NEAR’s Plan to Make All of Crypto Feel Like One App

Transcript

Bankless Nation, Kendall Cole is a co-founder of Proximity Labs. That is a research and development firm focused [music] on the NEAR ecosystem. Kendall, welcome to Bankless. >> Yeah, thank you for having me, David. Excited to be here. >> Kendall, we've got a lot to talk about. I want to start with this one. Um how many stablecoins will there be? So, I think this I'm reminded of the same kind of conversations how many layer twos will will there be on Ethereum? And once upon a time I was like saying, "There will be thousands of layer twos." And you know, there there are quite a lot of layer twos on Ethereum, but a few of them are very large. You know, typical Pareto distribution.

How do you think about in the future how many stablecoins will there be broadly? >> So, yeah, I'm I guess similar to believers in L2 proliferation. I I I do think that will become true for stablecoins, certainly in the in the immediate term, if not in the long term. Um I think that we we probably won't see many more brands, branded stablecoins like a USDC or USDT, they get really big. Um I think I mean, we might see some like OUSD is kind of an interesting initiative, you know, from from the Bridge crew. Um but I I I don't think that's going to make sense for users. I think what's going to actually happen is that a lot of different players are going to issue their own stablecoins, but they're not really going to promote them as an independent brand. They're going to show

them as USD or maybe as you know, some kind of indication they're a stablecoin, but they're they're not going to like they're not going to care that the user knows the full name and the ticker of that particular stablecoin. It's just going to be used as like a piece of almost like a database entry >> An accounting tool. >> Yeah, exactly. >> It's an asset in a ledger. >> It's an asset in a ledger, yeah. So, um but I do think that a lot of different institutions for a variety of reasons are going to issue their own stablecoin. >> Mhm, okay. The there's a stablecoin conversation. So, maybe a few stablecoins are kind of like the Bitcoin and the ETH. They're going for the money, they're going for the liquidity, the network effects, the brand, you know, the trust.

Uh and we kind of know who those are. Uh and I think as you kind of alluded to, OUSD from Open Standard is like this new entrance trying to penetrate that market. But anything downstream from that is like kind of turning into just like tokenized deposits. Like your tokenized deposit is not going to be money, but it is a useful tool back-end efficiency upgrade for from Wall Street. But what about the chains? Because there's Tempo, there's Arc, there's Stable, there there's Plasma. Similar answer? Or how do you think about this kind of thing? >> So, I would say less, way less on the chains. Like I'm not super I mean, obviously like certain chains they have a really unique unique distribution situation. So like Tempo is is

definitely the best example. Um I mean, obviously Circle, they have a lot of um they have a lot of influence and so I think they can probably get a lot of different groups to be using their chain. I think the hardest part is going to be like chain the best positioning for chains I think is credible neutrality. Um and most of these newer initiatives are like kind of very specific to either an issuer or like some type of player in the broader ecosystem. And I think that that aspect of their sort of background and story and and ultimately value accrual mechanism is going to like hinder you their ability to be that kind of credibly neutral layer and actually like work with all of these different players. Um so, you know, some of them will do well. Um you know, yeah, I think

Tempo, Arc, like a few of those are going to do well. Um you know, I think like Plasma is kind of taking more of the approach that actually like Near is sort of taking where like they built a blockchain that's really like designed to serve like a different product, uh like a very specific product in in Plasma one. So maybe they have they have a shot there as well. Um but yeah, I think like generally just having like you know, this this if you're backed by an issuer you have like way too much of an entrance interest. While that helps you get in that initial distribution, I think ultimately it's going to be difficult for you to be that credibly neutral layer and work with a lot of different parties. So like I don't actually think we'll see that many of those do as well and I think, you

know, really people are going to use the usual suspects if they're in Solana, some of the major L2s instead. >> Kendall, the reason why I asked all this is because you operate in the world of fragmentation or maybe defragmentation is maybe like the better the better word. Talk about what you do at Proximity Labs and in and around the Near ecosystem. Why is fragmentation your deal? >> Yeah, great question. Yeah, so we're we're basically a core contributor to the broader Near ecosystem and like most of the these similar groups Near and Tens has been a guiding light for for quite some time.

And the original thesis for that Near and Tens actually kind of came out of was this idea of chain abstraction. And that was something we learned just by running Near was like, you know, Near was made a lot stronger when we were well connected to all of these other chains and ecosystems. But getting the user experience right on that was quite difficult and there was a lot of infrastructure that was missing. And then on top of that infrastructure there were a lot of like product experiences that were missing. And so like it was that sort of belief set of beliefs that is what led to us to to ultimately build Near and Tens and get to where we are now, which is connecting I think 35 different chains and there's there's new ones every week at this point and delivering what we believe is actually

like the simplest experience for users who want to forget about which chain they're on and want think more in terms of assets. Cuz like ultimately I think what's important, right? Like chains are chains obviously are important, but really it's the assets that users most users care about. Um so yeah, the goal is the goal is basically just to initially the goal was to make it so you forgot which chain you were on, but increasingly the goal is to make it forget that you're on chains at all. And they're just these like really simple experiences that feel more like, you know Robinhood or you know, a high quality type of almost a brokerage experience than um you know, a typical blockchain or like crypto experience.

>> Now, are you guys pointed at just like retail end users who want to be trading tokens, or who is like kind of the main customer product or entity that you guys are building for? >> Yeah, good question. I mean, so there's there's two there's two splits there. So, Near Intents initially started more as like purely B2B, and so the main customers are like were and still are wallets, uh there's like, you know, Trust Wallet, Ledger, uh inter- like aggregators like Li.Fi, um and you know, these type of more like it was more of an a pure infrastructure.

