🔴LIVE: WLFI In Trouble? Winter Is Over. Brian Armstrong Pushing DC HARD, FTDA then Lighter & Akash

Transcript

Heat. Heat. Thank you.

Lord, 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 to my library every day, >> potentially multi-chain deployments. >> We are at Dev Connect day one here. I hope you guys Heat. Heat.

JP Morgan, Black Rockck, DTCC, Fidelity, the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. >> He said it. He finally said it. So bull. 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. >> People 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. Taste the golden days of crypto, guys. Get right. Let's go. >> Welcome to the next. See you on the show. >> Let's go, baby. Happy Friday round market to everybody. >> Welcome back to the tokenization town. >> Welcome to the program. It feels good to have this positive energy in the rollup once again. >> Yes, sir. Yes, sir. Welcome back to the nest by our friends at Plume, the tokenization tower here live from the center of the financial capital of the world. It is 12:35 p.m. Eastern time, baby. Let's give some love to all the production team behind the scenes

cooking everything up. We got a new light set up today, Rob. It's It's fired up. >> It's bright as hell, man. Well, what's going on, man? I >> mean, you got a beautiful view behind you. That's why we have the lights up. So, it's good to see. Um, it's green on the markets. We're going to talk more about that. >> Hyperlid. >> Yes, sir. >> Yes, sir. Ron, you got the lighter founder on today. >> Yeah. Uh, that should be fun. And uh we're going to talk about hyperlquid and we're going to talk about per in general. I mean just I think it's worthwhile just bringing up the overall just bullish nature in the air. Like >> just I mean personally I find it's just easier to just stay bullish all the way through the bear so that you don't have to switch biases.

>> Nah, I don't know. It was it was nice being bearish the last couple months. >> It was nice being bearish. >> Yeah. I mean it gave you a sense of reality and not of hope, you know. I think that's important. Uh I think you should be operating in a world not of hope but of in reality >> I guess but for for a while if you have a long enough time horizon then uh then you just stay you just stay positive and that is the reality. >> I mean hype at 42 something to get excited about. I'll tell you that guys.

It looks like we're we're about ready to go right up to the 50s and higher. We're going to talk more about that. We're going to talk more about what's going on in the markets. What's going on in DC? What's going on with World Liberty Finance on today's show. We're live from the Tokenization Tower. We got the markets and weather live from New York City. The deputy CIO of Franklin Templeton Investments joins the show. Um, that should be fun. He's going to be joining us here in the tower. And then Lighter and Akos, shout out to Treasure. Use code uh rollup 10 to get a treasure at treasure.io. Rob, um, which one are you most excited about, man? Um, look, I think Lighter, Hyperliquid are both uh, you know, the two leaders in the Pers game. And so I'm excited to talk about

uh, talk about this dynamic and the power law of PES with the Lighter founders. >> Uh, Akos as well um, was one of my favorite appearances >> from Neircon. Uh, like I don't think we got a word in Edgewise with Greg and he was just telling us about, you know, how he has GPUs powering his entire home and local LLM models. So, I'm I'm pretty excited to get a catch up uh from Greg and then uh look, I'm gonna uh you know, let you and and uh Max have just a time talking about tokenization. I'm pretty curious as to how they're going to be tokenizing more of their funds.

>> These guys are gigabullish. >> I mean, Franklin Templeton was uh all about, hey, we want access to this onchain uh net new demand, like these retail traders that are, you know, onchain. I think I mentioned something yesterday about, you know, look, these guys are used to like tripledigit yield farms on chain. Is that the same customer profile that they're targeting? It feels like there might be a disconnect there. And so, I'd be curious how he intends on selling to an onchain uh an onchain audience when it feels like there is quite a bit of differences in in those customer profiles. But, uh, plenty to be excited about, man. It's uh it should be a really good show to wrap up the week.

>> Happy Friday. Happy Friday. All right, guys. Let's get into the markets and the weather. Before we do, let me tell you about our partner at Frack Infrastructure for the future of digital money, open stable borderless. For more information, to start using the future of digital money today, visit frack.finance. Ladies and gentlemen, it has gotten a little bit warmer here in New York. It's 51. Feels like 48. Sunny day out there today. Sure. It's like 75 to 85 in Florida over there, Rob. >> Certainly is. You got that right. It is warm and breezy in Florida.

>> Yeah, it's looking like a bit of a spring day today, I would say, here in New York. Um, yeah, feeling good. You know, no rain, sunny all week. Obviously, we've been in the tower cooking, but did get some time to go outdoors a little bit, hit a park, and go for a nice walk. So, yeah, today's weather segment is powered by Relay relay.link for all of your crosschain swap needs. Let's move into the markets. Rob, I think that's what people want to hear about. Man, >> I am excited where we can get some more uh assets on because I want to see what World Liberty Finance is doing. Uh I want to see what some of these other assets like tow are doing.

>> It's green, baby. It's green. >> What we've got here is everything is green. Bitcoin up, ETH up, link up, near up. I mean, >> did you call bottom yesterday? Is that what happened? I did tweet that I think the crypto winter. >> You didn't just You didn't just tweet. You had a rant on the heels of CL 207, our local tank maxi. >> Yes. >> Our cat friend with a tank pressing the green button. >> And uh this was the spur of the the bottom calling.

>> Yes. I mean, look, he uh he said buy the big green button. And I mean, what else, you know, what else more can you ask of a lovely cat friend like CL? So, look, whether we're bottomed or not, the momentum's coming back. I'm still, you know, I'm still just kind of waiting and there's a lot of beach balls in the bare markets. And so, the beach ball that I'm currently underwater and is TA. If you guys watched the last couple episodes with it with the towel investment companies, they were very bullish on this company SN3 Templar uh thing rugpulled kind of. So we're going to talk more about that. Bitcoin 72, ETH 2230, Soul 85 near at 1.37 looking very strong. Chandler at over nine. I think

that $9 level is like the level where the link marine army going to uh hold them down. And if it goes under that, uh, yeah. So, shout out to Zama powering our privacy encrypted transactions on chain. Rob, uh, an amazing partner. Privacy is very important. Zcash is ripping. I imagine Zama could be a part of a privacy trend shift. We shall see. >> Let's see what uh, the Zama token is. I think it I think it'd be worthwhile just take a little trip around the horn. Woo! Zama up 10% today. >> Yeah, makes sense. It's a privacy run.

I'm telling you, privacy is on right now. I actually had Roman Storm comment on one of my posts today. He was like, "I tried with regards to privacy being very important to the industry, the most important thing since the inception of smart contracts." >> And he said, "I tried." I said, "Thank you man." >> Out of custody. So, I'm glad that he is uh on Twitter. Uh that's good. >> Well, yeah. I mean, there was a whole, you know, there was a lot of donations made, a whole legal case, and I believe he won. So, that was a good day for DeFi. Zama up 22% in the last month, I think. Uh, I think you're right about Zama being part of this privacy trade.

>> Privacy meta. >> Uh, Zcash and Monero also doing pretty well. >> Zcash is going insane. >> Yeah, I bought the top on Zcash and >> Oh my gosh, >> that's I think I'm still holding. >> Yo, come on. Come on. What do we got for Rob? What do we got for Rob? I think your towel position, which is also my towel position and my Zcash position are ju they're just ekking out your uranium position. >> Oh my gosh. How's uranium uranium? How's your uranium sitting sitting pretty at 51 barely up, barely down?

>> Yeah, we shall see. Not full panic mode. Macro is not full risk on yet. Seems to be kind of an unstable whiplash middle ground. Um still I think the market's kind of questioning higher for longer macro policies. Uh this energydriven inflation that is happening. I think oil prices still remain quite elevated for the average investors risk appetite. Crypto on the other hand tends to kind of lead the markets. And when I when I see crypto kind of bouncing like it is, it tells me that whatever is happening in the macro has kind of subsided enough to allow crypto to kind of have a more secular run and to have secular pumps.

And so yeah, let's get into the news today guys. Um before we do, let me tell you very very quickly about our AI partner Near. The blockchain design for AI native applications and autonomous agents start developing today at near.org near.com near.ai AI guys, uh, we've had a big big push from Brian Armstrong. So, Coinbase CEO Brian Armstrong says it's time to pass the Crypto Clarity Act, saying that he's grateful for all the bipartisan work from the entire uh entire state of Washington. You know, that's what it seems like as of late. And over the past couple months, make this a strong bill.

Um yeah, I mean the core goal is to get a split between the SEC, CFDC. You know, we want to see regulation by enforcement come to an end. We want to see a very clear market structure for this industry. Guys, if you are not on team Brian here, I don't know what to tell you. This guy is going in and trying everything that he can for his public company's interest, Coinbase, for his private interest with USDC Circle and everything that is, you know, kind of part of that web. The guy is going to DC pushing all the senators, the Treasury Secretary trying to get this done for us. Guys, I think we're closer than ever. I remain strong. Q2 is when

clarity will pass. Put it down. Q2 clarity will pass. You heard it here first. Rob, do you agree or disagree? >> Uh, I am going to choose. Look, I do think that if it passes, it's going to pass in Q2. This is what we've been talking about. I also think that the largest obstruction to this bill was Brian. Uh, Brian was saying that he was not going to support this uh in the previous form. It seems like that has changed. Now Brian is saying, you know, it's pretty it's pretty interesting. I mean, Brian didn't want the yield issue to go through, right? We saw that there was this uh resolution which effectively said the banks won and that we weren't

going to be able to pay yield on stable coins that was protected the bank's interest or that there wasn't this capital flight. Um, and so that's exactly what Brian must have been looking for because now he comes out in support of this. So, it feels like the crypto crowd is united once again. >> Uh, Poly Market hasn't changed. still 57% that Clarity Act is signed into law in 2026. So that's what I put the odds at. 57%. >> Yep. All right, guys. That is clarity. That's where we're at. I think that is something that the entire industry is ready to push forward on and yeah, looking forward to seeing where this lands. Let's keep it rolling here. Uh NYC partners with with Securitize on tokenized securities, guys. So, if you

were part of the DS coverage, this news dropped, then wanted to just kind of resurface it. Um, basically the NYC has signed anou with securitiz to be the first digital transfer agent on the NYC's upcoming blockchain blas platform, enabling the issuance of tokenized stocks and ETFs. Guys, Rob's right. The NYC is the next L1 trade. There is no other cryptonative L1 trade coming guys. It is the NYC is going to take their entire book of clients of infrastructure of distribution. They're going to launch

a blockchain. It is going to compete directly with all of your favorite chains probably in a more KYC permissionless or sorry permissioned Canton network style which side note they Canton just became the official partner of CFC St. Maritz they pulled it out of Algarand. Uh so Canton is very they're being very precise with their conference marketing budget. I talked to my quant further about the reasoning behind his prediction about why Canton might outperform Hyperlquid and he said you want to own the thing that everybody hates and so yeah guys I mean look securityize NYC man

>> that's why I own ETH >> well not sure everyone hates ETH the way that they do canon >> I don't know people don't like ETH these days you heard it from Logan I was talking to uh Buy quant this morning and he ridiculed me for buying ETH. >> Yeah. I mean, I cannot believe you would own ETH over Hype right now. That doesn't make any sense to me. >> I own Hype as well. So, >> No, no, but like in any portfolio allocation, I would never own ETH over Hype in this current moment. >> Like I said, I I own both ETH and Hype.

So, u I think that point is a non-starter. Um, >> okay. But what I'm saying is like I wouldn't own ETH in the first place if there was a chance to own Hype. You can own both. You don't have to own one and not the other. >> You don't have to yourself like that, Andy. You can own both. There's different value propositions. There's different investment thesis. I think these two are actually quite complimentary. I invest in both the app layer as well as the infrastructure. And I think ETH is the settlement layer because we're going to see more of these alternative trading systems. That is what New York Stock Exchange calls it.

They're not calling it an L1 or an L2 or whatever else they want to call it. They're calling it an alternative trading system because that is what the regulators call it. That is what New York Stock Exchange is launching. And I think NASDAQ is going to launch their own alternative trading system. I think we're going to have several of these alternative trading systems because ultimately they're all going to want to build their own. They're not going to want to deploy their indices or their equities on someone else's alternative system. But the main Rob >> value proposition >> of >> onchain of Well, you said it. I didn't say it. I was gonna, you know, the the main value proposition here is to connect disparit ledgers.

>> Is it dude? >> Do you think NASDAQ and New York Stock Exchange are going to connect their ledgers on Canton? >> Canton and Hype are both going to outperform ETH for the entire year. >> We should You want to make a friendly bet? I >> I mean I I I have with my own money. I just I mean how else do you put it? >> I mean the three. The point is that these uh alternative trading system is going to need a settlement layer to interact with one another. I think uh ETH is that settlement layer. >> Yes. Okay. Ethereum the blockchain might be that settlement layer but ETH the asset has zero representation of the value on that settlement layer.

