🟣 LIVE From DC Blockchain Summit Day 1 In DC

Transcript

We'll see you around the timeline. Feels good to be back. >> I think The Rollup is one of the most premier media brands in crypto, and Andy and Robbie are great experts at everything they talk about, and it's my favorite podcast. >> I don't need to elaborate. >> I very agree with you. >> Potentially multi-chain deployments. >> We are at Devconnect day one here I'm reporting from space. >> JP Morgan, BlackRock, 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. >> I'M SO BULLISH. >> And he's bullish, I'm bullish, we're bullish. >> The Rollup is headed to the top. If

we're not already at the top, we're going to the top. >> We're going. >> The Rollup is my favorite. >> People from all walks of life, all over the world, all over this industry, come together for the Rollup. >> Survive you mouth.

>> Institutions aren't coming, they're simply here. >> Taste the chlorine age of crypto, guys. >> Get right. Let's go. >> Welcome to the nest. See you on the show. >> Welcome to DC, baby. Let's get it. >> We are here. >> We're alive, baby. >> We're alive at DC Blockchain Summit. >> Day one, first show in blazers for the guys. We are live here in Washington DC, the home of Capitol Hill. We are live from Capitol Hill. We're live on On The Rope TV on YouTube on X. If you guys are watching, we are going to watch the chat on YouTube and X.

>> It's absolutely incredible energy in here. Think about how much innovation, how much product market fit the regulators have this year. >> Yeah. >> it. The regulators this year and over this administration have more product market fit with their regulations than a lot of crypto companies. >> Wow. Guys, before we get any further, shout out to Chainlink. Shout out to Chainlink. Let me tell you about Chainlink, the world's greatest oracle connecting D5 and legacy finance for anything link everything capital markets crypto D5 blockchains and more. Shout out to Chainlink. Guys, we are going to kick off today's show, talk about today's topics. We've got DC Blockchain Day 1. We've got markets and weather, which we're going to come back to.

There's a lot of conversation about the Clarity Act and the Market Structure Bill. And of course, we've got lawyers, policy makers, CEOs joining the show live. Guys, to kick us off, we've got Adam Meinhardt, the lead legal counsel at Chainlink Labs to open up our first day at DC Blockchain Summit. Guys, don't go anywhere. We're going to take a super super quick commercial break and we'll be right back, guys. Let's get this day started. >> I'm here.

I'm here. I'm here.

>> All right guys, we are live from DC Blockchain Summit day one Adam round two here SmartCon round one. >> Good to see you. >> It's good good to Yeah, it's good to have you on man. >> last time we spoke it was in New York for SmartCon. >> New York and I I run into you with the banner outside this morning. So, great to be back. >> Yeah, man. >> Absolutely. I mean lots of lots happened since since SmartCon. Chainlink has been absolutely crushing. >> Yep. Yep. Chainlink has been good. Um a lot's happened but also a lot hasn't happened when it comes to DC. So, um yeah, really good to see you guys.

>> So, this is your arena. You know, when we were in New York we were getting a sense of how the institutional capital is starting to come into the space. You've been here you as the the chief legal for Chainlink uh may you have made your mark here in DC. We see Sergey in DC quite a bit. You guys are part of the Innovation Council uh that came out. Tell us what it's been like to make your mark on DC. What has been the trials and tribulations in your personal experience? >> Yeah, you know, I was on Capitol Hill for uh almost 20 years and initially initially I went to a large bank. I went to Citigroup. Uh very very Wall Street, uh very traditional, and really wanted to get

into crypto. Moved into crypto and it's been wild. It has been quite a learning curve, I think, for me learning the industry. I'm 6 years into crypto now, but also the industry learning DC. Very different personalities, expectations for engaging. I think the the the OGs in crypto are more of a uh we break the rules, and I think government is very much like, we make the rules. So, I think it's it's been wild to see kind of this like clash of philosophies.

>> Yeah. So, Adam, perhaps we can set the context here for DC Blockchain Summit with this kind of clash in mind. Really this kind of core ethos of digital assets of crypto that is kind of simultaneously being combined into now this more grown-up sense. I mean, look at us. >> I know, right? >> I remember you, man. >> Exactly. You look around here, everyone's in suits. I don't see one T-shirt. >> So, what do you expect out of DC Blockchain Summit? What are some of the core topics that you think are most important? And just kind of walk us through why people are gathering here today at this pivotal moment in crypto's regulatory history.

>> Yeah. I think since President Trump took office, we have seen the crypto industry come to DC hungrier than ever. What's different though is that now TradFi is here doing crypto work as well. So, I think the word that comes to mind for me is convergence. >> Yeah. >> You're really seeing crypto do crypto things, but you're seeing TradFi do crypto things. And you're seeing crypto do tradfi things. And you see that with the policies that are being pursued both on Capitol Hill, but really in the regulators now. How can we allow tradfi rails to operate and facilitate crypto transactions? So,

I think what this is about here is not just crypto, but really about regulated finance. You really see a broadening of the of the word crypto here to really include Wall Street now. So, the playing field's gotten a lot bigger. It's led to a lot of complications though uh with market structure, but that's the word I would say is convergence. >> What you're you're our first guest today. I would imagine we're going to hear a lot more about market structure in the Clarity Act. We'll give you the first word on where Clarity stands right now today, March 17th.

>> Yep. >> Um >> I personally believe it is close. I think we're within a week or two of a deal being announced, um us seeing language on the yield issue, which I think what is what a lot of people think market structure really is. It's a lot more things, but the ability for an exchange to pay yield on static uh stable coins is the issue at hand. I think we're going to get some form of deal in the next week or two. The question is are the exchanges going to like it? Um will crypto writ large like it? And will the banks like it? So, it's one thing to put something on paper. It's another

thing to get people aligned, but I think we're going to see something in the next week or two on market structure on the yield issue. The other issues that people will talk about you'll hear talked about all week. Uh Blockchain Regulatory Certainty Act, which protects software developers, uh Section 505 regarding tokenization. A A of these issues are being worked out in the background. So, if we're able to achieve some sort of deal on yield, I think things could move somewhat quick. I mean, you know, uh the boy who cried wolf comes like to mind here. We've been at a lot of deadlines, but uh I think it could move quick if all these things come together, and it feels like a lot is aligned in

the next week or so to make that happen. >> Yeah. So, Adam, as Rob said, we're we're going to talk a lot about stablecoin yield, clarity, lack, market structure, but I want to throw kind of a curveball at you. Yesterday, the SEC announced that they are contemplating a proposal to reduce the quarterly filing requirements to bi-annually. Right? So, every 6 months rather than every quarter. >> Yeah. >> What do you Why would they do this? I put out a tweet, I said, "This doesn't make any sense to me. Why would you do this?"

What's your take on this? Why Why would they do that? >> Um they continue to send signals to traditional finance that it is okay to go further into crypto. And all of these small details matter. They're complicated, they're Byzantine, they're esoteric. You need a a computer science degree and a law degree to really understand it. But But the SEC and the CFTC are doing the hard work, making changes to the plumbing, if you will, so that TradFi can really enter the digital assets world in a big way. And things like the change they announced yesterday are really important. They sound complicated, but when you drill down to

it's another flashing green light of it's okay to come in and do crypto work if you're a regulated financial institution. So, bit by bit they're doing the tough work day by day, complicated as all hell, but they're doing it. And they're moving they're really moving the needle on a lot of this stuff. >> Yeah. So, you really think this quarterly filing change is part of this gradual shift towards kind of this 24/7 trading market, this more blockchain infrastructure-oriented way of of, you know, of doing their business?

>> Definitely. We saw it something like, you know, >> That's huge. >> transfer agents, another like part of the plumbing of all of this, critical part. They made changes there. Um they're making changes on this. We know the innovation exemption, albeit narrower, is coming as well. Uh and I look forward to hearing uh Paul Atkins talk about that later today. Um but really all these things are just lining up to really make it okay to kind of go further and further in >> Can Can you help set some expectations for this innovation exemption because we heard a bit about this in Denver. Uh Hester Peirce and Paul Atkins gave uh or it might have been Mike Seely. But But together the two agencies talked

about some of the things that we should expect when it came to the innovation exemption. It sounds like uh there's a carve out where some of these digital assets are not going to be considered securities, not considered commodities. There's this special uniqueness >> Yeah. >> to some of these digital assets. Can you just fill in some of these gaps? What should we expect from Paul Atkins today? >> Yep. >> Um >> What we know on the innovation exemption, we have been expecting this for months. Um we know that there are Wall Street interests that are planning to litigate on this.

>> Right. >> Likely the day it's issued. So, the SEC is aware of this and they have been taking steps to ensure that whatever they put out there is defensible in courts. This is why we've seen a narrowing of it. We expect the exemption to be quite narrow for smaller type projects, but again to provide a safe harbor so that they can conduct innovative ways to offer tokens to build projects without running a foul of securities law. So, I think it's going to get It's going to be whittled down. It's an important message though nevertheless. And really, you know, for the industry, you're surrounded by a lot of big companies now, which is wild. And really, what we we need to remember that there's a lot of small companies that

can benefit from this and can then become the next big companies. It's great for the ecosystem. >> So, let leveraging some of your legal background here, also your your experience on Capitol Hill, you know, Andy and I's experience and this our perspective comes from Gary Gensler, you know, issuing enforcement actions against these companies where everyone was in a gray area. Now, we're kind of approaching this from from the other side, and we're going to see, you know, the large TradFi companies litigate on this issue that tends to support crypto. How is this Is this going to resemble the Gensler era enforcement action just coming at it from more of a TradFi angle? Can you draw some of these comparisons, or how How should we think about litigation as this innovation exemption comes comes

forward? >> it's a great point that you raise because there are there are definitely pockets within TradFi and Wall Street that see blockchain as a monolithic competitor to take market share from them. It's really in the market maker space where you're seeing this. The Citadels of the world I think are likely to see blockchain and DeFi in particular as someone that can take market share potentially with a different set of rules, and they're going to protect their territory. I'm not going to hit the table. Don't let me hit the table.

What What I think makes it interesting though is you have to look at the TradFi ecosystem in different uh spheres. So, when you look at, say, asset managers, the Fidelities, the BlackRocks, I think you see a lot of alignment there >> Yeah. >> on ETF products, ETNs, where they're they're not likely to be litigious. It really is these market maker sides. I think the most to me the most interesting part of Trad Fi is really the banks, particularly the large banks, where you have the cities, the JP Morgans, the Goldman Sachs, who will be competing with crypto interests.

We all know their investment banks are book runners for various crypto IPOs. We all know that they're going to be working with crypto in various parts of their business. So, talk about a challenge. If you're the CEO of of a GSIB right now, and you have to decide, am I for or against it? It really depends who you talk to in your business. If you're on the retail banking side, you might be against. If you're on the investment banking side, and you're taking someone public, you don't want to say anything. So, so I think it's going to break along different lines, but I I think there's going to be a lot of litigation. I I see it mainly on the market maker side. Um, really focused on DeFi.

>> Okay. And my my last follow-up question on on the innovation exemption, within the the digital assets and tokenization space, who do you think is most poised to be the main beneficiaries of this innovation exemption based on your knowledge of how narrow this would be? >> Yeah. Um, it's likely to be projects none of us at this table have heard of. >> Really? >> I think they're going to be I think they're going to be smaller cap, newer projects that are looking at doing airdrops, some form of limited fundraising through a token.

I expect it to be capped at a certain size. So, I don't think it's going to be the name brands that you see at conferences like this. I think it's going to be smaller down the the food chain. Could be interesting deep in type projects. Maybe not at the level of say a helium, but maybe the next type of helium. Someone in that but maybe the next type of helium. for innovation. >> There are quite a few projects that fall into that category. We've heard of uh, you know, meanwhile, daylight, some of these these companies that are using digital assets and tokenization as a funding mechanism to fund the energy the energy crisis where you know, we know that with AI we need to finance a lot of this. The the main limiting

factor is energy and electricity and so there's digital assets and tokenization are used as a funding mechanism to drive that energy crisis forward and I could see a lot of alignment within the broader government agenda. >> Well when you when you can take take things out of the pure financial world and get into physical infrastructure and non-financial uses. Yes, funded by a token, but the actual product is something that is like wire like wireless service or solar or mapping or any of these real things. I think to me like that feels like a natural area where we want to spur innovation. So we're not just talking about financial

products, but we're talking about real world use cases. I think that's something I think all of us are starved for. I'm not saying there isn't any. There's a lot of it, but we could use more of it and we I certainly would like to talk more about things like that and less about trading all the time. So that'd be great to have that. >> He doesn't own any hyper liquid, ladies and gentlemen. It's okay. He's got huge chainlink bags, but that's okay. Doesn't own any hype. Adam, one thing that also kind of came out in the last 2 weeks I think was CFTC SEC coming together. There was this kind of joint MOU that was like, "Look, we're going to try to reduce regulatory overlap amongst our two agencies

specifically for digital assets, but also just broadly. How realistic is this? Is this just a headline? Is something that we can actually see in practice actually come to fruition? What you know, what's your what's your take on that? >> to like being like a like a long-time DC guy in the financial services world, the fact that we have a commodities regulator and a securities regulator that are not housed under one entity is insane. There's nowhere else in the world where this exists. You have ESMA in European Europe-wide, the member states of the EU, Japan, Asia. It is natural for commodities and securities to be housed under one entity because there is

so much interaction between the two regulators that they need to be within one entity. I think this could be one of the most important things that comes out of this this period for all of us, not just crypto, but for all of financial services to have stronger working relationships between those two agencies. The amount of time and money wasted by companies going back and forth to two regulatory entities that are on different pages is mind-numbing. It's a waste of their time. It's a waste of the industry's time. It doesn't protect investors well. So, um I think we're at a unique point. Mike

Selig worked for Paul Atkins. >> Yeah. >> There's tight uh personal alignment there. Uh so, I think this is one time that we can actually see you know, you see a lot of these um MOUs happen. >> Of course. >> And they don't mean it like nothing happens. I I'm very bullish on this one just given that you have Selig and Atkins who know each other very, very well. I think they can really bring a lot of alignment um to the industry, the people at both agencies. We've had legendary turf wars between these agencies implementing Dodd-Frank. Some rulemakings took a decade. Uh so, it's it is just insane the amount of time that is spent on

these regulatory inefficiencies. So, again, probably not a big deal to people outside of the Beltway, but in in inside and the people have to deal with multiple regulators, big deal. So, I love it. >> And would you anticipate that this materially lowers the cost and resistance for institutions, capital allocators, people trying to build on chain? Like, do you see a direct correlation to digital assets regulation or like just kind of show us what this means for >> Yeah.

I 100%. I mean, the the key issue I mean, we talk a lot about yield because that's occupied a lot of the the time in delaying market structure, but really the purpose of market structure is to decide when a digital asset is a security, a commodity, or something else. The the Senate uses a concept of ancillary asset, network token. So, really the most important thing to the industry is understanding is my token a security or is it a commodity? So, the amount of time that industry spends trying to figure out and get outside opinions on whether you're in one bucket or another bucket, there's very

different requirements if you are in each bucket with regards to disclosures, which are very laborious and time-consuming. Um so, it's extremely meaningful uh both as a signal, but then in practice where you can go and take one meeting >> Yeah. >> and get the lay of the land of two regulators and maybe have a unified response from them. So, it it's huge. I think it's really bullish for the industry. >> You know, Adam, we're we're going to be talking to uh you know, legislatures, regulators, policy makers, government officials from both sides of the aisle.

Um our understanding of the Democrats' position on a lot of the regulation that's moving forward is primarily around consumer protections. Um the do you think that the regulation that the SEC, the CFTC, the Clarity Act, the Genius Act, everything that we're seeing come out of this administration, we're opening up a lot of these markets. Do you think that we're doing enough to protect consumers? Should we be doing more or is this thoughtfully curated regulation protecting consumers sufficiently?

>> Um it's a great question. I'm going to be diplomatic in my answer. We saw a lot of enforcement under Gensler and it tipped well past, in my view, and I obviously most in industries, of what is reasonable as a way to protect consumers through an enforcement only mechanism. I think what Atkins is trying to do is bring that back into balance and really focus on areas where businesses are committing fraud against consumers. And I think that's important both from a resource spend at the agency.

If consumers are being harmed, by all means, go after the company. If someone's committing a paperwork infraction that you think may or may not fall outside of your view on what decen- decentralization is conceptually in the context of the Howey test, let's just leave that alone for now and let's really focus on on areas where uh consumers are being harmed. And I think that's what Atkins is trying to align. I think it's it is very important for us in industry that there still is enforcement. We want to see it. Industry does not want bad bad actors out there harming consumers. It's bad for all of

us. So, uh it it needs to be in balance and I think that's where we're going. >> It it really feels like the mantra of this administration and the SEC, the CFTC is protect consumers without harming innovation. >> Yeah. >> And and I think uh that I that feels like the right balance. >> Yeah, it does. It definitely does. And I think I think Atkins and Slaughter are like perfectly honed in on that. Getting us back to to to neutral here. >> Yeah. Last last question for you, Adam, is uh you know, where does Chainlink fit in? We're We're going to have you on a couple more times throughout the week.

Um you guys have made such a significant presence in DC. You've been here on Capitol Hill. Um yeah, so generally, how how are you seeing the space and how is Chainlink making an impact in DC to drive the whole industry forward? >> Yep. Uh Chainlink is pretty interesting. Uh Our origin story comes really from DeFi in providing data streams for smart contracts. And they've really built to be a full-stack solution for anyone really wanting to interoperate with a blockchain, whether it's TradFi, governments, or DeFi. So, I think Chainlink really sits in the middle now. We know where our roots are, but we know where the future is. So, I think we're looking at all angles really

as a software company that has become uh critical to the functioning of a lot of the infrastructure. So, I think it's a great perch to be in where we kind of can see all of this evolve without being overly parochial on one particular niche area. So, for us, we're trying to engage thoughtfully and really move market structure forward. That's our goal. We want to see this get across the finish line. Um we think it'll be good for the industry. Clarity is necessary on a lot of fronts, but uh I'd say foremost to really protect investors.

>> Mhm. >> So, and I think that I think protecting investors is bullish for the industry. I mean, that's how I see it. So, I think that's where we go. Chainlink, we get to kind of look at all vantage points given who we're working with. >> Yeah. >> Kind of a similar question, my last one, and you may you may have a biased answer. May just be channeling. Um I put out this tweet, if the tokenization thesis is correct and trillions of dollars of new assets move on chain in the coming years, which company will benefit the most? There was a variety of different answers. Um lending markets on chain, so like on chain DeFi protocols, they get a lot of these RWAs, ability to collateralize them, exchanges, oracles. Um we had kind of like a a wide set of of issuers, yeah etc.

Is this right? Like, what's your view on this? >> Yeah. Um there's going to be a lot of winners and losers as assets get tokenized and consumers uh start to choose the tokenized form over the non-tokenized form. I think uh before I get to your answer on that, I think what is incumbent is for the industry who's helping make these tokenized assets to provide consumers and investors with a real tangible reason of why you would actually want it in a tokenized form.

Yeah. Like, I don't want to lose like vision of that. It sounds cool, and it can move on, but we have to be focused on why would I prefer to have a stock in tokenized form than the other form. So, I think we're getting there, and I think the borrowing lending protocols, being able to move that around as collateral, uh being able to trade it 24/7, these are real advantages, so I think they're there and they're coming. Um for us at Chainlink, we like to think we'll be a big beneficiary cuz we're in the middle on the infrastructure side, but I agree with the list you laid out.

I think uh asset managers, banks, um I think exchanges all stand to benefit from this this tokenization play. I think the losers are likely to be your incumbents on Wall Street, and that's why we're seeing this tension that that you alluded to before. So, um lots of winners, lots of losers playing out before our eyes. >> Yeah, I mean, this is interesting because this tokenized 24/7 trading I saw this article on Wall Street Journal that said that institutions are kind of resisting it, and that they anticipate retail to be the early adopters of this as institutions work to kind of restructure their underlying infrastructure to actually provide for instant

settlement and provide 24/7 trading. They're just not built for that. >> Yep. >> And so, there is this kind of head-butting happening. >> Definitely. And and underpinning all of that is liquidity. It is you you want to be able to execute your trade for the best price, no matter what. So, I think that that also uh in addition to what is the reason you would seek a tokenized asset, also underpinning that is you need deep liquidity regardless of where you're trading. If it's a thin market at 1:00 a.m., well, you're probably going to wait until 10:00 a.m. if you can get a better price. So, I think these are questions that are open. I think infrastructure clearly is going to be a winner in the

near term. But, a lot of these crypto-native firms that are set up to help transition this over stand to win. Um we're starting to see it already. So, I don't want to name names, but I think we all know the names. We are starting to see see flows follow. So, I think there's going to be a lot more of that. >> Yeah. Plenty more to come. Ladies and gentlemen, Adam Monfort so much for joining us our first guest today from Chainlink. Uh thank you so much for sponsoring our week. >> Definitely. Um love you guys. Uh Chris loves you guys. All of Chainlink loves you guys. So, we really appreciate what you're what you're doing, uh bringing um real live interviews to the masses out there. So, thank you for

everything you do, and look forward to uh speaking with you again. >> Well, we love you guys, too. Thank you so much for pushing the whole industry forward. We'll see you again this week. >> Thank you guys. >> to come up to our Empire State Studio. >> Oh, man, I'd love to. >> It's It's pretty insane. >> I'd love to. >> Adam. >> Awesome. Thanks. >> Yeah, good to see you guys. >> Good to see you. >> Yep. >> Yep. All right, guys. That is Adam Minehart from DC Blockchain Summit. Great first segment. >> Yeah. >> Um >> Key takeaways for you, what do you got for us? >> covered a lot of ground. Adam helped us get up to speed on everything that's happening in the Clarity Act. I mean, a surprising takeaway right off the bat was Adam thinks something's going to happen here in the next 1 to 2 weeks.

Obviously, an ambitious timeline, but we're we're pushing forward at incredible pace. Hopefully, that you know, conferences like this week are helping move this thing forward as we bring together people that need to end up in agreement or compromising. >> Yeah, and I mean, I actually saw this tweet from Paul Barron. It's It's a kind of live show, and he said that 1 to 2 weeks, and the issue is that banks are actually going to win on the stablecoin yield component, and that's why he thinks it's going to be done within 1 to 2 weeks. I don't have confirmation on that, similar to my Tempo rumor mill yesterday. I don't have confirmation on that, but I We are hearing some rumblings here. We We'll have to ask the other kind of CLOs and legal counsels

that that we speak with. >> I think we'll hear plenty more from the rest of our guests happening this week. Another great conversation was around the innovation exemption. Another big takeaway there is that this is going to be pretty narrow. Uh but, we can expect some litigation from the bigger institutions, bigger banks. It's incredible because now, I think we're retargeting who the nemesis of our industry has been for a long time, the government. >> Yeah, for so long, right? It was the government, right? That It was the Gensler was kind of like the enemy, the villain of the industry. Now, we're reorienting around around TradFi and banks, and those are the incumbents that are looking to slow this industry down.

>> Yeah. Guys, we're going to go through our markets and weather segment as we wait for Salmon, the next guest from Plume, the the uh chief legal officer at Plume guys. Um so, we covered today's topics. So, why don't we get to the weather? It's an absolutely beautiful beautiful day here. >> here in DC. Absolutely beautiful. >> Uh yeah, let's go. >> It's not exactly beautiful. Let's be honest. Um Let's go ahead and go to the weather flip here. Guys, it's 36°. >> Really?

>> It was I don't know. It was sunny outside. >> I was freezing on the way here. >> I think it's beautiful outside. Look, I was coming from 85° in Florida. It does It is 36° here in DC. >> here in DC, guys. 36, windy. >> But look, it's sunny outside. Yeah, it's a little breezy, a little cold. Bumpy ride getting in here. And I took the train. I was >> Yeah, that was >> There was turbulence on the way in here. Tornado watch yesterday. >> Yeah. >> All that weather pretty much blew out, left a little bit of a cold front, but we're here in DC having a great time. We got some sunshine coming in through the window.

>> Yeah, guys. And shout out to Relay, powering our weather segment from the best cross-chain swaps in the industry. Let's give them some love, guys. Shout out to Relay. Um yeah, let's go to markets. Uh the markets are green. And before we do that, let's tell you about Frax. Frax is open digital money, the future of stablecoins, FRX. >> We're going to be talking a lot more about the genius act, of which Frax is genius compliant stablecoins. You guys are going to be hearing a lot more about this.

>> It's actually not genius compliant. I I got corrected by our boys from M0. It's um genius uh what's the It's not What's the other word? It's not compliant. Uh it's genius uh It's not compliant, man. I'm telling you it's like I'm Guys, the ad is The ad is still running. Shout out to Praxis, the future of digital money. Open, stable, orderless. Guys, we're live in DC. Great to have you guys. Great to be here. And let's go to the markets. >> Bitcoin green. It's Zama.

Happy St. Patrick's Day. It's a green day for all of our friends out there. Bitcoin, Ethereum, everything is green. Shoots. >> Numbers are going up. >> a green suit on today. I don't know if you guys can tell. But I got a green suit on. >> Andy has a green suit on in case you guys weren't aware. Chainlink also up today. You guys just heard from Adam. Shout out to our friend Chris over at Chainlink. Those guys are doing incredible work. I think Chainlink personally doesn't get enough credit because think about some of the companies that are pushing forward regulation on behalf of the entire industry. You also you look at, you know, Shane Copeland from Polymarket.

You look at Terek and the Kalshi team. I saw Kalshi out of my way over here. Says their number one priority is banning insider trading. >> Yeah. Right. >> Felt like that was that was pretty funny, especially here in DC. They're trying to they're trying to make an impression. And so generally I think there's a lot of very there's key companies that are here and present in this market in the DC area. And they're making an impression. They're really helping to pull the space forward as a whole. So this is incredible work that's being done. Zama is powering our markets today.

>> Yes, shout out to Zama. >> Shout out to Zama. >> Guys, Hyperliquid is absolutely on a tear. I mean >> Hyperliquid we got to get that into our market segment. >> 40. Little pull back there from 41, guys. Nothing to fret about. Don't you worry. >> Yesterday was great. Yesterday everything was up. ETH was up 10%. Bitcoin was up 5%. Hyperliquid up 10%. >> Yeah. >> Um what do you what what do you attribute this to? Anything in particular? >> I just I just think that we We a lot of bad news and the market wouldn't go down, so it had to go somewhere, and it went up.

And so, I think that's all it is. It's literally we had a lot of lot of interesting, weird news, and we went up. So, guys, that's the markets for today. I >> We're also seeing correlation break between stocks, equities, and crypto. >> Yeah, I kind of think that I think that I think that Bitcoin keeps leading the equities markets. Like, it signaled that the equities markets were going to have a pullback. Um so, >> you know and I'll just on that note, remember back when gold was having the incredible rally, people were saying, "Okay, once gold pulls back, then it's Bitcoin's time." That was flawed logic.

Bitcoin You're right, Bitcoin always leads because it is the most reflexive, and so it makes sense that it would have had to gold would have had to come down, stocks would have had to come down, we would have had to have an entire cycle reset in order for the the next to start over, and for for the next push to be made. And so, I think, you know, now we're seeing Bitcoin lead once again. Whether this is a sustained rally and we go up from here remains to be seen, but feels like we're at much healthier levels relative to some uh some of the other asset classes out there.

>> Yeah, I agree. I'm glad that we're having a little bounce. We'll see how long this lasts. It'll be a good good test of the current strength of this kind of bear market bounce, if you will. Guys, let's move on from the markets, uh and we're going to go into today's news and headlines live from DC, but before we do, tell you about Let me tell you about somebody. Let me give a little Let me give an applause in the back there. NEAR. NEAR is the blockchain for AI, powering the AI revolution on chain, agents, Iron Claw, and more. Guys, go to near.ai to learn more, or near.org to learn more about what NEAR is doing.

