out ways in which we can move those real world assets and functions on chain finally, right? Because you're starting to try to figure out how to bridge that gap. So I think private credit will move. You're already seeing treasuries move. Equity, you're starting to see us make some of those moves and I'm sure others will follow. open systems, you know, which basically means you need interoperability and composability. I think a lot of people

forget about that, which is you have all of these monolithic companies, including Kraken, where we're creating these experiences. And what we have to continue to fight against is making sure those experiences are not closed. We have to be interoperable. We have to be able to make sure that we are also building systems that are composable. And that, in my opinion, will always beat siloed platforms in the long term. And so what how do you build, but at the same time, you still have to build trust models. And so the way in which we think about Kraken is that look, there is more regulatory clarity. There's much more clarity around decentralization now finally. And you saw the announcement from the SEC yesterday. Wasn't that so exciting that announcement? Oh my gosh, it was beautiful. It's it's incredible.

So what that allows you to do now is think about mainstream adoption again, have market stability, market trust. Um, and so you can now start building out what I'd call these hybrid trust models where we can build what Kraken should have been and can be now moving forward rather than a closed ecosystem. So that's kind of how I think about it. So it's crypto infrastructure, AI finance, define tokenization, um, open systems and then hybrid trust models and that and that's how we think about how we're orienting um, our company moving forward. So what's what's the end state for Kraken?

Uh, and you could paint this picture either by talking about Kraken or maybe you could talk more broadly about how crypto exchanges, fintexs and banks, h how are they all going to how are they all going to work together? Like are is Kraken going to become a are we going to have one one company that we go to that is both a crypto exchange, offers fintech like services, also offers banking like services? Like is that the the future here? help me understand the end state. So the way I so this will be a little bit complicated and I'm sure you know some of the actually I don't think it's complicated. I think it's like the way in which the world works and it's in

that you know it rinses repeat history is like look if the internet needed AWS to scale I want to make sure for an open financial system you'll need something like Kraken to be able to create that. Um and so everything that I just mentioned right so when you think about platforms you don't think about just products right so you do need to think about extensibility um user development ecosystems you do need to think about um network effects okay well what are those types of products we do think about multi-asset multi- rails and I think that's really important as well right so when you think about rwas FX trading uh payments remittances what will NFTs now look like moving forward with real world assets you don't need to own the full stack but you need to own enough the stack to be able to make sure you can

ensure liquidity, ensure custody um and and trust and then you want to make sure that trust and compliance as a moat gives you that hybridization that I had mentioned earlier. Um, and you use that not as a trade-off but as an advantage. And and I think a lot of people think of it as a trade-off rather than the advantage. And so I think the end state for Kraken is really to become more and more a financial OS, right? Like a global platform that can power as many things from trading to custody to payments again to identity, real world assets and issuance. And we don't have to own it. We just have to be able to um enable it the same way I think about AWS. And so like Facebook just isn't a social network. And I don't think you can think about Kraken as just an

exchange. It's one thing that we do, but we've just we've also internally built infrastructure layer for open and programmable financial systems. We want to focus on making sure that there's one user that can own their own globally accessible, you know, uh digital tokens that's native to them. Um and and I think like we want to be at the forefront of helping to power that even though that we are we are just starting now and this is evolving over a period of time. Yeah. It feels to me and it's very interesting to hear you talk about multi-asset in one platform like that feels like a core of where this is going is that yeah right now sure the average person would say a kraken crypto

exchange because that's what you're best known for but the future is is is already I mean we're already in the future kind of coming back to your your sci-fi line it's already here and but but that feels like it's going to continue and I assume Kraken and I look others your competitors. I look at, you know, Coinbase or Robin Hood. I don't know if you think about fintex as competitors. Do you think about fintex as competitors? Look, I think when I think about the world of open source and closed source is that a lot of fintech and and rightfully so. They're trying to make experiences great, right? When you think about DeFi, DeFi is all over the place, right? Like it's a lot of protocols. It's really complicated in order for you to think about building a regular decent so let's call it a open

banking system. uh if you want to think about bigger ambitions. You're thinking about like connecting a wallet, you know, connecting a system. I just think that's pretty cluji and clunky. Um and so I I I believe there are going to be fintech companies for very vertically specific applications that are going to come in and think about what does crypto how does crypto power FX, how does crypto power treasuries, how does crypto power uh real real world assets. So I think there will be some places where it's all in one place, but I do think it it will be too monolithic. kind of um you know the way in which I think about Craigslist you know Craigslist was like the all-in-one place but then it just broke apart over time because the experience is not good. So I think the bigger ambition in my opinion is how do

