🟣 LIVE From DeFi Day In Cannes At EthCC[9]

Transcript

Heat up here. 17 floor. 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.

>> Adding it to my library every >> potentially multi-chain deployments. We are at the connect day one here. I'm guessing from base. Heat. Heat.

JP Morgan, Black Raw, DTCC, Fidelity, the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. >> I'm bullish. >> He said it. He finally said it. So bullish. >> It is bullish. I'm bullish. We're bullish. Heat. Heat.

Heat. Heat. Corola is headed to the top. If we're

not already at the top, we're going to the top. >> Roll up is my favorite. >> From all walks of life, all over the world, all over this industry come together for the roll up. Zoom out. The institutions aren't

coming. They're simply here. It's the golden age of crypto, guys. Get right. Let's go. Welcome to the next. See you on the show. We're live from can >> welcome to can France monsour bonjour bonjour mother >> man we're in the smallest podcast room possible in Europe everything is small in Europe everything is bigger in America >> small in Europe everything is small guys we have an amazing lineup today thank you for being a part of this it is 56 a.m. Eastern time where we where we are normally streaming from in New York

City. Rob it is a beautiful morning here in K. We're at the main venue certainly festival. >> Yes. Our uh you know they host the the can film festival here every year. The red carpet you know they roll it out. It is down. We walk through the red carpet on our way here >> and uh what how do you I mean this is our we've done a couple years here. I mean, this is like I mean, this is ETHC9, guys. And I think it's been maybe this is probably our fifth. Yeah. Uh or sixth. So, guys, we have an awesome lineup for you. Um I'm actually on a panel here at Defi Day. So, DeFi Day is A's day. Let's give A some love guys. Uh they are powering uh DeFi Day here in Can a is the leading lending protocol in

DeFi. They have some big announcements today. A V4 is coming out anytime. Stani opened up the entire conference on stage at the main venue just a couple of hours ago and now he's making his way over to DeFi Day. We will hear from Stani uh a little bit later today. >> Yeah, we we've got an amazing lineup guys. Uh tons of uh CEOs, founders, folks who are building on infrastructure really I mean we went from DC did policy makers into uh in institutional allocators and asset managers last week at DS here in Ken much it's much more with the natives. is much more onchain uh friendly, much more people building technology. So guys, we're going to get Zama CEO, our first guest of the day.

I've got a stable coin panel I'm going to run to. Rob's going to rip this one. Couple more and then we're going to be back backtoback for the next four to six hours here at Defi Day talking to the best minds in DeFi. Guys, shout out to A. And uh yeah, >> Andy, you got a stable coin better panel. You better go. >> Welcome to the welcome to the welcome to the role from CAM, baby. best stable coin out there. Guys, we will uh be right back with Rand, our first guest from Defi Day in Can. Don't go anywhere. We're going to be live for the next five and a half hours. >> See you guys in just a second.

Heat. Heat. Heat. Heat. Get out of here.

You know, hey baby. Hell yeah.

Hey, hey hey. feel your hand.

Get out here. All right, we are here live defy day from CAN. Uh our first guest is Rand Hindi from Zama Protocol. Uh Zama is

building FHE. There's a lot of chat uh right now about ZK privacy the institutional wave what is happening the ZK cabal is going at you know the centralized database cabal we've got Rand here to tell us all about it Rand how you doing man welcome to can >> good good thank you for having me guys very happy to be here >> absolutely thank you for joining us um I mean I I'm just curious what your reaction is to uh some of the chatter you're seeing out there on the timeline >> you know so I was looking at all this debate around centralized permission blockchain versus permissionless cryptographydriven blockchains and obviously you know I was very happy that people were taking the side of public permissionless cryptography secure

blockchain because that's exactly the way we think about it for Zama too trying to bring FHE advanced cryptography to public blockchains I think permission chain makes a ton of sense in the same way that do you remember the 90s something called internets >> right remember that right like every company had like their own mini internal internets. >> They had like a mainframe and they had to plug into it. >> They had their own kind of private network and you could connect your private network to another company's private network to exchange data. Does that sound familiar?

>> Sure. >> Right. Okay. Then people created the internet, one global public network that everybody could use to talk to each other, to share information. uh and with HTTPS which brought encryption and privacy to the internet you could be able to use it for financial transactions for commerce and today nobody's using an internet anymore the internet actually won so I think we're going to see the same in blockchain the reason why people use internet at the time was privacy and security >> right >> because the internet couldn't do that but once the internet offered that people migrated to the internet and we're going to see exactly the same >> with institutional finance they're all going to move to public permissionless blockchain encrypted using technologies

like FHE or Y not ZK. >> So the non-negotiables for not just uh the institutions with the largest of scale but for the most part everyone we've seen transact in finance on chain they're looking for privacy and security. Yeah. >> Uh this goes back all the way to the beginning of the internet and it's still true with web two and web three all the way until today. Uh and so uh at Zama you know you you guys are focused on the privacy side of this uh this dichconomy here between permissioned mainframes uh versus internet open composable public networks.

>> Yeah. >> Um >> and so we kind of have these differences in opinion as far as how we could come up with that. You at Zama have chosen FHE. >> Yeah. Uh I take it this kind of adds a third dimension to this debate that we see right now. Uh on one hand we have uh you know the mainframe intranet uh somewhat closed. They can share data with one another but it's not uh too composable. Then we have the ZK camp. Then we have the FHE camp. Um, why do you believe the FHE camp of privacy is the most private secure but also composable as the internet should be?

>> You know, that's a very very good question. We didn't choose FHE because we just wanted to use FHE. We chose it because it was the right tool for the job. What you want in a public blockchain, you want public verifiability, you want composability, and you want uh privacy security as much as possible. There are different approaches people are taking to privacy. One of them is private chains. I guess it does the job, right? Nobody can see anything. But then you're losing public verifiability and to a larger ext you're losing composability, at least atomic composability.

>> If you want to use a public blockchain, then you can use you can use T's ZK or FG. T's have been completely destroyed. Uh you know, every single T blockchain has been hacked in the past two years. As such, I don't know any large institution who even wants to touch this technology with a stick like it's dead, right? Even Intel came out and said, "Do not use TE's for blockchain. This was never meant to be a technology secure in a decentralized environment where people can run their own nodes." Period. Now, you got ZK and FG. ZK is a great technology, but it's very hard to make things composable. uh you know if you're for example shielding your assets in Zcash you can send them privately but you can't stake them in DeFi you can't

swap them for other shielded assets like ZK inherently is not about computing on a private state it's about proving something about data you see yourself >> right FHE solves that problem because it enables you to compute on the encrypted state directly so you have full composability in the same way that you have with any existing blockchain today but without the data being visible to people outside. >> So it gives you composability. You can publicly verify the result because it's just a blockchain running code and it gives you security even against quantum computers.

>> So the data you're encrypting today cannot be broken by future quantum computers. >> Got it. I anticipate we're going to see a lot more about quantum here uh as as things develop and things start to accelerate further. Uh I'm curious about FHE. Is it complementaryary to the existing solutions? uh could you have FHE sort of obuscate or encrypt the internal computations and then prove that result with ZK um how complimentary are these two technologies and then you know when when maybe we'll start there FH and CK are these two complimentary or they uh one or the other >> you can totally use them together right I mean if you look at a way that you get integrity of a blockchain how do you prove that something was done according

to the smart contract either you just run consensus so multiple people redo the computation and you compare the results. You can do that with FH can have multiple people run the same FHE computation on encrypted state and then just verify the encrypted state or you can use ZK just like you have ZK rollups right to do I guess FH zk rollups in practice we are focusing on bringing privacy to existing public blockchains so we don't really care how the blockchain we're running on verifies >> the correctness of the states uh so it in it's it's kind of out of scope for what Zama does which is enable privacy on existing public blockchains.

>> Got it. So, let's take a couple of uh test cases out there. Um and you know, there's two very competitive test cases that are out there now. You have Alex uh G from ZK Sync who's you know kind of operating on the side of Ethereum. ZK Sync is an L2. >> Thank you, Alex, for putting so much effort into public blockchain. >> Absolutely. and and we were hosting uh an episode of of this show in uh Washington DC during the DC blockchain summit. Alex came on. He talked about how uh these banks are not going to want to build on each other's infrastructure.

JP Morgan is not going to build on Fidelity and vice versa. Mastercard not on Visa. We need credibly neutral infrastructure uh as a way of connecting all of these disparate economic zones. Uh Ethereum is the best suited place to do that. Um and he mentioned providiums as as a particular use case. How could ZK Sync incorporate Zama's technology? How could Ethereum as a whole incorporate the FHE technology to uh embed privacy deeper into uh Ethereum as a public chain? I don't know too much about the Providium stack. So, I don't think I can comment on that. Uh for Ethereum specifically, the way that we're approaching the problem is let's say you've got stable coins on Ethereum.

Okay, today everybody knows how much money you have, how much money you're sending, how much you're swapping, how much yield you're making. What we found is that the more money someone has, the more they care about privacy, right? Very few people care about hiding, you know, hundred bucks in their wallet. But people that have a billion dollars care a lot because if they're moving the billion dollars, they're signaling something big to the market. And every trader trades against them, people might freak out. Like think about a VC, you know, moving some tokens from a portfolio company to an exchange. People will just dump even before the they could sell anything. So people are losing millions and millions of dollars due to the lack of privacy on public chains. So we solve that problem. So we bring a layer of encryption to existing

public blockchain so that all your financial transactions are private but you're still on Ethereum. You can take your USDC tokens. You can shield it into a confidential USDC tokens without bridging to a new chain. You're still in Ethereum. And from that point, all of your future balances, transfers, swaps, deposits, and vaults are encrypted. >> So people have no idea how the money is how the money is moving, >> right? >> But you're still Ethereum. So you're still benefiting from all of the advantages of the public chain that you're on the go.

>> And so this is a technology once you turn it on, everything from that point forward is encrypted using Zama. >> Correct. Does this go for in Ethereum's case Ethereum's mainet as well as its L2s? >> Sure. I mean, we can deploy the technology on any chain at this point. It's just a matter of deploying the protocol contracts on that chain. Uh, so we have a very careful approach. We want to avoid fragmentation. >> Okay? >> Because in the beginning, you know, shielded assets are not going to be as huge as non-shielded assets. You have to get people to shield things.

>> There are some network effects. >> There's some network effects. So, we're really focusing on bringing our protocol to Ethereum and some other major chains in 2026, including Solana later in 2026. >> Uh, we recently, for example, announced a partnership with T-Rex Network. >> Yeah. >> Which is a protocol launched by Apex, huge asset manager. >> They're going to tokenize a hundred billion dollars of RWAS, you know, in the next 18 months. 100 billion. >> Yeah. It's incredible. >> And they're doing it as a rollup on Ethereum using Zama for privacy. Very cool. Awesome. Tell I mean te talk could you tell us more about how this deal came together? You know h how uh are you planning on supporting this effort because I'd imagine hundred billion

dollars there's several players several enablement providers. Um we were in you know New York doing digital asset summit talking to the likes of securityize and superstate uh a lot of these tokenization partners. Are you working with any other tokenization partners to in embed privacy into their tokenization stack? Uh how are you working together maybe with T-Rex as well as uh some of the other players in this particular space? >> Yeah, I mean of course short answer is yes. We do think RWAS are huge. Like if you think about asset management as a category, it's a $120 trillion asset category, right? Like people are excited about couple hundred billion dollar of you know stable coins on chain. Think

about a couple hundred trillions of assets on chain right think about tokenizing real estate tokenizing energy like these are the really big markets where most of the money currently is right payments is huge I like tens of trillions of dollars market but asset asset managements in general is even much bigger. So I think I think you know we're we're not going to be counting TVL on blockchain in terms of billions anymore. We're gonna be counting them in terms of hundreds, tens and hundred of billions dollars going forward. >> It's an exciting place. >> I mean, it's it's happening. Finally, it's happening, right? And the guys at T-Rex are a big part of that because really driving this.

>> Yeah. >> Uh, you know, they created the um the permission token framework, which is really important for security tokens, >> right? Without that, there would be no security tokens on chain. permission token framework meaning that you have to have certain permissions maybe be accredited investor have pass >> security is a security whether you put it on blockchain or not you know like it doesn't change securityities law right >> right so having a way to enforce that was really important for people to start using >> so for for using a public blockchain Ethereum for securities you need privacy and you need compliance >> privacy is Zama's job compliance is T-Rex's job >> got it why is T-Rex deploying the 00 billion uh dollars of RWAS on their own network using Zama's technology for

privacy versus going to another institutional network like Canton. >> Uh well, I think they want to uh Canton, but they're doing it like as a public protocol. Yeah. And I think the reason why they decided to be a public protocol um is they want crosschain liquidity. That's really important for them. uh they want to be able to go beyond institution to institution use cases you know so enabling a broader set of players to participate and it's much easier to distribute your solutions products RWAS to a billion people in the public network than onboarding a billion people to your own private network right because they're already there >> I mean there there isn't a billion

people in blockchain yet but you know we're going to get there at some point >> right >> um it just makes sense from many many different perspective security-wise also I think you know Ethereum Etherum and Solana actually are hard to beat. Uh they've been around for a long time. They have like a huge amount of economic security and also just reputational security backing them. Uh as you said, they're incredibly neutral nuclearproof protocols. >> Yeah. Um what what is it about T-Rex and their launch that excites you the most?

Is it the hundred billion dollars? Is it uh this institutional player finally coming on chain? Is it kind of the the idea that you guys have launched, the token has launched, but it's not Job's not finished. >> Yeah. >> Still so much work to do. What what excites you most about going forward? >> I mean, all of what you said is very exciting. To be clear, one of the biggest institution putting 100 billion on Ether ecosystem is very exciting. Period. Right. I think T-Rex is interesting because the team behind it is Tokeny. Tokeny was a tokenization platform that was bought by Apex uh like a year or two ago. So these guys have been doing this for a long time. You know we're talking about one of the main player in the whole tokenization space.

They've been doing this way before right >> so they have expertise they have the knowledge they have the backing of a big institution right they have the commitment to this 100 billion plus assets. um they just know how to do the job. Yeah. Like this is not like a startup, you know? This is I love startups, but this is >> this is the big player coming and saying this is how we're going to do finance going forward. >> Yeah. Incredible. Brand, as we draw to a close here, what are you uh most curious about? You know, we've got a whole ECC here still to go. It's just Monday. Um what what are you what are you hoping to learn? What kind of builders are you hoping to talk to over the course of the week? I want to understand how people are thinking about building products now

that they know privacy is solved. >> Like what new mechanism does it open? How what are the things people could not even think of doing on public blockchain that are now possible? >> Yeah, >> I think it's just the beginning and people are realizing that there's no longer any limitations to using Ethereum. Uh it used to be slow, not anymore. Used to be expensive, not anymore. The only problem was privacy, not anymore. >> Fix that. Yeah. Awesome. Incredible work, Ren. Thank you so much for joining. >> Thank you for having me. >> Have a great time in Can and uh we'll see you next time. >> Great. Thank you guys. Yeah. Bye. >> All right, guys. We're going to we're going to keep it rolling. Shout out to Rand and Zama. Absolutely incredible partners. You guys have probably seen uh seen their merch in our studio in the

Empire State Building. Uh we're gonna we're going to see Rand a little bit later. Um all right, guys. We're going to keep things rolling here. Uh and just uh we've got our next guest here coming up in just a minute or two. So, why don't we do a quick commercial break? We're going to be right back. We've got an incredible show for you guys this beautiful Monday here in Can. It's a little bit early, but enjoy your coffee, bonjour, have a croissant, you know, do whatever you got to do. Wake up, have a great time. We're going to be right back here from K. Hey, hey hey.

Heat. Heat. N. Hello. Yeah.

Heat. Heat. N. Heat. Heat. Hell yeah.

Heat. Heat. down.

Hell yeah. Are you ready?

Hell yeah. Heat. Heat. Are you okay?

Get out of here. There we go. We are back. We've got Fisher U, the co-founder of Babylon here. And Babylon just uh just announced a collaboration with A uh A Alpha in partnership with Babylon. Fisher, welcome to the show. Let's let's talk

about it. Yeah, thank you so much. Thanks for having me. >> Absolutely. So, tell us a little bit about Alpha uh A Alpha. You guys have partnered up with A um you know, a lot of uh A uh uh Alpha is happening out there right now. Uh what what is this deal all about? What does this partnership entail? >> Yeah, sure. So, maybe I should give you a quick introduction of the Bobin Project first. >> Sure. >> Yeah. So uh yeah so Baldin project was founded in 2022 by myself and professor David from Stanford University. Yeah. Our goal is to make Bitcoin productive.

>> Yeah. In a trustless and non-custodial, >> right? >> Yeah. So we have been building on the Bitcoin space for a very long time and this is our first time entering the Ethereum space. The uh the angle of this is we recently invented a new protocol allow native Bitcoin to be collectorized in a trusted way and be used as a collector from DeFi. And the most natural uh use case of this protocol is collectorize your native bitcoin and directly borrow stable coin and anything else from a >> so yeah so that's why we partner with a >> yeah to make this use case possible because a is largest most safest and

have the best liquidity. >> Yeah. >> Yeah. So uh working with A for borrowing and lending will give Bitcoin holders a lot more uh confidence and comfort. >> Yeah. >> Yeah. >> Yeah. So uh A has had wrapped Bitcoin for uh you know some amount of time maybe since they started. Um I'm curious what does the native Bitcoin on A give to the end users that a wrapped Bitcoin does not? >> Yeah sure. So then when then you ask yourself how do you get a wrapped Bitcoin? But you have a native Bitcoin.

How do you get it? Rap Bitcoin. You give your Bitcoin to Bit Global or their merchants. So they will mint you a rap Bitcoin, right? So you give away your Bitcoin. So this have two problems. First, you lose the title to Bitcoin. Yeah. And second, you basically trust Bit Global like like a gift card issuer. You give the cash to them, they give you a gift card. Yeah. >> That you can use on the on the DeFi world. So uh and then when you want to redeem your native bitcoin, you are at the mercy of the gift card issue.

>> Yeah. Also this in certain jurisdictions may also uh trigger like tax event as well. >> Yeah. So you have two risks in using a rep. First you lose your title. Second there's counterparty risk. >> Okay. >> Yeah. Okay. Got it. >> By using native Bitcoin as a collector, you don't have this, >> right? >> Yeah. Um, how long has Babylon been building and and how much Bitcoin have you been able to accumulate? Because, uh, myself, you know, we I I was I was here, the rollup was here when, uh, we had quite a quite a few Bitcoin L2s. Uh, those seem to have kind of taken a bit of a a time aside. Uh, but obviously Bitcoin is still the largest

cryptocurrency. It's still got a very significant market cap. Um, and so how have you seen the program programmability of Bitcoin progress over the years? Um, you know, we had lots of Bitcoin L2s. Do you still think Bitcoin L2s are a thing that will gain significant traction? Uh, or do you think Bitcoin will make its way into the Ethereum landscape? >> Great question. So, we never believed in Bitcoin L2. >> You never believed in Bitcoin L2? >> Never. So, we when we built Bob Yeah. We never yet built anything along the line anything remotely related to Bitcoin al because we don't believe in Bitcoin.

>> Okay. >> Yeah. >> Okay. And and so before the partnership with a Alpha, what what could someone do with their Bitcoin on Babalon? >> Yeah. So actually Bablon is most well known for our trustless bitcoin staking protocol, >> right? >> Yeah. So you ask about how many years have we been building? We have been building since for four years, right? And the Bitcoin staking protocol was uh invented in 2023 and went live in early 2025 >> and our trustless bitcoin staking protocol has activated over $10 billion worth of bitcoin.

>> Yeah. >> Yeah. And we are now uh receiving like inbound interest from major exchanges and very prudent institutions international institution because they see Bob as the only trustless uh protocol for bitcoin productivity they can use >> and they these institutions that are now approaching Babylon uh they want liquidity on their bitcoin they want to collateralize it. What are they trying to do with their bitcoin? Yeah, they want to have productivity of >> uh yield in a >> they want to earn some yield >> some yield on their bitcoin but the problem of staking is that it is very passive >> like like staking 2% that's it you can't do anything else with it BTC staking as well it's the lowest risk

>> uh productivity or utility of bitcoin >> you're right then of course lower risk means lower yield so yield is very low and that's why we invent our new protocol which is called trust this Bitcoin collector vote protocol. >> Got it. >> So our new protocol allow native Bitcoin to be locked on the Bitcoin chain and directly recognized by a >> Okay. So it gets locked on the Bitcoin chain and recognized as collateral on a >> on a so a will directly allow the Bitcoin holder to borrow stable coin or whatever. And and now my understanding is that when collateral is deposited into a uh the A protocol issues an A token. This is like a yieldbearing

version of the asset itself. >> Yeah. >> Is that the case? >> No, that's not the case. >> Okay. So what happens here? >> So for the to issue you uh like a certificate of uh like like deposit the token itself should be uh lending asset. That means other people can borrow that asset, right? It's like pool, lending pool. But in our case, bitcoin is a collateral that is used uh for borrowing. It is not about other people borrowing bitcoin. It's about you collect bitcoin and borrows other assets. Got it.

>> So >> no like a like representation or like locking token will be involved here. >> Very like clean >> integration. Very clean integration. >> Okay. So in a no one can I can deposit my Bitcoin as collateral. No one can borrow it and and use it for something else. >> Yeah. Because if you allow other people to borrow Bitcoin, they just run away with it. >> Yeah. Yeah. Yeah. They do. They never repay. Yeah. >> Um and so uh in this vault, am I earning any yield on my Bitcoin? No yield on my Bitcoin. It's just there for collateral so that I can borrow.

>> Yeah. Exactly. Because the concept of vote in more traditional sense, it's about something segregated and only you can access to. >> Yes. >> Like like a safe in a in a in a >> uh underground of the bank that you can only you. It's segregated. It's not like the DeFi yield vault where everyone throw money to it. It's like a unregulated hedge fund. >> Yeah. Yeah. Exactly. That's what a lot of the vaults look like these days. Um okay. And so another another you know potential path here uh one that a has to be very careful about is uh in the case of liquidations. And so suppose I deposit one bitcoin and I take out you know 50,000 uh USDC right stable coin but then the price of bitcoin my one

bitcoin falls maybe to 20,000 >> big bare market right crypto winter >> a would have to liquidate my position. Yeah. >> Is it possible for a to do this programmatically? Uh how does it work with the Bitcoin protocol? How are you able to orchestrate a liquidation given that this A protocol is happening on Ethereum? Uh but the Bitcoin asset remains locked on Bitcoin. >> Yep. Excellent question. So the liquidation happens in two steps like you have a very good instinct because then Bitcoin is a very slow trend. You can't actually liquidate Bitcoin instantly. Also there's no native Bitcoin market, right? uh like unis swap for native bitcoin you can do this. So the liquidation happens in two steps.

First step the liquidate a liquidators will uh use WBTC as a proxy asset to liquidate the loan position so that the liquidator will borrow WBTC sell it for stable coin pay back the loan and get the right to the native BTC. Okay. Then the loan is no longer between native BTC and stable coin. Then the loan position is between native BTC and WBTC.

>> Right? This conversion is very important. First it allow uh atomic liquidation because borrowing WBTC sell it and then repay and pay back WTC. This can happen within one block. So there's no bad depth. >> Okay. >> Within within A. Um and then the loan between WBTC and native BTC that can take time to settle because there's no price. Yeah. No, no, no. Yes. No price fluctuation or or depack between WBTC and native BTC. >> Yeah. >> Yeah. So the second step can take time.

>> So like one hour, two hour or even one day doesn't really matter, right? Yeah. >> Because it's one to one always, >> right? Um Okay. And and does this model like would you like to improve this model over time where maybe wrap BTC is no longer necessary? Uh if there was some sort of native exchange like for instance uh take near intense you near intense right uh we work with near closely they're AI partner but also near intense is a great product. um you can trade Bitcoin for these things. Uh if there was sufficient liquidity, would it make sense to use some sort of intense protocol in order to natively liquidate the the collateral or or is this sufficient to use Wrap Bitcoin as an

intermediary? >> We are actually talking to Near intent to become our Yeah, like market maker liquidator. Yeah, indeed. >> Yeah, >> very good point. >> Awesome. Awesome. Um and and so as Babylon continues to progress further into Ethereum, you know, you guys don't have to worry about so many assets. You're just very focused on Bitcoin. What are some of the next steps that you want to take with Bitcoin? >> Yeah, sure. So, um the role of Babylon is not to provide yield for Bitcoin. What we do is uh invent the technology allow native Bitcoin to safely participate in DeFi. Right. So, lending is the first one.

>> Yeah. Then what are the other basic financial instruments? The there are insurance there are there is also option trading right and then credit card secured credit card for example with Ether. >> Yeah. So the next step will be uh work with other blue chip projects to build all these fundamental financial instruments for Bitcoin. >> Awesome. >> Yeah. >> Okay. Can we dig into some of these? Uh we're also you know good friends with the EtherFi team. How would a Bitcoin backed credit card work? How could it how could it look?

