LIVE from ETHBoston: FCAT Crypto Brief Podcast

Transcript

All right, we've also never done this before, so  we'll hope it goes well. Thank you all for joining and um thank you to the Boston Down ETH Boston  for having us. This is uh event has been great so far. Um and welcome to the FCAT Crypto Brief  uh doing it live today. Um just to give us uh I guess some introductions. I'm Max Wington. We have  David Shapiro. Uh Jack New writer and I'm part. So the FCAT Crypto Brief podcast originally started  as an internal webinar where we kind of grouped uh together a bunch of minds across Fidelity just to  have fun a fun conversation and talk about crypto.

and it evolved into a podcast. And sometimes we'll  talk about kind of news and events if it's a big week for that. Other times we'll dive deep into  a bigger topic or theme. That's what we plan on doing today. We're going to dive as deep as we  can into tokenization. And I think these guys have some really u awesome insight into that. So I hope  everybody's able to take something out of this um and have a fun conversation. But I guess before we  dive into that topic, how are we all feeling with ETH Boston? Give me some raw reactions initially.  Well, first of all, thank you all for uh wandering back right after lunch. Um so that's that's that's  a big dub. I I just want to make sure that this um is not a panel. It's supposed to be super fun,  casual, good vibes. So um we'll be talking about

our our opinions, but I think I I love the vibes  here. I think when you think about Eat Boston, it's just so um grassroots driven. You're not  being chased by uh by by vendors. People are not trying to sell you products. It's just so it's  it's it's builder first and that's the fun part about uh coming back to ETH Boston. I do have to  say it's it's a really interesting shift. Uh but I remember when I did ETH Boston a few two years ago  and or or even uh the MIT Bitcoin Expo which was in 2016, a lot of people used to I used to wear  uh a sweatshirt and and and shorts and I'm I'm actually now kind of embarrassed at myself that  I'm wearing a shirt and a pants. So you can see how crypto has also um has now gotten mainstream  and and also a bit institutionalized which is

which is different. Yeah, it's a great point.  I think uh one of the things which I think is a good sign is uh I haven't heard anybody mention  token prices. We have Bitcoin trading, you know, above 100,000. I guess I'm the first to do it.  Uh and I think that's a a good sign. We have, you know, a pretty decent crowd here today that  I've seen and a lot of people just talking about projects or things that they're working on that  they're passionate about and about the actual like infrastructure and technology and not just like  number go up which is I think a positive sign. Yes. So, this is my first um uh Boston blockchain  week and first first east ETH Boston and I got here about an hour ago and got into town last  night. But so far so good. Nice. Awesome. And

just a quick friendly reminder that this podcast,  everything we say today is just for educational purposes. Um none of it is legal, finance, tax,  other advice, marriage. No, no life advice too. No life advice. Sorry guys, but um yeah, I guess  we can dive right into it. Um tokenization is kind of the big theme. There's one kind of huge  question I really want to get to the heart of, but maybe we start off with some context kind of  level set everyone. Can can you guys just help me uh or help the audience and everyone understand  what is tokenization? And I guess a big question I often hear is why are we using blockchain here,  right? Why is blockchain a big part of this?

Yeah. So tokenization is it's really just the  act of creating tokens and those can represent anything from a stock to a collectible to a native  crypto asset. Yeah. And and what I want to do is maybe just do a quick backstory to provide some  context. I I know we we hope this doesn't come out to be just another tokenization uh podcast or  panel because that's the last thing in the world that you would want. Um I remember tokenization  became mainstream in 2018 2019. Um in fact um FDX was you know infamously using tokenized  stocks as part of their uh FDX trading platform.