you enable how do you enable people to access things permissionless like what is that hybridization look like? How do you move away from just being an exchange? How do you move away from just listing and custody? How do you think about u moving towards creation um and and opening up that part of the financial markets? How do you think about composability of financial infrastructure where anyone can build, trade issue settle store save uh get yield and then what are the experiences that you can build on top of that and and and I think what's really important is how do you do it without needing approval from a central authority like over a period of time and it's not going to happen overnight and and I think that that's where the community can come together. I think that's where exchanges can come

together. I think that's where companies can come together and so like look going back to what you had asked before I think the financial system is quite fragmented. It's quite gated. I've personally have felt this over a period of time. Um and the and ideally the future uh the future should be much more unified but completely open. Um, and that and that's when we can just build much much better products. And we should be able to compete not because we're a closed system, but we're competing because we're building the best products where we're offering liquidity, discovery, where trust is converged and it's open because it's by design, but we're designing better products. And and that's a lot of where, you know, permissionless doesn't have to mean like it's lawlessness. It just means it's more equitable. Um, it's accessible and it's programmable. And I don't like

using the word equitable as in like that's where everyone has to start. It's just that you have the ability um to be able to start um if you want to. Um and it's like a a fair way to do it. And and that's part of Kraken's ethos if you really think about it. If you look at any of our values and the way in which we've built the ecosystem is that we want crypto to be everywhere. We want to make sure as many people can access it as possible to, you know, billions and billions of people, not just a small subset, which is, you know, a lot of what you see today. And I think we're just seeing the beginnings of these use cases, which is great. you see stable coins and people talk about it a lot, but just think about all of the assets

that we have um or should have access to to be able to use that as collateral for anything we want to do moving forward. You know, one of it's funny you bring up stable coins and uh uh I've today I opened my email and one of my tradi newsletters that's quite a popular newsletter. The title was what the [ __ ] are stable coins? And I had a laugh to myself because I'm thinking wow here we are look look at the impact of circle's IPO. Instantly you have Wall Street and so many people that were not paying attention and don't know what stable coins are curious and here to learn about it. So it feels like we're at a really early point when you talk about products. Uh one product that you guys have recently done a partnership on and are working on is XTOS which is going to

launch tokenized stocks. I personally am very excited about tokenized stocks because you talked about permissionless and equitable access. A lot of the world does not have access to invest in the NASDAQ or American stock exchanges because they're just in certain jurisdictions. Also, a lot of stock exchanges are 20 are not 24/7 trading which crypto really embodies. So, talk to us about X stocks. What is what is X stocks and the future of tokenized stocks that you see? Look, I think this is more of a philosophical perspective is um look, everyone's excited about it, right? because they hint at a world where you can trade any asset anytime from anywhere. But I'm not sure if like the real value is just faster access to equities. It's more like you get to

collapse the friction, right, of custody, settlement, um compliance access. Um and that's more abstracted into code, right? for Kraken. I think it's more of a step forward for us at least today where we can have a unified market structure where traditional and crypto assets can coexist on today at least one single platform and for the world especially for the billions locked out of the global markets and I think this is a really important point. It's a shot at a financial inclusion and programmable ownership and 24/7 liquidity and borderless access. Now those are like real fancy words. So again, what does that mean, right? Like well it's not just access, it's composability, you know, for X stocks.

What's really important and exciting is that I get to plug into DeFi. I get to plug into lending. I get to plug into structured products, etc. There's global liquidity pool. So, it's not fragmented, you know, regional silos and people in the middle trying to make money. Again, it's 24/7 market. So, there's no market hours. They're not going to be arbitrage around each and every aspect of when the market closes and when it opens. Capital should and always be on. Um, and I think what you're able to do then with that again is like you get smarter compliance. So KY and C and AML can move onchain. So the rules are enforced ideally programmably not like you know brick and mortar World War II style where you know someone is imposing their will based on their interpretation. I think ideally it goes more and more on

chain and then look nextG UX right like you don't need bankers you don't need brokers there shouldn't be any delays. um you just need an internet connection which I think is you know it's awesome and and an AI agent who understands financial context and can help you you know not everybody can afford a a broker or can afford financial advice or a wealth advisor then the the the concept of a broker might be you know one agent a million agents right like and you're seeing a lot of great stuff that's happening every single day like just over the last week I've been spending more time on the uh Gemini V3 um you know AI related the videos we are watching with like the the the Star Wars troopers and and and Bigfoot like look that's that's a those are toys and

