🚨LIVE: CLARITY Final Countdown! Jesse Pollak, Haseeb, Santiago Santos & Olivia Vande Woude Join

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[music] [music] [music] Thank Son Lord. [music] We'll see you around the timeline.

Feels good to be back. [music] >> I think The Rollup is one of the most premier media brands in crypto and Andy and Robbie [music] are great experts at everything they talk about and it's my favorite podcast. into my [music] library every day. >> Potentially multi-chain deployments. We are at the connect day [music] one here. I'm guessing from space. [music] [music] [music] >> [music]

[music] >> Heat. Heat. [music] >> [music] >> JP Morgan, Black Rockck, DTCC, Fidelity, the entire thing was just institutions.

It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. >> I'm bullish. >> HE SAID IT. HE FINALLY said it. So bullish. >> It is bullish. I'm bullish. We're bullish. [music] [music] >> [music]

>> Heat. Heat. [music] Heat. Heat. [music] [music] Heat. Heat.

>> [music] >> A rollup [music] is headed to the top. If we're not already at the top, we're going to the tug. >> Roll up is my favorite. People >> from all walks of life, all over the world, all over this industry come together for the rollup. >> [music] [music] [music] >> Heat. Heat.

[music] >> [music] [music] >> Ah, [music] [music] heat. Heat. Heat.

[music] The roll up is headed [music] to the top. If we're not already at the top, we're going to the top. >> Roll up is my favorite. People from all walks of life, all over the world, all over this industry come together for the roll up.

[music] [music] [music] >> [music] [music] >> Zoom out. The institutions aren't coming. They're simply here. It's the golden age of crypto, guys. Get right.

Let's go. [music] Welcome to the next. See you on the show. It's August 6th. Welcome to the Welcome to the roll up. It is basically hurricaneing outside of my window. Um they don't call it the Miami Hurricanes for nothing, guys. Today's August 6th. It is the roll up. I'm stoked. I'm absolutely psyched. We're pre- rich, pre-bull, and you are listening to the rollup. We got our guy Aon back on the sounds today. Guys, hit me up in the chat. freedom guys here bright and early and uh man if you just keep patient if you just hold the line boy oh boy is

this cycle going to be promising it is absolutely sensational out here today and we are in the final moments of potentially potentially getting a vote on the clarity act that is the news that is what everyone wants to hear about guys tell me do you think it's going to go through do you think it's not going to go through I want to hear about everything that you guys want to talk about. We've got plenty to cover for today. Uh we're going to get into the markets. It feels like the macro is shifting. The landscape turned headwinds into tailwinds and we're going to be talking about it here today. Bitcoin total the line. Bitcoin looks fantastic.

Uh and you guys know that we are rocking with Bitcoin, ETH, Hyperlquid, Lighter, Zcash, Zcash, Zcash. That is what we are talking about day in and day out here on this show. I encourage you not to get too zoomed in. I know we go live every single day, but boy, if you just look at those weekly and those monthlies, oh man, it is just a matter of time. Just a matter of time, guys. Fantastic show as always. Shout out to Plume. Couldn't do it without Plume. They are sponsoring the tokenization tower. We've got a host of people in the tokenization tower today.

The team decided uh to pick it up and take it over to the desk to the tower for today's [snorts] show. So, big big shout out. Give me a couple air horns. Give me some noises. Give me some sounds. I'm uh I'm glad that I'm broadcasting here from South Florida. We've got our team in the office in New York. Uh we're going to get into today's show. Fantastic show for you guys today. Uh markets and weather as always. Like I said, it is I mean there are palm trees like shaking in the wind as a result of how much uh how much storm we have going on out here. almost hurricane season in Florida. Uh and then we're going to get into Clarity Day with Him from Dragonfly. Uh we've got Olivia from Ava

Labs, head of tokenization there, one of the smart smartest tokenization minds in the space. We've got Jesse from Bass. And we've got the head of legal from Chainlink. And last, but certainly not least, man, we've got the guy uh our friend of the show, Santiago, who's going to be joining the show. Fantastic show for you guys today. Honestly, uh couldn't ask for a better lineup today. And uh we've already got Freedom Guy with W's in the chat, so he knows exactly what's going on. Uh and we made a little note in our post-production call that we're going to lower the noise of the swoosh on the ads today. So, we're going to make sure that you guys are tuned in and locked in for today's show. Uh before we get a little bit

further in today's show over to the news segment, we're going to tell you about our open, stable, borderless, and genius compatible money, Fracks. Frack is one of the leaders in stable coins. They're doing big dog things. They've got big dog energy and uh man, I'm bullish on FRA and uh what they have coming out of the DeFi space. I just tend to think they're one of the few coins, one of the few stable coins that is considered money. They're not one of these hedge fund, you know, backed uh stable coins that are generating interest. These guys are actually getting the monetary premium. I think it's going to serve them extremely well in coming generations.

Like I said, the weather here is rough. 88 degrees. Is [laughter] that rain? Is that what I I hear something in the background. I think that's I think that's rain or static or storm or something. uh feels like 102 and it's hurricaneing outside. Uh Relay is the hurricane in the markets. They will take you anywhere you need to go crosschain. They also uh rolled out just today that uh I believe they're not doing any fees on stable coin transfers. So they do stable coin to stable coin uh pretty much pegged to a dollar. They don't charge any fees. You don't get 98 cents on $1 transfer. You get $1 for $1. That is what's happening on relay.com. one of

the few crosschain exchanges to do this. So, they're doing things the right way over there at Relay. Also, want to give a big shout out to our partner on the tokenized equities front. Uh you guys know them well. We had a good session with Gabe yesterday and uh Dinari is doing incredible things in the tokenized equities world. Uh they were able to take a much broader approach than we had previously seen in the tokenized equities world. Also, Gabe says that there's some tremendous partnerships and there are things that you can now do with your stocks like collateralize, like use them as margin.

I just think this is what is going to unlock a massive rerating in DeFi protocols. Obviously, the tokenization companies are poised to do quite well. Uh, dinar is a private company. They don't have a token, but uh if they did, I think it would do quite well. And then this is enabling a a lot of volume and TVL increase across the DeFi ecosystem. Lot more user activity. We just unlocked an entirely new asset class. These things are minted on demand and uh they represent real shares. You get all the same shareholder rights. No no SPV nonsense.

So that's dinari. Fantastic project doing tremendous things and the markets are just brewing. powered by Zama as always. I mean, things are shifting in the macro climate. The guy behind the sound effects is short, but that's why he's on the sound effects. And uh and uh [laughter] Bitcoin just turned green right there. All you got to do, someone's getting carried out. Uh hope it's not our sound effects guy, Mr. Aton. You're going to catch him on the streets. Powered by Zama as always. Zama is doing fantastic as well. um saw a good tweet earlier today that was talking about hyperlquid and how it is correlated to the equities

market and AI stocks. Also think it's correlated to the NASDAQ uh the AI equities and you'll hear in our daily equity segment for today there's a little bit of disorrelation or decorrelation happening. It seems as if the hyperscalers are kind of returning to their position as leaders of the market. And then Drram, semis, chips, all of these are are still really feeling the weight of the liquidation cascade. They got way way like I don't want to say overvalued, but their multiples expanded quite a bit. Those feel like they're coming back to reality. And so you're kind of getting this more mature, segmented approach in the equities market. Ultimately, you and you guys have been hearing us talk a lot

more about equities on the show because there's a lot more volatility in the equities market as it pertains to the digital assets. I mean, I'll just tell you about the approach that I've been taking, which is just steadily building positions. I'm not going to tell you. I mean, you guys know what I'm in. I'm in Bitcoin ETH Hype Ladder Near and Zcash, Zcash, Zcash, more Zcash. So, that is what I'm taking a position in. But I'm not rushing to go all in. I'm just steadily building positions because we don't know how long apathy is going to last. But this is the thing. You never get a long time to sell tops, but you do get a long time to buy bottoms.

That's the way that this thing goes. We already saw the big, you know, capitulation wipeout that happened that took us below 60. Now, this is just foundation building all along the low 60s. We might get one wash out. People think it's all over, but ultimately I think you're going to look back a year, two years, three years from now, and you're going to love building positions at these prices. I know I will. Um, and that's what's happening. Like I said, equities, it's a mixed setup. Uh, S&P's up, NASDAQ's down, uh, hyperscalers are up, semis are down. Uh, oil went up. Uh, feels as if this is driving a lot of the macro changes. Uh, we heard how, uh, and and I think we're going to cover this actually in the in the show today. So,

I'm not going to do too much on that. And then 10-year uh and 30-year are climbing. Uh and so that is what we're seeing in the traditional markets and the macro markets. Uh before we get into the news for today, I'm going to tell you about the AI company that I'm watching which happens to have a token. It's Near and we're big fans of Near on this show. They have ironclaw. Also, if you're worried about potentially the equities market fracturing and you're thinking about the rotation from AI into crypto, this is a great way to express bullish sentiment on exactly that because you can you can position yourself if the AI trade decelerates but the crypto trade accelerates then you're positioning yourself quite nicely at the

convergence of these two themes. We believe Hyperlid, Near, Zcash are the threeheaded dragon uh that we're we're betting on here at the rollup. Uh first piece of news here for today is from our boy Bitcoin Jack. If you assume AI will exploit the essence out of infrastructure, then you want to be long decentralized exchanges and privacy coins. So if you're long AI, you should get exposure to this basket, too. So, um, obviously, you know, we've seen what kind of havoc AI can wreak. I do agree with the privacy coin, uh, sentiment here and because you have these exploits, you have this potential,

you know, threat of, uh, vulnerability as a result of these models. I do think these models can be used for for good, but there's plenty of people that are using them for evil as well. They're trying to hack a lot of these protocols. I also saw another tweet just from a cyber security perspective. If you have any public keys just floating out there in the abyss on GitHub or just, you know, out there on your clipboard, it's a good time to just wipe all of that because there is going to be a model that is just going to be set loose and it's just going to say, "Hey, if you can encounter any of these things in the wild, suck as much money as you can from these wallets." You don't want to be caught in that sort of debacle. Uh, Bitcoin Jack does talk about this. also

talks about how decentralized exchanges could be the solution. Um, but then obviously the self-custody thing of last week and cold card is still getting worked out. So, I don't necessarily agree with the decentralized exchange uh angle on this, but I do agree privacy coins from Bitcoin Jack is a great way to express bullishness on the anti- AI uh hacking every piece of infrastructure narrative. Uh, Zcash is how we're expressing that thesis. We are big believers in Zcash. We saw when Zcash traded seven Bitcoin for one Zcash back in 2017 when it launched on Paloni X. I thought it was absolutely ridiculous. I still think Zcash is not worth seven

bitcoins. That would put uh one Zcash at the price of $42,000. Excuse me, $420,000. Um think we've got a long way to go there. Uh people are calling for $10,000 Zcash. Still think we got a long way to go there, but it feels like Zcash to 1,000 is pretty much written in the stars. Uh this is a great great way if you're worried about AI taking over the world where you want to take control of your money, you want to make sure that it's shielded, confidential, and uh make sure that you're prepared for a quantum future. Zcash is a fantastic way uh of doing just that. I'm long Zcash. I'm not going to say financial advice as far as

what you should do, but I am long as Zcash. Um, next up, our friends over at Plume have joined the DTCC uh digital asset solution industry working group. Give it up for Give it up for Plume. I mean, give me some sounds. These guys are doing fantastic. We know that the DTCC has the uh I don't if it's a sandbox environment, testing environment, this thing is going to come out into the real world and start getting used in October. And so this is part I mean this just happens to align with the one-year cycle, excuse me, four-year cycle, but you know the one year from the peak that happened on 1010.

There is one thesis that says a lot of people are going to frontr run that 1010, front run that uh that October one-year uh cycle uh reset. Uh but regardless, DTCC goes live with their uh digital asset solution on in October. As far as what they've announced, uh they've organized a working group of several industry leaders, uh Alpaca, Plume, Charles Schwab, NASDAQ, I mean the list goes on and on and on. Uh about the uh projects that are in this group and Plume now joins and they're in great company. Uh Plume says, "We look forward to contributing to this initiative and leveraging our expertise in compliance standards to the work the digital asset solution industry working group is

doing." And I think that's exactly what this working group is organized for. Uh they are looking at uh all of these companies that have done great work in the digital asset space and um they're they're looking to establish best practices uh before they just jump in head first. They're looking to learn from the best and Plume is certainly that. Freedom guy says he's a big fan of all the sponsors of the show which is rare. Completely agree. Uh couldn't do it without our partners here on the show. Big shout out Plume near Relay aligned one inch. Uh I mean just fantastic group of partners. I sensational indeed. Uh and so uh couldn't couldn't do it without all of

you guys. Um and like I said, DTCC is bringing their tokenization infrastructure into the limelight. Uh they are responsible for more than $114 trillion in assets. Absolutely massive in size. And now Plume is positioned right alongside the DCCC as part of this working group. Uh they also highlight that the Kimber transfer agency is an SEC registered transfer agent for official ownership records. Uh and this is I believe the transfer agency that Plume acquired. And so now they've got quite a bit of technology and regulatory infrastructure at their disposal to uh to garner uh some really really really capital efficient digital assets infrastructure

uh and work together with the DTCC to make sure that consumers get the best technology, the most protected and the most access to financial instruments. Uh if you want access to financial instruments and you don't want to move the coins directly out of your wallet, but you still want to contribute to some of these liquidity pools, you might have heard of this concept of shared liquidity. Uh 1 in products like 1in Aqua let you approve one wallet balance to back multiple positions at the same time across pairs, ranges, and chains. You're not splitting your tokens and you're not depositing them. This is what I think is a special sauce for 1 in here. You're not leveraging them either.

It's a totally different way to keep your liquidity active in more markets. You keep the liquidity in your wallet. Uh the protocol can pull it out of your wallet if the criteria on the liquidity protocol meets the criteria that you set for your liquidity. That is uh exactly what 1 in is doing. It also means that your assets that you keep in your wallet can be applied to multiple liquidity protocols at once. And so you can actually use the same assets and uh get quite a bit more yield. They did a a fantastic research piece with Dune that highlighted how massive this problem is of idle liquidity that's just sitting in these liquidity pools. It's not getting used.

1 in Aqua lets you use that liquidity. Put it to work. Make it productive. Earn more for your liquidity. Uh the USS Chain Link says, "This concludes the banker master class. Uh we got the Chain Link Marines in the building today. Absolute pleasure having you guys. Hit us up in the chat. We want to know what you think." And our first guest of the day is the head of legal from Chainlink. We're going to get her up in a few minutes. Uh it's Katherryn Kurpatre and uh we've got her on the show in a little bit. Uh we've got friend of the show uh Jose uh who is I believe at Delot I think. Uh Consensus says the US leads