And so tokenization has been around for a while,  but it does feel different. Like you kind of get your spidey senses on now because it it just feels  that you have big companies like Robin Hood, SoFi, uh or even big crypto exchanges like Kraken. U  now starting to offer uh tokenized securities. So 2023, two years ago, tokenized money market fund  was just a fun small experiment. Now it's 7 and a half billion as of today. So, it does feel more  real as opposed to when it was more conceptual uh a few years ago. And maybe some might ask,  well, what's the reason now? Why is a company like Robin Hood uh or SoFi going into it? And  I I think there's two reasons, and I'd love to hear your perspective on both sides. One is from  an institution standpoint for the person for the

institution that's offering those services.  You capture some of those margins by using by essentially tokenizing you. You you you are not  exactly getting rid of the underlying technology that's that we've been using for the last since  the 1970s. But essentially you do capture a lot of the margins just in terms of being more efficient  and building a more of an efficient system. So imagine if you are um you know if you are  a company like like Robin Hood or SoFi and you put 10% of your flow using tokenized securities  those are some notable gains just in terms of uh the fee that you capture. On the other side as  a user um you see private markets um are obviously have become so much more more valuable.  Um, in fact, I was reading this yesterday,

but there was uh or two days ago that there's more  ETFs in the public market than individual stocks, right? So, you can see that there's, you  know, a lot of these companies like OpenAI, Stripe, SpaceX, they're all intentionally staying  private and uh retail just wants exposure. I mean, they're they're kind of sick of trading meme  coins and so I don't know, maybe private markets are next. What do you guys think? Yeah, I think  uh so I'm on the the venture side of the house, I guess, investing in early stage crypto  projects and we've spent a lot of time looking at tokenization. It does seem like there's a  little bit of a bifurcation in terms of like what assets have been tokenized thus far and like  what's the narrative on tokenization? I think the narrative has been like, "Oh, we're going to  tokenize alternative assets, private equity,

private credit, things that are harder for people  to access today, at least in developed markets, I think. Um, and that has been like an interesting  idea and there's been a lot of investment in that space and I think there's merit there. But at the  same time, if we look at like what actually has traction, it's actually just access to like the US  dollar via stable coins." And so like there's $300 billion of stable coins from you know tether  and circle and other issuers uh money market funds and then like we're starting to see public  equities be tokenized. And in the US the value prop is I would argue for the average person less  strong less relevant. Like people will say well I have Visa and Mastercard today I don't really need  stable coins. I think that's a valid point. Uh but we actually spend a lot of time looking at like  companies in emerging markets that are helping

just people that live in like economies that  have currencies with higher rates of inflation uh be able to just access dollars and be able to  transact in dollars or trade finance companies be able to transact in dollars and hold their  wealth in dollars. And so we are starting to see like the beginnings of tokenization unlocking like  real world capabilities in the financial system. Um whereas you know crypto has built all this  financial markets infrastructure but a lot of it has been on like circular you call it  like ponzomics of these like tokens that have governance capabilities but no real revenues  and you can borrow against them but nobody knows what anything is really worth versus like now  we're actually bringing assets that have like

underlying cash flows and like using those  core financial primitives of being able to trade assets and send them and borrow and lend  against Um, and I think that's like where this starts to become like sustainable to some degree,  which requires tokenization. And I I think that's the most critical piece here. Early on, we we saw  we felt that there was it was the wild west in terms of tokenization of products and you didn't  see a lot of market traction, not clear demand. Uh but I see what's happening now is if you do  and I think you're right when when you look at an average US investor you know that person might  say well what's the exact benefit to me? I know I know the the institution gets a benefit but to  me it's still the same product but I I I still

think we haven't explored the ideas around well  if you have a tokenized security can I use that as a collateral and get liquidity or even just new  financial products like per um perpetual futures which a lot of us love and if you you know  and not not that I'm suggesting that but you know on on on on the onchain economy you can you  know move the slider all the way up to 20x 100x uh as opposed to on your brokerage you can go  only 2x but the average investor would think about well what's the benefit that I'm getting um  from a tokenized security. Yeah. One of the things like in the venture world that we talk about a  lot and it's like maybe a little cliche is like the product has to be 10 times better than than  the incumbent product for anybody like the average

person to care. Like maybe we up here care about  the fact that like you know you can get better portfolio margin than in DeFi if you tokenize  these equities. Um those are like marginal gains and like operational efficiencies that you know  some of the companies that are issuing can get. Um but in terms of like actual traction that we're  starting to see, it's where's the product 10 times better? It's in the place that like has capital  controls and people just can't access dollars. And like for the foreseeable future, I think  that's where I'm like most bullish on the real world impact of tokenization. But I do think like  the longer world view that we probably all share, I don't want to speak for us, is like we're going  to continue to see this trend of tokenization of impact both emerging markets and developed markets  and probably peripherate across asset classes.