There was no like really front-end sort of component to Near Intents. Um as of earlier this year, there was the launch of near.com, which is more of like a a true end user product. Uh and so, I mean, ultimately those have very different users, right? Like near.com is ultimately just trying to be like the simplest possible experience for any user globally who wants and right now exposure to cryptocurrencies, but increasingly real assets and stablecoins as well, and and even, you know, with integrations with products like Hyperliquid and there's a few others uh coming down the pipe there. Um but, you know, I mean, a lot of the most of the volume for Near Intents still comes from all of these uh excellent partners that are more like, you know, B2B2C. Uh and and and there's yeah, there's there's some evolution there happening like some more, you

know, kind of traditional players that are uh starting to look at Near Intents as a way just to make it very simple for either themselves or for their their end customers to you know, get access to all of these different assets. >> My my exposure to Near Intents came um in this one-two punch where I was using Infinix more and more, and Infinix is integrated into Near Intents, which is it's basically how Infinix does its magic secret sauce, where like, hey, I don't need my Ledger anymore. Not that, you know, Ledger's a great product, but I just want to click on my password manager with all my other passwords, and Infinix solves that problem. And then and hosts all of the assets through Near Intents that I would ever wanted to. And so I was like, "Oh, look at this like UX upgrade in my

wallet experience that I'm getting from Infinex and it's hooked into near intense, which is where the magic come from." So that was great. And then I saw on the other side of things Venice hooked into near AI. I was like, "Oh, wait. Venice is like getting adopted and it's got this product that's offering to the world. And how is that product being built? Oh, it's being built with near in the background." Like you There's another point for near. I saw all these like different like ways that near was getting integrated. Uh and then uh I was the my last part of the story is that I was like just cleaning up dust from old wallets, you know, like accumulated 30 wallets over the years. I was just like, "All right, let's let's clear it out."

You know, I have tokens on like Monad, I have tokens on uh you know, the Ethereum layer one. I got tokens like Where is like one single place I can send it all? And that was the first time I opened up near.com and I was like, "Oh, let me just send it to the place that can like connect with everything." And so as I'm clearing out all my dust, like I don't have like the destination of where do I send everything ended up just being just like the near.com wallet because it integrates with every single blockchain. And I'm like, "Oh, the And also near never exposed me to any blockchain ever. It just showed me as you were saying assets only." Uh and so there's this like this is like near just kept on poking up in my world like a little bit more and more and more. Uh and so like

to talk about just like how that experience is like where you guys are at with that experience and where you guys are trying to go with it. Both with near intense and uh if you want near AI in the back end, but also near.com the front end like retail user experience as I was using it for. >> Yeah. Yeah, absolutely. Um well, I'm glad you had that experience. Uh Infinex was a was and is has been an amazing partner in this in this journey. They kind of saw the vision as we were laying it out. Kane was Kane was really great about that. Um yeah, so I mean when it started it was basically like, "Okay, we just need to integrate all the chains people want." Uh and that was an enormous amount of work. I mean that I my team did not deal with that. That was

a massive credit to the near and sense core team and the bridge team from near one that have and still are kind of putting together all of these different, you know, as robust as possible integrations to all these different chains. Just like an enormous amount of engineering effort that that goes into that. And so like that was I mean it was as simple as that. It was basically like, okay, we basically just need to support these chains step one and make it so you can actually like interact with these assets in a non-custodial and safe way. Then step two was like, okay, now we need to go out and like recruit a bunch and work with a bunch of solvers and market makers to actually be able to like quote with these different assets.

And you know, basically that's like years, right? Like it's you know, we're kind of coming out of that that like very long period of just like basically bootstrapping all of the chain integrations and all of the you know, like the liquidity. And then as a piece of that was like getting integrated into Infinex and into these different players that actually would have and users are coming and like bringing order flow so that like this you know, this entire system works. So yeah, that's that's really what it's been about up until now and that was kind of like the growth potential for your incentive is really as simple as like we just need to integrate these chains and then the assets on these chains.

So most of the chains that I think people want to trade on are more or less integrated. There's still others that are coming down the pipe. I mean there's still a road map to be you know, to kind of be completed there. But increasingly the focus is a lot more on like well just making sure that we have you know, the best liquidity possible so that like users are getting the the best possible quotes and that's an ongoing game. Like that's basically an infinite game. I don't think that'll ever end. There's there's always competition there which is is great and I think you know, ultimately makes the end product better for for everyone. And then assets and you know, being able to support all these different assets. And and that obviously is going through an insane kind of explosion.

You know, I think before it was basically just list like coming up with new you know, cryptocurrencies for people to trade new tokens which like, yeah, you know, sometimes works, sometimes doesn't. But you know, now with like the kind of like RWA explosion and like all the serious players actually getting involved there, the SEC coming up with like real ways to issue token like tokenize assets on chain that are, you know, high quality regulated products. And then, you know, things like Polymarket that are in you know, Calico that have created like entirely new asset classes that are extremely popular now. That's actually given us like a whole new road map, right? Is like making sure that all those things are available to users on Near in 10s in a way that's as seamless as possible. So, basically we went from like chain integrations being like the

main thing, then to you know, just like integrators being the main thing to now just making sure that we actually have all of the assets that users like want access to globally, right? Like creating true global financial markets, right? Like I think I mean, this is the story for Near in 10s is very similar to the story for, you know, blockchains in in general which is like the the real magic is that we create this kind of stateless financial system where anyone globally can have very easy, you know, kind of ideally frictionless access to all the different financial assets and products that they might want. And so, you know, we've done a lot of work on the kind of crypto piece of it and then increasingly we're doing work still on the crypto piece of it, but also like expanding into you know, all types of

other assets as those as those come online, right? Like I think we're still very much in the early innings of, you know, all of like the regulation coming into play and all of these different, you know, great groups like putting together the products and bringing them on chain and then we want to make sure that like Near in 10s is able to support all those assets early and often and then expose those to users through near.com, through all the partners like Infinex, through you know, whoever whoever account might be there. >> So, there was like this original a Cambrian explosion with meme coins where there you know, there was already thousands of assets in crypto, but then meme coins came and it really just like, you know, order of magnitude increase the number of assets out there.