AI in China leads robotics. Uh let's go ahead and play this video. I think this is going to be an interesting take. Uh ultimately these two technologies are going to converge. I do think you know the US is leading on AI at least as it pertains to frontier models but um you know robotics is going to be extremely important. Also uh seems as if China is leading on the open AI progression. So let's go ahead play the video. you spent a bunch of time in China touring the Chinese robotics companies and you came back with like a very different view on this which was that China is actually like behind on the software piece right there's only one or two Chinese companies that are close to solving the the software piece so they

might be very ahead on the hardware and especially on on sort of scale manufacturing of the hardware but actually they're behind on the on the software piece there's been a lot of progress in the Chinese robotics companies have you updated your views on this or where do you sit now what do you think the endgame of US versus China and robotics actually looks like >> I've updated my views a little bit because I've been impressed by the research that's come out of um Robbie Ant which is kind of like a subsidiary of um Ant Group. They've released open source models that are kind of at the frontier of robot foundation models. They were one of the first groups that released robot foundation model based off of the video model backbone which is kind of where the the space has transitioned to and understood as the

future of uh robot foundation models right instead of having a VLM backbone. I don't agree with kind of like the framing of like this this country is going to win versus that country is gonna win. I think they're both gonna develop great technologies and um robotics companies. I think it's like more of a question is like what what is more interesting from an investor point of view. And I think this is what you see with not just uh robotics but also with cars, EVs and cell phones, right? Which is both companies or both countries can make great products there. It's like there's so many great companies and that's that's great for society and it's great as a consumer and techn great technology becomes very affordable but it's not great from shareholder perspective. There's still going to be good outcomes. It's just not

the you know multi-trillion dollar multiundred billion dollar outcomes that we're looking for as investors. >> Fascinating take here. Uh this is Andrew Kang. uh he's leading robo strategy I believe uh which is a robotics company and um >> I mean this is what we're seeing play out uh I would agree US certainly has a lead on China in the frontier model space uh they have uh the lead as it pertains to the humanoid robots um my take here is that this is such an interconnected world we know that there's going to be intelligence put into robots in order to let them move freely and interact with the world around them. Uh, and we know that

there's going to be a robotics play here in the US. Uh, which is positioned. I still think it's too early to tell. Uh, but I don't think this is necessarily like a very adversarial relationship. We know that China is trying to get its hands on Nvidia chips. Uh, the US has uh put a trade stop on putting the chips into hands of uh, Chinese manufacturers. Uh, and vice versa. Yesterday we were talking about uh some of the cabling that is required in data centers that the US obviously is going on this tremendous U US data center buildout but a lot of the infrastructure and specifically the cabling comes from China and so we use some of the materials from China in our

manufacturing buildout. vice versa. I'd imagine that there is going to be US models in some of the robotics, the humanoid robotics in China. And so they are obviously very vertically integrated. But if we have better intelligence here in the US from our frontier models, that is something that the Chinese can leverage and put inside of their manufactured robots or humanoid robots. Uh so I do think that there is uh you know there is competition but it is this very um it's not necessarily all adversarial. There is sort of this uh like biodal relationship between the two interdependence between the US and the Chinese markets as it pertains to AI and China. Uh USS chain link uh framing US

versus China. They will both win against the rest of the world. Yeah. I mean uh I mean we're talking about this interdependence between US and China. That's where these trade deals come in. We want to make sure that these are negotiated on favorable terms. But the reality absolutely you're right, US says chain link is that uh what US and China do ultimately sets the tone and is the leading in the direction for what happens in the rest of the world. Um let's keep moving on. Our next news piece here is that GSR says you can truly say there's an inflection point. Here's a throwback. Morgan Stanley's Amy Oldenberg explaining the progression of tokenization from a niche research project to part of the firm's daily business operations. We love hearing from digital asset teams within large

financial institutions. Let's hear what Miss Oldenberg has to say. walk us through maybe how crypto and tokenization move from I don't want to say that these innovation labs operate in silos >> but from maybe the the the corners of the organization to really being something that's now spearheaded by a person in a function like yours. Well, and I think that's it's a good question because I think that's where you can really uh truly say that there's an inflection point here because it's moved out of the innovation. I mean, there's still parts of it that are in the innovation um group as we think about things like quantum um or some of the

forward-leaning DeFi capabilities that we need to explore um where those are still edge case innovation in many cases. uh but this is starting to become uh you know business operations for us across all the businesses and that's one of the reasons we needed to uh set up this central strategy team to really help uh make sure that this is just part of the daily business operations. Okay. Um so obviously as every asset becomes tokenized uh it starts to touch more and more of these uh businesses uh right now there uh and you heard Frank allude to this uh big big uh Frank fan here on this show friend of the show and

uh you know Frank was discussing how there are these innovation labs and they operate almost independently within you know a research and development capacity within these larger financial institutions but Amy's making the the point that these are starting to seep into the rest of the business lines and the rest of the departments of the entire institution in this case Morgan Stanley and so Morgan Stanley I mean you know they've been a leader here they've developed you know some strategies around ETFs uh and they've started to incorporate DeFi into their innovation strategy uh shows deeper engagement with the blockchain infrastructure directly so Morgan Stanley is certainly uh embracing tokenization and going further and for further in this route um and I

think this is especially the case as we've seen more banks roll out tokenized deposits. We've seen more institutions roll out uh crypto trading and brokerage uh capabilities. And so as more of the institutions that their business interacts with on a daily basis in normal business operations, as they start to turn on their digital asset operations, the research and development innovation labs within these companies ends up navigating and helping to guide the rest of the institution as far as how they should interact with some of their partners and some of their internal business operations. So I'd imagine this is only going to continue to accelerate. I think there is this network effect within the institutional networks such that as these things come

online, they learn from one another. They try to navigate who should we interact with and how. And then they're going to be looking at the innovation lab within their own company for guidance on how they're interacting with some of their partners' uh digital asset offerings. Um and so that's a little bit of an update inside Morgan Stanley and how they're thinking about tokenization. Guys, before we bring you daily equity, I want to tell you about Zama. Zama is our privacy partner here on the show. These guys are doing incredible things when it comes to confidential applications on any blockchain. Uh, applying their technology very broadly.

We've seen a ton of adoption happen on Zama recently. All right, let's get into our daily equity segment. >> [music] >> Okay, so we've got earnings momentum in the equities markets. Uh, and so let's go ahead and play this clip of Ed Yardi on CNBC saying that equity markets have fabulous earnings momentum. Try to get a sense of how sustainable this AI trade really is.

>> Much Okay, Ed, tell me about this rally. What do you make of it? Where's this market going? It's going higher. Uh I mean my my year-end forecast is 8,250 and all of a sudden that looks fairly conservative. It's only 6 and a half% away. Uh I think uh we've got FIMO what I've uh previously previously discussed with you and that is fabulous earnings momentum. Uh that's really what it all comes down to. I mean, we've got uh plenty of things to worry about uh in the Middle East with the Fed uh and uh yet u the economy continues to form perform extremely well. It's resilient and we're seeing that in earnings.

>> You're comfortable where earnings estimates have gone. I mean, if that's everything according to you, then that's everything about what risk lies out there, too. Well, uh, I I do watch analysts earnings consensus very closely because I think that's really what's being discounted in the market, their outlook for the rest of this year going into next year. And uh, that's called forward earnings when you take a time weighted average of this year and next year. It's an all-time record high. Uh, I think it's going to hit over $400 a share by the end of the year, which will be the expectations for next year.

take 400 times 20 and you got 8,000 uh pretty reasonable estimates. I think earnings are going to be somewhat better and the valuation multiple may be higher. So, uh I'm feeling pretty comfortable with that. Yes. >> You had you had said in the I don't know maybe in the last week or or so that that tech had looked tired. It certainly looks like it's awake again now. No, actually on on on uh Sunday I put out a note saying that information technology was on sale. Uh so maybe that was an old note, but uh obviously you got to stay on your toes here with this market. But I actually pointed out that semiconductors were cheap that the overall uh information technology sector

was trading at the same multiple as as the overall market and that's unusual because growth stocks usually trade much better. And when you look at uh S&P 500 and information technology, it looks nothing like what we had back in 1999 and and 2000. So all all of a sudden all this talk about this being a a tech bubble is kind of thrown out the window. >> Um >> I mean there was that no from the gentleman at Citadel Securities who who suggested you know we we worked off our our on our own the excess that was in the market. Now we're primed for a reset. No, no end to the fundamentals.

Sounds like you agree with that. >> Absolutely. I think that uh it is all about earnings. The valuation multiple came down because earnings went up and investors felt kind of nervous about those uh earnings numbers and they weren't paying up for it and they actually took some profits. Now they're regretting it. They're jumping right back in. >> You like the broadening story? >> Absolutely. Uh we've been recommending market weighting information technology since the end of last year and and I think on balance that's actually worked out reasonably well. We've been recommending overweighting financials, industrials, and healthcare. And that's worked out very well.

>> Alltime highs in the equities markets led by the AI trade. Uh this guy's calling for 8250 on the S&P saying that is FUD and he might need to raise that expectation by the end of the year. Uh hyperscalers are up, semis are bouncing. Uh it feels like it is non-stop go mode in the equities market. Uh we will continue to monitor this on our daily equity segment. Guys, we've got our first guest. Uh she is the head of legal at Chainlink and we're going to be discussing the Clarity Act here today. And so we're going to bring up Katherine Kirkpatre in just a few moments. Uh she's recently the head of legal at Chainlink Labs and host of Dex in the City. Uh, pretty hilarious name

there. Uh, and, uh, she's a former big law partner, uh, and general counsel focused on DeFi, CFI, and L2s. Previously spent two years at Starkware and sits on the board of architect FI. And so, we're going to go ahead and get her ready. Uh, we're going to bring her up in just a moment. Like I said, recently the head of legal at Chain Link Labs, uh, former big law partner and general counsel focused on DeFi and CFI. Uh, previously at Starkware and on the board of Architect Fi. Big big week here in the clarity.

It's do or die time. And we're going to find out a little bit more. I see that she's ready in the back. Let's go ahead bring her up. And uh, there she is. Katherine, welcome to the show. >> Thanks so much for having me. >> Absolutely. And uh, welcome to Chain Link. We've got a few of the uh chain link marines uh in the chat. Uh >> in the chat >> and they are excited for your segment here today. Um I mean everyone wants to know clarity, clarity, clarity. What is going on? Where are we and where do we go from here?

>> Look uh we're in a little bit of a rough place. Uh we are still going to be optimistic. Where are we? The Senate needs to bring the bill to the floor for debate and what's called a closure vote, which basically means it's a special vote used in the lawmaking process to stop endless talking to break a filibuster. The issue that we're facing, however, is the Senate has a lot of priorities and those priorities are just coming before uh that vote on clarity and that is our next big hurdle. There were kind of three big substantive topics that were blocking the progress of clarity. Those have mainly been eliminated. You know,

one was the yield compromise with the banks. One was that law enforcement didn't really love the provision within clarity that protected developers. The blockchain regulatory certainty act made huge progress there. The third was a compromise over whether ethical limitations should be inserted in the bill. also progress there. Now, what we're facing, however, is just a lot going on in the Senate. >> Okay. And so, this is getting swamped down by I I saw there was a college athlete NIL vote and there's other things with Iran and all kinds of things that are happening in the Senate. This is just one of many that we're faced with. Um, okay. And so, as we kind of look forward to what we can expect, um,

you know, you mentioned the closure vote. Obviously, we're we're working on getting that through. Uh I I did hear that the SEC is considering rulemaking. They're in a position where they could do some rulemaking if this legislation does not go through. Obviously, we're still all optimistic. But maybe you could just highlight the difference if this doesn't go through and the SEC steps up and does some rulem. Does that get us where we want to be or what are we missing in that scenario >> to know? Uh you're right. Chair Atkins specifically said that they were ready and willing and able to do that rule making in the absence of clarity. The SEC's ready to do that. The CFTC's going to do that as well or making progress on guidance. However, the issue is it's

very difficult to futureproof all of this. And that's a term that both of the financial regulators keep using. But as we saw with that Gensler administration, all of what he did was pretty quickly undone with a very different posture. That same dynamic could happen with a lot of what the SEC and CFTC are doing, a lot of what they're putting in place. Now, it's not all immediately reversible, and you know, Chair Atkins and Chair Celig are doing a really excellent job at trying to think through all scenarios. However, nothing beats legislation. You know, once legislation is passed, it's extraordinarily difficult to walk that back. I mean, we

see we're seeing firsthand how hard it is to pass it. It's the same process with amending it. >> So, we want and need the legislation because everything that the SEC and the CFTC are doing now could theoretically be undone a lot easier than amending legislation. >> Yeah. Makes a ton of sense. And and it's a terrific analogy too, the way that you describe how quickly and easily we were able to repeal everything that Gendler did, which obviously was very harmful for the industry, but now uh we want this instantiated into law so that it is not easy to repeal uh once we do get the regulation that we're looking for. Um and so, you know, you mentioned how this closure vote would allow us to kind of break through the noise, stop all the

talking, and actually get some get some business done, get this vote in. How close are we to the closure vote? We we heard I believe it was the the the speaker that said they were going to put this on the floor and and we just keep hearing about this deadline on Friday. Is there a likelihood that the Senate continues to to stay in DC past Friday? >> Um maybe the here's the issue is even if we get the closure vote, this is not the end of the process. The issue is after the Senate votes on the bill, it the bill then needs to be kind of consolidated or or squared with the House's version of this bill. So, it's

not like we get the Senate vote and the president signs and we're all done. There's more that needs to come after this point. So, we need to get through all the other business of the Senate. We need to get this vote. We need to get that kind of momentum started again. And we need Congress as a whole to see this as a priority. They see it as a priority now to some degree, but soon everyone is going to be distracted by midterms, >> particularly if the Democrats have a really strong showing um at the midterms. That could change dynamics.

We're all rooting for clarity. Uh, Chainlink Labs in particular wants clarity because regulatory certainty is a huge unlock for a whole multitude of participants and growth. It's just looking like there's a lot to get done. >> Yeah. And and that is a great point because Chain Link is very expansive. You're plugged into so many different facets of the industry. Maybe you can just speak on chain link's behalf and tell us what clarity would mean for chain link and and therefore on behalf of the entire industry.

>> Absolutely. Look, we are technology uh we are neutral. We are we seek to be friends with everyone and it's in part because our technology can be used by everyone. And what we at Chain Link Labs want to see is a growth in the broader ecosystem. We absolutely anticipate convergence between you know kind of bringing the institutional world on chain that is a major mission of ours and that is going to be easier if we have legislation. The interesting thing about clarity is this is the last unlock to what you know I always use as an example if you look at econ 101 like bitcoin has all the attributes of a

successful currency except a clear set of regulatory guidance you know fungeability hard to counterfeit etc etc except that regulatory piece so the same could be said for a lot of crypto we've come so far but we still have a lack of regulatory certainty and that's gonna make it harder for builders to build and it's going to be harder for banks to fully engage. >> Yeah. Yeah. Absolutely. And this these are the floodgates that we're all looking for to open. They've signaled that they want to get into this industry by setting up these innovation labs within their larger organizations and and there's a lot of research and development happening, but without that regulatory clarity, we aren't able to

really start to execute some of that research and development. Uh this is what we're we're all waiting for. I'm sure the financial world wants it. We we want it onchain. Uh it's just a matter of DC. So So where are they getting hung up? We've heard so much about ethics. We obviously heard about the yield issue as it pertain to banks and stable coins. Is it still ethics or is there something else that's holding this up? >> I think a lot of it at this point is priorities. Frankly, the thing that we've spent a lot of time talking about yield and ethics and of course the BRCA, as I mentioned before, law enforcement, illicit finance concerns, but what we haven't talked a lot about is the fact that there are still a lot of legislators where crypto is just not a priority for them. We have come so far

in educating regulators about crypto. you know what I have seen within the regulatory sphere their understanding of DeFi for example they've come so far in in five years in two years there's so much expertise and there's so much understanding of how important this technology is we haven't come quite as far with the legislators themselves so you know if if someone doesn't understand something it's harder for them to prioritize so of course that's always kind of a spectre in all of this other thing is we've come to the point where we've we've seen a lot of compromise appropriately shepherd by shepherded by uh you know Patrick Wit who has been just a fantastic champion of this bill worked ceaselessly on this bill but what is a

good compromise a good compromise is where neither parties are that happy so that's what we saw with yield uh you know that's what we've seen with other points and we'll see if that holds up we're all hoping that those compromises hold up >> yeah um you We we talked a little bit about if clarity does not go through and it you know would be less likely if it doesn't go through this week the SEC would step up and and create some of those rules. But obviously that you know kind of kind of it's a it's a house made of sand not stone in that case. It's not as solid >> like the three little pigs you know like the the straw >> straw straw. Exactly. And and so so we talked a little bit about that and the

SEC stepping up but but let's just take you know a more optimistic point of view. Let's say, you know, they they are able to get a closure vote, it's able to get through, uh people do prioritize it, um and this thing does go through, what could the industry expect to happen next after that closure vote? And and ultimately, if it does get put into law, what is the industry doing to prepare for those next steps? You you rais an excellent point and I'm old enough to remember when DoddFrank was implemented. Okay. After the financial crisis and some people expected kind of immediate changes after DoddFrank. No, no, no, no, no, no, no. This kicks off a multi-year rule making and interpretive process.

So, it's not like we wake up the day after the president signs and and anything's changed. Probably not. And that's a good thing because things are materially changing within clarity. So this will give projects an opportunity to look at clarity very closely, the final version, the bill that the president signed and make sure that they're adhering to the new guidelines. A lot of the major projects and hopefully a lot of the smaller projects as well will be liazing with the regulators with those you know in charge of rule making to make sure that the industry is heard and these rules kind of come together in a way that works for everyone. Uh so it is a it is a uh marathon not a sprint to until we see

you know final implementation of clarity just like genius with stables. I think it's funny when someone says Genius compliant stable coin because I'm like well Genius isn't actually even in force. >> Yeah. >> Or with, you know, Mika, which is kind of the EU's version of Clarity. It's finally in full force now. They're already talking about changing it. [laughter] >> But it took a while. You know, it was years after passage of MA before it came into full force. >> Yeah. And who is in charge of those rulemakings? Um, like you said, genius, you know, still isn't really clarified.

Uh there are people that claim they're genius compatible, but they're not genius compliant. Somewhat of semantics there. But ultimately, if this does get signed into law, we're going to need to see some rules. Who's in charge of making those rules? >> Yes. And the bill is great about basically deputizing or designating a variety of agencies to make rules specific to these different categories. So, we're looking at a bunch of different regulators with different mandates who would make rules of, you know, Treasury for elicit finance. Obviously, the SEC and the CFTC hopefully working very closely together on ensuring that the rules kind of work in harmony. Uh, and you know, I think there's a lot of good to that.

Obviously, one of the big upsides of clarity is that we will see a token taxonomy. we will get that determinative determinative consideration as to which crypto asset is you know a commodity versus a security that's all going to be done through rulemaking. Uh so there's a whole host of agencies involved and there will be industry involvement extensive industry involvement to ensure that the tech the underlying tech is fully understood in the implementation process. I I've got a bit of an off-the-wall question for you, but be but it just popped into my mind based on everything that we're seeing out there in the in the industry these days. What does Clarity say about memecoins?