>> Zero claim on that quantum resistant asset. Let's move on. Crypto Hayes is putting his entire his entire stake against Zcash. This is private and quantum secure money, which I think is extremely important because what we see happening is this entire global order becoming reset. Uh here's Arthur Hayes in his tank top talking to Pompiano in his suit. And on one side you have a very buttoned up digital asset treasury manager. Uh, and then on the other side you have a gazillionaire Chad. I'll let you guys figure out who is who. Um, Arthur is >> some love for Arthur Hayes man.

And I personally love to see it. I think the thesis is still just playing out. >> Let's go Arthur. It's completely anonymous. I think this is how it is. Now, if you want to have complete anonymity, especially in an age of big tech, big government, and AI that can easily deanmize transactions and put a physical person to an address, then you want something like Zcash. Now I particularly believe that Zcash is the

best manifestation of this as you know zero knowledge proofs plus Bitcoin but other people have other opinions. There's Monero there's other uh different type of private privacy assets but we're all trying to do the same thing which is if you want complete privacy and there's good and there's bad things about that here as a protocol for you. uh and I think we're going to that desire to have completely private digital money is going to increase over time as the ways in which you know it's easy to deanonymize Bitcoin you know it doesn't it's not it's going to be so easy and so trivial that people oh well I actually wanted that to be a private transaction for whatever reason no judgment well then here's Zcash for you use this instead right and so that's why

I think having both makes sense and the price of Zcash cash is going to go up a lot to reflect this desire to have privacy over the internet. >> Yeah, I agree. I think Zcash is I think Zcash could go on a Bitcoin 2015 style run. Like I could see the thing trade two to $3,000. Um, and I can see it go quickly. Um, I it makes sense. Like it just makes sense. You want a inflation resistant hard asset based on proof of work that is private. I mean, who

doesn't want that? Even if you're just an American person thinking about how you can save more money from Uncle Sam. It just makes sense. If you're a person who is in a jurisdiction who doesn't have rights to the money that people in more established countries do, you want to hide your money. If you're doing payments, you want to hide your money. It just makes sense, man. Arthur's right, man. Zcash is going to go on a Jenny run. Straight up a generational run. It already is kind of starting, it seems. I wouldn't be surprised if Zcash

beats the entire market to new highs that were set in in Q4, the last cycle. It just makes sense. Anybody can understand the need for private money and it just makes sense, Rob. >> I don't have uh I don't have much more to add. I own some Zcash. Uh like I said, I bought at the highs. I I feel like I should have just doubled down for the the reasons that you're explaining. Yeah, you probably should have. >> Uh, but I feel I feel cozy in Zcash. Um, I think that there is an investment thesis for it and we're seeing it play out. Um, I think Zcash is probably more akin to the chaos hedge uh, value proposition that we like to attribute to

Bitcoin. As Bitcoin gets more institutionalized, Zcash, I think, is fitting more and more into that into that mold. So, yeah, I tend to agree. >> I like it. >> I think do quite well. I mean, look, rising surveillance, >> chaos, >> AI, big tech, government cracking down, privacy as a major theme. It's kind of just all coming together. I mean, I think um I think the European Union just put out something that was saying like we're going to limit like or we're going to start to like restrict chat GPT usage, for example. There's just all this like surveillance constriction things trend that is happening and yeah, I mean, you got to fight back against

that. Let's move on uh into our friends at Etherealize who from Mark Andre obviously A16Z I think AI is the killer crypto app. It's now obvious that AI agents are going to need money. It's already happening. >> Yeah. So Mark says uh my friends who are the most aggressive users of Open Claw have given their claws bank accounts and credit cards. And not only have they done it, but it's also obvious that they needed to do it. It's just completely obviously the number of people who have done it today is probably 5,000 or something, but it will grow. That's how these things start. So, obviously these things need money.

>> They've given them bank accounts and credit cards. But why crypto? Let's watch the video to find out. >> No, now I think it's going to happen for sure. Yeah. >> Yeah. And there's two reasons for sure. One is we actually have internet native money now in the form of crypto stable coins and crypto. And this is I I think this is the grand unification basically of AI crypto is what's about to happen now. Um I think AI is the crypto killer app. I think is where where this is really going to come out. Um, and then the other is just it I mean it's just I think it's now obvious. It's like obviously AI agents are going to need money and it's already happening, right? If you've got a if you've got a claw and you want it to buy things for you, you

have to give it money in some form. >> I would say the adoption is probably like 0.1% if if today. Yeah. Yeah. Yeah. >> So smart. >> Think forward like where is it going forward thinking? >> The ultimate principle of everything and and everything that I think I we we do is the William Gibson quote which is the future is already here. It just isn't distributed isn't isn't distributed yet. my friends who are the most aggressive use users of of of OpenClaw just like have given their claws bank accounts and credit cards. Um and and and and and not only have they done it, it's obvious that they needed to do it because it's obvious that they needed to be able to spend money on their >> Yeah. Yeah.

>> It's just completely obvious. And so and again like so the number of people who have done that today to your point is like I don't know probably 5,000 or something but >> it'll grow. >> That's how these things start. >> Yeah. Yeah. I mean, look, early I mean, giving your open claw credit card and bank account is is kind of insane. Um, and you know, maybe this is part of your Ethereum thesis that AI will need Ethereum for lowrisisk DeFi. >> I I didn't think it was contrarian to be an Ethereum bull, but here I go. I mean, AI agents are going to go where the primary uh, you know, they need lowrisisk DeFi. I think Etherealiz makes that point here. You've got Justin Drake

co-authoring a quantum paper for Google. Um, and then you've got the largest deployment of stable coins and the shelling point of settlement for tokenized assets. >> Yep. >> Yeah. >> I mean, >> I think it's pretty I think it's pretty clear. I don't know if they're going to win all of these at the same time, but they I think they're in the lead on four of the most important pillars of where this this economy is going. And so that that's where we're at. I mean, you have lowrisisk DeFi for AI agents, you have the uh line share of stable coins, and then you've got uh you've got the shelling point of

tokenized assets. I think that is uh those are three of the most important uh pillars of the onchain economy of where we're at right now. And then you've got uh something that is going to be uh very important in three to five years according to Justin Drake and the Google authors. >> And so what we have is a lead for Ethereum and uh how that translates to ETH the asset that's where I think it's maybe a little bit less clear. Uh but you have to think if you have a very valuable piece of infrastructure uh and it's it's supporting millions and millions if not more uh then we're going to have

uh quite a valuable piece here and then we'll figure out how to monetize that. Um so let's keep going. I think uh Andyy's setting up our first guest in the tower. So why don't we kick over to World Liberty Fi. All right. So obviously what is happening here is uh um so we've got World Liberty Fi depositing uh quite a bit of uh money in their own protocol as well as Dolomite.

Uh, World Liberty Fi is of course the uh the volatile currency governance token of uh of World Liberty Finance. Um, they've deposited this uh quite a bit of money. I think upwards of hund00 million, maybe 500 million actually. We'll fact check that. And uh they've borrowed USDC against their WLFI token. Uh we've seen this happen before. We've seen how you have some sort of volatile collateral asset and some sort of stable debt and then once there's a run on the volatile collateral that goes down and they're not able to pay back the margin or add more collateral to service this debt. Uh this happened with Teral Luna.

This happened with FTX uh and their FTT token. And so World Liberty Finance addressed this. They said let's talk about the FUD. What's actually happening? They said if the collateral goes down and their loan is at risk of liquidation, they would simply add more collateral. Well, there was exactly uh there is exactly a situation where that happened in which case Doan said steadys uh deploying more capital. We all saw how that turned out. So, I think uh the Trump family might might benefit from a lesson in old uh old crypto lore here.

Uh because you can't just simply add more collateral. If your collateral is a volatile governance token, if they have other collateral, Bitcoin, ETH, stable coins, they want to add that to supplement their loan, that could work. But I think we're going to need a bit more insight into the balance sheet of World Liberty Finance to understand how exactly they're going to service this loan. It is important that this project just doesn't rug, doesn't go to zero, or else there is major political backlash for the industry as a whole uh if this project does rug does go down. So guys, we're going to take a quick standby break. Andy's getting our first guest, the uh uh Franklin Templeton

deputy uh chief investment officer. So, let's do a quick standby and then Andy's gonna be coming at you with Max from Franklin Templeton. 70.

All righty, guys. Welcome back to the tokenization tower. We're with Max here of Franklin Templeton Investment Solutions, the deputy CIO. Max, good to have you, man. >> Thanks for having me here. >> Welcome to the Empire State Building. >> Welcome to the Nest. >> Nice. >> I heard you had a good interview this morning at the NYC. >> That's right. Yep. Kind of, you know, going from the annals of Trafi straight to the hallowed nest of DeFi. >> So, you are the deputy chief investment officer of one of the largest uh asset managers in the space. You've been doing this for 22 years, I think I saw on your LinkedIn. That's right.

>> Big LinkedIn guy, huh? >> Yep. Yep. >> Nice. Well, um, wanted to kind of bring you here to speak about this convergence really between what we're seeing in the digital asset space and with traditional finance and just kind of how you're thinking about this and what this looks like from your from your uh, firm's perspective as well as yours on the personal side. Before we get into that, um, any disclosures, disclaimers, anything that you would like to say about your role or just Yeah, >> sure. Just general disclosures. You know, don't take anything I say as anything other than my personal opinion and it's not an investment recommendation.

Um, exercise caution when investing in things that trade at a high volatility like Bitcoin. All right. So, uh, one of the talks of the town here in the digital asset space has been this rise of of 247 trading, right? This kind of war, this oil spike, these things that were happening on the weekend drew a lot of attention to a little exchange called Hyperlquid. The Wall Street Journal covered it. A lot of these kind of uh institutional focused mainstream news covered this concept of like oil futures are now being traded on this little exchange called Hyperlid. Um what is your take on the rise of 247 tokenized commodities trading, equities trading?

How do you kind of see this playing out? What's your thoughts here? Just high level and then we can kind of get into some of the nuance. >> Sure. Yeah, let's So, so high level, um, you know, we used to have this phrase coined here in New York City that money never sleeps and that wasn't actually true. Money took naps and it slept on the weekends and it doesn't anymore. Right. That's actually the real 247 market. Why did we start the war on a Saturday? >> Markets were closed. >> Yeah. >> Right. a lot. >> Like that's the reality, right? Like uh it's not a coincidence when when this operation kick kicked off um you know, you couldn't launch Epic Fury when uh oil futures were were actually trading in the pits. And speaking of that, we don't really have pit trading anymore.

So like like you mentioned, I've been around this industry for a while. I've gone from seeing like real like actual traders on save and in Chicago moving markets to all of that being electronic. This is just the next evolution of that and it makes perfect sense because things happen 24/7. So as an investor in Trafy assets now like commodities, like equities, like fixed income, what do I do when something like Epic Fury kicks off? I look at the DeFi space. I look at futures on Hyperlid. I look at what's going on with the crypto market. I look at other tokenized v uh venues. And I look at prediction markets like Kalshi and Poly to see what the actual sentiment is. Now, what I think is going

to start happening is you're going to see more and more firms move in to that 24/7 market and offer their products there because otherwise they're just missing out on on that additional opportunity for capital. >> Yeah. Yeah. And I mean there's been some resistance and push back from firms due to the infrastructural changes required to kind of shift into a 247 world. You know, whether it be on the market making side, on the kind of um reserve management side or just kind of a combination of all these factors, what do you anticipate to be the logical transition to get the NYC, the NASDAQ and and the large exchanges of the world trading 24/7? Obviously,

um, in the metals market and in oil and in some commodities, it's it's closer to like 245 with a little hour break there. Um, what do you anticipate to be that progression? >> So, hopefully this doesn't get my NYC uh admission pulled, but it's a bit of a blockbuster Netflix moment, right? Like, we actually don't need the NIC to do this. This is going to happen regardless. They should be moving to offering tokenized equities. the market is going to go 247. The providers of liquidity for that are going to be winners and it's really going to be up to how we can orchestrate successful multi-enue execution. We've been doing a lot of work at Franklin with things like our Benji platform that can offer cross uh blockchain uh transfers and I think

that's going to be really important like I should be able to trade what I want what when I want how I want full stop but technology for that exists. it is not dependent on really a massive entity with physical space anymore. Right? So I think once we've established that it's just a question of who is who's going to be the dominant player providing liquidity and and matching buyers and sellers for that and I think the answer is there's going to be more than one. The technology exists with blockchain and even people who are never going to trade crypto as specific specifically an asset class will still be using blockchain technology to trade whatever it is that they're trading. Now we need we have one bit here that does need to

adjust and that's regulation. But we've seen just from what happened in March with the SEC CFTC uh joint statement, we're seeing more and more moves towards a more sensible way to govern crypto and onchain transactions. Once that's really established, institutional adoption comes in and then it just becomes a default, right? Like we all like, as much as I liked taking some time off, the reality is you can't anymore anyways. I'd rather be able to trade things as they happen. Yeah.