But they're all still like inert and fleeting, but like nonetheless the the number of assets went up to like a bajillion, but no one really cared about them other than the meme coin traders, and so they didn't really proliferate. No one really needed to integrate with these things. The next you you alluded it to it. The next like explosion of assets that I'm seeing on chain is just like all the real real world asset stuff. All the tokenized stocks like Robinhood chain for example launched on the 1st, and you can you I'm just looking at the the real world asset.xyz page for Robinhood, and there's uh 30 assets. Uh you know, Nvidia Robinhood token, Tesla Robinhood tokenized stock, Micron AMD, and these all have somewhere between 400 and a million dollars of liquidity in day one.

Still needs to be a lot more, but like if I was interested in integrating tokenized stocks, and I'm a chain, well then I need someone to get me that token on my chain. And I'm assuming that's where Near Intents can come in and kind of fill that gap of like whether whether I'm even a wallet or a blockchain or even a a layer one app on some some layer one, be it like Aave or something on Solana, and I see Robinhood issuing tokenized stocks on one single chain, then I'm like, "Well, how do I get those assets into like my app?" And so I'm sure that this explosion this like Cambrian explosion of of real world

tokenized assets is actually far more of an opportunity for Near than like meme coins or any other asset revolution before them. Is is that correct? Like and talk to me about this experience that you've been having. >> Yeah, absolutely. And I think that that what you kind of stated is exactly right. Like a great opportunity is when like a new chain launches that has like unique super high quality assets, and so then there's this question for basically everyone is like, "How do we make it as seamless as possible to move from like wherever we currently are, wherever our assets currently are into this new chain, and like into those new assets?"

And like yeah, I mean so that's that's exactly right. I mean I think we're we're very excited about what Robinhood's been doing there. Uh you know, only a matter of time before before that support will be uh near intense because clearly there's going to be demand, right? Um so yeah, that's exactly right. Like it I mean there's there's some like if you look at uh like the the rebalancing of asset movements across chains, like it I mean it's it's constantly changing, right? Uh and I think that change is really sort of what we see as the opportunity. Like there's just like a a lot of these different ecosystems have like really been able to entrance themselves in like and get some like really sticky demand. I mean I think you know Solana obviously has done a fantastic job. Ethereum is still, you know, ultimately the king. Even Tron,

you know, like has like a very unique kind of like role that they sort of play. Um and so like it the more that that exists and that that is true and we don't see that changing. I I I think we might not see the insane fragmentation that we had of like a billion L2s, right? Which was like an almost like I mean like an impossible to solve problem. It's just like too much. Um but I think we are going to see, you know, at least a dozen or more of these different ecosystems that are like really I mean Hyperliquid another great example, right? That are just going to be like really entrenched and thriving. And so the interaction between them and like making sure you have this like nice abstraction between them is going to be really important, right? Like ultimately, users they want it they want

to be able to trade on Hyperliquid. They want to be able to like, you know, like bet on on Polymarket. They want to be able to buy Tesla on Robinhood chain. They like want to be able to, you know, uh use Ave on Ethereum. Uh and then they want to be able to like you to transfer like pay their friends in stablecoins on Solana, right? And it's like so if you want to do all these different things, you need an experience that makes that as just just feel like one application, right? And so new.com the goal is for is that to be one of those applications, but we also want to power as many of these possible. Like Infinex I think has done an amazing job there as well. Like we want to we we want to make all of these different experiences possible so that

you know, users are finally just like really excited to use these products that ultimately are just non-custodial and backed by uh you know, all of these on-chain products, which is the vision we're all we've all been trying to kind of push for for a long time now. >> There there's been a a handful of like companies that are going after like the super app idea or the financial super app. Like what it Coinbase wants you to be able to It's like it's basically the thing. It's like Coinbase wants to build a super app. Yeah, yeah, Robinhood, uh you know, any neo bank cuz I I think everyone kind of has the tools to be like the super app. I was thinking about this this is a while ago and I was like, you know what the original super app was?

Layer ones. Like layer ones were supposed to be and and are the place where like any asset gets tokenized. Well, it's you know, it's tokenized on Ethereum. Like any financial application is built on Ethereum. Now, that's kind of like spread out and that now it's been like fragmented. Ethereum is not really the epicenter that it was once, but but nonetheless it has all of these different apps and and and things in the thesis that I, you know, once had for Ethereum is that kind of like in the same way that Bitcoiners had the same thesis where if it's useful, it will eventually become built on Ethereum. Or excuse me, on Bitcoin. And then, you know, if for Ethereum the same way. Like if that's useful, like if it's good, it'll be tokenized on Ethereum, which is still

true. And then it's also getting to like, you know, and then there's also perps on Hyperliquid and there's like meme coins on Solana. And so I think like the the the real manifestation of like this super the open-source super app thesis is potentially being expressed in near.com, whereas like because of intents, if there is anything that is of use and of interest to anyone because of near intents, you can surface it on near.com. >> Yeah, that's exactly right. Um and I mean, I'll leave this to to that team to you know, kind of kind of reveal as they're as they're putting it together.