Because we got Robin Hood, you know, listing like Robin Hood US listing Cash Cat, this, you know, memecoin that originated from their chain. Does does the Clarity Act have anything to say about meme coins? >> Yeah, that's actually a great question. And candidly, I haven't focused on memecoins in a while. So, I would I will double check and get back to you. But I will say this, first of all, I think we've all been thrown by Robin Hood chain that activity built for institutions >> dominated by memecoins. And I know everyone spent way too much time looking at memecoins during the pump. Fun craze there for a while.

Not my favorite part of crypto, but fine, they're fun. But you know as a lawyer you're like crypto is a serious thing and then this happens. [laughter] >> Yeah. >> But uh you know I think the interesting thing is look memecoins have been discussed a lot as to are they securities are they commodities or are they a third legal category collectibles. >> So that is one of the best parts of clarity is that we get more transparency surrounding the categorization of all these different assets. Are they even financial assets?

>> Exactly. Exactly. And I didn't mean to put you on the spot there, but it's just it it invokes curiosity. I mean, there's so much imagination by people in the industry creating new things and then the legislators and the regulators come in and they have to try to make sense of all these weird and complicated things that don't really fit nicely into one bucket. Uh, and so, yeah, they certainly have their work cut out for them, uh, as a result of this. Um, and and I mean, it's it's just incredible. We know that there's this, you know, a lot of uh attention being put on Trump's memecoin and preventing that from happening, but uh you know, this this carve out for memecoins in particular is just a little bit a little bit odd. Um >> okay. And so, um otherwise, I mean, what what are you most what are what are you

focused on, you know, as we kind of get down to the finish line? What are you paying most attention to as it pertains to clarity? Look, I I'm really excited about clarity because the interesting what I'm looking at actually is the the global environment for legislation >> and this is a policybased argument as well. Like obviously we've we're behind many many many other countries and that gap is growing. You know in the past weeks not months we've also seen major movement from Japan on crypto market structureesque legislation. We saw a whole package from the United Kingdom, good and bad, but we'll likely make it a more uh friendly jurisdiction for kind

of crypto institutions. So, it's kind of like let's get this done, guys, because obviously the money's here. Everybody wants to play here. Nobody wants to leave. Everyone, everyone, and I'm speaking, you know, a lot of the global market participants, they want to transact here. People want to build here and this is an unlock for that. So, crypto has had to fight a narrative for years that we all know is absurd. The kind of crypto bro, crypto crime narrative. We've spent a lot of time and energy demonstrating that that's not what this industry is about.

It's about the technology. It's about making things faster, cheaper, more effective. We're at that point in time where come on, US, let's put your money where its mouth is. It's like, let's do something good for for America's bottom line. Um, and we've seen some really encouraging pro-inovation activity from our regulators. We need that support from legislators. So, that's what I'm I'm hoping that kind of policy oriented power, we see the follow through there. >> Yeah. And and I'm curious just kind of as we come to a close here if you think that the bill in its current form is sufficient because we've we've seen industry partners, you know, across the board, uh Brian Armstrong most notably,

you know, was against it. Uh now it seems as if he's for it. So there was some evolutions in the bill. It it feels like, you know, there's Republicans that want to get this through for the sake of, you know, industry partners and then there's Democrats that want to regulate the industry. They may not want to legitimize the industry in some regard, but they do want to regulate it safely and responsibly. This could be the way to do that. And and so do you think in the current form, you know, this is sufficient for the industry, for Republicans, and for Democrats? >> Yes. Cuz look, don't let the perfect be the enemy of the good. This bill is not perfect. No bill is perfect. No bill is ever going to be perfect. I mean, the crypto industry without anybody else involved could get together and there

would be no bill that would make everyone happy or would be perfect. This bill is good. This bill gets us where we need to get. It's a great starting point for that discussion and that engagement. So, you know, let's get it done. Let's not get hung up on, you know, it it's really hard to regulate an industry that covers everything from meme coins to infrastructure to DeFi. I I mean I could go on and on and on. So I think that the legislators have done an excellent job at this point in time. >> Yeah. Incredible. Katherine Kirkpatrick, thank you so much. Head of legal at Chainlink. Fantastic segment. I feel I mean we've been talking about so clarity so much. But I I really did do feel like I learned quite a bit from you today and

we were able to round out some of the conversation as we draw closer to the finish line. So thank you so much for joining. Would love to have you on again after we cross the finish line. One way or the other, we're going to find out what happens. Happy to be here. Thanks for having me. >> Absolutely. We'll see you again soon. Thanks so much. All right, we continue on. We just draw closer and closer to what is seemingly the finish line for Clarity. Uh we've got our next guest uh on stable coin spending. Coming up, we're going to talk a little bit about what stable coins may face in the new iteration of the Clarity Act. Also, um I mean the Genius Act is just continuing to progress as we get ready for some of the rule making there.

So, we're going to bring up a in a little bit. Uh really great segment with Katherine. Um let's see what we got going on in the chat. Word on the street as he's trying to get to thousand Zcash total and sign off for a few years. Oh boy. Andy, did you short Zcash yesterday? Uh what else we got here? Um token needed. Let's get clarity through. How does Chain Link acrew value to their token holders? Throw the lads a like and a subscribe. Oh yeah. Oh yeah. Oh yeah. Uh seems there's no urgency for people in Washington because the Clarity Act should be a national emergency.

I agree. I mean it's a national emergency for our uh for our industry here. Um, also I mean guys, how are they prioritizing things like NIL deals over the Clarity Act? Doesn't make any sense. So, uh, we should, uh, we should definitely get this thing pushed through, uh, very soon. That's what all of us here want. And I'd imagine that, uh, you know, this is going to open up, uh, new fundraising for some of these politicians. I mean, just doesn't seem like there's anyone that's hating on this. Everyone wants this to go through.

you know, how are they getting more momentum on things like NIL deals uh rather than uh rather than the Clarity Act? I mean, this is something that we've been focused on for so long. Uh so, it's certainly do or die time for the Clarity Act and uh we're going to continue to uh we're going to check it out. All right, next up we're going to bring on Hib for our stabled up segment. You guys know Hib well and uh you're familiar with our stabled up segment as well. So, we're going to get him in in just a moment and uh let's go ahead and uh get ready for our stabled up segment

with [music] >> [music] >> Welcome back to another episode of Stabled Up, our premier weekly show covering the ins and outs of digital dollars, stable coins, and the future of decentralized finance. >> Show is made possible by FRA and FRA is powering the financial engine of the internet, powering FRXUSD and genius compliance stable coins. This is the stablecoin super cycle made possible by FRA. Now enjoy stabled up, our weekly stable coin show.

>> [music] >> All right, we're back. We got HB and we got Air Horns playing in the background. Uh this is our Stabled Up segment with Hase. Uh powered by Fracks, our stable coin partner for Stabled Up and it's also clarity week. So we've been talking about clarity uh this entire week. Uh it's been a little while. How you holding up, man? >> I'm doing good. I'm doing good. Um, obviously a lot going on and uh clarity is starting to look a little bit dim, but I'm still feeling optimistic, but that's kind of my MO, you know.

>> Yeah. I uh I mean I feel like in this industry or any industry really, you got to stay almost perma optimist in order to just kind of make it through, especially these times feels do would you would you consider this like the apathy like the classic apathetic market conditions we kind of face? >> Yes. Uh very clearly you see a lot of market apathy. things are moving pretty slow. Markets are sluggish. The thing is markets aren't really reacting that much to anything, >> right? >> So it, you know, people people say, "Oh, it's terrible that clarity is not passing." The reality is that market doesn't react to clarity almost at all.

So if you remember in February, clarity was at like 80%. Then it was at like 50/50 a couple weeks ago. Now it's at 15%. >> You cannot see it in the charts. You can't see how markets are reacting to clarity odds. So like if you just if you if you just regress poly market against the bitcoin or eth price or or alts doesn't predict anything. Uh same thing happened if you remember there was bloodbath in the Korean markets. Uh just a few weeks ago Cosby you know roundtrip like 40 50% whatever it was. >> Um you couldn't tell that was happening in crypto. Normally, Korean retail is like the index of crypto, but we're kind of in a world now where like, yeah, they're all busy trading memory stocks and getting their faces ripped off, and crypto just literally didn't make a

blip. >> Yeah, they took all the liquidity and all the volatility with them uh over there into the Korean markets and the AI equities. Um, and so, I mean, yeah, I think that's uh that's effectively where where we find ourselves. Um, you know, I've heard a take just on clarity is that uh the the market doesn't like uncertainty. And so if clarity act doesn't go through and that's it or the clarity act goes through and that's it. Either way, we're going to get more consensus, more certainty than we have today. Either way, the market's going to perform well going from a position of uncertainty to certainty once this thing ultimately crosses the finish line one way or the other.

>> I mean, that's a very simple story. If that were true then you would see the poly market odds predict okay you know when it was at 80% it's like okay well this is going to pass therefore like markets should pull the outcome forward and say okay well we have the clarity therefore you know markets should be positive um so as uncertain so like look right now the odds are 15% right if your theory is true then that should mean 50% is the worst 50% is like we don't know if it'll pass or not so we don't have certainty when the odds go down to 15% that should be bullish because now we know it's not going to pass Obviously that's not that does not describe markets at all. So so I I think this story is not true. Um I think the answer largely is that look clarity is nice to

have. >> Does it really affect the asset prices of almost anything? You know like to what extent does clarity affect the value of Bitcoin? Almost pretty much nothing. Bitcoin has no relevance to clarity. Um what does it affect for stable coins? Not really anything. Okay. now that they can't pay yield, but they're already kind of, you know, like that wasn't a big part of why stable coins are are growing. Um, and aside from that, you know, ETH, well, ETH is already a commodity. We already know what ETH is supposed to be. Um, most of these things, and the reality, of course, is that we know there's going to be rulemaking such that the SEC and CFTC are going to step in and do this stuff.

Anyway, the last thing I'd say, so um Khi has markets on clarity going into next year. >> And what you can see from the KHI markets is that actually they're pricing 30 plus% that clarity passes next year >> and more than 50% that it passes by 2028. Meaning that, you know, everyone who's telling you like, oh, it's now or never. If clarity doesn't pass now, it's over and you know, kiss this stuff goodbye. That's not actually what markets are saying. markets are saying like look there's going to look if Democrats win the House the bill is going to get marked up again there's going to be a recompromise lines are going to get redrawn it's not going to be as favorable of a bill to the industry as the current version looks but likely there will still be some kind

of compromise and some kind of bill because at the end of the day both sides want there to be a bill it is a bipartisan bill in the sense that you know there's there's some basic stuff that everybody agrees on like hey there should be some kind of regulatory regime >> I think everybody agrees on that there you know exchange changes should be regulated in a clear uh way that's written in the laws. Yeah, we all agree on that. You know, when when a exchange goes bankrupt, the assets should belong to the customers, not the company. Yeah, everyone agrees on that. You know, there's a lot of stuff like this that like clearly there should be a bill.

>> Yeah. >> So, it's ultimately just a matter of okay, if there's a new Congress and there's a different set of power constraints that have to get navigated, that's going to change the face of the bill. But at the end of the day, it's more likely than not that there's going to be a bill that gets passed at some point within this administration. >> Yeah. Um like you said, there's a ton that everyone agrees on. Uh yet the bill is 600 pages and we throw a lot of other stuff in there that people go back and forth on and form compromises. Um, you know, we we saw some similar situation play out with the Genius Act and, you know, that went through much more smoothly than the Clarity Act is going through. Um, and recently we've been

talking a little bit more about the Genius Act because it feels like we're going to get some rules actually and that was passed a year ago, but we still haven't quite gotten the the rule making that people expected from the Genius Act. Do you have any sort of update on on you know given this is stable coin segment for today you know what the genius act where is the status today does it have any relevance do you see stable coin companies sort of preparing for the rules that could come out of the genius act >> yeah I mean the reality is that the rulem has been delayed and the rulem is you know a lot of the text in any bill is going to delegate to an agency that is an expert right so lawmakers are not experts and they also know by the time

they write the bill and by the time the bill goes into effect a lot can And they don't want to say like, okay, well, let's just put it from, you know, uh, clay tablets from on high of here's exactly what everybody should be doing. What we what they kind of do is they say, okay, well, the Fed should be responsible for this. SEC should be responsible for this. OC should be responsible for this, and so on. And now, okay, now they're responsible. What do they do? What are the rules? That is up to them. And they got to go do the work. And, you know, it's the government. So, stuff moves slowly. You know, people miss deadlines. And that's kind of what's going on right now with with uh uh Genius. Now, at the end of the day, like the most important question is not when do the regulators

make the rules. We kind of know at high level the contours of what the rules are supposed to look like. And more importantly, the signal has already been sent. And the signal is you can do this. It's okay to do this. It's okay to create stable coins. we want you to do so and you will be safe to do that within the guard rails of you know the American economy and companies have heard that and so they're launching stable coins and they're and they're and they're basically going to say look I know that the exact regulatory regime is a moving target but this market is so big I don't want to be late so that's why you're seeing OSD it's why you're seeing you know these these banks start to get into the game it's why you're seeing stable coin consortia all of these players are entering into this

market you know and that includes like you know CLA and you all these other uh fintexs that are starting to get into stable coins, including Stripe. The reason why they're here is that they know I don't want to be late. If I'm late, I'm going to lose market share. I'm potentially not going to be able to compete. And so, I'm willing to take on some degree of regulatory uncertainty because I know where the puck is going. >> Yeah. >> That is most of what you need to galvanize the market. So, it's not that big of a deal that the regulators are a little late. >> Yeah. And Genius was a lot narrower. And so, people can think of themselves as stable coins. They can launch these things. they, like you said, know generally where the puck is going. Uh even if it's not specifically, they can

remain nimble enough to adapt a little bit later. Um the the one that comes to mind here, uh recently announced that they're uh doing their stable card powered by Rain is Western Union. Um not that they're launching a stable coin themselves, but they're building on top of Dragonfly portfolio company Rain. Maybe you could just describe like what the value proposition is for a Goliath like Western Union to now come in and build on top of infrastructure like Rain. >> Yeah. So, if you're Western Union, I think you're well aware that stable coins are starting to eat your lunch.

Um, you know, they're not stupid. They're not that stupid, I should say. um like they they they know that hey you know the margins the intermediaries using the um uh you know basically using the banks and the correspondent banking system in order to move money is getting out competed in a lot of corridors by stable coins right they see the writing on the wall they realize that look our advantage as western union is not necessarily this infrastructure that we spent all this time building that is our advantage but it is increasingly getting displaced and out competed in a lot of corridors and we need to have some way to compete with them because at the end of the day our you know our brand our value is not just the infrastructure of you know the money changers and the

routes and and all that stuff. The other thing is that we have we have the trust we have the brand we have the customers we have the brand awareness. People know us and they know they can trust Western Union. So you know it's a little bit like when you see the sports books announce I'm going to create a prediction market right? Like why are they doing that? Because they realize oh this is where it's all going. But at the end of the day, you know, I'm DraftKings, I'm FanDuel, I have the brand, I have the credibility, I have the customers already captive on my platform. I might as well use this as a way to potentially allow myself to not go quietly into that good night.

>> So, I I suspect that this is a lot of what they're seeing is that they're probably focusing I mean, I don't know, I'm speculating. I'm assuming that they're focusing these cards in corridors where they already see a lot of stable coin adoption and they see their market share decreasing and they're saying okay let me let me go get a piece of that and the advantage of course of Rain is that by using Rain infrastructure for stable coin back cards um they can split some of the interchange so it might not be as lucrative for them I don't know um as it is for them to be running their traditional Western Union payments um but it's a lot better than having dwindling you know market share going to zero it's like okay Well, you know, I I it's still pretty good economics to be able to be a card. It's the reason why

you have all these neo banks who are, you know, launching cards on top of Rain is because they keep a huge chunk of the interchange. It's it's a pretty good business model. >> Um and so it's it's very much um it's it's the business model of Rain has been such that they actually allow by their nature and by the economic split that they offer to these uh uh card issuers that actually you can build a business on top of rain. It's not one of these things like, you know, it's very hard to build a business on top of Western Union, a scaled business, you know. Um, but you can absolutely build a business on top of Rain. It's part of the reason why they've been growing so fast is that they share a lot of the economics back to the Neo Bank or the or the issuer.