Yeah, I kind of see two sides of the tokenization  story so far. There's the businesses who are engaged in tokenizing and then there's users  who are actually engaging with these assets. When it comes to the businesses, I think that  Bass sort of rewrote the story where everybody was seeing the amount of sequencer fees they're  bringing in and started to think, okay, well, maybe we can drive revenue from tokenizing on  our own chains or on our own networks. And you've seen this happen with the launch of Tempo. Um,  stable coins are tokenization. Um, but when it comes to the user side of things, I think it's  mostly an outside the United States thing. So, a lot of people who are interested in these  assets, it's because they can't access them

otherwise. And so, that's why we've seen the most  successful tokenized assets be things like dollars and treasuries so far. And I kind of expect the  the other giant super liquid highvolume assets to also find success being tokenized on chain  like uh the fang stocks and things like that. Yeah, I I I do want to I I do want to make sure  we don't overindex on how tokenization tokenized products are helpful for markets outside the  US too. I've personally been a beneficiary of tokenized products. Try or buying treasuries  on treasurydirect.gov and that's how you would know how painful it is in terms of a UX to to buy  treasuries by yourself as opposed to, you know,

doing that on on unis swap. Not financial advice,  but just telling you what the UX looks like. On the other part, I remember um in in 2021  or 2022, I I remember buying a car and I I um for for the deposit, you know, you could go  through the car dealership um and uh or pay an interest of 6 and a half or 675, whatever that  was. or you could use some of the ETH and you know get liquidity from a lending protocol  like AI to get USDC out which gets exchanged um as as cash when you use Coinbase. So I I think  there's like it's one of those things where when once you actually use it that's when you realize  wait a second this just blew my mind. It's so much easier and sure it makes the the UX is fantastic  maybe for crypton natives but I the the end state

or the the hope is that it becomes the end user  doesn't even know that it's happening on crypto rails. Yeah. I mean one thing that David just  mentioned was like you have base you have tempo you have I don't know how many L2s on Ethereum.  Um but like for the average person I think at the moment like there's obviously a lot of things that  need to happen on the UX front. Um, and maybe like things like intents fix that where you can, you  know, transact across these blockchains and just basically like state your intent and then solvers  will be able to like automatically help you move from one fragmented asset on a fragmented chain  to another fragmented asset on another fragmented chain within the EVM. And and and you know what's  funny because that that goes into one of the most discussed topics which is interrupt, right? So  right now you see fragmentation of data and you

have capital parked in different silos and I was  thinking about this the the uh when you think about you know buying real estate or doing any  kind of normal real world finance you kind of have to go and use different systems on the back end.  So you're using a fixed protocol for securities moving from one side to another. Uh there's back  offices to make sure that there is correct recon on the other side. you're so you're using fixed  protocol for for for securities but you're also using swift for payments for settlement and so I  think maybe maybe DeFi is is actually that interop layer for traditional finance so we keep talking  about well there's there's a there's a need for interop ac across these different fragmented  liquidity but maybe this is the answer to the

interop issue in traditional finance I don't know  it is like one of the most cited issues especially in the ETH community so I I think that's super  interesting. On that point, since we are at an ETH conference, how are you guys viewing like the RWA  trend impacting ETH specifically? Uh, I know Jack, you mentioned there were a bunch of solutions  that could improve and and accelerate that trend, but how are you viewing that now, especially  given the fact that stable coins took over, you know, five to seven years to really get to  where we are today and considering that we're still pretty early innings in this trend. What  do you guys how do you guys think about that?

I mean I think network effects matter and like  it's obvious like when issuers go to issue a token quite often Ethereum is the first Ethereum  mainet is the first place that they go and like why do they do that because it's you know because  of network effects of users because it's you know the largest network by TVL um and it's like  sort of the deacto place that you just go to to issue initially um but I think like increasingly  we're starting to see competition in particular on obviously like the stable coin front of like  smaller, cheaper, faster payments and even within the Ethereum ecosystem on L2s themselves. Um I  don't know if anybody has a great answer of how they foresee that playing out but well I think the  the benefit of using something like ETH is that