Uh NEAR is the blockchain for AI. All right, guys. Moving to today's topics and headlines. Uh interesting interesting news Interesting post here. >> So, so I listened to this whole podcast. I'm curious how how your you're going to react to this. >> listen to this clip because I think this is super interesting. Let's do it. >> Um >> And and yeah, let's go ahead and play this so our audience can hear it. And I think it's something that's super interesting to hear about because I think that basically what David saying in in this is that the A16Z CEO co-founder, uh, Marc Andreessen >> is talking about no introspection required to be a successful man, to to be an entrepreneur. And

I thought this was super, super interesting. So, let's go ahead and play it out. >> Look forward. Go. Yeah, I don't I don't know. I've just I've found people who dwell on the past get stuck in the past. It's it's just it's a real problem. And it's a it's a problem at work and it's a problem at home. So, I've read obviously 400 I think now 10 biographies of successful entrepreneurs. And that was one of the most surprising things. I'm like, "What's the most surprising thing that you've learned from this?" They're like, "Oh, they have little or zero introspection." Like Sam Walton didn't wake up thinking about his internal self. He just woke up. He's like, "I like building Walmart. I'm going to keep building Walmart. I'm going to make more Walmarts." He just kept doing it over and over again. >> And you you probably know if you go back

like before 100 years ago it never it never would have occurred to anybody to be introspective. Like it's the whole idea of I mean it's just all of the modern conceptions around introspection and therapy and all of the things that kind of result from that are, you know, kind of manufactured in the 1910s, 1920s. >> Say more about that. >> Great men of history didn't sit around doing this stuff. At any prior point. Right? It's all it's it's it's all a new concept. >> Okay. >> It was it was getting you know, it was well, so first Western civilization had to kind of invent the concept of the individual, right? Which was like a new concept, you know, several hundred years ago. And then and then, you know, for a long time it was all right, the individual runs, right? And like that does all these things and builds things.

It just built empires and built companies and built >> The world over here in terms of introspection. >> You know, kind of this kind of guilt-based whammy, you know, kind of showed up. Uh, from Europe from Europe. Uh, a lot of it from Vienna in the 1910s, 1920s. Freud and all all all all that that entire movement. And it kind of turned all that inward and basically said, "Okay, now we need to be like, you know, basically second-guess in individual. We need to criticize the individual. The individual needs to self-criticize. Right. The individual needs needs to feel guilt. Needs Needs to look backwards. Needs to, you know, dwell on the past. It never resonated with me. >> Okay, so >> We had to >> We had to invent the concept of individual >> of the individual.

>> I think Look, I think that's extremely true. Um I don't know. I kind of went back and forth on this. I listened to the whole pod. Um and I think um you know, the way in which Mark talks about introspection is quite a bit different than what I think uh we commonly understand as introspection. When When I hear Mark talk about this, it's um second guessing. It's mainly what I think he's trying to prevent in the founders that he invests in via A16Z. Uh what what we've seen is that um Those who Those who are introspective are able to learn more about Like, for instance, thinking about thinking is a way in which you can improve your logic, the way in which you think, you can come

up with better ideas, end up making better decisions, and ultimately improve your circumstances. And like Mark says, you know, the the world around us is much more malleable than it may seem. And so, by having the willpower to manipulate the world around you, uh you can make changes and improve your circumstances. Uh that does not require introspection so much as uh impacting uh your will upon the world. But, you need a very clear understanding of your will. What is it that you're trying to impress upon the world? What change are you trying to affect? Um that doesn't require introspection. It just requires knowing oneself. And so, I

think uh Mark's uh definition of introspection diverges from what what would call cuz you may think, you know, I need to look inside myself, I need to understand what I am, what I want, what changes I'm trying to affect. All of that could be considered introspection. Mark's definition uh separates from that. I think he's mostly saying don't be stuck in the past about what you were doing. Don't be second-guessing changes that you've made. Be focused on the future and what changes you're trying to affect in the future and will those into existence. >> Yeah. Thank you, Rob.

Thank you for that, Rob. >> what do you think? >> I'm I don't know. I'm more on the uh team Mark. Yeah. I I think about things and then I introspect about them and then I write in the journal once in a while. >> Oh, so you do introspect. >> But I pretty much just floor it. Full steam. New York, 100 miles an hour. Just very little thought about what happened an hour ago or a day ago or yesterday or that last week. Just floor it. >> Just floor it. It's pretty good. All right, guys. Uh let's take a super quick break.

>> Because we got the Constellation the Constellation founders, they're going to join us next. Our our guy Salmon from Plume is going to join us a little bit later. I think he has run pulled us. That's okay though, guys. We'll be right back with the Constellation team. >> We get deep.

We get deep. You know we get deep. We get deep. huh? We get deep. You know we get deep. You know we get deep, huh? We get deep. You know we get deep. You know we get deep, huh? We get deep. You know we get deep. You know we get deep, huh? We get deep. You know we get deep. We get We get deep. We get deep. We get We get We get deep, huh?

You know we get deep. We get deep, huh? We get deep. You know we get deep. We get deep, huh? We get deep. You know we get deep. We get deep, huh? We get deep. You know we get deep.

We get deep, huh? We get deep. You know we get deep. We get deep. We get deep. You know we get deep. You know we get deep. We get deep. >> I love them. Line them up and cook them down. >> There we go. >> Let's go. We're back. We're live. >> All right, man. Welcome to the show. >> Yeah. Let's go. >> Let's give Benson love, guys. >> Good energy here, you know. I I love it. This is awesome. >> Yeah. >> I mean, what's your reaction so far? How long have you been in the city in DC and making an impact here in in the government capital of the world?

>> Yeah, yeah. Appreciate that, bud. Yeah. You know, we got in last night. We've we've been a part of the Digital Chamber for quite a few years. Last year we were the flagship sponsor. Um and one of the things we're excited about is that our company was acquired in this last year. So that was a big shift. >> Congratulations. >> proud of that because we believe that's a good signal for the industry, right? Like that the consolidations are happening. Um those that have been following our project, we've been contracting with the DOD doing blockchain solutions for the last 7 years. Okay. So we've been very involved in policy shaping, a lot of the stuff that's taken place here on the hill.

>> And could you give us just give us a bit more context into what the DOD is using blockchain for? Is it logistics operations? You know, I think they're probably not tokenizing too many assets. But what are they Is it supply chain things? What are they using the blockchain for? >> Great question, Robbie. Yeah, so what we've been focusing on is really provable guarantees is the is the crux, right? If you think about immutability with blockchain, um the big use case is say you have to send a secret mission or top secret mission communication to a contracting partner. So somebody outside of the DOD sort of mothership, uh when doing so, there's a propensity that it could be stored somewhere altered corrupted changed.

But by putting that information, that sensitive information that is cryptographically signed on a blockchain, they have that 100% provable guarantee that it hasn't been altered when they're receiving that message, which is an extremely important thing when you're talking about government defense. >> So, the DoD trust blockchain? >> Oh, yeah. We were actually approved by the DoD Air Force Research Laboratory in October of 2022 as DoD approved scalable and secure. So, very big deal for us. >> And now, how will things change now that you've been acquired?

>> Well, a lot of the big reason that we were acquired was because of the benefits that blockchain brings to AI. I think that AI is going to be one of the It is going to be the forcing factor when it comes to regulation that, "Hey, you've got this open claw agent swarm, if you will, that's out there. Do you have a trust layer? Do you have something that's preventing, you know, unwanted prompt injections and stuff like that?" So, I think it kind of is like the unsexy Robin to the Batman, if you will. Everybody wants to talk about AI, but how do you make sure that you're keeping it trustworthy and enforced by a blockchain?

>> And in Constellation Network, is there a notion of privacy? Because we can't have You mentioned the immutability, right? And that the secrets, the the confidential information, classified information is not to be tampered with. Is it also invisible or private from prying eyes? >> I mean, by nature, that's just really how it works. At the same time, when it comes to things like identity access, it's more about having that guarantee of knowing who did what, right? And leaving it up to the, you know, those that have to have the discernment or the decisions to say, "This this person was not allowed to get in on this conversation." Good example is I don't know if you guys remember a year ago when that Signal thing happened where >> Yeah. Yeah. Someone was added to the group chat and then

>> that wasn't supposed to be. Had they had like signatures requiring for people to access that that using blockchain enforcement, that wouldn't have happened, but, you know, we're all still humans and corruption really comes down to the the human condition, if you will. >> We've heard a lot about the blockchain being a solution for AI deep fakes. People are coining the 2028 election as the election of AI and election deep fakes, thinking that there's going to be propaganda, campaign material, and we're going to have this AI and we may not know what's real and what's not when we're seeing, you know, what looks to be a very professional, you know, video of a candidate and they're saying something that sounds ridiculous and wild. We're going to have to use our better judgment

unless we use signatures via blockchain to authenticate some of this material. People say that, you know, we could have a candidate include a hash or a digital signature that proves the authenticity of this material. Is this where you see this heading? How how how much credence do you give to this claim? And and what is this the right way to be thinking about the intersection of blockchain and AI in the next couple of years? >> Yeah, great question, Robbie. I'll tell you what. Right now we're living that reality that we can't trust what we see. Look at what's going on with this war, right? There's been all this controversy last few days if certain constituents are alive or dead and now people are using AI tools to say is this even a real thing, which I think points to this

sort of like weird moment that we're in as a society that we can't trust anything anymore, right? And so therefore if like we do have this elixir that is blockchain and I'm not here just to promote constellation. I'm here to promote the industry. I think this is good for everyone to have something that allows for that checks and balances, right? Imagine if there was a live feed from CNN doing a debate with two presidential campaign candidates and they've got a QR code in the bottom right-hand corner that you can scan and now it's validated on a blockchain of the lat long. These are, you know, the camera, all this stuff gives you at least a semblance of trust and faith in what you're seeing is real. Right now it's uh we don't have that, right? We have to take the media's word for what

they're producing and trust is at an an low because we've been duped so many times, right? So, yes, I do feel like this is going to be a really exciting election season coming up considering technology has gotten pretty weird. >> Yeah, especially as, you know, we see Telegram hacks, more and more news, like market-moving news, news that nations are dependent upon, comes out on Twitter. Like, we that that needs to be proven. We need to tighten the security of these things cuz it's >> You never know, or Fortune. >> You never know, right? Right, yeah. Yeah.

>> Yeah, man. So, it's you know, it's an exciting time to be alive. At the same time, it's sort of a white-knuckle moment for a lot of industries. Um AI being a big one, right? I have to say the genie's out of the bottle, the toothpaste is out of the tube. You have all these companies that feel this FOMO of like, if we don't use this, we're behind, but we're scared because we don't know if we're going to cook our entire our entire system by allowing access to agents to our sensitive stuff. So, I think we should get excited about the fact that we have some stuff that can solve some of these issues that are staring us right down in the face. >> Yeah.

Um what does your day-to-day look like? Just kind of a way different question here. Like, what is the company that has acquired Constellation, and what is what is your day-to-day? What what are you guys what are you guys, you know, creating in the world? >> Yeah, yeah. I mean, right now our big focus, now that we've done sort of a a pretty bang-up job when it comes to the federal penetration of America, we incorporated Constellation EU last year. We're expanding into the European Union. I just got back from Berlin, going to Lithuania here soon, and working on some pretty sensitive but very cool projects in which folks are saying, "We got to move quickly." Um so, there's that whole side of the business, but then our other side of the business is on that emerging AI. Well, you know, I know everybody's

tired of hearing about it. It's like the the the the worst thing to constantly hear about. That said, there's just too much action to not look at it uh well, you know, with a hard lens. And so, our engineering group, and this has been a big pivot that we've seen in the industry, went from being engineers to orchestrators in a matter of 3 months, which I've never seen anything like that in my career, where they're orchestrating agents versus actually doing coding themselves. And so this year, I think what we're going to see is a massive shift in industry. So our day-to-day is by being very nimble. The work I do is the unsexy boring stuff that it takes a long time with those sales cycles when you're working with, you know, foreign governments. But anything that's going to create a better trust layer of interoperability where

people can securely communicate without worrying about their stuff being, you know, intercepted by adversaries. I think opens up a pretty exciting time because right now, like we need more technology like we need a hole in the head is what I always say. What we really need is we need people to come together and that's largely what this conference is about so that we can outline those regulations and policies and rules of engagement, if you will. But the forcing factor is here. Everybody in this room has a little stress that's running underneath the current of not knowing what the heck is going on. There's a lot of blockchain companies, tokenization companies, digital assets that are looking to partner with some of the larger financial institutions of the world.

Given that you've partnered with one of the largest institutions in the world being the Department of Defense and the US government broadly, what does it take to land one of those deals? What is the sales cycle like? Does it start out as you're sort of a trusted advisor, you're educating them on what blockchain is itself, and then you work into the into the role of a partner and a and a service provider? Or just generally, how does that sales cycle and that experience work? Yeah, great question. I I you know, from my experience I've come up with my own term that you need the three Ps. You need they have to have a requirement that is outlined like, "Hey, we have a problem."

That's the first P. Second is you have to have the people that actually can absorb the solution and operationalize it. And then you need the purse strings. You need they they have to have funding set aside. And if you don't have that grand trying kind of aligned, it's going to be really hard to break in. And but the way you do it is through relationships. That's a largely what these types of things are about, right? Finding the right people and educating them at where they're at versus trying to get them to speed up. Uh I use a lot of analogies with four-star generals, you know? Uh Medusa's at the scene, it turns the data to stone, you know, like trying to talk about immutability. And they'll be like, I get it, let's move forward. And then of course, when it comes to the operators, the people that

have the hands-on systems, those are the ones you really have to prove it with. But these sales cycles, like for us to break into the government, we started out with what is known as the Small Business Innovation Research, which protects small businesses from the major primes. Cuz we're not going to compete against a Lockheed Martin. We We don't have their resources or their relationships. So they have these programs to bring innovative tech in and let it gestate through those channels. But it took us, you know, you're looking at a at least an 18-month to 2-year sales cycle to break into the government. >> Are those primes, are they thinking about blockchain?

I think they're probably thinking about AI at this point, but typically the faster-paced technologies, the AIs and the blockchains, are fit for the disruptors and not the primes. Where Do you see that similarly when you're working at, you know, the scale of the government? Or is it uh that, you know, now that this technology has became adapted and scalable enough, the prime contractors are also thinking about blockchain and thinking about AI? >> Well, they're they're always going to say they can do everything. Um and often when they're talking about what is known as a need statement from the federal government, hey, we need this thing, they may not say blockchain specifically, but all the different things lead up to like, hey, this is the only thing that can match those

requirements. That said, like the National Science Foundation, other groups have true open topics specific to distributed ledger technologies, even as niche as saying, we need this to be a direct today acyclic graph blockchain. We know that we need this to work at the edge low or no connectivity environments and we need it to be able to scale to upwards of, you know, 80 to 90,000 transactions per second. And so when you're getting that niche, that really shortlists a few companies that actually can participate in that sort of a bid. So having those relationships of folks that are sniffing those out and walking us in really matter and I'd say my biggest pride in the last 7 years is having so many letters of support all the way up to the Secretary of Defense

office that allows me to go into, you know, a room and be like I I don't just trust me. We've we've got other people on board to support this. But last thing I'll say on that topic is we're here to represent blockchain, not just Constellation. We do not believe there's one blockchain to rule them all, that there's so much opportunity for everybody in this room to get involved because the pie is absolutely massive. >> Benjamin, thank you for being a part of the DC Blockchain live summit show for a successful exit for 7 years building on the American defense scaling industry. Best of luck on the travels to Lithuania. That should be a lot of fun. Thanks for

joining us, buddy. >> Yeah, you guys are doing a great and cheers to the roll up. Let's kick some ass. >> Thanks. Thanks, Ben. >> Cheers, buddy. >> Yeah, thanks, guys. >> Yeah, that's great, Benjamin. Yeah. >> Yeah, it's a pleasure. >> Well, all right, guys. >> We'll see you We'll see you next time. >> the DC Blockchain coverage as we had the >> That going crazy on that. You guys got to chill out over there. >> Department of Defense >> That is going crazy on contracts over here. We've got our next guest. I don't think we're going standby or anything. >> our next guest, Alex, the CEO of Chiliz. >> from Chiliz Group. >> Uh >> which he's doing some interesting things in the sports and blockchain convergence as well. So we can have Alex come on over.

>> Yeah. >> Yep. Yep, there we go. Alex is making his way in. We have a niche Everyone is wearing suits here. >> Yeah. There is >> not a single no non-suit in sight. There are ties everywhere. People are absolutely fired up for watching and for digital assets. And nonetheless, we've got Alexander Dreyfus, the founder of Chiliz, one of the most, if not the most prominent sports and entertainment blockchain company in the world powering the likes of Juventus, FC Barcelona, and many others. Today, we're going to talk about the transition into the United States, the push towards RWAs, tokenization, and

more. But first, Alex, great to meet you. Nice to meet you. Welcome to the Rollout. >> Welcome to the show. >> Thanks for the invitation. Happy to be here. First time that today I do a live podcast like this, so it's pretty cool. Um So yes. >> Yeah, yeah, it's cool. Uh well, just a bit of a introduction about us. We are 8 years old. Uh look a little bit older. Um being uh we are in Europe, 200 people, uh focusing on just one thing, tokenization of sports. That's it. We are not here to change the world. We are not here to change stablecoin, finance industry, whatsoever. We do sports, sports sports.

And for the last 8 years, uh we've been the company, so it's called Chiliz, of course. Uh we are a layer one dedicated to sports. We have a consumer-facing app called socios.com, which is more or less a wallet with all the utility of the fan tokens. And the fan tokens are the digital asset that we invented, um fungibles, they are not NFTs, that give you more or less right to vote on decision of the club, being kind of a super fan or a super member uh of that uh of the teams. And we work with more than 80 sports team all over the world.

So, um as you said, FC Barcelona, Arsenal, Man City, PSG, uh Atletico Madrid, Inter Milan, Juventus, and all that stuff. Uh we do that all over the world, in Brazil, in Turkey, in Japan, in Malaysia, in Indonesia. And we are looking to come to the US. >> Incredible. And so, you know, 8 years ago, this industry was very new. Tokenization, blockchain, for the most part, when people first interact with this technology, they say, "Okay, this is a good application for money, financial instruments, these kinds of things."

When you saw blockchain, tokenization, why did What What made you think, "Oh, we should apply this to sports?" >> So, for us it's become We We actually came from the sports space. We came from the online poker space, actually. I've been a online bookmaker for 10 12 years, 2004 something like that. And online sports betting, online poker, online casino. So, we we worked for 15 years in that space, and then ended up going into crypto. But, we went into crypto because of sports, not the other way around.

And We We try You know, we always say, "We're trying to find problems that crypto can solve." Well, for us it was the other way around. Finally, is there is a problem. Sports team all over the world have fans, and they don't know how to engage and monetize their fan base. So, what can you create that is both valuable for a fan and scalable for a team? And that's where we invented this concept of fan tokens. This concept of giving a voice to to the fans by giving them a way to be part of being a member, a super fan, as I said. You know, when you're in Japan or in Korea, and you're a fan of Manchester City or Paris Saint-Germain,

what can you do? You can follow them on Twitter. That's a one-way relationship. We thought that instead of just being a spectator, you can become an actor of the teams you support. And that's where we believe technology can bring value. >> And you guys are bringing this into the US. Is that what I understand? Is there a broader kind of strategy here from the Chiliz side now that we're seeing more regulatory clarity, more positive regulatory enforcements? How are you guys approaching your entry into the United States? >> Positive is the right word. Clarity, I hope it will be as well.

So we To to give you an idea, in '21 '22 uh Chiliz, we saw Chiliz or socios.com or our consumer-facing app, we did sign 27 NBA teams, uh 13 NFL teams, the whole MLS, few NHL, UFC, and few other stuff. We signed all of these teams, which was 88 teams, I think, uh with a vision that, "Okay, guys, we're going to sponsor you first." And you know, our agreement is if/when there will be there will be a regulatory framework that allows us to launch a token, we'll do it together.

Then uh November '22, uh FTX happened. Then there was the Gensler/Biden uh war against crypto. So, we had to exit. We lost 80 80 million dollars into this. So, the money we spent by promoting and working with all of these teams, uh we paid everybody, uh which has been very painful till today. Um but we get a very good relationship. And now it's the opposite. We have a very pro administration. We have a president who launched its own token. Uh we have an admin regulators that are here. I mean, this kind of event would not have existed two or three years ago. Um so, that's great.

Uh but when you work, you know, for for us, can can we launch a token in the US tomorrow? The answer is yes. There is enough clarity for me or guidance to do it. Is it enough for a $6 billion franchise to do it? The answer is no. So, we do need to have this regulatory clarity. Is it Is it the Clarity Act? It's SEC giving guidance, launching this innovation exemptions format or whatever, but we need a piece of paper that says, "Yes, you can do that."

Once we get this, us or the industry as a whole, then we will be able to launch teams we've kept very close contact and relationship and that are ready to go live. >> So, there is actual MLB, NHL, NBA teams that you believe will have a desire to launch their own fan token. Like franchise token. >> I have major league teams that are ready to go public that they are waiting for a regulatory clearance to launch their token.

>> And and for fans of these teams, can you just help us understand what this is going to change to the fan experience? >> So, again, in the most of stadium, I'm not sure in US, but let's say in US we have 50 to 80,000 people in a stadium, something like that, probably. That's great, but all of these teams has 50 to 100 million fans globally, in the US, of course, but also globally. I could be a fan of the Lakers like everybody else in the rest of the world or the Bulls or the Celtics, etc. Um The the original idea of what we do, it's we we call that fan token, but as a fun fact for you, the original idea on the first white paper in 2018 in early 2018, we used to call that a voice

token. Why? Because we are giving a voice to the fans. Um so, and but then what happened is people thought we are going to launch a new Skype, so we had to stop because they thought we are going in telecommunication business. So, we created a fan token. What is a fan token? It's a fungible token like kind of a membership program, loyalty card, where when you own one token, you can vote on decision of the club. Not to buy the players, not to decide what to do, that's the job of the owner. And if you want to be an owner, that's the next conversation we're going to have about real world assets.

>> Yeah. >> But in the meantime, what we've done for the last 8 years is we've given access to fans from all over the world to be able to vote on what's going to be the design of the jersey next season. What is the music in the stadium every time we score a goal? All of these kind of real things that never been asked to their fans. >> Yeah, of course. >> And you know what? This is valuable. It should not be a free Twitter survey or something like that because otherwise it's going to be hijacked. Back in the years on Twitter, uh you used to have uh was it Liver Yeah, Liverpool that used to ask on the Twitter something like which thing do you prefer between A, B, C, D?

And you had the fans of other teams that were hijacking that because it's free. So of course you need to have an entry barrier. And that's where token is perfect. And that's where blockchain proved that it's transparent about who voted, not who was a person, but that's the fans who own the tokens. They didn't vote there twice. There are no big whale that can vote for everybody else, etc., etc. So for us it's about the It's really like becoming a super fan. I I like this kind of energy. There there is the casual fans, but you know what? I want to be closer to my team. I put my money where my mouth is. I can buy a jersey.

But when I'm in Asia, I'm going to buy a fake jersey and I'm still a fan. >> Yeah. >> So give give give me access to something that is digital, that is safe, not an NFT, uh but something that give me the rights. And the rights are uh for fan tokens. >> How important is the World Cup to this America launch? >> Yeah. It's in New York. It's in Atlanta. It's all over the US. >> It's all It's all over the It's all over the country and you're making a push into the United States. >> Yes. >> Yeah, tell us about how the World Cup is going to fit into the rest of the ChiliZ. >> So that's our third World Cup actually since we exist.

Uh 2000 1998 and then the World Cup in Qatar as well. So for us, this time it feels different because it's in the US, market is opening one way or another, there is regulation clarity for sure. Um the World Cup is an event for us to talk and you are talking to me because there is the World Cup. And that's great. I appreciate that, guys. Uh but I always like to say that the day the World Cup will end, we're still going to work and we're still going to do doing our stuff for the next 5 years, 10 years, 20 years.

World Cup, though, is an opportunity for us to highlight that we are working with national team. We work with Argentina, Portugal, Italy. We're going to announce more teams. So, these teams have tokens and these tokens have a trading life without the World Cup, of course, but especially during the World Cup. They trade like a meme coin, ish. It's a meme coin with utility. Um and you I I cannot talk about price and stuff like this, but I invite the audience to look at Argentina during the last World Cup, which they won, uh to see the the trade the the trading activity during the last World Cup. And that's what, 4 years ago.

For us, that this World Cup is just uh a way to accelerate our narrative, to talk about what we were doing, to explain what is sports file, game file, DeFi, sports file. That's the narrative we want to push, but it's just at the end, no offense to it, it's just a 1-month event in a 20-years project. >> Yeah. Yeah. Yeah. May I ask why you are here? >> For the weather, obviously. Um so, we are here as a as the main sponsor of the Digital Chamber of Blockchain Summit.

>> Awesome. >> We've been partners for a year with them. Um we are here because uh everything that we do is about education. It's about education of sports team. That was layer one. We need to convince these sports team to have access to the IP. Education of fans. We've been working on that everywhere in the world outside of the US. Education of media. What are we doing? What is this thing? That's very important. And education of regulators. Regulators being either I mean, being regulators or lawmakers, two different things. And this has been key for us. I've been very lucky to be at the White House with the SEC last year. Going to do that again this year. And here it's an opportunity for us as a company, as a foreigner

especially, uh to be able to have access to everybody under the same roof. And to explain, "Hey, this is a real use case. There is real users. We've been doing that for 8 years. We are legit. There is a track record. It's It's a concrete project that's not going to disrupt the banking industry, the yield, or whatever you guys wants to fight about." For us, it's a very simple project. >> So, I put up this three um asking about tokenization. And I'm just going to pull it up because I'm curious your answer for it. If the tokenization pieces is correct and trillions of dollars of new assets move on chain in the coming years, which company would benefit the most?

>> Uh hopefully us as a platform and an ecosystem for sure. So, I have a 8-year-old kid. He's spending all my money on Roblox. Uh this generation is going to focus on investing in digital asset. They will never buy traditional stocks as we know them. Sure, there will be tokenized stocks if you want, but they are still They will be still company stocks. I believe and we've been believing for 8 years that's people who are about 15, whatever generations Z is Z or something, uh these people will spend their money where their mouth is. And their mouth is not about tokenization of a building.

Can you tokenize this? Yes, great. Cool. But who cares? I mean, if I can have access to 0.001% of my favorite team and it give me benefits and and merch and and and and stuff like this, this is priceless. Why? Especially because it's never been done before. So, we are a very strong believer that outside of the US for now, because that's where we will start, tokenization of sports equity >> Yeah. >> will be a massive thing. And that's a trillion-dollar industry. And just to give you an idea, the sum of all the big franchises in the world, it's currently today at 600 billion dollars.

