Rollup TV: AI Supercycle EP 8, OverHerd, Offchain Labs

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The Satoshi Nakamoto is here to eat. Are we live, guys? Tech issues today. Halloween curse. We're going to try and do our best. Um, we're here. We're live, I think, at this point. Um, I might be a ghost. I might be a ghost of Halloween, but we are live. I think we're good. So, we're gonna get the show rolling. Um, we've got a great show for for you today. Uh, we're getting off to a little bit of a late start, but that's okay. We're going to bring you an X42 special. We're going to be learning about uh this new standard that we're seeing happening uh between uh AI agent coordination. This is something I'm

particularly excited about. Uh then we're going to go to Overheard, uh our friend Sherpa, who we had a great time in Vermont at Base Camp. We're going to speak with him on uh everything going on at Overheard. And then we're going to wrap up with AJ Warner from Offchain Labs. He was the one, he was the leader, the steward behind uh the deal with Robin Hood and Arbitum. Guys, uh don't go anywhere. We'll be right back with our first guest from Coinbase. We're gonna bring you live uh Eric from Coinbase for our next episode of AI Super Cycle. He's going to be here uh explaining X42. Don't go anywhere. We'll be right back.

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>> All right, GMGM. We are live with our friend Eric from Coinbase talking about the X42 revolution. Eric, this is our AI super cycle segment powered by Near. Recently, Near has partnered with Zcash. They're doing Near Intense and all of this is bringing more composability to the ecosystem. It's really, really cool to see. We're also looking for composability amongst the AI agents to really enable the agentic economy. So we've heard a lot about MCP. We've heard about agent interoperability. We've heard about agents paying one another to ultimately use uh their tools for the power of good. X42 is a payment standard in the agentic economy. It's been

floating around a lot, but personally I don't know what to believe and what not to believe. Is it the greatest thing since sliced bread or is this the reason AI is going to come and take over the world and kill us all? I don't know, but you're the expert. So, that's why you're here and we uh we really appreciate you taking the time to join us. >> Of course. Excited to be here. Near is actually they're always ahead of the curve with the stuff. They were actually super early adopters of X42 and some of the uh most early people committing in the repo. >> That it's awesome. Yeah. Could you could you and and you know what I like to think of as near as kind of like an AI company. The crypto was just something that and we had Ilia on and basically you know told the story invented the

transformer and then it was like hey we need a way to facilitate payments between these machines. Blockchains are the best way to coordinate that. Um and so X42 is a repo near was an early contributor. Now Coinbase is picking up uh picking up some steam. Can you just can we just start broad and then maybe we'll hone in on on some more unique things or specific things, but broad strokes, could you give us a an intro and explain it like I'm five here? >> For sure. Yeah. So, I I uh often call X42 the most standard that will ever most boring standard that will ever ever exist. Um the internet runs on standards that everyone agrees to just use. And so

there's like HTTP and HTML and CSS and all these things that make it so we all speak a common language on the internet on like how to transmit data. So all X42 is is a standard for how to transmit payment intent between different computers. And that's really it. It's a way for a server to it's a way for a server to say like hey these are all the ways you can pay me. And a client to say okay I'm going to pay you using this mechanism and So, it's super simple, but why it's powerful is because now there's a standard way for AI agents to pay each other or for your browser to pay a server and now an AI can pay for an API or pay for content or do anything on the

internet. And it's it's often been said there's like a great Mark Andre quote that the original sin of the internet is that they couldn't build payments into the internet. And this was like a thing Mark Andre spent a bunch of time in the 80s and 90s trying to do, but the tech just wasn't there yet. And so now we actually have great tech. Like modern blockchains are extremely performant. They're extremely good. Rails is for payment. And so now we need to kind of link it back into the rest of the internet and not make it so crypto is kind of this thing that's sits the side and is kind of like its own little world near the internet, but make it so you can natively perform a payment in any internet request.

Very cool. Very cool. I mean, look, you know, I go on Amazon, I put in my credit card details, I buy things on the internet, but it's not that deep, right? It's like them taking my credit card and running it through a system in order to charge it. And maybe if it's a credit card and not a debit card, right, settlement occurs a little bit later. What What does X42 unlock? Is it fundamentally going to change the way that you and I buy things on Amazon or is it not really meant for that? that it's meant for something more agentic than that.