gimmicks that give us a lot of entertainment and joy in life. Imagine leveraging that same, you know, technology around how you want to think about your wallet, um, your access to capital, um, you know, your investing strategy, whatever it might be. And so, look, we're we're crypto native, so we probably maybe think a little bit differently, which is like, you know, tokenized stocks, in my opinion, are a Trojan horse. They're basically bringing in all traditional assets into programmable finance world. And once they're on chain, innovation really starts to [ __ ] begin. And that's what I'm super pumped up about. And look, if it doesn't work the first time, we'll try the second, third, fourth, fifth.

It's going to happen, so why not continue to try? What do you think are the uh when you think about the next six to 18 months? What are the what are the big things that you think could happen here? Like obviously tokenized stocks is coming. Do you think that picks up steam quickly or do you think that's slow? Maybe you could talk about market structure bill in the US or thoughts around legislation. what what are the major things that you're most excited about in the next year? Look, what I'm what I'm most excited about right off the bat is like look, we're going to see three major shifts in my opinion. Um first, as you mentioned, is market structure reform, especially in the United States, where crypto legislation

could finally define clear lanes for assets, disclosures, oversight. Um second, real world asset tokenization will go from frankly pilot to production. Um, and our hope is that we're at the forefront of building that with institutions actively trading these treasuries, sorry, tokenized treasuries, credit and funds, um, and every other asset that we can think of, um, you know, under the sun. And third, like look, we're reshaping global capital flows. Um, you know, we don't we don't really talk about it, but you know, some of this has been driven by geopolitical instability, so it changes capital flows. you're seeing some aspects of ddollarization and then red dollarization coming through uh tokenized global capital flows and then you have increased demand

for neutral internet native assets like bitcoin and stable coins right so when you you put all these things together um it's really it's I don't know it's it's some of the most exciting things that we're going to see over the next as you mentioned you know six to 18 months so so what does that mean in the US so what do we need we need market structure so we saw the fit 21 um you know didn't u didn't go past we saw ma in EU where we're we're we're more predominant than we spend and we have a lot of our our market share and that's at a baseline. Um you saw ETF approvals so clarity has unlocked more innovation builders are building more than ever before and so they've always been waiting for a green light. So more of the market structure bill or stable as we get closer to the

market structure of the stable coin bill you know between now and hopefully August you I think you're going to see more people come off the sidelines and build more. Then what happens because of that is as you saw with the announcements with DeFi and with the SEC um chair Paul Atkins is like look now we're going to see what onchain treasuries become much more predominant. We'll see credit funds, DeFi, intrati. You're already seeing Black Rockck, Franklin Templeton, JP Morgan scaling up. Um, you're seeing programmable compliance and new financial products coming, right? So, it's not just about tokenization is wrapping something, but it's they're now starting to think about not just wrapping, but re again rewiring the back end of global finance. I actually think a lot of people are scared about that. I I saw I saw a post

from the air, the name of the company now, Airwallik's uh CEO, and he just said like, "Hey, this doesn't really matter." I I just think like anyone who's building or has spent, you know, hundreds of millions, if not billions of dollars on back-end traditional brick-andmortar systems are really scared, right? Because this just rearranges when tokenization goes real. It's also just sort of rearrangement of geopolitics in some cases and even macro cases. So, I won't go into the specifics there, but like look, US election is changing the way in which the central bank ch thinks and shifts. um you have more emerging market instability which is creating more demand for stable coins and global liquidity rails and more demand for Bitcoin. Bitcoin we always talked about it as a natural reserve and inflation hedge but it was you know

following tech stocks because I think they were uh naturally following the same route as well but this was the first time where you saw Bitcoin go in the other direction where it kind of stayed stable and it continued to go up. Um, and it's still the case now, right? As as more and more instability comes, people are going to that first and and there's a huge amount of liquidity. So, in a fragmented world, you're seeing a lot of realignment around that global liquidity. Um, and so the financial layer and the connective tissue around how um these companies are providing that I think become more important. And I think crypto and if I'm maybe to being too bold, is like the best position to serve that role as other people are trying to figure out what that will actually look like. And so, you know, I