And because it grows 5 6% every year for the next 10 years, it's a it's a trillion plus. Um And our job is to try to tokenize what? 2 3 4 5 6% of this? It's already more than enough. >> Yeah. And so, there is already sports organizations in the United States. The The one that comes to mind is the Green Bay Packers. Right? This is a community-owned sports team. Like the city of Green Bay and the citizens and the residents in the city are the equity holders of the sports organization. So, there's already a precedent for this in the NFL. When you're looking at expanding that proposition and doing it in a tokenized format across the NFL, the NBA, other

sports or sports leagues, what is the path What is the Like do you need regulation? Do you need buy-in? What What is the path, the sequence that you see? What are What are some of the steps that you're going on now? >> our road map for that is the following. So, two things about the Green Bay. First, Green Bay, everybody thinks that indeed fans are owners. It's actually not true. It's fake shares. So, yes, of course, they are representative, but they actually don't own any equity. It's not real equity. It's fake, quote unquote, equity. The second thing is this exists already in the rest of the world. In Brazil, in Spain, everybody knows Real Madrid and FC Barcelona, right? These teams are not owned by billionaires or or private equity. They are owned by their socios, which in Spanish means members, associates. And

so, that's why we are called socios.com as a consumer-facing product. And so, Real Madrid and Barcelona are owned by 150,000 members. And these are not equity. uh It's the equity it's a bit of an equivalent but it's not equity. They cannot sell. It goes from family to family etc. etc. So this model kind of concept exists originally and that exists in many countries all over the world. Now, the way we see it is we will start in acquiring us. We will start to acquire a minority shares of some of the teams we are working with already in Europe because these are already equipped to do that. We could buy tomorrow with teams we work we are working with cuz we already have their existing fan tokens. We have

relationship. We've generated thousands of millions of dollar for them for the last 8 years. These teams are open-minded to sell maybe 1% 2% and we tokenize this. That's step one. Step two and then eventually potentially merging the kind of utility token to this new generation of token that I don't know how to talk. Where there will be equity slash hybrid model. We need to invent a law for that a law regulatory framework but that's where what we need to do. The second generation or the second step will be US. So beside Green Bay Packers which is very unique NBA and NFL rules prevent retail access to ownership. So there is for example no listed company

really except in New York for a very specific reason but you cannot you and I cannot we cannot create a fund. We cannot take a billion dollar and we cannot buy 2% of the or 5% of it's it's illegal. I mean it's illegal. It's against the rules of the leagues. So my personal bet as a as a owner of this business is that in the next two to four years there will be a change of rules in the NFL and NBA where they will give access to a retail branded vehicle um that will eventually be tokenized and that will give access to the funds. But this will not come as a easy that will not come easy. Uh it's much better than a listed company

because nobody wants to list, you know, if you're a billionaire, why should I list my my my vehicle? I don't want that. But can I give access to my fans to a piece of ownership? 100% and that's where tokenization is the perfect use case. Yes. >> Look at the basic example of stable coins. They had to first accumulate the treasuries in order to back the stable coins that they can then issue. Similarly, we're seeing this in the private credit market. You have companies like Denari and Plume and X stocks that are looking first they they buy the shares of the companies, they put them in an SPV in the Cayman Islands somewhere, and then they issue tokenized versions of those stocks. So we're seeing this happen in the tokenized

equities market as well and the private credit market is the same. And so it makes complete sense what you're talking about the model. The model is that you're you're going to accumulate equity in these sports teams, you're going to put them in some sort of special purpose vehicle, and then you're going to issue these tokens, maybe they're member tokens or Socios tokens, come up with a new name, and and you end up issuing those shares of those sports teams to a retail audience. >> Yep. So that's that's exactly that. The way we see it to make it uh to make it work is to create SPV either for each teams and or uh like SPV per per leagues or stuff like this and tokenizing this.

It's still too early today. >> Yeah. >> Everybody will always talk about it. Hundreds of people tried before, to be clear. Uh but because we have this legacy, we have this track record, we uh we we understand sports and that's the thing, you know? Not sports as the as the game. I don't understand anything about the game, but we understand the sports industry, the sports business man, the the owners. I've met NBA owners, NFL owners for the last 5 years. Um and that's where we think we bring value. >> Last question I have, maybe Annie has another um how much revenue, you know, when you're selling these tokens or the shares in these in these companies, you know, even putting aside the member tokens or the owner tokens for a moment, how much revenue can you generate for some of these sports teams when you're selling

fan tokens? >> Uh the official number I've made public is that we've generated more than $700 million for the sports industry since we launched. >> Incredible. >> So >> and what what can we expect from the launch in America for some of these uh >> It will be hundreds of millions of dollars. >> Hundreds of millions. >> Yes. It's It will be spread because you have uh how many Let's say on the three major leagues or four major leagues, you have already 80 teams. >> Yeah. >> Yeah, 100 teams more or less. Uh so it it it is definitely few millions per teams, on not the first year, but over two, three, four, five years. And if it's 100 teams, it's already $500 million roughly. So it is but

it's not that because you launch a new product from scratch that suddenly people are craving it and wants to buy it. It took us eight years to be here today and yet nobody knows about us. So it's going to take us another five, 10 years to do what we want to do and that's fine. We have time. Um but yes, it is in hundreds of millions of dollars. >> I I think it's somewhat misunderstood the way that the the sports companies work. You know, when these owners are able to generate more revenue via products like fan tokens, they can pay their athletes more. They So right? And and it all flows. It means that more people can be professional athletes.

Like this all ends up flowing to the entire organization. >> So what what made us successful in Europe is uh COVID. When COVID happened in 20 uh 2020 and 2021 especially, um the stadium was were empty. So suddenly football teams say, "Shit, we have 100% of our fans that are not in our stadium. >> Yeah. >> How can we monetize our fans that are not in our stadium, that are still our fans?" And that's how we really picked up everywhere. And that became very successful. Here it's a bit the same. The conversation, for example, I had with the NBA team recently was, "We want your product because the um how do you call that? The gap the cap of uh is going to increase I don't know when

but there is an increase of salary cap and therefore we need to make more revenue and therefore we need new partners and new product. And that's as simple as that. At the end these guys compete against each other on the sports field but they need the best players. >> Awesome. Well, really appreciate you joining the show today. Best of luck in the launch in America and let's stay in touch. Really great to have you on today. >> Thanks. >> Thanks for having me in the USA. >> Thanks for joining us. >> Guys, sports fans around the world >> Love it. >> will soon be buying fan tokens >> We we know that accredited investor laws are going to change. We're going to have more you know conversations about this.

We're going to be opening up and democratizing access. Yeah. Go around, yeah. Okay. Actually staying in our hotel. Ran into him last night, yeah. >> We've got Alex Tapscott. >> He's coming next. >> Friend of the show. He's got his book in hand. >> There we go. Great to see the guy. Fellow Canadian as well. Alex beautiful. >> Good to see you in person, man. >> Yeah, good to see you. Welcome to the show. >> Thank you. Thank you. I brought you guys a little present here. >> Wow, beautiful. Yeah, let's do it.

>> Yeah. Tell us Alex. Tell us about it. Web 3? This is the book. >> Yeah, this is the book. Um the book that in many ways is kind of the sequel to the first book we wrote Blockchain Revolution 2016. Now that that first book came out at a time when the whole crypto market was about 10 billion dollars in size and most people didn't really know anything about it. So we felt that the the market was due for a bit of an update on everything that's happening. So this book tackles some of the big topics that are being featured at this event, you know tokenization stablecoins DeFi market structure, all the rest of it but also looks at the cultural and social impact of this technology, how it's uh democratizing not just the access to

financial services, but also to uh new ways of, you know, connecting globally, building wealth, um you know, scaling businesses using uh using this technology. And it even actually delves into the opportunity for AI and blockchain to come together. So, the book's uh over a year old, so it was a little bit ahead of its time in that respect. >> Speaking of democratizing access, we just had the CEO of Chiliz come on the show and uh talk about democratizing ownership in sports teams. So, we're we're also seeing this in equities markets. We're We think that accredited investor laws are going to be ripe for a shake-up. And so, ultimately, this is opening up markets, opening up asset classes for a much wider range of investors.

>> Yeah. How How are you reacting to this? What are some of the greatest opportunities that you're seeing? >> Well, I mean, my thesis has been for a long time that this technology's ushering in a new era of the internet. That for decades, we had an internet of information, and now we have an internet of value. And in the same way that the the first era of the internet um made it easy for anyone to access information, uh to publish information online, to communicate, to connect, that blockchains do the same thing for money and for assets. That it gives anyone anywhere in the world a way to move, store, and manage assets. A way to build wealth, a way to launch new businesses, um and a way to connect uh with people around the world on a on a sort of

deeper and more economic more fundamentally economic level. And to me, that's really, really exciting. You know, I think that for a lot of the early days when we were explaining this technology to people, we had to uh imagine some of the, you know, potential killer apps and use cases. Bitcoin is interesting as a store of value asset, but some people just don't buy into that thesis, in the same way that some people don't buy into owning gold as an investment. So, what we needed was ways in which people were using blockchain um blockchains as uh as a rail to move money and assets around the world. And so, I really believe that stablecoins uh became uh one of the easiest one of the best and easiest things that we could point to in explaining the potential of this asset that now anyone anywhere in

the world can move money peer-to-peer just as easily as you can send a WhatsApp message. And you know, there's there's product market fit for digital dollars, but there's probably product market fit for dozens of other assets, and we're starting to see that with the explosion of RWAs and and other applications. >> State stablecoins really are the tip of the iceberg. Um we're also seeing things happen in the rest of the RWA market. We're seeing private credit. We're seeing tokenization move high-quality assets like treasuries, uh like equities on chain. We think that once these things land on chain, we have high-quality assets on chain, they end up in DeFi, you get better liquidity, you get composability across what are what is currently disparate venues.

>> Yeah. >> And then you can get some really really interesting products and innovations like vaults. We're hearing from asset managers vaults are really particularly interesting. Uh and then you have the entire AI wave. AI-managed vaults is really really uh creative and unique thing that can happen as a result of coming with stablecoins and high-quality assets on chain. Do you think that this is the progression? Does it all start with stablecoins and the rest of this is all downhill from there? >> Yeah. >> Is that the right way to think about this? >> Yeah, absolutely. And I think the the discussion around AI is probably the most important one that we can have today, which is that AI agents, it's pretty clear at this point are going to be a big part of our world, right?

They're going to be doing all sorts of important knowledge work in the economy. AI agents building marketing plans, AI agents, you know, doing accounting and filing tax documents, agents diagnosing disease, uh agents that teach and and so forth. And these um this these agents, the software, it's going to need a way to transact and to do business. Now, we've heard a lot, you know, as as Circle as a company, for example, a company that that we featured in our original book way back in 2016, um is a company that's demonstrating that agents prefer to use stable coins >> Yep.

>> when doing transactions because they're they're machines, right? They're digital, it's digital, they're it's a machine-readable form of money, and it's faster than what what else is on on is is available. But, there's a deeper and more fundamental story here, which is that agents need not just a way to move money, they need a way to enter into agreements. Uh they need a way to work with each other. They need a way to store value. They need a way to resolve conflicts. And uh all of the things that you and I and the three of us, we all rely on for that, we take for granted as people, is not available to agents. Agents can't open a bank account. They can't sign a check. They cannot incorporate a

business. They can't uh sue, right? They can't um sue in court because they don't have legal standing because they're not people. They can't enter into a a legal agreement, a contract, but they can send a stable coin, they can have a vault, they can sign a smart contract, um they can do on-chain dispute resolution. So, it's not just about moving money, it's about a whole economic toolkit that needs to be completely uh developed from the ground up. And to me, this is the most exciting thing. Like again, in the 10 years that I've been in this industry, 2016 was all about, you know, building for people, right? Uh now it's building for agents.

2016 was learn to code. Now it's, you know, learn to coordinate, learn to conduct, learn to organize agents. And um and I think that, you know, if you look at like the sharing economy of old has now become the agentic economy. So, building for agents is the most exciting thing. Uh there's lots of really great stuff happening in the world of AI that people should be paying attention to. But, how agents do business and the way they transact is to me still an underrepresented story. I think crypto Twitter and some companies are really focused on this, but the rest of the world doesn't really understand its potential yet.

>> Um on a very kind of like digital asset specific note, yeah, there's been a large run in BitTensor as of late as well as the subnets and I know that you're on the fringe amongst you know of your many you know uh areas of of focus here and this is something that people are saying could be a top 10 asset. They are very excited about BitTensor as this idea of decentralized intelligence and kind of like creating this decentralized intelligence layer that powers all these subnets and all these kind of like individual agents. Do you buy into the BitTensor thesis? Do you agree with it?

Do you like it? Do you dislike it? What's your take on what's happening there as what people are calling the Bitcoin of AI? >> Well, I love it. I mean, I think BitTensor is the one of the most exciting and ambitious projects. Whether it will be successful, I I can't say for sure. But to me, the idea of um proof of useful work as a as an inherent concept, that if you're going to be utilizing all this computing power to secure transactions in a network and maintain this ledger, that you could direct that computing power towards inference or towards compute other forms of compute, that is a brilliant idea. Like that's an incredible idea. And so it's not surprising to me that it's had the kind of success that it has. What's

interesting is before this, we were talking about the way AI and crypto kind of interact, right? And uh we were looking at it at the agent level, but the agent is like the top of the pyramid, right? At the bottom are the models and the data itself. And right now, all of these models are being trained on um uh you know in data centers owned by a handful of large companies. >> Right. >> Yeah. >> And that there's nothing inherently wrong with that um because these big companies have created products and services that are very valuable and that's created a lot of, you know, upside. But, I think we need an alternative. Like, we need to have an antidote to a world where big the big get bigger and these super scalers become even more powerful. And so, the

idea of like decentralizing the compute layer of the AI stack, I think is an incredibly important idea. So, I love what BitTensor's doing. I think it's an amazing project. >> Yeah. Yeah, I mean, that was kind of like the earlier iterations of this intersection was the decentralized inference, the decentralized compute. Now, we've kind of moved into agentic finance as kind of like the hot topic and narrative. But, just was just kind of wanted to get your take on BitTensor there. I also put out a separate tweet that said, "If the tokenization thesis is correct and trillions of dollars of assets are going to move on chain the coming years, >> Yeah.

>> which company will benefit the most?" What's your What's your kind of like take on how the tokenization, this this shift of assets on chain, affects the existing players and the incumbents in the in the traditional market as well as in the digital asset market? Who is set to be the biggest winner here of the tokenization? >> It's the most important question. Right now. >> We're doing a big survey here today on the show. >> Well, I think that there's sort of two ways to look at it, right? What is going to be the company that benefits and what will be the protocol that benefits the most? Because the the fact that we're even talking about what company will benefit it, I think is almost a sign of the times that we're now thinking about how this industry is maturing and there're going to be big

corporations that are going to be >> man. >> the big winners. This is a sport coat. Not a suit. >> Got a long ways to go here, guys, on the roll out. >> Um just to be clear, not a suit, a sport coat. No, um so, yeah, like I think that protocol wise, I think Ethereum, Solana are going to be the big beneficiaries of this for a couple of reasons. Like I think Solana is internet capital markets, you know, it's the blockchain that can handle the transaction volume of equities, fixed income, and forex combined. So, if you really believe, if you really, really believe that all assets are going to move on chain, well, you actually need platforms that can support and handle that kind of transaction throughput and

are almost designed for it. And so, I think Solana is really well positioned. But Ethereum to this day, you know, despite the fact that it has in some ways it's deficient compared to some of these other newer platforms, it's still where most developers go to start, it's where most big enterprises go to start, it's where the majority of RWAs and TVL and DeFi are still located on chain on Ethereum. And it's sort of like in the old days, you know, you didn't get fired for hiring IBM, right? Like as a as a systems manager at a big company. And as a in a way it's like there's sort of you're lock vendor lock-in, but also you're you're you're going with a trusted partner and someone who's been at it for a long time. And I feel like people view Ethereum in a in a similar

way. It's like you don't get it it there's nothing wrong with the starting on Ethereum. And if you look at a lot of RWA projects, like Biddle for example, BlackRock's project, it's now deployed across 20 blockchains or 15 blockchains or something like that. Most of the volumes on Solana and Ethereum, but where did they start? They started on Ethereum. So, I think like those protocols like that stand to benefit a lot. In terms of companies, it's such an interesting question because there there are clearly some leaders. Circle I think would be the most obvious and Tether. You know, not to don't go too far afield. Like where are the where what are RWAs? You know, assets represented on chain as tokens. Okay, what are the two biggest things? USDT and USDC. So,

shouldn't those two companies be the leaders, right? And wouldn't they be the ones that could benefit the most as this continues to scale? I think USDC as a US domiciled company that's in good standing, that's, you know, publicly listed, like we can see in real time how the market is pricing in tokenization as a concept at a moment when, you know, a lot of crypto assets are nowhere near their all-time highs, like Circle's performing incredibly well, and I think that suggests that the traditional market and TradFi investors see the potential there. But at the same time, like where are we in the whole life cycle? Is this the you know, are they the Amazon and the Google and the Facebook or are they sort of the first

iteration of projects? Are they the Yahoo or the eBay? Still valuable companies that went on to do really interesting things, but actually didn't become the juggernauts of the internet of information. I don't know. But I think right now that they clearly have a head start and they've got great terrific people and they've done a lot of really interesting work. >> So you've talked about this transition from Mag 7 to Dag 7. >> Yeah. >> Uh we've talked about this in the context of like this Neo Finance 7 and 7 index. Why don't Could you start tell us about Dag 7?

We'll we'll tell you about N7. >> Yeah, I mean the the Dag 7 is a way of thinking about what protocols, what blockchains are going to become valuable over time. So the Mag 7 is short for Magnificent 7, and these are the handful of big internet companies that went on to dominate the first era of the web. And they did so by becoming a monopoly in each of the core industry verticals. So for search, you had Google. For online retail e-commerce, there was Amazon. For social media, there was Facebook, and so on and so forth. And these companies are huge. Each of them is got a market cap of more than a trillion dollars, in some cases three or four trillion dollars. Which to put that into context, you know, the entire value of like the the Toronto Stock Exchange or

like the Hong Kong Stock Exchange or the German Stock Exchange are less than the value of a single Mag 7 stock. >> That's nuts. >> Like, it's ridiculous. And those are big markets, right? That's but it just gives you a sense of how significant that these companies are. So, our view is that this next era of the internet is going to have its own set of winners. Um but it's not going to be companies necessarily. To my earlier point, it's going to be protocols. And it's not going to be the Mag 7, it's going to be what we are calling the Dag 7, the Digital Asset Group of Seven. >> Huh.

>> These are the seven protocols that we believe will capture the lion's share of the value from this new um blockchain-enabled internet. And the reason we think it's going to be about seven is that typically in industries when when things first start off, there are dozens, sometimes even hundreds of players all competing and vying for the same market, but over time those markets consolidate and ultimately there's a handful of winners that end up capturing most of the value. It's called the power law. So, you know, in the early days of the automobile, there were like hundreds of car companies and then there were only the big three and some others in the in Europe. Um you know, in the tech world there was hundreds of dot coms, but we ended up with a handful of like huge technology companies. The same is

true in the PC world, the mini computer world, railways, you name it. So, I think that that power law is going to apply again to blockchains, where there will be lots of blockchains and lots of tokens you can buy that will have value, but the majority of the value is going to accrue to a handful of projects. And so, that's the Dag 7. >> All right, you you left us hanging. What's in the Dag 7, man? >> Well, so you mentioned >> What the hell? Thanks, man. Thank you, Alex, for the power law. Class lesson, guys. First time hearing that here on the show.

>> Yeah. >> All right, what's the what's the Dag 7? >> Well, I think some of them are pretty clear and others are not, right? So, the way that we look at it is actually by industry vertical. So, I I walked through some of those industry verticals for the internet of information. The internet of value has different verticals. So, one of them is um digital gold, a digital store value. Well, Bitcoin I think is the obvious candidate for that and at this point is the likely winner. Um an open application ecosystem. So, the the old web had closed application ecosystems like the um like uh the Apple uh ecosystem or the Google ecosystem.

With blockchains, it's an open ecosystem. Well, where is the most fertile active ecosystem? Ethereum. >> Yep. >> But then you need blockchains that can handle the throughput and the capacity for transactions in financial markets. Well, that's Solana, right? So, we call internet capital markets or on-chain finance. Then there's blockchain for the enterprise. I think that a lot of big companies are going to want to launch their own chains. They're going to want to have um some sort of sovereignty over who gets access to those networks. And um I think that at this point there are some really interesting candidates for who could win that. Canton is one and Avalanche is another. Uh blockchain and AI. We just talked about BitTensor. I think that's probably one of the earlier

um like most sort of in developments kind of um verticals, but I think like BitTensor's clearly the winner there. And then there's another one we call the everything exchange, right? So, uh Amazon was the everything store, a place where you can go buy and any good, any physical item, but also was a launchpad for businesses to sell their things to to others. Um we think there's going to be an everything exchange, which I think I came up with that, but then Coinbase started using this more recently. So, anyway, imitation is the highest form of flattery. But um and and Coinbase the company might be the might be the um the everything exchange, but I also think that there's blockchains that can become the everything exchange. BNB or Hyp for example. You know, like

Hyperliquid, I think like over a third of all their volumes recently have been tokenized real-world assets, right? Commodity futures. And um boy, isn't that interesting? You know, like it's it's this is this is like a big deal. People I think it's a sign of the times that we're like, "Oh, isn't that interesting?" Moving right along. But there's a lot of alpha to be captured on these 24/7 mark outs where like, you know, oil's trading 24/7 on the weekend, Facebook stock is trading 24/7 on the weekend. People haven't really caught up to that yet. And so I just think like there's a potential for these protocols to be to absorb huge functions of the financial industry, huge aspects of how we exchange how we exchange value. Um and so on and so forth. So that's how we

think about it is really thematically. >> Yes. Alex Tapscott, thank you for joining us and sharing your insights on the DAG 7 bringing a book. Could you sign this for us? >> Yeah, this is for you guys. >> Thank you, man. >> Yeah. >> We're going to add it to our collection as well. Please sign it for the roll up. We're going to have it in our Empire State Building studio. >> I got to get a photo with you guys. >> Yes, absolutely. And quick quick pic, please. Hold the book. Let's go. To the roll up, baby. >> Beautiful.

>> Let's Let's hold it up. >> Here, you hold it up. >> The boys are winning. Hey, thanks guys. >> a lot. Can I get that photo? >> Yes, for sure from Rod. We'll get it for you. >> Yeah. Enjoy. >> Thanks, Alex. >> Thank you so much, Alex. >> Guys, if you're looking for a new book, Web3 charting the internet's next economic and cultural frontier. >> Cultural frontier. >> Hey. >> Which you heard Alex talk quite a bit about today. >> Guys, what a segment. I don't know how I feel about the DAG 7.

Kind of bullish on it. He almost mentioned hyper liquid. >> he did mention hyper liquid. The derivative exchange. >> He's also sleeping on Near as the blockchain for AI. >> Yes, he is. >> Bitcoin, ETH, Solana, all these ones. >> Also, I think Lightning he mentions. >> Uh it's a primary vertical of the upcoming wave. Uh look, there is some overlap not the most overlap with the Neo Finance 7 the end state. >> Certainly not but there are but there are some. There is some. >> Guys and gentlemen >> We'll be right back. >> We're going to be right back. >> We're going to put this book up, all right?

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DC Blockchain Summit day one. We've got Yoshi Yokokawa, the co-founder of Alpaca, coming and join us next live. Rob, 2 hours in. As I said, everyone here is wearing suits. It's very, very, very put together conference. What's your What's your initial reactions here? >> My initial reaction is that there's a lot of energy not a bear market here. Very similar to to Smart Con in New York City. Also what we're seeing in in the Empire State Building studio. This is the result of a secular bull market and this is part of the Neo Finance thesis.

I've been talking about this. Crypto as we know it is dead. But the exports of crypto are very much alive. Tokenization, which we're going to be talking about here, uh digital assets, blockchain. The Department of Defense is working with blockchains. Uh the government at almost every level is accepting of this technology. And so, there's there's quite a bit happening underneath the surface. Even the market is starting to reflect that as well. We've got our next guest, >> Yep. >> Yoshi Yokokawa. Uh thank you so much for joining us.

>> No, thank you for having me. >> And uh we're going to be talking more about tokenized equities. Uh yeah, maybe you could just start with a bit about how you're reacting to the energy in this room. You came from Wall Street. Uh give us a sense of what it's been like and a bit bit more of your background as you've transitioned into digital assets and tokenized equities. >> Yeah, sure. Uh I started my career at the Lehman Brothers uh subprime uh structuring. So, it has been a pretty interesting experience. But, we started Alpaca in 2017. So, we built a self-clearing SEC FINRA a DTCC member uh clearing firm. Uh and then, obviously, like you know, we uh we saw like a lot of change in the you know, crypto segment. So, we started offering crypto as well 4 years ago. So, until like, you

know, since last year, we saw like, you know, whole two things getting, you know, converging. And then, we saw a lot of like tokenization demands coming to our uh platform. So, we saw like a lot of tokenization players want to use our uh custodian layer to, you know, mint and issue the tokens. So, that's really something that we started seeing. >> What was this like before you came into the industry? Was there any inkling Obviously, digital assets wasn't the canonical term like while you were at Lehman but like even back then, did you know that eventually we were going to have to transition into a more digitized version of that financial world?

>> Yeah, I think like, you know, that if you think about it like 1970s, right? Everything was paper. And then, like we started using Excel like MS-DOS. And then, it's getting, you know, computerized. So, I think like, you know, that similar transitions are happening from just like really computerized system to real digital finance on on chain. So, I think that's the kind of narrative that I always think about. >> Um so, let's talk about tokenization that you guys are doing at great things at Alpaca. Um our understanding is that there's sort of this there's sort of three ways that we can bucket the current tokenization of equities format. Uh you know, the most aggressive is the native tokenization.

Securitize and Superstate are working on this. It requires a lot of restructuring, uh and so it's not the quickest path to market, but it might be the cleanest and the and the most native. Then we've got um the all the way on the other side of the barbell, the quickest path to market is sort of this uh SPV sort of format. Uh you know, a a buyer might buy a lot of shares, uh put them in the SPV, and then issue some tokenized shares against those equities. And then you've got kind of this hybrid format in the middle, uh where there's some more companies that are making uh progress on this to try to complement and balance, you know, tokenization done well with a quick path to market. Give us a

sense of how Alpaca thinks about this from the custodian perspective. Do you prefer any particular form of tokenization? Does it make more sense at this current time? >> I always kind of step back when, you know, talking about those things. Like cuz I think what we are talking about is like bringing whole financial system on chain. So, it's a huge thing, right? Like, it's a 315 50 trillion dollars in the custody. We're trying to bring everything on chain. And if you think about, like, you know, the money movements, we're trying to bring everything on chain. So, I don't think like, you know, there is only one correct way that's going to happen. I think all of us in the industry, including all of us here, are people, have to be a part of it to, you know,

make sure that like you know, we push that efforts, right? So, thinking about that, like you mentioned about like native blockchain, you know, tokenization to like more of the SPV structure. And then, you know, we used to see like those Luna coin. I don't know if you remember like those algo aside of it. So, you know, of course it doesn't happen anymore. You know, what we see is definitely like you know, the product market fit problem. Like even though there's a way that okay, this is how we should work. I think we should also think about what is the where's the really demands. So, if you see like trading volume, what are the real demands of the you know, tokenized stocks that people are seeing. We also see a little bit different view, too, right? We see like you know, a lot of volume seeing like X stocks, you know,

on those tokens as well. So, we definitely see like a lot of adoption there. And there's a you know, real like native blockchain based on the things. But, reality is there are a lot of a hurdles if you think about the regulatory framework. It's still a lot of you know, structuring that has to be sorted out so that it's really legal and clear. And I think we still need some time. But like you know, we have to keep pushing whatever it takes to bring you on chain because there's a lot of benefits. So, that's how I see it from my view. >> Yeah, there was this Wall Street Journal article that went out and it was talking about how institutions are kind of resisting the 24/7 infrastructure required to bring tokenized equities trading to the market live. What is your take on this? Who's

going to be the early adopters of tokenized equity trading? And what is like the very short and easy to understand pitch for why this matters? >> So, I think like you know, that we always think about of course like United States center economy and then it is you know, fact, right? We are the center of the United States, Washington D.C. But the reality is Um, you know, there are so much more people and actually so much more GDP outside of United States. And then, you know, US dollar and then US stocks, access to the US capital markets is even more needed by the people from outside of United States. And when you think about that, accessibility to those assets is not

that easy. Like if you are here, if you are here, you just like open the Robinhood app and just like you have you know things traded, but that's not the case if you go to you know like emerging countries, Africa, or LatAm, or Southeast Asia. Yeah. And because of that reason, accessibility becomes much much easier when things don't become on chain and then there are a lot of people like you know who are dealing with the local currency fluctuation, they have a lot of cash and money in the USDC USDT and they need to be able to access to that you know fiat capital markets risk which has been very very difficult. So, I think like you know if we kind of step back and looking whole earth instead of just United States, we start seeing like you know why this matters more.