But so I think what one thing that's not very well known about near intents, like people think of it as as swaps and that's obviously a huge, I you know, the most important part of it for now, but really near intense is like true chain abstraction infrastructure. It's like you can have what is a near account that's actually custodying assets on any chain and can also then interact with any protocol on any chain. So like hyper liquid I think is one of the early examples where they showed that experience where like you can the swap can always become a background piece of it where it's just like if you happen to have assets on different chains, sometimes even the same asset on different chains, right? Like you could have USDC on polygon, but you need to have it you need to get it to hyper

liquid so that you can you know take a perp position. Um that like that that's going to just become a background piece and really it's the the most important piece of of technology that was built there is account that can just actually sign any transaction on any chain. And then the end dots like use anything that exists on any chain. So it's this really nice primitive that allows near.com to go and actually integrate with all of these different products that are exist on all these different places while keeping the UX very very seamless. And then like the other really key piece they built there is they have really powerful kind of like gas abstraction where they're I mean basically it doesn't feel like you as a user on near.com ever are touching gas fees. The only time you really

experience that is when you're depositing from like near.com from wherever you are. You'll have to you know very explicitly on your side pay that gas fee on whatever chain. But once you're on near.com like it's all completely abstracted away. So yeah, that that like core piece is where like basically any chain that pops into existence as long as you know near chain signature supports the signature scheme I mean it there's really only two that anybody uses at this point and EDDSA and ECDSA. It's not a problem. And then you know obviously if there's another one that arose with post quantum or whatever then that that team will of course add support as needed. And so that means that yeah, there's this really great primitive basically to have that like that kind of non-custodial everything

app that like preserves the like the really important properties while also just having a pretty simple time to basically adopt and integrate all these different apps regardless of where they are that people might want to use. So, that's kind of why it's like, yeah, NEAR is still a layer one that's really key for building all this stuff on top of, but we no longer have to worry about like getting convincing all of these different like great app developers to actually come and build directly on NEAR. They can build on whatever chain is convenient for them. Um and then, you know, users users who have some exposure to an integration of NEAR and Tenso or use NEAR.com directly will be able to utilize those those products very seamlessly.

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an investor both at Bankless Ventures and also just in my own personal portfolio, too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So, if you're interested in getting extra content all while skipping the ads, or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for Bankless Premium. And there is a link in the show notes to get started. Cheers to a good 2026. >> I want to talk about recent current events and how this kind of like near model for the world applies here. Um, so what's going on with MiCA right now and how it's just impacting the flows of like crypto companies and crypto users

in in Europe. >> Yeah, yeah, it was a big week last week. That was I guess the the final sort of deadline for I guess I mean anybody who falls under sort of like the Mika you know Mika regime. Definitely the biggest news there was you know some of the exchanges and the moves that they had to make. So like the finance you know they they were not able to to secure their license before that timeline. I do expect they will get it eventually but you know who knows. And so yeah, I guess like if you're you know an an EU user you you currently do not have access to to finance which is pretty massive given that they are the number one exchange or at least were the number one exchange in the EU.

And then I think the second biggest news that I saw there was like so by bit which does have an EU and Mika Mika registered entity but that entity they had to move users over to it which creates some friction and then they also they don't have perpetual swaps which is you know obviously a a very popular product that they offer. And so like the two of those together like actually left kind of I think like a pretty massive you know massive gap where like you had all these people that all of a sudden needed to either move to a Mika registered exchange or needed to start looking on chain at some of the different products.

So that I think that's like that was like a massive sort of you know tailwind for the on chain space is all of a sudden there's like you know people who didn't want to move before because like they you know it's additional friction and like why would they all of a sudden were looking for a home and so like it's an opportunity basically for them to you know consider like oh maybe on chain is actually become you know just a competitive product in a lot of ways and and this is an opportunity to do that. So I think that was the biggest news. We're also obviously we're excited to I think similar to you know genius in the US like the fact that you know Mika is now kind of in full force and there was a quite a number of sort of you know actually regulated and

compliant euro stablecoin issuers. You know I think we're we're starting to see the similar adoption we're seeing you know from US fintechs and banks where like they're actually comfortable exposing those products directly to their users Uh now they're like okay this is We understand what this is. We know what a Euro stablecoin that's that's, you know, actually regulated means and like the protections that it has for our users and like we feel comfortable actually giving that experience." And and I mean, ultimately, I think that is the, you know, like this is what's going to make on-ramps like as frictionless as possible. You'll just be able to get access to uh you know, these these whether it's a Euro stablecoin, a US dollar stablecoin, or whatever currency, uh you're going to be able to get access to that directly from your bank or your fintech app. And

so, getting on-chain will be just as simple as like moving money to any anywhere else you would move money from from your bank, which is uh I think it'll be a pretty magical time. >> I was doing uh some of the numbers before recording. Only 210 crypto firms operating in Europe received their authorization by the July 1st deadline. That's out of like 3,000. Uh so, so like 7% got it in time. 7% clearance rate, you know, nice job. Victory to Europe for all their compliance. Yeah. >> Yeah.

And [laughter] so, like >> Yeah, yeah, as you as you said, it leaves a big hole in the market, especially when it's Bi- Binance and Bybit. Um but how does does near.com, I know you you're not on the near.com team, but does near.com need to be compliant or is that kind of the whole deal where it's like uh maybe somebody owns the front end, but the NEAR blockchain just accepts user inputs. How does NEAR as a project fill that gap left behind in the EU from Binance and Bybit? >> Yeah, I mean, I'll I'll let the near.com team speak to to their specific stance there. Um but as far as NEAR intends and it broadly and uh you know, at least like how we interact with it, like it the the goal is is for, you know, for NEAR intends to be uh to be

non-custodial. Like NEAR intends, the core protocol, is in fact non-custodial. And so, because of the that, um you know, that a lot of like MiCA does not or MiCA does not specifically, you know, apply to um you know, to at least to NEAR intends itself. Now, so for integrators, they have to kind of, you know, do their own sort of uh you know, legal analysis on like I and a lot of that will come down to like how the keys are managed and the how the users and you know, the different the different aspects there. But I think what what is powerful is that near intense can be used at least in these Nokas audio products that you know, are able to just more more seamlessly onboard users. And so to give an example, you know, of something that you know, that happened last week on