think again Kraken's role in this is, you know, tailored for how an investor might want to think about this, how a policy maker is thinking about this, how builders are thinking about where they want to be in this, you know, new global re again realignment around what global liquidity looks like and the baseline looks like. Yeah, I think uh one thing that stands out for me what you just said is that I think the trade war was one of the best things that could have happened for Bitcoin. I think it expedited into the mind of macro traders and gray hair investors. I've had more gray hair investors on my show in the past six months than I ever had before where they're putting Bitcoin and gold in the same sentence and that is absolutely massive. Uh, okay. I want to touch on Kraken's IPO. Uh, and I want to

talk about um some fun stuff and we got some questions in the comments. But before we get to that, we're just take a quick moment to hear from our sponsors who make the show possible. Selling your Bitcoin should be a last resort when you need cash. That's why there's Leen, the trusted platform for Bitcoin backed loans. You can unlock cash in as little as 18 hours with no monthly interest payments and no prepayment penalties. They've issued over 9 billion in loans and never lost a single satoshi of client funds, even during the chaos of 2022. If you're a long-term hodler, this is the move. Get liquidity without selling at milkroad.com/letin spelled ln.

All right, we're back. Uh Arjun, let's talk about Circle IPOed recently. Give us your takes on that IPO and then let's lead into Kraken's upcoming IPO and any other thoughts you have around IPOs in America, which seems to be a big narrative that's just gaining steam right now. Look, I think most people look at the IPO as like an end state, like the journey is over. Um, and and I think like that's a very wrong way to take a look at it because they start celebrating, hey, we're we're public and now we're done. And and employees can think that way. And so the way I've thought about it is that like look a company is built when you like the primordial ooze and then you are at the

early stages of building something regardless of if you have raised capital or not and you're in and you're in service to your customers or your clients or your ecosystem or your community and and I think that's a really important aspect which is along the way in order to serve your customers what do you need to do and I think in some cases in the past it's been really important for you to go raise money in the private markets from some brand name because it gives you credibility to hire people or you know get some customers. Then the next stage of that is you go public because then you get worldwide recognition that now that you have the ability um to be able to disclose your financials and and go at that level and get access to different levels of capital then you should be able to serve

more customers. I think if you look at at least um you know to your question on Kraken's journey everything that we've done is a we raised less than 25 million in our total um lifespan as a company when we started in 2011. Jesse and Tan were the two co-founders. they came from the gaming space and look their their mission and their vision which I'm privileged to be a part of and and the culture that they created that I'm hoping to continue to augment is that along the way we're trying to be mission and culturally aligned around how to think about what crypto is today and what it will be moving forward and again how it's going to be compatible for everyone in the world and what are and how do we build um along the way is that

we were always capital efficient along the way to make sure okay the money that we made on from our professional traders which is predominantly who our customers are worldwide that we would continue to build products for them and we would think about what does hybridization mean? what does, you know, getting into DeFi mean as the community and the ecosystem evolved? Because when we started, there was no such thing, right? It was just Bitcoin and then eventually Ethereum and then, you know, the rest of the alternate chains. And so I've always said internally that look, the only thing that matters for us is uh any decision that we make, external capital raise, going public or not, um all has to be on the road map in making sure that we're serving our customers and clients. And so that's how I think about it. Um so we're always ready be much

more transparent which is what we've done right so we did proof of reserves um we've been disclosing our financials every quarter um we started that practice earlier this year isn't meant to necessarily always gear up for something it's really meant to say like here we're serving our customers we're being transparent it's what the industry called for from the beginning and we wanted to do more and more of that to your question around the circle IPO and other companies in crypto that are going public I I think my my personal perspective here. So I wouldn't want to speak on behalf of the community or even necessarily Kraken is that you have a certain amount of capital market cyclicality into ecosystems where you know you you get the fear of missing out instead of thinking about tokenization

and investing into what I'd say onchain treasuries or credit and funds and defy and try and and that hybridization. People are thinking about okay well how do I check the box and what's my exposure into crypto? It's very reminiscent of like the dotcom era, which is you took a company public because you had an idea and your stock just soared. I think Circle is a great company. I think a lot of what they do in helping to facilitate liquidity is really important. Um, and we're glad to partner with them in in multiple regions as we are with many other stable coin providers. But I do think there is euphoria when you just look at um how the price is stocked versus how much revenue they make and what their margins look like because ultimately um that is what any company is going to be judged