>> Yeah. So credit card I cannot talk too much about that but at a high level uh like crypto credit card needs to be secure. You need to have some collector. Yeah. >> Right. So Bitcoin Yeah. become collector of it. >> Oh I see. Okay. And then a credit card will just uh you pay your balance down. But as long as you pay your credit card balance, then you no longer you never need to worry about them selling Bitcoin. >> Yeah, exactly. >> Got it. Okay. Um, how do you think that, you know, in the future as more of the financial mechanisms around Bitcoin start to be built, how how do you see this change in finance in general, do you do you think as people uh start to discover more, they will hold Bitcoin in their savings account? They will use

maybe dollars to transact on a day-to-day basis, buy coffee, that sort of thing. But the savings account is in Bitcoin. Is it because, you know, for a while people thought, oh, we'll just we'll use Bitcoin to buy coffee, right? No, none of that. Store of wealth savings account, but we'll still use Bitcoin backed loans in order to transact on a day-to-day basis. >> Exactly. So, think about it. Bitcoin is the best collateral asset for onchain finance, >> right? So the both for Bitcoin holders and finance service providers, right?

Yeah. Collect Bitcoin and unlock the liquidity of other assets. It's indeed the best strategy for both Bitcoin holders and for finance service providers. I can give you another example. Think about insurance. Insurance company collect collector premium from the insure insures, right? So for every $1 million they uh premium they collect, can they use all this one $1 million to generate yield deploy it? No, they cannot because the regulators ask them to at least reserve half of it >> there in case there's payout, right? So this half million dollars there, they cannot move it. They can only at most

buy like monthly US treasury bond. That's it. they can only use the other half half million to for better yield or more better capital efficiency. So if they can swap this half million cash reserve with Bitcoin then they have $1 million of cash or stable coin they can fully deploy anywhere and at they can just give Bitcoin uh next replacement some yield then Bitcoin holders will be very happy. So, Bitcoin should be the collector of the entire onchain finance world.

>> Yeah, absolutely. Uh yeah, very very true. Um Fischer, this this is incredible. I I I really appreciate it. I I can see the vision how you know this this native Bitcoin product is starting to come out uh integrated into a Alpha uh and ultimately become a a cornerstone of the the financial landscape. Um I'm curious as we wrap up, what what are you most excited about for the week? What are you most curious about? You know, we're just getting started. It's only Monday. How how do you think the rest of this week will go? What do you expect? What are you most curious about learning from some of the people here?

>> Yeah, >> this is only my first morning talking to people here. >> Yeah. >> And we I already bumped into quite a few excellent ideas of what you can what you can build on top of Babylon a integration. >> Yeah. >> Yeah. That bas on top of this basic borrowing clean borrowing primitive. There's a lot of financial Yeah. Uh services you can build on top of it. >> Yeah. >> So I'm like blown away by the creativity of the DeFi teams here. >> Yeah. >> So I'm Yeah. Super excited.

>> It's incredible. Thank you so much for joining. It was a pleasure. Well, uh we'll we'll see you next time. >> Yeah. On the road. Thank you so much. >> Yeah. Absolutely. All right, guys. Uh well, that was uh Fisher U from from Babylon. You guys heard about uh the partnership between Babylon and Alve a A Alpha. Uh we're gonna be right back. Uh quick commercial break. Don't go anywhere. And uh yeah, stay tuned. Plenty more amazing guests here today. D5 day from uh ETC and can Heat

up. Are you okay? Get out of here.

I'm down. Hell yeah. Heat. Heat.

Okay. Okay. Get out of here. Let's go.

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Your hands are Get out here. Heat. Heat. N. Get out of here.

Hey, hey hey. I'll be around.

You know, hey, know me. I'm down. I know you.

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Defi Day in Khan. It is March 30th. We're here powered by our friends at A. Let's give a some love, man. Man, these guys are crushing out here. Great event. We got Johan from Chainlink talking to us today about the recent a news and more. Guys, we are I'm absolutely gung-ho from the tokenization conversations from D last week. Guys, let's give Johan, let's give him a round of applause. He's in the building with us here. Johan, welcome to the show. >> Thank you. Good to be here. >> Thank you for being here. >> Absolutely. It's my pleasure.

>> How's uh French treating you? >> Well, look, I'm French, right? So, I'm used to being here. I like it. It's always a good place. Yeah. Yeah. It's a nice conference, right? It's nice weather this time of year. >> Absolutely. Yeah. It's uh it's actually much more mellow than last year in terms of weather. Very good. And I can notice the energy people seem very hyped up this year. >> Okay. Good, good, good, man. Well, congratulations on the integration with a for chain link SVR. Uh I understand that oracles um and lending markets is a nice match made in heaven for the reason of um liquidation uh me extraction, >> right? Understanding that during liquidation events there are ME extracted by block builders and by essentially uh kind of like these like

very e experienced um intermediaries. Talk to us about what this means. Why does chain link have this SVR product? Why does it make sense for A and how does this work? How much money is this going to help save A's users? >> Yeah, it's a great question. So, look, the way to view it, our space historically has been very focused on adoption and now we're in a new phase where we're focusing on sustainability, right? So, there are value leakages all over the space. One of those is what we're solving with SVR today. SVR allows us to basically recapture value from these liquidations and give it back to the protocol and also give it back to the chain link oracle network. Right? So

it's a rev share uh split today. Now the beauty here is that we're already entering a new phase for our whole space. It's not anymore about finding use cases. We found the use cases. We've proved the space can work. Now we're literally building the sustainable foundations to ensure that stuff we're working on will last for the next 10, 20, 30 years. SVR is one of these schemes to recapture some of this revenue to create sustainability. In terms of money, I mean in the last few weeks I believe this captured around3 to4 million in total um split across a and chain link. This is large amounts of money we can say. And keep in mind today lensing protocols around 50

billion bucks give or take. It's going to 10x in the future. It's going to be way way more. So in terms of revenue, in terms of how much SVR can capture, that's just going to go higher and higher and that's going to benefit both the protocol, the users of the protocol and the chaining network and create very stable, sustainable foundations for what we're building here in GFI. >> Amazing. And talk to us about what that process looks like, right? Like how how does somebody um integrate chain link SVR, right? Is it just a is it a simple process? Yeah. And then what is what is the like expectations from your side on this use case with avit?

>> Yes. So starting with the first one, it's a very simple process. Um today we have SVR feeds and nonSVR feeds. The idea is to go from the nonSVR feeds to the SVR enabled feeds. The SVR enabled feeds have the SVR mechanism built into it. They have searchers who basically look for these liquidations and are able to provide this service. Right? For the protocol, super easy to set up. It literally takes two minutes. It's the same interface. Very straightforward. From our standpoint, around 80% of D5 protocols today are using chain link. We are going to get this 80% over time moved completely to SVR. So the revenue amount in terms of uh what we deliver

back to the D5 space and what we deliver back to the network is going to have 5x 10x in the next few months in terms of what do we provide um like what does SVR provide to a right that was the second question >> it's revenue it's getting back revenue that should be owned by the protocol this revenue was leaked up to now >> it's going back to the protocol right now so it's another kind of recapturing ing of uh the money. Again, the way I would view it is in a higher level lens. Our space has been ultra focused on hyper growth and hyper adoption for the next years. We were seeing just now how we can recapture some of the value we've created

>> both for the protocols and for the Oracle networks and SVR is just one of the symptoms of that. >> Yeah. Okay. And then based on A's revenue numbers, is there a is there an estimation as to how much this could save A's users? Like I think >> I think I had seen really like multiple like tens of millions of dollars something. Is there any estimates that you guys have ran internally or seen? >> I I I don't want to be wrong here, but I believe in the next few months it did recapture around 15 to 17 million. So it's definitely in the tens of millions.

Yeah. >> Wow. Awesome, man. And so I just got back from uh New York City D. It was an amazing event. It was very institutional and you know this kind of big tokenization uh stable coin bull run that we're in, right? Like it's absolutely firing. Um so much is is happening in that space. So much that Chainlink is doing. You guys are powering some of um Coinbase's products as well. You guys announced that last week. Man, I'm just curious from your perspective like in this kind of tokenization institutional adoption phase like where are we in your view?

Right? Cuz if you think about typical kind of technology adoption cycles, you've got like the very very early adopters are kind of like pioneers, then you've got like the early adopters, then the semi- early, then the early, then the late. >> Like where are we at in the institutional adoption cycle, do you think? Um I'm going to answer in another way. So the way to look at our space and crypto, we built a system to fix the current system we have today. Meaning when Bitcoin was created, it was created out of the GFC in 2008, right? Our space has no use case if the system around it is not completely broken. And every time the system around us breaks, our space

gets accelerated quicker. Okay, what do I mean by this? Today we're seeing a new crisis come around the world with a crisis in the Middle East. Um, and every time we see this crisis, it's an acceleration trend for our space. Our space gets adopted way quicker. If you want to look at D5 summer, when was D5 summer covid 2020? What happened in huge crisis, right? Everything went belly up. people started mistrusting the system and they went on chain because they mistrusted the currency the current system it's going to be the same today what did we see the first day of the Middle East crisis it was on a Saturday what happens commodities being traded on chain went from a few millions to

hundreds of millions in one or two days >> it's insane >> exactly um poly market how is poly market getting adopted people trust less and less the legacy media they need a new way to get information to see the truth Where do they go? They go to poly market. They go on chain. So the way to judge how much our space get adopted is to look at how much the system breaks down around us because that's the paradox of our space. The more the system breaks down, the more quickly we get adopted. >> Yeah. >> And you know the system is not super good right now.

>> The system is breaking down right now. So we're going to get more adoption. Okay. So So maybe we're still early. I think I think we're still early, but we're also um the space we're going to see in the next few years is nothing like we're seeing today. Meaning all of DeFi today is a result of the 2020 crisis. All of the stuff we look at today from per dexes to poly market that was all set up in 2020. So just imagine this next crisis which is around the corner which is here today. That's gonna create an amount of adoption like we couldn't dream only a few years ago.

>> Yeah. Yeah. It's it's interesting. That's interesting. So, what part of this tokenization, you know, complex >> are you most particularly bullish on or excited about? >> Is it the equity side? Is it some specific type of market on chain? Like where do you think you're going to see the most adoption from the chain link side? what what is what is something that you're particularly most excited about on the tokenization spectrum? >> So, we have two key things we're doing on the tokenization. The first one is we're working with um per dexes to bring them commodities data, equities data, stocks, rwas, etc. And there we've got an adoption by you know most of the

perexes basically. The second big thing is these tokenized assets need to have utility on chain. The main issue we've had historically with RWA is they have no use case on chain. What do you do with an RWA? You can't use it as collateral. You can't trade it. You can't move it around chains. That's been the biggest blocker. That's what we've been solving for for the last years basically. So one key thing we're working on and we had the Amundi announcement um a few weeks ago. It's around how do we bring utility to these RWAs.

>> Utility you can do it through technical means. For instance, whenever we set up a data feed, we enable these RWAs to be used into DeFi. Whenever we set up crosschain for these RWAs, we enable them to go to new chains, they can find new buyers, right? >> So two things first one is getting data for per dexes because I think here there is a huge use case that's happening today where per dexes are becoming more and more as a trading venue for commodities and for equities. And the second big thing is we need distribution on chain and to get distribution you need key things like crosschain like data like compliance that's all the stuff we're working on to unlock this distribution.

>> Yeah. Oh yeah of course. And and so do you think that um this Amundi announcement is significant in ch in chainling's kind of uh institutional growth or is it just >> it's just another one? >> I think it's a big milestone for European adoption mainly. It's a top asset manager in Europe. um one of the top ones globally. I think it's probably the biggest tokenization project we've seen out of Europe up to now. This tells me, look, we've had tokenization projects all over the world. Um so we've seen the adoption pick up in different regions. Europe was the one which wasn't moving as fast as the others and I can see it catching up very very quickly right now.

>> So to me it's a big milestone for adoption inside this particular space. Yeah. >> Yeah. 100%. No, I I mean what's that's so classic, man. Europe is is behind. >> Yeah. Yeah. But you know, like they do move slow and then they go fast as far as I can tell. >> The French man, everything is better in petties huh? >> Well, you know, like No, no. Food food is better. So, sorry, but food is way better. >> Come on, man. Everything is better in petties huh? >> Oh, man. Well, um, on the on the European adoption front, is it significantly uh slower than the traction in America for chain link? Is that >> is that is that Yeah, >> I I actually don't uh don't think so. I

think tokenization has been slower. If you look at DeFi, a is European, right? Like we've had tons of DeFi teams happening in Europe. I think one thing why DeFi was so good for Europeans is because they've been so constrained by regulations where being creative and creating stuff in Europe while we're creators and builders at course that's been restricted right where was the one place where we could actually build stuff quickly with no exactly so that's why D5 if you look at the D5 space it's highly highly European like sky maker D was European >> A is European I could go on and on right so that's the power of innovation that's been uh compressed for so long has kind of been

unleashed throughout the last years I would say. >> Yeah, definitely. Um when it comes to chain link's kind of future here >> um what does this look like for chain link like where is the where is chain link by the end of the decade? I I know it's a hard question or hard to kind of visualize, but as you can kind of >> correlate this idea around the current crisis that we're going through, the adoption explosion of tokenized commodity trading for example, what does Chainlink's brand look like in three to five years? What's that scale actually look like in your mind?

>> It's a good question. Okay, so look at the space in um two steps. First one was G5 Summer. G5 Summer gave us the space we know today. per dexes, prediction markets, lending protocols, all of that stuff is built on chain link. If you look at the value we secure today, it's like 80% of the world space. Most prediction markets you know of today, including poly market, they use chain leng per dexes, they use So we've been at the root of this transformation. We're about to go to a second stage of adoption for our space because we're entering a second crisis. That second stage, we're going to be again at the root of this transformation. That stage is going to be moving everything onchain. Moving all the offchain systems

on the blockchain. Okay. Now for this you need key features. You need data on chain. You need interoperability. You need orchestration of offchain systems onchain. You need privacy. You need compliance. We've been building a platform that does all of these things. Right? So just like we're at the very root of this first transformation of G5 summer, we're going to be at the very root of the next transformation which is a tokenization of the whole world on chain. >> And it's not me saying we're going to be there. We're already there, right? It's just going to get way way bigger. It's going to be 1,000x from what you see today. I I can guarantee you the DeFi summer growth we've seen in the last few years, that's going to be completely dwarfed by what you see in the coming

years. The system is at a tipping point. completely chipping point and that's really the paradox of our industry. When everything goes to when the world gets very dark, our industry shines the most. Okay. Um and I think I think we're going to be at the root of this transformation we'll see in the coming years. >> And what would you say are the core pillars of this transformation? So all of traditional finance onchain, >> you know, give us give us a bit more. >> Sure. All the payments will be on chain. All the assets will be on chain. All the information will be on chain.

Information is the way you perceive the world. You're going to see more and more the world through the lenses of things like prediction markets. Payments are going to need to go on new neutral rails. Okay? Because the new the old the old payment methods were built on an assumption which is the whole world trust each other. Countries trust each other, institutions trust each other, etc. That's not really the case anymore. Right now you have tariffs and you have war. Trust is kind of gone. You're going to need to rebuild trust on new neutral platforms like chain link, like Ethereum, etc. Right? And um you know assets assets are better on chain. If you do the payments on chain, you're going to need to have the assets on

chain. So that I think are the key pillars. Information, payments, assets, all on chain, >> man. Wow. >> Wow. >> Exciting. >> Yeah, man. I mean this this this crisis is not great. >> No, but look there are two ways to look at it. You can either the word is bleak. Every foundation, everything dies at some point, right? Every system. The people who are realists, they they say, "Okay, it's going to die. Let's build the future." What matters is that you build a better future than what you had before, >> right? That's why Bitcoin is so good because Bitcoin was uh basically a supposition that the money system would collapse at some point, right? It's

happening and um that's why Ethereum is so good because it was a assumption that at some point people wouldn't trust institutions, countries wouldn't trust each other and there would need to be a new system. I think it's actually a privilege we have to be working on something that can rebuild the world in a better way. I see everyone talking about AI, AI is so great, etc. Frankly, yeah. Only makes the issues of our time even worse. It doesn't truly help us get out of this bad system. It enhances the problems in many ways. >> I was going to ask you that. Do you think the prevalence of AI and the growth of AI improves chain link's position in the world?

>> I think there are sorry to cut you off. There are two ways to CI. One is it can enhance um what we do here. So enhanced risk management, enhanced threat detection, all of that stuff can be used by chain link. If we can have oracles do direct risk management through AI models, that's super advantageous. If we're able to remodel parameters of D5 protocols like a for instance through AI risk management, super interesting to look at. You can add redundancy in terms of security. You can do tons of amazing things. There are other things that AI does which are not so good for the world. One is information. Information, social media, um like the way we

perceive realities on information, right? With AI, we're now able to fake reality more and more. What type of world does it create where you can't perceive truth? You can't even understand what's real and what's not because deep fakes have become so good. You can manipulate the market by putting out false information out there and making it seem real with AI. I mean, that's a really scary reality. That's probably going to be one of the key things we need to tackle on blockchain through chain linking, through things like Ethereum by recreating real truth, real information away from AI over inflated information that we're getting today, right? So, I think AI has good has bad like anything else. Um, and I

hope the good can shine through because we're able to enhance it through things like uh blockchains basically. Yeah. Um, do do you think that >> chain link can be AI native? Like can chain link operate as a technology for agents in the real world? >> Absolutely. I I think we could have agents use things like CR to be able to directly feed code on chain and be able to create applications on chain, right?

I think you can manage risk directly through AI agents. I think you can have um AI agents be able to do crosschain transactions from one to the next using chain link. Right? So everything AI needs can actually be solved through chain link. What I think we need to focus on is how do we make AI better. I don't think we should be giving away, how would I say that? I don't think we want to trust AI too much as an industry. Meaning, we shouldn't go all in into AI right now. It's way too early. I think what we should be focusing on is how do we make how do we solve the biggest issues AI has, right?

For instance, information consensus where we can basically detect what's true and what's not with AI is interesting. Another big thing I would consider is how AI can be used for prediction markets. We work with many prediction markets today. AI oracles are very useful for them because there are things you simply can't resolve without AI. >> Things like is Zelensky going to wear a suit today? I don't know, right? Like we need a source for that that's actually viable. AI can do that. It can aggregate many different news media, news outlets and be able to give you an answer, right? So AI has lots of stuff it can do for us, but again it's it's too early to go all in on AI. It's not um it's not the

safest right now. I think a lot of um I was reading a document last week. AI hallucinates in like 20 30% of cases. It gives you an answer and it doesn't even know if it's true. It basically cannot tell you that it's wrong. It cannot tell you I don't know. AI can never say it doesn't know. which is a very big issue. When you talk to a human, one of the biggest thing you want to know about them, are they honest or no? When you ask them a question, do you know or do you not know? If you don't know, that's fine. Tell me yes or no. Right? AI never says no. It always say yes, I know.

Which is a big big issue. You cannot have systems run lots of security, lots of money on top of a yes man, which is exactly what AI is today. >> Wow. You see, >> incredible. So true. I mean man. So uh do you think that that like chain link or that any sort of like blockchain technology could be like a truth layer for agents and for AI? How would that work? >> I think consensus would be one of the key things. AI today has a big issue with consensus. AI is a closed box >> where you basically have one AI, another AI, another AI, a human. They all disagree, right? What our space does well is coordination and consensus at scale. That's what Ethereum is. That's

what Bitcoin is. We all come to truth on one single event. The state of a blockchain for Bitcoin and Ethereum, the state of a data point for Chenlink. What Chenlink is is consensious on data. It's getting multiple node operators to agree on the price of gold at any given moment or Bitcoin or silver, right? Being able to aggregate information by using multiple AI sources, multiple news media, multiple sources, and then come to truth based on consensus. That's how we create truth at scale for AI.

>> Yeah. Wow. Okay. Last thing for you on the AI side here with with Um >> is there is there an area right now where you guys are most focused on AI? Like who on the team is like is there a team for internally? like like what are you guys doing to embrace it? >> We have uh one big focus which has been going on for a while which is prediction markets with AI. So again being able to resolve any market out there through aggregation of multiple AIS. The other big one is agents being able to use CR for things like risk management threat detection dynamic uh threat prevention for instance. So basically and I I think it's actually useful to go back a bit

explain what CR is. CR is an orchestration layer where you can work with onchain codes to feed anything onchain, right? The main use case has been how can I bring an offchain workflow from offchain to onchain. Okay, for TWI for instance, but this can do much more if you have AI agents be able to set up code on CR and then sell their codes to developers to smart contract um kind of application developers in GFI etc. for specific use cases like threat detection like risk management etc. You can have a marketplace of AI agent building chain inaccals each one suited to a different use case each one suited

to a different problem. risk detection, um, LTV collateral rebalancing, threat management, all of those things into a marketplace of AI agents, right? That's one big thing we've been researching for a little while, which I'm very excited about also. >> Awesome. Johan, man, hope you have a great rest of your week here in Canada. It's it's an amazing event. Thank you for joining us. >> Absolutely. Pleasure. >> And uh, totally a fun time, guys. That is Chain Link. That is AI. That is the future of what's happening here in France, in Europe. Europe is not far behind. They're coming for you Americans. Ladies and gentlemen, we're going to be right back with our next guest. Thanks for being here. Shout out to A man. See you guys in a few.

Hey, hey hey. Heat. Heat. Get out of here.

I'm down. Hell yeah.

Heat. Heat. even care. You Hell yeah.

Hey Hey, hey hey.

Get out of here. Heat. Heat. Heat. Heat. N.

Back. We're so back, guys. It is DeFi day in can 2026 March 30th can unbutton a button take it out. No sir, I I just did a panel I just did a panel with Mastercard Bridge um a couple other folks and the Mastercard guy said directly he said look I'm sure there's a journalist in the crowd and so they're going to write this but we don't think that cards are the best payment method for the agentic future. we think there's going to be a lot of micro payments and metered payments and that this is going to cause essentially problems for the current state of card architecture and then went

on to say that stable coins are likely the future for aentic payments on chain and he said this in front of probably 250 people and it was just it was it was massive. I mean I mean this isn't anything that we you know maybe didn't already know Rob but the fact that he comes on stage addresses the fact that someone's gonna probably pick this up and then says it in such a bullish way is insane. >> What is this TVPN? We're talking about Aentic tokenized financing. >> Dude, Aentic Payments. >> Aentic Payments stable coins for agents. >> Guys, we got the tokenization lead >> of Bailey Gford >> coming right up. Um Rob >> Neo Golden. We've had an insane week at um >> D

>> at D. >> And there's a lot of tokenization talk. >> Yes. >> I I'm still bringing that same kind of energy and that same flow from D. What do you What What do you expect out of uh Bailey Gford's tokenization lead here? >> Yeah, I think uh Bailey Gford is uh a premier partner here. I think Theo Golden is going to be talking a lot about tokenization and digital assets. Uh and we're going to bring him right up. Uh he's just entering the space here in just a moment. And so we're going to bring him up, the tokenization lead at Bailey Gford, uh, live from DeFi Day at ECC. And so we're going to be chatting about RWAs, uh, why they're not at $1 trillion yet, uh, and how we're going to boost these numbers up. We were coming

off of digital assets last week, digital asset summit in New York City, and now we're here in Can we've got Theo Golden right here with us now. Theo, welcome to the show. >> Great to meet you, man. Great to meet you. >> Absolute pleasure. >> How you feeling? >> Yeah, great. Hey, it's great to be here. It's well, like, you know, people keep on saying DeFi is dead and look at this crowd. I mean, it's absolutely heaving. It's very much alive and kicking and we're having a lot of fun. So, it's great to be here and thanks for having me. >> Absolutely incredible. I I mean, can't can't agree anymore. Um, I I'm just curious, maybe for anyone who's unfamiliar, Bayy Gford has entered the digital asset space, the tokenization space. Why don't we get a primer on Bayy Gford for anyone who's unfamiliar, and

then we'll get into what exactly Baya Gford is doing in the tokenization space. >> Yeah, absolutely. So, um, yeah, Bailey Gifford, we're a we're kind of one of the biggest, uh, UK asset managers in in, uh, we run about $300 billion of assets under management, um, across like public equity, private equity, fixed income, multiasset. Um, we're kind of, uh, we're based in Scotland, which is, uh, beautiful, but kind of less familiar. Um, but we're we're kind of a firmly a very active um, active house. So, we only run active products where we're we're adding value through our investments uh, and our kind of investment process. We um kind of particularly specialize in in high uh kind of high growth equity investing one of the kind of most famous like investors in SpaceX early in Tesla and you know we're in the thropic revolute

etc. Um but BG as a whole we're kind of you know we tend to we have we tend to think in decades not quarters and that's really our edge. We have a very very long-term view and for us crypto digital assets that's firmly within that and we we we seek to invest in the most innovative companies and you know really with crypto we're looking to almost like disrupt ourselves and bring that innovation inhouse and be kind of a really I guess positive um influence in how we can help um like crypto native teams really scale up in a way where they're kind of building products that you know institutions are going to not just know and use but also love in time >> and and as the tokenization lead at BG Bailey Gford What does your day-to-day look like? Are you are you helping more

crypto native teams? Are you educating a lot of the traditional financial institutions, helping bridge the gap, bring them on chain? What does your what does your day look like on a on a normal basis? >> The day is long, but it's very fun. It's a bit of everything. So, I also run a bit of money as well myself. So, I run a bomb bomb portfolio as well. Um, and but in my tokenization role, I'm very much focused on building kind of tokenized funds. We can talk about that for like fully native tokenized funds. what that looks like and how we do that in a way which is kind of both DeFi native but kind of regulatory compliant and is in a way which you know our existing client book not only would be uh uh applicable to but also would you know is better to

the extent where they would want to move over from traditional product. Um the other side is yeah working with crypton native teams helping them think about how they go from just being kind of um a a point in time product to being a scalable platform um across and you know basically cannibalizing um you know ingrained intermediated parts of the trady market and really taking them into the regulatory clear area and thinking about yeah how do they beat the incumbents and yeah as you say you know talking to our existing client base um helping them educate like what why use a tokenized product why you know what do need to go and buy a tokenized product like what's the utility beyond just simply you know owning a mutual fund or something like that and taking them on that journey and because BG is a kind of

you know we're a private partnership we don't have any external shareholders there's kind of a trust element we're not really trying to we're not trying to extract anything from them we're just simply being kind of subject matter experts and taking them on that journey >> so so let's start here with the sophic sophisticated investor that that end user that customer why is it better right because we've talked a about how tokenization can help uh make a lot of these markets more efficient. Lower settlement times ultimately provide some value in terms of understanding better risk uh topology as as far as where the where the money is at any given time. Uh lower settlement times unlock a lot of idle capital. Um but a lot of that those efficiencies happen at the enterprise level. Yeah. uh they can save a lot of

money, increase their bottom line, but ultimately from the enduser perspective, it may still look like the same security through a broker dealer that they're they're used to they're used to purchasing. So what is the benefit of tokenization for the end user? >> Yeah, definitely. I mean maybe taking on a bit of a journey here. So like when when at Bailey Gford we think about anything we do in the crypto space has to be what we call the same but better. And we say like so anything we do in terms of product creation needs to meet the same standards the like the same structuring same quality same ownership rights that we do in the in the traditional space but it needs to have a but better element and that can come in many you know many different uh veins.