So, do you think that there's going to be regulatory um issues with some of these per uh exchanges onchain? Right. >> I I I I think I think there will be. I I think there's going to be a lot of questions and and again, there are multiple ways uh if you're an exchange to address that. You can either work with the regulators, you can kind of figure out how to get around the regulators uh in a different jurisdiction or you can sit on your hands. And I think the ones who are going to do the best are the exchanges that really take a regulatory first mentality. Even if they don't agree with the regulations, they follow them. They work with the largest regulatory bodies around the world. That's another key part of it. It's not just the SEC and

the CFTC which you need to get on board. You have to work with other broader regulatory bodies in in Europe and in Asia. But those who take the effort, time, and money to do that are likely going to be the winners. >> Yeah. So, you have an a lot of experience in kind of like multi-asset, multi-enue alpha generating strategies, right? Like that's been your bread and butter for 20 years. You're sitting here in a lovely pink shirt, great suit. Like this is your this is your expertise. I'm curious if you're seeing a opportunity to generate yield and alpha from like off-chain venue pricing and onchain venue pricing for assets like a tokenized oil or a tokenized gold or a

tokenized um equity and kind of how you anticipate those strategies to really come to fruition. In crypto specifically, we had a a kind of a a basis trade for the last two three years in the bull, right? You could generate yield on like effectively a stable coin or a delta neutral strategy by uh doing interesting hedging on per which is obviously a novel instrument in crypto. How do you anticipate kind of this alpha generating strategies with off-chain venues and onchain venues as it pertains to more kind of like trify assets?

>> Sure. It's great question. Uh so before I came to Franklin, I ran uh a much smaller digital asset uh hedge fund and this was back like preft days. There was a lot of cross exchange arbitrage you could do and honestly like it was easy money. Like I mean I you know it's always like fun to say that after the fact, but it it was like you if if you were set up a as as a private vehicle that could trade across any number of exchanges, you really could arb um I mean not even just like Trafi assets on and off chain, but just like crypto native crypto assets >> and then more bigger players came in and that went away. And now we're seeing

this with pers and it's going to be the same thing. We saw this happen with high frequency trading uh back in the day where once they came in we saw those mini this pricings go away. It's actually a good thing. It generates a more efficient market. We want a more efficient market for digital assets. At least when I say we, I mean us like Frank firms like Franklin that want to be able to offer digital asset products to the largest institutions because we want them to know that the market is deep. It's liquid. you're not going to have some mispricing or some major risk event because of the underlying mechanics. Like that's why people get scared. So I think yes, there's still some ARB there that ARB is going to go away. Like and by the way, look for

anyone watching this who's thinking about launching a strategy. My my view is always if you see alpha, you should take advantage of it because all alpha decays over time. That's true of every asset class I've ever traded. That's why as an investor, we're always looking at new ways of generating it. But if there's an ARB, take it cuz it's not going to be there for very long. >> Yeah. And is it just as simple as the pricing the arbitrage opportunity on pricing from an asset onchain or on a uh on a crypto venue versus a TreadFi venue. Is that just as simple as it is?

>> It it it can be that simple. And sometimes it's, you know, different venues, different crypto venues can actually have different pricing. And it's really just a question of how quickly can you create a a delta neutral position so that you're not taking on undue risk or you know in some more complex arbs you are taking on some amount of risk. And if you know and again like this is where I again I stress this is not investment advice in any way shape or form but there are strategies that purposely take on some amount of of of risk knowing that in grand total these small positions add up to you know picking up the proverbial pennies in front of a steamroller and you know you're picking them up quick enough with more advanced uh systematic methods but

>> that steamroller is going to start moving a lot faster and again like that's where at alpha decays and the market becomes a lot more liquid. >> Yeah. And last thing on this front is is the transition to 247 something that a lot of the you know uh all the market makers in digital assets have been used to for you know 5 10 years. Is that a source of kind of of alpha still given that the let's say the traditional uh firms aren't used to having to manage these markets 24/7 in that same way or is that just not the right way to think about it?

>> I I mean I think it's decaying rapidly. So I really wouldn't focus >> Citadels in like these large firms are >> exactly. Yeah. Citadel Sis Kahana. I mean they're you know they're they're in there and whatever is left it's going to be gone very very soon to the extent that there even is anything in there. I mean I can tell you it's not something you know I'm actively looking at. >> Yeah. Okay. Um you guys just announced a partnership. I actually had your colleague Sandy call on the show. Uh she's great. She's a ton of fun. And we talked about this idea of tokenizing Franklin Templeton's ETF products, bringing them onchain viao, get a lot of distribution via their onchain kind of uh set of customers, users, wallets.

There's, you know, probably about like 10 million active wallets like actually active on chain. And one discrepancy that I'm trying to wrap my head around is a lot of us who have been DeFi native and have done our portfolio management onchain for five, eight years, we've been very used to like honestly operating like it's a minefield. It's smart contract risk. It's it's high velocity, low market cap tokens. It's aggressive leverage. It's borrowing on chain. It's collateralizing assets. It's holding things in self-custody. It's a whole it's a whole operation, right? And the products that a firm like Franklin Templeton offers are much more risk adjusted, risk averse products. So, I'm

just curious in this kind of like tokenization thesis, who do firms like Franklin Templeton actually anticipate the user or the buyer of something like a tokenized treasury or a gold ETF or a commodity ETF? Like do you anticipate that the same users used to high you know tripledigit APY aggressive short-term instant liquidity protocols are going to be the same buyers of a 4% tokenized you know treasury account. >> So I I think this is where you're going to see actually this become a bit of a two-way on-ramp. Um, so on the one hand, it's going to be the traditional buyers of those ETFs who actually want to trade them 24/7 and they use this as their

on-ramp onto the broader DeFi space. And then once they're trading these ETFs, we're like, "Okay, what else can I trade in here?" And they see some of the more uh DeFi native products. You know, something that we'll be looking at is products for that space specifically um in addition to tokenizing our existing funds. But then you also got the other side of it which is yeah like the people who are used to the massive returns but also the massive volatility of those D5 products actually saying you know maybe there's something to this diversification idea and I do need some amount of assets that are trappy but I don't want to move to a Trafy rail to to own that and that's another part of this

where I think we're going to see a future state where it's really is about proper riskadjusted returns And by the way, leverage is something that works, you know, for for any number of products. And so you could, of course, again, not investment advice, but you could leverage an ETF. So even a treasury can be quite uh palatable to a more cryptonative client if it's levered enough. But the broader more much more important point is there's going to be a realization and I think it's actually up to folks like like myself who straddle the two worlds to explain to both sides on the one hand why the cryptonative people need to own some trady assets whether it's commodities stocks or even

tradi currencies and then explain to the more traditional investment crowd why they may want move onchain both to trade existing instruments that have been tokenized. So, you know, the whole RWA market and then also some products that are done in a riskmanaged way for them that are DeFi native. I I think that's going to be the great coming together and like we're going to get to this point where we don't think of Trafi and DeFi. It's just going to be FI. Like that's like the future is going to be a single >> financial market that I believe is going to be predominantly onchain and 247.

Yeah. Yeah. So, it's a it's a two-way thing here, right? It's not just, you know, looking for distribution in these existing users. It's actually bringing some of those other, you know, traditional investors onchain who want to have access 24/7 and then giving other optionality to the onchain existing set of users. >> Exactly. >> Yeah. Yeah. And you know, you know what? Like people say that this may not get traction or it may not get picked up, but the reality is people who are on chain, they just want to stay on chain.

Like the process of of pulling money from the uh onchain world and the crypto world into your bank has been a lot easier as of the last couple years, but for a while it was still it was it it was a bit of a nuisance. And that whole process is to to people who've lived and die on chain, they just want to keep their assets on chain. And then like a time for like the last six months or so, if you could just get access to safer yield generating products in kind of a crypto coldfront, I think there'll probably be a lot of appeal there.

>> No, there is. And I feel like that's part of our our view. Like look, we're one of the largest asset managers in the world with over $1.7 trillion under management. We want to be bigger and we think the way we get bigger, one of the ways is going after folks who are onchain natives. We want to offer our products to them. We believe there's value in our products. Some of them are going to need to be modified and more than just putting them purely on chain, but we we feel like that is a market that's deserving of being served by an institutional grade asset manager.

>> Yeah. Yeah. So I'm curious from the firm's kind of view on how the state of blockchains is going to kind of evolve, right? So I think the NYC is getting ready to at least have a blockchain based platform is what they're calling it. Perhaps like an ATS um or you know like a layer one or a set of nodes, right? That is the NYSC's. How do you anticipate the kind of evolution of blockchains as trading venues with the public set versus these more kind of institutional perhaps more uh permissioned set and even Canton is like stirring up the pot right now as a kind of first interpretation of what

this looks like. How is this going to play out from your view and what do you see like the specific use cases for these different types of um execution environments? >> Sure. No, I mean I think the short answer here is we don't know yet and we're going to be figuring it out. And look, that's been the thing that probably scares most people once they get past the initial like, okay, I'm going to be in crypto, they don't realize how complex it is. And it's almost like, you know, when I see people who've gone from a Trafy world and they kind of get over like, I'm not investing in memecoins like yet, but there's a lot more than Dogecoin to crypto. Um, then they go like, holy crap, it's actually incredibly sophisticated and complex.

There's a reason why a lot of people leading these projects had very extensive trfight derivatives background, right? So, we're figuring it out. I think there are going to be private change which are required for by regulators. We need to figure out how to do KYC with institutional clients and other clients. And then we need public change for broader faster transactions. So, there's probably not going to be a single solution. What we're going to need is a way to move between change in a way that is as frictionless as possible. I think that's where this is heading, but again, really hard to have an opinion when we're this early. The smart thing to do and what we're trying

to do is partner with who we see as leaders and being really nimble. >> So, no plans for a Franklin Templeton blockchain then? >> Um, not to my knowledge. >> Got it. Got it. because it it it just kind of begs you know begs the point of we had a lot of these institutional kind of PC's happen over the last five years kind of get you know getting their toes in but now it's like very firmly in and I actually had uh your colleague Sandy on she was telling me that the 6040 portfolio is done that this is not the right way to think about how to invest now had Jeff Park the former CIO of Procap kind of say the same thing and so it seems like the tides are turning to a

different way of thinking about fundamentally structuring a portfolio in >> absolutely I mean first of all 6040's been you know bread and butter for asset allocators for a really long time but it hasn't really it the it only has one thing going for it it's very simple >> right and it's sort of if we take a mass average of investors it kind of is like that midpoint of of risk where it's predominantly equity risk but you got a bit of diversation from fixed income the reality is most investors have never thought like that and we even without getting into any of the digital asset considerations we've moved into things like goals optimized investing where we

actually you know for retail investors look at what their goals are which could be you know I want to send my kids to school I want to buy a better house I'd love to buy a sports car okay well those are all different goals maybe sending your kids to school is a high priority goal you know, house. That'd be really nice. And, you know, a sports car is is a desire. For me personally, it might be reversed, but, you know, that's kind of the point. And so then we build a portfolio that kind of matches those goals to different assets that have the appropriate risk and return stream. So, that really that's the real concept, right? It's about the denominator, which is risk, and the numerator, which is return. And then

diversification comes in in terms of how those return and risk streams of each underlying assets are correlated. So if we can construct a portfolio that actually matches that appropriately to an investor's goals, that's the solution. And that actually works for an institutional player like the largest pensions that have liabilities they need to offset against assets that are going to produce income or for a retail investor who's just trying to to get by. The same underlying concept is the same. What technology allows us to do is bring that fire like Prometheus down to the retail investor.

And then what blockchain allows us to do is to make it into something that's much more portable, much easier to deploy. And then we add in the additional benefit of digital assets into it and that just becomes another tool in our toolbox the same way as commodities, as equities, as fixed income to build the right portfolio. >> Yeah. And is the is the digital assets allocation still around that one to two percent. >> I so I I actually think that that's absolutely the wrong way to think about it. The right digital asset allocation is not some fixed number because you know for you know like a GEN like me maybe it's 10%. because I'm comfortable with the amount of risk and I've got

other liquid investments that are much lower risk and you know I'm comfortable with having the liquid portion of my portfolio move generate around a lot more you know for my my mother it may be 0% because she wants just super steady income but you know could I put her into a stable coin that generates yield probably yeah and she would be very happy with that so I think the bottom line is what is the goal from the goal you derive a benchmark which is your bogey as an as an investor that is my what I'm trying to exceed performance of that benchmark and that benchmark is going to vary dramatically from investor

to investor and that benchmark is going to have risk and it's going to have return expectation and the general rule is I don't want to have any single asset class take more than a fif of risk so if I'm thinking about digital assets more broadly, it's how much digital asset represents about a fif of risk. For a portfolio that's all equities, it could be, you know, 6 7%. For a portfolio that's mostly fixed income, it may be 1% or less. But the point is we got to think beyond that traditional 6040 anchored mindset.