>> Well, I I'll give you the point in that the way that what is happening between your browser and Amazon servers is completely different than what happens when you buy something on Shopify and what happens on your browser with when it's interacting with Shopify servers. There's no like standards for like how these payments kind of actually move or declared. And so that means that it's really difficult for an AI to like buy something on Shopify and Amazon because as a developer you need to write an integration for Amazon and you need to write an integration for Shopify and you need to write an integration for Etsy and there's just so many different ways and so you end up with this huge fragmentation and so as a human like maybe you'll maybe it unlocks more

places where you can pay with crypto but primarily it's about making it easier for computers to pay each other and so an AI agent instead of having to have like all of these different integrations with each different vendor, each different payment provider, can just understand X42 and then pay for anything that accepts X42. >> Got it. Cuz from my perspective, it just looks like I'm entering some numbers into a text field, but it's not that simple. Yeah, the text field is actually like hundreds if not thousands of lines of code that connect you to a server on Amazon's side that you know is is you know encrypting your credit card number and transmitting it to Amazon via some REST API and like it's that's you're just seeing like you know the uh the front of the internet but there's all

this stuff behind the scenes all the stuff in the back of the internet that is fully hidden and is totally custom from one one website to the other >> but the way that you see it is like is the same like everyone agrees HTML CSS test. That's how you write websites. There's not like Amazon HTML and Google HTML and you have to download a specific browser to visit Amazon and different browser to visit Google. All the browsers agree on these standards and then that makes it so we get this like beautiful composable open internet that anyone can launch a website and it'll work on any any human's browser which is kind of a miracle if you think about it.

>> You so that we're trying to do that but for payments. >> Got it. Okay. Um, I mean, you've been tweeting a lot about X42. This is something that has really taken off in the last, you know, weeks to months. There's been other standards that have tried to link together these agents, but X42 seems like it's kind of the the leader right now. It's it's really pushing and it's got a lot of momentum behind it. What is unique about X42 relative to some of the other standards that are out there? It is it just it's deeper? It's more comprehensive. What is what is the unique advantage that X42 gives us that something like MCP doesn't?

>> Well, I think that's kind of the beauty of X42 is it complements all these other standards, >> right? And so we're in this era where we we all know agents are going to become a bigger and bigger part of the internet and they're going to be this new like economic actor on the internet that needs to do stuff. And so MCP is really a standard around tool use. It makes it so your AI can use tools correctly. Then you have things like ADA which means which standardizes how agents can communicate. And X42 is just a standard for how do you transmit money? How do you transmit value? And so you can actually use X42 alongside MCP or A to A. And as your agent is using a tool, they can pay for access to that tool with X42.

And as an agent is talking to another agent via A to A. We actually worked with Google and Lowe's on a on a showcase of this. You can actually have your agent pay another agent in a very standard way where all these agents understand, oh, we all just use X42 for the payment and you know, we may communicate via some other standard, but we we'll all just use X42 for the payment. And I think the reason for that is is X42 is actually just really simple. Like it doesn't solve every problem at once. It's really simple and uh tries to just be like a like the lowest layer of infrastructure and lets you add on more complexity as you need it versus forcing you to do something really complicated right up front.

>> It's not necessarily a crypto thing, right? It's is it is it because it's more than just crypto payments. Is that is that right? Or is it only stable coins? >> Right now it's only crypto payments and stable coins. Um, and that's because I think stable coins are the best way to move money on the planet right now. >> And but what we want is for X42 to really be like an open neutral standard. And that means that eventually I suspect we'll have fiat payments as part of X42. And you know what X42 really wants to do is create like a an open playing field for competition to occur. And if you as a consumer want to pay with stable coins, great. If you want to pay with fiat, great. If you as a merchant want to only accept stable coins, great.

Ultimately, it's it should be consumer choice that uh leads to these uh the emergence of how money actually moves. >> Very cool. Okay. And so how do you how do you anticipate that this is going to evolve and and ultimately get integrated into these systems? >> Yeah. Well, I think the first thing is that it's uh we're actively in the process of moving X42 into a foundation. >> Okay. >> It'll [clears throat] be like, you know, a very not cryptoy foundation. It'll be like, you know, much more akin to like how open- source projects uh are our foundations like PyTorch or the Linux kernel >> or Kubernetes. These are examples of

like foundations that govern software projects. Uh because if people are going to tie their hitch their horse to the wagon, they want like certain asurances. is they want to know they're not going to get rugged if they adopt the technology. And uh from there, I think we're going to see just like an explosion of adoption both in the crypto world and in the web 2 world where I think I think X4 is probably going to be the first time a billion people use use crypto for something. Very cool, man. I mean, this is huge because you know this is an open standard. Um was this are you the founder of X42? Because it kind of has like Satoshi like beginnings. It feels like Immaculate Conception just kind of came from nowhere. But there was really people that were early