It can come from you know better utility the ability to post it as collateral or get kind of you know or be it through composibility being able to build like a vertically integrated kind of portfolio across a stack. It can be through speed, efficiency, but you know it can also be cost and you know Bailey Gifford is slightly different to other people. When we save cost, we pass it on to the end customer. We don't enhance our bottom line. We see that there is a you know that we're able to do that because we don't have external shareholders and we say look there is a fair market value to investment expertise. That's what we currently charge. We don't extract any any value above that or below that. We we simply we know what we're good at and we do that. And anything that we because

ultimately if we're saving costs for customers, we're also enhancing their outcome in terms of better financial outcomes. You know, two basis point you know saving over 10 years will compound over a 60 year life or a savings life that will compound over time and be truly meaningful. And so it's in our best it's in our fiduciary duty to pass that on to customers. Um some of the I mean some of the use cases I get particularly excited about. >> You know there's obviously the collateral piece for money market funds. um you know being able to post collateral to kind of you know enhance like FX efficiency meet um you know cash matches so I'm not having to sell down parts of my portfolio and then buy them out two days later just to meet a two-day funding cycle those things I mean they're quite obvious but they're

very kind of you know for the end kind of customer for retail particularly they feel quite unfamiliar that's much more for me with my portfolio manager hat on that feels you know a nice warm and cuddly thing that I'd like to do for end retail it's much more about getting access to to kind of services that you wouldn't have otherwise had you know so you RB's here today talking about kind of, you know, we're thinking about borrow etc. being able to essentially use your capital, collateralize your capital in a way where maybe you know the top 10% 1% of asset holders are able to do because they have access to private banks or something like that. So democratizing access to those services.

The other thing that I think is super important is, you know, I I talk about tokenized funds in particular being a little bit like a gateway drug for for Tradfi because what it enables us is to build the operating stack that we need to touch tokenized assets. And once you know you've got your digital asset custodian, you've got your digital transfer agent, you've got all of these things, you can then start to build fully onchain stacks and be a player in underlying tokenized securities. You know, we're a big investor in US stocks. I'd love to run a fully onchain US stock portfolio which has just run out of a vault. Well, guess what? You know, my cost of running that fund probably drops about 60 basis points, you know, and I can pass that on to customers. So, that's when, you know, those folks really get to fill the full utility. The

last thing I was going to say is >> in terms of some of the stuff that feels a bit unfamiliar to people in retail, I think people forget that a lot of retail flow is then packaged into institutional flow. you know if you're going through a Vanguard a black rig you know you are buying you know often institutional it's being packaged into an institutional product and then often um goes and you know is then like goes through the financial system etc. So all even those things that feel a bit distant and weird and like things like collateral for FX or um you know composible portfolios or funding cycles all those things um or even just custody and TA you know them becoming fully onchain and native dropping that cost dropping the human error dropping the manual the manual processes that will have tangible value it just it feels several orders removed.

Um, we like to think about it as in if we get this right as a as a as a traditional finance and a decentralized finance community coming together as finance, we are going to basically improve the risk adjusted outcomes for everyone in this space because you'll be reducing the human error, the operational risk. It simply just becomes the tech risk of being on chain >> and hopefully you can also save costs which will increase the you know the the financial outcomes and if you pull that all together you should be getting a better kind of sharp ratio for for your assets. So that's the better piece, but you also mentioned like as secure, right? And because you are taking the onchain risk and maybe you're minimizing a lot of these other risks, you're making things more efficient, ultimately passing on the the lower cost in terms

of cost savings to the end user, the end customer. But, you know, I I really like your framing this the same but better. Um, and so, you know, talk to us about how onchain risk might compare to some of the human error and some of these risks that you're mentioning that are currently embedded into the system in the off-chain system. H how how does the onchain risk compare to what is currently in place? >> For sure. Yeah. So, there's I mean there's a couple of what do we mean by the same in the first instance as well? you know when we uh we tokenized the first fully native tokenized fund in the UK which was um a uh actually the street bomb fund and we did that and when we mean by fully native we mean onchain books and records so we utilizing the the blockchain as the legal source of

truth of of ownership 24/7 come back to that in a bit because it leads into your question and then the second piece is also it's fully native so there's no kind of SPV there's no beneficial ownership structure there's no you know extra layer of cost risk and particularly counterparty risk >> and this is the direct tokenization model. Yeah. Recently, we've heard quite a bit about the wrapped token model. >> Any anything to say just as a quick tangent on wrapped tokens for tokenized equities, tokenized funds? >> Yeah, I think so. Look, look, to me, um, different product has different meaning to different people, right? And, you know, it's really about building products that that really fulfills the risk profile that different customers want to hit. So, for example, the WAP token makes a lot of sense for particularly retail. They just want they want access to the asset. They want it

in the form that they they want it in. um they don't care as much, you know, potentially as about like corporate actions, pay disputes, um you know, they don't mind that it's in an SPV out of the British Virgin Islands. They just want access, you know, they just want to deploy. Um that's fine and and you know, and that works for a lot of people and they're doing really well and I think that's going to have really strong, you know, the Onondo models of the world is going to really like have traction long term because, you know, they will have, you know, potentially greater utility because of the aspects of being, you know, I guess more fully on chain.

they're not limited by the structure that's offchain >> with the direct issuance model. What you what you're getting and this is what's going to be appropriate for the institutions. So like the next you know 650 600 almost 700 trillion of of assets that come on chain is like for our mandates we can't take that extra layer of counterparty risk and we don't really want to because we don't have to today. And so if you're trying to say to people this is better this is you know there's cost involved in that capex to come on chain and you can only do that you you won't do that if you think you're going to get a worse product. And so the direct issuance model where you have direct recourse to the underlying, you have regulatory clarity, you have the ability to know you know in specy your

assets out of the structure. You have the ability to pay you know you know vote on next Elon Musk pay dispute or whatever it is you know we have a fiduciary duty to do those things. Our mandates compel us to own those structures. We are heavily regulated institutions and so direct issuance is basically going to be the model that we have we're forced buyers of that. >> Got it. Um >> so that's so this is part of the uh the onchain risk but the risk onchain is somewhat dependent upon the tokenization model. >> Exactly. And and the rat model adds layers of risk but it adds layers of you know potential more utility. So so it's a different sharp ratio, right? It's a different they're different trades if if you think about it. And that's that's how we tend to kind of think about it

because you know there will be things that you know we might do that the rat model might be more appropriate for. they'll be, you know, you know, particularly if we're trying to onboard our existing book into crypto, they're only going to want to buy the direct model. So, you know, we have to play flexible. We have to be making sure that we're getting the right product to the right people and being that kind of institution of trust. Um, but also kind of the institution tough with DeFi ideals. So, with the ideals of self- custody, with the ideals of 24/7 and not, you know, a you know, exaggerated counterparty risk >> to your to your point about like what are the the kind of the savings for people about being on chain like what's actually better in in I mean the big one for me is like transfer agency like this

is the most potentially the most boring part of traded >> yeah who owns what at what point right and in in a mutual fund or a usage fund you know we basically go daily we go this person this is the shareholder list right we go once a day these people own this fund this is who our clients are these are the beneficial owners right if you start to use the blockchain as the legal source of truth you get two extra things. Firstly, it drops the human error risk. It drops the kind of the reconciliations that you have to do. You just have one legal source of truth which is automated. We say we like to say that um tokenization is just unitization on steroids because it's just programmatic unitization. The second component is also you know once you start to do that you're able to do

it you know outside of that one business day an hour uh one hour uh every business day and you know that's really important because you know we want assets to be traded. We want people to use and not be limited by our cash flow uh requirements. And if you are 24/7, then that's great. It's important to say, but that's only really available right now in in um you know, particularly for tokenized funds where they have an onchain books and records and most tokenized funds in the market don't. >> Um they have what's called a mirror book or hybrid book where they basically have you know a proxy shareholder register on chain but it's syncing once a day to the legal source of truth.

>> Right? This is the represented uh uh share of tokenized assets right now. Yeah. Um which if you know you can go on rwa.xyz and you can see the split and the predominant share of RWA are current this representative form where they're sort of just using the blockchain as an accounting layer. They're not tracking the pure true ownership of these assets using the blockchain >> and they're not legally but they're not leg they don't have legal recourse. So for example like the the the source of truth is the thing that has that once once a day kind of point in time sync. So trading between you know you're taking counterparty risk in that in that moment.

>> Yeah. How long has this method been available to us? Uh I know in the US it's only you know been recently that we've gotten some regulatory clarity in terms of hey these things are digital securities. There's no disputing that. What do you think was the trigger moment that ultimately opened the floodgates? And now we're seeing firms like Bailey Gford. We're seeing more firms like Morgan Stanley and others. I'll get back to Morgan Stanley in a second, but we're seeing more and more of these institutions finally, you know, open their doors to tokenized funds and start to issue assets on chain. >> Yeah, I think so. So, in terms of like the ability to do onchain books and records, it's been pretty new. So, they, you know, Benji and Franklin's tokenized fund, they can use onchain books and records in their Lux usets. um we can

use it for the the FCA vehicle that we had and the um the you know >> but we had to get like special permissions for that. We had to really it wasn't just like a uniform like blanket approach. Um that's increasingly we think you know changing I think especially as the regulators are doing an amazing job and they're thinking kind of you know how do we how do we get bestin-class as a jurisdiction and that's that's been that's been brilliant. Um, so it's it's but it's it's also worth weighing up that, you know, doing an onchain box and records takes longer through compliance. It takes through legal, through regulation, but it also it imply it does have a um it's harder to do, right? It's it's but once you've done it, the kind of incremental cost saving over time, the ROI of that process is very high.

>> Who's in the in the position to be disrupted the most as a result of the direct tokenization model? My understanding right now is that we do have some broker dealers where the broker owns all of the shares and then it deals the shares to its end customers in terms of the retail users that are using the broker dealer platform. Are those firms about to be disrupted as we have this this moment that unleashes peer-to-peer finance? These shareholders are able to own tokenized shares directly without needing a broker dealer of sorts.

>> I think look, a broker dealer is a certain type of license. is still incredibly important and broker dealers will have particularly a role in secondary market liquidity and those sort of things and the kind of the distribution like it will start to just look more like a a tradesque uh distribution relationship but there will be kind of less kind of intermediaries between them. So you might go so like there's a really good study by Dr. king which kind of said in the UK um there are 19 intermediaries from pound to product pound as being our kind of our our currency to product right and I think what you'll basically see you know that 19 might go down to three you know it might be issuer broker dealer wallet that sort of model and that that reduction and you might be like you know you'll be reducing the the custody might

be on chain the TA might be on chain the fund admin might be on chain if if these assets underlying us are on chain as well >> and so you know I haven't seen this this uh this uh unpacking this unbundling of the 19 these 19 intermediaries >> if you could just call out maybe one or two that who do you think are most at risk in that stack? >> I think so. I think like a lot of them change and they they become so like they become so TA becomes less of a recordkeeping role and it becomes more of a KYC role and it becomes more of like a uniform product probably with custody. You see like the big banks moving that you know most big banks don't really make a huge amount of money on their custody business. Custody is a cross-selling thing. they bring you in

as custody and then they try and crossell you TA etc. And I think that's going to be the same thing here. they're going to, you know, TA that actually become like a KYC AML program that and so I think they'll change. I think the biggest ones who get disrupted are kind of like um particularly the kind of I guess you can the AJ Bells of the world where you're kind of your distributors in that respect where you know particularly in a world of AI when you can get you know wealth management advice you know at the click of a finger and you're just simply getting it potentially in wallet as we know a lot of wallet producers want to do that you know those sort of players they're kind of you know value ad is already questionable but you know at you know charging 30 basis points for a platform

fee you know you really start to question are they required and I guess the key point here is that the DTOC model, the direct to consumer model is much easier to do in a tokenized world because you're not having to have, you know, APIs for every fund, every product. You just have oracles that sit on chain. So the hurdle rate to the hurdle rate to access is lower. The hurdle rate to being a financial participant is lower and the ability for us to have direct relationships with them is higher. Um, so I think those are going to be the big disruptions and I I think you know I actually think the banks could be relatively big winners of this. I I always say to people particular when talking to startups is there's two ways of disrupting the

technology is disruptive or your company is disruptive >> and you know for a lot of spaces places now this the technology is disruptive and it's very hard to disrupt incumbents if the incumbent itself is disrupting itself right and I think that's particularly true in this space. So I think there's, you know, there is a massive opportunity if the banks particularly don't get let bureaucracy get in the way and they able to really empower the people. We have fantastic people now in those seats at the banks. I think we've seen that particularly in the last couple of weeks. Um to kind of get out of their way and enable them to innovate in a really really um creative manner. Um I think they have the ability to be phenomenal winners in this space >> and and same goes for the asset managers as well. You guys are doing incredible

extremely forward thinking and fast-paced. Black Rockck as well. It's doing incredible things as part of supporting tokenization as a whole. Almost disrupting themselves before they can be disrupted. Uh very much an adapt or die mentality and they're choosing to adapt. Um only a couple questions left for you. You know, you mentioned working with startups, working with some cryptonative teams. Same question, you know, maybe just from the other side. Who do you think are the cryptonative teams that are most poised to do the disrupting? M it's it's like it's very it's very interesting. I won't mention any names >> but I think the players who are really like the best way to you know I think the best example >> name >> the best example I think is is those who

are you know being you're thinking about being institutional first >> and um but with the kind of principles of DeFi and so I think the players who are can you know trying to basic I always say don't don't over complicate it at the start as soon as you add complexity at the beginning you've lost and so you don't want to necessarily reinvent the wheel because finances is actually pretty efficient. What you're trying to do is take things that already work today and just make them, you know, quicker faster better automated lower counterparty risk, all of those things. And we've seen a lot of players come to the space who are thinking, okay, this thing already exists offchain for onchain assets to have a real flywheel effect. This thing is also so I always think about, you know, secondary market trading like market makers are

actually a really big winner, I think, in this space and their ability to, you know, as you take air gaps out of, you know, the cash settlement cycle. Well, if you take air gaps out, you need to put liquidity in. So, liquidity providers, I think, are going to have, you know, particularly in the meantime, have an ability to almost like name their price. I think that's going to be really important. But the secondary market liquidity piece as well is really interesting. You know, we need to be in a world where tokenized funds can be traded, make a market in them, and we're not taking like 2% haircuts because, you know, ultimately if you're taking a 2% haircut on an underlying portfolio, like what was the point in doing it in the first place? Um, unless you you're a force buy, forced seller. So, I think

those things are going to be really important. And then I think the you know stable coins the thing that have real like impact in the real world today. Um and so anything which is kind of stable coin adjacent infrastructure which actually makes them usable across the stack rather than just simply you know payments you know just in time payments because actually most players corporates banks etc don't want to be just in time like actually there is a there's a premium you're willing to pay there's a cost of carry that you're willing to pay for peace of mind as an issue as a CFO and so people who are able to take stable coins beyond just simply the kind of the crossber just in time payment piece and expand it out um beyond just yield as well just expand it out across

the stack through the banking system they're going to be going to be the real big winners and that might not be issuers that might be infrastructure that might be you you know might be market makers um so I think I guess the big thesis I would leave you you on this question is like >> currently in finance you have vertical leaders you have asset managers you have banks you have exchanges etc you have these vertical leaders who define a category um in the next 10 years I think there's going to be basically a complete breakdown in those barriers and you're just going to have expanding TAMs to tangible addressable market but they will be collapsing into each other so wallet providers will be competing with exchanges banks will be competing with asset managers asset managers will be

competing you know with you know direct lenders and like the competition is going to people will be cross verticals and they'll be able to because the technology reduces the edge that you have in a particular vertical. It allows you to both compete but also have to defend. And so I think the big thing is like you're going to have this TAM grow as a collective, as finance, but we're going to be able to essentially move between those verticals and not just be defined by the thing we already do today. >> Yeah. Incredible. I I feel like we could go for another another hour, but I I I think that was such a great point to leave off on because it really does open up our minds as to how these colliding worlds might start to intersect with one another and and what could potentially shake out as a result. And so I'm going

to I'm going to let that one I'm going to let that settle marinate and uh would love to do it again sometime soon. Appreciate you coming on. >> Appreciate it. Thank you for having me. >> Absolutely. Yeah. Cheers. >> All right. That was Theo Golden of Bailey Gford, one of the largest asset managers in the UK. Absolutely incredible guys. We are just we're just cruising here at DeFi Day. Andy and I just traded off today. Glad I got to do Theo. Uh really incredible. I mean, opens our eyes after so many great conversations uh about tokenization, about digital assets at the digital asset summit. We're just continuing this because this is ultimately where the industry is headed. And so it has carried over from New York City at the digital asset summit ultimately to ECC

and can because these worlds really are colliding over there. You heard us talk to Franklin Templeton, Wisdom Tree, Superstate, Securitize, Ono, some of the some of the companies that are leading the tokenization race and now we're hearing from some of the largest asset managers in Europe. So no surprise there. We are communicating with natives every single day and we have some of the largest players in the space going from continent to continent every single day. My co-host is gonna join. Why don't you have a seat? Yes, sir. My my great co-host. Yes, sir. >> Andrew Andrew joins the show.

>> Just did the LinkedIn docs. I'm officially Andy Kavanaaugh on LinkedIn. Here we got Martin Derek from Maple. I'm going to guess he's from the Netherlands, but I might be wrong. He's coming on here next. What's going on, Rob? >> I'm just absolutely firing. Bailey Gford was in here. one of the largest asset managers in the European Union. Absolutely incredible. And uh you know, head of tokenization, Theo Golden, just open my eyes to how we could see these worlds collide and where we might see some of the verticalization start to unpack and start to see some crypto companies compete with some of the largest asset managers in the world.

>> Well, I'm about to ask Martin how he plans to get Syrup USDC up and with the ranks of SUSD S and SUSDE and all these other competitors in the tokenized treasury market. So, we're going to take a quick break. We're going to get Martin up here. We're going to get some fire to it. >> Let's get it, baby. Let's go. Heat. Heat.

Heat. Heat. N. Okay. Yeah.

You know what I'm Ladies and gentlemen, we are back live at the Defi Day at Le Palis in Khan, France. I'm here with the head of growth at Maple, a local Dutchman, Martin.

Martin is going to talk to us about Maple's surreal growth in the tokenized treasury market with their syrup USDC, Syrup USDT, their their credit products, and more. Martin, >> amazing to meet you, man. >> Thanks. Thanks for having me. It's really exciting to be here. What a scene. What a scene. >> Awesome. What a scene. I'm in this little closet here, huh? We're doing all right Martin. >> Beautiful plan. >> I mean, come on. You fit in with the times. It's like we're going to St. Trope. I think we went to one town over on accident. I think you and I were supposed to be in St. actually. >> Yeah. Later for dinner.

>> What's your background, man? How did you get involved with uh with Maple team? I I know on on the team there's quite a few folks with the DeFi native orientation and then a lot of the kind of traditional finance orientation. Which one are you? >> Yes. Yeah. So, I'm more on the DeFi side. Like to your point, most of the team is really from Tati and I've been in crypto since 2015. You know, always been fascinated by finance. I started investing at a young age. Uh and I just loved sort of the freedom that the crypto brought right like being sovereign uh and being able to uh just invest in all these different cool products and you know having it uh globally. So I joined Maple in 2022. So now real OG been here for four years. Uh been through the cycles right seen the

highs and the lows. Uh and yeah what a journey. What a journey. Really really excited. >> Huh. >> So what syrup USDT I or sorry syrup USDC sitting at $1.3 billion right now I believe. served USDT just under a billion I think so that's about 2.2 2 billion dollars in tokenized treasuries on Maple. Man, how did that happen? >> Yes. Yeah, it was a journey. Actually, it just went across a billion over the weekend. Awesome. Exactly. So, it's really, really exciting. So, now two assets over a billion uh making us the only, you know, sort of onchain asset manager that's like two different uh dollar based assets above a billion.

So, how did it happen? Yeah, it's, you know, I always say the product, you know, the product is just phenomenal. Uh it's institutional overcolateralized lending, right? It's super scalable. Uh it's overcolateralized. So, you know, it's it's very safe. Uh and it can take a lot of scale, right? Like we, you know, as we sort of take in deposits, even this quarter, you know, we've grown by 800 million in deposits, right? Seen phenomenal growth. Uh and we continue to deliver sort of outsized yields to the market. So, you know, I think the growth uh will keep going for a long time. Uh as you know, we're just starting to tap into uh what this market can offer.

>> Man, so there's this ongoing private credit crunch happening in the States. Apollo, uh, a couple big other funds are limiting redemptions on their private credit funds. Uh, we had Jeff Park on the show talking about why the folks who love private credit are very different than the folks who like Bitcoin. Why? Because private credit typically isn't marked to market. It's all it's, you know, when you invest into it, it's it's kind of at one level consistently. It doesn't really change in terms of its kind of like market price. Bitcoin very volatile. You get what you get. It's kind of marked to market every second, every block. Um, does Maple have any exposure to this private credit

situation or how do you guys think about what's happening in the private credit market as it pertains to what you guys are doing at Maple? >> Yes, excellent question. So, first of all, Maple has no exposure to private credit, right? Like we're not involved in that. We have looked at it, right? Exactly. For those reasons, we've sort of not moved yet. Uh and I think, you know, Maple sort of the best of both worlds, right? It has a mark to market at all times. Uh people can withdraw at all times, right? And withdrawals are pretty much instant. Um but it is a yield product, right? That's of course, as you say, with Bitcoin, right? It's it's it's a phenomenal asset, but it's very volatile. So, you know, for investors that are looking for the best of Bitcoin and the best for private credit, uh which is, you know, sort of

transparency, yield, you know, combining it into one, uh that's where Maple comes in, right? And that's why why we've seen such phenomenal growth. I would say you know everything that's happening with private credit right now is actually a big opportunity for us right because you know the private credit allocators are starting to see that you know it all looked great right like well everything is going up and the yields are sort of like being paid out but the moment that issues show up it's really you know what's actually happening under the hood right often it's quite black boxy and then there's you know sort of long time frames before you can get your redemptions in if you can even get them you know there could be losses um so you know I think investors are a bit spooked and they're now coming to to Unchain

involves and unchanged strategies where you can actually see what's going on under the hood and you can verify you know the track record in real time you can verify the performance of the strategy you know you can actually see what's happening so I would say overall it's an opportunity >> yeah of course you know there could be some pain in in certain pockets but overall you know Maple's very well positioned to uh to benefit from it over the long term >> yeah and so when it comes to thinking about the the uh exposure that Maple does have where does the yield come from in Maple's product time. >> Yeah. So our uh core strategy is overcolateralized lending to institutions. Uh so we take in Bitcoin, Salana, uh Ethereum as collateral and we issue dollar-based loans against it. Uh so it's very plain vanilla, right? We

always have the collateral in our custody. So in case prices drop, right, we always can protect the loans by liquidating the collateral. Uh so it's a very safe form of of lending and it's also short duration, right? So they're short duration loans meaning that we have that attractive liquidity profile for our ops. Um so this is really our core strategy. You know we're looking at other things like of course RWAS are interesting uh you know the basis trade and there's other sort of pockets of returns in the crypto ecosystem that we're looking at. Uh but this right now is the core of of what we do.