near intense is one of these regulated euro stable coins issued by Monerium called EUR E was was launched on near intense and and also on near.com and part of the reason that you know, that that was like kind of an an early-ish initiative in in getting a a euro stable coin listed on near intense integrated into near intense is that it Monerium has done a really great job of making it frictionless for European bank account holders to use SEPA instant to transfer funds to in this case they transferred to Monerium as the issuer and then Monerium gives them one-to-one no fees EUR E as basically in return for that for that euro and they do that for both on and

off ramps. And so if you use one of the you know, Monerium you can use the Monerium app directly or you can use like Gnosis I think is a really great option. Gnosis has done a very good job of creating an app that's like I mean incredibly seamless no gas fees all of that. You do have to KYC but once you do that KYC with them you can straight up bank transfer euros into Gnosis you'll get EUR E on the Gnosis chain and then we support near intense supports EUR E so you can deposit that into your near.com and then you can trade for any asset that's supported on near.com. So it's actually I mean depending on you know, depending on the day and like the solvers solvers doing some really tight quotes with USDC and so that actually unlocks like using USDC as the underlying pair that unlocks a

really competitive pricing for euros to Bitcoin to Zcash to height to all these different assets that are on near.com and that's kind of just the beginning like I think it's cool that you have that experience. There is still generally going to be that KYC blocker and I think the next phase is that there's a a lot of European banks that are already looking into and at various stages of integration of um doing an even deeper uh kind of integration with Euros. Um and I think the the gold standard for that experience that happened a few weeks ago is like Cash App did their integration of stable coins where like you actually do not even deal with the like the blockchains or or or gas fees or any sort of pricing at all in order to transfer uh USCC out from your dollar balance on on uh Cash App. So, if we see

that same experience moving to European banks, then it won't feel like an on-ramp anymore. It'll just be like, "Oh, yeah, it's just uh you know, to to you can transfer from your European bank account into near.com cuz all you have to do is you'll get an address on near.com. You paste that into your you know, your bank app and you just transfer 100 Euros and then bam, uh all of a sudden you're able to buy all these different assets. You're on-chain. You can participate in you know, any sort of you know, any sort of application on any sort of sort of chain, which I think is going to be really magical. >> Okay, so this is the part that I like uh I get kind of excited about because this shows how silly and dumb and ineffective regulation is. This is me speaking. This is but you you can let me go on my like

libertarian soapbox for a moment. Uh so the all the big fintechs that are no longer compliant in EU as of July 1st, like 6 days ago, the grace period for Mika is over. And so like now people are truly if you're uncompliant, you are now illegal in the eyes of the EU. And so that now like Bybit and and Binance have been said has to have bowed out from the market. One of the big reasons why Mika was established was monetary sovereignty. Like the EU was trying to protect the Euro as a as a unit and as a brand and as it's like money like didn't want to leak value of the Euro. And so Mika is supposed to protect the Euro.

And so there's like a pretty like explicit transaction cap for non-EU stablecoins for 1 million dollars of transactions daily in payment value when mean when used as a means of exchange within the EU. So, if it's over a million uh Excuse me. Um not a million dollars, a million euros daily, then you have then you have to be using a euro according to MiCA. And so, if you if you use dollars or any other like non-denominated stablecoins. And so, I would expect that would that was one of the main reasons, one of many reasons uh why so many centralized, you know, super FinTechs, you know, the Coinbases, Binances uh of the world just like saw all the the MiCA regulation be like, "It's it's so too hard. It's so

much." And as a result, some uh so, something we've seen in the stablecoin market are the thinner on-ramps. You talked about Manarium, but there are just thinner on-ramps that are just like, you know, app-specific. So, it's like, "What do we do? We get dollars on chain. What do we do? We get euros on chain. That's the whole thing that we do. We don't do anything else." And that to me like then carves out like a faster way to get on chain. And the on chain world doesn't give a [ __ ] about MiCA. The on chain world is decentralized protocols. Like, they are they are whatever about MiCA. They are indifferent to MiCA. That's the whole point about being on chain is like, if you are on chain, you are supra to you know, nation-state borders and regulations. And you kind of see the

whole same thing with like uh NEAR AI, whereas it's like there's certain regulations, but the whole idea about being a public permissionless protocol is like, you don't really give a an F about the the regulations. And so, I'm seeing like the the siloed walls of the EU go up. And then they make Manarium, you know, MiCA-compliant. And it's easy for MiCA for Manarium to be MiCA-compliant cuz it does one thing and one thing only, which is it gets uh tokenized euros on chain. And so, that's permissible. But then they go go straight onto NEAR, where you can literally do anything including swapping to dollars, which is likely going to be, you know, no offense to euro holders, but much more of the the store of value

fiat currency that you one would elect to use. And then going back to the whole like on chain L1 super app idea, like you have full access to the full, you know, might of on chain applications because because with like the very thin on ramp onto near.com and then you have a direct access to the rest of the world. All of a sudden like Mika regulations just don't matter. Like sick walls that guys but like we permeated right through them. And so it's a I think it's just it's it's a funny it's like anecdote for why regulation is kind of silly and it's nice that it's just like actually we'll have like an anecdote to like talk about.