contributors. You were one of them. You mentioned Nero was one of them as well. Where did this thing ultimately come from? How did it go from like obviously we've all said and it's easier said than done. We've all said like look, we should all be able to coordinate agents and pay one another on the internet. But how does that actually come into a real thing? >> Yeah, I'm I'm the author. So I I designed X42. I wrote the initial SDK with some help from my team. Um, I designed the protocol. It X42 started actually back in almost a year ago. I was before I rejoined Coinbase, I was thinking about, you know, what did I want to spend my time doing? And one of the things that occurred to me is like, oh, there's this is X42, by the way, it's not the first attempt to create an

internet native payment protocol. There's been a bunch of attempts. And I I had some time off and I was I did some research and went and read all of those protocols and I was like, "Oh, I actually like I have an alternative take to all these." I think each one of them does like some little part differently than I think it should be done. >> Um, and then I I was interviewing at Coinbase and I was talking to Brian Armstrong and I was like, "Hey, I think we should do this thing." And then Coinbase has this program internally called Next Bets that is like a way for like people to surface ideas within Coinbase uh that should be worked on and then they can get funded. And uh Brian said, "Hey, like there's a team that had pitched a next bet that sounds kind of

similar to what you're talking about." And so when I when I joined, I kind of uh took over that next bet and then uh literally wrote the spec and first implementation of X42 in in a weekend based on kind of all this research I had done before rejoining Coinbase and you know the team has helped me polish it up and build make the SDKs more robust. But X42 as it exists today is is fundamentally very similar to what I wrote in that weekend. Man, that's inc. And and so was when you're thinking about like the unique things like you said, these things have been tried before. They didn't really catch on.

What was it that you did in a weekend? Like there's a zero to one moment. It wasn't, you know, spending brute force a thousand hours doing the thing. No, it was just some light bulb moment that you had. What was what was the what made the difference? >> I Well, it's not just, you know, like a weekend, right? I find for me engineering is like I think about an idea and then it kind of percolates in the background for a couple months and then one day it's just ready to pop out, right? >> Um I think there's a lot of like little design decisions with X42. Like one using signatures and not requiring gas on the spender I think was a really big decision. Uh understanding that from the start it needed to be neutral. It couldn't just be like a base thing or a

Salana thing. It needed to be agnostic to the underlying mechanism of of payment and be any blockchain should be able to be used. Any fiat method in future should be able to be used. Understanding that there's different logical ways that you want to move money. If if money is truly digital, it's you want to be able to represent things that are more complex than hey, I'm just giving you $5. And so these I think these are like some of the decisions I made that have so far held up relatively well. But I think, you know, in full cander, it's it's X42 is not a new idea, right? It's it's an idea whose time has come, >> right?

>> It's we've been wanting to have internet native payments since the 90s. It's just >> there was no reason >> because, you know, once we got HTTPS, entering your credit card into a site and then having it save your credit card is like actually not the worst checkout experience for a human. >> It works relatively well. It's annoying the first time, >> right? Um, but now you have these AIs popping up that are it's like significantly a worse experience for them and you kind of need a 10x better solution to break kind of the entrenchment of how things like the internet that are at such scale work.

>> And so AI is this like force that ma makes it so that this is the right time to adopt this kind of standard and for something like this to actually get like used. >> Yeah. What what is your wildest dream about how this could manifest and ultimately evolve and become entrenched and ingrained in into our into our everyday lives or into our systems? >> I I tweeted the other I tweeted yesterday uh x42 number of transactions billion bald trillion tattoo. >> What does that mean?

>> Well, it's it means I'll shave my head if we get to once we get to a billion transactions and I'll get a tattoo once we get to a trillion transactions. Uh, >> how where are we now? >> Uh, about three and a half, four million. I haven't checked this morning, but that's up like that's up three million in like a week. >> Xbox has been out since like March, so you know there. >> Okay. So, now it's starting to pick up some traction. Okay. >> Yeah. Yeah. Yeah. >> Couple. So, so what has what in the last few months is when I've really seen it take off. What was there any sort of inflection point or any one integration that really spurred a lot of momentum?