>> Yeah. Okay, so you guys have about 500 million in AUM in tokenized equities. Is that correct? >> Yeah, we we have much more now, but yeah. Yeah, I think like the latest numbers probably like you know close to close to like 1 billion dollar. >> Okay, so a billion dollars in tokenized equities. I'm just curious, where did the additional 500 million come from in in recent weeks? >> You talking about like you know assets under custody for that, right? >> recent partnerships, yeah. >> Yeah, yeah. So, like we we have multiple you know tokenization partners who continue to you know mint new tokens.

And every time those tokens are minted, there's actual fiat collaterals are custody on our custodian platform. So, that's how we continue to increase our assets under custody. >> So, we're here in DC and obviously the Clarity Act is still kind of coming together being in this kind of evolving changing goal post. What is the biggest regulatory blocker or regulatory obstacle for platforms like Alpaca to really scale and become this on chain on chain brokerage, what needs to happen from the regulatory side for you guys to be able to really scale?

>> Um I think there are many things in my opinion. Um cuz even like with the genius act, real kind of you know, regulatory frameworks are not there yet, right? Cuz like you know, there is an act, but there are still actual laws have to come out based on the SEC and FINRA. So it's still not there. So I think like it's moving and I think it's moving fastest compared to any other world or any history of the United States. So I think everyone's doing an amazing job, but still I think we're still you know, continue to make progress. Like again, like we always have to you know, think about how long it took from the paper-based financial system to the computer financial system.

It took around 50 years, right? 1970 to 2020. So we're moving really fast, I think. But there are still like lots of things to do. >> Yeah. Um speaking of things to do, you know, you guys are at a billion now. How do you get to 10 billion? Do you work with the the traditional players in the in the equity space and you help them move on chain or do you work with more of the digital asset and tokenization companies and help expose them to higher quality assets like equities? Which direction are you pushing on?

>> Uh that's a that's a great question. Um we definitely see like you know, both of the directions are pulling, but our job is that like in order to bring the assets on on chain, we have to firstly connect all the fiat assets into one platform right? Because like you know, like right now like most of that stock tokenization's happening on the you know, United States issued the DTCC stocks. >> Yeah. >> Right? Like but like we need to have the old asset classes like European stocks to Hong Kong stocks, Japan stocks, everything into one platform. and not even only the public listed stocks, private securities, alternatives, you know, even futures and fixed income.

Everything should be able to be tokenized as easy as other like US stocks. So, I think like you know, that's the really thing that we're focusing on. >> a bit more of a technical question. You know, right now, and correct me if I'm wrong here, but the DTCC custodies the physical stock certificates of 90% 99% of the the US equity market. With more of these assets being tokenized and moving on chain, they would end up would they still be in the DTCC with these physical stock certificates, or once they're tokenized, do they end up with custody providers like Alpaca?

>> I think like you know, that's the I think conversation always comes up, but the reality is like if you think about even today's um kind of computerized uh system, we still see like actual paper certificate. Like that they exist stocks. So, it's not like you know, completely everything is just a ledger of the DTCC, for example. So, if you think about that, we have a multiple ways of the tokenization that's happening, right? There's a X stocks, there's a Ondo, there's like you know, Canton Network, and like you know, DTCC is involved, Nasdaq trying to do something, and the NYSE is trying to do something. So, there are many ways of the tokenization that's going to continue to happen, and most of the times like it still, you know, has to cooperate with the DTCC's, you know, source of the true to ledger.

So, like you know, everything usually happens, okay, there's a uh you know, the basically like you know, ledger that's archived in the you know, DTCC. And then when the DTCC becomes actually on chain, then that's going to be, you know, also the DTCC management as well, right? So, I think like you know, in the real ideal world, I understand like you know, okay, there's a SEC approved blockchain, you know, DTCC equivalent, but I don't know that's when or like if it's going to happen. Because if you think about our ideal of the crypto. We talking about decentralized finance, but reality is it's always centralized exchange, right? So >> So, there was an announcement from the DTCC. This goes back a couple of months.

Uh December of 2025, where they said that This is dtcc.com. DTCC authorized to offer new tokenization service paving the way to tokenize DTC assets. >> Yeah. >> Um my understanding is that they were working with the consortium model, kind of like the Hyperledger. It's going to be their own L1. You know, on the other side of the world, you have BlackRock talking about how they're going to tokenize every single ETF in the next 3 to 12 months. Uh Matt from Bitwise came on. He said this is a foregone conclusion. They are tokenizing all of their ETFs. That's billions of dollars that ends up on chain.

You got Larry Fink from BlackRock saying that there's one blockchain to rule them all. People think he's talking about Ethereum. Is he actually talking about the DTCC Hyperledger L1? >> So, it becomes more of a kind of religion religion conversation, but I I I really think that okay, the ideal is that we should have one currency. Right? If you think about like you know the most you utility wise, but we don't. >> Right. >> And we should have one nation. That should have the exact same rule everywhere in the world, because that's going to be probably easy to deal with, but we don't.

>> Right. >> That's how I think about it. Like I understand the ideal, you know, since one, you know, network, but reality I don't think that will be the case. How That That's the reason why there is a more business opportunities, right? There's a players that have to kind of bridge each of the layers and networks, and there is a more businesses that would happen. And I think there's ideal and there's a actual practical situation that we have to deal with that's a as a human life. So So, that that's I always kind of question myself, right? You know? >> Uh I'm curious kind of what you think the edge is in the tokenized equity growth that you guys have had and just kind of generally the types of companies that are really going to benefit if this tokenization thesis is correct.

What are the companies that are going to benefit the most from this massive transfer of assets on chain? Right. Give our audience give our community a sense of Think about from an from the investor's perspective how to position and think about investing in this era of all these assets coming on chain. What types of protocols, companies, entities are are ripe for the biggest growth? >> I I think about like you know two fundamental benefits of this whole thing, why like you know it will move there as just like gravity. Like one thing is just basically like it's going to be a much less systemic risk because like you know when things move on chain, settlement timing and speed becomes almost atomic, right? Which

means that like you know you don't have to worry about okay you have to put the collateral here because it's a T plus one settlement. That problem will be gone. Which means that we'll have like so much less systemic risk as a financial system, which means that it's going to be good for the end customers and individuals like us. We don't have to deal with like, you know, global financial system crisis, right? So that's one thing. And second benefit is a capital efficiency. So we are talking about tokenization of course stocks but tokenization of the real world assets like, you know, real estate. We don't have like you know those assets right now on the same wallets or same network right now. Once everything go on chain, we're going to have all those weird different asset classes into the same one layer, which means that we can

start like doing that cross collateralization, which means that we can utilize, you know, much better capital efficiency. We can borrow against real estate or like some trade certificates to buy Nvidia stocks. And those things become like so much easier. So which means like much capital efficiency, more leverage. So that that's that will be the benefit. So, it's like those are two foundational reasons and benefits why just things will move on on chain. >> We have hold a very similar thesis. You know, the adage in the in the industry around this is that if FTX was on chain, it never would have happened. We would have seen the the fraud, we would have seen the risk much clearer on chain before ever happened. So, um we're also seeing that play out.

Custody risk, settlement risk, all of this is mitigated. And that's money that is held up uh because uh you know, we had someone on the show recently talk about over the weekend the repo market doesn't work. This was Eric from Canton. He mentioned how on Fridays these banks and these payment providers, they require more money. They take on more risk. They take on more money because they aren't able to access that overnight capital over the weekend. And so, all of this is an inefficiency that can be saving money and improving uh the top line revenue. And this is ultimately what companies want. Um I'm just curious like when you're helping, you know, the traditional players and the institutions overcome some of these knowledge gaps, do they ever have a lightbulb moment? Like what

do you say to some of these institutions that helps them understand the value proposition? >> Um it's it's it's it's not easy. I think like, you know, that people get it when people get it. And then there's definitely like, you know, that's kind of information gap, right? Because we work with the uh financial institutions in 45 different countries. And each country has a different um you know, perspective in this like on chain financial system or even the world of a crypto or tokenization, which means I have to be very careful about how we communicate and which word we use so that they don't become allergic to certain terminology that we use, right?

That's how sensitive that we have to be to even explain the benefits even before doing that. And at the same time, I think another important point is that I think you mentioned a little bit is, you know, we have to also utilize what we have established as a you know, compliance and regulatory framework and investor protections because that's for us to protect our you know, customers and investors and also the financial system as a whole. So, and that comes from the 100 years of the knowledge from 1933 of the Securities Act. So, we have to utilize that into this on chain financial system instead of just okay, it's going to happen you know, out of air in the on chain only. So, I think those are the kind of couple things that I would always emphasize so that people become

comfortable hearing my pitch of why this is going to move there. >> Yep. >> Yeah. >> Can Can I ask you which of the institutions or countries are most susceptible to like actually moving in to digital asset world? Like from your experience, has there been a spectrum of difficulty from a country or institution wide perspective as far as like their interest and their speed? Like give us a bit of a a spectrum here of which countries and and institutions that you've spoken with are very very warm and are are moving quickly and which ones are moving a bit slower?

>> I think like it's also usage as well though. Um instead of like only country, I always also want to think about movement as well instead of like point to point but like also that you know, connecting, right? So, the reason I talk about this is that if you think about like after stable coin funding usage in the United States domestically, I think it's going to be like much less than 1%. If you think about like cross border, I see close to 5%. I know it's not still very small number but that's a big difference like if you compare it's like probably like you know, that more than like 50 x difference. So, those are the things that like I see if you think about cross border usage,

I see more like adoption speed and if I see more outside United States persons and countries trying to connect to the United States assets, I see definitely more adoption and excitement and you know acceptance there. >> Earlier we had Adam from Chainlink come on the show and he was talking about how, you know, it's still important to keep in mind that we have very clear reasons and use cases as to why these assets should be tokenized. Is it your opinion that every equity should be tokenized? Is there a particular, you know, corporate reason as to why some equity shouldn't be tokenized?

>> So so there are two ways of thinking about this. I think like you know one way is that you will everything will be tokenized anyway. So I think like everything should be tokenized. That's the one way of thinking about it. And second thing that we should be thinking about is like you know what's actual practical demands. >> Yeah. >> In my opinion like you know there's ideal. That's how we should be. But at the same time as a startup company as well, we always think about product market fit. So like why would you do something that there's no demand? >> Right. >> We wouldn't do that, right? So so definitely like we see what's actually getting the traction because there's a reason why. So like we focus on that.

>> And so it's probably the case that we have this initial early on wave of tokenization that has a lot of product market fit and demand. We end up with a lot of liquidity in tokenized equities and then maybe there's a follow-on wave of equities that doesn't really matter if they're tokenized. Doesn't really matter because people don't really care to trade them on chain, but they're going to be tokenized anyway because they're going to follow what the bigger players with product market fit and on chain demand are doing. >> Yeah yeah because even you look at like you know the fiat tradfi exchange, there are a lot of stock that has almost no liquidity. That's already publicly listed, right? So I think it's going to be the same thing.

>> Okay. Yoshi, last thing for you from me. What do you think is the biggest edge for a tokenization company? Is it partners, distribution, liquidity? Like where are you guys finding a monetizable moat for Alpaca? Like what is your monetizable moat? Why are you guys better or different than other tokenization platforms? >> So we are really like you know that custodian for the tokenization platform such as you know X stocks or Ondo. So our job is to make sure that we are connected to a lot of different asset classes that can be that is a tokenizable by the tokenization platforms. So that's our job. How can we quickly add a lot of different asset

classes, a lot of different like you know stable coin funding is doable and then also like you know support the minting burning in the same like you know the same account on the same layer. So that like you know that market makers don't have to you know take this settlement risk. So that's something that we do to create a moat. But in terms of the tokenization platforms in my opinion it still comes down to product market fit. Regardless of how you structure it even though how you say this is a quick way of doing it. If you don't have product market fit, I don't think it matters. So I think that that's the most important thing in my opinion.

>> Yoshi, I've got one more question for you and it's a little bit different from what we've been talking about. It's the other side of the spectrum. It's companies that have tokens they've been maybe they've been a DAO or you know they've lived in a crypto native world and now they're looking to go public or and take the case of a cross right? Recently um put up a DAO proposal of buying up all of their tokens and converting it to equity. How should we be thinking this is a pretty new paradigm like even tokenized equities as we currently know it are you know we have a better understanding cuz they're not as new as some of this model. How should we be thinking about this model? What is the right process for a company to take their token out of circulation and go public or take it

private? >> I think that which means that we're putting like all those thing into the trust model right? >> Yeah. >> I think it's actually simpler because like in the centralized model there are so many use cases of like you know how the incentive structure works based on like you know what are the shareholder rights, what is the like board director rights, what are like you know the preference stock of the investment and all those things. So, we just need to put those existing models into what the DAO was trying to do and make the agreements from the you know participants and like holders of the tokens, right? So, I think it's going to be a little bit easy in that sense, but I don't know like I don't know like it's the right thing to do or not, but again like it goes back to the product

market fit. Like you know what are the more people wants to see. I think that's where it's going to go there anyway. >> Yeah. >> Yoshi man. >> Thank you for joining us, man. >> Appreciate it. Super fun. >> Enjoy the rest of your time in DC. >> Yeah, yeah, definitely, definitely. >> It's It's a great conference. >> Yeah, yeah, yeah. >> Enjoy it, man. >> Yeah, thank you. Appreciate it. >> We'll see you next time. Thank you. All righty, guys. That's tokenized stocks, tokenized equities, another really, really important part of this kind of new stack of this regime shift that we talked about on that first episode, Rob, which continues to kind of come up time and time again in our conversations throughout our work. And so, yeah, guys, I mean, we are live here from the DC Blockchain Summit. We've got Salmon up next, the general counsel at

Plume. >> Oh, yeah. >> Uh we are obviously live at the Plume's office in the Empire State Building. I've heard quite a bit about Salmon, so excited to chat with him. More tokenization, more clarity act, market structure. It's time to get into it, I think, Rob. We kind of >> Salmon is boots on the ground at Plume. He knows how to tokenize these things, what traditional institutions are looking for, what product market fit looks like when it comes to tokenizing private credit and yield solutions from outside the industry. Remember, we were part of DeFi Summer and 2021. We saw endogenous yield sources from emissions, token inflation. It was very unsustainable. Now, exogenous yield sources like private credit, real estate, energy, all of these things are

bringing new fresh capital and yield into the industry and passing that along to shareholders. Salman is is a great person to speak on exactly this, what it takes to tokenize yield, bring it on chain, and ultimately pass it along to shareholders and token holders. >> Most definitely. And I think like we've kind of circulated around the Clarity Act conversation and the and the market structure bill conversation, but I think it's time to get into it and and get some real boots on the ground opinions about it from Salman. Guys, we're live here at DC Blockchain Summit. It's a beautiful day in Washington, DC. We're wearing suits. This is the first time I think Robbie and I have been in a blazer on the show since I don't know, since maybe a different conference.

>> I bought this suit yesterday. >> I uh I I I I did not buy this suit yesterday, but I am rocking it for happy St. Patty's Day. It's got a light tint of green. >> It does. Yeah. >> A little light tint of green. >> I don't have to pinch you. >> Good luck for today for everybody out there celebrating St. Patrick's Day. >> I'm wearing some socks here. >> up. Let's chat all things Clarity, market structure, and more. Salman is the general counsel at Plume. >> Salman, good to see you. Welcome to the show. Pleasure. >> Um and Salman, >> You're missing the nest uh >> Yeah, right. The nest logo.

>> We've got it up here at State Building, yeah. >> The nest um Salman, man, you've got quite the voice on X. You have a lot of takes around the way that the market is evolving from tokenization, wrappers, etc. We're going to get into all of it, but Salman, tell us about how you got started on the hill. What is your previous career been pre-Plume, and um just kind of give us a bit bit of a walk-through here. >> Yeah, so I uh I got started here in DC um at the CFTC. So, after the financial crisis, the CFTC uh implemented the uh reforms, you know, the Dodd-Frank uh uh Act and uh got a chance to work with Gary Gensler. I worked for one of the other commissioners while while uh you

know, Gary was the chair. And uh yeah, that got me into the uh you know, derivative space. Um worked for worked in TradFi for 8 years at a company called IHS Markit, got acquired by S&P Global. And uh while I was there, I was working a lot on blockchain, you know, related projects. And uh from there, um I met the team over at Chainalysis. Um and that was kind of my, you know, full entry into the into the crypto space. And um at Chainalysis, you know, we were asked a lot by lawmakers and policymakers um about how do you regulate DeFi? How do we think about illicit finance in DeFi? How do we manage the risks? Um Chainalysis obviously had a set of set

of tools, um but I wanted to hear the perspective from folks in DeFi. So, that got me introduced to the folks at Uniswap. They were looking for a policy person, so I went over and or worked at at Uniswap for uh almost 2 years. And then while I was at Uniswap, while there was an open investigation, I got a call from the SEC saying, "Hey, we got this position open. I think you'd be great for it. And uh you get to work on, you know, uh supervising exchanges and ATSs as well as uh working on DeFi policy." So, went over to the SEC, was there for about a year and a half. Um and uh yeah, the election happened and um you know, I got approached by folks at Plume.

Um I thought they had a really interesting business model, very much in line with the way I thought about how tokenization was going to happen. And so, yeah, I've had the good fortune of working with Chris and Teddy and the team and uh trying to make tokenization a a a thing and you know, we've we've we've hit some pretty solid metrics so far and we got a lot more in the pipeline. >> I I'd love to hear more about, you know, the way you think tokenization should work. Like you said, you know, Plume came to you uh while you were at the SEC and and sort of talked to you about how they thought tokenization should work and it aligned with your perspective.

What's currently wrong with tokenization and why does Plume and the current model fix a lot of that? >> Yeah, so the goal with tokenization should be that the product is better than the off-chain version. >> Yeah. >> And it should be composable. So that the the owner of the asset gets the full benefits associated with the asset. That's not currently the case with off-chain assets. So for example, your broker is making money on you holding securities by they lend it out, you know, in the securities lending market. You're not getting that. Some of the brokers are offering that, but they're also taking a spread on that.

So what we'd like to see is that composability unlocked and for those benefits to be distributed to the investors. And so when we look at the landscape where, you know, and thinking about well, what is a better product to tokenize, we look at, you know, this was the provocative you know, post that I had on on on Twitter or x.com a couple days ago, which is tokenized equities, at least in their current form, are inferior to the off-chain equivalents. You know, these are generally, you know, the the the ones that trade the most are, you know, wrapped versions of the public equities.

They introduce, you know, instead of getting rid of intermediaries, they actually introduce a new type of intermediary. Um and you know, they're seen, you know, quite you know, understandably by the SEC staff that I worked with as undermining the purpose of regulation NMS. So regulation NMS is kind of the the very fine-tuned, very complicated regulatory architecture for public equities in the US. And it's really designed for a world where you have these chain of intermediaries um, you know, routing orders to different trading centers and trying to get best execution, you know, national best bid and bid better offer, um, and, you know, making sure that trades execute, you know,

at or better than that that price. Um, and so, it's very prescriptive rules of quite incompatible with D5. So, for example, D5 you trade in pairs. You know, well, how do you trade, you know, how do you compare, uh, liquidity pool, um, with like Tesla stock versus Ethereum versus USD versus, you know, Bitcoin versus, you know, how do you get best, you know, so, the the calculations that would be involved in the and the pools that you'd have to screen across and all the delays that would come from inevitably from accessing those those oracles makes it challenging and you'd have to either um, come up with a Reg NMS just for D5, um, or water down Reg NMS for, you know,

the currently well-functioning, uh, public equities markets. So um so, equities isn't really a focus of ours, um, although there are, um, firms that that are, uh, offering equities products in in the Bloom ecosystem like Denari. Um, uh, our focus is really on asset management products and yield bearing debt securities. The those types of securities. Um, and so, uh, we're in the process of, uh, you know, getting all the right licenses in the US to be able to offer those to a US audience. We have currently an, uh, offshore, um, vehicles, uh, offered through the Nest protocol, which is a on-chain asset management or vault protocol. Uh, we're also in the process of, uh, getting, you

know, reg reg reg regulatory upgrades there, um, in order to provide our institutional, uh, our regulated centralized exchange partners, our, um, regulated asset management partners, um, comfortable with, uh, the management of risk associated with with those vaults. So, um, you know, we met rece- recently with the uh uh the SEC crypto task force team, and they said, "You know, your strategy at Plume is really the tip of the spear in trying to make tokenization and real-world assets come on chain, but doing it in a way that's consistent with uh US securities regulation." And so, we're really proud of that.

>> Yeah. And I mean, we've kind of learned that there's obviously quite a few different models for tokenization. There's like this direct tokenization on the far left side of the spectrum all the way to like perpetual futures, where you're literally just speculating on the asset. It Is there a evolution that you expect to get to this direct tokenization model that Superstate and Securitize, kind of those two are really pioneering that? Like, it What is the evolution here that you've seen from your side, specifically from the regulatory side, that is going to lead to this less structurally flawed version of tokenized assets? Like, what does that actually look like from a regulatory perspective and from a Yeah.

>> So, um we uh we've been um recommending that the SEC uh encourage direct ownership models. >> So, like full shareholder rights. >> Full shareholder rights, nothing in between the issuer and the investor. Um and that's really the only way that the investor gets the full benefits of their I mean, right now, people don't realize when you have when you own an equity right now uh in the US, you're really owning a claim that a broker-dealer has, and that in turn represents a claim on um Cede and Co., which in turn has a claim on uh database entry at DTC. So, there's this chain of intermediaries between you

and the actual equity. >> Yeah. >> Um you know, if I can if I can summarize uh uh you know, our view of uh uh is that I I talked about equities, but when it comes to bonds, which actually a lot of people aren't focused on, but is actually at an institutional level and at a regulatory level where a lot of promise we've seen a lot of promise in in terms of tokenization. And this is actually being actively promoted in Singapore and Hong Kong. Hong Kong actually has a subsidy program for corporate issuers to go in there. I think they get two or three hundred thousand dollars subsidy to tokenize their bonds because Hong Kong has found that you get better liquidity um you know, better volume,

better secondary trading, more investors because you can fractionalize these bonds, which you know, generally have a very large face amount. Um, you get better liquidity in terms of bid ask spreads as a consequence. And as they are trying to develop their, you know, competitive capital markets, they're looking to actively promote bond tokenization. So my message for US policy makers is bring back bearer bonds. So bearer bonds actually come under really punitive They're all but banned in the US. And this came out of concerns around money laundering and tax evasion back in the 1970s and early 80s.

And there's a law called TEFRA. But as we've That was in a world where people had bearer bonds, piece of paper that represented a claim against an issuer that they could then redeem, you know, in person to get their you know, their their their bond and and the coupon back. So, um, the way that legislation is drafted is very broad. And you know, we've been calling on lawmakers in the US to revise TEFRA. That's the law from I think 1982, which all but banned these bearer bonds. And so what we'd like to see at the minimum in the US is this legislation, this you know, antiquated legislation being revised to

reflect on chain realities where you can ensure tax and AML compliance at a at a token level at a you know, bearer bond level. Um So, yeah. Um, and then when it comes to, you know, asset management, um, you know, our our approach is uh it's a win-win situation. Um, right now, um, asset management products for the act funds in the US uh generally limited um in terms of their distribution networks inside the US. And there's a lot of interest for them to use on chain global rails uh in order to increase their AUM by accessing global capital markets. Right now, it's really hard, you know, if you're middle income individual um outside the US to get exposure to US capital markets. And asset management products are the best

way to do it. >> Yeah, I mean, that kind of tokenization of access, first point. Second point, thank you for the history education here on the on the bearer bonds. I can understand how with the the direct >> Let's bring them back. >> Yeah. And who who would that be up to? Would it be the the SEC? Would it be regulators in Congress? Who who makes the decision on the regulation? >> Yeah, so that So, the the bearer bonds, uh you know, revising TEFRA, um that would be Congress.

>> Okay, Congress. Well, we haven't talked that much about the Clarity Act today. We we've kind of talked a bit about it, but only the people that are here in the hill full time. That's you. You're one of them. What is your perspective on the state of this conjunction? Where we at? Are we really one to two weeks out? People are saying, are we months out still? And has there been any sort of compromise? Where we at? >> So, there's really three big issues um at varying levels of closeness.

Um, closeness to being closed. Um issue number one is this issue around third party rewards and stablecoins. So this is this has turned out to be primarily a battle between Coinbase and to a lesser extent the rest of the crypto industry on one side and the banks on the other you know particularly the community banks. And I'm pretty confident or I should say hopeful maybe not confident somewhere between hopeful and confident that we're going to get a compromise that the that both sides won't be totally happy with but should be enough and I and I'm hearing this week actually is is when we should be getting

a deal brokered by the White House. The second issue is around D5 primarily title three of the Senate Clarity Act bill and to what extent you know D5 is pulled in you know D5 interfaces for example how broad the protections for for D5 protocol developers are um and that one I think is close but not quite as close as the the rewards issue and then the third issue which is probably the most intractable is the ethics issue.

So you know a lot of a lot of people publicly Democrats and privately some Republicans too have concerns about the business relationship that you know members of the current administration have with different crypto projects. And so handling that I think is going to be quite sensitive and you know what it would take to get a lot of Democrats on board will probably get the the White House off board. So that one I think is going to be a challenge you know whether Democrats are willing to you know hold this arrow and put it back in the quiver for when they take over Congress you know which all the poll seems to indicate they will after the next elections,

um remains to be seen. So, um So, yeah. I mean, when you uh you know, multiply the probabilities um across all those, you know, three different um you know, uh smaller and smaller hoops, um you know, I give the bill about a 25% chance of making it through. So, uh not not great. >> Like like just as as like with no timeline, just 25% chance of going >> 25% um I think before May. And I think if we get to Memorial Day and there's not a deal, we're in election season, and I don't think Congress will be able to get around to it.

>> Wow. And so, the ethics part of the bill is something that is far less discussed, but it's actually the the part of the bill that you think is going to require the most work because of President Trump's affiliation with World Liberty Finance, meme coins, etc., as well as other uh people within the House and the Senate and the Congress that have different relationships with different digital assets companies. >> I think that's right, yeah. I think that that one is going to be really hard, and it's going to you know, one of the the reasons why it's it's also the most difficult one to get through is depending on the political reality at the moment that um this bill is, you know, being marked up, for example,

um you know, going through the the Banking Committee, um is it gives Democrats a convenient way of getting out of the negotiations and voting no on the bill. >> In what way? Like >> Uh because it gives them it gives them cover >> Okay. >> to say, "Hey, we we like this bill, but we don't like the fact that ethics isn't being covered, and we're worried it's going to you know, grow this market to the benefit of uh >> Of the president, basically. >> of the president who, you know, has uh you know, some questionable ties to some crypto companies.

>> So, literally Trump's uh crypto projects could prohibit the industry from moving forward. >> It's kind of ironic because Trump has been seen >> president I thought. >> That's right. Yeah, so it's it's >> A little too much though. >> Yeah. >> That's not good. >> With the one hand give it, the other hand take it away. >> Yeah. And are ethics part of every bill in general Congress, the house? Like is there always like an ethics part ethics part that kind of talks about what conflict of interest there are with this or is this specific with the digital assets?

>> That's a that's actually a good point. What a lot of people are saying is let's draft ethics language that is just general. And you know, right now there's a lot of controversy around you know, potentially members of Congress doing insider trading. So you know, there's famously like the um >> Nancy Pelosi >> The Nancy Pelosi ETF or or or or trading strategy that's out there. I don't I don't know. There's different like getting that exposure. Dan Crenshaw, Republican Congressman in Texas lost his primary recently in in large part because of a perception that you know, he had he also had one of the highest performing you know, portfolios in Congress. And so there is you know,

rumors of him and it and it cost him politically that he was you know, using his position in Congress. So it's a serious thing. Um and the current laws clearly you know, either aren't being enforced enough or aren't specific enough to prevent this this type of thing and it really erodes confidence in in in markets as well as Congress. So um you know, my personal view um we should have very strong ethics rules for you know, public servants so that they they don't you know, abuse or be in a position where there's a perception of abusing their position.