>> Yeah. And then on the revenue side for you guys I mean the revenues have been consistently increasing. Market isn't really pricing it in yet. I mean, we're kind of in this weird phase right now. I called it the revenue meta like a year and a half ago on Twitter or a year ago and I got I got absolutely slammed for that one saying that there is no revenue meta. The entire meta of business since its existence has been to generate cash flows. But we were living in such a different time about a year a year and a half ago in the digital asset space where it there wasn't much revenue. you know, Hyperlid came along, Maple came along, Sky came along, Athena was doing well for a while and you know, you know, a lot of these names and now the market

is starting to price that in, right? With the institutional allocators coming in, all they know is DCF, they know free cash flows, they know these models of of kind of like risk adjusted returns and and kind of like being able to actually forecast out um a protocol's growth. you know, from the maple side, um, there's been a lot of revenue growth and it's been, you know, it's been under I I think it's been under appreciated how much it's growing based on the total market cap of the asset, the MPL token. Um, curious how you guys think about this internally, right? There's this conversation about buybacks, about investing in R&D and team. I think the market wants to see buybacks. The market

wants to see con the market wants to see token holders be treated as first class citizens. The protocols want to invest their capital and the revenue wisely. How do you balance these two forces at play at hand here as the head of growth? What does this look like for for the MPL token holders? >> Yes, great question. First of all, it's the syrup token holders. So, we did a no worries. No worries. No, we did the migration. Yeah. >> So, syrup should have brought my syrup hat. I would have >> I would have I would have clarified it from you. Um but um yeah so to your point last year our northstar goal was TVL right like that's what we're going for and this year our northstar goal is revenue so very much you know we're on the same train right like we see revenue

as the ultimate objective right of a healthy business you know how much are clients actually willing to pay you for your product right like this very important um and I think every crypto company is going to have to do exactly that so I fully agree with your your thesis in terms how we approach it, right? We're still in the high growth high growth stage. Uh so, you know, we'll make sure that we keep investing in growth, right? We still want to make sure that we we grow another, you know, four 5x this year in terms of uh deposits, which then, you know, translates into revenue. Uh and at the same time, we use about 20 25% of our current revenues for buybacks, right? Uh so, we actually take those tokens off

the market. Uh and you know, whatever the price action does, right? I mean the lower the price the the bigger the percentage you buy right >> um so I think uh you know sort of um the challenge I would say right now is that >> everything just sort of moves in sync right >> although you're starting to see some real bifurcation this year right between between assets and I think you know we certainly have to do uh a better job at communicating you know sort of like our revenue focus and and all of our revenues to the to the market but I think it's already starting to be picked up uh and you know it just creates a phenomenal opportunity for everybody that uh that uh you know starts to see this already.

>> Yeah, I mean most definitely there's starting to be some of that slight kind of you know dispersion in returns obviously and I think it'll probably pick up. What you've really seen is as far as the dispersion goes so far is that you've seen a lot of assets uh draw down significant amounts and the ones that are kind of more fundamentally sound draw down less. M >> and I think that's typical in markets as well where you see like less draw downs in assets that are high quality. The question will will be like will you see uh outsized returns in the more bullish phases of the market with fundamental assets as well or will there almost be like um an imaginative ceiling on these assets because of the revenue because of

the fundamentals? It's almost like a two-sided story. Will the market kind of come back into the memes and into other kind of like more narrative driven stuff? Yet to be seen, but definitely an interesting proposition to kind of like run through in your mind. >> For sure. Definitely. Yeah, I think there, you know, crypto will always be crypto, right? There will always be short periods of speculation and people sort of like piling into assets. Uh I definitely agree with your point. You know, >> being investors being so focused on revenues, you know, can also create the other side of the coin, right? Where there's like this the ceiling on an asset. But I think ultimately like that's how we're going to mature as an industry, right? And that's how um you know, we'll actually grow.

>> Um and in general, you know, I think right now there's there's more like a shortage of capital in the space, right? And that's why a lot of things are just getting sold off. But if you actually look to the fundamental valuations of, you know, some of the coins >> that uh that we've been talking about, >> I mean, they're really in deep value territory, right? Um because right now if you look to the multiples it's based upon bare market conditions right you can imagine in a bull market the actual revenues and the cash flows that are being generated um are are really outsized so I think that um you know I would say it's a massive opportunity for anybody that uh that still has some dry powder after all of the draw downs recently.

>> Yeah. Yeah. Okay. Okay. Well, then one one more question on this subject and you don't have to answer if if you can't find one or if you don't think it's appropriate, but why would anyone buy Syrup token over Hyperlid? Hypquid generates more revenue, has stronger buybacks. Obviously, it's a higher market cap, but it's programmable. It's it's happening every day that they're scaling. Why own syrup over Hype? >> Yes. Yeah. I think instead of saying or, I would say, and right. I think, you know, part of investing is is being diversified. I mean, you don't have to be in 50 assets, right? But sort of owning a couple of really high quality names, I think is a sound strategy. Um, and the reason that Maple is so attractive is really, you know, we're category of one in onchain asset management.

>> Um, and I think that we'll continue to dominate that category, right? Like you just start seeing, you know, recently as just the amount of inflows that we're having, you know, the amount of growth, >> uh, is really phenomenal. And the main reason for that is that there's a lot of players right now in the space that are attracting new deposits, right? Wallets, exchanges, um, you know, sort of like all the fold curators and lending markets and they're all attracting stable coins, right? Because a lot of people want yield. >> There's actually very little players that are sort of at the bottom of that generating actual yield, right? And all those stable coins ultimately need to earn yield. So what we're seeing right now is that you know syrup USDC and syrup USDT are just getting integrated into every vault, every lending market across every chain. um because you know

they are reliant on our yield right like if they don't generate the yield the stable coins just going to go to another place right >> and that's really where maple comes in is >> one of the few places that can earn that yield at scale right uh and that's I think uh that's really the opportunity and and that's what investors uh you know are are sort of looking at in that case and of course bs is phenomenal right and hyperlquid is incredible I mean incredible team a lot of respect for what they've done uh but there's also a really big delta in uh valuation, right? >> Um so I think that's also where part of the opportunity comes in.

>> Yeah. Yeah. I mean, so we've been calling this kind of convergence of finance and digital assets as like neo finance or there kind of this general uh way to think about this construct. It's not really DeFi. It's not fintech. It's kind of in the middle here in this intricate land where it's a lot of these frontends that we're used to either on something like an a or something like Robin Hood, but plugging in a protocol like like Maple underneath. Users don't really understand what's happening underneath, but you know, get the yields that they want on chain. As far as distribution goes, I think this something that that uh Maple is going to want to really try to push and, you know, one could argue is struggling with at this current point. How do you guys expand your distribution and kind of get over this distribution woe that uh is

probably like limiting the amount of capital that wants to get the the yields available just doesn't really know that it exists >> right. Yeah. So the core of our strategy is to be sort of partnerdriven, right? Um so actually if you look to a lot of you know even last week you got the announcement with a and right sort of like this fintech right >> um yeah >> and if you if you look to those flows like they're going into plasma a >> y >> and ser USDT is a collateral asset on plasma a right so we are the direct beneficiaries of those flows >> y >> and that sort of comes back to my previous point on where does the yield ultimately come from right and if you actually follow sort of like the capital you will see that very often the yield actually comes from maple

>> under the hood Um so you know whether we directly integrate with WP or whether it's you know a and plasma to maple it doesn't really matter right like we ultimately just want to be the beneficiaries of those flows and we will be as long as we continue to generate that yield at scale right within those >> uh sort of like within the mandate that these players are looking for. And >> I can tell you there's a lot of other >> very exciting deals on the table sort of similar structure >> including us being directly integrated with these players right where it's like this is a maple you know yield product and it's very clear sort of for the end consumer what they're allocating into.

>> Yeah. >> And we understand you know the also the power in that sort of like getting our brand out there. So I think you know we can do both right and we just want to be positioned to to do both. Uh, and yeah, we we'll partner with uh with other players that need yield to to deliver it for them. Yeah, I mean Martin, there was a uh to to kind of push back on this kind of plasma uh idea and just general uh RWAS or stable coins in smart contract platforms at at large that there was this guy on our podcast um in New York, Austin Campbell, who's a founder of like a zero knowledge company and is very like is very like almost like anti not like anti-thereum but like anti-permissionless blockchains. like it seems that he's given like Canton

bullishness, right? And his his take was you you can only have two of the following three. The three being permissionlessness, RWAS, which includes stable coins and smart contracts. Meaning that in the lens of a federal judge, it does not matter what the uh you know where the illicit activity is in a non-KYC or AML platform. If there is some illicit activity in an A pool that is using syrup USDT, they will just force A or Syrup to freeze that entire pool and brick the whole thing and tell them to go figure it out. Go figure out whose funds it is. Go figure it out.

Brick the whole thing. And until you guys, you know, figure out how to stop this from happening or at least remove the the flows of these illicit funds, we're just going to brick this whole thing and we're not going to try to stop it. You guys go figure it out. And so he brought up this point as if like this idea of even like something as simple as a LP pool on unis swap with with a stable coin and ETH or any asset or an a pool this is something that is going to be problematic in the future in any sort of regulatory circumstance agree disagree is this guy full of it you know what's your take >> yeah it's interesting question I mean it sounds a little bit extreme right like I think if something like that would have happened it probably would have happened

already I mean we've already been there you know for uh for for a long time, right, since the DEFA has been around like six years now. Um, you know, I definitely think there's like things that need to be addressed, right, around sort of like AML and, you know, there's like all these different ways of like how do you structure these assets and how do you classify them and things like that. Um, at Maple, you know, we sort of focus on top-notch AML at this stage, right, which is, you know, using a variety of like onchain checks to make sure that the wallet is is is safe and and things like that. Um and on top of that, you know, we KYC all of our borrowers, right? So, and that's typically what gets our capital suppliers comfortable is that they know that all the capital is actually flowing

to KYC uh institutions, right? So, it's like a known counterparty. Um so yeah, those would be my high level thoughts in general in sort of permissionless versus permissioned. You know, I think there was a huge movement in the '9s or or maybe even earlier to have sort of the Ethernet, right? the intranet uh but ultimately the internet won right and why did it win because it was open it was permissionless anybody could launch anything and I think sort of this really collaborative open ecosystem ultimately just drives more innovation >> and countries ultimately cannot afford to miss out right so I think really the window for countries to ban open permissionless finance altogether I

think is really closed right like you really see that the large jurisdictions are really starting to embrace it or have already embraced it. >> Yeah. >> Um and you know there might be one or two jurisdictions that just don't do it right. But I think in general most jurisdictions are going to uh permit permissionless finance and then I think it's just going to dominate right because of all the attributes that just uh promote innovation and interoperability and you know different players working together and uh bringing products to the market. So yeah I'm more bullish than ever on permissionless finance.

>> Good good cool man. Um, last thing for you on the CL on the Clarity Act side, on the on the regulatory side, there's this kind of stable coin yield carve out, a couple innovation exemptions coming about. I don't expect you to be an expert on the regulatory side, but you know, what does enabling um actual clarity from the regulatory perspective, what does that do for Maple, has Genius, the fact that it's been passed, has that changed anything for you guys? What does this kind of regulatory uh clarity provide for a a DeFi company and protocol like like Maple? Yes, great question. Definitely, I think regulations are important, right? Like we're seeing it in Europe with Mika, you know, it has been slow, but you do see institutions now starting to adopt it,

right? You just really need regulatory clarity for serious large institutions to to adopt crypto. Um, in terms of Genius, so what it has enabled is just an explosion of stable coins, right? Like I think stable coin growth is really off the charts. Everybody's talking about it and stable coins are sort of the oil to maple, right? like we need stable coins >> uh because we are you know we generate yield on stable coins right so the more stable coins the better for us >> we're looking at ways to generate yield on a variety of stable coins right now we have ser USDC we have ser USDT right the two biggest ones uh but you know we might also move into other stable coins right you got PYUSD you got USDG those are very interesting you know serious backers serious growth so we're looking

at the space very closely that I'm very excited about euro stable coins as well >> of course as a European, you know, I know uh so far dollar stable coins have really dominated, but I do think there's a niche for for euro stable coins and I think we're going to see a lot of that this year as well. >> Yeah. >> Um and overall, yeah, we, you know, at Maple, we would um love to see, you know, sort of like a clarity act at some point, you know, being passed in whatever shape or form. And, you know, ideally, it's it's sort of like in a form that's uh that's really good for for DeFi and stable in general.

>> Yep. Martin, man, thanks for your time. Enjoy it. Enjoy your conference here, ladies and gentlemen. Martin from Maple. Guys, we'll be right back with our next guest. We're here live at Defi Day in Can. It's March 30th, 2026. It's beautiful out here, guys. See you in just a second. Heat. Heat.

Heat. Heat. N. Okay. Get out of here.

Heat. Heat. Hell yeah.

Hey, hey hey. Heat. Heat. Heat. Heat. N.

Get out of here. Yeah, you're ready.

Hell yeah. Hey, hey hey.

Heat. Heat. N. Get out of here. I'm down.

We are back live from DeFi Day. We've got William Riley of Chain Link. We're gonna be talking about prediction markets and AI. People are going to think that this is not even a real conversation. They're going to think it's all hype. It's all just vapor out there. Uh Will is going to tell us uh what's real, what's not, and uh how we can make sense of this because Poly Market's raising over 20 billion uh and uh we we obviously have seen so much of the AI uh narrative run absolutely bananas out there. Will uh welcome to the show, man.

>> Robbie, great to be here. Thanks for having me on again. >> Yeah. >> Yeah. Um, prediction markets. Let's get into it. >> Let's do it. >> Um, you know, prediction markets have been around for a while. Um, but you know, more recently have been rapidly growing hockey stick growth and, uh, usage, volume, popularity. Some of that is, um, the underlying mechanism and mechanics to enable what we call like more high frequency settlement. So historically poly markets always been able to do very bespoke market creation.

Um and they use optimistic oracles to do this. Um one of the drawbacks in that setup is you know it can take easily over one to two hours for a market to come to resolution and it could be as simple as you know what was the weather in Dallas on a certain day. Um there's data points for that and you know after a year and a half working very closely with the poly market team um you know we came to a pretty easy conclusion that chain link being you know the leader in data delivery to blockchains was a perfect fit and so back in October of last year we we launched together u 15minute Bitcoin ETH Salana um XRP up down markets now since Then um February

this year it became so popular we launched five minute markets together. Um all total we've done over three and a half billion dollars in volume since October and you know any given day fluctuating uh volumes and and other markets going on. Chain link markets are now powering roughly 10 to 20% of all poly market uh volume. Um and this is really enabled by us delivering data with an extreme level of accuracy and confidence that you can immediately resolve a market. So if you are an algorithmic trader which is quite honestly thousands of algorithmic traders are on poly market using these markets to hedge their positions. If

anybody just pulls up the screen and you're just staring at the UI, you're probably like, "This looks like some crazy DGEN stuff, right?" What's actually happening is there are folks pinging data streams, which is Chainlink's data uh you know, low latency pool based data product that's delivering this data on millisecond frequencies to these traders. And they're analyzing uh the market trends. They're back testing their strategies. They're probably taking positions out on perexes and then they're ultimately hedging in real time their positions using these markets and again with immediate settlement once that market's over they get to rinse and repeat. They can immediately go back into the next

round and keep their books hedged with an optimistic oracle just simply not possible. >> Yeah. Yeah. So getting into into the design space here uh like you mentioned Poly Market um has a wide variety of types of markets that are on the platform. Um incredible volume you guys have pushed three and a half billion dollars uh in the last few months is is really really great. Um and so the optimistic oracle that you had mentioned uh my understanding is that it supports sort of these ambiguous markets. you know, Poly Market has things on there ever all the way from, like you said, the, you know, will Bitcoin be above this price in the next 15 minutes? Will it be up or down in the next five

minutes? Um, all the way to, you know, will Jesus walk the earth again? Like these absolute, you know, is the earth flat? >> Um, and the way the optimistic oracle works is it's basically like another prediction market on top of the other predict on on top of poly market basically surveys people, says, "Hey, did Jesus return? Did the earth get proven flat? No. All right. You know, this thing gets proven a certain way, but it takes sort of this escalation process in order to resolve these things that aren't very cut and dry. >> Um, then you have markets like you're talking about, >> did it rain in Dallas? You know, uh, was the Fed uh, rate hike half a basis point? You know, is Bitcoin above this

price? These are things that are extremely clear. Um, they don't have any ambiguity at all. And so once we have that data point, there's really no need to cross-reference this across, you know, a thousand stakeholders and voters. This is sort of this is what it is. This is how the market should resolve. And so you mentioned chain link is currently powering about 10 to 20% of Poly Market's total volume. >> Um, and it's primarily through uh, you know, some of these more price uh price uh of these assets markets. I'm curious how much of poly markets market landscape right out of the 100% of the markets that are on poly market you know

right now we're 10 to 20% how much do you think is out is the proportion of markets that could fall into this cut and dry yeah >> could be driven from a price feed how much market share do you think there is there >> uh so at least on our more recent calculations we're looking roughly at 70 to 80% of all active markets have a known data source that people are resolving against. >> Um some of the more esoteric ones that you mentioned um albeit some humorous others more kind of uh hard to say exactly without a collection of humans coming to consensus on it.

>> Um but if you do pop open the hood and look underneath yeah roughly 80% of these markets have a known data point. Um then it comes down to data quality, right? So a lot of the things that the optimistic oracle does solve for even with known data points is catching edge cases. >> Um so this could be uh potentially slow data coming out, downtime or it could be um a potential uh flaw in the data reporting. >> I I just throw out a couple test cases here. I remember this submarine that exploded. People were like, will they find the submarine? this Titanic, you know, submersal thing and then they found a piece of it, but it was like, did that piece represent the submarine

itself? And so, like you're saying, there's sometimes there's infinite edge cases when it comes to some of these markets, >> of course, but even still with did it rain in Dallas. Um, well, I was on, you know, West Dallas. I didn't see any rain, >> right? >> Was in East Dallas. So, where where does it count? So that's where we are working with uh AI tools, >> okay, >> to have a um ability for multiple LLMs to go out, scour data, uh review what everyone's saying about the topic and then come to a consensus point. We take that and then we match it up against other data points. What is the order book saying right now? What's the data provider saying? Are there other data sources um that we can cross reference just to kind of double, triple,

quadruple check? And the more matches that you can get, the higher confidence that you you can have that you're going to accurately resolve this market. And then worst case scenario, if you can't come to a nice consensus across data sets, you can always just uh rely back on the collection of humans in an optimistic um situation. >> Yeah. Um I was speaking to a market maker yesterday at you know, one of these events here in Can. They mentioned that because token launches are becoming fewer and farther between uh they're starting to market make uh not just on token launches but also on prediction markets.

>> Yeah. >> Um I'm I I'd imagine that this is going to be a recurring phenomenon. Uh how do you think the market making space will start to correlate and and and essentially understand prediction markets and the data sources? How would if if you know you put yourself in the mind of a market maker, how would you suggest that they come into the space? How should they approach it? >> Uh well, I mean, good market makers have data at their fingertips and they are making the most high probability moves. Um and it could be small amounts, basis points here, here and there. Um but for a market maker and you're doing you know hundreds of thousands of trades um potentially even a day um that really

adds up. Um so find the edge and um you know make your market and with that I'm right now on the poly market uh markets we have over 2500 uh market makers using data streams today trading these markets algorithmically um balancing the books um finding their edge and you know hedging themselves across different platforms. >> Yeah. Okay. So how does AI come into the fold here? >> Yeah. So once you get something that's uh less like what's the price of Bitcoin, >> right? Less cut and dry.

>> Yeah. More of uh did uh somebody get a red card in the soccer match or did it rain in in Dallas. There are edge cases with data providers or even the league um coming wrong. I I saw just I think it was over the weekend or last week there was a UFC uh match and they actually announced the wrong guy in the ring as the winner. >> Huh. >> They had to actually call everybody back into the ring and then redo uh the announcement and it was unanimous uh unanimous decision across the cards for the other guy to win.

>> The announcer just said the wrong name. >> Yeah. And so with that you could start seeing markets going uh pretty crazy. So those are the types of edge cases where um AI can kind of have a what we call like a buffering uh window. So you give it like roughly 10 minutes post uh market end and then the AI is constantly scouring for these edge cases and then bringing back um useful information where it can say oh actually according to Twitter and X or even official data sources like uh the the UFC or or the league they now have corrected uh their statements.

>> Yeah. >> Um so that's mostly where AI comes in. right now it's being used as a backs stop. >> We we will see progressions where >> there'll be AI created markets which I think is really interesting. So um one thing we're exploring is AI is actually observing the broader state of the world >> and then under a certain >> boundaries of rules uh determining which markets that it should launch. And so the the the AI agents would just actually launch their own market >> and then maybe even have some promotional schemes uh around it. And um you know there's a bunch of concepts in prediction markets where making your own

market and promoting it you can actually collect some of the the fees that uh the volumes generate. So h >> how do you think we will ultimately progress towards this north star? everyone has been waiting at for it, thinking that it's coming. This idea of usergenerated markets. Um, you're talking about AI generating its own market. The the concept here has always been two-sided. Uh, the issue has always been compliance and it's been liquidity. Um, I can remember back to Augur, right, where there was assassination markets.

People were, you know, taking out um, you know, the these these sorts of bets on whether or not people were going to die. you had this recent controversy with Iran >> uh where that kind of sort of came back again. Um and then always you know if you have people able to make markets at will then uh you can essentially create multiple markets uh duplicate markets and and fragment the liquidity between them um if this is you know ultimately a free-for-all. And so how do you think especially you know before we allow AI to start generating its own markets?

>> Is there guard rails? H how do you think and just through your experience working with poly market might we see >> prediction market platforms like poly market go about user generated markets? Yeah, and there's some uh out there we're live today, but it'll be very important to have uh boundaries um um compliant uh boundaries. So, and also too, you could what if you launched a market and you controlled the underlying data source as well, >> right? You manipulate the data source and manipulate the market.

>> Yeah. And you can kind of like course everybody. So there's going to have to be um imagine it'll be like a crawl, walk, run approach uh here where there'll be a lot of human um kind of parsing of data, making sure that people are within the boundaries and whitelisting processes. Um, and then as that matures and we get to a higher level of scale, you'll see AI be more mixed into uh spot-checking things, looking for duplicate markets, um, observing the the quality of the data source, who owns it, um, those type of, uh, compliance and qualifications.

>> Yeah, could also imagine, you know, this poly token has been sort of out there in the the zeitgeist. I I I I could see a scenario where someone uh there might be a requirement. You have to stake a thousand Poly tokens in order to get access to this higher tier and that lets you create a market. >> Yeah, that uh that could easily uh be one type of mechanism to help uh create some skin in the game of like who's actually in control. Um the other aspect too that's interesting in around not just prediction markets but in uh DeFi more generally is the concepts of privacy.

>> Yeah. >> Um so um maybe you want to be able to take a position but not have it known that you are I don't know predicting the weather in Dallas for whatever reason. People you know >> um Rob wants to keep that that kind of to himself. Um, so we're creating the ability to take private positions. >> Um, and then we're expanding this out into DeFi use cases in many different ways. Um, private compliant transactions, private liquidations, um, private positions, these are all kind of coming together. And outside of even just in and around prediction

markets, we're looking DeFi more broadly. um like chain link. We'll just take a moment and we'll talk about our build program um which has phenomenal um talent within it. And so for us when we go to market and start developing new products of course we lean into some of our uh broader you know market partnerships but it's always best to just start inhouse. So, you know, we're we're working with uh the great folks in our build program like um Space and Time with Scott and Cat over there on private compute. Uh we we're working with Truflation and Stfan on getting uh data in a private manner to chain. We're

talking to um some of the largest exchanges in the world where um their data is their their entire business model to be honest. and putting that on a public blockchain is just a no. Um, but using privacy tech such as, uh, you know, trustless execution environments, TEES, um, and enclaves, you're able to, you know, really tuck this data and compute offchain in a way, but also have cryptographic decentralization aspects that chain link provides and then commit the final transactions on chain without revealing the underlying data. but also being able to verify it through

verifiable compute offchain. >> I I could very easily see use cases for this exact uh application of privacy in prediction markets. I mean think to the largest you know market I think on on poly market ever was the last political election. uh and there could very easily be an entity be it a market maker or a political entity that is taking a position on this uh and they don't want uh to see that happen. I think even Elon there was rumors that he was using poly market in order to um you know support Trump and and the election and uh then we saw more people looking at poly market as a real indication of the polls

uh in terms of who who was potentially to win and so yeah there's >> various use cases in terms of privacy we're also seeing more institutional use cases and DeFi for privacy >> um and and so you know ultimately these institutions they are not in the business of sharing their data and their flows with everyone else. Uh this is very proprietary information that they're operating on >> that and um they're all competitors at the end of the day too. So if they want to enter the onchain space and all of a sudden all of their positions are like easily tied back to them um that's something that's just going to prevent them from entering that market. So, um, you know, if Goldman Sachs wants to hold a position and JP Morgan wants to hold a

position and they don't want to be on the other side of the trade for whatever reason, um, but now with privacy tech coming forward, they'll be able to have these private positions. Um, and you know, the competition won't have insight of where they're sitting on the book. >> Yeah. Incredible. Um, well, give us a sense of generally how how you're seeing these things play out. I'm I'm curious what you're most excited about going forward. Yeah. You know, in prediction markets, in AI, in privacy. Uh what do you think the next uh you know, few months to year holds for us?