>> Yeah. Okay. Then kind of zooming in into the uh space itself of the digital assets, you've got kind of this common frame of thought, Bitcoin being like this digital gold, Ethereum's earned its place as this kind of like uh technology layer. Um and then you've got all the rest. At least that's kind of how I am thinking about it from the institutional allocator perspective. And there's a ongoing trend right now and it's been going on for a while. I actually called it something silly, the revenue, the revenue meta, which is like we are now in a period where revenue matters in terms of DeFi protocols. And I think I

called this out about a year and a half ago and we were still in this very like narrative driven uh crypto landscape, but it's very very very drastically changed now. And so there's a cohort of leading DeFi protocols that are actually generating significant amount of revenue, allocating that back to their token in a form of a programmable buyback or some sort of share of that revenue. Obviously, I think the market structure bill and clarity will help to really kind of put this into stone and and so like the the pendulum of investing in the space inside the space has shifted far from like the network effect L1 L2 kind of blockchain trade to like who's making money or who is like

very very hard like you know hard store of value. And so there's this cohort that I mentioned and and I'm just curious like within the space, what are you anticipating as far as dispersion of outperformance going forward? >> Sure. I I think that's one of the things that is really important about this space because yeah, like whenever I talk to, you know, like if I'm on a Trafy show, if I'm on CNBC or Bloomberg and we're talking about crypto in the context of assets, it's almost always just Bitcoin. Um, and maybe Ethereum like you said, but it's not a monolith.

And I think we need to look at other tokens. We need to look at utility tokens, at um tokens that are actually backed by RWA. we need to look at um gaming and defy tokens and they all are actually kind of like different sectors in the stock market right so no one would bring me on to talk about stocks and say okay >> what's your opinion on equities and really mean just what's your opinion on the max 7 right they would generally want to know about my views on utilities industrials and um you know healthcare etc so it's kind of the same thing like just because the Mac 7 is so dominant.

It's not the entirety of the equity market. Just because Bitcoin and Ethereum are so dominant, they're not the entirety of the digital asset market. So, I think as we see more institutions come in and as more we see more active players come in, >> that's just what you just described is just one way to value those other tokens. Yeah, >> we've been developing other ways and it they kind of depend based on what the token is. So, if we're looking at a DeFi token, it's what the volume of transactions. If we're looking at a gaming token, what are players that are we seeing, you know, like those rewards actually getting sold in a secondary market on chain, right? Like if we're looking at a technology platform, who is making commits on GitHub that are that

are backed by it? Are they the people making those commits like respectable in the space? Like we're building these valuation methods that are differentiated but ultimately not too different from how we would look at evaluating any business to determine if it has intrinsic value or not. And then if our view of intrinsic value is different from what the market is pricing then that makes it you know a good long or short position. >> Yeah. Okay. So then you guys are developing then a view specifically for the sectors of the market. >> Correct. And are you guys uh like like overemphasizing or emphasizing strongly on purely just revenue?

>> So I wouldn't say purely just revenue but it is a big component. I mean I think you you do need to look at the I would say really especially where we are right now what's the second derivative of revenue like like is the re and by the way same thing if I look at most tech firms right like >> are we seeing an acceleration in revenue how is that acceleration map out is there like a terminal value where we expect some kind of steady state is it more cyclical where we expect like hurdles where like you know really strong revenue growth you know whatever percentage terms triple digits until we get to like a leg down. I'll never down and at a steady state. Those are all really important things to consider. But yes, revenue matters, DAUs matter.

All of those things together basically build your valuation uh framework. >> Yeah. And you are still excited about gaming in in in crypto. That is >> I I I I I still am. I mean, maybe it's >> that is a hot take, >> you know. Yeah. I mean, I know. And it's been like like a lot of people kind of make fun of the central, right? And I think like, okay, fine. Mana wasn't everything that it it said it would be. But I think what excites me about that is this kind of concept of how I see the evolution of money as a concept for Gen Z and Gen Alpha, which is it's really like we've gone from like you know people like well older than me um you know would say like you know I have one

job maybe two jobs and then like you know millennials we're like you know we we work at a gig for five to seven years but we're flexible and then you kind of have the gig economy that also came about with the younger millennials. I think the newest generation, they're not really looking at things that way. They're looking at money as something that they receive through any number of things. So, if they're making money gaming, that's that's just part of the way they they make money. if they're getting income, which for older generations, like you know, Gen X boomers would be something you think about just kind of in retirement, like how do I now that I have this nest egg, um, you know, how do I generate enough revenue till I die and leave something to my heirs to now like,

no, income is just something I might be getting an airdrop of income from this cultural asset that I own where maybe I owned a share of royalties from an artist that I like and also I got airdrops to go see them at a show. So it's like both a utility that's not pecuniary and a utility that is uh money and then yeah like you have a job that pays you and gives you health insurance etc. there's a much more fluid approach >> to how you make a quote unquote living. And I think that really syncs up very nicely with a smart contract based world. Like why can't my employment contract be a be actually a smart contract that also has, you know, a

smart contract for my health insurance, for my life insurance that adapts as my habits change. >> Yeah. You know, those are all things that could be done on chain much more efficiently, make it much more portable. And from an asset management perspective, that gets me excited because that's like a whole new way of actually helping people maximize their utility in the world and maximize what they can generate to live the kind of life that they want. So, that's why I'm still excited about gaming tokens. >> Yeah. Um, do you So, Jamie Diamond um came out with something a couple days ago saying that tokenization is going to uh do kind of a lot in the way of disrupting banks and kind of what banks

do and we're kind of living in this agentic world where intelligence is rapidly accelerating. I know you're excited about this and have, you know, have done some investments here and thought about this. Are are you at all worried about AI coming coming for asset managers? >> Um I'm not because I'm building AI if it's going to come for asset managers. That's what Jamie was saying is like banks need to go build tokenized products and blockchains before they are basically, you know, >> absolutely and and that's the number benefit of not being a bank, right? Like I mean, yeah, like if if you're thinking about like I I started my career as an investment banker, okay, um before I started a a hedge fund and like yeah, all of the work that I did as an investment banking analyst can be done

by an offtheshelf model very quickly. So that means that there's not so much of a need to pay those big banking fees. Then there's a question of like, well, do I really need to do an IPO where I need this whole road show and you know all the bells and whistles or can I just do an ICO? >> Yeah, >> it's another question, right? >> Is it simplify like the whole concept of adding liquidity to private shares? What are private versus public shares? Well, in a tokenized world that can become much more fluid. So, it's much more easier for me to attract my employ, you know, new employees if they know that they're not tied in to sitting on this paper wealth.

>> Yeah. >> Right. And they can go and like buy that house, that sports car, you know, send their kids to college, whatever. Right. Like that changes things quite a bit. And and that actually really isn't great for banks if they still maintain that, you know, white shoe mentality of we are important because we are an institution in and of itself. And that's that that is why you need us. That is how dinosaurs die. >> Yeah. >> By not looking up and seeing what's what's coming. >> And I think that kind of goes handinhand with the change of way people are thinking about work that you were just talking about as well. It it's all this kind of like progressive evolution. And so then if you're not too kind of worried about the agentic side replacing

asset managers, what are you doing to kind of push that forward on your side? H how does that actually look? >> Sure. I mean I'll give you one concrete example just to put some meat on it. Um so we we built >> a aentic analyst and the reason I wanted to build an agentic analyst is because I saw in my investment committee anal like my human analysts weren't disagreeing enough with each other and I was like you know I'm worried about consensus. That's like the worst thing in any investment group is if everyone's sort of like nodding their head. >> Yeah. So, I specifically built this agent with with my AI team that is really sassy. He's got an attitude. Um, he calls people out on their BS. He can fact check everything um near real time.

He's got access to everything we've ever said in any of our research meetings. We're working on getting uh this agent data from cellside research, from independent research. Um, and so it's able to synthesize all that and actually move the discussion in ways that are much more productive. So now you've got this human agent hybrid investment committee and it's so much more powerful. And if I want to research something real time, I I can just tell my agent like, "Hey, go research this and and then play it back to us." >> Yeah, >> that is how we're adapting and evolving in this world. And I think what you're going to see going forward is more and more agents in the ORC chart like that.

That is going to fundamentally change the game for investment managers who are at that level. And it's just going to leave other folks behind because I'm getting so much more data at my fingertips. I'm not doing too much secondary or desk research work. I'm doing primary research and I'm synthesizing information. and where I can offload that work to an agent. I'm doing that and it's giving me answers back much faster. >> Yeah. And are your analysts worried about your agent obsession?

>> They're they're they're not because uh one thing I I did is I made sure the entire investment team is upskilled in uh first of all just basic concept of coding. They're now getting um comfortable writing uh augmented code themselves, building tools and their own agents that can do more work for them. So it's what so actually what gets them excited now is they're not doing the what we call the no joy work. They're doing the really interesting work. And so it's kind of like you create value from your intrinsic humanity and your creativity and and not from being able to stay up, you know, super late compiling a report on what was said at the IMF conference.

>> Yeah. Yeah. And so do you think clients would um want to interact more with Agentic Systems in like a clientf facing manner? Um how do you anticipate that that kind of like relationship part of financial asset management evolving with AI as well? >> So prior to um Franklin a couple steps before that I was an allocator for about seven years. So, I actually invested in firms like Franklin, um, like JP Morgan and and and others. And but traditionally, when I wanted something, I would have to call my sales rep, explain what I want, they would try their best to understand it, call up a client portfolio manager who would then call the portfolio manager, and then

eventually this game of telephone would get back to me, and I would be like, "That's not quite what I wanted. Try again." You know, um, and so that is not efficient for me. Yeah, >> what is much more efficient is if I ask a question and get an answer back. So actually one of the things that I I worked on first when I came to Franklin was building a client-f facing system that could answer those questions. >> Um where if one of our institutional clients has a question about say how did you build this capital market expectation which is our 10-year risk and return forecast. Um or how would you look at this manager? It can actually give an answer. And the clients I've talked to so far are really excited about that because it gives them on demand answers that are just as good as

if they went through about an entire process, but now if they have a question in the middle of the night or I don't know, we just bombed another country, >> they can get that answer. >> Yeah. >> Immediately. So I think clients, especially institutional clients, are going to be really excited about that. >> Yeah. Yeah. Um, on that note, how long do you think it's going to take until we have um advisors pitching their clients on ETF products for crypto assets outside of just kind of like Bitcoin, ETH? Like what's that look like? Because from what I understand, right, like you get this relationship over time, right, with an advisor, you trust them, they slowly start to introduce different

ideas to you um based on your risk as you were mentioning. And the whole process of like doing that, getting them educated enough to be able to make a pitch to their client and then doing the process is is quite a process. Where are we at if you were to say in like the broad spectrum of that process for for crypto assets? >> It really depends on the advisory group is is the short answer. Maybe not like the most, you know, clear answer. And what I've seen is there's advisers who have predominantly um less crypto interested demographics that are they're investors and they feel like they don't need to learn anything about crypto. Of course, what is also happening is

>> and look, not to make a blanket statement, but a lot of those demographics are older. >> As they pass on and pass their wealth to the younger demographics, those demographics care about digital assets by and large. We've just again just seen that in the numbers. um that Gen Z, millennials, even Gen X are much more comfortable with digital assets, uh hold at least some amount of digital assets. So, they're going to ask those questions. It's we saw the same thing, by the way, with sustainability. >> Yeah. >> Um and other concepts. So, those advisers are going to have to learn and I'm seeing now a lot more questions from our advisory channels of, hey, tell us how to invest in digital assets. How do you integrate this with a traditional

portfolio? So they're that's where something like the digital asset ETFs like even the single token ETFs like what we launched or uh multi-token ETFs they're a really easy on-ramp because you don't have to go on chain you don't need to set up a wallet you can just buy it in your brokerage account so an adviser can easily access it but at least it gets them thinking about that and then it starts moving more towards that you know advisor really as I would say a life coach where they're helping clients think about money from all parts of their life. And that is where I believe we're going to be as that wealth transfer really continues and we get to a predominantly millennial and younger held wealth base. And then it's going to

be similar to institutions and and banks and asset managers. You're either going to understand the space and maintain and increase your client base or you're going to lose it. >> Yeah. Max, kind of a more kind of a personal portfolio thing here. Are you bullish on pers as a category? Are you bullish on hyperlquid? So, Hyperliquid, I think, has some some challenges and and I, you know, I think what happened in October of last year really demonstrated a concept that I've seen a lot in uh platform shops like Citadel um and uh and Millennium where when risk goes above a certain point, you just

take an executioner's axe to portfolios, right? And so that kind of blunt deleveraging is what caused a lot of the dislocation we saw the collapsing of the dad premiums and things like that. So it's hard for me to get super bullish on that just yet. Personally, I think we need a better risk management framework. I think in general, you never want to have a situation where you could see your positions indiscriminately cut. Like I would never personally be a PM on a platform like that. And I think investors who are playing in that, you know, find out that the the name has a dark irony to it where all of a sudden things were not that liquid and

positions were in fact liquidated at a hyper speed pace. So that that makes it harder for me to get bullish on that. >> Yet, you know, it was worse on centralized exchanges actually. >> It's true. It's true. And I think that's the other part of it, right? Like you really have to know how to trade your uh w within your your risk bands. But I think that is something that, you know, we've seen it often enough in Trafy and I think the DeFi world is kind of getting up to speed on it. But we need to make sure we set up >> exchanges that have deep enough liquidity that they can manage the risk of these much more volatile products, right? And so then anything that has a harder to capture, harder to analyze

return stream like a per becomes a more difficult security to manage within your own book. And then if I'm looking at an exchange level like at the exchange book, right? And I I think that's where if we minimize those kind of mass deleveraging events, >> we maximize broader adoption. >> Yeah. So there's a tokenization company securitized getting ready to go public sometime with a spa. Uh I'm curious if you have any any views on the tokenization market and just generally how you guys are thinking about that kind of sector of of the market.