And that should extend across digital assets and trap by assets and you know, any type of commercial dealing. >> And and so how are you advising, you know Plume to navigate this in light of the 25% probability that Clarity Act passes? Are there steps that you guys need to take in order to sidestep the lack of regulation that could be coming? >> Yeah, so um, you know, the the SEC, CFTC, the other financial regulators still have a lot of authority and they're still making a lot of progress within their existing authority.

Um, a lot of people are looking at the forbearance, you know, the lack of enforcement focus right now on digital assets as good enough for them. Um, because we're in the real-world asset space and because so many real-world assets could be seen as securities um, or as regulated securities, um, it's our view that um, we should take advantage of this moment where the regulators want to work with us and bring us within the regulatory perimeter and are um, showing themselves to be creative in terms of getting to the same or better outcomes with new approaches to compliance um, and getting, you know, the registrations in place so that, you know, we can future-proof our business um, as, you know, the the political winds shift. Um,

but that's actually been my advice to other firms that are, you know, working in the tokenization space or in the DeFi space is um, you know, try to get regulatory certainty while you can um because uh, this forbearance um, it's probably going to go away. Um, I mean, one can't even imagine even under a Republican um, you know, future president like a Marco Rubio, you know, will Marco Rubio be as pro-crypto as the Trump administration? I don't know. You know, he's a national security hawk and national security hawks don't love DeFi. They don't they don't love, you know, permissionless networks.

So, right now is the time to come up with ideas to get to the same or better outcomes, you know, for example, on to finance and anti-money laundering which uh Genie has actually shows you can do, you know, um stable coins, you know unlike um physical cash or, you know, um cash uh intermediated by banks, particularly offshore banks, um you can shut it off, you know, the second you know, um you know, an illicit actor is has your stable coin in their wallet, you can shut them off right away. And then you can hand the you you know, and this has happened.

Um You know, I I uh you know, as I mentioned I was at Chainalysis. Um something like 27% of all the illicit funds identified by Chainalysis, uh I think this was 2022 or 2021, um had been had been seized by law enforcement. You know, and estimates in the, you know, in the real world, not the digital world, um are that seizure rates are like 0.1% if you want that. So, when you look at asset seizure rates, and you can see why because you have this freeze and seize capability uh built into the smart contracts um for for different products, particularly stable coins, um you can see why, you know, you can you can get to better outcomes when it comes

to combating illicit finance um through on-chain, you know, compliance infrastructure. And so, um you know, a lot of what we do is educating, you know, the policy makers that, hey, you can actually get to better outcomes um by leveraging this technology as opposed to trying to fight it. >> Someone, you brought up a really good point kind of separate from Plume and more into the insider trading. There's a I think, Rob, you said you saw a Cal-Chi ad >> Yeah. >> in DC today talking about >> number one priority is to ban insider trading.

>> Yeah. >> Yeah, what has been the chatter on the hill about insider trading in prediction markets? What's Like, what's been those developments? Um because the core feature of prediction markets is kind of this democratization of access to information information to to act on on Like, you know, like if I have a friend works in who works behind the scenes in the Oscars and he shoots me a quick text before the Oscars, you know, it's that's insider trading, but it's way more accessible with prediction markets because of any scenario similar to that. And that scales across all culture, weather, industries, sports, etc. Give us a sense of where that conversation is at on the whole.

>> no there's nothing new here. It's really the SC the CFTC in this case uh reinforcing the fact that um you know, the the markets that they supervise should be um clean from this type of thing. Um so, there's a couple couple requirements that futures exchanges are subject to that that apply here. Number one is that the contracts that they offer shouldn't be readily susceptible to manipulation. So, the CFTC can interpret that narrowly or broadly uh to make sure that, you know, it isn't easy to manipulate um the contract. Um if it if it is, you know, potentially susceptible to manipulation, then making sure, and this is where the second duty that the futures exchanges are sub

subject to applies, having a very robust market surveillance system. Um so, knowing uh who is who is trading, who's engaging in suspicious trading, and then engaging in investigations and enforcement actions uh when somebody is is, you know, for example, you know, always, you know, conveniently buying a big position ahead of the announcement that settles the contract. Um you know, getting, you know, for example, trading ahead on the uh uh the Oscars announcement in that case. So, um CFTC's just saying, "Hey, reminding the futures exchanges that you they need to they need to enforce these requirements that they're subject to."

>> Yeah. Yeah. Yeah, for a while there they were almost like they weren't regulated by anyone. They were just like this new class of market and then then I remember there was that photo with all of the CFTC and and SEC reps and then there was um the Polymarket CEO and the Kalshi CEO and they were just they were just like going at each other's throats almost. So >> There was an there was an interesting part of it. >> on this issue though, I think both of them share an interest in making sure that there's confidence in these markets, that it's not seen as an you know, insider game. Um that retail loses out.

>> Yeah. Um recently there was there was an interesting podcast where Mike Seelig and Paul Atkins were on the All-In Summit. They were talking through the All-In podcast. They were talking through this prediction markets. Uh and essentially it seemed as if the CFTC is just passing on to Kalshi and the exchanges and letting them police themselves according to the laws that you talked about. This is very different from the previous SEC CFTC. Even in future administrations, what is what should it be? Like >> So that that's So I actually worked at the CFTC on these issues. So Um futures exchanges, designated

contract markets are self-regulatory organizations. So they have to um comply with those two requirements that I mentioned. Um contracts not being readily susceptible to manipulation and then having a robust market surveillance program to, you know, uh detect and deter this type of, uh you know, insider trading abuse. Um and then overseeing um the exchanges and their compliance is the CFTC. Um and I actually part of my job at the CFTC was actually conducting independent surveillance as well.

So um the CFTC has its own surveillance resources and it can, you know, find its own, um you know, anomalous trading activity and and tell the exchange, "Hey, we're noticing this. Are you Are you Are you guys doing anything on this?" Um and I was involved in a lot of those conversations with the future futures exchanges. So there's two layers actually of oversight here. There's the SRO, the futures exchange, and then there's the CFTC overseeing them. Um now, one thing that's happened, you know, um in the last couple years is the CFTC's lost a lot of people. And so, you know, uh some people are saying that the CFTC needs more resources in terms of staff, and I would say especially technology, in in order to be able to

provide effective oversight of the SROs and the and of the markets. >> Why are they losing so many people? >> Um remember Doge and the the chainsaw? Yeah. >> It's Elon. >> Yeah. That's what happened. Yeah. >> Someone, and thank you for joining us. Thanks for being a part of this Plume and the Rollup journey, as well. The Empire State office, you got to come up >> For sure. Yeah. >> The studio's insane. I'm sure you've been seeing clips and videos of it. >> Yeah. >> Um so, yeah, I'm super stoked on that. Great Great to be here. >> we're excited to be partnering with you on this. And yeah, next time we'll we'll have the Nest logo in the back.

>> side. Thanks, Solomon. >> All right. Thank you. >> See you, man. See you next time. Thank you. >> care. >> All righty, guys. Very interesting segment there on the end with regards to prediction markets and the impact there on those markets. Kind of how these markets started as kind of non-regulated, kind of these random markets, and now they're now they're being, you know, regulated as if they're a futures exchange or very similar. Guys, we've got Evan Cheng, CEO of Mysten Labs, coming up with takes on takes from Solomon. >> Look, I Solomon is extremely well versed in a lot of these topics.

>> Yeah. >> I think the way he articulates the Clarity Act is very very very eloquent. Like, he's able to understand not just the odds of the thing passing in general, but each of the segments of the act passing, as well. He puts, and this could be why we're seeing a pop in the market now, which is we anticipate a decision in the yield conversation, you know, as soon as the next week or two. And then, you know, following through from there, things might things might decrease in the probability that we succeed in getting the bill passed due to the ethical uh, considerations. But, ultimately, you know, this is very, very positive. Next, we've got Evan.

>> Let's send him some love. Here we go, baby. >> Yeah, from District of Love. >> Live from DC Blockchain Summit. >> Evan, good to good to see you in here. >> Thank you for coming on the show. Absolute pleasure to have you on, man. What's your What's your first reaction? Everyone's here in suits. >> Yeah. >> You're wearing a suit. Are you wearing >> No. >> a sport coat? All right. >> a sport coat, right? I got to wear this once in a while, so might as well. >> Yeah, man. Well, wel- welcome to the Roll Call. It's your first time on. Uh, I think we're we're obviously quite familiar with your work as is our audience, so let's just get right into it Evan.

What are you doing here? Why are you here? >> Well, apart from the great weather, uh, and seeing so many people in suits, uh, no, it's it's important. Uh regulation uh, especially around DeFi, around you know, kind of we we all uh, my kind of wondering where we are with the clarity we all and all that market structure, all these. So, it's important to talk to folks to share our perspective, to make sure people understand what we are building for. >> Yeah. >> Yeah.

>> Definitely. And I feel like this space has evolved so much in terms of it's the era of the professional. Obviously, folks are very focused on their institutional strategy and and positioning. Um, so, organizations state of coins, curbs, vaults. Very like clean tunnel vision here on very specific use cases for blockchain. So much so that a reductionary view could say it's just finance. Is that true? Is blockchain just for finance? Or are we just in this kind of like intermediary period here where we're evolving through it?

>> It's not just for finance, right? You think about you generalize everything. What is tokenization of means? What does it look like tokenize can apply to a lot of other kind of data, information, other things that doesn't have perceived value as well we think about tokenize assets today. So clearly this is a generalized infrastructure. Let's say this is where the interests are because people are always interested in the finance the world is always interested in finance and so it's not a surprise this is where a lot of the energy is

focused on right now. >> And so what is what is Sui most focused on? You know, you guys have a lot of product market fit with USD Sui at 580 million in TVL. This is one of the main exports of this ecosystem. How do you start to build more products around this core infrastructure? Does it start with finance? You build out from there? Where are you seeing the most traction? >> So if you've been following Sui's sort of history, we build the layer one we say this is the coordination layer you can build other things on top and we've done that. We build wars, we build seal, we build you know deep bulk, the on

chain order book and all that. So so the way we think about it we've been building the core underlying infrastructure. Now we're building the building blocks that make it easier to build products on top of, right? If you think about the complexity of uh anybody who is outside of web 3 and coming in have to deal with all that blockchain terminologies and how do you deal with the the interoperability of all these sort of thing? It is very very a lot to handle. So we sort of like moving up the stack in a lot of way.

Uh so we're building a lot of products ourselves. We actually have a few on the solar launch pads where we're launching pretty soon. But these products are going also going to be sort of building blocks that other you can integrate into other surfaces. Could be integrated into your favorite track by integration surfaces to to solve a lot of distribution. So, that's what we've been building. We're kind of building up the layer. Yes, a lot of focus is on finance right now, but we always have our eyes on what's happening. The overall trend is everything in the world is going towards automation.

Humans are sort of coordinating. Right, this you start hearing the word orchestration and coordination when people talk about AI as well. So, the trend is very obvious. Everything is being automated including some part of your financial, you know, world. Let's get used to it. >> Yeah. >> Yeah, definitely. So, you guys will know this question already and I've asked quite a few people. You have an interesting perspective here as the CEO and co-founder of a very successful blockchain. The question is if the tokenization thesis is correct and trillions of dollars of assets are

going to move on chain the coming years, which company will benefit the most? >> Which company will benefit the most? Uh, that's an impossible question to answer. Like we are already seeing a few depends on your horizon, right? In the near term, you see the what the hyper liquid, you know, in very short amount of time benefit tremendously. You see Robinhood really, really embracing and benefiting from tokenization, things happening on trading cryptocurrencies.

You're going to see other fintech dev build better product maybe in payment and payment is very broad cross border payments all that. But I would like to think everybody could benefit. Because ultimately consumers should benefit from it. It's all about which business adopted quickly, which one adopted best, understand what how to take advantage of technology advancement to build better product for the customer. Maybe there's a world where you don't think about separating our finance and other kinds of product. It's all integrated. Right. So what I hope for is consumer benefit from it.

>> Yeah. Well, I'm I'd like to build on something that you asked earlier and that you answered Evan which was around this USD three asset growing in total TVL and then you kind of answered with this verticalization thesis almost and we're going to go dog food our tech, build our own applications on our blockchain. And I feel like there's a this is part of this bigger regime shift of building applications on chain now. As we originally started with like let me build this credible neutral blockchain this decentralized set of of nodes and let me invite builders to come build on our blockchain.

We'll do brands, we'll do special ecosystem programs, we'll have a head of ecosystem and we'll kind of leave it to builders to build on our fertile lands. But that's changing. These blockchain from the top down are trying to go and start to build a lot of their own products because they're trying to generate revenue to to basically come back to the token to create a business model for for the chain that's not just reliant on transaction fees. Is this thesis right? Is this verticalization regime regime shift thesis right? How is this happening?

>> It's not or, it's and. >> Okay. >> So, attracting developer, helping them build credible product, help them build successful business is going to be ongoing. But if you look at this is a unique sort of industry. If you look at successful platforms, if you what comes to mind? You think about iOS, you think about Microsoft Windows platform, you think about Android, you think about all the other platforms, you think about Roblox. Almost all of them go top-down.

They started by having launching successful product and then see other demanding want to build on top of what they build and becomes a platform. So, because of nature of business, you kind of have to build the infrastructure first and open up for other builders. Doesn't mean that's only strategy to building a platform. So, the question is how do you go about building this product or top-down? What you're going to see is our product are more product infrastructure that others can integrate or using as building block. Uh, you know, deep pool is very good example. We had that for almost at the beginning of Sui.

And people has been building other kinds of product, you know, a front end for trading or integrating a for liquidity and all that. So, that's the way we approach it. Uh, so it's not oh, we're going to to take all the opportunity and build ourselves. That's insane. That's never going to work. >> Okay, so you don't want to like compete with your own ecosystem, but you realize that you know, you want to be building applications and business lines that are complimentary to the ecosystem. >> Yes, because we have the inside, right?

As you build, you work with other, you have inside what is needed. And there's also the recognize, you know, recognizing the difficulty of builders. So, especially now you're seeing different kinds of builder, they may not be as comfortable dealing with all the blockchain complexity. They want solutions. So, you build solution for them, so they are integrating into other types of products. >> I'm curious how you're incorporating AI into the stack. Uh this is something that a lot of teams are starting to incorporate. Uh both, you know, could be AI-managed wallets, could be managed vaults, uh more in the financial world.

Sui is one of the most scalable blockchains available. And so, as greater throughput becomes available, more use cases become pragmatic and feasible. How are you starting to see AI playing into some of the applications that could be built on top of the Sui base layer? >> So, I think AI is going to be everywhere, right? So, we recognized a while ago there's no such a thing as a developer that don't think about AI. So, it's about what you can integrate with into that world. Development is going to look very different. People are not thinking about what stack I'm going to be using before when they start a new project. They're going to talk to their AI or using whatever tool they use to

kind of turn their idea into a product, right? So, you kind of have to be part of that. So, for us, we are thinking less around how do we use AI to make our product better? Right now, we're thinking about what can we do to integrate with AI to help address some of the shortcomings of AI or the limitation of AI. Anything from or everybody's talking about agentic commerce, you want to give the agents a wallet, a payment rail, and all that. So, these are very obvious, right? I think we all at the industry as a at a point where doing the obvious everybody's doing the obvious. You got to see You got You got to think a little bit deeper.

>> Yeah, I mean, this this agentic finance kind of conference so much so that there are narrative peddlers out there. finance. Are we just over hyping the next era of slightly incremental higher TPS blockchains or do we really need a step function in performance to facilitate agentic commerce? >> Well, so on one hand he's not wrong. If you look at Sui's thesis at the beginning it should be you don't want to talk about capping terms of capacity, right? You will grow with the demand.

That's true. So in a very very long-term time horizon the number the requirement that needs going to be as high as going to be we don't know, right? If you look at the internet sort of think of internet as the the layer for moving data and blockchains on top of it for moving assets. You can say well, they probably will grow to eventually roughly equivalent in terms of capacity needs. So it's true. But what that will look like or is it one blockchain or is it interconnecting a lot of different blockchain or is a blockchain only one the building block for this?

Uh I'm going to bet on the later ladder, right? It's going to be uh a blockchain like Sui that build with growing with the increasing capacity with demand in mind. There's going to be layer on top to enable these sort of massive amount of you know, sort of transaction going through transfer asset going through. Um So I think hyping I say well, we need this today. People are rightfully skeptical.

Uh but in the future, yeah, it's probably going to be true. >> Um I'm curious what you're most excited about as far as the regulation that's coming out of DC. >> We're in DC. The regulation that's coming out is extremely promising for the entire industry. The SEC and CFTC are now working closely together. Congress is working on some exciting acts as well. What are you most looking forward to? We've talked about the Clarity Act. We've talked about the Innovation Exemption. What does some of this regulation mean for us?

>> I think what we are all looking for is clarity. >> Right. Not just the Clarity bill. >> Right. >> It's clarity what the rules are. Because if we is that being clear, we can build for it. Right. We can build with it. Without you kind of have to guess. We You if you have to guess, you're going to perhaps not taking the step you need to do. Uh so, we're going to see innovation, the pace of innovation move not just grow tremendously uh when we have that level of clarity. Now, obviously, you are we are here to make sure you know, the wrong kind of regulation the one that really choke innovation or

shift the liability onto developer that innovate don't happen. Cuz that can be really, really bad for us. But some of the other, you kind of know because the whole space is moving. Technology is ever evolving. You're not going to get a perfectly right. Right. Regulation usually always trail technology development. Uh we recognize that. But having some of the really important questions answered will be a tremendous boon for the industry. >> Yeah.

So Evan regulatory clarity is amazing for the spurring the next era of innovation. But part of me worries about a lot of the existing protocols, companies in the space being held to the same standard as the rest of the market inside of the digital assets market and outside. Notably, this new administration came in, kind of reduced the need for what we call in the show decentralization theater or this kind of fugazi Dow governance. Trump came in and was like, "Look guys, you know, like let's just operate under maximum efficiency, launch a meme coin, done all this crazy Then Hyperliquid comes in, launches their token and says, "Hey,

we're going to just buy back our token with maximum amount of daily revenues and just do it and you're either going to compete with this or you're going to have to come up with a better reason for other people to own your asset." And so I guess like the the circle that I'm coming to here is how does Sui and Mysten Labs plan to adjust to this new environment where investors are looking at you with a P/E ratio, they're asking you about your business lines, and they're asking you about how you plan to grow this thing to create buybacks, buy pressure, and create a kind of flywheel here. I'm not asking about token price. I'm not asking about what you're going to do in that regard. Broadly, where does the industry go from here as

it's kind of at the big boy table now? It's no longer what it used to be. >> Well, if you look at our strategy, our aspiration has always been pretty great, right? We believe everything needs a sealer on top for to facilitate, you know, all these exchange of information, assets, to coordinate. And you start see that will be true. Uh so, we've been playing a very long game. Not that we don't care about short term, but we're not sacrificing our future for short term benefits. So, there are things we could do to compete directly with a Hyperliquid, which ultimately is about trading all the asset, right? It has one purpose. It

has a tremendously great business model. It's capturing a lot of attention, a lot of benefit benefit today. If we shift all that, do we give away some of the opportunity for the future that may be greater, right? If you ever seen the long-term success that child always look at flat flat flat until it goes like that. Where is that point for us? That's what we're focusing on right now. So, maybe early on relative to hyperliquid is flat, but relative to some other we're doing quite well. So, so we're finding that balance, right? We care about the near term because we're the company. We have to be successful.

We have to be able to compete and grow and innovate and invest in new opportunities, but at the same time we're not giving up the future when this goes vertical like this because we want to build something that's generalized enough for that 100x bigger market down the road. And if you are sort of building for just what we need now, we may not have that opportunity. So, these are the balancing act, right? As a business owner, a leader, we have to think about. We think we are doing the right thing.

Um okay. We as a startup that have now just one cycle under its belt, we default alive. We have market recognition. We have community. We have some success, some not successful ex- experience. We're learning from that. We're adapting. We are really so excited about what we're building right now. A lot of them are just around the corner. We're going to launch. We're going to see how it goes. But the gap between hyperliquid and Sui today is not as big as you think.

That's what we believe. Just like you rewind know ago, hyperliquid was just starting out and Sui was doing quite well at that point in time. And very suddenly they they passed us. These things move very quick. >> Yeah. Yeah, no. And I don't mean to like, you know, grill you, but I'm I'm going to ask you another one here. Um Okay, so there was a point in time where the L1 or the base layer construct was it was the transaction fees, like the gas fees or transaction fees. You would multiply that over a 365 annualized rate kind of like forecast and you get like this like revenue generating network.

It's not a business, it's like a network. These across all chains have significantly decreased. Bear market, very very classic speculative activity slows down. >> Also, scaling the chain reduces the fees. >> Right. And so like there's kind of a weird incentives with base layers where like you don't really want to have a lot of fees because you don't want to cuz you want to compete with other chains and etc. But I guess like the crux of the question here is like is that part of like the business model for Sui? Is that still in your mind as like a part of the business model?

>> No. >> Okay, no. >> No, no. I mean, if you any business, any software business, you know, right? When if you are selling a commodity, the price drive down to the >> Okay. >> as low as possible, you're going to get a lot of market share. But ultimately you're not moving your you're not making money, you're not moving your business forward. The business model has never been there and we always shift, right? So you do that early because you want to sort of have this lock-in. You want to have more people using that. But over time it's not about jacking up the price, it's about other ways to make money.

So the way why we have uh Sui dollar Sui USD well, the yield, right? The more Sui USD being minted, the yield comes back into the the ecosystem and that's another sort of way to grow the ecosystem. So, all these things, right? We already have sort of we're planning for the transition into a different business model. Uh so, a lot of these things came sort of overcome the diff- the the challenge of the the fees going lower and lower. Yeah.

>> I appreciate these answers. This is like a investor update here. So, thank you for bearing with me here. I I've got a bit of a different question, Evan. Um you know, you left Facebook when you were 50 years old. Uh I'm curious, do you ever think that with the administration we have in office now, the Libra project would have been able to launch flawlessly, successfully? Do you ever think about that? What it What What How do you How do you think about this? >> I don't really think about it, right? Cuz back then, when I left, it's not just because of Libra wasn't happening, right? Cuz I I want to do something a little bit more broader and more general.

>> Yeah. >> Uh I you know, it's like our thesis is if you build a chain just for payment, primary payment, your design is going to lock you down to that use case. Uh and it's really really hard to loosen up and generalize later. We'd rather go the other direction, much more generalized platform that we're believing, and then we can easily build rails on top for payments and other, right? We'll see if that thesis play out, right? We We talk about this difficulty of like going bottom-up versus top-down. Uh so, yeah, in what on one hand, I completely agree with you. It's like Libra 2.0 is spinning off here and there, Tempo and other uh basically

following the same playbook and learning from that experience. It would have been great that Libra had launched back then and had been tremendously successful, but I still and I'm very happy that three exist today. Uh and that's sort of to our kind of vision what it looked like. We just have a lot of more work to do to prove our final thesis. >> So, you you made the right decision. Now, I'm curious, today, do you think Facebook tries to relaunch something similar?

>> I did hear something about that. >> I think Facebook is too busy with other stuff. Honestly, right? Yeah, I think I think it's not like the company to go back and revisit past project. But, if you look at what they focus now, right, it's elsewhere. I think they will absolutely at some point in time make use of stable coin for payment. Whatever will make the business more efficient, move faster, they will adopt it. It's a very smart company, just like every other company out there. Now, it doesn't matter if it's big or small.

Whether they do something like a Libra again, I doubt it. Yeah, I really really don't see a reason for them to reboot that. >> Yeah, I'm not sure that they will, either. Evan, I know I know we got to uh let you go here. Last thing here about this kind of like fees and valuations and business model stuff. Like, when you're speaking to institutional uh allocators, whether that's on the tokenization side, the equity side, uh you know, RWAs in general, like, what do these conversations look like from from the base layer perspective? Like, what what kind of what kind of investment appetite is there into Sui, the asset? What type what what type of uh allocation appetite is there to bring tokenized assets onto Sui? Like, where

are you guys at with that conversation and how is that developing? >> I think there's tremendous amount of interest in Sui, as well as basically the possibility of building on top of Sui. Uh we in particular has had tremendous sort of interest from Asia. Uh for whatever the reason, this is where we are the strongest. Uh there's going to be a lot of things coming there. Uh you know if you look at it like we are the only blockchain they have relationship with uh the big three of China, right? The the Bytedance parent company, the Alibaba, the Tencent. I think we have a relationship with all of them. Uh we have a lot of other interests from institutions in Asia. Uh I think US Wall Street there's a lot of interest. Obviously everybody's thinking about it. Everybody's talking about it.

Everybody's energy is here, too. Focus here. There's a lot of competition. We see a lot of good feedback. A lot of folks understand a lot of these institutions understand what we build are differentiated, right? But I think the right now what we're seeing is US and Wall Street are a little bit slower moving in terms of adoption. They are looking for more turnkey solution. Uh so you will see a lot of exploration, uh a lot of POC being built, a lot of you know sort of these uh tests being done with us, with other. Uh broader adoption I think it's going to happen. Uh when that's will happen less clear. Uh but we're we're we're going where the demands are. Right now it's Asia. Uh that's just going through the roof. Interesting. Yeah, interesting. Interesting. Awesome. Evan, thank you for your time, sir. Thank you very much.

Enjoy your time here. Thank you for coming on NBC, all right? All right. We'll see you next time. Tell tell Trump that we say hi. All right. And you speak to him, all right? Thanks, Evan. Thanks, Evan. All righty, guys. Um pretty good episode, man. Yeah, Evan's great. That was solid. Yeah. Uh friends at Mysten look these uh these guys are building an L1. Yeah, man. I mean the a base layer for finance, so >> All righty, >> guys. Um pretty good episode, man. Yeah, Evan's great. That was solid. Yeah. Uh friends at Mysten look these these guys are building an L1. Yeah, man. I mean the a base layer for finance, so >> And L1?

>> Yeah, man. I mean, the a base layer for finance so Guys, up next we've got Chaz, the CLO and co-founder of Denari. Uh Denari fits right into the conversation that we've been having today and for the last couple of weeks on the roll-up, tokenized equities, doing it in a unique way, uh and bringing this market to scale, right? And so very, very interested to hear about their strategy, what's coming up, um and really just kind of like Again, let's get into some of the nitty-gritty of what's happening here in DC and how that affects that specific market. So >> Yeah, let's do it.

>> Let's bring Let's bring up Chaz. We've got him here. We're on a marathon right now. We're absolutely ripping. >> Yeah. We've been nonstop. >> Here we go. >> Chaz. >> Welcome to the show. And here we have Robbie. Good to see you. >> Great. >> Chaz is doing well, man. How's How's the conference treating you? >> Uh so far, so good, I have to say. I mean, I I I I got in yesterday, so I was there for the fun. >> Here we go. >> Uh I I will be honest, it was I was checking out I was I was grabbing a late dinner and I'm like seeing the warnings on TV I'm like, I need to get back to my hotel room before I get blown away. It was crazy.