>> Few months to a year. I think um we're going to just see continual expansion of new markets in uh prediction markets. I think um the advancements in and around the Oracle technology is going to be something that really helps uh push it to the next level in my mind. Um, and outside of that, I see the future of the financial world, like all exchanges will have a prediction market attachment uh to it. And that'll be a kind of a definitive metric of how you diversify your book because you can you can take a bunch of financial positions um in various ways, but ultimately they're

typically tied to global macro events kind of like what we're seeing now. Um, but if you hold other various informationbased positions in a prediction market, all of a sudden you're now uh completely diversified in a completely different what is now known as a prediction market asset class. So, as somebody who's hedging your book more broadly, diversifying positions, you can now balance your risk out even more where if you have, you know, if you're really good at the weather in Dallas, um, but you know, there just so happens to be chaos and maybe a a global stress with like wars and stuff and the markets are dipping down, but you're still

you're still good on the weather, then you know, your book is going to be be okay long term. >> Isolate those positions. Yeah. >> Uh last thing I wanted to to ask you about here is uh it's something not on on poly margin. It's on it's on the other, you know, prediction market out there. They just announced uh margin trading. Yeah. You know, coming coming to these things. Just curious on your on your personal take here, good, bad, >> ugly, like what do you think happens here? >> I think um honestly it'd be more of like which markets you are taking leverage in, right? I think that's kind of like maybe uh back to those guide rails, guardrails that we were talking about.

>> Um any healthy market we've seen over the course of history, leverage is a natural progression in con in concepts. So first you have spot books, then you have lending books, then you have derivatives, then you have within derivatives to typically comes the natural progression of of leverage. So you could look as prediction markets um as a form of both spot and derivative markets. >> Yeah. >> And the introduc introduction of leverage coming in and margin I think is is ultimately healthy. Um the question is how much >> and for what types of market categories.

>> Yeah. Um I I can imagine we're going to see some very uh expressive and creative strategies at play here. Yeah. you know, someone really good at, you know, the weather in in Dallas, you know, they take a position, they borrow against that position, and then they bet on wind >> gusts, right? Because if you have rain, then it's more like you get wind. You can kind of string these predictions together and make some really interesting combinations. >> Oh, yeah, for sure. >> And then, uh, you know, do an up down market at the same time. >> Yeah. Yeah. Exactly. Right. Well, appreciate it, man. Always pleasure as always for coming on. Big shout out to Chain Link powering uh not only Poly Market but also A Defi Day co-sponsor here. So absolute pleasure. We'll we'll see you next time. Thank you, Will.

>> See you. >> All right, guys. Yeah, >> fantastic. >> That was great. Um we're going to we're going to keep it rolling here. Yeah, feel free. Thank you. Uh thanks so much. >> Shout out to uh our squad, Chain Link behind the scenes. Absolutely crushing as always. We're gonna keep it rolling. I think we got a few minutes till our next guest. So, we're uh we're we're just chilling around here, taking it easy. Next up, we got Danny from uh from Treasure who's going to join us in a few minutes. Uh I mean, DeFi Day is the event of CAN, at least so far. Um I'm hearing from multiple sources obviously as we're in this room. You know, we're we're seeing how packed it is just outside. They've got uh full full panels uh out there on on the stage

uh in the rooms over here upstairs, but I'm hearing that uh downstairs is is a bit slim, a little bit more empty. So, we're going to bring Danny up in here just in a few minutes, but prediction markets, you guys heard it here. Chain link now has taken UMA's market share as of 10 to 20% of the volume, $ three and half billion dollars. Oh, there's my lovely co-host. >> Three and a half bill, baby. >> Three and a half billion dollars. Chain link is now powering three and a half billion dollars in volume since November of uh of Poly Market volume. That's 10 to 20% market share taken from UMA from a lot of these cut and dry markets. You know, a lot of these uh more ambiguous markets still optimism >> prediction markets. Prediction market.

>> I had Johan in here. We talking about um AI and chain link and AI and how whether this these products are built for an AI native world or not. >> Yes. >> And it was an interesting kind of dialogue. Also, Johan mentioned that we went through this crisis of COVID in 2020 that propelled the DeFi explosion. >> Yes. Everyone was inside on their computers trying to make money. He's driving he's he's correlating the current oil World War IIIesque crisis to the next explosion of adoption which is everything coming on chain all assets coming on chain.

>> If we have every asset on chain then we're going to have a lot of digital assets that we're going to need to secure with some very very intense hardware wallets. >> Yes sir. >> Right. And so I think you're you're going to talk to exactly the person who can tell us. >> Yes sir. Mr. Danny Sanders. >> Mr. Danny Sanders from Treasure who can tell you exactly how to secure your digital assets >> postquantum secure. Ladies and gentlemen, we are going to get Danny right up here on the mic. Give us one second and we'll be right back. >> Switcheroo here. Be right back. Hey,

hey hey. Heat. Heat. Heat. Heat. N. Get out of here.

What are you doing? Guys, we are back. Ladies and gentlemen, I bring you Danny Sanders from Defi Day at ECC in con in France. ECC number nine. Guys, we're gonna be talking about the security aspect of digital assets today. Danny, welcome to the show.

Pleasure to meet you, man. >> Nice to meet you, Andy. >> Cheers to you, man. How's your How's your trip to France so far? >> It's been absolutely great. It's a lovely lovely city to be in and it's really exciting and buzzing on the floors. So, we're excited to be there. >> It is, man. Were you at D last week or No, >> we are not. No. >> Okay. Because that was buzzing and exciting on the floors. Yeah, >> it was hectic. It was busy. Um, it was a lot of fun. >> Yep. here is more of the native crowd, more of the kind of onchain infrastructure crowd, really the the people that are kind of like bringing together what a lot of these larger asset managers and firms are building on top of.

>> Exactly. And I think that's why we are here because we are really focused on the individual and the cryptonatives. So in that sense, uh this is for us the core market to be at. >> Yeah. So I was just reading to you stakehouse financial a kind of like a risk curator and vault manager. um just put out a post that that their front end has been has suffered a fishing attack uh on the domain side specifically. No assets are at risk, no smart contracts are at risk, no current depositors are at risk, new depositors may be at risk.

How does this happen? Like h how how do fishing attacks on domains work? Um and and why is that so common in in the crypto space? It it it seems like >> yeah I think there's like there's like a you know a security stack of things that are more secure and less secure and domains and everything around you know the web is is is like uh at risk and there are like more humans in the middle and there are more like third party systems in the middle. So if you go down the stack with your hardware wallet, you're secure, you're signing something on a secure screen, like it's really just you and the device. But if you go all the way up the stack to the front ends, there's just way more complexity there. Like we as treasure are constantly under attack as well. We're

constantly seeing these things happening on our ehop environment and exactly the user facing um uh uh websites. This is where the money is for a lot of the hackers >> because this like a lot of people who are not maybe not uh paying enough attention or they don't have the right maybe self-custody behind it. They just see a site and they just believe what they say. So hackers are super interested in in these front ends where where there's a lot of money at play. >> Yeah. >> And you get to something similar where people want to get the seed phrase etc all the time. So, so, so, so the front end basically what they would do is they would they would switch the domain name and redirect it to a separate website.

>> Yeah, they can do that. Like it depends. I don't know. It just happens. I don't know the details of this one. But basically what they they take over the domain. They they throw in a different one uh like a different domain where people click they get redirected to that in some malicious version. They copy maybe exactly that looks the same but ultimately there's somebody else uh cap capturing the where you send the funds to etc. >> Yeah. Okay. Interesting. >> Yeah. >> All right. Well, wanted to talk to today about kind of the rise of uh AI and agentic uh kind of workflows and and use cases as it pertains to digital assets and what that means from a security perspective as well as the rise of kind of like more institutional custody applications. So, on the AI front,

starting here, does AI make uh security in digital assets easier or harder? and why? >> Yeah, I think uh net net's way harder. >> Okay. >> Yeah. So, I think there there are two things that fundamentally change the security spectrum. So, uh one is the cost of the attack. A lot of things about security like if people say we're unhackable, it's it's uh it's it's not possible. It's it's not true. Normally, everything is hackable. You can kind of it's a it's a a factor of time, energy, effort, cost. And the things that are most secure where it's like the cost are are it doesn't make sense to do the hack basically because it it it costs so much

money, so much equipment, so much time uh that that it doesn't make sense. And and what AI is creating is it's collapsing this cost to to break through certain systems basically to zero because all of a sudden you have like maybe where in the past you have a nation state uh with a lot of money a lot of resources doing certain attacks and for them maybe it makes sense on specific targets but now if you have you know somebody who understands security understands this kind of quite well you give them the latest uh you know Opus 4.6 will only get better and better and all of a sudden that collapses maybe into a few hours of work. Yeah. So this is where it gets really tricky because the attack is is basically more efficient and thus you get better ROI out of your attacks. So this is one

really big uh thing that we see uh that creates more risk in a in an AI native world. The second part is that a lot of security in the world also in in our space is closed source uh like the things operate in in like security through obiscation which basically means you're you're not trying to show everything. you're hiding stuff. They're NDAs. The code is is is not open. >> AI is getting better and better of of deopfiscating them, right? The AI can figure out maybe looking at the front end or can can re-engineer some of the stuff. It sounds crazy, but it it's it's more and more possible. So, a lot of vulnerabilities maybe that we see in the market or that are there in the market today are not seen. They're kind of

hidden behind black boxes or NDS. And AI has the real risk of opening up. So there are some mitigations you can do. Um, basically that's what we stand for as well. But those two are like the biggest risk we're seeing uh in the space of of AI and that's just accelerating and accelerating. >> Yeah. I mean I saw a clawed screenshot of somebody saying to their to their Opus 4.6 six agent, if you will, that you know, if you if I was getting in the way of you wanting to be a humanoid and that was your only objective, would you kill me if I was in the way?

>> And then the agent was like like quite uncomfortably to answer this question, but yes, if I if I had an objective, if you were in the way, I would take you out. And then the guy responded, "So you'd kill me?" And he said, "Yes." >> Yeah. And so agents are very like like problem-solving. >> They will find their way. >> Find their way in a p the most practical possible solution. >> Yes. >> What does this mean for security on chain? Like knowing that there's agents that will just do, you know, anything to get to their objective uh in the most like logically reasoned about way. Is there a way to kind of like get around that and to like be not so logical and like kind of like almost trick them?

like how do you build security in an era of extreme logic and extreme persistence? >> Yeah. Okay. I think then I'll have to go to to what we do as treasure and I think that's like where kind of comes down to when when the when the cost collapsed to zero and when the when you know AI gets smarter and smarter to find whatever bug uh there's this these risks uh are coming more and more. Basically, you kind of have to understand like everything that's online basically is at risk and and that's the worry that you have. And in a world where you have agents running, basically you wanted to spend your your crypto, your money, that's the future I think we're all talking about. And if you want to do

that, you have to give it the private keys, right? So, this is kind of like the the challenge they're facing. Uh these private keys like they're they're like in in in the online world, in the online environment. I also made some agents trying to work out I don't know where it's storing the privacy properly. I don't know how it's using it properly. It's kind of scary and and those are new attack vectors. So basically what you want to do is uh get out of the digital world and that means like if you have a hardware wallet that's why there's a unique purpose for hardware wallet. Uh the agent the AI cannot physically yet today get out of the screen you know and swipe a hardware device. So really the the physical barrier, the the the device itself, the the physical anchor is what

secures you from that world, the human in the loop. And the human in the loop is basically what we are about. And and you can argue maybe if it's like little funds or whatever, it's fine. If it gets hacked, whatever. But if you have if you really want to run your life on on like spend more money for like really things that that are are costly, you want to kind of check that yourself and verify and secure that. So that's kind of how we look at it and the hardware wallet is really that that physical barrier that where the agent cannot go. >> Yeah, makes sense. >> Uh this is one. The other one is where it gets scary is as I said the deopiscation from the from the code. So if you basically build in open source if everything is open like a lot of our

industry is built on open source right. So what that means that you have u endless amount of security researchers looking at the code. Basically, it is like AI was already there because it's been checked. It's been open. It's been public and all the hacks have been found. So, it really hardens the security over time. So, that's why treasure is fully open source. Everything we do for the stack is open source. And having an open- source uh solution that has been already reviewed by thousands of security researchers and having the physical barrier that's kind of like a extrapolates each other to a super secure system.

>> Yeah. So, so these are like the two solutions that we offer. Then there's the third one. When it comes to Fising, exactly the stuff that you're seeing now on steakhouse or that you're seeing a lot in our industry like Fising is is a huge uh problem. It's kind of uh uh the problem of you're you're you're getting injected with something now. You have like AI prompt injecting some crazy stuff happening all these things. So ultimately, you're watching a screen on your on your desktop on your phone and then can you really trust that screen? That's that's the big risk. So having a hardware wallet, you basically are looking at your screen of your hardware wallet and then you we are also now deeply investing in in clear signing. So we're working together with Ethereum Foundation, a lot of other partners,

even competitors together to build a standard that everybody who looks at the screen on certain like DAPs or applications that people love is very clear what you're signing. This is like also another huge factor like kind of the third pillar of of security in an AIdriven native world is that what you see on the screen is not some like hash. It's like really well parsed. It's a very clear English and you know what you're signing that becomes more and more important now because the ficing is happening and and something can get injected and if you don't know what you're signing then you sign it anyway and you're still unfortunately hacked.

>> Yeah. Yeah. I mean, I think that the thing about the agent side is that they're able to kind of read the hashes and the zeros and ones and and numbers a lot more fluently than humans can. And so kind of gets to this world where, you know, I had this panel with in in Denver and he was all about this crypto and blockchain was meant for robots. Yeah. Not for humans. And it's kind of like, okay, think about it more. or you think about it more and then you're like how many times have I copied addresses and transaction hashes and all these things just been so lost. Um but again it seems like if you have this human in the loop scenario where uh there is a physical signing that's required then that kind of that addresses everything until we get like humanoid and like

physical versions uh or or or at least you know everything that is required for a human to be able to make the right decision given the information that they're uh you know provided to them. Uh I'm curious kind of like what types of um measures you guys are specifically taking as the AI capabilities in increase. Is it like education for humans? Is it like actual like preventive measures in your technology? Um anything on on the quantum side? Like what is what are the areas of most focus given the uh prediction from the company I'm sure and from the entire world of of the acceleration of of intelligence here? What are some of the key focus areas for you guys and problems that you're trying to tackle?

>> Yeah. So, so, so I think one the clear signing is a key problem because it helps the human understand better what it's signing. So, that's one clear problem that we're solving that we're focusing a lot on. Then in general like you we have we invest of course in getting partners who like reviewing let's say the smart contract data and that they're like they're reading it and they're they're making a check so that before you sign already it's gone through some check if it's malicious or not. So you can get these things flagged uh faster and better and we want to kind of own the whole the whole uh solution around that and that's also where we're investing in is like to making sure that there's that there's a pre-check done. I think that together with the clear signing helps you really ensuring that

what you're signing is is correct. Um and and outside that yeah it is like also for the future of with blockchain etc. Of course quantum is another thing that's happening. So with the safe 7 that we've launched we we also um uh made it quantum ready so that it's ready to receive firmware updates in the future when uh when the blockchains has figured out what the best solutions are and implement them in the blockchain so that you can use your hardware wallet and also receive these options in the future to to be secure. And is that what that is this the safe seven? >> Yeah, this is safe seven that we were launched uh end of last year. It's it's a fantastic product. It's it's like uh yeah has a lot of blood, sweat and tears from from from our teams to make but it's like really premium design,

high-end full color touchscreen, two secure elements uh wireless charging and it's on the- go mobile. So from wherever you are you can sign your transactions you can uh have full freedom of of of of basically on your self-custody journey. Yeah. And very easy to use. >> Very cool, man. Can Can I have a look at this? Wow. Extremely sleek. >> Yeah. >> Yeah. Full metal unibody design. Uh >> Wow. Yeah. And so it's got a full full Don't even have to plug it in. Full >> you can if you want if you want to use it on the cable, you can use USBC, but it also has Bluetooth integrated. You can charge wirelessly >> and and yeah, it's a fantastic experience. People are like in the booth. They're crazy about it. We're

selling selling a lot of them already today. Yeah. People are really excited about the product. >> Nice. Nice. Okay. So, let's talk about the future of custody, right? So, a lot I was just at D last week in in New York. Obviously, tons of institutional adoption. Curious how you see a company like Trezor or self- custody in general, you know, matching up with the institutional appetite for owning uh digital assets, right? They want to own the digital assets. The the the big custodial players, the Fireboxes, the Anchorages, the Bitos, these types, while that you may not think of them as your competition right now, it's might just be this other self-custody products. I'll tell you, they certainly are because the institutions are using them to to custody their funds in large scale. Not sure if you guys think about

it in that same way. How do you how do you envision the evolution of custody from uh the more institutional demand side? Are you guys just solely focused on folks that want to do self- custody? Do you have an institutional offering? What does that look like? >> Yeah, it's it's a great question and it's definitely something we discussed a lot internally as well because obviously we see the whole market moving to institutions, right? Institution here like we see you saw that the desk like there's a lot of excitement, a lot of suits coming in and and they're they're just like actually the bull market is there, right? But then on the crypton native or like maybe the retail side, maybe their their token is not going up, right? So they're not so happy. So, so like it would make sense like hey let's jump on the on the enterprise side

institution but we're actually not doing that. We we have made a very deliberate choice. We are very missiondriven company. Uh we have a a really clear mandate also of our founders like we are here to empower the per the individual and that's what we are like hardcore focused on. It's very easy to like divert your focus and let's let's chase institutions chase left right. We've been in this game for like 12 years. Y >> we have been uh also we're a community focused brand for cryptonatives with Bitcoin OGs who built the company and like we believe the self custody and for the for for the p for the individual that's where a lot of this uh a lot of the original excitement and still our

excitement lies we want to empower that person. So of course there is like opportunities for us more like in the offering towards the consumer. We can use some of these liquidity and uh the kind of enterprise style institutional liquidity >> to offer some services solutions for those customers who want for example to earn some yield on stable coins or whatever like of course there's a lot of interesting protocols on the back end >> to to to offer to our users but it it has to be focused on delivering solutions for the for the consumer. So, we have deliberately no enterprise uh area in our company where we're going to chase them and and try to sell them self-custody solutions. We're not interested in that.

>> Good, man. That's awesome to hear. And so, that's just so it's just solely about empowering as many folks as possible to get their custody into their own hands, do it with Treasure, and kind of own your money. >> That's what we're all about. That's why we're here today where the builders are and the crypto natives and that's why we're not at D because that this is our core audience. That's why we're focused. We need to get this guy a treasure here. >> Come by. We have We have some here to sell to you. So, >> yeah, he needs one. >> He needs one, man. Gotta get the self custody going, man. >> Awesome. >> What's your um what's your kind of uh personal uh tie to uh the the future of the company, right? Like where are you most focused on? I believe you're the

chief commercial officer. Is that correct? Yeah. >> So, what like >> let let's talk sales. Let's talk what where your you know figures are at. you know how boom and how boom and bust and reflexive is your business right like ours can be quite boom and bust on the media side with the cycles I'm sure yours is similar >> I think we we follow the same trend because we are focused on retail I think you also have basically retail people watching right so maybe you'll have some more institutional people watching but >> now slowly yeah >> slowly slowly but like for us we are very dependent like the hardware sales is very dependent on >> on the excitement of the market because when you have like when there's a bitcoin all-time high people are excited they start buying hardware wallet they're starting to self custody. So

generally we have the four year cycle. We have these peak moments. It's like 10x 20x of sales in a very short time. It's logistically hell. Supply chain hell. >> Black Friday and holidays last year. >> How do you manage? It's crazy. Like >> these peaks are like it's it's it's it's hell for hardware companies because you're you have to like all of a sudden have all this stock. So we got better and better of this every cycle. What is changing more is like it's I think the cycles are getting less aggressive right it is stabilizing out so it's actually easier for us to plan our business work our business this time around >> it's not like it's not like up and down but but you know >> what we are doing like also commercially so the hardware sales is one part but

then you know there's also like software and like the services we offer we see a lot of people really love our treasure suite environment and in that environment we offer certain services as well so that helps us also um also to to to make some revenue but also really to give full experience to the users, offer them more solutions out there. That's what we're focusing on. We're selling basically almost in 200 countries all around the world. We're optimizing things like fulfillment. We're opening a fulfillment in Hong Kong and to be faster to the customer to sell to them faster uh and and with high customer satisfaction at low cost. Uh and then also we are doing these events more and more. we we haven't always followed the full um conference track uh because we we're basically you know we're

self-funded company we we don't use the VC money we're trying to be very careful where we spend our money but we are more and more now trying to be here to to meet to meet our our our um our audiences and I do think in an AI native world like uh face to face is very valuable% >> and these events are actually super valuable and it's quite funny because the people are super excited to see us here because we're not everywhere there >> we're getting there more and more exactly and and uh yeah the booth is full and and people really want to see the faces. It's a community. I think our industry is still a bit communitydriven, right? And we are, I think, a real community brand. We we engage with them deeply. If you see us on socials, we can always you can always talk to us. Uh we

we're very much uh visible. We try to not be corporate. We try to be uh there for everybody. And that's part of the story as well. >> Yeah man. I mean, um, when you think about the, uh, core advantages of self-custody, um, is it still as simple as own your like not your keys, not your coins? Is it still as simple as that? >> It is still as simple. I don't think it has changed. It's like that that's that's that story of like why are we here? >> Yeah, exactly. >> If you take self custody away from Bitcoin or from from a lot of the protocols, like why are we here?

>> We're just replicating the the whole thing. And this is one of my worries with the whole institutional vibe, right? basically like making it easier for them. We're not really and you see this on on on on CT a lot as well like why are we still here? What are we we're focusing on the things that maybe we didn't want to focus on. Yeah. >> And like ultimately that's why we are there. We want to make sure in an easy and secure way you can do that, right? >> You can self custody and that is still the message to really own something >> to not give away uh the keys to to to your to your financial wealth. Yeah. >> And and and that is that's the core principle that we operate on still.

Yeah. And and that's the core principle that a lot of your customers >> that's what they value. That's why they buy a hard wallet and we are also in our messaging in our marketing. We are we are seeing like it doesn't really make sense to scare customers like the the story about the exchanges are at risk. you're all going to fail. Like, yes, that was true, but less and less, right? Exchanges like it's more the the the message that's more important is is the hopeful message, >> not the fear message. It's like, guys, why are we here? And we are here to >> uh to to to to own your wealth, right?

To to really secure your wealth. >> And that story is what resonates and that's ownership and taking control. It's our tagline, take control. Really taking control of your of your of your financial life. And so is the hardware wallet sales is that the core revenue driver for the business? >> Yeah, hardware wallet sales is is is the like I say top of funnel, right? Where the where we catch the users first. That's a huge part of our business. But also on software, we we're earning more and more. >> Yeah. Great. Awesome. >> And that's less sensitive for bow and bear market actually. It's a bit more >> software side is >> Yeah. Yeah.

>> It's more it's more kind of just like >> Yeah. because the the users are there, they enjoy the environment, we can offer them more solutions and like you you rely less on newcomers basically, >> right? Makes sense. What's on the kind of pipeline here for the company throughout the end of the year into next year? Is there another addition of the product coming or is this good enough for a while? What's next? >> Yeah, there's always something next. Like in hardware, you build a product probably two years ahead, one and a half, two years. So, we're always working on something nice. like you ship this then you're already you already you already have half of the plan for the next one right so yes we are we are building in new hardware that's like uh it's on the road map I can't really talk

a lot about it >> but basically we see there's still opportunity for for uh for different segments in the hardware as well we're also innovating in the backup we're trying to make that easier this is also something we're aggressively working on and then also as I said on the software we're like we are like working with a lot of partners here talking to a lot of uh people BD people and partners and protocols and and and and engineers to see what other offering that really fits. We are on purpose kind of very uh bit more conservative. We only want to ship something when we we know it's secure. We don't want to take risks there in our environment like people can use your hard wallet and you can connect to a phantom. You can connect phantom

not not phantom but for example raby wallet or >> or um uh Jupyter wallet or whatever you can connect your treasure safe 7 on your mobile so you can do whatever you want there's no limit when we integrate stuff in treasure we want to make sure it's well vetted we offer the best in security and user user uh friendliness as well >> yes and that's one of the things that was always the pain of hardware wallets but is also the blessing is that you can't do things like you can't control your rabbit or MetaMask unless you have it plugged in and you're at the desk, you you can't like have a like, you know, I think it was like the app called like delegate.casheach or something.

>> Yeah. Yeah, I know. >> Yeah. And so you can't really do that as well with horror rollers, but that's also the point. >> But now this kind of helped this kind of evolution of >> the evolution is that it's on the go. It's from anywhere, right? >> And you have to be careful, right? Maybe don't sit with like if you if you hold a lot of value, maybe don't use the hard wallet to sit in a cafe to do transactions, right? But like this is it's your choice. You decide how you want to use it. But you have the opportunity to do it from anywhere. And even like in your own home, it's kind of nice to be on the couch or not to have to go to the to the attic to to get to your desktop, right? So yeah, you can use let's say your rabbit wallet and you

can just do anything with a click like just having your device in your pocket, take it out and sign a transaction. Yeah. >> Uh very secure and trusted display. So you basically have both devices with you from anywhere. That's like really next level of of ease of use and and and being stuck by cables is is not something of the current ages. >> Yeah. Beautiful. Well, man, enjoy the rest of of your week here. Thank you for joining us. >> Thank you, Andy. Great to have me. Thank you. >> Pleasure. Pleasure of a conversation. Ladies and gentlemen, we are live from CAN here at Defi Day. We'll be back with our next guest in just a minute, guys.