>> So broad broadly tokenization we're we're you know really bullish on. I think in terms of RWAs um we've got a lot of private funds with within Franklin that you know I personally would love to see get a tokenized share class on. I think in general it's a way once regulation catches up with the technology, a way to get different investors access to private assets, access to assets that don't currently exist like cultural assets like fine art or collectibles. Um, and what we also will need is to my earlier point, liquidity, right? Like something gets tokenized, that's great.

Is it inherently liquid? Like if I'm a a big pension and I now have some share of my private equity exposure tokenized, well, it means I can trade it 24/7, but only if someone's willing to take the other side. So, I think we're going to need also market makers for tokenized assets to come up. And that's going to be a fundamentally different type of market making than either your traditional equity market making or even your traditional digital asset market making. So that's that's another area that we're really looking into and trying to figure out how to best serve our clients with that.

>> I did see a um so in the recent IPOs I've seen some tokenized versions launch on chain uh instantly on the same day on like X stocks on Salana and a couple others. So I think that's an interesting vehicle. I agree on the on the liquidity front on chain for these assets you need market makers. You probably need an order book. I don't know like the AMM model is going to be tested hard. There's this new kind of concept of prop AMMs that that will um I think be interesting. I think another area where the market's going to need liquidity is for these big IPOs coming up. You've got SpaceX, OpenAI, and Anthropic amidst a macro war time and a bit of a liquidity crunch. How do you anticipate the market

reacts to these three trillion dollar IPOs this year? Do you think the market can handle that? >> I think the market can if the bankers do their jobs, right, which I think on this one they they will. So, this is actually a good example of where the traditional banking model does have some benefits, right? In a traditional IPO model, right? I I think if you were looking at doing something like this onchain right now, like purely onchain, it wouldn't work at that size. >> Yeah. I think three four years from now that may be very different. So it's a great example because yeah these are massive mass these are going to be you know probably the largest IPOs ever and

happening very quickly in succession and there is demand for it. So finding that demand cl you know corraling that demand ensuring that it's you know listed on at the right time with the right buyers ready providing that additional liquidity as banks do for their trading desks. Those are all things that need to happen for those to be successful. >> Could you do that technologically fully on chain? Yes. But you need the bigger players to already be there. That's that's kind of where we're at. I I feel like we're at this we're like right at the catalyst point but not quite there.

>> So you think the market's going to be able to handle it just generally like the traditional market will be able to handle? >> I think it's I I think that their book runners are going to do everything they can to make sure that the market can handle it because flopping an IPO of that size is not something you are going to come back from. I mean these are to your point some of the most talked about names. There's been so much discussion about when are they going public? How can you know everyone from the biggest institutions to retail investors get you know their hand on any of these companies. So yeah, I mean the bankers are going to be earning their fees on this one.

>> Yeah. Max Gman, the deputy chief investment officer at Franklin Temple Investment Solutions. Thank you for spending some time with us here at the Nest. Enjoy the rest of your day. Ladies and gentlemen, we've got Vlad of Lighter coming up next. We will be right back with him on. Hope you guys enjoyed that one. Hey,

hey hey. Heat. Heat. N. Heat. Heat. N. Yeah.

Heat. Heat. Hell yeah.

How was it? >> All righty, guys. >> Good interview with uh Franklin Templeton there. >> Yeah, man. Vlad uh or I mean Max came in and uh schooled me on the way that these investment managers are thinking about digital assets. Needless to say guys bullish and um is bullish on pers too but was bit bearish on the deleveraging that happened from 1010 um thinking about things in a different way from a unique perspective as well not in the traditional kind of like asset manager way so that's interesting um had a lot to say about about tokenized assets coming on chain we talked a bit about openai anthropic spex as well um just Good conversation all in

all. Great. So >> incredible. >> Yeah. >> Well, it's pretty cool. I think uh you know, obviously they have quite a few ETFs uh and exchange products themselves. And uh look, the way I think about per is like this is a modality that is applicable to several asset classes uh ETFs included. Uh obviously we've seen the rise of you know the RWA asset class onchain. I think also in PERPS uh and really all kinds of digital assets are uh able to be traded in per makes a ton of sense. Provides a whole new dimension for uh traders to get access and so pretty stoked. Why don't we bring up uh Vlad, founder of Lighter, >> the CEO and founder of Lighter. We've got Vladimir Novakowski in the building.

Let's give him some love, man. Vlad, welcome to the show, man. How are you? >> Thanks, Andy. Good to be here. Uh, happy Friday to you. >> Yes, although I feel like in these markets there's no, you know, every day is kind of the same, you know, so much going on. >> It is uh the end of the crypto winter. Vlad, good to have you, man. Catch us up, man. What is the latest with Lighter? How is the last couple months been post token launch? I I know you guys have been shipping a ton. Would love to just get a a quick lay of the land as to what's happening over there in the lighter verse.

>> Sure. Yeah, we you're right, we have been shipping a lot of different things. Uh I I think one big initiative that's coming up is the lighter EVM which we did um kind of a technical deep dive on last week. What that will ultimately allow is kind of any Ethereum developer could launch uh you know apps directly on lighter. So for somebody who's not building something that requires kind of the high throughput of our customized circuits that you know allow high frequency trading like let's say you're building a prediction market or you're building a lending platform or bridging like you can actually just deploy that directly on lighter and that would uh allow you to interact with the liquidity already on lighter and the

same balance sheet. So that that's that's really exciting you know that's kind of in in DevNet. Now, um the other big things that are coming up are universal cross margin. So kind of uh like right now the only collateral you can use for trading pers on lighter is USDC and uh pretty soon um we're going to have a whole system there where you know kind of any um starting with the the safest kind of ERC assets like ETH but and you know as well as the LLP but like you know that'll really improve capital efficiency where because you know we're talking about pers we're talking about um spot and tokenized assets like I think the bigger

picture here is like for all of those to be traded from the same balance sheet and in a capital efficient way. So that's big initiative for us as uh as well of a bunch of other things right like adding new assets improving liquidity you know iterating on our mobile app you know the team is uh you know this is just uh still early days for us >> incredible man >> awesome um I'm curious what you're paying most attention to obviously there's so much happening in the markets but also you mentioned you're shipping tons of features what are some of the most critical things that you have your your your eyes on as of Are you are you keeping tabs on macro? Are you heads down building? Do you really? Because from from our perspective, it's like,

okay, per as a category does well when there's a lot of volatility in the market. And so, are you paying attention to volatility in the market? Are you sort of heads down shipping? >> Right. Right. I mean I I think we're paying attention to it to the extent that you know there are products that our customers want to trade and we want to make sure they have the right amount of liquidity to trade them but also that the risk management engine works well and you know there are no you know we don't want another you know 1010 like uh event you know so so I I mean I think we are paying attention to volatility both from the point of view of the opportunity you know obviously there are a lot of folks who want to trade assets

like crude oil right now, you know, we're doing, you know, that's not something that 3 months ago was necessarily like the thing that the market expected, but that here we are. And so, you know, we we have to make sure our customers have the liquidity to do that. At the same time, I want to make sure that uh you know everything works in a stable way in terms of funding rates and the risk engine and but you know we're we're not um that that being said you know most of our time is spent focusing on the on on the bigger vision right because there's this is kind of like ultimately what we want to get to is a place where you know all of these assets that exist in Trafi are on chain and you can trade

the spot and the burps in a secure and efficient way and kind of share the balance sheet across them. And that that's that's a longer term vision. It takes, you know, time to get there, but um right now is like the best time to do that between all the all the tech that's available between kind of institutional like finally institutions actually get it. Like I think you mentioned previous guests from Trafi was talking about tokenization. I think a lot of folks we're talking to in in Trafi really get it now and you know regulators get it as well. So this is like the perfect time to be building the future of finance. So that that's our main focus. But yeah, if there are specific markets that our customers want to trade, you know, based on what's going on right now, we we do

pay attention to that. >> Yeah. All right, Vlad, let's get into the juicy stuff, man. Um, there is a regulatory question right now surrounding the architecture of purpose platforms. Um, and there is different ways of thinking about this and I am just blatantly curious if you feel that lighter has a a or any regulatory advantage against other purpose platforms and why or why not. >> Sure. So I I I think that uh you know our goal and we've been spending time in in DC the last couple of months meeting with folks kind of from you know from the Hill the White House and the the

agencies. You know I joined the CFTC's innovation advisory committee as well to help through help think through these things. You know obviously our goal is not to have like some kind of unfair advantage. I mean our goal is to help these folks who now actually are supportive of the industry and want to figure out the right rules and clarity like our our goal is just to help them understand how these technologies work. I mean ultimately these decisions should rest with you know with the regulators and the policy makers but they should be aware of all the technologies that that are available. So I'll give you an example right like how how should you think about KYC? I mean I think >> there's a range of opinions on this from >> like DeFi should have no KYC at all to you you know DeFi should have the same

KYC as as as Stratfi right and there there actually you know there are a lot of interesting solutions in the middle which in some cases the technology we've built using zero knowledge proofs works really well for. Um so for example you can have something where you know in like a platform isn't actually tracking customers KYC but there's some wallets that went through that process or some kind of you know AML check um kind of through a third party and then th those can be those can trade particular products or those can have particular counterparties and that's all part of the same order book but different rules in the order book where like certain >> like for example let's say a citadel

doesn't want to trade with some types of counterparties, but maybe another market maker is okay with that, right? Like you can actually build all those rules into the order book with our architecture. So I guess to answer your question, it's not like they're, you know, it's not like rules will favor one participant or the other, but I think sensible rules will be easier to implement with certain architectures. And we think our architecture is is a really good one for kind of the merge of when DeFi meets Strati. Well, that's kind of what I was getting at, Vlad, is I think that the way that you guys have set up the fee model and thinking about how market happens on lighter is quite differentiated from uh other perexes in terms of the types of fees, the way that

that the uh actual um attraction of market makers happens as well. And there's just a growing worry that regulatory action could come down. And from smart uh investors that I've spoken to, part of their kind of lighter thesis is that from the regulatory perspective, there's actually a much stronger stance here and a much stronger kind of uh moat in comparison to others. So I just wanted to ask about it. >> Yeah, I mean I think the the fee model is um one that you know we we've always believed that you know trading should be free for the retail customer. I mean, uh, that's actually one area where I think Trafi

was kind of already ahead of a lot of the the crypto space, right? And so we're I I think that that makes a lot of sense. uh but uh you know again I think the the the way we want to think about regulation right is like now that there are folks who actually kind of are you know there's a lot of goodwill and folks who want to actually figure this out as opposed to um creating problems for for the industry know there's a lot of opportunity to create rules that last right so the goal isn't just to have like okay like um there right now there are no rules, but then maybe in two years everything changes again. The goal is to actually have rules that are

going to last and that make sense in in different market environments and that will work well for resale and for institutions, right? Because ultimately you need those institutions to provide liquidity. Like going back to your point about, you know, real world assets, right? Like right now it's it's great that folks have access to these perks. Um but the way that it works in the back end is not as efficient as it could be, right? Because the market maker now they still have to hedge that position on the Trafy rails. Now if if the if the kind of the trafi institutions themselves could be on chain with a lot of these assets in a tokenized form that that's going to be a lot more efficient and that that that's going to be ultimately those

efficiencies will be passed on to the to to the retail customer as well. >> Yeah. Yeah. Which kind of brings us to an interesting point, Rob, because we had Logan Gestreky on Vlad and and he's a a notable Salana bull and we kind of had like this like uh hyperl liquid versus Salana conversation, but it's really lighter versus Salana as well. And he has this thesis that's localized ingestion is the future of trading on chain. Essentially what he's saying is that he does not believe in the lighter model or in the model of a single sequencer or a collocation being the main way that trading is going to happen

at scale onchain. He sees it as more of a replication of traditional finance systems in the sense that you have a central limit order book in the uh NYC for example they have a database in New Jersey where if you're you know as close as possible to this database you get you know asymmetric information flow in terms of latency and you know he he talked about how hyperlquid's nodes are all are in Tokyo for in in in the majority lighter obviously has a sequencer, right? So like a single node.