the a lot of the core infrastructure is already  built out and um so so it's a great way to get adoption. So if I'm starting out with a stable  coin now, hypothetically I make, you know, USDP, USD parth or whatever you want to call it, the  the the the one part which I don't have to worry about is think about a lending protocol, think  about a market or think about uh a DEX, all of those things that you know a classic example is  uh Coinbase rolled out a product where you can do Bitcoinbacked loans right now. you if you have  Bitcoin on on Coinbase, they they didn't go and build a lending market. They're using Morpho on  the back end, which is a D5 protocol. So the the the fun part of and the essentially the benefit  of this is that you have composibility and that's

extremely relevant in ETH because you have it's  kind of in a sense withtood the test of time when you think about a lot of these big D5 protocols.  So that infrastructure is built out already. And that's that's that's the benefit um that  institutions and and new companies building out products get. It's just faster go to market. And  to me that kind of seems like a like a flywheel a bit. And that's why we kind of see network  effects often just run away. Um because you're building blocks on top of building blocks, right?  Um so I think that's that's pretty interesting. I would hate for our compliance folks to be mad  at me for not talking about the risks maybe risks to the trend of RWAs maybe taking longer than  stable coins or um it's kind of counter to your

point Parth but um like how are you guys viewing  thinking about the risks here? Well, there's there's a lot of risks and maybe I can go into  one. We can actually talk about one each because I I think we could do this round twice if if we do  one risk each. But the first one that I foresee is the uh the state of smart contract security even  now is is not is fairly nent like you still do a lot of manual auditing. There's um humans in the  loop. A lot of that process I was listening to the to the panel right before in the morning focused  on security. And uh and I loved the point around well you you kind of have to understand what's the  scope of the smart contract audit that you just

did. It's not just a certificate that you can show  and say well here's how it's done. So, so smart contract security is I think a big risk and I I do  foresee as much as we have a lot of optimism now I think there's going to be a few experiments which  are not going to go well and so that kind of might dip the sentiment around tokenization but I think  it's just important for us to embrace that we I just feel like we're just from a smart contract  auditing security standpoint we're we're not there yet I would say um sort of relatedly is the  reliance on oracles like when you converge between an inherently digital world like if you're on a  and you're borrowing against you know a digitally native asset it's less of an issue but if it's a  tokenized asset and you're relying on an oracle

provider to feed you in what the price of that  asset is in real time and your risk parameters are set as a result of that I guess that also  exists with digitally native assets too but the reliance on oracles and the fact that like Oracle  vulnerability and um manipulation and reliance on a single party to to give you the source of truth  that melds like the real world with this onchain world. Um and the fact that like those risks  within a protocol are sort of being socialized by the users of that protocol. I think that is  increasingly a risk that like has to be dealt with and and understood. And and what's interesting  is you you don't see a lot of decentral like you don't see a lot of Oracle providers, right? It's  just the three or four like how many of us know

maybe five other oracle providers outside  of the the top two or three. Yeah. So it's it's a big risk. Yeah. I would say custody and  custodian risk. So as far as custody risk goes, I work on self-custody and you know it's possible  to lose your keys and lose access to your assets. And when it comes to something like stable coins,  you know, if you lost a material amount, you might be able to call up the issuer and say, "Hey, like  I lost the keys to the coins in this wallet. Can you cancel them and issue me some new ones?" Um,  but for like native assets, obviously you don't have that type of recourse. Uh, when it comes to  custodian risk, um, stable coins again seem pretty

safe. um you know under genius these entities will  be audited but when it comes to other things like maybe uh goldback tokens you know you there's  a little bit more trust involved there that all the gold that's backing the tokens is actually  in the vaults I don't know if we have as robust of systems to you know like audit gold vaults  and things like that yeah that's a fair point I think to piggyback on that I hear kind one of  the main benefits or opportunities of tokenization uh being you know the impact to accessibility  right that's probably one of the core reasons I think Jackie mentioned for stable coins becoming  so accessible is um or so impactful is because of

their accessibility right so I hear that as like  a bullish case and you'll often hear them quote hey there's five billion people with internet  access so that's like kind of the upside But then I kind of think back to conversations I've  had and like how many people uh like want to deal with that hurdle of private key management  to your point, right? If the product isn't 10x better or the you know getting access to this  new tokenized product isn't 10 times better than what what they're experiencing now, are are all  five billion of those people going to deal with private key management and do it in in the right  way? Um, so I guess that that would be a risk to kind of like the addressable market or the upside  to to accelerate this trend. Max, that's a that's