>> Yeah, no. I mean I think you know, yeah, anything that's like looks or resembles kind of currency controls in in this day and age is not going to it good luck, you know, kind of escaping the forces of the broader market. Um you know, so I think like the least nice part about Mika is that I do think that I mean regardless of what the initial goal was, I think like having every currency that wants to be, you know, part of the like global community, I think should be tokenized at this point. And that's going to take a long time before it actually happens, but like it's it's super useful frankly that there is like a way to get European banks to you know, to utilize stable coins. So like yeah, if you're if the goal of the with that was basically to you know, prevent

people from like using USDC or USDT instead of euros, like that's probably not going to you know, have much of an effect and it may even have like some ways where it like leaks value cuz it does like actually break down the barrier of getting on chain. But if the goal is I just to make the euro more like broadly useful globally, then I think actually it you know, it does it does have some benefits, right? I mean there are going to be companies at least and probably individuals that like have to denominate their life in euros because they live in the EU and thus like they have exposure to expenses. >> You need to pay taxes in the EU. >> So you like I mean you're going to have currency risk if you're just in the dollar. And like, you know, maybe that's a risk you want to take, maybe it's not,

right? It all kind of depends. So, like, I But if you don't If you're don't have this digital version, then like, I I think that you Yeah, your users are going to be like shut out. Like, Europeans are going to be shut out a lot of these like really great global This emergent like truly frictionless global financial system. So, you know, I I I kind of agree and disagree in the sense of like, yeah, if that was If that was the core goal, like, that was kind of ridiculous. Uh but there are at least some like nice other benefits that I think do help the EU. It's kind of like what we were so excited about Genius. We're like, "Guys, this is literally going to make the dollar like continue like more important like for a longer period of time, right?" Like, any declining dollar

dominance is going to be stemmed by the fact that like people want to denominate the internet in the dollar. And this is a way that we can actually make that happen. And then yeah, I think that that's That's the argument I would make for any regulator that's like looking at like should we have, you know, should we create a pathway to our own currency stablecoin? It's like, "Yes, if you want your users to be able to participate in this global economy, then you have no choice but to do it, and you absolutely should." Probably like a Genius more than Mika as far as like a way to do that. I mean, obviously Genius is still coming online, so we'll see what it looks like when it's all done and dusted.

>> What about confidentiality? Um at least previously with the pre-Mika era, one could onboard onto Binance and Bybit, and then and then get on chain, and those two actions would be separated. Um and so, like, at least on chain, like, you're not connecting you're not connecting your bank accounts. You're still not doing that with in the this method, but just like SEXs did provide some user identity obfuscation for the on chain world. Uh how how does confidentiality work in the in the NEAR world? >> Yeah, great question. Uh yeah, today is today was a big day, actually. Um today being July 7th, uh there was the we we were able to push out uh broad support for um, to confidential intents. So, there's going to be a lot of the Near

Intents partners. It's been on near.com for a couple of months now, but now the broader set of Near Intents partners will be able to, uh, support confidential intent. So, the way that works is there's actually a shard of Near Near is a shard of blockchain, meaning not every validator has to process every single transaction, but ultimately it rolls into one set of blocks. Uh, and that's done primarily for scalability, but there's also some interesting and interesting aspect to that where we can have, uh, shards that have specific use cases. So, one of that like the first one actually that was shipped is this confidential shard. And so, that actually works there's basically a set of rather a subset of validators, uh, on Near that, um, are running basically a a parallel version of the Near blockchain.

They're running it within a trusted execution environment, which enforces a set of rules where these validators are not able to actually like view, um, much information about what users are doing. They can't view balances, they can't view transactions or like anything that could be, you know, deanonymizing. Um, the only way that that can happen is if, uh, you know, basically, uh, I think it's like I believe it's like either the a supermajority of them basically agree to deanonymize a transaction. And that was done for compliance, that was done, uh, ultimately that there's a court order, uh, you know, to deanonymize something.

And this was important for, you know, getting kind of like enterprises to actually take this product seriously. Um, so that's like one case in which it's going to be deanonymized or that the more common case is that a user can basically have a a viewing key or give a they can create viewing keys and then give them to different parties so that themselves and those other parties have the ability to, uh, you know, to reveal those transactions. And so, that's that's another piece of kind of compliance there. But like by default, um, nobody other than, you know, you yourself as the user with your own viewing key is actually going to be able to, you know, view what's happening with these transactions. And so, initially that started off where it's literally you just like transfer like all your Near Intents assets into this private shard and then like your balances

shielded and you can send you could just do a simple transfer within that shard to any other user and those those transactions will be hidden. And then the second phase is of course allowing solvers to actually come in and quote assets and then trade with users within this confidential shard so that you know even those trades are anonymous. So the result is that you can custody any asset that's supported on near intense um in the like in a confidential way and you can then trade the vast majority of these near intense assets within the confidential shard. So it's basically a very broad I'd say it's the broadest by number of assets and definitely number of chains kind of privacy product that exists in the space right now.

>> Uh I mean I'm sure the answer is both but is this mainly for just retail individual users who want individual privacy or is this more for enterprises who need some level of just like sovereignty over their information in order to be able to integrate something like this? >> Yeah it's definitely both. I think like initially it was you know like the the initial traction has been just near.com which is primarily you know a variety of different types of retail users a lot coming from like kind of like the Zcash community you know which has been a great partner to to near intense but but increasingly and and the reason that you know I mean the reason that it's designed the way that it was was to also be friendly to to enterprises cuz like interestingly enough I think they like the first wave

of people who cared about privacy in crypto is like the true cypherpunks right who like you know have have like very specific ideals that they're trying to uphold but but I think the next wave is not like broader retail it's actually is like most of the the feature requests that you know that I think like the industry is hearing is actually coming more from enterprises where like well this is sensitive business information right if I'm using the blockchain to move assets around or for my customers to pay me or to like rebalance my treasury or whatever it is like that is extremely sensitive commercial information So, and you know, I can't possibly imagine, you know, like revealing that to the whole world and to anyone who's looking in. You can have their agent analyzing that and like putting together really detailed competitive analysis on me. Um so, yeah,

like it it it very much started more as I think like, you know, designed for like frankly a niche of retail who are these kind of more cypherpunk, like, you know, very privacy um focused individuals. But like increasingly it is like the focus has very much been on you know, enterprises and making sure that it's like actually a usable product for them. >> The well the the first time I heard about it um well, not heard about it, but I just like saw it impact the market was when Zodl Zcash Zcash now Zodl integrated integrated this. And that was that was where Zcash kind of got its like first big pump was because people downloaded Zcash Zodl uh formerly Zcash now now Zodl um and and because of near intents and