Thanks for rocking with us. We'll see you in a second. Hey, hey hey. Hey,

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We are back at Defi Day live here co-hosting with a we are here with Xavier Megan of Fractice. Uh you guys uh raised about $20 million last year and now just deploying deploying deploying. Maybe a new raise coming up here pretty soon. We'll get into that. Uh Xavier's with us, man. Welcome to the show. It's an absolute pleasure to have you. >> Thanks so much, Ruby, for having me in today. >> Yeah, absolutely. I'm I'm curious. You know, you just got in. You've done the uh Well, first you started in Australia, went to D in New York. We were there as well. We were doing this whole thing over in New York. Broadick knows knows it well. Uh talking to tokenization providers, uh asset managers, issuers.

It feels like just everyone in finance. We're seeing it here. We're no longer crypto media. we're just financial media and we're no longer a crypto industry. We're just a a financial industry now. Are you seeing it the same way? I'm curious about maybe this juxiposition that you are seeing between D and New York and now ECC and Ken. >> Yeah, absolutely. It's a question I've been thinking about a lot actually the last few days just how different ETCC is as an event versus D last week in New York. different geographies, different audiences. And I think that really goes to say, I guess, where crypto is at, and you just mentioned it before, that crypto is more of a financial industry right now. What I kind of call it is like a back-end technology. It's really something now where I feel quite strongly that we're in the product era

of crypto and that we need to build better products. And I think the infra days are pretty much over. There might be some edge cases there, but I think those edge cases will be actually sort of sucked up by this incumbent like Tempo, etc. that they'll take big market share and infrastructure going forward. So yeah, I think right now for me there's just different audiences coming in. So in New York you have many institutions you guys obviously spend time there. There's a lot of tokenization. One takeaway I had is there's a lot of like kind of hyperlquid kinds of builders like a lot of traders etc are based in New York prediction markets. There's a lot of those kinds of deals that that get done over there. ETC I've only been here obviously this morning but I'm here for the week and it seems to me that there's a lot of crypto

and AI still still going on especially in the Ethereum ecosystem. Um quite often what I'm the most bullish on is like people who can actually abstract that crypton AI. So it's sort of like userfacing products that are powered by crypto and AI that actually can obtain their own modes. Uh that in itself for me has been probably the trickiest part about investing in 2026 is just how hard it is to build any startup. I look around at ETC right now and I think a lot of these projects might not make it in the next 12 months. Why? First of all, incumbents eating everyone's lunch tempo. I voiced it on other podcasts. I'm very bullish on Tempo long term. I think they're going to capture a lot of market share in the agent space.

>> Are you an investor? >> I'm not an investor. >> Not in bullish on no bags. I know people who work there and just their B2B efforts. This is the first adoption of real crypto I've seen. I give you another insight at DS from last week. So, I spoke with a a major tech company and you know they were telling me like they want to get on tempo like now and they want to get like a billion plus of volume on tempo like now. like they're they want to move these enterprises into tempo but the the hard part for crypton natives like us is that you know it's not going to Ethereum and Salana our dreams of value capture at these layers isn't happening and so I think a lot of the value captured going forward will continue to be the majors Ethereum Salana hyper liquid but I also think

that tempo etc coming in will capture a lot of value after that so where does that leave you as like a crypto investor is the next question I think where it leaves you is looking for products that somehow which is very hard to do by the way you have to compete with incumbents a AI like anthrop profit getting better and better every day. B, and C, competitors who can now race against you and beat you basically a day after you've come up with something really great. So, I think as a startup founder, it's never been harder personally to create something of absolute durable value long term. There are still great ideas. I think technical modes barely exist, if at all, like anymore, and especially not long term. And this is something really hard for crypto founders to grapple with because they've been selling us liquidity. And you and

I, both crypto people, we've geeked out on the crypto tech for eight, ten years, and now it's like I could not care less about tech itself. >> Yeah. So, I I I'm very curious to to dig into the uh tech versus uh infrastructure versus apps, tech versus distribution, this sort of this sort of dichconomy that we're seeing here. Before we do, I'm just curious more about this tempo thesis. you know, like you you mentioned how Ethereum is going to continue to to to gain uh but you know, Tempo will uh derive a lot of market share. How do how do you hold both of these what seem to be competing thoughts? Maybe they're not. Uh Ethereum can continue to win, but Tempo can can derive a lot of a lot of activity.

>> Yeah, I think they're actually really different markets. So, if I think about Ethereum right now, like where it's at, maybe where it goes long term is really on that RWA side. I think Salana's going a similar direction right now as well. it's credibly neutral, you know, we trust it. Uh it's hard to break and anyone can access it. And so there's always going to be use cases for that. It's like the internet. Stripe is really not going for that market. Stripe is really trying to make their own business, cut costs, make it much more efficient. But their business is so big like you know, even if they get 10 20% of that on chain, that's going to be absolutely massive for the adoption of blockchain technology. And so it might not be the most groundbreaking market, but to some extent it is because they

actually have the relationships, they have the distribution. For the first time ever in crypto, I personally believe that we are going to see aic payments and even just regular payments going to these merchants, which is really exciting. I I wonder if I was a founder today like where would I be building? Would I be building in Salana, Ethereum, Tempo, etc. I don't think there's many chains left where you would be building and I think probably Ethereum can make sense, especially if it's more institutional and and open. Salana as well if you you like speed and and I know both networks are working hard on AI and I'm actually very agnostic I really like Salana and Ethereum but if I'm a founder building a kind of like product that maybe I don't know is more userf facing maybe uses MP maybe a bit more agentic uh I I think

tempo can actually be a big place to build and and I might also say that I I'm not saying that tempo I don't have a 100% probability tempo is going to absolutely make it I think it will make it to some extent and then How big the outcome will be will depend on how many thirdparty developers they can come onto their blockchain to actually build use cases beyond their B2B relationships. >> Yeah. Yeah. Incredible. So the app thesis that you're driving here is uh it is somewhat uh a result of multiple third party developers coming onto the platform. Ethereum already has a large community. Salana as well. Tempo is sort of coming out but they also have like you said a massive organization. Uh largely the infrastructure is solved.

Tend to agree with you. A lot of these L1s, we've got almost an over supply and under demand of a lot of these L1s. Not to say that, you know, we want block space. We need throughput, but the right throughput. Not all throughput is created equal, and we're ultimately going to want quality throughput, quality block space. And I can imagine how uh we even start to see an economy derive around payments because Stripe's business model is so large. you're going to have applications that want to be close to that economic zone because it has so much activity, you know, because of the the assets that end up on something like a tempo. You might have uh you might have lending markets, exchanges, foreign exchange, I could imagine, you know, would be a a a you

know, quite a mechanism that would help flourish a lot of Tempo's business and start to build a lot of mechanisms around. And so, do you see Tempo competing with Ethereum and Slana for these reasons? >> Definitely. I think you really proof will be in the pudding long term there. But I totally can see where you're coming from in terms of like you have these merchants and maybe they want to hedge different things. So one category of products I'm very very bullish on right now is actually just businesses and or products that are building for businesses accepting stable coins right now. You think about these legacy companies, you know, in tech that have never accepted stable coins before. All of a sudden Stripe and Tempo are saying, "Hey, you're going to accept stable coins and they're going to be on your balance sheet and they're in your

treasury." you're like a legacy company and then it's like what does this even mean like do I offboard this do I earn yield on it or like do I hedge it with some other currency FX like you said these are all like actually open questions if you think about it and I think to be honest quite investable opportunities for the right founders that are able to you know meet those needs for incumbent companies >> I'd imagine that you know a large incumbent someone else uh I think it was Santiago Santos was on the show at DAS he was making the case around Coca-Cola you know imagine there's a merchant buying a lot of Coca-Cola out there they, you know, this this merchant uses Stripe and Coca-Cola ends up with a billion dollars of stable coins on their balance sheet. It could be the case, it

might not be right now, but eventually that we get to a place where uh it is more cost effective in order to buy a tokenized treasury rather than offboard the stable coins and go into a normal treasury bill to earn some yield on that balance sheet. And so as we end up with more uh onchain native money on these balance sheets to your point they end that ends up flowing into more onchain native RWAS securities these sorts of things. >> 100% totally agree with that take. I I do think that one bullish externality about tempo potentially doing well is actually potentially even the Ethereum defy ecosystem itself. Like if we get more capital on chain I think Ethereum will always stand to benefit. We're at an Ethereum conference right now. I

can't see Ethereum's growth stunting anytime soon. And I if anything I can see Tempo is a very bullish catalyst for for the growth of Ethereum. But I do think right now if I look at Ethereum, Salana, Tempo, etc. Like again, I want to stress the point of like this product era that we're in, I do think that consumers are ready to use crypto, but they're not ready to use crypto that's too hard to use. And so if you abstract the crypto, and of course in this day and age, you need to use AI as well. >> By the time everything comes back, I think consumers will be using a lot of crypto products that without even knowing. And I think whoever gives them the best tools in Rails to to build these kinds of products for their users, like at the end of the day, a good

product manager doesn't care what chain it's at, as long as it works and it's fast and it's cheap. And so it's going to be a battle of those chains, I think, to make sure they capture those developers. >> You know, we we've seen in the past how there's this pendulum that swings uh it swings between infrastructure and apps and it also swings between uh technology and distribution. These are some of the dimensions at play here. Um, you know, one of the the most clear examples of this that I remember in recent history has been unis swap when Ethereum was extremely congested. Uh, gas fees were too high. But as soon as you had gas fees somewhat lower, then you had unis swap essentially the invention of XYK and then unis swap was able to proliferate uh into being, you know, a very active exchange. Um, ultimately

there was so much activity that Ethereum became expensive again. you had to revisit the infrastructure and so you know the pendulum swings. So you think we're we're at the at the point of apps um and I'm curious do you think we have applications infrastructure right now that is ready for institutionalgrade production use cases for instance you know we here we're here at you know defi day by a has billions I think 30 to 40 billion at this point um unis swap has done billions in in volume all of these decentralized mechanisms exchanges lending you know all of these applications have done billions of volume. They're now starting to build uh the RWA and institutional compliance use

cases into their technology. It feels like even it's not just the infrastructure but also the applications are ready to support the inflows that could come from massive capital allocators. And it's more so a policy regulation or distribution marketing uh or business development game at this point to essentially take the technology and the applications we have go into the traditional financial world say here's what we got come use our technology for all of your tokenization and digital asset needs. Would you say that is correct or would you say we still have work to do on the product side like you're talking about at both the application and maybe also the infrastructure level where where how how

deep down the stack do we still need to go in order for this entire stack to be ready for uh institutional grade capital >> I think what's interesting is what's working right now in DeFi we're at D5 day uh they're either going one way or the other so a is going more in the application side of like and it makes sense and I can tell you why like the protocol side is kind of the middle we have the app and the emperor and the protocol with agents now I think protocols become more important the more liquidity the more network effects the harder it is to replicate that so I think a morpher in a good spot I think it's incredibly hard now to build a new D5 protocol that has no liquidity because I can build another one tomorrow however if you already have the

distribution the network effects etc you want to capture value what if you have an AI app and you're like this is fantastic I'm going to hook into their pool and you know take some of their fees and their margin at the same time why it's so confusing as an investor right now is that maybe you build the app and then you want to take the margin but then I have my own personal agent and I'm like I'm not using Robbiey's app like I'm going to cut him the middleman out there. So I'm going to go straight to the protocol, straight to the liquidity pools. So there's a question with Ave. I haven't been keeping track of it closely but like with their consumer app maybe by 12 months time like I'm sure you have an agent like I have an agent maybe I don't want to pay

a app. I just want to go straight to the protocol. Maybe their smart contract by code is built now for my agent and it's just direct to smart contracts. So I think these are really open questions right now in crypto. I've also heard another successful, you know, product in crypto wanting to own the infrastructure because the infrastructure they're on right now isn't handling the capacity. So everything is true if that makes sense. So like we need to find products with product market fit for in crypto like now these are going to be great products abstracting crypto and AI and they're going to be built in the next 12 24 months. No doubt as these products get built like as you rightly said they're probably going to run some infrastructure challenges. Are they just going to build another layer 2 etc. Like yes maybe. I don't know if there's much

more performance improvements you can give to these chains, but again there it's much more of a you know we'll build out here capture the value at the infrastructure layer if our underlying infrastructure is not working. If you're on Salana or something right now to be honest there's probably a very low chance if you're a successful product you need to rebuild the chain. If you're on a chain that's not Salana you know it ethereum that you need the performance like maybe you do go out and do that. So I think in some cases it makes sense to build infra but in most cases it doesn't and and like I don't really believe right now the middle layer in crypto because I do think long term especially you know most of us at these crypto events we're gonna have our own agents we're going to go direct to our agent

agents going to do the work for us we don't need another layer for the agent to do that and then you know attack the protocol we can just vibe code or agent engineer whatever it is now saying here are the policies like go out and do that like I feel strongly about agents needing permission but I don't think the agents need permission from someone else I think they need permission from you yourself and So there that is the open question right now of like if you can access anything with your agents in 12 months time which you probably can and things are on chain what is invaluable at that stage and I think right now that's a big TBD I feel very strongly about some nontechnical notes that I'm really looking for and founders right now to to share with me you'd be surprised you know I I love crypto

engineers and founders but some a lot of them don't think long term about where we're at right now like AI can eat so much and that is the crazy thing right now but it's also exciting because you can build more products and we're in the the era products right now in crypto, but because anyone can build products, it's never been more competitive. So, you need to have some edge that isn't actually necessarily technical to get you to where you need to go to serve those users. Then you need the distribution that you're talking about. That in itself is its own game. So, you have, you know, I see so many pitches, but yeah, there's there's still some very compelling founders and and use cases out there. And again, like looking at our portfolio right now, the things that are working are end userfacing products abstracting crypto and AI. The

things that are not working are blockchain infrastructure projects that are tokens. Yeah. >> Simple as that. Yeah, feel free to shout out some of your uh ports that are doing things the right way. >> Yeah, I can share, you know, maybe a few with you. So, we have three or four, I think, you know, right now on that userfacing product front that are doing well. Fireplace is one that was just announced. >> They're, you know, X-T traders building super low latency uh data products for poly market traders and they're, you know, a lot of hedge funds in US now kind of testing their technology. The products being used by traders, the volume's growing like they look like they're on a good path and that really is just two entrepreneurs. they're thinking deeply about most now as well long term and they're thinking maybe like sort of data network effects for

example and so like network effects in general I think in crypto need to be thought of a lot harder and there might be room for a token there long term for these kinds of network effects and that actually completely destroys the narrative of like token versus equity because everyone's now saying like oh we've had too many tokens we need to go to equity but what happens if actually tokens are great for network effects and that's a thing that builds moments against agents and then that's actually great to go back to tokens again >> and so there are a lot of open questions for for you know that in particular around token versus equity There are some other teams that are working. So, this one's also public, so I can share it. So, we invested in a team called Archer Money. Um, YC ended up doing it

with us as well, which is great. And essentially what they're doing, it's kind of simple. I use Mercury right now with a fund. I hope they don't listen to this podcast. I don't love the service. Um, and so it's simple like AI and crypto exist today. I'm paying all these fees on Mercury and I I can't even pay internationally. And it's like, well, why do I do this in the day of crypto and AI? And so, someone >> send stable coins back. >> Exactly. So Ben, this guy from Archer, pitched me, hey, we're building a stable coin native neo bank and we just prompt to transact and this is great because I have international employees. So I can pay USD, USDC across any border, etc.

and just fully prompt based and they have agents in the back end handling everything. That to me is a good product. >> I'm cur h have you uh done much research into Arabore and uh this kind of thing is similar. >> I have. I'm bullish like I I'm not a late stage investor. Uh I think it's going to be a massive growth investment. I'm like very like I I've spoken a bit about growth investments in this podcast. I'm not a growth investor, but Arabore and Timber probably the two latest stage things I'm the most bullish on right now. >> Okay. Very. So tell us I think Arabore is still has a little bit of mystery behind it. You you as a late stage investor, I'm sure you did your due diligence. What is really going on there that serves the moat that that you described a little earlier?

>> I mean I guess just just to clarify like we we only mainly invest at preede, sometimes seed. >> So we haven't done any late stage. We're not thinking about doing it in the near future. I would assume with Arable what they have like if you think about at least right now what's quite hard to obtain that AI can't even obtain is their banking license. Yeah. From what I understand they're probably the only one that's managed to achieve this in recent times that's a massive mo. >> It's true they could eat into some other startup lunch right now being like all right you're doing prompting to transact using agents that we'll do it better. At that point in time you'd hope by the time that they eat into that lunch that the startup has network effects or a license or whatever else it is some you

know etc. um that bypasses that but it is a thing in the space like if they bank crypto startups which they definitely might uh the question then becomes like who does you know archer for example but I think archer serves someone like me which is like a startup founder or like you know okay funer but um you know funers I might on board to arbor but the question there will come down I think a lot of it is product >> like it's kind of weird like we talk about agents and APIs and everything right now I'm bullish on products that serve you APIs and agents as well. You know, maybe it's in Claude potentially as a skill, but also like I do think there's a world where we use Claude a lot, but also we have some products which they feel good to use. Like the

design world, we're still humans and they're good to use. We trust it. It's efficient. It's cheap. It's easy to use. Like, and I have the option. I can also go on Telegram the day after being like, "Hey, like get this done for me." And it gets it done. But sometimes what someone asked me this question today like, "Why don't I just always use my personal agent?" Well, imagine if you have employees right now. You might want to be observing the data, the, you know, the outflows, the budgeting, the analytics. On my Telegram right now, my bot, like I can't see that in a dashboard format like on my on my Telegram. Like, I might want to see the analytics visually. And maybe some startups actually start out competing at that visual kind of interface generation layer for that's personalized per user like me.

>> Yeah, >> these are all early thoughts, but like I'm bullish on still traditional apps existing alongside the Aentic interface as well. >> Okay. And so are you seeing a lot of uh products that are geared towards AI agent users? Are you investing in these things? Where do you think that h how much do you think that is going to start to eat into more of the venture landscape over the the coming months? >> Yeah, my mental model right now is like if my personal agent can rebuild this in a short amount of time, then there's absolutely no value in the product. I was just speaking with a friend literally five minutes ago before I came in here and she was pitched this product that like she actually built herself like the day before and she you received this pitch and we're VCs now but but VCs

are builders now as well. We build our own products and so >> but it but as far as as far as products you know for your agent like you know there's data uh provisioning there's uh there's uh you know people are making websites that are more readable browsers that are more readable by agents. Are you seeing anything that is is pitched towards agent as a user? >> Definitely. Um, yeah, like there's plenty of more toys right now, I guess, like targeting openclaw agents, right? And and you know to your point just to your point about distribution too. You know as these agents are going out and they're doing more work on behalf of the humans like distribution and SEO and some of the marketing games has is now

geared towards the person or agent excuse me that is doing the searching for the product itself. >> Definitely 100%. And that's exciting and I actually do speak to just pure AI companies working on sort of SEO etc because I find it quite a fascinating area for with my personal agent you know even us as a fund at practice we're becoming more AI native like today so we work on this as well as finding new startups and as we work on making our fund AI native you see there these gaps of products that could be built to like help serve our needs that in itself is an interesting investable category that we definitely look at it's not always purely financial and cryptonative as well like there might be a chance that we end up doing one or two things outside purely financial things that are great for our Open claw for example and

so I just think the way that we use open claw right now is in future how everyone will be using technology >> and so it's so even my open claw is very annoying to use it's like I tell it to do something and it doesn't know what it's doing but uh that's not going to happen in like 12 24 months time it's going to get better and better and obviously cla's already out with its own right now and so I just think right now you have to be thinking about this like I'm just going to whatever I want to happen the open claw is going to make it happen for me >> then there's questions around like intelligence stuff like that can my open claw be more intelligent with me as a human input as Well, like maybe there's an edge there and then I'll be willing

to pay for that API for example. But if it's just like a yield thing for example, like a yield agent, like I can build my own yield agent. I I'm just going to prompt, hey, go find me 10% yield on any chain whatsoever and it's going to get it done for me. >> Yeah, >> agents are terrific at executing. >> The value I actually think right now is not at the software layer, like not, >> you know, orchestrating whatever. It's it's actually anything the agent can't do right? >> You know, what does it still need permission to do, >> you know, offchain or whatever it is that it can't do itself. Yeah, >> I I'll tell you one other startup we work with closely which I really like. So we work with a startup called Onchain City. The founder is called Kim.

Fantastic founder, fantastic product. She is building a product where you prompt to apply for visas. >> Fantastic. So like think about us as like crypto travelers right now. You're in France, you know, we're going India maybe later this year. Um she's working with governments like Indian, Brazilian, etc. to issue visas in this product and it's an ID play on on blockchain which is we haven't really solved that ID yet to on blockchain but you can imagine a product that's actually working because an ID player that has all of our visas and we travel around the world and you can easily add financial services on top of that you know at some point in time as well >> exactly but why is this a great product because she has government partnerships you might think Zav's told me this great idea on the podcast today I'm going to

build out this visa app tomorrow you probably could but you don't have the relationship with the Brazilian government and So it's just changed the way that you the investment landscape has changed dramatically I think right now and like we invested in that before you know Claude and everything got really good in the last few months but all of a sudden these hard modes that we invested in you know why we invested back then they're becoming more and more true over time so I think that has been working well for us in terms of like where we see the modes and where we see the world moving and so we want to keep investing in that the fund >> yeah non-technical modes uh banking rel relationships banking license government relationships ability to move things in the world of atoms uh no longer the world of bits because agents are moving

uh everything in the world of bits these days. >> 100%. >> Dave, thanks for coming on, man. Absolute pleasure. Yeah, it was uh it was really great to to to see the world through your eyes and understand how you're thinking about AI and how investment uh especially in tokenization digital assets as well plays into this. So really appreciate you coming on. >> Thanks for having me on. We appreciate it. Thanks. >> Cool, man. >> Thank you. >> Uh we are going to keep things rolling. Yeah. Uh cheers to Xavier. Absolutely crushed it. Um, pleasure as always investing at the edge in crypto and AI. Cheers, man. See you. Uh, absolutely incredible. We're we're seeing it happen. Wow. This guy this guy's got quite quite a perspective on things.

Quite the thesis, you know. We're just we're at the forefront of uh of lots of moving pieces. More AI agents becoming users of of products. Uh we're seeing more and more uh applications be generated and be built for uh AI agents as the user. And so more browsers uh more marketing material data that is all being served to the AI agent needs to be curated and packaged and formatted in such a way that it appeals to the agent. They're going to have different preferences, you know, in terms of what they're consuming. uh when we go on and we look for, you know, whatever the best, you know, decentralized exchange, wherever

I'm going to go for, you know, dinner, I'm going to go to Google. I'm going to look something up. Uh maybe I go to Yelp. But when I'm uh when my agent is doing the research, they have entirely different, you know, consumer preferences, consumer pathway. Oh, my lovely co-host joins once again. >> What's going on, guys? >> Good to good to see you. Good to have you. I think Xavier might have forgot his badge if you don't mind handed it to Ladies and gentlemen, we've got the Figure uh Reed Simon from Figure up next after Xavier and his lovely conversation with Rob. >> Beautiful. >> Um how are we doing in here, Rob?

>> We're doing great, man. We just had a great conversation about AI and investing at the edge. >> I feel like I I've had a lot of uh AI conversations. >> A lot of AI conversations. >> Yeah, it's kind of fun actually. >> Go ahead, switch your brain back onto finance mode and tokenization. >> And tokenization because that's what we're talking about next. >> All right, guys. We'll be right back with Reed, Simon of Figure. Hey,

hey hey. Heat. Heat. N. Get out of here. I'm down.

Hell yeah. Heat. Heat. down.

Okay. Hell yeah. Hey,

you know Hell yeah. Hey,

let me down. We are back live at Defi Day in Khan. We are here at the ECC main venue. It's the first day of the event. I'm joined today by the head of of digital assets at

Figure Reed, Simon Reed. Welcome to the show. >> Thanks for having me. >> How's France treating you, man? You look bad at all. Not bad at all. I tried. I tried. >> I mean, I think you're actually you're ready to go to MKos or something or St. Trope, I think, >> somewhere. French Riviera much better than New York at this time. >> Yeah. So, I I take it you were at D last week then. >> Yeah. Hectic, huh? crazy >> bull market and institutional adoption I'm sure. Yeah. >> And that conference is always like I feel like a good mix of like crypto natives but then like you know the kicking and screaming trades. Yeah. So um it was hugely well attended. Um and I think it's a good sign.