by in terms of what what they offer their customers and that's how we think about ourselves and how we judge ourselves by you know today or what it will look like you know 10 years from now as we're building all these products for our customers and our community. Yeah, euphoria is a good word to use for what I would feel about circle IPO as well. It feels it feels like there is pentup demand from Wall Street and from institutions that aren't allocated to crypto because it's hard to do or I do I do think it gives you a future state of what the world will be like. So if you go back in time when there was an injection of liquidity and obviously lower rates uh during the covid time frame you saw zoom pop right which is like everyone had to move on to zoom and

everyone's starting to think about okay the future of remote is already here. Well, that's true, but it's really only coming true over the course of three, five, and 10 years. So, you have this huge injection of what usage would look like. And so, I I would I wouldn't say like, hey, that's their terminal value, what they would eventually be. But what it really showed was the accessibility and the ability for people to work in a specific way and and that's what the future was going to be. And so, they were pricing in too much of the future right now. And that was the trade-off. I think you're seeing that in crypto right now as well, which is look, the future is happening. it is compounding at a certain rate. Some areas are moving much faster than others. Um and obviously these are, you know, companies that make

money and they have margin. Um and and and they're growing at a, you know, a tremendous rate and the whole ecosystem as well in including ourselves. Uh but that doesn't mean that you should be valued on what your future could look like in 20 years because 20 years is a really long time from now. Yeah, it's it's a great point. Uh any details you can give us around Kraken's IPO? uh as I mentioned before, anything that we do is going to be in the service of clients, right? And so we always want to be make making sure that we're transparent and we're ready to go public when we want to on behalf of our clients. Um and so timeline isn't something that we're thinking about.

Okay, great. Uh you've got I want to have a little bit of fun here at the end before we let you go and then we might ask some questions as well. You've got three tokens listed in your bio on your X account. Dog, BTC, and Crack. I assume Crack is a homage to what the ticker will be for Kraken is what I'm assuming why you have Crack there. Is that correct? No. So, we have a product coming out called Crack shortly. Um, and so there's there's a wait list for it and so I'm just excited about launching that product and um and so whatever I might be paying attention to, it could be anything. It could be a video game.

It could be, you know, the new um ruins protocol that people are talking about under under BTC. I just get excited to spend time digging into it. Um, even building around it just for fun, not necessarily a reflection of Kraken. Um, but I do think whenever the community is engaged, it's kind of incumbent on us to do some investigation work to see what what they're doing with it. And sometimes it could be a meme. Sometimes it could be a form of expression. Sometimes that toy um, as you know, Chris Dixon famously put, can become more of a utility and then everyone can and can start using it. And I think it's the same way in which, you know, Doge became more predominant. I'm I'm always looking for sort of interesting tidbits around what's going on. So, I tend to just, you know, put that form of

expression in my Twitter or LinkedIn profile um while I might be playing video games at the same time. So, it's just a it's just a reaction to how I'm feeling at that moment, not necessarily reaction to what I'm executing on. Right. Right. I I appreciate your uh your willingness to share and to be so present on X. It's uh it's awesome to see. We need more founders and more leaders who are doing that. What's Dog? So, it's you know, I don't know if you've been following it. Um, I'm not following dog. No, give me the TLDD. Um, you know, it's it's an it's a it is a community that's focused on getting um the meme memecoin style form of expression on uh the Bitcoin network, right? And so um there's a group of folks I think today they're calling June Rune June. Um okay. and uh and and and

dog is one of the uh meme coins that they're thinking about um continuing to build against and you know ideally um they're looking to go get listed but I've just been engaging with the community learning a little bit more about what they're building. It's not just dog but a bunch of different things. Um so again like I said I'm just excited to dig in and and and wondering why uh why they're there in the first place building. Yeah. Yeah. The best way to learn is to experiment and get involved. You also have Bitcoin on there. Uh, this may be a fairly obvious question. I'm not going to ask you why you have Bitcoin on there. We talk about Bitcoin all the time. Um, what's one thing that you think everyone is missing about Bitcoin or one thing you think you wish everybody knew or was paying more

attention to? Look, I think there's always a early adopter crowd that looks into crypto. I mean, we're we're a part of that and and so are my teammates and we're trying to figure out a way in which we can redefine new rails and old rails and I think like you know Bitcoin has become um at least today a form of digital gold, right? And and that's how people are thinking about it, right? Because it's a natural reserve inflation hedge um and that and that's why Bitcoin becomes strengthened.