>> Yeah, it it feels like there's this value acrruel story. Part of the value acrruel is or the value proposition is the efficiency element that might create some sort of productive value and then they're going to charge some for that value. But if they leave a little bit or enough then another business can come in. They can also take a share of that productive efficiency and charge their own spread and then therefore you know then the entire productivity gets monetized accordingly. Um and it's smart for rain to do that because then they end up with a whole market on top. It's like I I was I forget where I was the other day, but you've got sports cards, you got all these Pokemon cards where now there's markets on top of the underlying, you know, infrastructure, if you will. Uh, and it and you know, it

creates a whole secondary market effect as a result. Um, and so I I I also want to just check, we don't have to spend a ton of time on this, but I've been hearing more about it. The most recent one was Wells Fargo because a lot of like bigger institutions, specifically banks, are getting into this game and a game I use broadly with like tokenized deposits, stable coins, feel very similar in the way that these institutions are entering the market. How different is a tokenized deposit to a stable coin? What does that allow a bank to do versus just, you know, why are we seeing banks go into the tokenized deposits route versus launching Wells Fargo stable coin?

think that tokenized deposits are basically completely uninteresting. >> Okay, >> so what is a tokenized deposit? A tokenized deposit is, you know, normally if you, let's say I'm a Wells Fargo customer, you're a Wells Fargo customer, I can send you money instantaneously. And the reason why it's instantaneous to you as opposed to, you know, a customer of JP Morgan is because it's just moving money around on the internal bank ledger, right? No money has left the bank or entered the bank. So there's no interbank communication that's happening. So in that world, if I'm sending an intra bank transfer, it's instantaneous. Okay. Um, so now instead of with a tokenized deposit, instead of going to my Wells Fargo thing and typing in your number and then sending you money and it going to you instantly, now

I can do that on a blockchain. But a tokenized deposit, every single holder of a tokenized deposit must be a customer of that bank. >> Okay? So it's simply a different database for the intra bank uh transfers >> of a bank. That's what tokenized deposits are. >> Okay. Do you I agree with you that specifically is totally uninteresting. But do you think that this is potentially a stepping stone to an interbank transfer if we get some sort of interoperability between a Wells Fargo tokenized deposit network and a JP Morgan Kexus?

still private permission chains but not just >> intra bank. >> So if you're doing that if you're doing intraank settlement instantaneously right if banks are settling instantaneously with each other um that is potentially more interesting for increasing the efficiency in the correspondent banking system. However banks can already do that they choose not to. It is not it is not a failure of technology that the banks cannot settle with each other instantaneously. Right? The fact that banks settle up at the end of the day with each other is a choice they are making in order to make their grossing of transfers between each other more efficient, right? Like they actually prefer to allow transactions to accumulate over the course of the day

because they sort of net against each other. It's like, okay, I would have sent you some money, but then you would have sent me some money. I would have sent you some, you sent me. We're essentially extending credit to each other effectively for like the net payments. And then at the end of the day, okay, well actually I sent you, you know, 4,000 transactions. you send me 5,000 transactions and the net actually is that I only send you, you know, a couple million at the end of the day because, you know, there's debits and credits on both sides. That's what banks do with each other, right? They don't have to do that. They could be settling with each other instantaneously. They're choosing not to because it's more capital efficient. So, the interbank settlement system like you know, are they going to be willing to settle with

each other using each other's tokenized deposits? It's not obvious that they would. They might say like, "Well, actually, why don't we just keep doing what we're doing and instead of like sending each other tokenized deposits, instead we just keep kind of netting each other on a piece of paper and then at the end of the day, then we settle with tokenized deposits." >> But if you're settling at the end of the day with tokenized deposits or with actual bank deposits on over Fed wire, who cares? At the end of the day, you haven't improved anything. You haven't made anything more efficient. So, it's a choice that banks are making to settle this way. So I I can imagine this convoluted story of tokenized deposits as stepping stone to interbank blockchains and then tokenized equities and tokenize everything, right? And then everything's on chain and everyone's more capital

efficient. What and I can kind of picture that endgame. I don't know exactly what it looks like, but it sounds like a nice story. [laughter] >> When you think when when you think of an endgame, like what what do you think of I mean capital wants to be free. It wants to, you know, move and and and whatnot. Do you have an endgame as far as like how these things if we do move just more capital onchain steadily over the next 5, 10, 15, 20 years? What is that what does that look like? >> Look, I would say tokenized deposits are not really moving capital on chain.

>> Um tokenized deposits are not free. They are not open. Not everyone can interact with them. Only customers of a given bank can interact with them. In which case, what can they do with a tokenized deposit that they couldn't do on the Wells Fargo website? The answer is basically nothing. >> Basically nothing. It it enables no new functionality. It doesn't enable programmability. It doesn't enable, you know, almost anything that you would care about. You can't create borrow lend market. I mean, maybe if it's internal to the users of Wells Fargo, but there's a good chance that Wells Fargo would be like, "Wait, you're creating your own money markets on our deposits? Well, we have a money market product that we have, so you can't do that, so stop it."

Um, so like the reality is that this is just not where you should be looking for, you know, the the the kind of open permissionless innovation that blockchains create. This is intentionally a kind of middle ground. You know, it's like an intranet. It's like a it's like a, you know, it's like a walled garden. It's like, okay, you can go on, you know, JP Morganet and look at websites that JP Morgan created. Who cares? That's not what the internet is for. that you you've enabled none of the value creation that the internet makes possible, right? Like if you think about, oh, I can ow into this website using JP Morgan, you use Plaid to like connect this to my okay, that is using the connectivity of the internet. That's kind of more like what stable coins are,

>> okay, >> than what tokenized deposits are. So stable coins are permissionless. They're open innovation. Anybody can build anything on top of a stable coin. They settle instantly no matter where they are. They're non KYC. They're not walled garden only closed to the the users of this particular bank. That's why stable coins are so disruptive. So there's all look there's always been this kind of like fake crypto stuff you know whether it's like enterprise blockchains or whether it's you know uh you know ins you know insert all the various you know corda and R3 and all these consent you know consortium chains from the past there's always been this kind of weak version of the technology >> and the answer it's it's this compromise

that never goes anywhere never works never built anything of value so in the long run. We all know the answer at this point. Even the US government knows the answer, right? If you listen to what Secretary Besson is saying, you listen to what Trump is saying, they know the answer is stable coins. >> The bill, the Genius Act, is about stable coins. It's not about tokenized deposits, not about CBDC, not about any of this other stuff. It's about stable coins. I I think we're at the point now that the industry understands it. Even the government understands it. The banks are the last ones to get the message because it's not in their interest to do so.

>> Yeah. I and I want to talk about uh OpenUSD from Tempo and there's big consortium around open USD and whether or not you think it it it you know has a real shot at becoming a a majorly adopted stable coin. The last thing on on this that I I I just want to talk to you about is like how the permissioned blockchain ecosystem that you're absolutely right we've seen time and time again it never creates anything of value how that complex has evolved because I agree things like tokenized deposits totally uninteresting in their current state maybe they change probably they don't but then you've got something like a DTCC network we don't know exactly how this is going to look but it feels a lot more interesting it feels a lot closer to the reality that we all

know is ultimately the winner here, which is the public internet of blockchains. How do you parse through like the permissioned institutional chain consortium that seems to be doing something of value versus the ones that aren't? >> So, to be clear, I don't know what the DTCC is doing. So, I I really don't want to comment on something of which I have no knowledge. Um, and I'm not trying to say that every consortium chain is worthless or every single enterprise chain is worthless. very clear there's been a phase shift over the last you know three four five years of people realizing that the value of a lot of these enterprise chains is the connectivity to the wider market right it's like okay if you are creating assets that are then exportable on other public chains and you're connected to

other public chains and you're interoperable with other public chains that is where value is created right it's through the communication through the openness through the sharing of state and information that you can actually get some value from putting something on a blockchain Um, if you were just putting something on a blockchain to say, "Hey, our old system sucks. Here's a new system. It happens to be a blockchain, that may be an improvement, but it was not necessary to use blockchain to get that improvement. You could have just created a brand new database and maybe you couldn't get the funding for it or couldn't get the budget for it. But, you know, in principle, obviously, it's possible to have a real-time growth settlement system without a blockchain. There are many real-time growth settlement systems around the world. They don't use blockchains.

>> So, or they don't all use blockchains, I should say. Um, so all all of that is to say, you know, I I um I do think there is a changing of understanding from a lot of the enterprise about why about how you need to architect these systems to create value. So that's why I I don't want to claim that I'm blanketly bearish on all of these things, but I think tokenized deposits is kind of the apotheiois of the wrong answer. >> Yeah, makes sense. Um Yeah. and and you know as as we're sort of I mean then then just to contrast that with like Robin Hood right which is obviously you know one of the largest financial institutions at this point but is able to do this in a chain that has interoperability and composability with

ETH it's an ETH L2 would you say Robin Hood has gone about this the right way yes decidedly and it's very obvious from the way it's getting adopted from the way developers excited about it the way you see TVL flowing onto that chain like that's the right answer and I think increasingly people are going to start taking their cues from that. Same thing with Tempo, right? Tempo obviously the right answer is that it's open, it's permissionless, everything's built out in in open source. And when people see that, oh, they see, you know, Stripe, this hundred billion dollar plus company, Robin Hood, hundred billion dollar company, they're doing it the right way, and this is why they are good at what they do, and they have their finger on the zeitgeist.

>> Yeah. Um, and since you mentioned Tempo, uh, OpenUSD from Tempo and Stripe, uh, I mean, they had a massive, uh, backing of partners, um, at least on the initial announcement. And then there was actually, uh, some there was a friend of the show from Lorenzo from Arc Invest, who who has some great uh, kind of like medium-sized Twitter posts as of late, uh, commented on the Visa earnings call. someone asked him about OpenUSD and uh he said, "Well, we're sort of, you know, he kind of took a step back and wasn't really gung-ho about OpenUSD. We're incredibly neutral. We want to support all of our stable coin partners." And so it kind of seems like all the partners that were listed on this grandiose announcement, you know, they support it,

but just as much as they support Circle and Tether and some of the other stable coins out there. And so how real do you think >> OpenUSD is and how much of a shot do you think it has at unseeding the du the stable coin duopoly? >> So I I've I think I've echoed the core point that it sounds like Lorenzo made um is that very bearish consorcia. I think, you know, if you remember way back in the day, USDC was supposed to be a consortium and it was basically just a consortium of two at the end of the day, which was Circle and and Coinbase. Um, but originally Center, which was the the organization that issued USC, was supposed to be a consortium with many different players, and that went away.

Um, so what you're seeing with this consortium, if you remember early on, there were a bunch of Korean companies that were supposed to be part of the consortium, and they're like, "What the hell is this? We didn't hear about this. We didn't put our name on this. please remove us. Um, and you're you're hearing increasingly from a lot of the players that like they kind of it's like signing a petition. You're like, I guess I'll sign, you know, like why not? Obviously, I'm not putting any money up. I'm not doing anything. Um, so it's a free option, right? And you're always going to exercise the free option. So, I think the reality is that, you know, this thing is basically being quarterbacked by Bridge uh or slash by by Stripe. That seems to be the reality as we've, you know, the dust is cleared. Um, now look,

Stripe is a real player. Uh, but of course, you know, Bridge already had a stable coin, didn't get a lot of adoption, wasn't really a significant player. And lastly, look, you just think about base rates, right? Like the um the duopoly is really, really powerful. Most duopolies do not easily get displaced. That's why we call them duopolies. So, of course, it's long odds for anyone, no matter how successful you are, to try to displace that. Um, does OpenUSD have a shot? Has, you know, it's not zero, but we kind of got to see the game get played. So, like what do they, you know, it's not live yet. So, let's see it go live. Let's see what they have up their sleeve. It's hard to bet against Stripe.

They're obviously very good at what they do. Um, but it's pretty clear that like, you know, this is right now it's giving Libra vibes is what I would say. >> Yeah. Yeah. Um, you know, Circle and and uh well, USDC and USDT had some very early mover effects and, you know, kind of grew with the industry as it grew over the last few years. OpenUSD very, very new. But I do just find it I find it cool and and sort of a nice experiment that we have Tempo which is fundamentally a payments company putting this forth into the market. Whereas USDT was born out of Bitfinex and USDC sort of born out of Coinbase. Both of those exchanges aren't really coming at it from more of the payments angle. Now USDC and USDT are trying to get into the

payments game whereas Stripe already has such a big piece of the market share in the payments game. It feels like there's going to be a different path to market. What do you think there, you know, kind of path dependency is going to play a a role here? >> Possibly. Um I think the reality is that very little payments in stable coin settles on Stripe. Um Stripe is predominantly a card processor. So, uh, you know, obviously they're very bullish on stable coins and they are trying to skate to where the puck is going as as, uh, as they should. They're very very bullish on stable coins, >> but it's not a meaningful part of their business right now. And it's just not, you know, these are not the merchants that are trying to integrate stable coin

payments. These are just, you know, they're just card processors. That's that's most of what why they integrate Stripe. So, um, I I think we should also be wideeyed about the ma there's there's often a lot of magical thinking about large companies. You know, Stripe is a large company. Obviously, they're betting hard on stable coins, but they're not betting that hard, right? They have a core business. They're doing really well. They're crushing it. Um, they're not looking to disrupt their own business. They're not looking to push people away from credit cards. they're not look, you know, like they'll take the market share if it's there, if it's presenting, but for the most part, like this is just not how stable coins are mostly moving. Um, it to some extent, if you're talking about stable coin

payments, most stable coin payments are happening through something like rain rather than people trying to settle at like some kind of stable coin checkout. That's why Rain is growing so fast. That's why the stable coin park business and all these NEO banks are growing so quickly. this is a an affordance that consumers are very comfortable with and that they like and that merchants already adopt. So this is a big part of the reason why okay if that's where we're going that this is basically these stable coin back cards where most of the settlement is coming from then Stripe doesn't have to do anything right they're already processing a lot of these cards so you know whether stable coins the back end or not from their perspective it's just you know Visa cards a Visa card >> and so maybe you can just help unpack

this are are Rain and Stripe competing with each other it doesn't sound like it it sounds like more so Stripe is helping facilitate the processing of cards. Rain cards, >> correct? So, Bridge does have a competitive product with RAIN to try to issue cards out of Bridge. So, they have a competitive product. They're very small player relative to where Rain is today. Rain is growing and has probably I don't know certainly more than 50% market share in this in this uh space. Uh whereas bridge right now relatively smaller competitor in that space. Um so, they are competing directly on that front. But on the processing side, I mean, you know, RAIN is, you know, ultimately used to issue the cards and, you know, it's like the kind of

technology and the in the program manager for the cards. Um, Stripe is what the merchant integrates to process the cards. So, if you're, you know, some Shopify or whatever or some, you know, checkout thing, you integrate Stripe and then you use that to process the cards, right, that you're getting and it's all the cards, not just grain cards. >> So, issuance is a totally different game. That is where Rain is probably predominantly playing and that's the space that's growing like crazy within stable coins, not stable coins at checkout. >> Yeah, got it. Um, yeah, make makes sense. Um, got a couple more minutes. We got a couple questions in the chat. One of them's on uh all of the cold storage self-custody debacle things that have been happening recently. Um,

>> do you believe that cold storage devices are dead? This is a question from our friend New Type Trader. Is it now unfortunately better to keep your Bitcoin in an ETF uh or sell your Bitcoin for something that is quantum resistant? >> That that third question sounds totally different, but uh >> yeah, that's a very that's a very different uh question. Um okay, so number one, I would say look, if you are an ordinary person, you should almost certainly be using some kind of third party custody. Um the reality is that there's just too many foot guns for ordinary people to be self-custodying.

Um this has nothing to do with cold card. This is just a general rule of thumb. Um if you own Bitcoin ETF, obviously they're very low fee load. Um or if you just hold assets in an exchange or whatever. Uh I mean look, if you own the Bitcoin ETF, basically you're holding it with Coinbase because you know Coinbase custody does the custody for the for the ETFs. So um the answer by and large is probably if you're an ordinary person you should be doing that unless you have a good reason to be self- custoing. Um and there are good reasons to be self- custodying but just you know because some Bitcoin maxi on Twitter told me to is not a good reason. Um so now the reality is that cold card was a very small vendor in the Bitcoin hard hardware wallet space right so clearly they had some very very bad

security lapses. There's been a lot of reporting now about, you know, their coding practices and the fact that they did probably almost no AI hardening given that this vulnerability was found for a couple dollars of AI spend. Um, so that tells you this was kind of a delinquent vendor. Um, they have like 1 to 2% market share of the Bitcoin hardware wallet space. Like this is not this this is not a major player. So probably what it does mean is that you should only be using the biggest vendors when it comes to security critical stuff because they can afford to spend the money to make sure that their stuff is absolutely robust with the latest generation of of uh you know kind of cyber security scanning from AIS. Uh, but you long story short,

you're probably pretty safe holding the Bitcoin ETF, but that doesn't mean, look, throw away your your ledgers and your treasures and like all this stuff is I don't think that's true. >> Yeah, you make a good point on the uh, you know, the the largest custodians are the ones that are the most battle resistant because they have the most resources deploying their cyber security, ammunition, and artillery. So, makes a ton of sense there. Uh other question is how big do you think Rain can get in terms of TAM or market cap? >> Yeah, look I mean we're investors. Um I think Rain can potentially be one of the biggest companies in crypto. Um I I I don't say that lightly but I think if you just look at the TAM of how much of

payments can be potentially run through rain cards obviously you know card is a huge business and um if you just think about you know once upon a time we imagine that stablecoin payments were going to be happening through you know you go you see these images in like Venezuela or Turkey of like you know some some corner store has like a we take tether sign in the window right >> that only really happens in the most up countries you there's places where there's very high inflation, very low state capacity, you know, basically like failed states are where you see this kind of thing happening out in the open. Um, the reality is that most places even that have high inflation, they're they don't have merchants openly taking stable coins and it may not even be legal for them to do so. Um, it's it's it's in these places where you

don't require the two-sided market to cohhere where instead users can decide, okay, I have stable coins on the back end of my card, but every single merchant takes this. Every e-commerce platform takes this. You know, if I'm buying something from from uh, you know, AliExpress or Alibaba or I'm buying something from Amazon, I can still use the same card and the merchant never has to care. Nobody in the middle has to care. Stable coins on the back end, but everything on the front end is exactly the same. And the reality is like that we've learned, you know, it's not it's not like an ideological thing. We have learned that like that is just way more effective for adoption for the stable coin stack uh and still maintains a lot of the efficiencies that stable coins create. So I think the reality is that look at least in the beginning this is

the thing that is going global that is papering over the world. Um you see it growing almost everywhere but the endgame like what is the endgame? The endgame that I imagine is that look, at some point, let's say you are Amazon, right? And you see, okay, here's here's a card that somebody just typed in. Um, you know that a lot of people use rain cards, right? >> So, you see this card come in. Um, and you ping Rain's API. You say, "Hey, I just saw this card. Is this a RN card?" And Rain's like, "Yeah, yeah, this is a RN card." They say, "Okay, cool. Well, um, why don't we just not run this through Visa? Why don't we just run it directly like just settle in stable coins? You send me the stables and we don't bother with all the Visa stuff.