such a good point because I when you think about  these products, a lot of people ask, well, where's the demand? Who's who's asking for it? And it's  that classic case when um you you kind of have to build something to so you know if you think  about the the 1970s uh paper crisis on security which actually was a part of project crypto by by  commissioner Atkins in the 1970s um at some point they had a lot of mergers and u it became really  hard to do reconciliation of the the securities the physical stocks and so what they had to do  was they would take Wednesdays off. Now, you know, the exchanges would take Wednesdays off, try to  recon, and that also led to uh securities fraud,

uh thieves just essentially taking that paper  and claiming, well, that's mine. It's, you know, um so so then what they realized that well maybe  we can digitize these stocks. And so they they they say this word called dematerialized those  stocks which means that they got all the physical stocks in a in a room and then they said well  let's just now digitize them and uh and then get rid of the physical stocks. So it's actually true  proof of burn in in in the truest sense right and um and then now the tricky part the interesting  part was it did solve that problem then but it also led to the origination of u central  limit order books which is a you know a massive innovation in capital markets so that  tells you that there's a lot of innovation that

you might not we might not be able to imagine but  I think that's the kind of it's that that's the challenge where you you first have to play it out  you have to build the infrastructure and then let let it spin and see well you know here's five  new primitives which which come out which are beneficial to users. Yeah that's Jack's job right  to to think of that. Um it does I always love to think um you know of the you can imagine all  the people that uh like were caught on video you know kind of bad mouthing the internet. Oh my  fax machine works just fine right and we look back and see how silly that is. Um so yeah, you can't  help but almost assume that that will that will be the case going forward. Um we just can't put our  finger on it right now. I guess guys when you look

at the existing types of assets specifically  we have kind of surprising surprisingly to me we have private credit kind of leading the pack  in terms of assets under management uh and then followed by like money market funds and then kind  of everything else like we are at the point where experimentation is being done on every asset. Do  you have I guess maybe an answer as to why private credit in particular is in that spot today and  where you think kind of which specific asset is most impacted here? Well, personally my view  is that I would love to see more exposure to private markets through this vehicle. I do think  when you when you think about um AI and and a lot

of big companies focused on AI, I think it's  and this whole this whole doomsday of well, is my job going to be replaced by AI? I think  you want to make sure that retail and people have exposure to some of those AI products. So,  and I'm, you know, I'm making this up, but if, you know, people, if someone has skin in the game  and if they have a token, some kind of exposure to open AI or cloud or any of those instances, I  I think, you know, moving forward in the future, I you you won't see a lot of resistance to some  of these products as well, just because you have you have some ownership or some some exposure  to it. I'm personally I I love the idea of um private markets just getting more accessible to  uh to retail. Yeah, I mean I think the thing about

uh private credit is I think higher yields and we  know how much crypto loves their higher yields. Um, and so like there's dollar assets and like you  can obviously go further out a risk curve. And so there's like Dow treasuries that hold originally  stable coins now increasingly onchain money market funds and they're just like large pools of  idle capital and now like holding private credit and taking some sort of like I guess credit  risk on the under underlying businesses. Um, makes some logical sense. But I also think like  people within crypto like the average crypto user wants exposure to crypto and like we haven't seen  public or private equity onchain take off in a material way. And I think that's because it like  that's a different user base. Not entirely but

I think a lot of people within crypto are like I  want to own Bitcoin and ETH. And like I think you again not investment advice use the disclaimer but  like they're super bullish on crypto on a relative basis to traditional assets. And so, sure,  tokenize public equities and private equity, but they still want to own their Bitcoin and  ETH. Um, whereas, you know, the the average person that maybe gets benefits from public  and private equities being put on chain isn't using crypto yet. I I think you're spot on about  just the customer demand. Like maybe the reason why all of this failed until now was because,  well, the customer base was different. you had cryptonative people who knew how to use wallets,  the wallets were fairly clunky and u and they just didn't really value public markets. But now as  it gets more mainstream and as you see private