But what I'm most excited about is what else it enables, right? like Bitcoin and Ethereum, you know, pairs just on the exchanges are extremely liquid and we have one of the most one of the most liquid marketplaces. I watch this all the time and and so what what I think becomes much more important is like as the market bifurcates between these chains and what interop again what interoperability will look like. I'm just really excited around what the new order is going to look like for DeFi and Tratify and what that convergence is going to look like. Again, I go back to we already have um financial products that we've been building, but it's been building off the old ecosystem. What does it look like when you can start building this on a new ecosystem that's got global distribution? It's just I don't know. It's it's it's exciting, you

know, like if I was to continue to talk about it, I would just have tears in my eyes because it's just so cool. I I it's it's awesome to see you be so missiondriven and so and so focused on not just the future of crypto but a bigger mission around the future of finance and the future of really everybody's access to these financial products. Uh well I think I think I think what's more important is that like look it's um crypto is just enabling these rails to be able to think at a global macro level but at the same time we can build much more micro products and so I'm I'm I'm looking forward to a world where not just us right like this is kind of like what you know Kraken's perspective is and I' I'd mentioned like we want to be like an AWS for the

ecosystem rather than one platform to rule them all is imagine all the things that you can start building for not just a million people but actually just for one person like building a product for one person is just as important for building it for um a million people and and does is that enabled because of AI because obviously like usually building a product for one person isn't profitable well look you you you always were thinking much more uh global distribution with one product that is meant for everybody because that's the way in which the infrastructure was built like you can think of any company right which is like everyone should just eat the same cereal Okay, great. I get it. And then you started thinking about supply chain logistics and like local so like local coverage of food is becomes different, right? And now you start

thinking about okay, well, what do I get in San Francisco? What do I get in LA? What do I get in New York? And then how do I uh produce supply chain for those specific locations? And that's also continually involved. When you think about software, we've already been starting to do that. Uh in software, you're starting to think about, okay, great discovery, workflow, conversions, uh you know, what does it mean for an accountant? What does it mean for compliance? What does it mean for legal? What does it mean for marketing? What does it mean for a designer? What does it mean for a product manager? The definition of product manager for Microsoft, they used to do all of these things. Now the product managers are very attuned to a very specific use case. And so was a designer. Now you're thinking about back-end programmers.

It's not just full stack and then front end, but then on front end you've got front-end design programmers. So you're starting to become more and more specific. The reason why you can do that is because you're able to build more software to be honed in into what I'd call one customer profile. There's no reason why I don't think like consumer products are going to do the same thing, which is great. Now I can build a set of products for millions of people, but within those millions of people, I can build a set of um feature sets that are very specifically attuned for, let's just say, you right or me. Um, and so you're already starting to see that, right? Where like the Facebook feed is attuned to you, the Twitter feed is attuned to someone else, but that's related around content. But but imagine when your experience charts uh starts

changing because and and again I always go back to the world becomes more permissionless becomes more decentralized um there's a lot more discovery and then the convergence of like what design will look like for each individual will make it much more profitable because you're not relying on traditional infrastructure and so maybe that's in I don't know 50 years but I just feel like every week we're compounding with more and more innovation to be able to build around that. Um, and and by the way, I can build for myself. And this is the whole point, right? Like maybe I don't need the company to build for me. I just need the company to help enable it for me. And this is why I always go back to the AWS construct, which is look, I've got I've got teammates here that are also from all over the world. In fact, I have

a teammate here, and he's just he his his whole sole goal is like, look, I live in I live in Australia where there's it's a little bit more overburdensome in terms of what my capital is, where it's stored, and what do I do with it? So, I just want to build the product for myself. And he's just doing it by himself. He he doesn't need an army of 15 people. Imagine doing that two years ago or doing that even 10 years ago. It would have been virtually impossible. It's an exciting time for sure. Arjun, really appreciate you joining us today. Thanks for your time. Jay, thanks for having me. Thanks everybody for listening in. I've got to remind you all before I let you go that none of today's episode is financial advice. I'm not your financial adviser.

Arjun is not your financial advisor. You should always take time to think and do your own research before you make any investments. If you need help with any of your research, you should subscribe to the Milk Road Show because we're here every day, five days a week, helping you guys with your crypto investments. Appreciate you. Thanks for your time today. All have a wicked awesome day. We'll see you back again tomorrow. If y'all are making swaps or trades right now, highly recommend you check out Milkroad Swap. This is a deck that we built in partnership with Cow Protocol. Why did we build it? Not to make money, just honestly. until we could have a place to do our swaps for the lowest fees that we could find. This is the fees on Ethereum, Arbitum, and Bass are only.15%

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