confidential intents, like the app just worked better. And then like near then Zcash had its first like big price bump and then that's been part of the narrative ever since. That to me counts as an entity, not an individual who is like using and integrating near products to the betterment of their own product in pursuit of their own ideals. >> Yeah, absolutely. I mean, yeah, I think that's and that that kind of breaks down to the Yeah, so the initially that wasn't confidential intents. So, that was um >> That was a regular intents, regular intents. >> And I mean, the cool part about like yeah, so what users were doing is they'd be like, well, I have you know, USDC on Solana and I want Zcash and I want to shield it. So, they would you know, use using Zodl, they would basically near intents integrated into

it. They'd get an address in Zodl where they could deposit USDC to. Then that would be swapped into Zcash and then they could and then they could shield it. And then they could do whatever they want to after that. And so like that was you know, that that's basically how it worked up until, you know, fairly recently. And then now now there is confidential intents where like they can actually they could they could shield base shield, you know, {quote on quote} that uh USDC on Solana before even leaving Solana, and then swap to Zcash within the confidential realm. So, like, even that initial step is kind of like lost, right? You don't even see the fact that that Cuz uh in the early days with with Zotl or was actually at the time uh that swap between USDC on Solana to Zcash, that would have been public, right? And so,

now even that piece can be, you know, can be um off basically big driving >> With Zcash now Zotl, it was the hub that was obfuscated. That's once once you were already bought to Zcash, then you could shield it. So, the hub. But now now with confidential intents, it's the hub and the spokes. And really there there is that whole idea that um you know, there pri- you don't really get privacy unless everything is private. If if like a healthy chunk of society opts out of privacy and they just like don't care. They're like, "Ah, whatever. I have nothing to hide." You actually make it harder for the people who are seeking privacy to seek privacy.

Cuz like if there's there's only like, you know, 10 people in the world who are looking for privacy, well, then like those 10 people don't have privacy. You actually need a very large privacy set in the broad sense. And so, the fact that it that confidential intents is expanding privacy from just the hub of Zcash and Zcash asset to the hub and spokes. And then also just spokes independently of Zcash and just elsewhere. That to me is just like we are increasing the net privacy on the internet. Did you see Alex Karp's uh not crash out fake crash out on media recently?

>> I heard about it. I have not watched it. >> Yeah, he he basically was like getting I mean, he's always very animated, so that's what that's why the media was calling him a calling it a crash out. But to me it made perfect sense. It's just like all of um Anthropic and uh OpenAI's customers are just feeding these two AI super uh labs all of their data, all of their information, all their alpha. And then and then these companies are just taking that and turning that into products. And so they're they're uh competitive with their own user base because if their user base gives them any alpha, if their if their prompt into ChatGPT or Claude is at all useful to Anthropic or Open AI, then they're ingesting that and like using that as

their competitive edge, which is like a huge violation of like a social contract that could be solved with privacy. And I actually think that's like a really big bull case for for Venice or anyone doing any sort of of thing that's protecting user data from like coagulating into these massive super scalar AI labs. I don't have a question here, but I'm just like throwing throwing >> No, no, I mean it's a good it's a good uh segue to um to like Near AI too, which I I don't think I I mean you you've brought it up a couple times. I haven't talked about it, but yeah, I mean that this it's a similar like similar goal there on the AI side where the goal is to, you know, have infrastructure where um where AI models are run with in a privacy-preserving way that also cannot actually have any like

basically leak any sort of any of your prompted like any of the context that you're putting into the model, right? Um so, yeah, you mentioned Venice who who uses it as like one of one of the ways they can offer end-to-end privacy where like yeah, these so they're in the early users of of Near AI are basically enterprises that are like we we have to be using these models. Um We have ones that have that we've identified that we want to use, but we have really serious concerns either either because like we have compliance regulations like HIPAA or something uh or or just, you know, competitive uh you know, concerns about like giving all that information to these model developers. Or or also giving them to I mean OpenRouter is amazing, but they also like do have all these kind of like pretty unknown like hosters of the

models uh that I doubt enterprises are using too heavily, but like a lot of people just see one that's like fast and cheap and use it, but like that could be anyone who's up there and they can like collect as much information as possible, right? Um and so basically yeah, like if what you you still get the hosted like the the whole like hosted setup of like people running GPUs for you and optimizing the entire infrastructure, but then also knowing that you have some sort of like technical way that can prevent that hoster from like actually getting access to your information and your data. So like I yeah, I fully agree. I mean I think Alex Karp's concerns are are very valid. I mean it's funny, it's one of those things where like I kind of doubt that like that is even too much of a priority for OpenAI and

Anthropic at the moment, right? They're in such like hyper competition. They're just like we need better models. But like yeah, absolutely, they have this like complete treasure trove that they will first are using probably just to make the models better, but ultimately will use for like competitive products once they, you know, their margins get squeezed so much that they're like, "Well, where else is there? Where else can we, you know, can we expand?" >> I I mean wouldn't be too too sure about that because um Dylan Field from Figma uh had some proms that he said cuz he was a he was a client of uh Anthropic and then and then like they >> Right. They launched like Anthropic design the design product right afterwards. And so like I don't think they're doing it like everywhere all the time, but they are definitely identifying high-value products that

they are seeing grow success in the market and then like, "Well, we can make that independently." >> No, yeah, good point. I mean like yeah, and I we've seen like OpenAI health and like they're hiring like investment bankers. Yeah, so yeah, for sure. They're going to They're going to go for everything. They're going to try to eat everything they can. I mean as they should. >> I want to work >> work back into into your neck of the woods on the on the on the NEAR ecosystem just with like intents and everything. Um W- All the things that we've talked about, what is the the way that the NEAR ecosystem captures value the most? We we talked about there's like the growing explosion of stablecoins and assets, the assets that other chains and apps want to integrate with where there's like NEAR intents,

uh like kind of settling between all of this. How how does NEAR capture the all of the value that it's creating with with NEAR intense and all and all the just like the aggregation of everything useful in crypto? >> Yeah, absolutely. I mean, right now it's actually pretty very straightforward. It's really it's volume, right? So, NEAR NEAR intense the protocol, which is thus NEAR, takes a cut from every single swap that goes through, NEAR intense. And so, that that fee varies based on, you know, the partners that are integrating it. There's kind of like a whole, you know, type of you know, revenue agreement program that exists with these different partners.