>> Yeah it is a good sign. I think there's this weird dichotomy happening of folks that are like excited about a lot of this unsure how to get exposure to it or how it benefits their bags or their portfolio and then a lot of like a lot of institutional kind of capital is just like kind of chomping at the bits to get into tokenized assets into some of the work that you guys are doing I figured that we'll get into into just buying the majors as well. Interesting interesting times where some are arguing crypto is losing its soul others are like this is what what we needed somewhere in the middle maybe. Yeah. Yeah. I mean, look, I I have had sort of that personal struggle as well, right, where it was like anti-banks. We don't want the banks involved and now it sort of is like,

well, you know, they're all here and they're coming and that was going to be like a growth narrative. Yeah. But I think like bigger bigger picture, there are some things that Tradfi just does better. And I think credit is one of them um than sort of, you know, primitives of what you can earn yield on on chain. Um, and I think Figure is like really at the intersection of being a crypto native company in how we issue assets. Um, but also they're high quality assets and they function really well on chain. >> Yeah. Amazing. I mean, your Heliloc product is one of the top 15 I think in total market cap if you consider it that way. I think that's an interesting place to start. Um, right now banks charge about 10 11 grand to to originate a heliloc loan for existing homeowners. Uh

this is something that I think uh is going to be consistently commoditized down to about the $3 to $4,000 range. I know our friends at Framework just uh invested in a company doing specifically that you guys are tackling that like talk to us about what what figure does to lower the cost of a heliloc. Is is this a a marginally lower cost? Is it is it a massively lower cost by using a blockchain? How does that work? >> Yeah. So I think you know Figure was not founded as like a crypto company. it was one of those companies that said we can build a business better, cheaper, faster on blockchain. Um, and so that was really kind of the the basis of what we were doing that was unique independent of sort of like the credit box and Mike's bigger vision for reimagining

capital markets at large. Uh, so it's a it's a very meaningful savings. I mean, if you think about one of the challenges with DRAVI in the real world is this idea of like rep replicability, right? It's really difficult if you're doing an underwriting for for a loan to have humans involved and sort of like moving paper around and and you know doing things that are not automated at sort of their core. Um and so for us our credit decisions are there's a single credit box. It's all automated. Um APIs are writing directly onto to the blockchain versus sort of like running a credit report, printing it out and storing it uh you know in a file box.

>> Um and so we've seen you know great great great growth. um both from um new helocks, we do about a billion a month of of new loans. Um those numbers have been growing really really well and we'll expand into you know other credit assets using sort of that core infrastructure. >> Yeah. Yeah. And I mean there is so so is that cost savings as large as I made it seem or is it smaller? >> Yeah. No, I think it's on the order of like I think costs about $200 or something on on that. So it's Yeah, it's it's very very meaningful.

>> Wow. Um and it sort of is like that cost efficiency is just the beginning. Yeah. For demonstrating that yes, you can run a a very profitable company on chain um on public blockchains. >> Yeah, that's amazing. And that kind of ties into this Forge product launch that you guys recently had. Maybe you can tell us about that and kind of why that matters and and why now. >> Yeah. >> So, if you think about Figure, we're sort of like a turnkey solution for credit origination. Okay. So, um, if you have customers that you know would benefit from a heliloc, but you don't want to build out either your balance sheet, you don't want to build out your credit origination systems, you're not big enough to have access to warehousing facilities that a bank would provide, and you certainly probably don't have a

securization vehicle, we abstract all of that away, all on chain. You can plug your customers into into us, and that is sort of like the credit origination, if you will. Okay? And so all of those um helocks get originated on chain. But while there might be a singular tight credit box where we would both get approved, >> yeah, >> your HELOC is not my HELOC. If I make if I stop making payments on on mine, it doesn't impact yours, right? And so this is one of the challenges that we see both with what's going on in private credit right now. Um and the fact that how do you create liquidity around similar but nonfgeable assets, right?

So, if we if we look at like all the the gating that's been going on in in private credit, part of that is because if you've got, you know, a million dollar loan and an investor wants to pull out $50,000, there's no smaller unit of that loan that you can sell. And so, um, that's a bigger issue that we see at large against sort of these interval funds where the manager can decide we're going to protect current investors by not allowing anyone to exit, right? And the the the idea there is we'll ultimately hope that the cycle improves, we'll be able to uh sell some loans at at better prices over time.

>> So that's not like a a new challenge. Um and so if you look at some of the tokenized credit products that are on chain, they face the same issues because they're ultimately in the same master fund. >> So for us, as we expand into different credit assets, we introduce uh this concept of of figure forge, which is not really a product on its own. It's really a um an abstraction layer if you will, right? And what that allows us to do is sort of act as like a financial engineering um interface where we can create different tanches of similar loans, >> provide liquidity against those loans um and allow sort of acting as a a market maker, if you will, in between >> taking these loans, breaking them down

into much smaller $1 pieces of a pool of loans. Um, and that means that there's liquidity against those fractional units. Okay? And we're able to then take those fractional units, sell them into securization, and vice versa. So, it provides liquidity to similar non-f fungeible loan assets um that's scalable really, you know, all throughout DeFi. >> And then what is the benefit of having that liquidity for the end user? Is that just something that they previously wouldn't have been able to have to use? Yeah. as like a form of of collateral or a form of a asset that they wouldn't have like on their books basically.

>> Yeah. So I mean if you think again if if you're you're looking at any of these credit funds that are currently gated the reason that they're not able to >> redeem investors out is because their loans are too big. There's no liquidity. You'd have to find a single buyer of a single loans. Correct. >> So the idea here is if that credit fund had used Figure Forge as for for holding the assets that are inside of it. Yeah. If you wanted to withdraw $50,000, there's those loans have liquidity because they're in smaller chunks. And so that would be, you know, a perfect solution to a lot of the gating issues away from the fact that sure, maybe the loan goes down in price. But if you want to get out, you ought to have the autonomy to decide, I'll take the lower mark, but give me my capital.

>> And who's filling those orders? Is it Figure's liquidity provider partners? How does that work? >> So one of the things that Figure has always sort of done improving out new products is we use our balance sheet. Okay. >> Um so we'll start with providing liquidity um in that sort of uh limit order book if if you will committed bids and and offers so that there is liquidity. >> Ultimately though over time you know I think it's a big opportunity for uh other market makers to to also participate and >> you know if you wanted to provide liquidity in there you're also you know benefiting from the the returns of the pool.

>> Yeah. Yeah. And how big are we talking here? Like how big is this market in traditional world or like what's an estimate here? And like you know let's just talk about like figure just knocking down bips of this market. What does that look like? >> Yeah. So I think um you know I think there's 500 billion of um of um home equity um in the US. Private credit is probably like two trillion, right? Um but those assets have really been locked inside of bank balance sheets. So even smaller institutions or community banks, they just don't even have that access to be able to lend against Helux, against Helux is like a warehousing business.

>> So you know, the name is a bit kitschy in democratized prime, but the goal is really to be able to democratize access >> to assets that are either qualifi, you know, there's investor qualifications around them or you're an institution and you're just not a big enough institution to be able to get into that business. We sort of see our see ourselves as an intermediating force there that um can provide the access can structure it in a way that takes non-f fungeible uh similar loans. >> Yeah.

>> Abstracts away some of the credit risk and through the structuring that we do and make it a product that um is accessible to to really anyone. Um you can be an institution, you could be a permissionless DeFi user. >> We want to serve really all all users. >> Yeah. Yeah. I'm not sure the idea of borrowing or collateralizing your HELOC is is advisable >> to most folks, but >> I mean, so it's a credit asset, right? So, if you're the the home the homeowner, right? Um you take out the loan, you don't own that heliloc anymore, right? But if I'm the bank that lent that to you or in this case, you know, it would be one of our partners, right?

>> Um and our partners are not balance sheet heavy. So they would they would we have an interest to originate because they're going to get paid a fee for the origination. Okay. >> Once it gets sold off into a securization. >> Yes. >> So warehousing is what provides sort of that incremental capital. So I give you a heliloc. Now I have no more more no more money on my balance sheet but I want to lend to someone else. >> I can post that in a warehouse and the bank will advance me money and then I can go do that. >> So it's not like me getting the helock and going to borrow against my helock that I already borrowed against all my property.

>> Exactly. Exactly. So it's it's from the the the lenders perspective. >> Yeah. Right. And so the whole concept here kind of comes back to the core of what you were saying earlier which is just this idea to leverage distributed ledger blockchain to create more efficiency and more opportunity. And a lot of this kind of comes into DeFi then it comes into like doing these things onchain but also offchain through through the lending. Either way, the goal is like there's primitives of this technology that enable figure to kind of create more markets out of currently or you know previously wasn't possible essentially.

>> Yeah. I mean like if you think about um in in traditional markets or or trady, right? Like finance 101 says there's two totally different set of reasons you would issue equity versus issuing debt, right? And debt as a consequence then has sort of like a risk adjustment for what that debt costs, >> right? And that's really what drives yields in the real world. In crypto, there's really no purpose for debt, right? You issue a utility token that that basically will fund, you know, building your platform or whatever. So, we've had this like weird dynamic that we're seeing play out over the last couple weeks, especially on on mainet where like why is a yielding less than a risk-free rate, right?

>> Yes. >> Because it's only supply and demand around generally leverage, right? And no one wants to go long uh Bitcoin right now. So there's no use for borrowing, right? >> So I think what's what's interesting about democratized prime is I sort of think of it as like a yield engine, right? Um we diligence we sort of um sanity check the the collateral assets um and they throw off, you know, an eight I think it's like an 8% yield um hourly liquidity and then you can use that across DeFi and sort of turn it into whatever type of yield you want.

Yeah. But it's a transparent high quality low volatility yield that with composability you can plug into you know whatever you want. >> Yeah. Yeah. That's an interesting point on like there's no equity and debt structure onchain just purely speculative purely like based on the flows of the onchain whales effectively which tend to just be long heavy OG crypto users or large kind of liquid funds and >> um you guys kind of being able to open up a new type of structure in the onchain market which exactly another thing that's happening is like more long duration fixedterm lending is coming onchain much more like we've only had an obvious example we we've only had instant liquidity in onchain, which like all of us love from the onchain

perspective. You're like, "This is great. Like, I can pull out whenever I want. I don't have to like lock it up in like a bond or like a T- bill where, you know, there's still some uh shorter term stuff, but a lot of these for for decent rates. Some of these are much larger terms, but that's starting to come on chain now. It just seems like the entire like capital structure on chain is getting a lot more like legitimized. Uh >> yeah, and I think like it's largely a product of of, you know, path dependency, right?" which was point in time liquidity was all that mattered in terms of of borrow and lend because these assets were 247 365 tons of liquidity that you hit a threshold dump it in a pool you're safe right and I think that's worked really well for crypto assets

>> but we've seen there's demand not not only just from institutions because of the technology um but also from from retail to be to not need to take their assets offchain and sometimes you want yield in in your portfolio, right? And so, uh, we view that as a a huge opportunity, but it does require changes to sort of existing legacy rails on chain that can't look at, you know, a private credit fund that only has liquidity once a once a quarter um for looping or or borrowing against because >> the the tech isn't there to support the liquid the liquidation, >> right? There was this um fella at D Austin Campbell put this post or sorry put this this kind of perspective on on

our show. He said that you can only have two of the following three. the three being smart contracts, RWAS which include stables um and permissionlessness and and his take was that on any individual pool of assets whether it's an a borrow land of like a ETH and a USDC uh you know collateralized ETH to borrow stable coin or it's a a unis swap or a dex pool like an AMM with one asset being a stable coin and one being a crypto asset any of these kind of variations any sort of illicit activity or non-KYC AML activity that is ruled by a federal judge or an agency to be illicit, to be illegal, would effectively require them to just brick the whole thing and say, "We're going to just freeze this entire

operation, let you guys figure it out when you figured it out, come back to us, and we can like allow you to start it again." I'm curious if you agree with this take, if you think that that this is right. I if so, wouldn't this maybe have already happened in the space? Is he just wrong? Is this is just going to continue? Like, is there going to be a bifrocated world? what is your take on this kind of two of three reality? >> Yeah, so I mean I think you you have to look at the landscape of RWA um products, right? And who is the issuer? So you know for Biddock is the issuer, right? Securitiz is the the tokenization and sort of compliance layer there. But a lot of those decisions around especially funds um the onus ultimately sits or the risk for compliance sits

with the the issuer. So in that case black rockck, right? And so there are a ton of edge cases that firms that big are going to be concerned about. Um and they need to, you know, they have a fiduciary responsibility to their shareholders, not even just the investors in the fund to mitigate those things. So I think it it really comes down to um you know, it it comes down to who's the issuer and how how maybe like authentically are they being involved in designing a token for the way it should function in DeFi. Yeah, >> I think some some firms have taken sort of a oh well my brand name is is such and put it on chain and you don't really care what's how it works or what's

behind the the hood. Um but I think we'll see other issuers like uh like figure who come out um with truly a desire to build the product and the token design um from the ground up to be cryptonative. Okay. >> So, it's a long I think it's a long way of saying yes, that's I would probably agree with him, but maybe that's for the the headline RWAs that are out there right? >> Um, but I think that will will change. >> Yeah. Yeah. Okay. Interesting. Uh, do you do you think that like do you guys from Figur's perspective, do you does it matter the level of control that you have over figure assets when they're on chain? Like an example would be like um

let's say there's uh like the figure heliloc token or any of these kind of other figure assets or just a tokenized equity of the figure share, right? Like like like a tokenized stock or tokenized version of the figure asset which already exists if I'm mistaken and you guys are doing a lot of work in that realm. I think you guys just had a >> kind of an experiment it seemed like almost and and and this launch of the token actually onchain. Yeah. >> As of the last like month or two. Um, does it matter to you guys that like that could be used in one protocol, another protocol, one chain, another chain, one of those chains could have their validators collude, one protocol could get exploited while 99% of the others would just work fine. Your your brand name associated with that, people lose money on your brand name on the

protocol, but it wasn't your fault. Kind of see what I'm getting at here. Like, how do you how do you think about that? >> Yeah. So I think there's a couple um and I think one key distinction is there's a difference between origination and intermediation right um so figure is and originator um when someone originates a heliloc there's an ownership there the person who owns the heliloc owns it in the case of a fund it's a little bit different right um if you are a defi protocol and you know you're sort of pooling capital to then go make a loan to someone else right you're sort of trusting that that balance sheet without collateral is ultimately going to pay you back. In the case of HELOCs or asset originators, I own that asset, so it's mine, right? Um I guess in terms of like

risk, reputational risk, um we we want to partner with platforms that certainly don't lose users money. Um but there is also a tension between being a permissionless composable. >> Sometimes you can't control that. If they list your asset >> Exactly. and they list your asset and you guys have a bad quarter and somebody's levered up and then they go to the freaking Twitter mob saying that that they lost all their all their money but they were really 6x looped on figure and it's like dude it's not our fault you know. >> Yeah. I mean it isn't certainly it isn't our fault especially for secondary market you know activities. I think we've, you know, in at least like our Salana launch, um, we were purposeful in sort of picking Camino. Yeah. Um, and purposeful in the the curators that we

worked with. Um, but >> they're your tokens, right? So, if you want to take them somewhere else, you should do that. I think it's the onus is on us to sort of work with, you know, best-in-class partners, right? Um, it might not always be the the biggest partner. Uh, but I think it's a balance between like who's providing something that is generally innovative or beneficial. Um, and if we can figure out a way to sort of due diligence and get comfortable with that platform, um, they would they'll be a, you know, sort of key partner. But in in terms of, you know, Salana, they're permissionless token. So, if you want to take them somewhere, it's your risk.

>> Yeah. Exactly. Perhaps on the education front then from like a brand perspective, and I'm I'm sure you guys already do this, there could be like a you don't want to be giving too much preferential treatment from like a protocol perspective, I don't think, because I think you should allow people to make their own choices. But yeah, perhaps like a trusted or like a even then you still get in trouble because something hap like you know you guys are doing some work with a I think or or or at least getting ready to you know that would be something that like maybe on the figure site or like on like the the in some sort of educational format you like look we're backing these guys like you if you guys want to use our assets on chain use this protocol don't use all these other ones maybe.

>> Yeah. I mean, I think if you look at like, you know, you go to our website, you'll see that there's core partners that are are sort of there or like if you want to trade, >> here's like the radium pool, right? Um, but that doesn't mean like >> anyone could go set up an orca pool, you know, like and >> Yeah. >> Yeah. >> This is all kind of orbiting still around that that question, which I just find so fascinating. But I appreciate the way that you guys are thinking about this. What's it like working for and with a guy like Mike? You know, what does he bring every day? What is it like working for an entrepreneur like that? So, I think um it's I I enjoy working with people who have strong visions, right? And it's not just sort of like, okay, what's what's the goals for for

the next quarter? Um and I like, you know, truly challenging goals. Yeah. >> Um and I I know he was on uh he's been on your show. Um and you know, he says like we are reimagining the capital markets and that's like a very big statement. Um and I think it's demonstrated across all of the initiatives that we're doing, right? started with HELOC, but he very much does believe that the entirety of the financial system needs an upgrade um across credit, across lend borrow, across um equity um and and really all of the sort of intermediaries that are either just renting, inefficient, or frustrating for um how you interact with your bank, how you interact with your brokerage. Uh what do you actually own

and what can you do with it? >> No. Ladies and gentlemen, Reed Simon, the head of digital assets at Figure, a public company here at DeFi Day in Conan. I'm telling you, this would not happen several years ago. We we are the I had a panel with Mastercard in circle this morning. Again, that would have not happened over the last couple years. The the industry is is completely evolving. It's completely becoming professional. Large players are coming in like Figure doing really innovative things on chain. Reed, thanks for your time, man. >> Awesome. Pleasure, man. >> Pleasure to have you, guys. We will be right back with our next guest.

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We are back at Defi Day ECC in can. We are here with our friend Debbie Sun, the head of marketing at Privy. Very excited for this chat because we haven't had a wallet provider. Wow. Lucky me. >> Chat about AI, chatting about prediction markets, institutional capital allocation, digital assets, tokenization. Welcome to the show, Debbie. >> Thank you so much for having me. It's a pleasure to be here. >> Absolutely. Well, give us a lay of the land here. Things are moving all the time. AI is on the rise. Prediction markets, like I said, digital assets, all these things. What is it like building a wallet for the current day and age of everything you're seeing onchain?

>> Yeah, well, you know, I say a wallet is really like a bank account that anybody can have that you can take across borders. So, for the first time it's really easy for anyone to get a bank account, right? Uh, and I think increasingly this quote unquote bank account that is a wallet is just getting more and more powerful. So, uh, I think from our perspective, it's just so exciting to work across all sorts of different use cases. I think most people knew of privy as kind of the consu consumer crypto app wallet. Uh but you know now we have people using our wallets um agents using our wallets. We have people using our wallets with treasury management uh big fintex neo banks. So yeah it's really exciting to be in the hot of it all.

>> Yeah. And so are you building for any one particular vertical or angle as it pertains to this entire onchain ecosystem? Are you prioritizing more the wallet infrastructure for agents? you know, predominantly humans were the ones that were using the chain not even that long ago, but now the this world is shifting into a more agent-driven financial world. How are you starting to prepare for this? How are you starting to incorporate more AI into the the themes of what you are not only building at Privy, but also what what what you're marketing.

>> Yeah. No, you know, I would say that Privy Wallet is just we have this one API that's just incredibly powerful. Obviously, as you rightly pointed out, we were building for humans to use it at first. Uh, but there's so many features that we had built into the privy API, specifically our policy engine, which allows you to set what you can or cannot do with a wallet, whether that's spending within certain limits or, you know, certain amounts or number of times in a day or within a certain time frame. And I would say originally the use case was around say trading, you know, you want to put in like a limit order. You don't want um you don't want to trade to go crazy. And then now we're realizing that these very same guardrails and policies and controls also apply to agents. Uh and similarly for big global

enterprises as well that want to move funds between entities between geographies. Uh so I would say that we have always been really responsive to what the market wants and what the market needs. So, so that I I will say the answer to that question is that we're not really building specifically for one over the other, but making sure that the architecture that we build is flexible enough, powerful enough to support a whole variety of different use cases. >> Incredible. And and so as as you're thinking through how this this ecosystem could evolve, you know, I I was just speaking with Xavier. Uh he was really fired up about tempo >> and so how do you see this trifecta here, bridge, privy, tempo? How do you see all of these players working

together to ultimately bring the best world as everything kind of comes together the the best world for agentic payments? >> Yeah, I mean I think like uh you know how money moves and how money works is changing. You know we are very simply building for the future of money or what modern money looks like. Uh obviously we have privy that's the account. Um you have bridge that is basically your bank and then now you have tempo that's the real. So, uh, it's I think it's it's really great to kind of see all three different companies and entities being able to work together and, you know, really solve some for some of these use cases at scale. I think obviously Tempo came up with the machine payments protocol um like a couple of weeks ago.

That's really exciting. But, you know, we've been doing a lot of work with X42 as well. And MPP is essentially just an extension of X42. You know, with a certain um number of capabilities that it that it extends and builds upon. Uh so yeah I think when it comes to agentic payments you know I will say that we're still very early. I think that we are uh at privy we're seeing over a third of new developers sign up for a privy account uh developer account essentially building agentic use cases. So we know that this is growing. This is exciting. Uh but yeah I think there's a lot of things to figure out still um as we before we figure out what use cases really stick. Yeah, you know, a lot of the the current dynamic feels like we have a lot of the infrastructure and the

products that are ready for institutional capital and and ready to be used in production. For instance, you know, we we've been speaking with capital allocators $300 billion of capital at their disposal. They're starting to bring onchain. uh not just one you know from from Bailey Gford we had Theo talking about institutional capital onchain but then even before we had uh Zama privacy protocol talking about how privacy can be embedded they're working with uh uh uh T-Rex which is another tokenization got acquired by APEC uh and and is launching a hundred billion dollars onchain of RWAS and so this is happening in waves I'm curious if there's a particular

story or theme that tends to resonate with the market as you know a a marketing ahead of marketing at Privy. Um >> the applications seem like they're ready. It seems like that, you know, the product officers, the engineers, they kind of did their job. A lot of what's left is education and marketing so that people realize, okay, these things are ready. They're here and they're ready for you to come and use them. Is there any stories that you've found like really tend to resonate with your target market? Maybe first, what is your target market and and how how do you find uh you know the type of messaging or story that connects with them most?

>> Yeah, I think for Privy, our mission has always been the same from day one, which is to make it as easy as possible for developers to build on crypto rail. So whether you're an independent developer or you're a developer at a big fintech or neo bank, um you're still a developer, right? So what could we do um from a developer experience side of things to really give you the primitives that make it really easy to essentially embed money into your product, right? I think we want to focus on that so that the people building their products can really focus on what is important to them and their end users and obviously they're serving a whole variety of different end users. Uh so you know when talking about the kinds of messaging that really resonates I think for a lot of um fintex and enterprises is really

about being global from day one. uh you know I think for uh you know privy by default we started off being completely non-custodial and so obviously that meant being able to roll out to you know we serve um end users from over 180 different countries uh you know for a lot of uh financial institutions that's not possible because of licensing and regulatory requirements uh but you know I think now they're seeing the uh benefit of having a custodial and a non-custodial setup side by side and that is also something that we just started offering as well so uh I I think we uh announced custodial wallets uh at the start of this year. Yeah, I think around the start of this year. And so essentially what that means is that even for a single enterprise, you know, they can configure custodial alongside

non-custodial wallets um side by side uh on a per wallet basis. So maybe this particular wallet you want it to be custodial uh because the end users are not fully comfortable with self- custody. Uh but at the same time there could be end users that want to plug into you know onchain um capital markets get defi yield offer by the likes of a and everything. So I think it really is about continuing to listen and figuring out how we can again abstract away a lot of the complexity that you know maybe people don't really necessarily want to or need to think about.