>> It got pretty Coming from Seattle, I expected it to be less rainy here, I'm not going to lie. >> Well, we're glad you're here. We're glad you're on the show. We've been talking a lot about tokenization, tokenized equities. >> A lot. >> It's like everything tokenization. >> Everything is tokenization. It is the thing. Before we get into some of the things that we've heard and >> and and you know, policies that we've had >> Yeah. >> would love to just get your raw, unfiltered approach to tokenization, how you're implementing it at Denari. >> Well, I mean, there's a reason why tokenization is kind of the buzzword right now. I You know, you can't think about the future sometimes without looking at the past, and it was it was 50 years ago that we were trading stocks on paper. It was 50 years ago that they

shut down the market every Wednesday so they could sort pieces of paper in filing cabinets, right? It was 30 years ago that we finally went to what, T plus three and only two years ago we went to T plus one. The only way in my view that we can see a future that is more like atomic settlement that allows for what I would call kind of like the the security, the rigidity of future financial rails, I don't see a way that you do it without involving blockchain in a fundamental way. In a not just in a free-for-all way just to be clear like you know, I'm I'm a lawyer by trade, but I'm at fintech, right, at heart. And I there's got to be a way for us to blend the security and regulatory what you

call like infrastructure with the technology in the future and do it in a way that they can both coexist until we can maybe flip that switch. >> Yeah. >> Yeah, and so as you have a very unique background from different industries. >> That's true. >> Um I'm blanking on the name of the document sign company. >> at I was at LegalZoom. >> LegalZoom, yes. >> Yeah, yeah, yeah. >> And then they exited. >> Yes, and then they they exited and then you kind of parlayed that into finding fintech >> Yeah, so it so it's honestly it goes back a little further than that. My my I my original job I was actually a navy pilot for eight years and I never ever thought I would be a lawyer, right? I thought I'd probably be an airline pilot or a corporate pilot, but as I got out of the

military I was really thinking about what my future would look like and I was really interested in the legal system. Um just be clear my my dad ran a small business and it and the legal system didn't do a very good job for him. And my my job at LegalZoom, this is where the intersection comes down. The job of LegalZoom was really interesting because it's a heavily regulated industry, the provision of legal services, right? You have to have law degrees and pass bars and you have to have expertise, you have to have commitments to your client, you have to have all these rails around knowing who your client is. And what we were doing is we were introducing a technology which was in the 2000s, right? The internet into the concept of the traditional practice of law and they there was no there was no

room for it. And what we decided to do is we decided that we needed to make a stand and we needed to take a position that you can operate a legal and regulated kind of version of the practice of law on the internet and eventually even rolling that the the provision of lawyers. And so when I left there, just to be straight, my my goal was to maybe just kind of coast for a bit, but it was not I had not even left a month and I got a call for a call from my co-founder Gabe who got introduced through a mutual friend and he started explaining this concept of tokenization and how guess what? It's a heavily regulated industry with no clear path toward doing it, but the idea that there should be a company out there that

tries to do it right and shows regulators what regulation could look like. And after we talked for about an hour, um he just said, "I want you to come on board." And honestly, I I I I won't pretend like I jumped right away because I was a part of me that really wanted to just chill, uh but after I really started seeing the future of this, I thought, "Why not?" I mean, the the the the wide-open field that we have in front of us is very similar to to 25 years ago. >> Yeah, man. I mean, a man with a passion for disrupting industries with little clear path ahead.

>> Right. >> And I think something that the market needs to know is that Denari actually created a standard of tokenization that is the right way or, you know, you put it in parentheses, the right way. Explain that. What happened? >> Right. Instead of so, just to be clear and I I'm with you on this, but I don't like to call it the right way. I like to call it a right way, right? And and and just to be clear with what that what I mean by that is there is no right way yet. The regulators haven't spoken, uh you know, the government hasn't spoken, the legislators haven't spoken, um but they need to start speaking. And as a matter of fact, part of this conference is getting them to actually speak. What we've seen from, uh, you know, from from some from the

legislature and from the current administration, from the crypto task force has been nothing short of amazing. And what Denari did, even before that happened, was we set out to do exactly that, which is how do we take this new technology and build it not to replace the infrastructure, but in order to to ride on top of it or alongside of the current infrastructure without breaking it. So, and again, I'll I'll I'll try to draw an analogy. If you think about like the days we used to watch movies on tape, and then we started streaming them. When streaming came out, all of a sudden, video cassette recorders didn't explode.

Right? You could still you had a choice. You could still do it the old way, or you could do it the new way, right? And eventually though, the new way did kind of take over and go good luck finding a VCR today, right? Um, maybe in a maybe in a thrift shop. And and I and I think that we've got the same thing happening here in the same way. Just to be clear, like I'm not dogging out the current system. I mean, to a certain extent you have to. I mean, to a certain extent you do have to. >> Right. >> But what I what I what what Denari is trying to do is to try and say, look, the current system, it's already evolved before.

Let's keep evolving. >> Right. >> And just to be clear, I think that, you know, entities like DTCC that really brought that paper, they took the paper out and put it on, you know, put put put it, you know, on computers, they're looking for this as well. They want to see tokenization happen, too. I think the big difference is is that innovation and that is is that standard going to come from inside an entity that's currently operating and doing a really great job, or is it going to come from outside and then be adopted by those people inside? And so, what Denari's done is we've created the standardization that we think is agnostic and we see as agnostic. It's cross-chained. it's cross traditional, and and the future of markets that's going to allow

tokenization to be more easily and widely adopted both now and in the future. >> Yeah. Um there is demand for these uh these tokenized forms. There's demand for 24/7 trading. We're seeing hyper liquid how price discovery is happening there over the weekends. Yeah. >> Yeah. >> Um and and we've also heard, you know, and and I think this is a a passion for the administration because we can bring some >> some one of the greatest exports of America, which is our financial system. >> 100%. >> Our currency, our equities, we can export this around the world. What does it look like to bring tokenized forms of US equities around the world? And then how different is that for customers that might already have access

to these things? They're citizens of the US. >> Yeah. >> Do they need tokenized forms? Is it primarily for, you know, outside the the US? >> Yeah. And and so there's a a real interesting way of looking at this, and you look at it the way I like to look at it is you look at kind of like kind of what is and what has been for about the past couple of years. >> Yeah. >> And that is Dinari using a tokenization standard to bring the benefits of US equities to individuals in now 80 countries, over uh you know, you know, tens of thousands of customers, 150 assets. And we are sh- pe- people who are right now, you know, they you I can't say no one has access. That's not true. You can find international brokers, right? You can go and you can uh you can go through

the process of trying to open up a US bank account if you live in Peru or if you live in, you know, you know, some other some other rural area. >> man. >> But it's not crazy easy. >> Right. >> And so in order to do this, you know, in a better way, in a smaller And the And the other thing is that it it also means like if you just wanted to trade 20 or 30 or 50 dollars, sometimes that juice isn't worth the squeeze. >> Right. >> But if you can make this a little bit easier by giving the making the rails a little more simple, right? Allowing people to hook up a wallet, get a verification through a KYC and AML, like we do all these checks, right? The stuff that's required of most international and legitimate systems, then you can start trading almost

immediately with just a few dollars. Um and also, you know, when when you take a look at some of these uh some of the countries and again, I don't want to name anyone by names, but there are places where their currency is being devalued at a regular pace. Some of them are getting They prefer to get paid in stable coin. They prefer to get paid in US backed or euro backed assets. And so, for them to be able to then try and find out a way to get that money into the US system and and and buy a US equity directly, sometimes it's just easier and it's a little bit more beneficial on that smaller scale to grab a token, which Denari offers through what we call D shares.

>> Yeah. Yeah. >> And so, so that's a very clear value proposition to everyone outside of the US. >> 100%. >> What is the value proposition of tokenized equities to US citizens? >> I think as I as I stated here in the very beginning, that idea of T3 to T1 to T snap, right? Atomic settlement. I don't see a way that we can do atomic settlement without tokenization, right? How do you do what I call kind of like right now, you know, if you're a high-net-worth individual and you've got assets in the seven figures or eight figures or more, it's very easy for you to do things like get margin loans, for you to have lines of credit, for you to like collateralize those those assets, right? But if you don't have those, if they're in, you know, small amounts in,

you know, in the markets of 401(k)s, yeah, you can pull loans out of there. It's a little bit tricky, but the idea of being able to do spot lending, to be able to do atomic settlement, uh the one thing that I'm really interested in and what I'd like to see happen is instead of having a stock, selling that stock into fiat and then buying another stock, what if we just were able to swap stock for stock, right? And not actually take it off the rails of the system >> Yeah. >> and how about not recognizing a loss or a gain at that time because you actually haven't done anything to trigger a tax, right? So, I think those are the things that we all should be talking about right now. In the same way that if you're in a mutual fund and they swap out assets, you don't get taxed on

gains, right? If you are, you know, investing in a property and you want to swap it into another property, you don't get taxed on that gain because why? You've kept your money in the system. And we need to be able to encourage the retail investor, the small investor to invest in the same ways and with the same protections that large and institutional investors and qualified buyers and purchasers can. >> I wonder how much of that is technical hurdle versus a regulatory one? >> I think it's both. Yeah. It's it's absolutely both. Like you can't you can't you can't give someone regulatory approval if you can't have a way to implement it and you can't have a way to implement it until there's some regulatory approval. So, there's a little chicken and egg going on here, but I really feel like we're right at that spot where the chicken and the egg

are happening at the same time. It's really cool. >> So, the cool idea here is like do more with your stocks. Like get your stocks and be able to do more. I mean, there's collateralization that's possible. There's borrowing, lending, there's a swap concept with >> Absolutely. We can all open up an app. We can open up Robinhood or our Schwab app and we can say, "It's going up. It's going down." That Where's the fun in that right? What's more fun is like what can I do with this money while it's sitting there? I mean, right now what you can you can earn a a tenth of a percent of interest from your bank account or maybe you can get a a better yield in treasuries, but what we're talking about is the being able to take that money that's kind of sitting there earning and

use it for the benefit of your own family and your and your legacy. >> It also turns asset management to more of a skill game. Whereas right now, you can pick that, you can pick this, you know, you do your own research, you kind of and then once it once you're in that position, you know, it's going to go up or it's going to go down. >> Right. >> Once you have more mechanisms at your disposal, you know, it it's you there's more you can do with it. You can get more creative. You can implement more unique strategies and use cases. >> Absolutely. >> And And then it becomes What's that?

>> With AI coming to say there's just >> Yeah. >> Yeah, 100%. So, think of it this way. Right now, if you want to, you can find an ETF, right? You can find something that tracks, whether it's the S&P or it can track gold, it can track certain things. But what if you're a relatively smart investor and you want to track 17 unique stocks, but there's no ETF for it? It'd be relatively easy to take that and create a token out of just those 17 stocks that you personally could invest dollars into every month, every week when you get your check, and do it in sort of like I I call it like we call it like an alloy fashion, right? Where you can create your own material that allows you to invest in a way you want to. It's personalized. It's individualized.

>> We We've talked about the N7 index. We believe in this thesis of neo-finance, which is the convergence of a lot of these things, high-quality assets, exogenous yield sources, AI asset management, and putting these things into vaults, like you're talking about or alloys. Um I I can imagine how we have And people have actually asked us, okay, we have the N7, like the Mag 7. >> Yeah, right. >> Put that into an index. People have access. Where can I get exposure to this? >> Exactly, and that's where it be It becomes difficult. Now, we can branch it out further. What if you wanted access to three of the N7, but you also wanted the top five uh coins, right? Right?

Now, like Well, wait a minute. How do we do that? Well, it's actually not as difficult, right? As long as those things are trading and there's a price and there's an NBBO, there's a a place to bid for them, a a place to understand what the pricing is, we can put that into a token, and you can buy just $1 of it, $4 of it, $17 of it. >> Quick Quick follow-up Uh just a quick follow-up on this. And I want to give our our sponsor for the week a shout-out, Chainlink. Um they're powering price feeds. I'm just curious how these things ultimately get implemented. All you Does all All you need is a price feed that pulls together a an equity price and a coin price and then you can create or tokenize assets and indices as a result of that and or is there Is there more going on

>> Well there's more there's more but it's all behind the scenes right? What the what the what the customer sees is exactly what you said. I just chose them. I picked the percentages. I know what my exposure is. I'm willing to right to take care of that. I'm willing to put in like said 50 100 10,000 whatever how many dollars I feel comfortable investing in. I do want to kind of touch on that idea of credited investors and kind of how that is a little antiquated. Um but the behind the scenes right there's a lot more than that right? There's the acquisition of those assets because issuing a token and saying it's backed is different than issuing a token and it actually being one-to-one backed. You've got to have You've got to still integrate with the rails that can

currently acquire those assets hold those assets sell those assets when the time has come and do so at the price that's going to be the natural you know kind of national best bid that's going to be that market price. And so the again this is it's the iceberg syndrome right? Where all you see is the really cool stuff on top but the really interesting things that are going on behind you don't need to worry about the the sausage getting made there. >> Yeah. So I just I really love your energy and the bullishness and and just kind of like general passion for tokenization and seeing how this is going to disrupt the market but I'm going to ask you some hard questions here.

>> Oh boy. >> Um what is Denali's monetizable mode? You guys got a US broker dealer license that's super solid and is a regulatory mode but like why is Denali going to win in the slew of other tokenization platforms? Why will Dshares and Denali's tokenized equities win? What's your mode? >> You know it it's a it's a great question and I think that if you could ask any company that's kind of just starting out and we're four years old you know almost five years old now. Um you know are are we going to win? I think that's that most of the companies that have won they'll say the same thing. Of course we're going to win, right? The how is the is is the interesting thing and really what the how comes down to is it's not your product, it's your team, it's your execution, right? We've got a great team

of people. We've got, you know, Gay Bots proven proven entrepreneur proven already in different space. Just be clear, I'm not I I I'll I'll you know, toot my own horn here. I've done a pretty good job, right? When it comes to execution and making things happen in a difficult regulatory landscape. It's great technology, but the other thing is this is building relationships. You got to build relationships with the SEC, with Finra. You have to if we're here in the United States, you got to do it with the the regulators that are in the EU, out in the UAE, right? They're all in Singapore, like all across Asia and South America. We have to come up with a with a with a standard that's going to be as interoperable as possible with as many different regimes and as many different companies as many countries as many different regulatory schemes as

possible. And in order to do that, you've got to reach out across the aisle. The first thing you have to do is you have to say I'm not here to break your system, I'm here to make it better. When we're ready, so let's make it ready together. That's number one. Number two is you need to reach out to the people who are already in the thick of it, but they want to see things better, right? The institutions of the world, the neo banks of the world, the wallet providers, right? They're saying how do I make this how do I confer more of a benefit to the people who own my wallet? I know what I can do. I can get them stocks. I'm a neo bank. How do I add more investment opportunities to this? I know what I'll do. We can add DShares and stocks.

But the but the overwhelming thing right now is and you can ask any venture capitalist this, execution and team above product and idea every time. The product is here. The idea is here. The need is there. The big question is who's the team that's going to execute on it and I put my money on Denari and I have. >> Yeah. I love it. >> And I understand you guys have a unique international model as far as distribution, right? Key partners in strategic regions that allow you guys to scale without having to necessarily go into those regions on your own and navigate the their individual legal structures.

>> Right. >> That's that's like as as well and I mean, something else that's quite interesting is that Kraken just got this Fedwire access. >> Yeah, I heard about that. >> So maybe this is another hard question. >> Yeah. >> Like that competitive edge on the regulatory and the liquidity side for them is significant. Do you expect Fedwire to be accessible by other digital assets companies? How do you guys compete with a company that has Fedwire access? >> Yeah, well I mean there's always I I mean there's always going to be someone that's out there doing it different and someone that's maybe out there doing it first. Um you know, I believe Denari, you know, we we've we've we've pushed it out there and we've done a lot of things first as well, right? This idea of tokenizing and and and getting

securities outside the United States. But yes, like like just to be clear, sometimes you do have to fast follow. Sometimes and and again, once there's a once there's a path whether it's to to charter a bank, whether it's to whether it's to partner with a bank for for things like the top for for lending, settlement, etc. Partnering with clearing agencies, clearing firms, partnering with other like I said neo banks or institutions or exchanges or wallet providers out, you know, we're going to have to we're going to have to keep moving quickly, right? That's the whole point. You you are you are right. You even a company as nimble as Denari, if you sit and just stare too long at your own problem, you miss all the other problems that are passing you by and other people are solving. So we're going to have to continue to keep innovating

and keep pushing forward. And honestly that what you what you mentioned the regulatory issue is a big one, right? You can rely on partners for a while, but you also, you know, at the same time need to be learning those regulatory structures. You got to be complying with those structures. You need to be making sure that you're have you know, kind of hand in hand with those partners. And also you got to be ready. What happens if that partner decides to exit, right? The partnership, right? You got to be ready either with someone else be able it you got to be able to back fill it yourself, so you know, we're always taking a look at what it what it would look like, what it would cost, what the you know, kind of runway is for us to to go direct as well, because I think that's the the end

goal, but you know, just to be really clear, the the next main thing that we're really focused on is right here in the United States, right here in you know, this district, right? Um you you've we've got to find a way to give the US investor whether they're someone who's been investing for years or someone who's thinking about it tomorrow, that ability, that clarity to and wow, what a great name, right? Clarity, the clarity to actually do this. >> I know, it's a it's a play on words a bit. So so be before we let you go, sure thing.

>> Um I I want to get a chance for you to comment on you know, this next wave of investors that may not be accredited. >> Right, right. >> This is a big problem that a lot of people are trying to solve, but with the regulatory landscape the way it is, it's got this gatekeeping effect. Um the current administration is very open-minded to changing some of these rules. So now feels like the right time to address this. Tell us how you feel about the current accredited investor laws. Where do you think we should go? >> Um they're one-size-fits-some, right? They're not one-size-fits-all. Um you know, very few people have you know, a couple hundred thousand dollars of just income flowing in every year. Very few people have millions of dollars worth of assets just sitting that they can that they can you know, be exposed to risk.

Um you know, I'm I'm not going to pretend like I came up with this. I've heard other people, other podcasts talking about the fact I think we need to relax >> Yeah. >> the the the the rules that allow people to invest, but do it in a smart way, right? In an adaptive way. Um I mean, we've got so much coming online right now in the form of information, intellect, artificial. Uh we should be able to we should be able to either test people or give them some sort of a primer course that tells them like you you need to take this, right? We we make a lot of people go to, you know, You know, we make them learn how to drive before we put them on the road, right?

>> Why can't we have something like that for people who want to invest? And sure, maybe maybe for some people we say, "You know what? Your limit every year is going to be 5,000 or 10,000 or 100,000 or maybe 2,000." But at least you can get in there and you can get access to some of the things that other people have had access to for decades. >> And if we allow that to happen, that's going to be kind of step one. It is really, like I said, you you've got to you've got to relax it because you can't get away with it all together because then people will get burned, right? People have gotten burned. Institutional investors have gotten burned, right? So, we've got to we've got to balance what it is We've got to balance the risk with the opportunity.

>> And the problem right now is that the accredited investor law, it's just all risk and all opportunity and it's it's only for the it's only for the wealthy. >> Right. >> And as long as it's only for the wealthy, only the wealthy benefit. And we've got to be able to pull that in and it's got to be more than just, you know, you know, rolling up on Robinhood and putting $16 into Bitcoin or whatever, right? You got to do more than that. >> And and just to point out how how uncommon sense that this is and how we can improve upon it. You know, the example that I've heard is imagine a an heir to some inheritance >> Yeah.

>> that has no financial education whatsoever but inherits $10 million. All of a sudden >> All of a sudden they can participate whatever they want. >> someone who has AI at their fingertips, the wealth of information in the internet, studies up on a particular stock but they don't make $2 million in the last year. >> can't go and buy this this asset for exposure? >> Exactly. So, from a from the legal standpoint, you know, the way I look at this and by the way, this is very much in line with what happened at LegalZoom, right? People used to come up to us and say, "These are legal rights. You can't just allow people to have them, right? What if they mess it up? What if they do something stupid?" And I'm like, you give people too far too few of credit.

When you provide them with really great information, when you provide them with really great tools, when you provide them with really great backdrops, right? So, for instance, what if alongside of this you have the ability, if you're a little worried, to talk really quickly to a financial advisor, someone who can just answer that quick question, right? Right, which which is what LegalZoom did with lawyers. You're not you're worried about your this this question? >> Yep. >> Why don't you grab a grab a phone real quick, hop on with a lawyer, they'll talk to you about this, right? They'll make sure that that it's right for you. So, you've got that part of it. You got to make sure that that we do this the right way, um and and and make sure that it's it's it like continues to to move forward. We can't constantly be

baby sitting everyone. And it it it it's interesting and back when I was in my my old job at LegalZoom, I I met with a an attorney general who was a part of the, you know, the consumer consumer affairs consumer protection department. And I I said, "Well, you know, some of these laws they're like really really stop people from, you know, from benefiting themselves." And this person, I'm not going to name the state or when, you know, looked at me and said, "You know, my job is not to protect the citizens of my state. My job protect the stupidest citizen of my state." And I'm like, "But then all the people who are actually smart also get hurt by that."

>> And it kind of is like and then again again that's that idea of government over protecting versus properly protecting. And it's it's not what I call wild west and I used to say this a lot in legal. It's not it's not deregulation, it's right regulation. >> Right. >> This industry needs right regulation. Right now it's just got right now regulation and actually has yesterday regulation. We need future regulation. >> Yeah, we absolutely do. Chas man, thank you for joining us. >> Absolutely wonderful, guys. Yeah, you take care. I actually did a radio show, called in legal talk show for about 5 years back in back in the early 2000s, so.

>> Man, I might need to shoot you a message for some tips as we go on this broadcasting journey. We have a studio in the Empire State Building we're doing a show and >> Oh, I love it. I'll have to get out there and see you guys again soon. All right, take care, guys. Cheers. Bye-bye. All right, guys, we're going to take a quick >> that guy on a Must have, right? >> On a radio. >> Quick break. I'm going to be stepping out for this next one. We've got award-winning TechCrunch journalist Jacqueline Melnick that's going to be joining I think actually for the next one. >> Quick break, boys. >> Quick break and we will be right back.

Don't go anywhere. >> We get deeper.

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You know we get deep. We get deeper. We get deep. You know we get deep. We get deeper. We get deep. You know we get deep. We get deeper. We get deep. You know we get deep. We get deeper.

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You know we get deep. >> We are back with our friend Jacqueline Melnick, award-winning TechCrunch reporter. Welcome to the show, Jacqueline. >> Wow, guys. Thank you for such a kind intro. I haven't been at TechCrunch in 2 years, but I appreciate it. >> You got on the podcast, though. >> I know. They they brought me back. They brought me back. I am the external crypto expert now for them.

>> Sign of the times. >> I will do. I think so. I think so. >> Yeah. >> Jackie, do you own any Hyperliquid? >> I don't, but I should. >> gosh. >> I should buy some Hyperliquid. >> listening to the show. >> Is this like the intro question you ask all your guests? >> Wow. She hasn't been listening to the show for the last year and >> Oh, no. I I saw the episodes. I saw it. Um I guess and honestly, this is a shout-out to them. So, I had Hyperliquid Strategies CEO David Chames on my podcast. And after I sat down with him, and I never expressed this to him, but if he's listening, this is a nice anecdote. I literally was like, I should go buy some of their stock.

>> Yeah. >> Because of like his thesis, the team, just everything about it felt so elite. And like very rarely do I feel that way after an interview where I'm like, wow, I want to go buy this like asset token, etc. Um but when you do that, like you're winning, essentially. So. >> Yeah. Yeah. Yeah. It's a very compelling thesis. So, entire Hyperliquid thesis. >> Uh yeah, we >> I have some Hyperliquid, yeah. >> Yeah, it is her. That's why I didn't say it. It's just like Hyperliquid Strategies, yeah. >> Yeah, Jackie. I mean, look at us. We're wearing uh sport jackets. Raoul's got a suit. You look great.

>> I wore my my suit jacket for you guys today. I'm usually more casual than you. >> It's a sign of the times. >> It is, yeah. I mean, this whole room is filled with suits right now, and I was I was going to tweet this out, but essentially, it's just like everyone here is networking. They're listening to the panels. It's more serious than like past conferences. And this is like a trend I just continue to see over and over, where it's like the room is filled with these serious people opposed to like that degen energy that we're so used to in like past cycles. >> That DJ energy, you know, there used to be so much innovation and engineering and innovation that would take place like on the actual technology.

>> Mhm. >> The actual technology is less innovative than the policy these days, which is insane because how slow the policy moves, but it's almost like the technology is there. Like we have fast, affordable, secure blockchains. There's not really a lot more to do there. Now all of the innov- Like I just find more entertaining, more interesting conversations coming from the policy. >> Really? >> Yes. Have you heard >> I mean you're at the wrong place if you're not entertained. >> When when you've heard, you know, people talk from like the the L1s or the technology side of the world, like there are good improvements that we can make to the technology, especially the financial side of things, but like when you when you hear some of those things, have you heard any like really

powerful updates when it comes to the technology? >> I mean yeah, sure, a bit, but I see what you mean like there's actual progress happening on the policy side. It's I mean >> And it feels like more of the moat at that these companies have is regulatory. Like you you mentioned like the Kraken has the FedWire account. Some of these companies has a broker-dealer license. >> And so like the the driver of this OCC charters as well, that's a really big trend as well that we're going to start seeing too is like either they're trying to get it, they're filing for it, or they already actively have it. Like I spoke to Diogo Monica who is on the board for Eris Board.

>> Yeah. >> You know, Palmer these new stablecoin now turned bank situation and it's just so interesting because like the OCC charters historically have been so hard to get and now under this administration it's like it's not easy, but it's more accessible I would say. And so we're going to start to see these crypto companies have them and it's really going to be kind of this like convergence of like the traditional markets with DeFi. And I think a lot of it comes down to education too because I was talking with the Euler CEO and they were talking about how they're really trying to build credit markets for the internet on chain all these different things and that like a lot of these different like retail investors are now looking into more exotic assets opposed to just like I'm going to buy

Tesla stock you know like something vanilla I don't even know if Tesla stock is vanilla I I think it's kind of vanilla. >> It's just a plain stock yeah. >> Whereas like now people might be like okay I'm going to get this like tokenized money market on chain or I'm going to get this like defi swap through this protocol and like it's all coming through like defi. >> Yeah and we were just talking about how there's so many more financial mechanisms for tokenized versions of those equities. Yeah like Tesla stock plain and simple is just a vanilla stock but once you put the Tesla stock into an Ave horizon or an Euler then you can issue credit against it you can take that you can lever up on it and do all kinds of very fun and like creative things to the plain of vanilla stock to

get more exposure or to create more complex strategies where someone can get like what what I said earlier was that it's like turning the stock picking game into a skill game where you now you have all of these all like a lot more financial mechanisms that you >> you also could use like AI agents or AI tools to literally become a financial professional with no prior experience. Obviously do your own research I'm not saying like go and use them like they are literally like an investment advisor but it it opens up the door where you no longer have to be someone working in this industry to get ahead you could just use the tools that are at your disposal.

>> Yeah you know what's interesting I had Yuki on the show yesterday and he was like there's going to be a world entering a world where people's first interaction with blockchains is not going to be to buy a crypto asset like they're just going to buy like a tokenized gold or a tokenized equity on chain likely without even knowing it and that's going to be their first interaction where it's like for all of us the first interaction was obviously buying Bitcoin or Litecoin or Ethereum or whatever it was but thought that was interesting. All these are signs of the times. >> Yeah.

>> This kind of regime shift happening, these conversions between these two asset classes happening at scale. And then, you know, here in DC you throw in the policy mix into the whole conversation and it's like it's a really interesting kind of concoction being stirred up here. >> Yeah. And I mean, it used to be like, how do you guys operate within the securities laws frameworks, the existing frameworks? And now it's like we're actually kind of paving the way for digital assets specific frameworks that allow us to create technology, whether it's in a sandbox or in something that is dedicated for this industry. Not like trying to fit digital assets and blockchain technology into like old school laws.

>> There I I believe Paul Atkins is on the stage later today with Michael Seelig. And Adam earlier today said that they're going to be talking about this innovation exemption, which is exactly what you're talking about. A carve out that is a different asset class. It's not securities, it's not commodities. This is a particular asset class, digital assets. Adam said that early on it's going to be quite narrow as far as what this pertains to. And then we also heard how Citadel and other market makers in the traditional space as well as JP Morgan are planning on litigating the the CFTC as well as and the SEC for putting together this exemption. So, the big financial institutions are not

particularly happy that digital assets and crypto are getting this carve out. It's it kind of shows that now, you know, we've kind of conquered the regulatory villain, if you will, of our industry. Now we're kind of getting back to our roots and we're fighting this traditional financial villain once again. >> But I think there has to come a point where everyone kind of not gets along, but works together. Like we're going to have the JP Morgans, we see BlackRock, for example. We're going to have the JP Morgans, the Bank of Americas, the Goldman Sachs of the world having to interact with these DeFi protocols that historically have only engaged really with crypto users. There has to be some bridge between the two where it's like we're bringing institutions on chain,

but on the flip side, these on chain protocols, DeFi apps, whatever it may be, are now coming to them. And there is like this middle piece that connects the two. But I think a lot of it comes down to education. >> Absolutely, it comes down to education. Even within And this is another point that Adam from Chainlink made, even within particular organizations, you've got an asset management business and a trading business inside of a company like BlackRock or JP Morgan, and you hear two very, very different things. One side could be very pro pro digital asset, pro tokenization. The other sees it as a threat to their business.