markets getting more valuable, that's where you  see this new customer base thinking about, well, how do I get access to it? Yeah. Uh like I said  before, my mental model for all of this is that the highest volume, the most liquid assets will  find the most success when they become tokenized on chain. and private markets sort of conflicts  with that in my head because you know we've seen it's obviously like a lot of people want access  to equity in a lot of these private companies and so maybe tokenizing them and putting them on  chain will really be a way to sort of gauge what that actual demand is. Yeah. Yeah. That's super  interesting. I think going back to Jack's point, do you think one of the kind of core impacts to  tokenization is going to be changing the user base

specifically? And I guess how do you view that  demand? I guess um do you view it as more sticky and maybe more sustainable? Because I guess when  you refer to the cryptonative bunch, it's it's very pro-yclical kind of boom and bust. you're  here when the g when the getting's good and you're and you're kind of gone otherwise. How do you  view that impacting like the underlying networks? I mean I I think like technology is good when you  don't know that you're using it or you don't know how it works. It's like a lot of people are like  we'll ask a question about crypto and I'll be like well do you understand how the internet works?  And it's like, no, a lot most people. Uh, and that should be how crypto is is like you're interfacing  with it or you're using it and you don't even know

that you're using it. And we're not there yet.  Um, and so until we're there yet, like I think finding that user base to connect it back to to  tokenization is like the users that will hold, you know, traditional assets onchain aren't going  to hold them until they don't know that they're holding them on chain is like I guess the take  that I that's concerning to me. Go ahead. Well, I was just going to say I think we are seeing  big trends in the last few months around a lot of these cryptofocused companies trying to build  the super app and I hate using the word super app but it's just it's an app it's an application  where they're good at quite a few things as opposed to just one but uh you know just backstage  David was telling us about how um you know one of

these firms is coming out with a prediction market  on their uh application based app on on Coinbase has social media along with crypto and then  possibly some lending. But I I think it's to to Jack's point, the the end user wouldn't  care, but it it does to the to the institution that's offering that, they they really value  those efficiency gains uh and capturing the margins. Yeah, I think long term that's where we  end up where you're using crypto rails and and you may not know it. Um, but I think in the more  immediate future, it will be more of a story of uh people accessing assets outside the US that they  can't otherwise access. So, I think there's just a

lot of people out there who want exposure uh to a  bunch of the companies in the MAG 7 and just don't really have a good way to do it. So, I think in  the more immediate term, that's uh how we'll see it play out. Yeah. Yeah, I agree, David. And I  can't help but think that part of the end goal here is to be able to have basically every asset  on a single ledger or a single subset of ledgers um for your entire portfolio and have kind of  democratized access to all of these assets. But when you max when you think about it, it's  not even if you think about like tokenization of securities for instance, it's not it's not a  hugely massive technological innovation, right?

Like when I think about tokenization of precious  metals, that is still innovation, but on the security side, it still exists in a database at  at DTCC. So it's just about change like it's it's an upgrade but it's not true innovation. So that's  the part where I think it you know that's probably the path of least resistance. I think the the true  innovation is when you think about like companies like Paxos or Tether doing like goldbacked  um products which are tokenized. That is true innovation because that's not that doesn't happen  that often. But when you think about just pure securities it's more of a almost like a technical  upgrade kind of like how we do ETH upgrades. Yeah.

That's super interesting. I think in my mind  uh like part of the like kind of my cheat sheet way of thinking about this is that a lot of the  liquid assets that kind of are high volume anyway um are getting that incremental upgrade that that  Parth mentioned and maybe possibly depending on the reason that they are illquid the illquids uh  you know may have the most potential innovation ahead of them could be proven terribly ly wrong  on that. I don't know what you guys think, but um yeah, we'll see. Yeah, I mean I would argue  it's like David made the point too. It's like XUS or emerging and developed and like in developed  countries accessibility to illquid asset classes

maybe is an unlock and like that's I think more  of a relevant trend in developed countries. uh whereas you know emerging countries literally  just getting access to things that we take for granted in the United States but being able to do  it to everybody in an open source way with access to the internet that's you know the near-term  where we're seeing traction and I think where we will continue to see real world real world  traction. Okay. Okay. So we'll get to a point we're assuming here we're going to get to a point  where all of our portfolios are on chain. Okay. talk to me about the privacy piece because I  don't want you guys seeing what I'm buying and I don't want to see what you're buying. You know  what I mean? What role does privacy play? I I think that's the that's the final component which  hasn't been solved for and and which is that how