Right in that world now all of a sudden you are actually using stable coins as an alternative settlement rail. >> Mhm. >> That is the endgame. That's the endgame. The endgame is that stable coins actually disintermediate the payment networks once you get big enough ubiquitous enough and you have this alternative payment system. Now we're very very far away from that. And to be clear that's not going to happen anytime soon. But, you know, back in the day, we used to talk about how like, man, why don't Apple Pay and Google Pay just run on stable coins and cut out all the traditional payment rails, right? Like, that's why it's there. It's open. It's permission. You don't have to charge.

There's no gatekeeper. There's no nobody charges rent on using stable coins. >> It's actually neutral infrastructure. Um, Rain is the first thing I've seen that can get close to that. >> And that's a big part of the reason why I think it can be an absolutely enormous company. >> It's huge. Uh very cool to to actually see this get uh put into fruition. Um see man, absolute pleasure as always. Last one I got for you actually is uh we got Jesse from uh from bass coming up next and I'm just curious if you have any questions that I should ask Jesse. >> I my biggest question is how's he feeling? I know it's been uh he's gotten he's gotten his ass kicked over the last month or so. So um I'm hoping he's uh you know got his uh got his mojo back and he's feeling positive.

>> Yeah, same here. Cool. Him, you're the man. Appreciate you coming on as always and uh we'll see you again soon. >> Thanks team. See you. >> See you. Fantastic segment as always with Hib. This one mostly about stable coins also on the Clarity Act a little bit. Uh we're going to get right into Jesse. I think he is just about ready behind the scenes and uh we're going to go ahead and bring him on the show. I mean, what else what what what is there to say about Jesse? Um, I mean, you guys know him. Uh, fantastic lineup today. I mean, give me some air horns because what what other media show has survived these market conditions, let alone brought

together some of the best in the business here to chat on a random Thursday? I mean, big week this week, big lineup here on uh on the rollup. And so, uh, and so, man, we're gonna we're gonna keep keep this momentum up. We're gonna keep this show rolling and we're gonna bring up Jesse. I see he's ready behind the scenes. Let's go ahead bring him up. He is the creator of bass and uh well, he's a bass creator. I think we pulled that directly from his bio. Jesse, man, it's good to see you again. Thanks for uh thanks for coming on.

>> Thanks for having me. Excited to be here. Happy Thursday. >> Happy Thursday. >> Sensational. >> Sensational indeed. It's a uh it's a pleasure to have you. Um I mean, bass has been in the limelight as always. It es and it flows and uh no no surprise here. Uh you look like you're somewhere sunny, blue sky, so I hope everything's good in your world and maybe you can just give us a little bit of a sense of how you're feeling in reaction to everything that has evolved on base. >> Yeah, I'm feeling fired up. I mean, I think what we've seen in the first half of this year is just that crypto is starting to kind of go uh you know vertical in terms of its adoption on stable coins, on tokenization, on trading, on financing. Um, and so I'm heads down basically trying to figure

out how to serve all of these customers that are coming online. I spent all day yesterday um, in San Francisco with a bunch of customers um, just kind of hearing what they're solving with Bass and it was pretty inspiring. Um, you know, one in in particular customer that I talked to is integrating financing on Bass are kind of borrow and lend markets uh, where they're doing cryptobacked loans for their customers and also giving yield to to other customers. Um, and they were saying, "Hey, we tried to do this with CFI. Uh, and it was too expensive and too slow. Uh, we tried to do it with our own internal systems and it was too expensive and too much balance sheet capital." And then we found base and now we're rolling out a financing product that instant that has

lower rates than anywhere else in the world. Uh, and that is a like incredibly seamless consumer experience. And so that to me gets me so fired up and I think it's indicative of crypto really crossing the chasm where we now have it powering these use cases behind the scenes in a way that's going vertical. >> I absolutely love it. I mean I we are fired up here too and people are you know they're they're they're dropping like flies out there. They're going to AI. They're going here. They're going there. But we're not going anywhere, Jesse. We've been live every day for the last like four years. Uh and so we're we're not going anywhere. We're going to stick around. Um, but there's a ton that has been happening despite market conditions. One thing I want to ask you about is Robin Hood and Robin Hood chain

because I'm curious. We've talked so much about Ethereum at large and when you see a new chain come on, do you think like all right, we got to toughen up. You know, here's more competition or do you think this is more onchain activity? These there are more people that are going to come on chain that ultimately means user activity, more user activity for Bass. What is your reaction to what's happening over there and how do you think it could complement or compete with what's happening on Bass? >> Yeah, I mean the PI is is just growing. We're upgrading the whole global financial system and seeing other folks come in and say, "Hey, wow, what Bass has been doing for two and a half years and you know the billions of dollars of assets and billions of dollars of volume on base that looks pretty good. Let's

figure out how to contribute to that effort as well." That that gets me excited. Um I'm also someone who always loves a little bit of competition. I grew up playing um sports, played all the way through college as as a soccer player and you know my attitude was always like I just want to be pushed to be the best that I possibly can be and I think base is the same and the builders on base are the same and so um yeah I think it's a sign of the times. every single financial institution in the world is going to bring their business to be powered by crypto rails uh because it's going to offer cheaper, faster, more global financial services that let them just offer better customer experiences um to to their customers all around the world. And so uh we want Bass to be at the center of it. Bass is at

the center of it today. It's the place where 90% of Agentic Finance transactions on 402 X42 are happening. It's the the second largest financing market in the world for borrow and lend and growing quicker than any other ecosystem. You know, every other ecosystem is actually down in terms of TVL since 2025. Base is up 35%. Um, and then the core of our trading business is live and well, where Bitcoin, Ethereum, they trade more on base than any other chain in the world from a spot perspective. And so those three products trading financing and payments are growing incredibly fast.

And that's what we're going to keep doubling down on. >> And and so with that in mind, uh and I mean, first off, kudos because you know, TVL is up, activity is up, haters can say what they want, but you can't argue with the facts and the numbers. And so, you know, there there is real live activity happening on bass today, whereas there's a lot of theoretical things happening across the rest of the space. But I I want to get a sense of how you're thinking about this as bass moves forward, because we've seen how there's kind of this barbell approach. We've seen RWAS on one side, memecoins on the other side, these two wolves inside of us. You know, we've also seen on base specifically sort of the the you know, iterations through social tokens and creator coins and and all kinds of

things like this. Um and and you know, the old adage is if you're everything, you're you know, to everyone, you're going to be nothing. So, so where is base uh positioned? What is the unique differentiation? Where are you guys hyperfocusing? What is the facet of the industry that Bass wants to dominate? >> Yeah, I I think the way we think about success for bass is becoming the internet exchange basically where every asset whether it's stocks or crypto majors or um commodities or anything else that you can imagine including these longtail attention assets is traded uh where you can trade and exchange those assets in every form whether it's spot or per lending or or borrowing. um you can you have the right market structure for you and it's

serving as the backend to power financial services products from Coinbase to new age wallets like Phantom and FOMO to uh brokerages that are starting to leverage this technology like um e Toro and and tons of others that are starting to come on chain and so that is the vision and I think that's what we're we're heading towards now. I think the the the thing that's exciting to me about um open blockchains is that you have space for the the longtale of builders and innovators to explore new markets, including attention markets, which are kind of like my catchall for memecoins, creator coins, content coins that are all basically taking the attention that we spend uh on culture and on creativity and on feeds and turning it into tokenized value that can

then be redistributed through the different constituents who create it, who consume it, and who distribute Um, and so you have the space for that. And then on the other side, you have the space for literally every asset in the world that's offchain today to come onchain to benefit from 24/7 settlement, uh, global access and deeper liquidity and better technology primitives that can then be built on top of it to offer different kinds of financial services. And so base is going to be the exchange where all that happens. Um, and we're actually going to be programmable exchange where then other people can layer on a bunch of pieces as well. And so um yeah I I think it it's all going to happen on base.

>> And is the infrastructure and user experience is it generalizable enough? Is it flexible enough where you can build one piece of infrastructure you can build base and it can appeal to the most you know suited up institutional of RWA folks and it it can appeal to the you know degenerate attention traders. >> Uh I think I think so. I and I I do think that is a little bit of the two wolves like you you you need culture and you need seriousness. Um and that's the kind of spectrum of of you know conversations that we see on crypto Twitter today. That said, I will say where Bass is focused is on delivering long-term value. Um and so I think attention attention assets can be

long-term valuable for the ecosystem. You know, I think you have memes on base that have been contributing and growing and onboarding people. Um, I think you're seeing that creator coins, you know, with Anom and others, I think, are going to make a resurgence and be something that also happens. Um, but I I think one thing we're we're we're a lot less interested and is people who are just here to kind of short-term, you know, uh, make a quick buck and then leave. And so where we're most focused is how do we build systems and products and and build the infrastructure that can support trillions of dollars coming into this new economy and give access to billions of people all around to that value um so that they can have more economic freedom. And I think a big part of that is backing long-term builders

who are, you know, coming through the ups and downs of the market and saying, "We're going to stay focused on delivering those products." And then also working with kind of upmarket customers that are, you know, NEO brokerages and neo banks and um centralized exchanges who are upgrading their systems in order to offer better experiences to their customers. And so that long-term value and the long-term builders, whether they're big companies or small companies, that's BAS's primary focus. And I think it comes through in the quality of different teams that you see on base. You know, Aeradrome is now one of the largest exchanges in the world. Virtuals and Banker um originated on base and of course they're going elsewhere, but um it's been awesome to see them kind of like thrive and grow and and explore there. Venice is, you know, the the probably one of the

biggest consumer apps um in crypto today. Um you know, they just said said to announced that they're doing something like $90 million uh in in annualized run rate. They've invented this thing called tokenized inference that now has all of these markets that people are pricing and then consuming inference all happening on base with a ton of programmable primitives that are being built on top of it. And so that kind of innovation coming from builders who have been here and are going to keep being here through ups and downs. That's the thing that we care the most about and are going to be supporting the most. >> Yeah, there there's uh some bass lifers in the chat. Uh big shout out to OneArm Bandit who uh who's a big bass fan here.

And then we've got a question from the chat from uh let's see uh from uh Greg who's asking if or excuse me from Edward that is asking if uh Bass is considering integrating a pers exchange like lighter. >> Yeah. So um we think one of the one of the places where there's definitely the most opportunity for growth on base is around per um we've we have uh per venues like Ovantis um that have been growing really nicely on base. Uh but we think there's a lot more that we can do to kind of get that ecosystem growing even more quickly and as we talk to traders um and also as we talk to other kind of financial app builders um the lack of a scaled per venue um that is you know bringing billions of dollars of

volume um is is a missing piece that that would let them offer a better product to their customers let them do a bunch of more kind of hedging uh and and financial engineering uh on base directly rather than having to go elsewhere. And so as we're working through the second half of this year, that's a big priority um to make sure that we have per alongside spot as a really liquid marketplace on base that can then kind of fill out that full financial services offering. >> Yeah. And and I do want to just get the biggest of pictures here because you know Bass is so expansive and you talked about attention markets and I think it does make sense when you when you really do think about it how you know there is an exchange and a culture that is able to tie these two together. you know,

long-term attention. You want the liquidity and the culture sitting next to, you know, some of the largest amounts of liquidity on, you know, in the world on the internet. And so, internet capital markets, internet finance, um, feels like a really good term because ultimately all the capital is is wanting to move at this speed and proximity to some of these markets makes a ton of sense uh, in terms of signal, attention, and then also how that translates into uh, capital markets as a whole. So the last missing maybe final piece here is AI. And I just want to get a sense of how you see AI integrating into you know the the two wolves, right?

The third wolf being AI, the first and the second being the the attention markets and uh you know more serious RWA products. How does AI fit in? >> Yeah. Well, we're seeing AI totally change the way that we work on base. I'm writing code now uh in between meetings and shipping products internally and externally uh in a way that I just like wasn't able to for 5 years. But as an engineer, I'm now just like totally giddy about getting to be able to do that again. And then it's also happening directly on base. Uh I said at the beginning, but um I think something like 90% of X42, which are kind of a HTTP transactions are happening and being processed on base today. Um the things people are and agents are buying are inference. Um they're buying data. Uh they're buying uh consumer goods and

services. Um and that that's growing pretty consistently. Um where basically it's getting integrated into more harnesses. um you have more suppliers um who are offering services. You know, lately we've seen um AWS turn it on for their web application firewall. So now any AWS customer can basically just enable monetization um directly in CloudFront. Uh so as they have data and and content that they want to be selling that's currently being overrun by bots, they can turn that into actually a revenue stream. And so I think that it's been cool to see that kind of primordial soup of AI plus crypto innovation start to develop on base. I talked about tokenized inference earlier and I think all of it's going to come together over the next few years to basically make base a place where you have millions or

billions of economic actors in the forms of agents who are doing payments who are uh trading who are accessing you know lines of credit and capital um and are doing things that we maybe can't even comprehend right now uh as an industry and so um I think we're in day one of that transition and it's going to get a lot bigger in the years ahead. >> Yeah. And uh you guys have assembled a fantastic team at Bass. Uh some more questions here. Uh people are curious. Uh they saw some uh things with Kobe who recently joined the team, but then his base tag on Twitter. Something got revoked. Can you confirm or deny is Kobe still part of the the base team there at Coinbase?

>> Yeah, I just walked I just walked out of a call with Jordan uh with Kobe um who uh was, you know, weighing in on base, where we're going um how we succeed and win. um him and I have gotten to work really closely over the last year. Um I was a core part of kind of championing him joining in the first place and um uh the big reason why was I I've just um found him to be an incredibly incisive uh and visionary leader and so um it's been awesome to get to have him weighing in on base and um helping us build base into the best possible thing it can be.

>> That fantastic. And do you just out of my own curiosity, do you find your you guys kind of agreeing on most things as far as the direction of bass, maybe you can just give us a sense of, you know, what what are some commonalities? And then are there any areas given that both of you guys are OGs, are there areas where you disagree on on, you know, the path forward? >> I think one of the things that I love most about working with Kobe is that he's just incredibly direct and we get to have really like clear uh conversations about where we think we're going. One of the places where he's influenced me and I think influence base is on the trading side. Um I'm historically like I haven't been a trader. I've been much more of an investor um you know like buy and hold.

Uh and Kobe is someone who I think kind of grew up trading in the trenches of crypto for the last decade. And so that's helped him um I think really be a really strong voice for me of that trader as I'm starting to spend time with a lot more customers. And so as we're thinking about per um as we're thinking about growing our spot markets, as we're thinking about attention assets, um I think he's been uh just like a really powerful p perspective to make sure that we are um prioritizing the foundations, the products that serve traders um to make sure they're getting a best-in-class experience on base. And so I'd say that's a that's a place where he's he's really influenced me. I'd say, you know, one of the places where me and him have a lot of commonality is just, you know, our perspective on the long

term. Um, we've both now been here building for a decade plus and I think both of us feel like there's there can at times be so much noise and really the thing that matters is putting our heads down and and trying to change the world. Um, and the way we do that is by upgrading the financial system which is going to let us increase economic freedom globally. And so, um, that mission and then just the relentless forward progress attitude of we're going to show up every single day. Um, you know, he's, uh, uh, you know, sometimes showing up in the middle of the night.