And and if I'm a CEO and I'm looking over both of these departments, who am I going to pick? Like Like how do you you pick which child you love more? Like which, you know, which one is it? So there's some really difficult decisions to be made. >> Every You always have a favorite child, though. I I'm my parents' favorite child. >> She's the only child. >> She's the only child. No siblings. >> That's the kicker, right? No, I have two siblings. They're wonderful, but, you know, It's It's It's the Jackie show, right? Yeah. >> But I think you're right there, Rob. Like there there is that clear market making dynamic issue with these types of assets where they're kind of like at odds with this 24/7 tokenized trading idea, but then the allocators in the asset management business sees it as

a way like the thing with the Gen的那 co-founder is that if they get that right, they will be able to offer because they have a US broker-dealer, they will be able to offer any RIA, any registered investment advisor, the ability for their clients to just borrow against their stocks and do get yield on their stocks, do do all these intricate things. And the RIA is going to be seen they are a genius. >> Yeah. They're going to be like, "Wow, like their clients are going to be like, how do you offer this? Like, what crazy technology have you built that allows you to get more capital efficiency out of my my equity holdings?" And they won't even realize that they're using something like Denari. And it's very very weird.

>> And Jackie, this is a part of the thesis that we've been talking about a lot a lot on the show. Obviously, there's this convergence between the two worlds. We're also talking about this evolution where it starts with stable coins and tokenization, specifically tokenization of high-quality assets. High-quality assets could be treasuries, could be bonds, but it's also speculative high-quality assets like equities. First, you tokenize them. They end up on chain. Then, you put them inside of the DeFi protocols that are now resilient and secure and unlock all of this liquidity and composability. That allows you to create really really interesting, complex, and capital-efficient products like vaults. We've heard like I think you had Matt from Bitwise on. They're he's very excited about vaults. I think

we have Teddy from Bitwise in just a little bit. And so, vaults are something that every asset manager's dream is to have all of this creativity when they're structuring a product. Vaults provides that. The final frontier is AI-managed vaults where you can sort of rebalance these things, put in new collateral, take things out, have different parameters, all AI-managed. And so, there's this evolution. It all starts with tokenization, but as we progress through this, we end up with more assets on chain, and this ends up into our protocols, it ends up into our assets that are more crypto-native, and this is the evolution perspective of what we're what we're seeing, which is also this new finance ecosystem and this convergence.

>> Yeah. I think also, too, it at the base level, it starts with like that T+1, T+2 settlement, and explaining to them how it doesn't need to be like that. >> Right. Yeah. >> Cuz if they don't really care for things on chain, then it's like, "Okay, well, what you do care about is speed." And also, the 24/7 markets. Um and even with the Nasdaq, we're seeing them do I think it's like 24 5 right now. >> Yes. >> Maybe 24 6. They're not giving us the 7 days yet, but you know what is 7 days? >> Hyperliquid. >> Hyperliquid, yes. >> Yes, Jackie. She's going to get unboarded.

60 minutes in the show. All right guys, we're going to take a super quick break. Then we've got James, a NASDAQ listed public company talking tokenization and more guys. Quick break. Jackie's going to co-host this one with me and we'll be right back guys. Don't >> We get deep hop.

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Maybe we get deep. >> We get deeper. We get deep. You know we get deep. We get deeper. We get deep. You know we get deep. We get deeper. We get deep. You know we get deep. We get deeper.

We get deep. You know we get deep. We get deeper. We get deep. You know we get deep. You know we get deeper. We get deep. You know we get deep. You know we get deeper. We get deep. You know we get deep. You know we get deeper. We get deep. You know we get deep. We get We get deep. We get deep. We get We get We get deeper.

You know we get deep. >> All right guys, we are back at DC Blockchain Summit day one. We've got James Chang, the CFO at Canaan, talking Bitcoin mining, infra, energy. Here with my special co-host Jacqueline Melinek. >> Always a pleasure. >> And James. >> Yeah. Yeah, nice to meet you. >> Yeah, same here. >> And it's good to have this session with you, Andy and Jacqueline. >> Awesome, man. Well, welcome to Washington D.C.

>> Yeah. It's uh I've been here several times, but the weather here is lovely today. >> There you go. >> It's not a tornado today, that's a good thing. >> Yeah, it's not snowing, no snow storm. Yeah, very good. >> There you go. Well, James, Canaan is a publicly traded company in this Bitcoin mining field, but also into the energy and the infrastructure for data centers, for power. I'm going to start off with the straight question. Are Bitcoin miners pivoting to AI already? What is happening? I'm hearing so many rumors of Bitcoin mining companies and firms shifting to AI to power compute for the ongoing AI kind of super cycle. What's actually happening on the ground floor? Is that a trend

that you expect to continue? >> Yeah, I think uh the two business, Bitcoin mining and the AI cloud computing, actually is quite similar. We use the energy properly to generate value. Different value. One is for cryptocurrency, Bitcoin, and the other is for the food for AI. It's just like agriculture for AI. It's cloud computing. So, same thing. And I think the difference here is the two infrastructure is a little bit different. Because they use different machines, different hardwares, and also uh the level of requirement is different. Usually, data center needs

like 150 MW to start a big data center. But Bitcoin money is more flexible with small energy sources. So usually the investment starts from Bitcoin money. We see a lot of public companies they shifted to AI. But they on the other hand a lot of small companies and entrepreneurs they are entering the sector to buy more Bitcoin machines because they they can get the capex returned in the coming two years time with quite a big certainty.

Bitcoin money has the certainty to get the capex back. And then with the large large larger and the larger scale of their operation, they can also upgrade their mining sites to AI cloud computing. So I I consider that these two business is in one ecosystem and it's not a competing each other. It's just a one plus the other. So that's my personal view. >> In general in DC there's obviously a big focus on financial access and market structure for crypto and a bunch of these different firms. How does that kind of impact the large scale mining operations in the US?

>> You mean the Bitcoin price? >> Well, no, not necessarily, but maybe the the focus in DC on the front of like financial access, market structure, etc. How does that play a role in operations for major Bitcoin mining firms? >> Yeah, I think it's it's extremely important for Washington DC to make all kinds of policies related to our industry. For example, we we do need the whole industry development with a a very solid foundation for you know, for law. Like clarity, like all those things are very important for the industry development.

So we are waiting to see more exciting moments in the in the coming months time. And I think in this this industry's leader is definitely United States. US should always keep keep going in the innovation and then try to, you know, do a kind of regulation for the innovations and then make the leadership more solid. >> So, you guys have recently expanded into Texas as well. >> Yeah. >> Uh looking at sub 3 cents per kilowatt hour of power >> Yes.

>> Yeah. >> at that cost basis are you guys still are we still underwater on Bitcoin mining right now? I keep seeing charts on Twitter. Guys, for the this has been some of the longest time that Bitcoin mining has actually been unprofitable. >> Yeah. >> Where where are you guys at? Has it been a tough quarter? What's what's the kind of >> Yeah. >> Yeah, like what's the state of affairs? >> Well, to be very honest, we are currently still profitable doing Bitcoin mining considering the variable cost. And uh I think because of the energy cost is extremely low in Texas, like below 3 cents, >> Yeah.

>> we will continue to invest in Texas and we will continue to commit to Texas and other United States states. Uh you know, because the regulation here is quite consistent. You welcome Bitcoin mining and you consider this is important contributor to the grid. So, if that that continues the leadership of US mining will continue and we will be part of that. We will continue to invest. I think uh profitability perspective we look forward to future Bitcoin uh the the price could continue to go up. At that time, we will see uh our profit today is

not profit for future. It can be you know, maximized by the price going up. >> How would you kind of compare the demand between the US versus other markets like APAC, LatAm, etc. on the mining front? Is it regionally very similar or drastically different? >> Uh in the past, I think US occupies like a 40% global market. But uh recently, I I think it can be bigger. It grows faster, especially after this uh new Trump administration, you know, uh triggered a lot of new energy sources like nuclear. So, we we consider US market is developing faster than

elsewhere. We consider US will continue to be be the biggest market and uh even have bigger uh market share. >> Mhm. So, I've also done some research and and found that you guys are shifting towards self-mining versus hardware sales as part of the business strategy and economic strategy. What is the margin profile difference between self-mining and hardware sales for Canaan and kind of how did that decision come to fruition? >> Yeah, I think hardware selling is always depending on the price, >> of the ASIC or >> Uh the ASIC and the Bitcoin is so linked. The price >> Correct.

>> fluctuates. >> Yeah. >> And uh sometimes we have a strong profitability, sometimes not. So, if that's the case, that's the only business we have, the stock price could fluctuate together with the Bitcoin price. But if we add on the, you know, the mining side, we can see accumulation of the assets. >> Mhm. >> And we can see more stabilized uh you know, the profitability. >> 2,000 Bitcoin, almost 4,000 Ethereum, I think it is on your is on your books now.

>> Yeah. >> Yeah. >> Yeah, it's uh 1,800 >> Bitcoin. >> Bitcoins in our book now. Uh >> and we are very proud of holding that for a long term. >> All right. Canaan's been around since uh 2013, right? So, it's been almost 13 years, give or take, and you've been with the company for four or five, right? How would you kind of characterize the changes in the market over the past 5 years and then for the larger business over a decade? It's It's very uncommon for a lot of crypto companies to last that long, right? >> Yeah. Uh I think uh we started the business in 2013. At that time, nobody knows Bitcoin mining. It's just a very small industry and it's a new industry.

But now, it's quite organized by a lot of institutions and also a lot of individuals. So, it's a mixture uh with uh institutions and individuals joining the industry. So, from our observation, uh the US take the leadership and the global other countries also follows. It's closely linked to the energy business. I think 13 years ago, we didn't uh even think about the energy can can be helped by Bitcoin mining. Now, we know that because every location, if they have Bitcoin mining, they have certainty of consuming energy. And then the energy investor can invest in that location

even there is no other citizens to consume the energy. They have some certainty to invest. So, I think uh now the industry is growing into a new level, but it's still in the early stage. That needs a lot of contribution from the uh manufacturers like miners, everyone in this industry to help, you know, to develop it into a kind of normal normal industry. Normal industry means uh we can uh be very profitable for a long time and to be sustainable and then pay back to our shareholders.

>> When it comes to the self-mining part of your business, are you positioning this towards institutional players or is it more for retail and like the the OG Bitcoiners? >> Yeah, I think uh currently uh the self-mining uh is more for institutions. But I think the more and the more individuals are having interested to joining this section. It's not only the OG uh OGs. Yeah, I think a lot of individuals in United States, they showed a strong passion. After the ETF has become common for everybody. Some of them they they like ETFs, but some of them they consider the Bitcoins cannot be controlled by only a few institutions

or giant guys. They should be owned by every individuals. Everybody has the right to protect their wealth against the inflation. So, Bitcoin is a weapon for everybody. So, that's why we developed a kind of retail uh you know, mining machines and also a kind of heaters to help the winter time. The families can warm their bedrooms using that small machine and they can generate Bitcoins at the same time. That's something we want to continue the philosophy of decentralization to make Bitcoin be held by everybody.

>> Okay, James. James, um I don't know if you remember there was a pushback when Ethereum switched to proof of work because of the energy consumption of Bitcoin and then already now Ethereum and other proof of work networks, there was this big kind of pushback around a lot from from the Democratic Party as well as just folks who were environmentalists, really just pushing away from Bitcoin and digital assets, kind of put like just saying that they don't really contribute much to the world, but they contribute a lot of the world's energy. food. That happened. AI came and blew the amount of energy required to do compute out of the water comparatively to digital asset mining.

>> Yeah. >> Very ironic because AI is kind of like everyone's on on board with it. Very weird. Anyhow, that energy shift and expansion, the requirements and the the increased demand have caused a ripple effect in adjacent adjacent kind of like industries where the price of of sand and stock and memory has gone way up. Copper, uranium, and then like gold and silver and kind of like some of these like precious metals do slightly different, but there's a lot of these like different trades and different sectors really blowing up because of this energy and commute and compute demand.

>> Yeah. >> How do you think about this part of the investment thesis here? Not Bitcoin, not in the mining hardware it itself, but the ripple effects of the demand for compute consistently increasing. What do you expect to see kind of in the broader market as we continue to increase the demand for hardware for compute? >> Yeah, I think that's a very interesting question. I started in my career as a demand planner for Johnson's baby and for Mars bars for chocolate. So, I know usually the consumption is not a bad thing. If you consume a lot of chocolate, the chocolate factory will be very happy to see that.

So, the energy, same same. If you consume like energy, the grid will feel happy. And if you consume that energy in a kind of very organized, very certain way, that means your consumption can be calculated easily as a cornerstone of the grid. So, the grid can invest more to those stranded energy. Like the natural gas well, nobody takes care of, nobody use that's natural gas. So, in the earth a lot of energies cannot be used in the past. By the way, it's Bitcoin mining, now they can be used. No matter for in West Texas like the wind in West Texas, like the natural gas in Indonesia.

We entered a lot of energy sources human being never touched. So, with that assumption, I personally consider energy consumption of Bitcoin mining is worth. It helped people to develop more energy sources, not only for today, but also for future where AI cloud computing needs a lot of energy as their food. So, who helped the AI is Bitcoin mining as the early stage business to help them. And we will continue to help them.

So, from broader, you know, market perspective, I consider the hardware is continue to be needed by the energy companies, by the energy source owners. So, I have, you know, strong confidence on that. >> Then on the front of investors, what are they really interested in right now and how are you kind of working with shareholders to really bring it to the next level? Like all in, what are you talking about with investors right now on the front of shareholders and everything? Like what is the feedback you're getting when you do the quarterly calls?

What do they really want to see done, let's say, in 2026? >> 2026? >> Six. >> Six. >> This year, yeah. >> This year. >> I think our shareholders, they have different views. Some of them they want to have our liquidity stronger. They want they want us to sell all the Bitcoins. >> Oh, sell all the Bitcoins? >> mentioned to us if you sell more sell all your Bitcoins, that's also, you know, better to for for your value. But, we had a discussions internally, also in the board. We still want to hold the some of the coins and to make sure we have long-term assets uh accumulated for our our shareholders.

I think a different uh views uh especially in the bear market, people have the you know, emotion like feeling tomorrow the Bitcoin price could continue to drop. But, for us as a company going going through the past four cycles, we we've been through the bear markets many many times. >> Yeah. >> So, we know it's good thing in the bear market to accumulate more assets. So, in the next bull market, you will come back stronger.

>> Yeah. Yeah. James Shang, thank you for spending some time with Jacqueline and I today. Best of luck as you guys finish this bear market, get into the next bull, and continue to expand into Texas where energy is cheaper, there's more opportunity, and continue to scale into adjacent sectors like AI, like cloud computing, and continue to mine Bitcoin. Thank you, James. >> Thank you, Andy. Thank you, Jacqueline. >> Thank you. >> Great to see you. >> Cheers. >> You as well. Thank you. >> Thank you. All right, guys. That's James Shang. That's Canaan. That is Bitcoin mining.

Guys, we're going to take a super quick commercial break. We'll be right back. >> We get deep hot.

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Blockchain Summit day one. I'm here with my gracious special guest co-host Jacqueline Melinek. >> Hi. I'm I'm here. I'm still here. Hopefully you guys like having me on the show. >> And we've got Wasim Amjad live from DC Blockchain Summit, the co-founder of Vault 12. Wasim, welcome to the show. Welcome to DC. >> Thank you. >> Yeah, okay. Maybe starting at a high level, let's talk about like what Vault 12 is. We were kind of joking before we came on air that we're hoping that we don't die anytime soon, but kind of tell us the impetus for this and really why it matters today. Even for us young people.

>> Well, I think especially for all cuz all of the stories around people dying and then their assets not being available to their families are unfortunately the young people. So, everyone from the Melon Bank heir who did all kinds of stuff to make sure his crypto was secure. It was so secure that none of the family can get into the $200 million worth of of crypto that he left. And he died very young. So, yeah. I mean, the impetus comes from when crypto was first taking off with Bitcoin.

My CEO was at Andreessen Horowitz. He was part of the blockchain team and helped do the deal with Coinbase to get them funded. And he realized at the time that if Coinbase was successful, there'd be all these consumers that would have to deal with security of their their assets during their lifetime, but also what happens to their Bitcoin when they die. And so he founded uh Vault12 10 years ago. Uh it took us uh a little bit of coding work. Uh and we launched uh in 2019 uh in the App Store. So we're in the Android App Store and the Google App Store.

>> Beautiful. And what is the kind of product suite look like now? Walk me through like what it looks like to join this product and kind of like what this what this means for somebody who wants to protect their assets uh pass them down to their uh children or or grandchildren. What does this kind of look like, right? Because in my mind it's like Ledger, private key in a vault, buried like you know, just talk to me about what this looks like. >> Well, it's so it's different for different kinds of people. So for someone like you that's clearly been in crypto for a long time, it's all of the things that you described. But if you bury your Ledger, who knows if anyone will be able to find

it when they need it. >> you bury it, Andy? >> Yeah. Yeah. Look on our on our X. You'll see a little skit we did about burying uh Ledgers. Um if you uh put it on a Ledger, it can be stolen. If you use the backup services that many of these products have, um they could change the business relationship with their cloud providers and you're you're not you know, you're not able to access the private keys. So there are a lot of unintended risks of something that sounds super super secure, but it isn't. And then the other type of customer is someone who, you know, maybe their kids talked them into buying some crypto assets, but they're not crypto savvy in the way that you are. And they need a

product or solution that's very simple, straightforward, easy to use. We've all used MetaMask, and it's a horrible, horrible, horrible way of handling crypto, and hopefully that's all going to change with AI and all of those kinds of things in the future. So, we set out to build something that was very simple and easy to use. We've revved it three or four times now. So, it is very simple. It doesn't use any crypto jargon. You create a digital vault on your phone. You add in your crypto assets. You can make a video. You can do a riddle of what the seed phrase words are. You can put them in in a structured way. Um you have many, many options. It doesn't have to be in any one format. That

information, cuz it's just information at this point, is encrypted, split into pieces. There could be nine pieces. And you can send those pieces automatically to three family members, three friends, three business partners. And you can say, let as long as three people out of that nine say, "Okay." You can unlock the assets and use them and see the seed phrase or the private key. One of those people is going to be your beneficiary. So, if you're incapacitated, which is what happened during the pandemic the year after we launched, um or you're in jail, or you have indeed passed um some someone can inherit the

instructions and then pass them on to whoever's executing your your your will. And this is completely independent of what you sort out with your lawyers. >> What about the art aspects? I saw on your site it's Bitcoin, crypto assets, and art. >> Yeah, so I mean a lot of people, I mean, I think with cryptocurrency people buy a lot of different types of cryptocurrency. There's something new every year, and people go off and buy you know, there's new blockchains, they go off and buy those things. >> hyperliquid? That's That's the standard question they ask on this show.

>> personally, but >> Oh my gosh. >> But it's just struggling out here. I think when NFTs were in vogue a few years ago, um there was an emotional connection between whatever that type of artwork was. I have four pieces of a Banksy. I'm not selling those. Not worth anything right now, but you know, I'm holding on to that, and I want my niece and nephew to have those. Um and so those are registered on the blockchain, so they are in a wallet, and so they can be put into the vault in exactly the same way as Bitcoin or Ethereum or any other crypto asset.

>> Yeah. What's it Do you guys offer um like insurance as well? Like what is the What is kind of like like My mind goes to life insurance, but I I'm not sure if you guys do that as well. >> Uh we don't do life insurance. We are basically the transportation mechanism from the owner to the beneficiary. >> Okay. >> Uh and and we just focus on that, and that way you can have whatever law you know, law firm help you with your overall estate. >> Um but it makes it very easy to get the instructions to the right >> Yeah.

>> Yeah, maybe someone that's technically savvy. >> Yeah. Last thing for me, when you guys are building out the kind of suite of products, the vault, the application, what is the kind of user reaction and growth story here? Like you know, you guys started with a product, and you said you you kind of had a lot of iterations on it. What's been the traction in the user story as a result of the product iterations, and kind of what where you guys at from a a numbers perspective? >> Um yeah, so we have about 400,000 customers who've downloaded the app and are using it, which is great. But it's a drop in the ocean, because we're not yet at the point where we have a wave of consumer crypto. We're waiting for this

clarity act that everyone's talking about today, um for that to come in and then hopefully the banks will come in and give people bank accounts with crypto, mortgages with crypto, all of those kinds of things. And then people are going to start thinking about, "Oh, but I've got to pass these on. How do I do that?" And so that's that's going to be a complex problem with many different ways of doing it, but we will be right there to help people. >> Beautiful. Waseem, thank you for joining us, man. Quick session. I appreciate that. >> Thank you. >> It's been great. Ladies and gentlemen, we'll be right back with a another session with Adam, the head of public policy at Chainlink. Coming to the the end here, guys. Just about an hour left. Stay tuned. Stay Stick with us.

See you guys in a sec. >> We get deep heart.

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at day one DC Blockchain Summit. We've got our lovely co-host Jackie stepping in for Andy. And we are back with Adam from this morning. Welcome back. Thanks, man. And woman. Uh Good to be Good to be We're all here. Good to be back again. It's been a a really action-packed first day. >> Yeah. Awesome. Well, give it Give us a bit of a recap on day one. We've been locked in here, so we haven't caught any of the panels. >> out there. What are you talking about? >> Yeah. A lot of energy, great crowd here, cutting across all of crypto. Yeah, of course have a lot of lawyers, a lot of policy types, a lot of people from the Hill, regulators as well.

We heard from the Comptroller of the Currency, Comptroller Gold today. Very interesting. And then upcoming we have remarks from Mike Selig and Paul Atkins. I think that's why you're seeing such a big crowd stay so late as you know into day one of a conference. Big crowd still out here, so a lot of energy right now. I'd say in terms of things that are percolating amongst the crowd, not necessarily on stage, is I'd say some increased energy and chatter about potential deal market structure on yield. So, I think that's something that everyone is hopeful for sometime this week, next

week. So, devil's in the details. Deal is in quotes because not sure who will support it, but at least potentially something to look at. >> Yeah. Which would be a huge accomplishment at this point. >> Well, that's incredible because this is something that, you know, obviously it's been on the table for a long time. Earlier we had Solman from Plume come on tell us that, you know, deals on yield are very very close. There's still this question of the the ethics that the Democrats are pushing back on.

He gave the Clarity Act a 25% chance at of passing overall. >> Which percent? >> 25. >> 25. >> Over Over under? Over or 25. I'm going to go over. >> Over, okay. >> Now, I mean, as you guys are probably hearing me, like it vacillates intraday here. So, right now, based on what I've heard and just some of the discussions going on on 505, Title III, um the BRCA uh uh provision, um I think I'm going to go 45, just under 50, but definitely feeling stock up on market structure right now. Um but, I agree with you.

I think outside of the substantive issues of yield, DeFi, 505, um Title III, I think there's two mainly political issues, ethics and the commission appointments for both the SEC and CFTC, that are really important part of this that aren't really something that we're all It's not something we're discussing on the Hill. It's mainly in the political sphere on both of those. I think I put ethics there, um as well as the uh the potential appointments, the Democratic appointments to both.

>> What is the kind of energy you're feeling or like is there tension in regards to the stablecoin conversation on the yield front? Is it still tough because I I've read reports in the past that it was kind of contentious in the room and has it alleviated at all? >> Um I I think two things are happening. I think one, the White House is weighing in very, very hard on this issue to get this bill done. And I think two, uh there's fatigue. And I think we all feel market structure fatigue. I I don't know how many more interviews can you guys do on market structure before like your heads explode?

>> And then that's it. >> So, I think between White House pressure and some fatigue here, no one wants to be seen as blocking market structure, a a White House marquee uh uh item here. So, I think there there's that. Um So, I think the short answer is I think it is improving in terms of a dialogue, but the banks still seem like they want to uh hold on here um and not and not compromise at all, which of course is odd to me given that if if we keep the status quo exchanges can continue to pay yield >> Yeah.

>> on static USDC or stablecoin reserves. So. >> Uh Adam, you were on earlier. You you set the tone for the day and we had a a string of really really interesting conversations. Um I'd love to get your number one takeaway uh from day one. It sounds like something is brewing underneath the surface on clarity. Uh anything else on day one and then I want to get your expectations for day two. >> Um I think uh having the controller of the currency here is really really important. Um Bank regulators in general are key here, but the OCC on several fronts has become a critical player uh both in terms of the charters

they're approving uh under their national bank authorities but also their proposed rulemaking on the genius act for how they propose to treat yield. So, I'd say the OCC's involvement here today sticks out. They've really become a critical player on several fronts in the crypto space. Not something you normally hear from a bank regulator. Usually maybe above the fray a little bit, but the OCC is squarely in it when it comes to crypto now uh for better or for worse. I think we're seeing that uh on both sides. Maybe uh approving a lot of crypto native charters. On the other hand, uh putting forward a proposed rulemaking

that uh in many ways prevents the payment of yield on stable coins. So, I'd say the OCC's a a highlight for me. Yeah. >> Is there anything specific in market market structure that is really important to Chainlink that gets across so that you guys continue to like grow to the next level? >> Yeah. Um Chainlink's really a we're we're effectively a software company that allows any entity to integrate with blockchain. So, for us, we're not an exchange, we're not a layer one, we don't make NFTs, we're not a wallet.

So, we're really in the integration business. So, for us, we're working with DeFi, which has kind of been our roots. We're working with TradFi, we're working with governments, we're working with CeFi. So, for us, it's really just getting market structure done. Our view is that market structure is going to be a be a catalyst for the entire industry. So, our hope is that this thing gets done and all boats rise here and there's more work for everybody. >> Yeah. >> Last question for you, Adam. Day two coming up tomorrow, what are you most looking forward to?

>> Uh I mean a a little a little bit kind of like playing in our own lane here. Our general counsel, Ben Sherwin, he's going to moderate a panel with Angela Alsobrooks, who is the key Democrat on the yield discussions along with her Republican counterpart Tom Tellis. He'll be moderating a fireside with her and Senator Hagerty, obviously a big player in several areas, particularly on genius. So, you can talk to him about genius implementation and the OCC's proposed rulemaking tomorrow. Definitely a much heavier Hill day. Today, I feel like you had the OCC, you have the SEC and CFTC coming on now. So, I think really hearing the Hill, hearing from the Hill

tomorrow is going to be where it's at. >> Appreciate it, You know, Atkins and Seeliger getting out there now, so we'll let you let you catch them. >> to go catch some of it. >> Yeah. >> Thanks for having me on again. You guys are great. Keep it Keep it going. >> Well, thank you to Chainlink and we'll we'll see you again tomorrow. >> Thank you all. >> Thanks, Adam. All right, guys. Jackie? >> We're still partying. >> We're still We're still here. We're still chugging along. No, you're still here. >> I haven't said the wrong thing. I've only said the right thing. >> Not canceled yet. Um We're going to get our friend Teddy in on in just a few minutes. First, let's get Peter, uh who's working on making the Federal Reserve quantum resistant. Felt like

this was pretty pretty cool. And we were talking just a little bit behind the scenes. He's a new addition to the docket today. >> Okay. >> Uh so, we'll we'll get We'll get Peter in for just 5 minutes or so, and then we'll get Teddy from Bitwise. Uh and uh and that'll be That'll be how we close up day one. Jackie, Adam's the man from Chainlink, isn't he? >> Yeah, he is. >> Have you guys had a chance to chat before? >> Adam. I've been on the Chainlink team for a long time. >> Adam's great. >> Yeah, they're they're wonderful. Yes. >> Peter. >> How are you? >> So nice to meet you.