It's it's interesting because we had this great like 30% week-over-week growth for like six months and I was like, "Wow, this is like a Y cominator startup and growth and then we hit this wall." >> I I'd like to think it's uh you just hit a critical mass of crypto Twitter noticing and then people just start building more stuff and then people see the people building stuff and then you get the snowballing effect. And so I think last week we saw someone build a token launcher on top of X42 and then the token went gigafiral and then all of crypto Twitter saw it. And then the thing that was really gratifying to me is that a bunch of people saw X42 and actually started building stuff and understood the technology and uh took the time to like build APIs that you could pay for with X42 or new clients.

And we didn't it didn't just turn into, you know, all token launcher meta. Like there was definitely some token launcher meta, but we saw like real interesting novel things being built using the technology that wouldn't have been possible prior to X42. >> Very cool. Uh Eric, when you hit and not if, when you hit a billion transactions, will you come on the show and we can shave your head live? [laughter] >> I uh I I'm gonna have to check with my comm's team. I'm I'm sure they might have something they want to do there as well, but you know, maybe we can do kind of a like a co-produced thing.

>> But I I think like genuinely I I think that within the next decade there's going to be more economic transactions from AI than there are from humans per day. >> Are we already there or where where are we at on that? Because people have also said, you know, that we're that this is coming. >> Yeah, we're definitely not there yet. We're definitely not there yet. Like the internet is so big. So so big. And the but the way we get there is through things like X42 that make it just so much easier for AI to pay for stuff. >> Mhm. >> It's but it's inevitable, right? Like >> think about how many times computers send messages to computers that humans have no part of, >> right?

>> That's that's just going to be that like for every request that you you make from a browser, I I'm willing to bet a thousand happen autonomously between computers. >> Right. Right. So a thousand >> thousand to one. >> Yeah. Yeah, I think it's roughly in that range. Yeah. >> Okay. And right now they're sending messages back and forth. They're passing packets. They're doing this this thing. What changes once we add money to that stack? Once machines are paying one another, once they're exchanging money, but you know, machine to machine, how does how does that change things from your perspective?

>> Everything that is like a composition of different services right now on the internet requires a human to be in the loop. So if you want your if you want to write a program and you want access to like let's say like a weather API, you as a human need to go and get an API key for that uh for that API or for that product and you need to manually integrate it into your program and then finally it can access the weather. But if you can and why that is is because there's no good way to give the weather API value for the data that it's providing you, >> right? The API key is tied to your credit card and then they bill your credit card at the end of the month, >> right? And so all of that between all of that human stuff is actually just

because we have lost a transmission of value. And if you make value transmission instant now you as an AI can just say I want weather data and just pay it a scent to get that weather data. There's no kind of like oh I must like go and get the API key and do the integration. I these AIs are really good at using APIs. And so >> if you give it the way to pay for an API, now you get kind of a fully composable internet where anything that has value is inherently gated on the internet, whether it's content or tools or anything else. And so now AIs can just punch through those pay walls and punch through those gates and use those pieces of content or use those valuable tools without a human needing to get involved, which it makes the AI like way

way better, way more useful. >> Right. Yeah. There's no less uh less slippage, if you will, or like their their flywheels don't get slowed down. >> Yeah. >> Way less friction in the system. And now you can have AIs that like dynamically do things that you didn't think they could. >> Yeah. Okay, Eric. Um, rapid fire, a few last questions as we as we come to a close here. Um, call to action. What are the applications that you would like to see built on X42? Oh, great question. X4T is really a double-sided market, right? Or a two-sided market. There's supply and demand. Supply are the people who are selling content or tools, and the demand are people who are using content and

tools. >> Uh my my job with X42 is largely pingponging back and forth between those two sides of the market and activating one or the other. >> So, right now I'm in activate demand side of that pingpong. And so if you're a builder, if you're an engineer, if you're a product person, go vibe code, go engineer, go build something that is like a novel way for agents to use things that accept X42. >> Okay. Um and and the flip side of that, if you're a user, what is and and maybe broader than just X42, what are the AI tools out there you find most useful?

and and the everyday person can incorporate into their AI stack to become more productive or or you know a higher a higher uh powered human. >> So we launched this product called payment payments MCP a couple weeks ago and what it does is it's an MCP server that you can integrate into Claude and it gives Claude a wallet and it gives Claude access to the X42 discovery layer and it gives Claude the ability to pay for anything with X42. And this works with like a bunch of different LLM chat apps, not just Claude. Uh, and what it means is you can now have Claude pay to do stuff with X42 on your behalf. And so you can say, "Hey Claude, make a research report for me about a thing."