I'm show sometimes showing up in the middle of the night because we're in different time zones at various times. And we're just going to show up for each other and and for for Bass and for Coinbase and for crypto. Um, because we believe that crypto is a incredibly powerful tool for freedom. uh and that hard work is gonna what is going to be what brings it to the to to millions of people, billions of people all around the world. >> I mean, I think it's a it's an extremely virtuous, you know, and noble effort. Increasing economic freedom globally, I think, is is something that, you know, is true to the ethos of of and philosophy of this industry as a whole.

it it's where we've been and and it's indicative of you guys be being in the space so long but many who have been in the space so long have kind of lost their way and and you know sometimes forget some of the original ethos banking the unbanked is kind of the one that you know comes to mind but obviously that has gone through iterations itself uh in uh economic freedom globally I think is huge a piece of that is you know economic freedom here in the US and and I'd be remiss not to ask you about clarity act it's the clarity week it's a big week uh I prediction markets have this at like 15 to 18% these days but actually uh we had hib on just before you and he mentioned that Khi has a prediction market about uh it going into 2027 2028 it's actually

increased odds of happening later uh in later years how important is it to get clarity act through I mean another co-orker of yours is Brian Armstrong has just been relentlessly in DC trying to help this thing move forward maybe you know you can give us some insights into discussions you've had with Brian and his experience in DC and also your perspective on the relevancy of Clarity Act. >> I mean, I think as we talk to builders, one of the the most pernitious realities of the last decade has been that um it's just way too hard to build in crypto in the United States. And that means that builders are spending more money on lawyers than they are on engineering and product. Uh and that's that's kind of like an untenable reality for uh being the place where this innovation happens

in the future. And so I think from an importance perspective, it's super important. We need clear rules for entrepreneurs in the United States to innovate with the most important technology for financial freedom that we've ever had as a world. And so I am like 100% uh behind that. And I think that uh that's not just me. I think it's it's Americans around the world who are getting behind it. um you have an increasingly loud uh set of constituents uh from stand with crypto to just everyday people who hold crypto uh that want to see the benefits of it um be more widely adopted and clarity can provide that in terms of kind of where clarity is right now. I think one of the things that's been most exciting for me is just the bipartisan nature of it. Um

you've had you know as it passed out of the committees bipartisan support um which I think has has made the bill better. Um, I think as we're in the kind of final negotiations, um, there's people sitting down from both sides of the aisle to to get this bill done. And I'm seeing just a lot of energy and, um, support for for making it happen. And so, I'm optimistic. Um, you know, it's it's always a little bit of a uh, you know, work in progress as you're trying to get through um, a major piece of legislation through through both both chambers of of Congress. But, um, we have the best people in the world working on it. um from both sides of the aisle from um companies and individuals like Coinbase and others um uh who are flying into DC who are putting in the nights and weekends and um I'm

optimistic that it'll get done. >> Yeah, this industry has been relentless. I from from your perspective I'm just curious one follow-up there is that you know mission of improving economic freedom globally. This clarity act has kind of been touted as like opening the institutional floodgates, institutional being the key word there and a big part of, you know, the mission at base and your mission personally, opening up economic freedom. How do you square that? You know, opening up the institutional floodgates. Is that really what clarity is about? And if so, how does that help achieve the mission of improving economic freedom all over the world?

>> Yeah. Well, I think what we saw with the Genius Act, which was the stable coin bill that passed about a year and a half, was that it created certainty around stable coins um for businesses in the United States and beyond to more aggressively embrace them. Um and I think that that's led to or been one of the contributing factors behind this real inflection that we've seen where um you just have really really dramatic growth happening month over month, quarter over quarter on stable coins. And I think that clarity has the potential to do the same thing for the rest of the crypto ecosystem. um where it really creates that regulatory framework for tokens, for protocols, um it protects developers, um and really makes it so that businesses of all kinds can more um seriously, I think, lean in.

Um and some of that's going to be uh like literally the law is changing. But I think some of it's also just um like a message from the United States government that says like we're here to support this innovation which then kind of ripples through boardrooms and and CEO conversations and lower level employees to all the way to the people on the ground who who figure out okay how do we take this technology and make it something that can transform our business from payments to trading to to agents to to whatever it is. And so I'd say um you know I'm optimistic that clarity is going to pass and that it's going to lead to a bunch more adoption uh in businesses and then that adoption is actually going to contribute to this increase in economic freedom. Um because

like we've seen with stable coins, the more people that support stable coins, the more opportunities and and and products are available to people who are using stable coins. And today I think there's something like 500 million people around the world who hold stable coins. And so if we can just keep giving them things to do with that, that's going to lead to more access to credit, um, more access to equities of all kinds from all markets, um, easier payments that are faster and cheaper, so you're not paying $40 or whatever it is to send a remittance to your family in a different country. Um, and I'm just like so so bullish on uh that leading to more economic freedom. And look, if if if something happens with Clarity, it's not going to stop.

>> Like it will be an accelerant, but this is inevitable. Just like the internet, uh, crypto is a technology that is out of Pandora's box where it is freedom technology for money that lets us take legacy systems that are 50 years old or 100 years old sometimes and turn them into modern softwarede defined decentralized systems that give more people access, make our money more efficient, uh, and make it so that the the products that we use and sometimes hate today just work a lot better. And so when you have a technology that that's that's that powerful and you have a technology that really can transform the consumer and business realities as as people use money,

we could not have clarity for for years and it will still lead to the transformation that all of us are working towards. And so I'm I'm bullish on passing clarity. I think we're going to do it. Uh I I think it will lead to this wave of adoption and this technology is going to uh lead to adoption regardless. >> I I love everything you're saying, Jesse. I think it makes a ton of sense and I love how it all ties into the bigger picture. I I realize we're probably tight on time, but I I'd be remiss if I didn't ask you one one last thing, which is uh we were in Vermont for Base Camp. Uh this was a little while ago, maybe last year I think around this time and you announced that there would be a base token and I just I'd love an update on on like are we

going to see it sometime soon? What's the status? Are we still going to have a base token? Just anything you can share on this regard would be would be awesome. >> Yeah. Well, you know, last September we announced that we were starting to explore a token. Um which was a shift from where we were previously where basically for the first two and a half years we we said we're not even going to think about this. we just want to focus on building a product. Um, and so we shifted that perspective and we always build in the open. So we wanted to communicate to folks. We're starting to explore, you know, obviously when you have a big scale network like BAS and you're doing inside of a big public company, um, when we explore things, we do it super intentionally. And so I don't have an immediate update to share

right now, but I will say that um, our goal with BAS from the beginning has to been to be a decentralized global network. Um, we want to build the blockchain for global finance that businesses and and consumers uh and everyday people can use regardless of where they're from, regardless of where they're born, regardless of what phone they have from every country in the world. And the only way you can do that is through decentralization. And so, um, we're heads down focused on delivering that alongside making sure that the product that we have across trading, payments, financing, um, agents is delivering value to our customers big and small. And um as we have more updates, we'll share them.

>> Beautiful. Jesse, we love you, man. You uh you rock. Uh the industry is behind you and uh we are very excited for more great things coming out of bass. Thanks so much for coming on, man. >> Yeah, I appreciate it. Have a great day. >> See you again soon. >> All right, guys. We're going to keep rocking and rolling. Uh we have our next guest getting ready in the back. Jesse, as always, is fantastic. Um Edward, yeah, I hear you. I see you there in the chat. We're going to bring Olivia, head of tokenization at Ava Labs, up very soon. Uh, as always, I mean, Jesse, Jesse's the man. Uh, you heard him talk about Coinbase, uh, or excuse me, Kobe and, uh, working together with him. So, very fun times. Um, getting a word from my producer in the back. I think Olivia

is going to be ready any moment now. As always, I mean, shout out to our partners and uh, shout out to everyone in the chat. Edward >> using the chat. >> Give me some W's in the chat. Uh you guys, you guys wouldn't wouldn't be possible without you. Uh all of our partners and all of our friends in the chat. You guys are uh you guys are what makes this happen. Uh we are going to get Olivia Van Wood up on the show very soon. She is the head of tokenization at Ava Labs. And uh it's a big week. It's clarity week. So, we're going to be hearing a little bit more about clarity, a little bit more about how the tokenization front is going in the Avalanche ecosystem. And as always, uh

we always learn so much when Olivia's on the show. Let's go ahead. I think she's ready there in the back. So, let's go ahead bring her up on the show. There she is. Olivia, welcome. Welcome back. >> So much for having me back. Great to see you. >> Absolutely. I feel like uh it was just yesterday. We were in Bermuda. We were hanging out >> on island time. >> On island time and uh we were chatting tokenization. Yeah, happy to be back. >> Uh, what's new? Um, I mean, Clarity is right in front of us. Uh, what have you guys been up to at uh at Avalanche? >> Yeah, definitely. Well, I would say first of all, I mean, obviously the buzz is around Clarity Act this week. Seems at this point pretty unlikely to pass in 2026 in my opinion, but I'm really optimistic nevertheless around the

direction of travel for the space. Um, and you know, I would say that and reinforce that the legislative timing issue here really isn't a verdict on the underlying market. Um, and just, you know, to to illustrate that further within the avalanche ecosystem, we've seen continued uh building by a variety of institutions, enterprises or otherwise. I think the most recent example uh that really illustrates this is dinari's launch earlier this month um and making tokenized US equities infrastructure available to both eligible US investors and the institutions that serve them. And again for those who may be less familiar dinari's dshares are backed one for one

by shares in qualified custody. They preserve the NBBO execution, voting rights, dividends, and corporate actions and are disclosed as securities that are are subject to federal US securities laws. And so very excited to see continued progress on that front. Um, and they're, you know, opening up to US investors. We've seen Broadidge launched an L1 related to onchain proxy voting. We've seen even more recently um some work with Hyende that was very exciting in terms of Hay um treasury operations and in that instance Hyende card and Hyendai Motor actually did a live stable coinpowered treasury transfer between their US and Mexico subsidiaries via

avalanche. So, all that's to say, um, you know, despite the potential hold up with the Clarity Act and whether or you know, it passes in in 2026, we're still seeing a lot of enthusiasm and energy from builders in our ecosystem. >> Fantastic. I mean, that is a great update as far as what we've seen as of late. Um, and you're right, Clarity is looking unlikely, but there's still a ton happening here. Uh, I want to talk about the the Hyundai stable coin transfer because this is a major major company. um but doesn't have anything to do with crypto. And so it's very cool to see them getting into the stable coin game uh and just using it for the benefit of making cheaper, better, faster technology and ultimately uh

improving their bottom line. Can you just talk us through how that deal came together? What is it like building a relationship with, you know, this multinational, you know, conglomerate car company and and what does it take working through the education process to ultimately get them to conduct this stable coin transfer? >> Yeah. Well, would say that it's been definitely a joint effort on the business development team at Avalabs just especially given um Hyundai's operating across so many jurisdictions. So our head of Asia Justin Kim and team um as well as Morgan Ketsky who leads out our onchain finance team were really instrumental in making this happen. And just for for viewers um what was announced early in July or last month uh was that Hyundai card had uh completed

its first stable coin remittance PC with both Tether and on Avalanche. Um and so in that instance it was a conversion of $20,000 into USDT that was then um sent to a Mexico affiliate. And what's really once again um we are very focused on technology built for business and we really strongly believe that in working with our partners we're focused on business outcomes as opposed to um you know the minutiae of whatever tech is is underlying um and powering that business outcome. And so in this instance, you know, Hyende card um and the relevant parties were were not so much interested in the fact that it was a stable

coinbase, you know, crossber remittance uh with Tether, but really focused on the cheaper fees and also um you know, less time that it took uh to initiate this transfer. So just for for context, you know, the entire process took about seven minutes and that's, you know, in stark contrast with traditional interbank transfers that take, you know, as much as 3 to four hours or longer. >> Yeah. Can can you tell us what you think this could grow into? I mean, you mentioned $20,000. It took seven minutes. They they're operating at a scale of, you know, multiple nations, multiple jurisdictions, you know, millions, if not billions and more dollars at stake here.

>> Yeah. When you when you think about this and you and you think through it and you scale this out, what is the endgame here? What does this ultimately look like and turn into? Yeah, >> absolutely. I mean, you could view the surface area really is the um you know, multiple Hyandai Motors overseas entities. So um very exciting to see the possibility of this PC scaling and again meeting the real tangible intercomp settlement needs that they have um as opposed to being just a you know PC or experiment. And so uh the hope is that this would scale further. But the exciting part about this PC is that there will be um a second uh you could call it stablecoin PC or chapter uh in

which Visa and Circle will participate. And so that's due to start um or has started actually at the end of July and and early August. So more to come on that front. >> Very cool. Um switching gears a little bit, you mentioned Dinari. We're friends with Dinari as well. They've been a great equity uh they've been a great partner to our show. They they uh power our daily equity segment here. Um and so we've been talking quite a bit about um you know, equities a little bit more on the show just as these market conditions evolve. Uh, and we had Gabe on the show the other day and he was kind of talking through, you know, how they've been able to tokenize the entire S&P. I'm just curious from your perspective, you know, how how do you and Avalanche work with dinari and and what is the core

innovation here? How have they been able to achieve, you know, this level of uh product market, you know, integration in the tokenized equities world? >> Absolutely. I mean, Dinari's been a great partner. have always respected their very compliance first approach. Um, and that they have really been designing inside what the US rules already look like. Um, and as we alluded to earlier, they announced, you know, really the first of its kind and and at scale instance where tokenized US equities have been available, you know, at scale to eligible US investors and also the the institutions that that work with them. And so very excited to see to see that launch and you know that's all

been made possible by their decision on day one to work closely with regulators to secure a broker dealer license to have the requisite licenses again to operate within the existing framework um you know within the US and and securities laws and I think that you know it's become even more clearer now with um questions around whe you know whether clarity will will pass or or not pass um And you know I think that the the winners like dinari um have really chosen the compliance first approach that um works you know with the SEC and also is you know already compliant within the existing rules today.

>> Yeah fantastic. Um it is clarity week and so uh I would have anticipated that something like a dinari where we're tokenizing all of these equities. We know that they're securities but you know we go ahead we tokenize them anyway. and bring them on chain wouldn't have been possible if it wasn't for the Clarity Act. But nevertheless, we're here. The thing is live online. Um, and so how important is the Clarity Act? We talked at the beginning of the show how it's maybe looking like it's probably not going to pass, but is that really relevant at this time or is are do we kind of have signal from the regulators anyway? Like as far as what we can and can't do?

>> Yeah, I mean I would argue that clarity doesn't add clarity. It really just makes the clarity permanent. And what I mean by that is that we already have quite a few um you know working rules for tokenized assets specifically um such as those from dinari uh they didn't you know come from congress they they came from the regulators. I think the March 17th guidance um joint guidance between the SEC and CFTC uh really gave a better coordinated framework for when a digital asset is a security and um you know unlike ordinary you know staff guidance it it bound both agencies was which was pretty critical and and a mark of real progress um and you know as I think it was A16Z's Chris Dixon had put

it you know the market has gotten rules for the phones and not the towers in other words genius settled stable coins while the chains that they run on were were left really to agency discretion. And so, you know, an interpretation is still at this point very much an agency product um as we saw with the March 17th uh interpretation. Um but one, you know, what one administration's agency's write, you know, obviously the next can rewrite um and without legislation vote or like notice and comment. And so um the difficulty now for institutions and builders alike is that they may start a pilot or launch something in production um but you know it's hard to have the confidence that they can really build a balance sheet on it um given the lack of

um you know clarity that's that's permanent. Um and so I I think all that said you know the firms are building regardless and like I said dinari's taken a very compliance first approach that uh irrespective of of clarity act passing um you know within 20 within 2026 um it will you know exist within existing US you know regulations and and be able to thrive um accordingly but I would say you know clarity act for most builders and and institutions would be very important for creating the the permanent clar um necessary for making five or 10 year road maps.

>> Yeah. Um I I been kind of thinking through and walking through this thesis on this show with you know several guests and I'm just curious to get your take on it which is that as we tokenize more of these asset classes now we have equities. We've got stable coins. We're kind of you know making our way through the asset classes that are available to tokenize. These things go on chain. Doesn't stop there. Ultimately, we want to do things with these assets on chain and so they end up landing in DeFi protocols across several chains. These D5 protocols flourish. Their TVL their t their their total addressable market increases and you know all of these things get rerated much higher as well as the underlying blockchain such as

Avalanche. More DeFi activity means more chain activity means you know generally more revenue fees for the underlying protocols. Is this a valid way to think about the progre progression that we're seeing in the industry these days? Do you think you know this tokeniza it all starts with tokenization is kind of downhill from there. Do you do you think that there's any problems in this thesis? Do we get roadblocked by anything? Where do you think we are on this tokenization journey as a whole? and maybe you can just point to some asset classes that haven't yet got tok been tokenized that you know we can start to to channel our focus into these asset classes and bring them on chain for the sake of the entire industry. I

mean I would say stepping back the thesis from my perspective um for the tokenization space's success has really been start with a high quality asset supply where demand or distribution already exists um help to build out that distribution infrastructure be it through fintex that may want tokenized US equities from dinari or just basic stable coin infrastructure but then I I think the layer um that's really been important and and not yet um you know really filled out has been on the the utility side and I think over the next year uh we're certainly working on this um is at is really building out the convergence of tokenized assets um and DeFi. So think uh more innovative uh use

cases like a retail user potentially being able to borrow against their you know tokenized stock or um other use cases that again aren't focused on you know whether something's onchain or off-chain but unlocks you know new new use cases or uh would be compelling for a retail user to to adopt. And then, you know, to your point about, you know, the v various asset classes that are coming on chain, obviously tokenized money market funds have been uh frankly just more easy to do. Um I I'm very excited about tokenized private credit and how blockchain can upgrade um you know both distribution mechanisms but also uh those processes from the ground up and

lead to better efficiencies. Uh I think tokenized real estate has been a tough nut to crack um globally depending on the jurisdiction you're operating with within and um you know the laws that that you're subject to. But there's you know we're still very much at day one. we have a long ways to go and you know I I would also to add to that in terms of the progression of of the space uh at large you know if clarity fails the tokenization efforts aren't going away like they're not just going to die day one but the US digital asset market you know does remain really stuck under a patchwork of agency guidance you more narrow court decisions um and would have been to date non-binding staff

statements as opposed to clear statutory law that I think would really um unlock more uh ut you know comfort by institutions and enterprises and and end users ultimately to um derive more utility from tokenized assets. >> Yeah. Um makes it makes a ton of sense there and and you're absolutely correct whether no matter what happens with clarity we're we're going to continue to accelerate this tokenization movement. uh maybe the guidance comes from the SEC or another regulatory body, but nevertheless uh this is going to continue to push on. I I I uh remember that uh there's been a mechanism and I want to hyperfocus on uh equities here just for a moment because it feels like

that's where a lot of the action is. A lot of attention is here. We've been talking about dinari. Also, Robin Hood chain, you know, has gone live and has a unique model for how they're tokenizing some of their equities. And as I understand it, this is a really novel mechanism where um and this was originally, I think, the case on Robin Hood, but it sounds like dinari is doing this way as well. I feel like you're the person to ask about this, which is that the best way I can describe it is like just in time tokenization or tokenization on demand. You know, let's take Robin Hood for example. They've got um you know, they're a broker of a ton of equities, you know, in in uh in financial, you know, institutions here.