Um, and he argued that the future is much more of kind of like this distributed set of of nodes essentially and being able to uh optimize not for proximity to the central place of information flow but actually creating a more diversified set of information from different uh players where basically the ordering or the uh possibility of being the first one to get alpha from in terms of latency game is not necessarily because you are the one that's closest but because that alpha was generated in a region perhaps closer to your validator or to your node and this kind

of goes about into uh all over in terms of global access and I'm just curious like what your thought or push back would be as to why this kind of collocation sequencer model is the way that you guys designed lighter rather than thinking about this kind of um in you know more distributed set I think he called it ingestive localized ingestion uh is the kind of way that he framed it how would you think about this kind of uh trade-off set >> yeah I mean building you know decentralizing the sequencer has always been on our road map and so I I don't disagree with that as a goal the question is what's the priority of it

right because >> like you know yeah ultimately like in five years. I you know if you ask me how's it going to look in five years like I think by then the sequencer will be decentralized is it going to be decentralized in in one year we'll see right right now that hasn't been a priority for the customers and and the market makers um but once you know because there's still like a lowerhanging fruit right as far as um you know different types of assets and you know just overall liquidity um being able you know kind of the the right um you know structures for funding rates like there there's a lot of lowerhanging

fruit before you get to the point where the only thing that's missing is like latency at the millisecond level on once you get to that point you know our architecture actually allows for decentralization of the sequencer in a pretty natural way because with zero knowledge proofs like one thing that's really nice about that is as long as the proof is correct it doesn't matter who generated right so if um if if there's sequences running you know one in Tokyo one in New Jersey or whatever, like if any any of them generated uh the proof of what happened that it it it doesn't matter who did it first as far as the proof generation, but you know, as far as the um processing of the trades, we we do believe that'll happen in in a distributed way over time. We just don't

think that's the lowest hanging fruit right now. As far as like when we talk to traders, when we talk to market makers, um you know, they just want to get more assets, get more liquidity, like have a really um you know, stable trading platform in terms of latency, in terms of um funding rates, in terms of volatility, like you know, leverage models, all of that stuff, right? And I think once all of that's figured out, um, you know, we we're actually very excited from a technical point of view to work on decentralizing the sequence.

Like if we >> if we if our team was just focused on like let's solve the hardest technical problem ahead of us, that's what we'd be working on right now. The reason we're not is because that's just not what we're hearing from our customers as the priority. >> Yeah. Um, >> so we don't philosophically we don't disagree with that, I guess. Bottom line. >> Yeah. >> Yeah. Makes sense. >> And the market is aligned with that, right? like the market's not been rewarding necessarily the most decentralized architectures as of the last year or two. It's really been rewarding protocols that have great UX good product make money um and do it at scale. Right.

>> Well, I think our like our take on that is yes, that's true. But also like I want to decouple like decentralization from verifiability, right? Like for us, yeah, it's one sequencer. >> Um but everything it does is is is verified and and the the code for that is open source. So, so it's so you know I think part of what you get from decentralization is the verifiability which we have that already now in terms of like you know the the um having a distributed system that can help some you know HFT firms kind of at the millisecond level that's a different thing you can get but just as far as the core value which is that everything that happens is verifiable uh and anyone can check it in an open source way that that

that's the big win that we kind of have had from day Yeah. >> Yeah. >> And and so there recently was a a rather large influx of new customers from Telegram. Uh you guys had this successful partnership. I think it was upwards of 23,000 new users. Um really just an explosive growth moment. Um what was it that stood out about Lighter that you know Telegram really valued? Right? We're saying it's not necessarily the you know decentralization. Uh what was it that stood out about lighter that really uh that really captured Telegram and its users?

>> Right. Well, that's a good question because we're working on a variety of partnerships. We're really proud of of the partnership with Wallet on Telegram as you mentioned and uh you know they're like I think they do a really good job on their end of like building an ecosystem of um of of traders and they're rolling it out. It's it's a different type of trader than what we've had before. So it'll be a really complimentary um user base. Uh I think you know it's it's one thing that's interesting about that is like their product is actually has some centralized components uh the way they've built it on the front end.

Now, so you know, a system that's verifiable and decentralized uh like lighter can still be used in that um framework as well. So from their perspective, they they like the low latency, they like the, you know, the low fees. They like how easy it is to integrate with. Um and you know I think our our team has generally been um very helpful to kind of work with these partners you know um so so I think from their perspective that's the part they like so essentially like if they think of like per in a box right like if you just want to introduce per like if your front end is centralized you can still it's still better to plug in kind

of defy rails underneath than than a centralized product underneath right even if even if your own front end has some centralized component. So I think that that's one interesting thing to point out, right? Because the various partnerships we're working on, some also look like that, some don't, right? Some are completely decentralized on the front end as well. And and and again touching on the regulation point, right? Like once we have a license, there'll be some players that actually could integrate with us that couldn't before because they require um you know like a broker can only integrate with an exchange that has a license and you know maybe that broker itself themselves are you know are custodial maybe that they're they're non-custodial right so

so there are all these different possibilities and I think the bottom line is like the tech underneath works across the board and we're very happy to integrate with any of these partners and um you know work with them to make sure that kind of the solution provides value to their customers. >> Yeah. And and now that uh these users are on the platform, you mentioned that uh lighter's got zero fees uh for these retail users uh coming from the Telegram wallet. Um, >> right.

>> You know what? And I and I want to, you know, couple this with uh the Tom Lee earnings call I was watching a month or two ago. Uh, and he mentioned lighter uh a couple of times. And so there's, you know, strong uh overlap in between the investment thesis into, you know, the lighter token as well as kind of the sudden influx of users. But given that there's no fees, how will the lighter token benefit from you know the zero fee environment or just generally you know if you can't comment on token how how can the protocol benefit right uh you know from these users but the lack of fees from these users >> right so the um for something like the telegram integration like all of their

users like they're they're coming in through this embedded wallet product like they're all retail right like you know you're you're not running a high frequency trading strategy through that app, right? So, it's all retail. So, then basically um that's great flow to have for the market makers, right? So, that basically what happens is like where lighter gets revenue from that is on the maker fees. So there there's you know the taker fee is is is zero because those are not premium taker users like in HFT shop but there are maker fees there and uh you know I think that so so that partnership even to date already has brought revenue that has been used

for buybacks even just in the first week. So, you know, um you know, I I guess in general with with these partnerships, we would kind of like, you know, we we work with them to kind of revisit different like how the fee split works. But in this case, I think it's pretty clear, right? It's like this is 100% retail. So, u so th those customers if they were trading through the lighter mobile app, they wouldn't be paying taker fees either, but the the maker fee is um is where the revenue gets generated there. I I got absolutely molly wpped on a trade I placed on mobile yesterday. I what? Yeah, I placed a trade on mobile.

Not on lighter. Not on lighter. I want to make that clear. It was on Coinbase. I don't have a problem calling them out. Um just absolutely insane uh fee. Uh and I think it was because I placed it on mobile. >> Yeah. >> Right. And I guess for us like it's more we actually want to incentivize mobile usage and we've seen that like mobile usage has gone up from um you know it was kind of below 10% now it's closer to 20% like and that's going to go up further. We're going to release the V2 over the mobile app um in in the coming weeks as well. So yeah we think like mobile is really important. I mean that's one area where I think DeFi has been behind CFI right historically is is mobile.

>> Yeah. >> Yeah. Um Vlad, I'm curious what you think about the valuation dynamics right now. Um obviously Lighter has just recently launched on the token front. Um people are looking at the at the token and looking seeing the amount that you guys have bought back. I think it's about 4% um and growing and it it just kind of seems like as as the valuation kind of uh disparity grows between lighter and hyperlquid the case for lighter becomes stronger and stronger.

Um and then you also look at other kind of like revenue generating applications in in the space. Anything from like a sky to an aerodyome to other kind of defi protocols and you start to really see more of this disparity. What is your what is your thought or thesis on this kind of valuation disconnect between lighter and hyperlquid? H like do you think that there's something that the market is missing here? How do you think about this kind of uh state evaluations of perp dex assets? Yeah, I mean I think like high level it's good that uh the market is kind of valuing protocols that generate revenue,

right? Like I think a couple years ago we had without calling anyone out, I mean we had projects that had like revenue that was not even in thousands, right? Like that that where the valuations were in the billions. So I mean I think it's a much healthier market now. Um, and uh, on a on a relative basis, you know, I I think like we're obviously we're not like we don't trade these tokens ourselves. Like we're not macro traders. We're not, you know, we're not like running a onchain relative value fund. So I, you know, but I, you know, I think there there are others that that do that professionally

that I think have done different analyses of it. But I will say well a like I think the market is figuring it out, right? It's it's it's like the idea of actually valuing protocols based on real economics. Like that's actually pretty new to the industry. So folks are still figuring it out. But I I think on on on our side like there there are three big um you know unlocks coming up right one is kind of composability with the entire Ethereum ecosystem which we haven't like we've been building on top of Ethereum from day one but we haven't actually yet seen the full benefit of that yet. I mean we have from a security perspective but not from the composability

perspective and lighter EVM will unlock that. So that's that's one big unlock. Another one is kind of actually having um you know working with Traty partners to actually have a bunch of assets tokenized where you can do things like the basis trade on on lighter and again I think that's our architecture is really suited well for that both from the efficiency perspective but also because I think for a lot of trafi like the Ethereum security and verifiability is important. So I think that's the big one. And the third one is, you know, like working on getting a license and coming to the US. So those those are kind of three massive things. And so we kind of we want to keep our eye on the ball there. Like you know, maybe the

market isn't pricing in the value of those. Maybe it is. I think again that's kind of up. I'll leave that to, you know, professional analysts to figure out. But but like that those are things we're excited about and we're here for the long haul. You know, we're like it's not about, you know, price action Q1 or Q2. It's it's like are we building something that you know like if you're building something that has the potential to be a major part of the future of finance I mean that's like orders of magnitude bigger than any of the current um >> projects today.

>> Yeah. And as this sector continues to develop um you know there's sort of this clear lead that you and Hyperlid have. It feels like there's one and two and everyone else is chasing. kind of feels similar to the prediction market space with poly market and kalshi as this power law tends to play out. Um how how do you how do you see this shaking out? Do you think this is a winner take all or a winner takemost category or do you think this is sort of a space where there's several players that can all have a piece of the pie?

Yeah, I mean I think even if you look at uh like I think in general exchanges are have you know whether it's in traf fire right between you know all the you know ICE and uh you know CME and all the other folks there I mean if you know centralized exchanges you have your Binance and Coinbase and etc. I mean I I think probably similar dynamic will play out here. Again like I think we're I think our vision is is really exciting. We we think that there's like these like macro factors between um like again think about it like three years ago something like lighter the

tech for it just didn't exist right like it wasn't possible to build. So um now so we have that now we have the trafi actually you know wants to adopt you know defy rails and I think a lot of trfy is committed to doing that on top of ethereum and third kind of the regulatory climate has done a 180. between those things like there there's such massive uh trends here that I think you know we're very well positioned to ride those trends and kind of where where things shake out in terms of you know market share in five years we'll see right and you know we'll we'll do our best and we I think it's good that it's competitive right like building in a space that has

no competition means you probably don't have product market fit >> yeah Vlad I'm curious if your vision has changed over the last several months right like we've obviously seen seen this massive rise of trade any asset on chain. I think a lot of us were kind of pigeonholding periods in general into just being applications for the crypto asset set, the, you know, $150 billion of TVL onchain, the $3 trillion of total market cap. But it's very clear now that we're going to be trading tokenized commodities, tokenized equities. Uh there's going to be all different types of assets on chain, speculative, non-speculative. Perhaps you were always setting out to build a

platform to trade anything, but how has your view on the kind of TAM of lighter changed over the last several months? Right, we've seen just a massive uptick in tokenized commodity uh equity trading, etc. How has the scale of what you're doing here in your mind changed or has it not really? >> I I think yeah we we always like if you were if you look at our pitch attack back from you know um two three years ago we were always talking about how trady and D5 will merge and that's that's kind of the ultimate TAM here. So I think from that perspective it hasn't changed but

the sequence in which it's happening is a bit different than we expected. So like I think our expectation was that a lot of the trifa assets would get tokenized first kind of as spot assets and and then you'll have a really strong derivatives market on top of them on chain. And until that happens, the derivatives market would be would exist, but it would be like pretty small kind of like like how how um prediction markets were a year or two ago, right? Like like you could trade um a market of like is is crude oil going to hit 100? I mean, you could have traded that market in on the prediction markets before as well, but it it it was it was more of um you know, an experiment. There was very

little activity. So I think there's there's a little bit of like putting the card before the horse here where the you know it's like folks want to trade like I think the tokenization process is happening maybe a little bit slower than expected but and whereas like the propification process has been happening faster than expected. So some some of these markets it's like as long as you have a data feed let's launch a per market whether the underlying is tokenized or not and and that's okay. I mean, if that's kind of how the market is playing out, like that's um that's certainly something that we are adapting to and we will as soon as those underlying markets are tokenized though, I think we'll add them to

lighter and we'll work with kind of token issuers to do that as well. Like we're looking as an example at tokenized gold um as a spot asset on lighter. Like imagine if you actually have that you can do the carry trade um on chain like again we think that's kind of the where long-term the big opportunities from like because like right now for what's happening it's like yeah you have these commodity perks but then you know someone has to hedge those in in on the trafire rails uh and the I guess the good news that the demand is so high that even with that inefficiency it's still a huge market but imagine how big it would be if you didn't have to duplicate it and actually it was primarily happening on chain. So that's

still the long-term vision. It always was but the sequence of how we're going to get there is a bit different and you know we have some very you know sharp competitors here right so that that's and that ultimately that's a good thing. Yeah, man. I mean, the, you know, the volume of onchain trading of noncrypto assets, it it's just kind of crazy to think that that could be the dominant the dominant form of lighter. Like, it could just be a massive global stock exchange where crypto is a small amount of the volume as it is today.