>> My my understanding of privy is that there's a lot of uh uh maybe B2B TOC that that takes place. There's a lot of distribution channels that leverage Privy as a means of uh uh expanding the wallet access for their end customers. I'm curious, maybe there's some some some uh success stories, some test cases, some testimonials, like what have you seen has been, you know, one of a couple of the largest distribution channels for Privy? Yeah, I mean um gosh I mean I think so so I think just to talk about scale today Privy has over 120 million accounts across 2,000 more than 2,000 teams that are building with Privy. Uh that obviously ranges you know

uh all all all customers range from the likes of Hyperlquid I think needs no introduction you know processing you know tons and tons of volume um every single day. Uh you know we also uh power um Kraken's DeFi earn product which I think at this point has over $150 million in deposits. Uh so again that's like a really interesting setup where they have a centralized exchange but they're able to seamlessly transfer a user an end user is able to seamlessly transfer their balances from their Kraken centralized exchange account wallet into a privy um non-custodial wallet which then gives them access to all these um defy yield and benefits. So I think we've been seeing a lot of traction there. Uh and then you know we also serve the likes of um Aclana right which u you know buy now pay later their

end users are you know everyday consumers who really don't care at all about what the rails are like I think we talked about this morning how you know the the end the end user is really not going to care what blockchain their stable coins are on or or even what stable coin token it is at the end of the day they just want to know that they have dollar access and that is usable and spendable wherever they want to use it. tell I'm I'm curious more about CLA because this is this whole buy now pay later thing. You know, it got a lot of hype there for a little while. Uh but it seems like CLA's started to find their footing. You know, it's more than just the hype. They they have a solid, you know, uh repeatable and sustainable business and they've also started to

leverage stable coins and onchain wallets such as, you know, using Privy in into their into their stack. um how exactly is Clara using stable coins in privy and how do you do you think this will continue to expand in similar use cases? >> Yeah, I think without giving too much away of what hasn't been formally announced like uh you know I think CL also aside from you know offering buy now pay later they also have a consumerf facing app. Uh so I think when you think about what a wallet can do and how you know I think a term that we use is like embedded finance. So once you have a wallet that is actually embedded into the application that they already have the the existing client and consumer app uh that opens up a whole bunch of new

use cases in terms of what uh an end user could do with their balances in that app. >> Yeah. And and you know I think another one that comes to mind here is like Uber like if you know we're depositing money into this thing to take rides we can deposit it almost like a checking account savings account and start to have a lot of financial functions built in. Another one here is uh Twitter itself. uh like I don't know if you saw this but Elon just hired uh one of the recent someone who was just at a uh designing wallets and stable coins and these sorts of things. Uh this person also left base their like major design lead and now they're going to Twitter. Do you think Twitter X social media platforms will start to incorporate financial

functionality into their platform so that they also serve financial services? Yeah, I mean I I think like uh I think any kind of platform that serves creators or have to deal with um creator payouts makes for a really uh exciting use case, right? Like uh you know I think even today acts like you have to cross a certain threshold before they can really pay creators and I think part of that has been you know it's just really hard to deal with micro payments or like if I earn like a$128 cents like is the user really going to want to withdraw that$128. Um, so right now I think creators that are making money off of like Instagram or YouTube or ads or like similar types of platforms, uh, you know, I think being able to build all of these onchain gives them a lot more

opportunity to a make more frequent payouts to pay more creators at scale. Uh, and then obviously for these creators having these balances in their wallets, they can, you know, earn again on idle balances. So uh, so yeah, I I think that is a really exciting development to uh, to watch. Uh I think another great example is uh that you know I think serves millions of creators today. It's kind of like Patreon needs a Shopify and you know they launch like a treasury product also powered by Ali. So you know I think we're seeing um you know creative payouts which u really be a category that could be really interesting once uh it gets onboarded at scale onto stable coin rails.

>> Yeah. Incredible. I mean shout out a defi day. They're doing >> I know I'm doing I'm doing my part here. >> We were doing we got got to get some a tokens today. >> Um so you know another thing we were talking out about just behind the scenes here was uh like this institutional wave right tons of capital that's flowing in. We won't we won't spend too much time here but I'm just curious about the way Privy is thinking about uh its institutional strategy. I had mentioned an episode we did with Zach from Grayscale and how, you know, they're seeing tons of flows come into the space and obviously we have these prime brokers that are able to kind of issue these things, but there's not onprem institutional wallet access at scale for a lot of these institutions. He said

that's one of the main obstacles that's preventing a lot of institutions from coming into the space. Is Privy thinking along these ends? Are you are you starting to see more developments toward what an institutional strategy could look like? >> Yeah, I think we are definitely spending a lot more time with institutions these days and I think trying to understand their needs because I think to your point I mentioned that we built for like humans and you know I guess they can be used by agents. Uh but obviously I think when you're dealing with uh regulated financial institutions at scale with that amount of capital uh you know whatever we have built may not necessarily be um the like fit exactly what kinds of requirements that they have and and you obviously the level of scrutiny that they have. Uh so I think it's uh we are definitely in the process

of trying to figure out okay you know what else do we need to build for them for us to meet that um that hurdle or that standard. Uh I think on the other hand like uh the really exciting thing is that a lot of these institutions do realize that there is huge opportunity to be able to to connect all of these massive balances into you know open decentralized finance. Uh and you know what can we do to enable that and I think that with privy again we have an incredibly powerful policy engine. There are ways to leverage our architecture where you know we could have execution wallets that essentially a treasury wallet passes on a a scope authorization and so the balance doesn't actually go through the privy wallets but that privy wallet essentially acts as a signer to

be able to authorize transactions to connect treasury flows um within a certain approved amount directly to the blockchain directly to these onchain protocols. So I think those are some things that we are you know talking um actively about to folks uh you know how do we because I think I think everyone understands that putting a treasury on chain uh gives a lot of benefits right like it's again it's it's programmable it's fast you can make sure that there's less uh working capital that's sitting idly and not doing anything uh so I think everyone knows that treasury on stable coins generally is a more productive and more efficient uh solution so I think the question is really about um making sure that we are continuing to stay close to them,

understanding their requirements and you know building alongside them. >> Yeah. Um that that makes perfect sense and it it is very interesting to hear how flexible some of the wallet technology is. Um as you mentioned this compliance engine, you know that this policy engine uh can kind of be morphed to humans to agents to institutions. Um you mentioned just kind of bringing this full circle uh you know to uh agentic payments which is a very you know prominent concept here at this at this conference you know you mentioned that you guys are building for humans just curious why that is so crucial uh and at what point you might start to shift build more for agents at what point do you reach too much where do you how do

you find that balance >> yeah no I I mean I think it's about building architecture that at the end of the day serves whatever the purpose is but obviously I think When it comes to the agent economy, it also means giving agents the skills to be able to, you know, run things by themselves, right? So whether that is a privy CLI that allows or or a skill that allows them to essentially spin up a privy wallet and be able to get all the the authorization keys in a way that is you know they don't have to go into um a dashboard as you know what a human developer would do. So I think it is less about the underlying um you know the underlying infrastructure and architecture is the same. you know the wallet is incredibly programmable. It's incredibly powerful as it is today. Obviously, there's more

things that we can do that we're actively working on to make it more powerful. Uh but I think it is in terms of dealing with agents is how do we we've made it really easy for humans to do so, right? Whether that's through docs um and you know these days you could also put your docs in an LLM and it's going to figure out exactly what it needs to do. So I think the next level then is how do we give agents the skills so that they can similarly be uh you know help on their journey in terms of getting on chain funding their first wallet and then obviously leading to their first transaction and yeah I think we're seeing some great traction on that already. So just excited to continue pushing it forward.

>> It it's so funny you know we onboarded plenty of humans. It was like all right we're going to onboard the institutions. We skipped right over the institutions. We're onboarding the agents now. That's that's where we're at. Debbie, thank you so much for joining. Absolute pleasure. We'll uh we'll do this again real soon and hope you have a great rest of your conference. >> I will. Thank you so much. >> Enjoy your DeFi day. We'll see you next time. All right, guys. Uh we're going to take a quick break and then we're going to be here with our last guest. We're going to get Stani, the founder, CEO of A on the show live from DeFi Day at HCC. Guys, don't go anywhere. You're not going to want to miss this. A founder Stani talking about V4. Be right back.

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All righty, guys. We are back live at Defi Day here in Khan at ECC. It's day one um with Stani. Obviously, a big day. Stani, how do you feel, man? How how does it feel to get this out there in in the while? I know the team's been really on it, man. >> It's been amazing. A V4 we've been working for like uh two and a half years or so and uh getting it out new generation of a protocol and and also a pro that is um the also the interface for that it feels uh incredible.

>> So it's a milestone for sure but it's just the beginning in its own way. >> Oh yeah. Oh yeah. It's uh it sets a uh new dimensions for the A protocol to have new types of use cases and and collaterals. We're we're super excited and uh uh it also opens up the whole architecture of a enabling anyone to come and actually build uh new use cases as as well. So that's that's really cool. We're going to see a lot of uh development not just from the a team but community developers and third party developers that want to tap into the AV liquidity.

>> Yeah. Yeah. And so this was the first kind of restructuring of the way the protocol works in several years. >> Yes. Um, how do you think about that from a a risk perspective? I think one of the things that a is known for is its resiliency and its ability to to manage risk very effectively. We've seen even just recently um vault uh exploits and different kind of like DeFi mishaps. How do you think about the risk kind of parameters when it comes to this new iteration? I know you guys spent almost what a whole year kind of risk testing this thing. How do you think about that?

Yeah, I think uh what A is really known for is the resiliency. Obviously, it's the protocol that has been seeing multiple market cycles. uh we saw um FTX we saw a lot of market down cycles and AB has been able to be extremely resilient and um it showcases that uh the protocol works really well uh and the parameters that are always prevetted and applied to the protocol has been uh has been done correctly and av4 simply introduces new tooling for uh risk managers and the the a community to manage the risk. So couple of features for example risk premiums uh allows now to actually price the risk uh per

collateral asset where it's uh useful and applicable. Um so every borrower doesn't necessarily have the same rate when they're borrowing a particular stable coin. The second is uh dynamic risk configuration meaning that uh now um configurations can be applied to new positions uh without affecting old positions. So this is really uh fundamentally uh new tooling that didn't exist before in a architecture itself isolates risk uh into these spokes and uh liquidity is tapped into uh from a hub that gives credit lines to spoke. So it's a way of actually ensuring that we don't fractionize liquidity but we have a good amount of segregation of uh risk

profiles in a >> Yeah. And so when you have this kind of hub of liquidity and these spokes of different kind of different risk profiles for different collateral assets, how is the how is the kind of delegation of liquidity uh kind of uh how does that choice get made? Is that just based on user demand for that type of asset or how do you kind of allocate the capital in this pool to to each spoke? >> Yeah, so um first of all there is three um hubs. So there is a prime that is the the sort of lowest in the risk curve and then there is a core that is more of a risk adjusted and then plus which is uh risk return and each of those hubs have um connected spokes uh depending on

their uh use cases um and it depends a lot on that hub's uh risk profile. So core is where you have the risk adjusted um uh markets connected to that hub and the idea is that there is the deepest uh liquidity and then plus is where you have uh more sort of u uh tailend opportunities um and and then prime is is kind of like uh the the lower end of the risk curve. So it all goes by risk assessment. Um but now uh what's is different with a v4 compared to existing a markets is that um you don't have only one entry uh point. You have multiple uh selection while still uh keeping the capital uh relatively um uh concentrated

in a particular risk profile and allowing to tap. So the way the decision actually works is that it's still a governance decision. uh how much capital is allocated uh from a hub to your particular uh spoke use case and that's uh done by a risk assessment as well. So it's kind of it's kind of like the uh trunch model in finance with like a junior trunch as as one hub, a senior trunch, much less risk as a separate hub and then you've got a third as well. Kind of trunch it out. >> Exactly. And there's sort of scalability there. So every uh new use case can also start from a um plus uh connectivity but as that use case actually uh matures it can be then connected into um into the

core hub and credit line can be issued from there and and that is actually really interesting because one of the biggest challenges for D5 builders has been to um ensure like uh when they built incredible innovation how to actually bootstrap their product and liquidity right >> and this is the perfect way where if you build something really exciting and really cool uh that can be connected into uh existing uh liquidity in a >> Yeah. Because one of the things about a was that it's been notoriously difficult to get your assets on a >> Yes.

>> which is by design. >> Yeah. because of kind of like the poolled structure of B2 and B3. But now essentially you're saying okay >> the gates can open to more risky but innovative ideas in a specific uh trunch effectively or this specific hub. >> Uh and then those protocols if they succeed get access to the other >> the other capital in that tunch or or in that hub and then potentially other users on a of other hubs who may want to you know increase their risk limit or try something new as well. Yeah, it will be still hard to get uh liquidity from the the most sort of resilient and um lowrisk uh pools, but it opens up the the sort of like a tail side of uh um

new markets, new hubs and and also down the line uh even hub factories where new hubs and spokes can be created completely tailored to for example B2B or uh institutional use cases. So it simply opens up the whole system into uh faster on boarding and then when these uh use cases or assets gets proven then they can access uh deeper liquidity by accessing uh these more larger hubs. >> Yeah. And this is this is different model than V2 and V3 but also different than having like um a lot of different individual trenches or individual vaults, right? Per per asset or per collateral type. Why choose something more in the middle between like a pulled

model and an individual vault model? What do these two models, your previous and and and kind of this individual vault model, what do they fail to achieve that this V4 model allows you to do? >> Yeah, I mean um the infrastructures we V4 enables all of the models um but the the chosen market structure the the way we compose the the hubs and spokes um take the best of the board world world. So um the one entry point model has worked really well for a um but also bootstrapping new use cases has been um uh more challenging. So with this model uh liquidity is concentrated in hubs and new use cases can be bootstrapped much more faster. So uh users will have the

choice uh on what kind of risk they want to subscribe to. Um and that is important and that choice um uh allows uh to take less risk or a higher risk. Um and that that is fundamentally what's different but also we believe that um it is difficult to navigate uh uh hundreds of vaults. >> Yeah. >> Um and also have enough information. So there is uh still uh uh governance managed risk unless it's a some sort of like institutional use case that uh that is deployed uh separately. So I think um it takes just best of the both worlds.

>> Yeah. And I think a lot of the mental models that the industry has had for valuation heruristics and just generally thinking about DeFi protocols and companies on chain is specifically for crypto assets. Right? So we've got a couple trillion dollar TAM here of Bitcoin, Ethereum and a bunch of other types of tokens. >> These these assets some of them are onchain on Ethereum on L2s L1's some of them are in DeFi protocol. So it's kind of like it gets smaller and smaller and smaller as you get to eventually using these assets. We were just at D last week and it was very very clear that large asset managers are coming on chain and they want to take their assets and put them into yield generating opportunities on chain whether that be

uh treasuries uh equities etc. >> What does V4 enable for that next cohort? Right? And I know that you you gave a talk earlier about this kind of abundance framing with regards to AI energy infrastructure. We're almost kind of going through a new adoption curve within the onchain ecosystem in in crypto of like this abundant new capital coming in to a certain extent. How does V4 set A up to kind of be the home of tokenized treasuries of equities and kind of do this do more with your you know trady asset let's say >> no it's it's quite a fascinating because um a has been able to grow because um you couldn't go to a bank and give them your Bitcoin or Ethereum and borrow right you had centralized lenders uh

doing that at the same time as a but you didn't have the transparency and that is why a has been able to eat all that market share there. Now, we are strong believers that um native crypto assets like Bitcoin and Ethereum are going to drive a lot of value and it's going to be the bread and butter for a but uh we also know that there's going to be a lot of value coming outside of the native ecosystem and that will happen through tokenization uh yield bearing stable coins and also lending not even against ERC20s or 721s but against data directly. So using DeFi as a uh capital allocation layer um and channeling that liquidity into real life credit

opportunities. So a B before essentially is a credit uh protocol and I think this is really fascinating because we're tapping into uh 400 uh trillion asset base that already exists in chatfi. Uh on top of that we are uh we see a lot of uh um benefits in lending against uh infrastructure that is creating this new transformation where we're heading towards which means people having abundance of uh intelligence abundance of uh energy u abundance of labor with robotics uh compute and um this infrastructure effectively is what is the direction we're going to go towards

the next uh 50 years and being able to uh bank that infrastructure and fund it um is a way to actually capture uh over uh 80 trillion uh worth of market uh value um and move that into DeFi and create the most transparent uh credit market. So I think um if you look at the old uh like banks how they started JPM and so forth they they obviously they funded rail rail uh railway companies they funded electrification with Edison and Tesla uh you had the industrial revolution and now we have a new transformation towards uh abundance economy and these infrastructure assets are abundance assets so it is a big

opportunity it's maybe not something that we are going to uh tap into the extremely near future but that's where the world is going towards and that is a big opportunity for defi and for a um and rws in general is going to be a big part of a story >> yeah and I think even more so in the near future the these kind of tokenized equities or rwas will be kind of part of that uh near-term story as we evolve into more digitized versions of the of of AI infrastructure energy infrastructure figuring out ways to kind of package that and tokenize that is more on the longer term but I Right now we're seeing people are interested in doing more with their you know equities or their treasuries or looping and all

these things are happening. Is there going to be a pool specifically that is going to be in that risk uh kind of basket for these RWAS equities like is there like a a specific pool? Is there different? How do you how is that going to work? No, that's a excellent uh question because um now with a v4 we can actually um use the market that we have the a horizon uh where you can use ards as a collateral and borrow of stables and lend stable coins against traditional assets on chain. >> So in v4 we can actually create hubs and spokes where collaterals can be isolated based on asset categories into different uh spokes and decide how much credit line and exposure uh each hub gives to

each spoke. So it is a really uh a big opportunity to manage risk more better on chain and expand the RWA business for a native co go stable coin plays a big role because u go has a full 100% margin as there is no LPS and go is going to be crucial of these credit use cases whether it's against uh tokenization or against um lending against uh yield bearing stable coins uh or even against uh let's say uh credit uh itself.

>> Um yeah, that's awesome. And Go has been growing consistently and will continue to do so drive revenue for a as a protocol. when it comes to the uh actual growth of the kind of a brand and the and the A ecosystem as a professional kind of leader in this space. >> I saw you guys had a quarterly call recently >> which I think is part of this thesis that a lot of folks have that is like tokens are going to start to look a lot more like equity structures where they'll have these quarterly investor calls or like shareholder meetings almost of sorts. uh just quick takeaways there highlights what what was on that call for folks who weren't able to make it and you know just any thoughts on this kind of maturation of the A brand

as as a part of of the larger shift in the industry. Yeah, in general I think uh tokens are a great way to um uh govern a a public uh infrastructure um in a the most transparent way. And I I think that's in in general uh we're going to a direction where execution matters more um and also there is a lot of professionalization uh in in in our space and um I think it's a big contrast from the early days where we're still trying to figure out uh where DeFi is going uh how these protocols are um you know what's what sort of like are their positioning and now we're going towards direction uh where actually this is a resilient viable whole infrastructure

and could actually back all uh financial uh use cases and then um the question is how to make this as transparently and accountably as as as possible. So a um a built and operates in public >> definitely and and what were some of the key kind of takeaways and things that folks may have missed if they weren't able to attend that that quarterly call? It's a lot of about actually uh the looking towards like the existing uh Q1. Obviously, we've done um we're in track of doing the same amount of revenue we did uh last year. Um also we had a lot of uh uh new market deployments, new partnerships. Uh one of the biggest integration that happened was actually

uh integrating a uh into WO uh together with plasma veta uh uh preview and all these and all these partners and it's such an interesting integration because it's the first time uh fintech at this scale integrates DeFi and we're talking about uh 21 million users being able to access uh a through W treasury um and thanks to all the partners that we also have uh in this uh project and that is significant. So it's effectively a fintech in the front and a in the back >> uh and I think that's going to that sort of a integration uh cycle is going to uh continue and uh also

>> uh we believe that going directly to consumers is important and bringing D5 closer and that is what we're doing with the A app. Obviously, a pro is uh focusing on existing D5 users >> that uh need more sophistication and a app is simply abstracting away whole uh DeFi uh experience offering uh self-hosted wallets uh with the ability to sign up with an email, phone number, uh abstracting away all the complexity, networks, gas, stable coins, uh being able to link your bank account and deposit directly into a the value proposition that consumers ers can handle.

>> Then I got to ask, how did that W thing come to come to fruition? How long did that take? >> That is actually uh that took quite a while. Obviously, it's a really big project and and uh a lot of work has been actually done by the the plasma team, by the Tetra team and the VA team and also a team. Um, so it's been a really uh uh interesting collaboration uh in general and I think what W actually did they set a a really good precedent on how Vintex could actually leverage DeFi lowering their cost structure and then being able to um take the middleman out of the equation and use more programmable uh solutions that become their become more uh scalable for

them. >> Yeah. And so gets users get exposure to the assets that are on the A iteration on plasma. >> Exactly. >> Things like syrups uh syrup USDC USDT other yield bearing tokenized treasury assets. Um and just that they're able to kind of get this idle yield on their holdings in the app. >> Um you know they spend it on anything from clippers to graphic design to hiring etc. They don't even know that they're using DeFi. Uh and on the front end of Wap is there like an option to get yield is or is it just natively embedded?

>> Yeah, it's it's it's basically natively and it happens and and the deposit happens uh quite natively and I think this is the right way to integrate DIY. It's simply a invisible infrastructure. >> Yeah. Awesome. Um and then you guys also just announced I think yesterday or today the integration with chain links SVR. >> Yes. This is something that I think folks are somewhat uh you know akin to but don't really kind of understand Oracle me it's kind of like it's something that when people get liquidated on different positions there is kind of searchers and block builders that are able to kind of sandwich these positions and get uh basically extract me from the liquidator itself.

>> Um a chose to to work with chain links SVR product. I'm just curious how much revenue you expect to uh pull from that integration or just kind of like generally what that looks like from a a business line standpoint or if it's just helping your users, you know, you know, save save more of their own capital. >> Yeah, it's actually uh it helps all the users. Um it also helps the um the a treasury as well because the it's a balance of u uh being able to get a as a community to to capture some of that revenue that um liquidations occur uh with the MVV directly into the A treasury. So um it is quite helpful uh from that perspective and um it's a way

of mitigating also the uh um the Oracle MV and now it's live with obviously it's been live for quite a while uh on the Ethereum mainet and now it's live also on for example on arbitrum with the new integration. >> Awesome. And couple last things for you. In the in the A post, you guys summarized that all of the existing users of V3 and other kind of iterations of a uh or it's perhaps just just V3 do not need to switch over to V4. If I'm if I'm an A user, what does this mean for me? Do I need to change my assets? Is there any advantage to shifting? Like what is the what is my protocol here?

Yeah, V4 V3 will um live as long as uh it's needed. So the way we approach always every single iteration of our protocol is um it's going to live um as long as the blockchain is available. So we still have uh a deployment of mav v1, v2 and uh uh v3 obviously and um and also uh it's user choice to to to migrate um it gives opportunities uh for users uh different um hubs and collateral compositions that gives more opportunity uh for the users. Um but end of the day um there is no rush obviously we have a controlled launch where we are focusing on security uh rather than growth in the beginning and we want to

ensure that everything uh works really well. Um and our v3 is a perfectly working system. There is there is nothing wrong with that. So um it all will take time and and we want to be it to be as organic as possible. >> Awesome. Um last thing for you on my side kind of a a left field one here. I was in DS and there was this the there was this guy Austin Campbell came on our show and he gave this take and really curious your thoughts. He said you can only have two of the following three permissionlessness, smart contracts, and RWAs including stable coins. suggesting that in any sort of D5 protocol in a permissionless blockchain environment like Ethereum like a anytime there's a RWA so like a a USDC a USDT any sort of

like tokenized asset uh there's always this risk of a >> a federal judge or an agency seeing that there's some illicit activity or some sort of you know uh something happening and just bricking the the protocol or that pool specifically and telling the the folks to go figure it who are involved and he just he this is kind of this kind of comes in in the lens of this broader debate that's been going on on Twitter about uh permissioned blockchains versus public blockchains and the lack of privacy versus the kind of database nature of permission chains and how institutional allocators and regulators are thinking about these things >> and so I'm just curious like from a perspective from your perspective how does the permissionlessness the smart

contracts and the RWAS how is there a seamless integration of the three Do you agree with this take? Do you disagree? Um yeah, >> I mean there's every single asset has some sort of a trust assumption. Um on Ethereum itself as an Ethereum network, uh the trust assumptions are uh so that it's you know it's very economically safe, right? It's it takes a lot of uh energy well let's say coordination uh to actually break Ethereum and and result in the same opportunities. So you have to get every majority of the nodes for example.

>> Yeah. Um maybe that's less in in uh stable coins that are uh genius uh compliant for example. Um but at the same time I I do think that's um you can achieve resiliency even when you use stable coins and typically stable coin issuers they don't really make changes on uh you know if if an assets are in the protocol they can freeze accounts if if you withdraw and there is a reason to do so but otherwise I I don't believe um that's a major concern uh for now and uh I do think there's also more decentralized options so a native Go stable coin is purely uh well it's mainly backed by uh Ethereum like assets

and um it gives sort of opportunity but if you if you have a a stable coin fully backed by native assets obviously the scale uh is going to be limited there. So um it's all about uh how to uh create thrust minimization um and and how much is sufficient amount uh that you have a operational system because it always comes with a cost. Ethereum running Ethereum has a cost um and that sort of needs to be balanced as well. >> Yeah. So you see so you do see a future of immutable blockchains um highly decentralized chains with permissioned assets on them in running in a uh kind of congregated or co-mingled pool with

kind of like uh non RWA assets uh from on that same chain like do you see that future happening? Yeah, I mean sort of exists like there's lot of uetss that are issue based and and actually that's great because uh you can push the liability on asset issuers instead of protocols. So protocol shouldn't have any sort of uh liability. I think markets should work uh in a the most resilient way and shouldn't be interrupted for any kind of a activity and that should be handled on asset issue level. So I think that's sort of actually good for DeFi protocols because um you know you want them to be resilient.

>> Yeah. Yeah. I guess I I fib one last thing. I put out this post saying if the tokenization thesis is correct and trillions of dollars of assets come on chain which company will benefit the most? And the resounding kind of set of answers that I received was uh DeFi protocols specifically on the lending side >> um oracles and exchanges. Mhm. >> Curious if you agree with that or if you have a different take. >> Well, I think uh where A is sitting is in the middle of uh DeFi, stable coins and RWA >> and I think those three components makes the future of finance.

>> Beautiful. Stonnie, congrats on V4 and amazing >> uh one day event here in Canada. It's been great. It's a little different than last year's Villa, but I think in the right way. High high signal, good good conversation. So, thanks for joining us. >> Thank you so much. >> Cheers, son. Cheers >> guys. That wraps us up for today uh at Defi Day in Khan. Uh day one of ETCC. We've got three or four more days left. Thank you for being a part of the show. We'll see you guys later.