And so my understanding is that someone is submitting an order and that is when the equity is tokenized. Whereas in previous times, you know, you either had to go directly to the issuer and say, "Hey, we want to, you know, tokenize your your equity from day one or, you know, you would go through all these, you know, SPV rappers back and forth to, you know, buy up an inventory and then put them in these SPVS in order to do this." But I think that's not the case with what I'm seeing from dinari and you know I think Robin Hood as well is that these guys didn't buy up a ton of equities. They've got market makers and they've got broker dealers. When an order comes through the platform to purchase one of these equities, they signal to that broker. They signal to

the market maker. They say, "Hey, we got this order come in. The market maker broker says, "Okay, we're going to take this equity. We're going to keep it where it is, but we're going to tokenize it on demand and serve that tokenized version directly to the customer that submitted the order. So, it's much more capital efficient than buying up a ton of these equities. That would be a real capital bottleneck. And and instead, we can just go directly to the people that already own these things like the brokers and say, "Hey, we got an order. We want you to tokenize this and you can serve it based on whatever you want to quote to the end customer." And that's the quote that you know the platform shows to the end user that is what they submit the order on. Is this the right mental model? Is this the right way to

think about this mechanism? And if so, you know, why wasn't how did we not solve this before? Why was it always like native issuance or SPV rappers? Why why did we never not think of this until now? >> I think that's a great uh mental model and your framing of just in time tokenization makes sense. I think Dinari themselves have pitched it more as tokenization on demand. Um but nevertheless, yes, that process um you know does match what what Dinari does and that the order hits traditional markets for real pricing and execution before the token is is issued and the coverage at this point is about 700 stocks or ETFs um including the full S&P 500 um you know as was announced for for eligible users. So yes would say that it

is a tokenization on demand um model as I understand it you know they with dshares they work by submitting the order first and then the underlying shares acquired and then a onetoone back token is is minted to a user's wallet um and so you can submit or place an order through dinari's trading app um or through their part you know partner platform because they've taken a great B2B TTOC approach um of embedding with exchanges fintex and and others and then you can use market or limit orders. Um the funds would settle in supported stable coins or fiat depending on the the partner interface or or given preference. Um and then dinari would acquire the underlying security to your point. You would or as a user would receive the tokenized equity or a

corresponding dshare as they call it. Um but importantly there every circulating token is backed by a locked underlying share. Um and then you can hold it and manage it like a stock. you know dividends are paid in stable coins like USDC now stock splits and corporate actions are all automatically mirrored. So importantly in this model and which is in a you know contradiction with some of these other what I call wrapper or derivative style approaches to tokenization um you know you're able to retain as a user the economic rights associated with the underlying security. Great. And you know, I I realize that you're sort of at the the head of tokenization, maybe a

little bit earlier in the process after someone, you know, has it in their wallet and they're looking for something that they can do with this equity aside from just holding it in their wallet. Maybe a question for, you know, a DeFi person, but I take it that a lot of the demand of having a tokenized version here is that you can margin it, you can collateralize it, maybe lend it, do things with it. What is Avalanche doing to sort of foster this DeFi ecosystem around the equities asset classes, the the equities asset class? How are how, you know, what does this look like? Is there any projects or things that we can expect from Avalanche as far as you know, we get a Dshare, you know, we want to withdraw it to a chain, maybe we choose Avalanche. What can we do with our tokenized equities, tokenized

Dshares on Avalanche? >> Absolutely. I mean I think the uh DeFi functions are wide ranging and many of which haven't um you know yet to yet to come to fruition but I think in the context of of dinari what's really exciting is um you know lending and borrowing applications for example so you could post dshares as collateral in lending markets to borrow stable coins or other assets but you know in a capital efficient manner and that you don't have to sell the equity position and that's very much like what we have in trad today with prime brokerage, you know, use cases for stocks as collateral. Um, but in this case, available onchain. I think something that is another interesting use case would be atomic share for share swaps.

So, you could directly swap one equity position for another in a single transaction. And again, without settlement frictions, without intermediate, you know, cash or the multi-step process that would be involved with traditional markets. Um there are yield strategies and staking opportunities. Um you know more in the way of portfolio construction tools. I know Dinari's been very focused on direct indexing and automated rebalancing or some of the more um you know onchain portfolios that are sophisticated that mix US stocks and ETFs with crypto assets potentially. And I think down the road we'll see even more cases around collateralized lending or margin, continuous, you know, 247

trading integrations, more automated portfolio management and a lot more in the way of of programmable services. So that's um you know very early early innings uh and we'll we'll definitely be excited to to see the progress there with respect to to dinari. But, you know, I would also just say in terms of a a DeFi update, we're very excited um that a v4 instance has launched on Avalanche uh as of a few weeks ago. That represents the first um you know, instance outside of Ethereum where V4 is being launched. Um, and that's a pretty big architectural overhaul um, in that it moves the protocol from what were

independent monolithic perchain liquidity pools um, as was seen with V3 to a unified liquidity hub as it's called with modular borrow spokes. Um and so that'll be very exciting in terms of decoupling the deposit risk from borrowing risk or having longtail or emerging tokenized assets live in isolated spokes that you know could potentially absorb first loss bad debt before even touching the main hub buffer. So uh thereby protecting you know the primary depositor. So there's a lot of um exciting uh features that are coming from the the V4 launch on on Avalanche and this hub and spoke model that's emerged. Um and one of them that

uh we'll have more to share on um probably later this month or next month is um an forthcoming RWA hub um in in the context of the hub and spoke model that V4 um offers. And so you you kind of preempted my next question there, which is that do you anticipate uh these tokenized equities getting loaned out and borrowed lent out and borrowed on lending borrowing markets like a V4? Is that capable of facilitating uh the the lending market for tokenized equities? >> Yeah, I mean I think sky's is the limit.

I think SEC lending is going to really take off over the next few years as well. So uh it'll be really interesting to see the integration of tokenized equities and this you know before and hub and spoke model but there will be so many use cases that we probably haven't thought of um that'll that'll come to fruition there. >> Oh yeah, we're going to see financial experimentation on the equities asset class. Probably hasn't happened for hundreds of years. Uh, we got a a question in our our chat here from Greg who says, "If I have a stock in my Fidelity account, I don't own it unless I do the official filing. This allows Fidelity to loan my share out. Who gets to loan tokenized stock out?"

>> In the context, well, I guess I can't go back with questions [laughter] on it. Um, but my question would be in the context of of dinari, but the question is, can you repeat it again, Robbie? >> Yeah. So, uh, Greg says, "If, uh, I have a stock in my Fidelity account, I don't own it unless I do the official filing filing that allows Fidelity to loan out my share. If I have a tokenized stock, who gets to loan that out? Who gets to loan out a tokenized stock?" >> I think it depends on again like the venue that you're, you know, using this tokenized stock in. And then also like whether the tokenized stock is taking the dinari approach which has been termed more of like the regulated custodian infrastructure approach or if it's more of like the legal rapper

approach um and you know if it's direct issuer tokenization like whether the there's whitelisting or if there are constraints on um transferability for the tokenized stock but I think the idea here is you know what can you do with the tokenized stock um and again like depends on the venue that you're you're transacting on but I'd say in the context of a v4 um and you know the initiative to really rebuild securities finance um there will be native support for tokenized equities and rwas that can really disrupt the you know5 $5 trillion almost traditional securities lending market as it stands today but I'll get back to uh Greg on that [laughter] >> yeah that that I mean that still is a is

a terrific insight um and in a similar manner like you know let's say we do have a couple of dshares I want to natively or I want to make an atomic swap from Nvidia to Tesla. Greg uh or Gabe was making the point from dinar. We had him on the show when they made the announcement that this might not constitute a taxable event which is you know potentially a huge development in how these things are are handled. But, you know, regulatory or technologically, it these things I'd imagine are just ERC20 tokens, right? Can or maybe they have some NFT metadata or something like that. If we have a tokenized equity and let's say they're, you know, 2D shares I want to go back and forth, can I swap

them on something like, you know, are we going to see unis swap or air drone pools just get spun up, you know, with tokenized equity uh liquidity in there where we can swap back and forth? >> Yeah. I mean also just to address the first point, I'm not a a tax expert. Um so I can't you know answer directly about whether you know atomic swap of a Dshare for a different Dshare is is treated you know as a taxable event. Um but yeah I mean I think that the applications for tokenized stocks are very interesting in the context of DeFi. I think to your point, you know, be it in the context of unis swap or um aerodyrome pools or or otherwise, I think there's a lot to to be seen, but

where I I get really excited is first and foremost with using tokenized stocks for collateral for lending and borrowing. So, you know, deposit tokenized stock XYZ into, you know, a lending protocol, borrow your stables and again without having to sell your equity position. that to me represents a few benefits and that a you can potentially keep the upside exposure but also unlock liquidity. Um I think you know there are countless examples of this with Camino Morpho you know loop scale other markets that already are accepting certain tokenized stocks or ETFs as collateral. Um and you know then you can also think about it in the context of institutions like funds could potentially post large equity positions

for onchain credit. Um I think in the context of liquidity provisioning that's really interesting kind of to your point earlier seeing a world where you could supply tokenized stocks or stable coins um to AMMs and then you know earn trading fees um I think that'll be very interesting um I think in the context of yield generation or structured products like it'll be very um compelling for end users to lend tokenized stocks to earn interest or you know deposit into vault or strategies that combine, you know, equity exposure with with yields. So, um there's a lot lot to be seen. I mean, we haven't even scratched the surface of

programmable portfolios or like, you know, automated strategies. Um but there's a lot to be seen for um the number of of applications um you know for Dshares or other other forms of tokenized stocks. >> Yeah. Once we uh once we get agents as financial advisors, things are gonna get very fun. >> Um >> yeah, I I mean this is this is exactly where we're headed. And you know, the the whole you know, buy some stocks, monetize them, borrow against them. You know, you don't have to pay, you know, capital gains because you don't sell, you just borrow against. This has been something that I think, you know, it's a tax strategy that, you know, rich people have used for a long time, but everyone

else has kind of been, you know, siloed out of it. Man, I I wish I could put some rollup equity, tokenize it, you know, take take from equity from the rollup and borrow against that. That would be tremendous tax advantage. >> We can uh take that up offline, Robbie. Um I'm just [laughter] I think I think here just, you know, stepping back once again, tokenized stocks offer a number of advantages over traditional brokerage or standard brokerage accounts. You know, you can think about tokenized stocks in DeFi as enabling a retail user to retain ownership rights or the economics exposure, but while also making that asset more productive and borrowing against it, earning fees, rebalancing, you know, atomically,

whatever it may be, and also accessible 24/7 and and globally. And that's again capabilities that are difficult or sometimes impossible inside of a standard brokerage account or um you know where many are are edged out by not having private banking you know capabilities. >> It it feels like this is a sector of the industry that's about to explode as we tokenize more and more of these assets. Um and you're ahead of it uh as you always are. So, thank you so much for sharing, helping us understand this, wrap our head around it, and uh yeah, for coming on again. We'd love to have you on again soon. Sounds like you guys have some things uh coming out the the end of this month. We'll have you back, and I think uh we might be up there in

New York for the Avalanche Summit. So, we'll uh we'll see you uh we'll see you soon. >> We'll look forward to seeing you. Thanks Robbie. >> Absolutely. We'll see you again next time. Thanks. >> All right, the show goes on, guys. We have our final guest that is going to be joining us for another segment here very soon. It is Santiago Santos. Uh and uh boy, what a doozy of a stream. I mean, I think we've been going for about three hours here.

Three hours with some of the best in the business. Uh some people here have just been uh just been doing fantastic, guys. Uh we've got uh Santiago Santos, the uh founder of Inversion. Uh he's been around the block a couple of times. Very curious to hear his market takes. And uh I mean just guys, give it up for the the guest lineup today. Jesse Pollock of Bass, uh Olivia, the head of tokenization at Avalanche, uh Hib of Dragonfly Capital, and then the head of legal, uh Katherryn Kirkpatrick from Chain Link. Rockstar lineup today.

Uh and we are getting ready for our grand finale, uh Santiago Santos. I see he's ready there in the back now. So, we're going to go ahead and bring him up and, uh we're going to take us through the finish line here. Santi, it's good to see you again, man. Thanks for coming. Jav, how's it going? >> Good, good. I uh don't remember the last time we got to chat, but I think uh it was relatively recently, maybe at a conference feels like uh market is apathetic, but underneath the surface, there is so much happening. You know what it is in bare markets, there's a lot of development, doesn't go unnoticed. It's like oftentimes headlines that would happen in a bull market that are happening in a bare market would like lead to a market rally. But you're right, there is a lot

of apathy. feels like AI, robotics, and uh you know, anything hardware related is sucking the air out of capital markets. And it's a tough it's a tough environment to be a crypto investor out there. You know, maybe not so much a builder because there's a lot of really good stuff happening, most of which you've covered here. Do a great job doing it. But yes, >> thank you, man. Um well, let's talk about it. Uh yeah, it does feel like we've gotten a slew of negative headlines as of late, but the market hasn't reacted. Before that, we got positive headlines and the market still went down. And so it feels like we're kind of, you know, before we go up, we have to not go down, right? And that's kind of where we are right now. We're kind of holding the line. Um, and so I

guess do you do you feel as if you know we're kind of forming what seems to be a more solid foundation for like the next cycle? It does, as you mentioned, hardware AI is kind of sucking the liquidity and the volatility out of the room. People have been saying that we needed this rotation, you know, out of equities, out of AI, ultimately into crypto for us to rally. >> What are the catalysts? Like what are you monitoring? What are you watching that ultimately is going to pave the way here? >> Yeah, it's like simultaneously it's all it's all priced in and none of it is priced in. So the question is like what does it mean to be in crypto today? I think is a definition that means a lot of things to many people. I think the role as an investor is to say okay what

does the world look like in 18 24 months 36 months 3 to 5 years out you're already seeing signs of that today. Cloudfare coming out saying agentic payments is going to be big and they put their weight behind that. They aqua hired a team from syndicate. You know, whale go out and check his profile. What they did is is pretty monumental. Again, this is what I'm talking about. This type of headline in a bull market would have led to a systematic like rally across anything that remotely touches stable coins, right? My point more broadly here is what does it mean to be in crypto today is very different than what it was three years ago where you were talking about NFTTS and and gaming.

Today it's stable coins, it's fintech. Let's let's just call it that. this divide between crypto and fintech is going away and you're already seeing that in some of the biggest rounds like Rain uh working with Western Union to power their debit cards uh for a 50 million user base. Again, a headline that in a bull market would definitely not go um uh you know unnoticed. So I think um crypto captures so many different things and we've had many different experiments along the way but there's a pocket of crypto that is working. It's working in a very material way. It's just not it's the bull market but maybe not the one that you wanted that aligns with your bags. And that is

I think the realization that many investors are coming to terms with which is let's just get behind what is really working in crypto and focus on that because there's a lot of really good stuff happening in in in tokenization and stablecoin land. >> Yeah. Tokenization, stable coins, fintech more broadly. Um I mean we'll we'll get into all this, but am I right? You pretty much called this, you know, you said tokens were going to go down, but adoption was going to go way up. And the biggest benefactors of this technology would be the maybe public companies or more traditional incumbents that would adopt the technology, not really the disruptors and innovators with the live tokens.