And then, there's NEAR.com, which takes, you know, takes its own fee, right? And then, like just takes like the the fee there. And so, I think like the average is somewhere around like you know, 10 10 to 20 bips depending on 20 10 to 20 basis points depending on, you know, where it's coming from. But yeah, that that goes into right now like the NEAR House of Stake, which basically controls that pool and has been at least quite a bit and buying back NEAR. And so, it's pretty straightforward. Basically, more volume that's going through NEAR intense is going to lead to, you know, more potential buybacks of NEAR or at least more control by NEAR token holders a, you know, a growing treasury that's just been accumulated from the fees that

NEAR intense takes. So, you know, I mean, look, I think ultimately there's there's a lot of ways to kind of monetize this infrastructure that'll go beyond just swaps. But right now, the the North Star is pretty simple. It's like make sure that NEAR intense is creating enough enough value to all of these integrators who have demand for moving between assets, whether explicitly or implicitly. And and then, just and then monetize, you know, by taking a cut from that. So, I I'd say like yeah, there are really the two parts of the business. The like NEAR intense as as infrastructure and that is the still the dominant one in like in absolute you know, top priority for, you know, for everyone. Like we have a lot of really great a great and

growing number of partners that are integrating near intense and that's going to continue. And then I do think there are some unique opportunities to create just in basically do some experiments and like run, you know, kind of like popularize some some like newer products. So like the the way that the confidential intense rollout happened, I think was like a useful demonstration of that where like it landed on near.com first to get the experience right before, you know, making that more broadly available through throughout the network. And you know, that can be another opportunity, you know, for near.com kind of capture capture that revenue directly for for the near ecosystem.

>> You know, one like idea I've been working with lately is every business model in crypto is just being an exchange. Like that is actually just the business model. I remember my my Bitcoiner friend telling me this in 2021 during right after D5 summer and then 2021 where like we had just finished trading food tokens and now we're trading JPEGs and all the Bitcoiners were back in that era like kind of ruffled they had their feathers ruffled just because Ethereum was capturing so much attention. And like why was Ethereum capturing so much attention?

Oh, because it's a fantastic exchange literally any single asset that you could ever imagine would being traded on the Ethereum layer one. And like Uniswap was the darling of that era DYDX at the time and then like Ethereum couldn't scale so the layer twos were like well now you can come trade on our chain and what was the breakout app on top of Arbitrum is GMX another another perfect exchange. Now we have like hyper and lighter and like what are the big biggest centralized business models in crypto still being an exchange. What are stable coins for?

Payments which is still an exchange is a trading a good for for money or for you know being a trading pair. You have Ave and you know the borrowing lending protocols. >> But that's still an exchange that's a swap right? >> You can still argue that's that's a swap. >> [laughter] >> And so like any successful business model of crypto is doing some form of exchange, which I think actually if that if we accept that idea, which I'm not saying is correct, but I think it's still illustrative, you can point this towards near and tense. It's like, "Oh, just near is the platform for apps and chains and issuers. Manerium issuing euro gets to be exchanged with any other asset inside of any other app across the

rest of the ecosystem. So, like as far as I'm concerned, just near is another form of an exchange, but it's just got a little bit of its own kind of properties that carve out space for it inside of like the cryptoverse. How do you How do you like that that that thesis? >> No, that that's a simple very simple way to say it, right? And that's why I like volume is like what's the North Star for exchanges? Like ultimately volume, right? I mean, you know, you make trade-offs at different times to like capture users and like, you know, optimize the product, but like ultimately, you know, exchanges make money by people exchanging. And like yeah, so you volume, you take a bit of a cut of volume, and then like, you know, as long as you're making that number ultimately go up and like continue to

expand in the markets that you can kind of like ultimately create the best product and like align up buyers and sellers. Um yeah, that's what's going to make That's what's going to make it work. And so yeah, that's it That is I mean, that's exactly right. That's why it was like started with like integrating more chains, and that's still part of it. Continued into like, you know, integrating into new partners that like can, you know, create like have that order flow, and that's still a big part of it. And then yeah, we want, you know, we want every single asset in the world that people desire to be available on on near.com. And I mean, I think that's yeah, that's like that is exploding, right? With like AIs also like, you know, agents and the different products that are coming out there. I think that's going to unlock an entirely new

set of, you know, assets that people want to trade and traders, right? Like agents will, you know, are and increasingly will be, you know, will be trading. And so like we want to make sure that near and tense is just like providing enough value to all of those different parties that like we are the exchange in a lot of as many cases as possible. There'll be a volume, and take a cut of volume, and then ultimately that'll, you know, that'll flow back to to NEAR. >> Beautiful. Kendall, thanks for coming on the show today. >> Yeah, thanks for having me. >> Bankless Nation, you guys know the deal. Crypto is risky, you can lose what you put in. You can exchange it, and maybe it goes away, but hopefully not.

Uh this is frontier stuff everyone, but we are glad you're with us on the Bankless journey. >> [music] >> Thanks a lot.