>> Right. Right. Well, that's interesting because now that seems obvious, but yeah, like we actually made that pitch two, three years ago at the time. It's like, okay, that's cute, but like, okay, where what are you guys doing for, you know, the core crypto assets, right? But, but I think that, you know, I think the big shift there is like the around how Tratfi looks at these assets and kind of how regulators look at them as well, right? Like it's it's night and day. And I mean I think ultimately the like DeFi rails were always it's like the internet right like initially the first you know 5 10 years of the internet it was primarily like the content or or you know the the products there were all kind of from

within the internet there were no like real world things and then all of a sudden you had things like Uber and Door Dash and all that right so so you kind of I mean these these rails ultimately are meant not just just for their own ecosystem but for the wider um you know for the wider market and um so that was again that was always our bet. I mean the sequencing in which it's happening is a bit different. We're um learning a lot from that and and kind of building towards where the puck is going. >> Yeah. And it's a it's a process and a journey. Um you mentioned that on this journey there's a couple things coming up that the market may or may not be pricing in. There there's three including uh the US launch uh as well as um the lighter EVM and unlocking full

composability. What's coming up next? Uh and and can you just speak to the scale at which you think these things might change the game? >> Yeah, so you know the the Ethereum stories that there's like give or take, you know, 100 billion in uh TVL kind of on the Ethereum ecosystem, right? like if any of those assets can be used as collateral on lighter um that's kind of much bigger than you know kind of anything we have today or anything our competitors have today right so that that's a huge unlock um and and yeah the timeline for that is um you know I think in in kind of the three to six months

range um and then you know some of these partnerships with TRFI you know, some of them will be pretty quick, some of them will take longer. Uh, you know, but I think again, um, the like if it's something like the Telegram partnership where it's more of like kind of giving customers easy access to perks, those might go faster. The ones where kind of full tokenization is needed, that's a bit slower. you know, there's still some stuff that has to be worked out with the the the you know, the clarity legislation and all that, but again, that it's it's going to uh is going to happen as well. And then, you know, we're on the US side, you know, we're working closely with the CFTC to make that happen. So, so yeah, I

mean, I think by um by the end of the year, uh we um are, you know, I think we we could be in a really strong place across all three. And uh that's that's what we're building towards. >> Yeah. >> Yeah. >> Vlad, one last thing. I know we're running up on time, but you mentioned the CFTC working closely with these guys and and being part of this innovation council. I I realize that there's this innovation exemption that's sort of on the horizon as well. If this is to go through, we saw Citadel and some others may be, you know, pursuing litigation against the CFTC as a result of this.

So, it seems quite significant. if this thing goes through this innovation exemption, who do you think is the biggest stands to be the biggest benefactor of this exemption? >> Right. So, I mean the the exemption language and I mean I I think Citadel, you know, they're weighing in on kind of what's in the like there there are some things that are in the legislation and there are some things that'll be worked out by the agencies, right? So I think um you know I think right now they're and we understand their perspective too right like I started my career at Citadel like I like I think trafi and some of these cases has a legitimate point as well right but I think the

innovation exemption I mean I think it's you know the innovation advisory committee and the innovation exemption you know very are unrelated right the the committee is actually kind of um pretty Um, you know, there's a lot of very mature companies there, but just everyone, some smaller players like us, but like everyone who's thinking about innovation and how to regulate everything from per to prediction markets to AI agents, onchain, all that. the innovation exemption. My read on that is that that's meant more for like really like like let's say someone was starting a new DeFi project like right now and they you know they don't have a compliance staff or legal you know they just want

to build something that you know a few thousand people will will use and see if it works like that there there should be exemptions for folks like that right like protecting developers protecting those innovators just to build you know a v1 or you know test or something right like before even folks like that would be scared to build in the US where that shouldn't be the case. Now if it's product like lighter that has hundreds of thousands of registered users and we have you know real revenue and resources like I think we should have a path to registration and now that should look different than a trati exchange but again our goal is to actually have institutions from the US trade on lighter so so we we don't view the

innovation exemption as meant for necessarily players like us but more for like somebody who's just starting out you know building something um experimenting innovating at the very early stages. That that that's my take on it. But um you know I I don't I I think um there should also be paths for for kind of more mature projects as well and and we're very happy that the CFTC is uh kind of very thoughtful about all all these paths. >> Yeah. Well, Washington DC is a shark tank. So we appreciate your hard work there and uh fighting it out for you know the industry as a whole. uh not everyone has the opportunity to you know send some representation up there and

and you know do some of the good work kind of pushing the regulation forward. So appreciate you you doing all the hard work in uh Washington DC and and spending some time with us today. >> Well, thank you so much. Great conversation. >> Lighter looking good here guys. Let's give Vlad some love. Thank you Vlad for coming on man. Speak to you soon. Best of luck. I know you're slammed men and have a good weekend buddy. Cheers. Alrighty, guys. Our next guest is Greg Osuri, the founder of Akos. Take a quick commercial break. Rob's gonna talk to Greg and we're going to get the show right back on the road, guys.

>> I'm looking forward to it. Greg is a homie. I like his hat that he came on with in uh San Francisco. So, we are looking forward to chatting with Greg here in just a little bit. We'll be right back, guys. Hey, hey hey.

Heat. Hey Heat. Okay. Get out of here.

I'm down. Are you ready? Hell yeah.

Hey, hey hey. 2. Get out of here.

I'm down. Hell yeah.

Allighty we are back. We are here with Greg from Akos. Last time uh we had Greg on the show was in Nearcon in San Francisco. Greg, you I remember, man. I think we said hello and then you went on like a 20 minute rant about all the entire configuration, GPUs, LLM, local LLMs, like everything in your house and had, you know, wild stories about how these things were. They knew you were going to wake up before you actually woke up. They started your coffee machine. They were you had cameras on the cars outside trying to detect abnormalities. I I'd love just a catch up on how you're doing. First off, welcome to the show, but then also, you know, how how you're doing and and how your house is doing this entire

configuration. >> Oh, it's a I mean, this I am doing fantastic. Um but little underwhelmed with or rather overwhelmed with a little lack of lack of time for all the things I want to do because the last few months I feel like if there's a way to replicate me I I think we can solve world hunger. >> What are like the three bucket list items you have up at the top of your mind right now? high priority.

>> Well, besides the Akos, you know. >> Yeah. Like the things that like you could have a few replications of yourself like what what would you know Greg A, B, and C be doing? >> Farmland. >> Yes. >> Um I've been feeling it more and more lately. The more and more I see agents going, you know, taking over. I mean, I feel like I can't I can't shake off this thought that anything that's digital um without a non-tangible value attached to it, I'm talking about a digital item without a brand attached to it or a community or network attached to it will be worthless.

>> Okay? So if if as a human being only thing you have to offer is a digital good, I think that'll be worthless soon much sooner than we we we'd think. Um considering how good these agents are getting, how how fast they're getting uh better. Um I just don't see a place for say a software engineer that identifies themselves as a front-end engineer or a backend engineer. Um, you know, I just don't see people that are sitting at desk jobs clicking buttons. I just don't see a future for them. Uh, you know, >> yeah.

>> And um, and it's kind of scary. I'm pessimistic in the in the uh short term and optimistic on the long term, right? So I think there's going to be quite a lot of I mean I was very like you know pro pro AI like expansionism but the last few months I think I've taken a little bit more thoughtful you know approach of like what are we going to do with these people the displacement is going to happen right >> in my own company itself you're seeing quite a lot of like >> displacement people that consider themselves was builders in the sense that you know they look at a problem and

they go beyond what their uh knowledge is limited to and be curious about how you can take a unique approach or a broad approach to solving a problem versus people that identify themselves as experts. Right? Because you know all this while we the advice we've been giving or we've been getting for the last 20 years is specialize in a subject. That's that's the advice you give for folks that are coming out of college. But now it seems to be the opposite. Don't specialize. Go broad. Be jack of all trades because you know your ability to specialize is no longer valuable because AI is much better at specialization. Like AI can

solve math problems much better than me. AI can write better code. I've been coding for 25 years. AI can literally write better code um in terms of schematics of the code much better than me. I'm not talking about logic, right? um there are a lot of like specialized skills that AI will replace much more rapidly than than I anticipated and that's going to cause displacement and ultimately I think my opinion is the because AI is a force multiplier right so for people that have a lot of ideas and have a lot of aspirations AI is it's a perfect companion um so people with with that mindset will be able to a lot more means that there

will be a huge demand on resources that uh unlike anything else right we are already seeing the demand in like look at AI data centers alone first we saw a chip uh shortage then we are seeing a memory short shortage memory has gone up four times the cost HP memory especially then we starting to see energy shortage I mean we can't even buy a transformer without waiting four years we can't buy a turbine without waiting 14 years now the amount amount of stress on resources anything AI touches is just uh unbelievable uh rates right now so and I think that's going to trickle down trickle down to the fundamentals which come happens to be food shelter and

water right um that's why when I said farmland because I think that's the ultimate safety bet you can actually make if you have food to eat and shelter and and water and and farmland will give you ample amounts opportunity to capture solar or whatnot uh and even have data centers or or or you know small buildouts with hash home node coming along very soon. I'm very very um I don't know pro rural and less urban. Uh that's my that's that's what's going on my mind right now. That's not uh and everything ties into right the the work we're doing with Akash and um you know recently we we announced home node as a solution to this energy problem. where

you know we as I predicted several years ago the energy is going to be a bottleneck. I testified before Congress about it. Um and yesterday OpenAI cancelled their plans for new data center buildouts. Why? Because they cannot get energy. I it is happening right now, right? Um so and it's going to continue happening, right? It's going to I know we're going to see a lot of cancellations and I'm afraid all the big leg up we got with GDP growth in the last quarter is going to be cancelled uh this quarter because you're going to find out data building data centers is not as easy as uh it it it seemed to be back then. I mean people like Elon Musk are proposing going to

space. they're basically giving up on earth which I think is little little bit of a stretch there but but bottom line is um the energy problem is becoming so pervasive uh we have to do something about it on the bright side distributed training actually is taking the center stage we saw uh a new model by a subnet in in bitensor called covenant which did a 72 billion parameter model which is not state-of-the-art but definitely better than what llama 70 billion parameter model was right so We're starting to see heavy uh incredible progress in distributed training and distributed inference. Uh so you know it's not hard to see where you have a distributed grid and that grid contributing to a larger distributed

network for AI as a possible solution. We saw Jack Clark from the co-founder anthropic talk about distributed AI training. We're I've been talking to several labs. I don't want to name specifically who they are under NDAs. Everybody's looking at distributed training as a serious u potential and I think if we figure out an incentive structure for distributed training I mean I think that's where crypto there's a phenomenal role there uh I don't see how distributed training will take main stage in uh in in a couple of years and that when that happens bet you you want GPUs in a farmland >> maybe we'll we'll circle back to the farmland because I think that does peique some interest and I want to get into you know kind of the your theory around labor and dilutive digital goods

and and that sort of thing. But you mentioned Bit Tensor and the decentralized AI training. I I want to dig into this because you're right, Covenant just announced yesterday. You know, they not only did they, you know, have this 72 billion parameter model, they also announced that they're leaving Bit Tensor for a variety of reasons. And so, you know, because Akos and Bit Tensor both fall into this decentralized AI stack, I'm curious if you could first untangle these two, just kind of maybe compare contrast AOS and Bit Tensor and then, you know, tell us your reaction to Covenant and you know them leaving Bit Tensor.