>> That's absolutely right. I was on the record uh uh you know November October of last year saying look we will likely see uh a redo of what happened with the internet you know where you saw the NASDAQ collapse 80% and then users grew internet users grew 15 times and then the NASDAQ took 10 years to recover. We're seeing that play out in real time. Um what is important now is what you just said that last part I don't think is consensus. what was not consensus. Typically what you hear in venture is uh first mover advantages are very real.

You have moes, you have network effects and I was like wait a minute guys this is the open source networks and by the way uh you know you codify certain architectural choices like Ethereum did that are hard to to to undo if you will. Um I think the clear so so that's definitely manifesting. Tokens are down in a very meaningful way. Um and look there there could be a number of reasons why that's the case. The more important stat here is Robin Hood has launched a chain. Robin Hood has many users obviously everyone knows it. It's it's trady but it's a type of user that likes crypto which is u you know speculation and that energy like people are trading options. They're the type of people that want to trade uh coins. Robin Hood

launches a chain on arbitum. They are capturing 90% of the fee revenue. Arbitum is capturing the other 9% and Ethereum the L1 is capturing 1%. That is not the network effects that we were promised. That is not the first mover advantages that we're promising. And and that is a that has always been my position since since last year, which is as an investor, you have to understand you can both love the technology and hate the price of the of the stock or the token. And crypto is um I guess there's a lot of reasons to be excited about crypto. There's phenomenal technology and the testament of that is Robin Hood, a $50 billion plus organization, launched a chain to offer

a great product to users. And you go talk to those users, they're liking and enjoying coming on chain. So all the things that we celebrated and wanted to build in crypto are simultaneously happening in real time. So there's no reason to be upset. I mean, maybe you're upset because you held ETH and it's down, you know, 60%. That's a different story. But we we're here to celebrate the technology and the fact that some of the largest organizations, Black Rockck, Visa, Cloudfare, Robin Hood are all entering the space in a very meaningful way. >> Yeah. Um and so I'm I'm just I happen to be looking at the Robin Hood stock ticker chart because you know just to kind of validate this thesis, it's like well they would be the perfect example of this. They adopted the technology.

They don't have a live token but they are public. We can check the price and I think they're up since they launched the chain. Um, >> well, kind of kind of sideways. >> The stock has been sideway put it this way, Robin Hood has 12 different business units that are each generating $100 million each. There are very few organizations that can pull that off. Coincidentally, uh, uh, Coinbase also has that, but Robin Hood is super interesting because I felt that it is a founder-ledd organization and Vlad and the team really understand retail >> and crypto is a big part of crypto is retail and I think it's uh, it's definitely a company to follow and study because it puts pressure on so many of the other fintexs out there to develop a

crypto strate. no longer in a state of the world where boards and people are saying crypto is a scam. Like put put it that way. Like sometimes we sit here and p and and talk about why the token is up or down where all it takes is go back two, three, five years ago and all of the things that we wish would have happened have happened and we're complaining about certain things and I this is why I started in a version because I want to build and will into existence things that I want to there's a lot of things that we can do to make crypto and continue to build on the promise of crypto but a lot of that also requires adapting to the things that are working and the things that candidly are not working and that's okay too, you know.

>> Yeah. Um, so let's get an update on Inversion. Uh, quick disclosure, the rollup is a investor in inversion. We're a proud angel. >> Thank you guys. We appreciate your support. >> Uh, one of the one of our, uh, angel companies that is still surviving and alive. So, uh, shout out to you guys. And so, yeah, where where we at? How's In Virgin going? And, uh, yeah, just love a general update. We'll get into some of the nuts and bolts. >> Yeah, been public about it. We did a major pivot a couple weeks ago and I sent this letter out to all of our investors and I've talked about it publicly. We as a group have uh done the most amount of work to understand where crypto fits in to a wide variety of sectors. The conclusion out of all this exercise is crypto as a piece of

technology is very useful. So stable coins are very useful to most businesses for the simple reason that they're all interacting and doing crossber and you you would have heard me say that time and time again. I still hold to that. The insight that we've had is crypto implementing crypto is not sufficient in the way that it doesn't release as much value. And so the strategy of inversion for context for folks was let's go buy businesses where we think crypto can can fit in but also release a lot of value because as an investor you have understand okay we're going to buy this company for X price. We want to make sure that the things that we're doing as a rightful owner are producing value.

And that led us down a path of looking at businesses that were not so great but where crypto could really fit into that. So put an example remittance companies. So we looked at a lot of remittance companies and we came out of that actually quite quite quite bearish and I cleared my mind. I said gosh this is not a business that I want to own and stable coins can probably do a lot of stuff here that could be impactful for the business but it's not a good business. And so as simple as it sounds, the insight that I had and perhaps the mistake that I did was just overfitting the type of business that I want to buy to where does crypto really fit in. And this is not to say that crypto's dead.

This is not to say that crypto is not going to be used in our companies that we acquire. It's more of a let's go first and foremost buy good businesses that are going to compound that are going to continue to produce value that are AI resistant that are good durable businesses and then figure out a strategy to build value. But I'll tell you Robbie, it is very hard for us to overlook the amazing stuff that we as an organization been able to do with AI. >> Yeah. >> I mean give you an example, we're a team of four. I would have I would have needed a team two or three or four times the size to cover maybe as much ground as we're covering today. Like the ability to source and um cold call and and really enrich context

for companies and due diligence unparalleled. I mean I come from a world where you used to have an army of analysts and associates and an assembly line to cold. I don't know. I mean you guys are pretty AI native, right? It is it is truly remarkable. And so we look at that and we're sitting there and saying, gosh, there's this whole part of what we're doing in our organization that has allowed us to be way more efficient, more capital efficient, and we definitely need to pay attention to that. So, um, I continually believe this is the most exciting time to go out and look at businesses where they haven't been really forward with technology. And by the way, like this is a tale as old as time. Small and medium businesses of

all kind are always slower to adopt technology versus smaller scrappy organizations that has always open an opportunity to go and partner with these businesses and just build value and allow them to use technology. So incredibly excited. I think this is a generational opportunity to go about build. I tell my team, we can build massive businesses on the back of acquiring smaller organizations, bring them under one hood, and just make them way more efficient. Give an example. What takes 80 hours to produce might now take two hours, and you're still building the exact same amount to the end customer. Similar to what we hear in crypto, you have a massive opportunity to increase throughput and lower costs in most industries out there. And it's

it's incredibly exciting. I uh I saw a tweet the other day that said uh we need a bending spoons for crypto. [laughter] >> There you go. >> So, and obviously anyone who's unfamiliar like Bending Spoons is effectively private equity acquisition company that's bought up I think they recently bought up Air Table um and just put this all under one roof. They verticalized the whole thing. Put you know a ton of Oh, he's there. We got the dog on the show. >> He's a mascot. [laughter] He's a bit restless because Uh, and so, um, and so yeah, I mean, is that that's similar to what you're talking about? You're you're kind of saying we need a bending spoons that's

going to go out there into the real like, you know, not crypto world, but that take this technology and advocate for it, champion with it. Um, is that similar to this to the strategy here? And just generally how do you like how are you thinking about ultimately transitioning from the discovery and research phase staying patient but ultimately making the decision and executing an acquisition. >> Uh great thing. So bending spoon similar to us is a holding company and and I think that is um the preferred structure. uh because to your point we're we can be patient and my first and only duty is to protect capital and and allocate it in a way that will compound and outperform and if I don't feel that I can outperform then stay disciplined

don't deploy when you're in a fund structure different story you have five years to deploy five years to produce value so insight number one I think we got the structure right um but bending spoons is what they're doing is um you know group of young uh tech forward guys from Italy out of all places uh deciding to buy Silicon Valley startups that you know for better or for worse just have raised a bunch of money over the last 10 years. I was an investor in Air Table for instance and I mean like company's growing like 20% ARR year-over-year um and uh you know it just tells you the bar is much higher now to build enduring businesses. So like it's kind of remarkable. We're sitting here looking at enthropic, you know, go from zero to 5 to 10 to 15 to probably close to 100

billion of ARR. There is no business in the history of mankind that has done that in the time that they've done it. Like Salesforce 20 years in is at 50 billion of ARR. >> Yeah, >> it is crazy. But there's other businesses, even tech for businesses that are still trying to figure out a way to like really get on the AI train. Um so so yeah pretty remarkable what those guys are doing is they're really um consolidating a bunch of these businesses like they bought Evernote they um if you look at their S1 it's a public company now what from my estimation they've you know reduced a lot of the back office people and really streamlined it under one roof. It's kind of like the Elon Musk playbook, right?

When he bought Twitter, now X, he basically, it's like this idea like an organization for whatever reason eventually becomes bloated. And there's two things that are really true in in in in legacy businesses. They eventually become bloated uh unintentionally or intentionally and they don't price correctly. And bending spoons, I think those are the two insights of these guys. It's like we can probably continue to run these businesses uh with a fraction of the of the staff and prices can go up and you're going to lose some customers, but the net impact of that is that you grow revenue quite a bit.

There's another private equity fund that quite literally all they do is they go in, they buy the business, then increase price 2x and they'll lose like 10% of the customers. But they do the math around how how much of the customers are we going to lose? Um and again as founders chronically underpric their product >> because you get started you offer premium and and there's these are some of the this goes back to like there's certain core principles that we have in a version and this is one of them like founders never have time to figure out how technology fits into their business because they have they're running their day-to-day. Founders typically underpric their product. Founders typically think that they need to have a larger organization because it feels more secure to have more people around the table. We've gotten extremely comfortable at Inversion to tell you the

truth to be running this company counter to what most people would say is like go you're raised around go hire a bunch of people. Uh we're a team of three. A lot of that is possible today with AI. So where we focus on when we go talk to business owners is look, I'm not asking you to believe that AI is great. I'm just telling you to look into my business and figure out how how I'm running it. And I'm telling you you can do a lot of the same. But tell the truth, Robbie, like I think the the core insight that I that I is top of mind for me is technology comes in and changes a lot of things, but it doesn't change human behavior.

>> And that and I think that is important to understand because you will I develop a lot of my investment ideas thinking about what changes and what doesn't change. >> And also culturally, Robbie, you guys are probably a small team. You can implement technology from one day to the other. If you're a team of a much larger team, culturally it's it's it's slower. it's more difficult and a lot of times you know biting the bullet is is is is really hard. Some people just don't want to do it because the status quo is more comfortable. So that's the kind of culture that we have in Virgin which is let's be respectful. Let's partner with great operators that have built really good businesses but there are aligned to make this change and and and that's kind of like numbers on a spreadsheet tell

you one thing but culturally being aligned with making this change requires a certain DNA that not everyone has. the the part of what you just said that I want to focus on is the consumer behavior. The behavior doesn't change. Technology, you know, comes in, it it adapts some things, adapts some business practices, but behavior doesn't change with a technology that feels so transformative like AI. What do you think are some of the behavioral characteristics of people, consumers, founders that are not going to change?

Just they're going to remain constant. there's going to be through lines despite AI and how impactful it is. >> The founders that I backed and and many of them will tell me, "Yeah, I know there's like five or six or 10 people in my team that are just not performing, but I really don't want to like I feel like, you know, it's hard. I don't want to let go of them." And I'm like, you owe it to you yourself, them, and the rest of the team to make that change as quickly as possible. And it's I think a hallmark of a someone once told me who who knew Mark Zuckerberg early on and was one of the first investors in Facebook. And he said something to me that it's always stuck because Mark was very good at hiring but he was better at firing.

And I think there's this fear of like look it's very stressful. I've had to do it you know but you again you have to just like you have to bite the bullet you know you have to chew glass. And I I feel like um so there's always this uh innovator's dilemma. It's a great book, Klay Christensen, uh, at HBS. Go read it because I think there's always complacency, human behavior, like you're you're lazy by default. Uh, and that's not a bad thing. You prefer the status quo. Like, if it ain't broke, don't fix it. But then there's the common adage, which is like, you know, a frog in a boiling pan. You know, the temperature keeps rising, rising, rising, and one day to the other, you just kind of you're fried. And I think we're living in interesting times where

the the the the you know back in the day like in the 1980s like the the S&P was mostly industrial companies. Uh it took 20 years for it to mostly be technology businesses. Up until like the early 2000s it kind of gradually changed to technology and then like in from 2000 to 2010 2020 it is now mostly technology >> right? Uh like Nvidia is worth more than all the steel mill companies, car companies combined like Tesla worth more than all the car manufacturers combined. Even though it's a car company, but it's technology forward.

>> And I think the the pace of creative disruption is is is going higher and higher. And part of the reason is that we're getting better at innovating, but we're also um I think simultaneously humans are slow to adapt and slow to change. >> I mean, you've all seen the charts, the the penetration. I mean, god damn it, there are companies that are still running on fax spreadsheets and we're here talking about how AI will disrupt the CRM and the Excel. I'm like, hold on a minute. Like, there are still businesses out there that do pen and paper, and that's just human psychology and behavior, right? It's it's a um there's a part of a generational thing, like there are business owners that are

much older and less at the frontier. Um and so I think that uh always will allow for opportunities to to buy these businesses. Second also is when we think about crypto just to bring it back a little bit to what what we're doing here is >> crypto touches money. Money is one of those things that we all think about because it it is important for our needs but we don't want to think about it in the way that crypto requires you to which is Robbie. You don't wake up one day to the other and say, "I'm going to change bank accounts." Like, you're happy with JP Morgan or Bank of America or, you know, whatever. But crypto touches money in a very in-your-face kind of way. And so, crypto, unlike AI and other technology,

my belief is that it is a bit harder for people to adopt and get behind because it is so front and center with money. Um, and people don't like to think about it. >> Yeah. you want you want the convenience of someone. So the the insight that I have just to kind of round it out is people will always pay for convenience >> no matter how good technology gets. People like peace of mind and convenience um because you want to go and do other stuff. You want to be, you know, anything that simplifies and you'll pay a premium for that. Go look at MetaMask and how much money they're making and and Phantom. There's swap functionality right then and there. You Robbie know that that's not the cheapest most effective way to trade on chain but that

doesn't matter for a vast majority of users that just want the convenience right that's why I think businesses like Robin Hood provide a lot of convenience for users that are already doing a lot of other stuff on the platform and so I think um this is why it's a bit I don't think it's u consensus my view has always been companies that have distribution that have trust because you're touching money, you need to leave, you need to embed crypto in businesses that have already earned the trust of the consumer. And buying the trust and earning the trust requires many, many, many years and can be broken with a bad hardware update, a hack, a social engineering attack. And

unfortunately, crypto has a lot of that. And so, um, this is again what I was saying earlier. Crypto is working. it might not be working in the way that you want it to in the pure decentralization ethos and be your own custodian and own your own wallet. I think we're past that that you know not everyone is prepared to be their own bank and not everyone is prepared to be very sophisticated with their own obscurity and and that's okay you know and and I think that is unfortunately required us many many years and a lot of pain to come to that realization but I think we're getting there. Yeah, the only way out is through and I think uh a lot a lot of people are are like you said

facing that and uh coming to that realization. >> Uh Santi kind of a quick one today. Um really appreciate you coming on and uh the investor update on inversion as well as uh just the broad strokes in the market uh and where we are today. As always um you rock. You're the man. Appreciate you coming on. >> I love I love having these investor updates with you. We should do it more often. Thanks for having me on and uh keep doing it. You know, crypto crypto is not dead, you know, but we have to go through to get out of it. >> I love it. Yep. Let's do it. We'll do it again real soon. Thanks again, Santiago. >> Thanks.

>> See you. >> Bye. [cheering] >> All right, guys. Well, that was the grand finale. I don't know if you guys can tell, but it's been a doozy of a day. I mean, fantastic lineup across the board. Uh Santiago wrapped us up. Uh we had Jesse, we had Katherine Kurpatre, we had uh we had Olivia. Um, man, I mean, just overall fantastic, fantastic vibes. Uh, sounds a man as always. Glad that uh, Good Idea Ventures, our portfolio company here at the rollup is invested.

Um, bing bang boom. That's how you do it, guys. That has been the show for today. That's it. August 6th in the books. Uh, we didn't get a closure vote. Uh it's looking unlikely that Clarity is going to go live, but you guys heard from all of our guests today about why it doesn't really matter and crypto is not dead and how uh this thing is going to continue to chug along and progress further and further forward uh even without the Clarity Act. No matter what happens uh this week, next year, the year after uh we're going to continue and accelerate.

It is inevitable and this has been the rollup, guys. Thanks so much for rocking with us. Give me some W's in the chat. Ricardo, you seem like a new >> a new viewer. We appreciate you. Greg, we appreciate you and your questions on uh on tokenized equities today. Edward, as always, you're the man. Go lighter to the moon. Uh new type trader. Dinari sounds like intense for stocks. It kind of is. I mean, it is tokenization. It's bringing the stocks online. Um, and so almost like who would do you? It's like the ERC20 standard for equities on chain. Uh, and then you're going to get a ton of DeFi exchanges, AMMs, dexes, bridges, lending markets that are all

going to facilitate uh, DeFi with these equities, asset classes, all kinds of stuff. I don't know about you guys, but I want to see a base token uh, token with a public company. Feels like Clarity would help that out. Guys, we appreciate you. We love you and we're going to see you again tomorrow on the rollup. [music] [music] >> [music]