>> Peter, I'm sorry. >> Jacqueline. >> Peter, welcome to the show. >> Thank you very much. >> Absolutely. Um I just mentioned to Jackie we were chatting a little bit behind the scenes. Making the Federal Reserve quantum resistant. Maybe you could tell us a little bit about your background and how you ended up here helping the Federal Reserve with quantum. >> Well, it's great to meet you both and I'm happy to be here at the Digital Chamber. And um I'm here with the UK US uh crypto alliance. So, we have members of the House of Lords and the House of Commons here from the uh UK Parliament.

And as part of that, also, I'm here as a chairman of a board of a startup company that's focused on uh uh crypto security. As cyber security against quantum computing. So, that's a big threat coming up in that quantum computing is going to invalidate all the current cryptography on classical computing. So, companies are very worried about how to protect themselves against quantum computing cyber attacks. So, what's happening now are bad actors all over the world North Korea, other hostile countries are copying all companies data and they're

storing it because once quantum computing comes into play, they're going to be able to break all of the cyber security things that have been put in place prior to that. So, we've got a solution and we're working with our goal is to work with the Federal Reserve and the Treasury Department and the SEC to work in their sandbox to test the solution so that they can help all of the companies that they work with, all of the clients that they work with protect themselves against quantum computing cyber threats from these bad actors. So, that's and the solution uses a

a kind of a digital certificate. So, we shard some of the technology and create like a digital certificate that's stored in a vault. So, and it's stored offline not on the network where it can't be accessed and attacked by quantum computing. So, that piece of it and then when when we want to release it to the network, we combine it with our digital solution to then release it to the network so that it can be exchanged between different countries, between companies, etc. to to make the economies work. And it's very exciting to be here.

Um we met with uh senators uh in the Senate about this earlier today. And we're looking forward to bringing this forward. Again, to protect the United States especially and all of our economy and our companies who are worried about the uh quantum computing cybersecurity threat. >> Has this been a threat already today or is this more like a hedge to get ahead of the potential threats? >> It's a great question. It's It's It's It's a threat in that bad actors are already copying data. So, they're breaking into networks and they're copying data from companies, from government agencies that have all been uh encrypted under classical computing models. So, the

threat is ongoing. As we saw I I think we saw recently Iran just attacked uh a company in the United States and wiped out all the computer laptops of this company. You know, what's what's going on. So, it is a current threat in that they're already getting ready taking all this data and storing it so that when they do have quantum computing uh capabilities, they can unencrypt all of that data and then use it for uh you know, bad purposes or dangerous reasons.

>> Is there a specific part of like blockchain technology you guys are using on this front or how does it operate? Now, without getting too technical, but I'm just curious how that works on the back end. >> So, that That's a great question. And the The way we do it is we The only way you can protect or one of the most efficient ways to protect against quantum computing attacks are to take some of the uh product keys and shard them and put them on a certificate. Just like a uh treasury uh certificate. And it it creates it offline, so it's not up in the cloud, it's not on the network, but it's in a vault as a certificate. So, even if the

quantum computing attacks what's online, they can't compromise it because part of that key is stored in a vault with the certificate. And then we have a technology that then combines that certificate with the digital asset to then move it back up to the network to allow the transfer money and and goods through the system. >> It's interesting. >> Um, last question that I have for you, Peter, is that obviously we know quantum security it has the potential to make radical changes yes to the way that a lot of our system works, the entire world. The pushback is that we just keep kicking the can down the road.

>> Exactly. >> This might be a 20-30 year thing. How quickly do you anticipate quantum security becoming a problem in in in the world? How quickly do you think that will happen? >> question. So, in in the area of quantum computing, there are a few major players. Uh, Google is very advanced with their quantum computer, IBM is very advanced with their quantum computer, the US government, and also China. So, it's a strategic arms race on quantum computing to see who can get there first. And obviously, you know, different countries or different players are going to use it for different reasons. You

know, some good, some bad. So, the answer to your question is not exactly clear on an exact date, but what I can tell you is these big players, the scalers if you will, just like they're scaling for AI, they're also focused on the area of quantum computing. So, it's just as important and even more important. I I just to give you an example uh with quantum computing, you can do a trans- a calculation that would take a classical computer a million years to do in a matter of seconds.

>> Right. >> So, I mean, that and that's the exciting frontier that that I'm very excited to be involved with with quantum computing. >> Peter, thanks so much for coming on. >> very much. >> edition, glad glad we can make it. >> Thank you again. >> Yeah. >> Thank you. >> We'll see you next time. Thank you. >> Yes, thank you. >> All right, guys. >> Yeah. >> Quantum. How much have you been thinking about quantum? >> I've written a few articles on it, but I think I don't know it well enough. So, I maybe my questions are a little high level, but maybe the audience is also high level with me, okay? >> I think I think we're all high level when it comes to quantum these days. Um we're going to get Teddy from Bitwise up on the show. He's going to be our last

guest of the day. Jackie, I think it's time that we have to bid you farewell. >> All right. >> Unfortunately. >> You have fun with Teddy, and I'll cheer it on from the sidelines. >> Okay. We're going to have your partner Eleanor on the show tomorrow. >> Yes. >> Um any closing thoughts for the audience before you go? >> Um I think in general, we talked about this when I came on before, but like the energy in this room is very optimistic, uh very sophisticated. And in general, the guests we have brought on have brought in, I think, you know, a a new fresh perspective in general. So, overall, like no notes, good stuff. Uh and we'll see how tomorrow pans out.

>> Let's keep it up. Day one success. >> Yeah. >> Finish strong. Jackie, thanks so much. Guys, quick break. Don't go anywhere. We'll be right back with our final guest of the day, Teddy, founder of Bitwise. >> Yeah. >> We get deeper.

We get deep. You know we get deep. We get deeper. We get deep. You know we get deep. Baby, you know we get deeper. We get deep. Baby, you know we get deep. Baby, you know we get deeper. We get deep. Baby, you know we get deep. Baby, you know we get deeper. We get deep. Baby, you know we get deep. We get We get deep. We get deep. We get We get We get deeper.

Baby, you know we get deep. We get deeper. We get deep. Baby, you know we get deep. We get deeper. We get deep. Baby, you know we get deep. We get deeper. We get deep. Baby, you know we get deep. >> All right, ladies and gentlemen, we are

live day one of the DC Blockchain Summit. Our final guest, last but certainly not least, Teddy Fusaro, the president at Bitwise. Yeah. Rob, before we get into Teddy, how you doing? >> I'm doing great. I'm excited to get into Teddy because we've had Matt, we've had Hunter, and it feels like we're completing the Bitwise trifecta. >> Okay. So, you're So, you're done with the policy conversations. You're ready to talk some institutional flows? >> I am ready to talk some institutional flows. >> do that, guys. We got Teddy in the building. Let's give him some love. Let's go, Teddy.

>> Teddy. >> How you doing, man? >> I'm great. I am I'm wondering how Rob is doing because I know that this is a very policy-heavy day, very policy-heavy event, uh and getting into some of those details uh can be uh at times tedious. >> Rob loves it. >> I'm having a great time. I actually mentioned earlier that there is more innovation happening in the policy world that I'm seeing from some crypto native L1s out there. It feels like we have scalable, affordable, fast, secure blockchains. We're kind of like not done, but we did a lot of the thing. Now a lot of work and innovation is happening on the policy front. That feels like there's a lot of That's where the action is.

>> Yeah. I hear you. And look, it's important. It's very important. I mean, I every year since Bitwise's inception, so starting in 2018, we've done a survey of financial advisors, thousands of financial advisors every year. And up until 2024, the main thing, the number one thing holding them back from investing client assets in crypto, was regulatory clarity. So, I think like there's there's there's a there's a moment in DC in particular where we feel like we've kind of like gotten to the on top of some sort of plateau or crossed like a Rubicon of sorts because we've had so much progress on the regulatory front.

But it really does matter. It matters not just in crypto, it matters in every industry. You need to be able to particularly for early stage companies, you need to know what the rules of the road are going to be. So, it's important to be here and I'm glad you guys are here. >> Yeah, absolutely. Teddy, president of Bitwise, carries a lot of gravitas. Such a role. Can you tell us how you ended up as president of Bitwise? >> Yeah, sure. Well, thank you. I think that's that's very kind of you, very kind. My my career, I started in traditional finance. So, I spent a couple of years at Goldman before getting into the ETF business generally. And so, I got into the ETF business in the early days of that industry, before ETFs were a thing.

Like, I think it's easy for a lot of us to look at ETFs now. They're the building blocks of like almost all wealth portfolios now. They're In In some respects, ETFs are actually the the the biggest financial innovation so even a fintech innovation of the past 30 years. Think about how huge ETFs are. 15 years ago, it was not assumed that ETFs were going to be as dominant as they now are. And so I was sort of lucky enough to get early on the ETF trend.

I spent better part of a decade in early stage ETF issuers. After selling one of the companies that that I worked for in the ETF space was when I I fell down the crypto rabbit hole, got bit by the bug. I met Hunter who you guys had on the show when Hunter was was starting Bitwise and I wanted to be in crypto. What I knew how to do was build asset management companies, asset management businesses, and that was in that was in 2017. So I've been been working with Hunter and Matt who you guys have had on the show since then and building building Bitwise. So that's that's the story.

>> Well, Teddy, we brought you on today to just kind of have a general conversation about what's happening behind closed doors in the asset asset management and kind of capital allocation space. Let's just start super high level. There was a news report today that I think actually Frank tweeted about that said that institutions and banks and firms are now adjusting their crypto allocation from 2% all the way to 7% recommended from RIAs, other other you know, firms. Where we at as far as asset management space in terms of recommendations of crypto exposure? Is that 2 to 7% what you're seeing? What are you hearing? What's the chatter kind of behind the closed doors?

>> Yeah, so the the the one thing I would say for starters and I and I I know that crypto people don't love hearing this. >> Okay, great. Well, let's let's hear it. >> But I and I talked about this on stage earlier, it's still very early in the process. Um going back to the second half of 2025 was really when we started to see the large platforms that host most of the wealth that is advised in America. Uh the second half of last year was really when those platforms started to approve Bitcoin and crypto ETFs to be available for their advisors to invest in on behalf of clients. And so like you say behind closed doors, this is a this

is a little bit of a window into how that works. Like in order for a financial advisor who runs his or her business on Morgan Stanley or Merrill Lynch or Wells Fargo or UBS, think about the large broker-dealer platforms where most of the mass affluence wealth in America, the doctors and lawyers and dentists who have a financial advisor that works on one of these platforms, there is uh there is a centralized gatekeeping process at each one of these places. And in in less than until a product goes through that gate, they won't be put into the portfolios of

those clients. And I think that the second half of 2025, really the fourth quarter and the beginning of 2026, is really when that approval process started to really go through the process. And the the reason I say crypto people don't love to hear this is that it's early on. >> Right. >> In in that in that process. Like it it takes a while for these things to work their way through the system. And what is what is the like the the blocking and tackling of this process looks like?

It now means that for these platforms that have thousands of financial advisors across America, someone who who manages a crypto ETF, a Bitcoin ETF, an Ethereum ETF, a Solana ETF needs to go talk to that each one of those advisors and say, "Hey, here's why having an allocation, like you talked about Frank's article from this morning, 2%, 1%, 5%, here's why having an allocation makes sense." And then the advisor is going to want to talk about it. They're going to want to study it. And so it takes, I think, years for this to really unfold. And I think we're in the beginning of that

process now. So I think it's a long >> Yeah. Is this the same way that the ETF innovation unfolded on mutual funds and ETFs? Did it start out 1%, 5%, 7%? How similar or different is the parallel of the ETF business to the digital asset business? >> Great question. I think it's very similar. So like something that a lot of ETF aficionados, like Matt Hogan, who you all had on, our our chief investment officer at Bitwise, was one of the leading lights of the ETF movement early on before ETFs were widely accepted. At that time, in in the early 2010s, there were people who said that

exchange-traded funds were financial weapons of mass destruction. And it's a it's very similar >> Sounds a lot like crypto. >> Right? Like it's very similar. And it's, you know, it's not all that different from from any new technology, frankly, right? Like the horse and buggy proponents of the horse and buggy said that automobiles were the most dangerous invention, right? Like it just people are resistant to this kind of change. And from a very early phase in ETFs adoption, you could see that they were eating mutual funds, but but it it was going to take a decade or two >> Yeah.

>> to actually occur. And so I think that this is the way. Like uh you know, I was on stage earlier we were asked the question like, "Hey, what's next?" I'm very excited about what's next, but I also think that we need to as an industry be aware that change it it's rapid, but it does take time for it to work its way through the system. And I think we're in the early innings of that and it's I'm very confident Bitwise is very confident that that is what's happening. >> Yeah. And so one of the ways that these you know, types of folks who are yet to be exposed to this asset market get their information is through RIAs, through their through their advisor. And as you said, we have a process here with kind of the advisors actually studying, learning, making a pitch, being

confident in it, and then actually going and implementing that with their clients, and building a portfolio. One of the other ways that these folks get their information is through kind of like mainstream media. >> Mhm. >> Wall Street Journal, Bloomberg, Yahoo Finance, these types. >> Yep. >> Over the last 2 weeks on the weekend these news sources had a completely new story. >> Right. >> Oil futures trading 24/7 on the weekend on this platform called Hyperliquid. >> Right. >> Right. >> And so for the first time ever, these folks are reading about this idea of 24/7 tokenized commodities trading.

I can't imagine what they're thinking. Have you had any conversations with folks in this kind of camp who are like did they call you up and say like what's happening? Like like yeah, I'm just curious. >> This is Yes. So it it's kind of funny actually. >> Yeah. >> Most Friday nights when I'm uh not quite wrapping up work for the week, I'll look down and it'll be like 6:00 at night. And I'll tweet. And I'll say and some of my the followers that I've had for a while will get a kick out of this. I'll say, "It's 6:30 and the stock market has been closed for 2 and 1/2 hours.

In crypto, it feels like it's the middle of the day, right? Bitcoin is still trading, the blockchain is never down, Ethereum is still trading, Coinbase is still ticking, Kraken's still ticking, and we have people who are still putting orders in. It seems crazy to me, and it has once you work in crypto for a long enough time. I've been at this since 2018. It seems crazy to me that the global financial markets shut down mid-afternoon, late afternoon on Friday. Doesn't it? >> Yeah. >> Like, what are we doing here? The internet doesn't shut down. The the the the stock market shuts down. Why?

Because like people have to sign off from work? It's banks close for the week and then it takes longer to send money. It's uh it's just not like the financial infrastructure has not caught up to the reality of the available technology. >> Yeah. >> And so for a long time I've had this view that it's just kind of crazy that this is what happens. The things just stop. And now if you want to trade risk on a Saturday night, the only thing you could trade was Bitcoin. And I think with Hyperliquid and the substantial uh progress that they've made with listing new things like oil futures, that obvious future is starting to become recognized by the rest of the world. The

Wall Street Journal, Financial Times is like, "Oh, you can trade future You can trade oil futures on Hyperliquid on a Saturday?" >> Yeah. >> And the answer is yes. And it reminds me of your your your your question, Robbie, is like, well, like is this going to take a long time to develop or what? And like from as a like entrepreneur and technologist, I feel very impatient that it hasn't happened yet, but it also seems very obvious to me that like the future's here, it's just not evenly distributed, right? Like this is This is happening, it's just not happening as quick as we think it should.

>> Yeah. Yeah. Yeah. Another thing that I wanted to throw your way was this valuation conversation. So, I think a lot of the industry went through this kind of era, like let's call it 2017 to kind of 2025, where the valuations were not effectively compared to traditional markets, public equities, or other companies. It was kind of like we're living in this Metcalfe's law L1 network effect, where there's this user growth, we have these transaction fees on these base layers, they're powering the future of the internet. Ethereum's trading right now, I think like 400 to 500 billion or something in that range.

Bitcoin obviously quite a bit higher. And so, you've kind of got these little carve-outs for Ethereum and Bitcoin, but the rest of the market, the valuation hammer is being struck on them, because they're looking at hyper liquid, but really they're looking at traditional equities, and they're being compared on a revenue basis, on a PDE earnings ratio kind of a framework, and it's new, and it's different for crypto. When you're talking to institutional investors, clients, high net worth, are they thinking about crypto assets in the similar bucket as traditional equities and traditional companies? Has that kind of shift happened in their mind? Or just kind of talk us through what that valuation puzzle looks like from your perspective.

>> Great question. Important. Comes up, as you can imagine, in many of our conversations with financial advisors. I think the best person to follow on this, I'll talk my own book, is Matt Hogan, who's written written eloquently and at length on these things. I would say that um Bitcoin sort of stands alone in in this in this category for the time being. Bitcoin in the professional investor set, financial advisors, institutional allocators pensions foundations endowments, it sort of has its own story that can be differentiated from the other blockchain tokens and assets. I think the emerging

store of value, digital gold, supranational asset that can play this role of existing outside and on top of the existing financial system sort of gives it this unique position where it is digital gold is not an analogy that a lot of people love, but the idea of being a digital store of value or emerging storehold of wealth is is the narrative and valuation framework that gets applied the most.

And I think in that light, the the most reasonable thing that we see people do is compare it to the market cap of gold. >> Right. >> And so you're you're you're still in a high single-digit relative to the to the to the total store of value market for gold, and I think that is the the the the best that we've seen and the one that is most evenly applied. Um it's also interesting that you can look at that and and and look at what the gold market cap was when gold ETFs launched in 2004, and you can extrapolate some pretty ambitious potential growth numbers for

for Bitcoin. If you if you if you assume that the the store of value market is going to continue growing the way it has in the last 20 or so years, and you also assume that Bitcoin is going to continue expanding the percentage of the pie that it gets, you can get to some very bullish price assumptions for Bitcoin. Um, and so anyway, we'll we'll set Bitcoin aside. I think for things like Ethereum and Solana, I think is where you see more additional work being done, but still not as mainstream as Bitcoin. And I think there you see people consider investors consider it as like um you have to think about it as almost a high-growth

software high-growth high-growth technology. And you do want to look at things like fees earned by the protocol. Staking rewards is also very interesting. Obviously, Solana and Ethereum are both proof-of-stake blockchains. So, you have some sort of baseline that you can earn if you stake your assets, um which I think investors find very compelling. Um, but then taking those metrics, so to fees earned, throughput, transactions, applications, you have like a little bit more of a of a venture lens that you can look at it through, but then a tech software investor lens that you can look at it through. It's not perfect, but you do have revenues or

or something comparable to revenues when you look at on-chain fees, and that's where we see away from Bitcoin other blockchains, there's some more of that type of financial analysis being applied. >> Yeah. There There's a very provocative headline that gets tossed around, which is that there's more than 21 million Bitcoin. With an asterisk, the asterisk is that there's synthetic products, ETFs, derivatives, digital asset treasury companies where you're laying out a valuation heuristic that is very compelling. People want exposure to these things. When you are talking to asset managers and speaking about the institutional capital flows into this industry, where Where you see those flows landing?

Is it primarily in the spot assets themselves? And if it's not, if it's in this synthetic derivatives category on top of the spot assets, how dilutive to the spot assets are those contracts on top? If we're putting into a treasury company or an ETF, how complementary or dilutive to the overall industry of that asset is that derivatives product? Where are you seeing the institutional capital flows? >> Yeah, it it comes up a lot. Primarily commentators who have spent a lot of time in crypto and in Bitcoin, but have not spent a lot of time in financial products. And so what we see, what I see, as I told you at off the top, my

background was initially in in in traditional finance. I spent a lot of time in derivatives product manufacturing. I Some of the the the derivatives that I worked on were options, futures, total return swaps, volatility swaps. And what I really see is the financialization of Bitcoin through the ETF. And what you have is you have Bitcoin entering the traditional financial system. And what you need for an asset to be in the traditional financial system is you need the you need the participants in that ecosystem to be able to hedge risk.

So, hedging risk is usually being able to go long or short with a variety of different instruments. And so when I want to when when you want to buy Bitcoin, there may not always be someone who wants to sell it to you at exactly the right time. So, a market maker may need to step in to sell you that Bitcoin. That market maker doesn't want to get short Bitcoin. So, he wants to hedge that exposure. He or she wants to hedge that exposure at the same time. So, you need these dynamic abilities to go long and short at the same time so that liquidity can be provided to people who want it for these these assets that exist in the system.

I think that ultimately though, the thing that people miss is that if you have more people buying Bitcoin than you have selling Bitcoin, >> Yeah. >> the price is going to go up. >> Yeah. >> If you have more people selling Bitcoin than you have buying Bitcoin, the price is going to go down. In the times at which we hear the most complaints or dare I say conspiracy theories about Bitcoin and and and the derivatives market being too large, um it's not when the price of Bitcoin is going up.

>> not. >> It's It's It's only when the price of Bitcoin is going down. And the reality is Bitcoin is emerging as a potential store of value asset. It's a fixed supply. It's It's It's whenever there's more sellers than buyers, it's going to go down. And we're we're We believe and our investors believe that there will be continued volatility in the market. Bitcoin will draw down periodically as it has over the past 6 months. Um and we just think that that's a natural part of the process.

>> Yeah. Thanks for debunking our bear market more than 21 million Bitcoin thesis. >> was just got tossed around a bit. >> You mentioned the emerging volatility that's, you know, been happening in the digital asset space for a while. Robinhood actually makes about $4 billion on their options product per year. They offer options to traders. They do a lot of really insane options. Robinhood basically fills their orders, you know, buys puts, sells calls, does does, you know, intricate options market market making basically.

The crypto and digital assets options market though is kind of dominated by a couple players and also significantly smaller. >> Mhm. >> What is Bitwise's your to bring the options market as a core product for your clients and and for your business line and to capitalize on that if if if Robinhood's doing 4 billion, there's no reason why you guys can't be you know, chipping away at that in the digital asset space. What's the plan there? >> Yeah, congrats Vlad. 4 billion. Nice. >> That's nuts. >> Um, we actually have a growing part of our business um is a separately managed account business where we have uh investors who have an existing large exposure to primarily Bitcoin, but

sometimes other crypto assets and they want to work with us to develop an options strategy around that core holding. And so those investors could have a variety of different financial goals relative to their Bitcoin. So they may have uh they may have a uh uh I'll use round numbers, $100 worth of Bitcoin and they may want to hedge their downside risk. So they may say, "Okay, I'd like to work with you Bitwise so that you could create a a a downside hedging mechanism so that if Bitcoin drops below $85,000, uh sorry. It's say below. We'll we'll we'll take it to current prices. We'll

say if yeah, if Bitcoin drops below $65,000, I want you to limit my downside risk there." We may have other investors who say, "Hey, uh I've been long this Bitcoin for a very long time. I'd like to uh I'd like to sell some options. I'd comfortable selling my Bitcoin if it rises up to $90,000 again and I'll sell call options to earn some premium on that in the meantime." And that's just like a a small sample of what you can do in the options markets and a little flavor of like the kinds of strategies that investors are interested in in having developed for them that that Bitwise can help them with. It's It's

one of our the fastest growing parts of our business and one in which investors are becoming Bitcoin investors are becoming increasingly sophisticated in thinking about how to do these things. The other thing I'd say is that this market is now we talk about like the financialization of Bitcoin via ETFs. This market is now increasingly liquid in the traditional financial markets because the options on Bitcoin ETFs are deep and liquid as well. It can be a little harder or has historically been a little harder to get this exposure on a spot basis in the US at least because you need to trade on these derivatives trading venues like Deribit,

but now under the new administration I think those are coming to the US soon. And so there's a variety of ways that you can work to implement these. There's also a lot of different different tools that investors are interested in using options to hedge or manage their exposure. >> As we financialize this asset class and it grows in maturity and we tokenize more of these assets so that they become composable with these mechanisms and these tools, Matt Hogan was very excited about this vault complex. >> Yeah.

>> I'm curious how important the vaults are to Bitwise's business going forward and because we're in DC, what are you looking forward to from regulators if anything in order to fully support vaults in the next few years as a primary mechanism for this asset class? >> Yeah, it's a big question, but I think it's an important one. I think that we're we're in the early innings. So the things that you you you you asked about specifically was vaults, but I would I would extend that out a little bit to vaults tokenization perps.

>> Yeah. >> All of these things when when you like when you when you think about them bigly and you remix them together they can replace a lot of the existing financial infrastructure. And I I I kind of I separate these two things a little bit. Like we talked a lot about Bitcoin, Bitcoin hedging, investing in Bitcoin, talked about Ethereum, talked about Solana. Those are the assets that you can invest in, that I am bullish on, that Bitwise is bullish on. We think there's a uh uh a long-term bull market play there for the prices of those assets and they're worth considering as an investment in

your portfolio. This other topic I think of as slightly different. This is This is technology based on the underlying blockchain along which those assets ride and reside, right? And I think that that technology as a financial technology is is 10x better than what we currently have. And and and and I think that like the scale of disruption is only starting to be realized. Like vaults when you think about it can make programmatic and replace a lot of what is done in asset management right now.

It's not going to happen tomorrow. Like I'm not like a doomer like an AI doomer. Like we're all going to lose our job because of AI. But like if you really like take out a notepad and start like scribbling around with what this technology can do, can simplify ETFs, can simplify mutual funds, it can make them transparent in terms of how returns are calculated. Hedging with perps, tokenizing exposure, getting leverage with perps, that disrupts Wall Street in a big way. Like like like Wall Street banks, prime brokerages business prime brokerage businesses are $40 billion revenue a year business. Forget the four that Vlad does with the options. 10x that, right?

And and that's largely leverage and shorting. Now, you can replace all that with perps and tokenized equities. So, it's a big it's a big topic. >> Yeah. Man, I don't know how deep we want to get into Vaults. We're going to wrap up here, but I think RIAs and curators of Vaults look very similar, and I think there's going to be some some issues there because they look so similar, and they all operate in a very very similar capacity. Yeah, the SEC is kind of starting to get involved, but they haven't quite figured it out yet. Still a bit of regulatory arbitrage left, but the Vault curator who sets the parameters of the strategy that the assets get deposited into they're very similar to an investment advisor.

>> Yeah, it's a good point. I think, you know, we we we we sort of started the conversation with saying we're not going to veer too much into regulatory policy cuz it's a little dry, but I think this is part of where it's actually interesting, right? And I think that's part of why everyone who's building in crypto is is so excited about the current administration. We're we're sitting outside of a room right now where the the chair of the SEC and the chair of the CFTC are giving a joint panel right now. >> We should probably close out. >> if that's ever happened before. >> They just issued guidance two times in the past week where they're working together on initiatives relative to crypto. In the prior administration and in the one before that, there was

actually like a there was an antagonistic like like like turf war between the agencies about who would would would be responsible for jurisdiction over these things. These are These are new technologies that are complicated that have, you know, don't fit neatly within the rules that were written 75 years ago. And what we need is we need regulators like the ones we have now that are really interested in actually creating solutions to the new issues that we have based on the new technologies.

>> Teddy. >> Teddy Fusaro. >> Thanks so much, man. >> Thank you for joining us. First time me the Roll Up, not not the last. Enjoy the rest of your time here in DC. >> Thank you for having me on the Roll Up. >> Thank you sir. >> See you again soon. Enjoy the rest of your time. >> Thank you. >> Thanks sir. >> All righty guys, I think that about wraps us up for the day. It is 4:36 p.m. This has been a nearly a 6-hour go around here. Thank goodness for Jacqueline, for Rob, for all of our amazing guests. >> too, buddy. >> Day two tomorrow. >> day one. Plenty of takeaways. Um I mean, we heard from Clarity. We heard we heard about uh so many things. Apparently, Clarity, there's pending things that could happen as soon as tomorrow.

>> Yep. We could get some news. >> Uh there's work being done >> policy talk about >> in that room right now. >> Go Rob. >> Love that policy talk. >> All right guys, we'll see you guys tomorrow. Live here at DC Blockchain Summit, day two. Thanks for tuning in. Bye.