>> You know, when you say decentralized AI, it's a broad sector, right? And there are different several layers for decentralized AI, right? So let's start with um you know we can go as far down as we want in terms of abstraction let's start even with start with energy right okay ultimately you know AI needs compute physical resources uh compute needs energy right uh energy means you know well energy needs other things like transformers and turbons and whatnot so um if you start with the top right so the way you access AI there are two main aspects to AI There is training and there's inference. Training is how you build a model. That means you take raw

data from the internet and you train a model and you make it usable. Uh and there are several steps with pre-training, post- training, all that stuff. But ultimately training is training the model to answer your questions. And inference is when you use the model. So when we use when we say we're using a lot of tokens from cloud or whatnot, that's basically inference. You're not training much, right? Um and so that there is that layer that uh you know there obvious reasons why you want inference to be you know decentralized because well control I mean look at today um you know I mean cloud I mean last week or week a few weeks ago cla anthropic cloud happens to

be the best state-of-the-art model for a lot of reasons. I mean they they they're phenomenal at coding and they're amazing when you use it with open claws of the world right but they announced yesterday or last week that they're going to ban open claw uh usage I mean openclaw has been the most successful open source project in the history of humanity in the history and the reason of why it's successful is because people love it so when you have the most powerful model in the world basically come out and say they're going to ban for reasons set aside and they have their own reasons what not but they're going to ban the most loved the most loved project in the history. What does that tell you about

where the incentives are, right? So that's just one example as to why you need unlimited untethered access to intelligence. Intelligence should be a commodity that is free like water and air we breathe. um being controlled by a company or group of individuals that serve their own in their best interest is not aligned with the interests of the world and that's very simple very straightforward on top of that um you know transparency and and and we have no idea the biases that uh that the anthropic has developed right sure it's really good coding model but what about if you're going to say the intelligence u you know from these

models are going to directly impact the way I think make decisions uh I want to make sure that that decision tree is not corrupted right with with biases that may not align with my values. So there are a lot of reasons why you want to uh in why you want to decentralize the the training uh and the and the u and the inference side of things right and that there's privacy there's a lot a lot of reasons why you want that so there is that layer and second is for both inference as well as um training you need compute right so if the access to the compute is not as easy uh as it should be then you're going to create uh

incentives in the in the middle layer like that that control the supply of of of compute right so Amazon so the world we saw very in 2023 2024 era when chach basically came uh and became super popular mainstream that created a lot of interest in AI a lot of developers started using um using AI and now obviously cloud was the first place you go to get GPUs or compute That's what we did in the last 20 years. For the first time, we saw cloud no longer in works in your best interest, but rather gives compute to people they think are going to be successful. So you know one might say Amazon again know this is speculation but

Amazon overwhelmingly supporting anthropic uh might have you know resulted in their success right so who's to say cloud companies are not picking winners and losers right so and during that time no startup I mean they literally paid you know, literally give compute to people that they thought are going to be successful and there's some investment that happened or kinds of, you know, deals that happen and guess who are left out the developers that are actually, you know, wanting to get these chips. So, we cannot have an uneven playing field if you have to have a fair competitive world especially for something like

cloud which touches every aspect of our life. I mean this particular stream is you know contra right >> y >> and yeah and uh you know we have fair pricing and transparent pricing for electricity and water and all the commodities that we we use and depend on why not have the same mechanism for the cloud and we don't want a state actor to enforce that but rather a free market to enforce it that's the thesis of decentralized compute right uh so there's that layer of decentralization of get puring pure getting pure access to to compute. And third layer of decentralization, I would call it, is energy, right? Um energy is a very interesting uh uh area. It's a lot harder to decentralize energy than than

the previous two layers. Why? Because well, we can't just produce energy in one place and transmit the energy. We can't even the way you transmit is through the copper wire, right? the grid and our copper wire grid is extremely fragile because there's a limit as to how much energy can be transmitted on a physical limit right by the same size of the wire transformers the heat and whatnot. So you can't produce energy and transmit it elsewhere even though you have solar at home whatnot. But if you put a GPU on top of it, now you abstracted energy. You abstracted the energy in a GPU that you can pass around the computer can pass around, right? So,

but the ability to produce energy and and and abstract that energy into a compute where you're doing useful work for in AI workload um can be considered as a way to decentralize energy and same thing we saw with Bitcoin, right? So Bitcoin um you know another way one way to look at Bitcoin is a global load balancer right people energy load balancer right because when you have areas where you have excess energy you know most renewables do produce uneven spikes of energy when you have excess energy you can use that energy to mine bitcoin and when you want energy you can use that bitcoin that you bought to get more energy so it becomes like a global load balancer same concept extending to AI when you have excess energy you you

you you trade using AI assuming there's some way to transmit that that those tokens and then when you want uh the energy you can like use those tokens to get back so um so there's that level of decentralization right so Akash comes in the middle layer akash comes in decentralizing compute um by relying on excess compute around the world and there are several protocols now which I'm very excited about daylight energy is is a good company there a lot of energy decentralization plays um that will perhaps use something like Akash on top of them to create a more distributable grid in a undistributable uh physical layer right

>> um so now bit tensor the big difference between bit tensor and akos is bit tensor is creating incentive network for different aspects of of AI so be it you know you want specialized models for doing you know science rese research, you want inference, you want compute, you want storage, you want so many layers that will contribute to a training or inference run. Now, bit tensor is trying to create a a a network of these um um these subnets they call them right that do specialized things.

Now, um can these subnets exist without built tensor? Absolutely. they can exist outside on any other decentralized network. um bit tensor in particularly not focused on the I would say the decentralization of the subnets in the sense like if you have a inference provider on on bit tensor it's not necessarily decentralized it still is a it's an entity that's connected to the network it's an incentive layer now is there any advantage um for Akash or someone that's established and any other you know distributed deepen network or any other established Helium or render or any of these networks to uh beyond in uh bit tensor? I I I don't think so

because we looked at it pretty serious. I mean I'm a tow holder again. I like I love the community and all the good stuff. Um but the question when I ask is there is there what's the advantage? Is there an interoperable advantage? Is there a uh orchestration advantage? Is there a uh some form of advantage that is ideal for established systems, not systems that starting out? Um it didn't seem to me, but is there an advantage if some if I'm someone new uh for me to start get incentives, get, you know, token emissions, whatnot, that actually incentivizes my my initiative. I think it's a phenomenal advantage. So, if you're I think if you're starting a a new AI project, I would definitely choose Bit Tensor as a great platform.

and um and uh and hope the the network will evolve to a point where it can keep the keep the subnets after reaching a certain level of success and we saw that with covenant right obviously there's a misalignment incentives once you reach success uh and that's a question I think um um doesn't seem to have a straight answer at this point but given their track record given um the the team values given uh you um a lot of the technical capabilities uh uh will they figure it out? I think they will. Um and that's where I stand with Bit Tensor.

It's a big difference. Akash is more specialized. Akash is direct. You you get compute, you get storage, you get IP addresses, you get a lot more things that you normally can't get um you know in a single place. Uh you layer right now. Um will we have subnets? Yes, there is you know in our in our road map we talked about managed services. uh since like 5 years ago >> and we'll we're continuing going down the path. But we think in order for us to have subnets uh like services on a you need to have a solid orchestration and coordination orchestration and interoperability layer meaning if I were to use say a vector database or if I were to use a SQL database, if I were to

use a caching layer, if I were to use a load balancing layer to build out my software stack, right? I should be able to have a single orchestration language. In Akash we have something called SDL or ST stack definition language where I can define the services pay for the services scale them monitor them whole I mean control access and whatnot in a unified um uh manner um so that you know it's it's easy for the developers it's easy to maintain it's easy for a lot lot of lot of people and there's clear advantage because and for the user side you don't want to be paying in different tokens and you want to come and pay in one single token ideally have some sense of stability in terms of uh value transfer um and use services like you would

normally use Amazon on web ser you know Amazon stack or whatnot. So that's a that's a big difference as to where Bit Tensor and Akash uh differ makes complete sense. Thank you for not only you know illustrating kind of the the differences between the two protocols but also just illustrating the entire stack um because it is quite broad uh like like you talked about um and also why Covenants might be leaving the Bitensor ecosystem now that they've hit some scale and the ecosystem over there seems like it's built primarily for some of these earlier projects so that they can help find uh some some initial uh fit into the market. Um, Greg, uh, I think we've got time for

maybe one more question. I know we're running up on time, but I I I wanted to ask you about, um, Mark Andre, who recently just he went on a podcast, I think it was today or yesterday, just recently, he said AI is the killer application of crypto. Now, given that you've just illuminated this very broad stack of AI, what do you think is it that he's talking about? Do you is it the payments element of it? You know, this machine to-achine payment economy that we've been hearing about is it the compute, is it the inference decentralization?

What is it in the AI stack that is most fit for crypto disruption? >> That's a great great question. I mean, he's he's right on the money and this is something I've been talking about or thinking about quite a lot. When I think it comes down to identity and and sovereignty and and and custody, right? Like when an agent wants to in a cache example itself wants to go deploy something he wants to build build a stack right um will it go to Amazon web services and sign up for an account and wait for approval wait for you know money credit cards there's a whole lot of bootstrapping aspects you need to have I'm not saying it's not not possible but this is extremely challenging versus go generate a key

locally use that key and you know figure out how to uh boot there's so many ways to bootstrap um in in crypto. Use that key, use that key and there's no limit as to how many keys you can create and how you can propagate and how you can deploy. No one's going to stop you from doing that, right? So what's most likely to be used of course getting a key and you know getting a wallet that's frictionless for for human beings but but not for an agent. So I think that coming from that aspect and there's so many opportunities to make money in crypto, right? Like you know there's so many opportunities, arbitrageing opportunities. So, I think what Mark I mean I haven't seen the podcast, but if I were to guess what he's thinking, I think uh you know because crypto is hard for humans to use

um and not AI agents to do and it's perfect for custody and identity that agents don't have in the real life. Um I mean getting a Amazon account for a human being is hard enough, right? Like you can imagine how hard it is for cryptos uh for for for AI sorry. So uh it makes total sense like you know uh and payments obviously is a is is a big thing and there a lot of standards now it's hard to say it's hard to pick who's a winner. Um you know one big question nobody able to cannot answer is like okay what happens during a fraud scenario right like for example like if agent goes and does something dumb uh with a credit card and credit cards have mandate to mandate to what do you call

uh uh charge back we get lot of being having credit cards on top of crypto products you get lot of fraud right how does how does one deal with fraud um with with agents with cryp with crypto there's no I guess there's no roll backs once it's done it's done. a lot of questions that are still now will people figure out probably people are smart I mean you know maybe they will figure out like you know how to do fraud management but there are no clear answers now that in the traditional finance world but the clear answers in the crypto world uh so I think from that angle uh AI agents using crypto is very obvious uh and we're already kind of seeing with Akash

too there are a lot of agents now using Akash um like for deploying and whatnot um you know and we are kind of optimizing agents to use Akash more because we see a untethered access I mean we see incredible growth for for agents but also like we can see a world where if you're an agent you get discounts too right so and we're working with our protocols to like proof of humanity um uh you can clearly see a world where agents will be given higher priority uh because they may generate like bigger much much higher revenues um and humans lower priority. I mean there's a lot of really interesting things that that I I'm I'm seeing potentially happening. I

mean it's still early to say what path but it's crazy right now. >> Your insights on the entire AI stack and I'd love to have you back on after some more of these partnerships with labs become more public and continue to develop. Uh so hope to have you on again soon. Of course. Thank you so much. Appreciate it. >> Dear, Greg, thanks. >> Bye. >> All right, guys. There we go. That's about it. Uh, I think Andy's gone. We're going to close today's show. Uh, that's a wrap. Franklin Templeton. Um, Greg from Akos, great guy. You can tell this guy just likes to go on rants and he's

really, really good at it. Um, it was a pleasure to uh, you know, basically hear how these decentralized AI companies, these crypto AI companies are starting to work with some of the larger labs still under NDA, but I have a feeling a lot more of that is going to be coming out soon. you saw Nvidia and Jensen is uh already aware and thinking about you know okay we've got uh we've got this thing called tow this decentralized inference decentralized compute uh area to the AI stack and so they're certainly thinking about it and then you've got obviously Mark Andre uh which we covered today talking about how AI is the killer use case killer application of crypto so this is again this is part of the

convergence you know we've been talking about the convergence as the collision of the two worlds, the onchain and the off-chain economy ultimately just becoming finance. There's a third meteor that's coming in just going to strike this convergence. It's a three-way convergence with AI as well and AI converging with crypto. So, you've got onchain economy, off-chain economy, and AI all just slamming together. Um, that's when we reach the singularity. I don't know. It's the convergence. It's happening right here on the rollup.

Guys, thank you so much for watching and it's a Friday. So, have a good weekend and we will see you same time on Monday. See you guys then. Peace.