can I ensure that I I I can just prove that I have  access to these securities as opposed to sending you or showing my my wallet uh to you. So, I don't  think that's been solved for yet. And and this is um I I I I teach zero knowledge proofs at at Nor  Eastern, so I understand that how important this piece is, but I think it's been we're far from the  place where we can have a truly thriving onchain economy. Yeah, I I agree with Parth. The privacy  is definitely not there yet. Some of these new uh like stable coin chains have said that they plan  to build privacy into it. U so we'll see where we land on that. There's just I think there's a huge  regulatory question around uh turning privacy on with a lot of this stuff. Um but it's definitely  something that's going to have to be in place if

we if we like really want it to go mainstream.  Um you know maybe people want open portfolios and open wallets for like a social aspect. Um, you  know, if if you want I I can see scenarios where um you want people to be able to see what you're  up to and have some type of social trading going on, but that's also like in the context of I want  to know what assets you're like long or short, but not necessar I don't think people want to  know like what the amounts are, right? Yeah. So, today it's all on Ether Scan, right? So, there's a  there's a number of ways you could set it up like not showing the amounts but showing just  the assets themselves. Um, but you know, I do see like a future of like social finance  and I think that um, you know, like radical

transparency there could be something that people  are interested in. Yeah. No, I completely agree. I actually want to pull on that a bit more. I think  the amount is what gets people kind of hyped up, right? We saw the whole hyperlquid trades all  out in the open and that was getting people a little riled up. So I think there could be a  really sticky social component there. David, I'm excited about that. David, just on that  piece, I I and it's it's not something which is which will be done for the first time. You  have Venmo where you can see, you know, your network and people they're interacting with. And I  remember at some point I would get so bored that I would use that as a feed and see, well, you know,  what what are people up to? It's it's the it's the it's the it's that piece who loves to look at at  onchain wallets. And I I realized that well you

can do that on on Venmo too. So I think there's a  component to um to to like using u social finance and it's surprising to me everybody that I know  makes those Venmo transactions public. I keep mine private but it's it's out there. So yes, you could  be scrolling all day there. Sorry, David. Go. Well, what I sort of say is that this exists  already without blockchains and you know, one of the big brokerage apps out there has recently  announced that they're going to add a social uh component to it and so you probably can trust that  what you're seeing on your feed is true. U but I guess doing it on chain would give you, you know,  a little bit more confidence if if you wanted it.

Awesome. That's all I got, guys. Was there  any other final thoughts them out? What I'm really excited about is uh with tokenization as  interoperability, right? I I want to be able to take my SNP shares and put them in a D5 protocol  or something like that. I think that's really the the big promise here is is like actually being  able to do something with your assets other than them like sitting in your brokerage account. And  there's probably all sorts of DeFi things that we'll we'll come up with. Yeah. if we're going to  do that. Uh what I'm excited about with relation to tokenization is like continuing to evolve the  number of like real world use cases that actually

have an impact on like more people than just the  1% of people interacting with crypto today and making use of like the financial primitives that  actually do work but are largely built on like circular assets and bringing real assets on chain  and and sort of unlocking the 247 accessibility efficiency see transparency, fairness that  like blockchain infrastructure brings. Well, to to Jack's point, I'm I'm excited about using  AI and Compound and UniS swap with my tokenized securities and really stress test them. Awesome.  I think I'm excited to finally get to the point where I open an app or I go to a website and I  don't have any idea that crypto is underneath.

I can pay with my Apple Pay or whatever other  options I want, right? Um and I think this will that'll be one of the requirements to get  over this um kind of user demand hurdle. Looks like we nailed it on time. Thank you all  so much for listening. I hope you got at least a little bit out of this today. For those who don't  know, this is a bi-weekly podcast. You can find it on most of the major podcast platforms.  So, I would love if you gave us a listen, reach out if you like something. We can obviously  chat after this call as well if if anything came up or came to mind. But thank you. And thank  you all gentlemen. This was great. Thank you.