And it can, you know, search the internet. And then it can also pay for like bunch of financial data APIs that accept X42 payment. And that means that like the report it generates for you is is higher fidelity, better done because it has better data. And uh Claude gets its own isolated wallet. You can do spend controls. You can, you know, limit how much it'll spend for requests. Uh and it makes your makes your AI productivity productivity like noticeably better. >> So this is uh like I can say, "Hey Claude, go book me a flight." And it'll it can go do that.

>> Yeah. Yeah. There's actually I don't know if it's rolled out fully in the US, but there's actually a team that lets you purchase flights via Trip.com with x42. Wow. But I can also use this clawed integration. >> Uh I haven't tested that one specifically, but in theory. Yeah. >> Yeah. Okay. Um man. Okay. Uh oh, I had I had feel like I had more. Man, this has been a really fun chat, Eric. I think I'm all out of questions, but uh I would love to have you back on again sometime soon because it feels like X42 is moving so fast that three months from now we could have an entirely new conversation and it it can you know it can take a a you know bunch of wild twists and turns.

>> Absolutely. Yeah. More than happy to come back and it was great chatting. >> Yeah. Awesome, man. Congrats on uh on a great build and uh keep up the good work. This is really really useful stuff and uh very very uh exciting to see X42 come to life and and start to enable the payments economy uh and the machine economy at large. So thanks Eric. Really appreciate it. >> Thank you sir. >> All right, man. Eric, you're a G. Uh appreciate you coming on, man. And uh we're going to keep things rolling here.

So Eric, you're free to go in the back. See you hanging out. really great conversation. Um, I'm I know I'm gonna check out the Claude integration. Uh, I use a mix of chatbt and usually Gemini for research, claude for some more uh like businessy type build a presentation or make an SOP or this kind of thing. Uh, to integrate that in uh is is huge. Um, and so really really cool uh to see this come to life. Um, all right guys, we're gonna keep it rolling. Uh, we'll be right back. Our next guest, uh, is an interesting character. I played a round of golf with

him in Vermont. And, uh, he is, uh, the founder of Overheard. He also founded a really, really massive, really viral product a few years ago. You guys probably heard about it. Uh, but we're going to be talking more about it as well. Guys, we'll be right back with more on Rollup TV. Heat. Heat.

Dang, we're back. All right, next guest is our friend. You guys haven't met him, but we've met him. He's a great guy. Uh, he is a nonfirstime founder. Um, he's got a really interesting story to tell. Uh, super viral company and product uh that I was part of. I used it. Um, I bet a lot of uh you who are watching and listening at home used it. Um, and so we're gonna bring up uh Sherpa, the founder of Overheard, also the founder of Yik Yak. Uh, let's bring him up. Sherpa.

There he is. Sherpa, you got the helmet on. You're uh you're looking good, brother. That's a Is that a llama if I'm correct? Or an alpaca? >> Alpaca. Thank you for the correct pronunciation. Yeah, it's it's often confused, but alpacas are everyone loves them, so that's uh that's what I'm rocking. >> I love it. I love it. Um well, Sherpa man, you have came a long way. Um obviously founder of Yik Yak, um which was giga viral. You can you can probably speak to the level of uh reach that you guys had, but I know it was on the scale of of what I believe was either tens if not hundreds of million uh monthly active users, which is a massive success. Um and and you you discover some real um real things about the way

that people connect with one another. uh especially through anonymous chat and so you know you've got quite the founder story now you're working on uh now you're working on overheard and uh man just just would love to let's just let's start from the beginning um introdu please introduce yourself it's the first time on the show and uh I think our our audience is going to be really interested to hear about how you've how you've gone to start Yikyak and then also now uh why you're choosing to build Overhard. >> Awesome. Yeah. Well, thanks for having me, guys. A big fan of the show, so excited to be up here and share the the builder stories from the war room. But yeah, about 10 years ago, um was one of the co-founders of Vak. Um the initial idea with it of it was how do you give

every single person on college campus an equal voice is there was the quarterbacks of the football team, the popular meme pages, but there was also the nerds in the back of the classroom, me being one of them, and those people were never heard. Um you would just speak into the ether on social media and you never got that chance. The belief back then was if you make every post anonymous, everybody has an equal voice and post can rise on merit alone. Um and and that was the thesis of it back then. Um yeah, evolved from a a college basically project or for fun hack um to a an app that was used by tens of millions of people every single day. Um it was a a wild ride 10 years ago. um learned a lot from viral growth, how to make apps actually hit scale and

um taken the learnings from that and and building over hurt which is inspired by it and to some extents but leveraging the learnings and um crypto building on crypto rails actually solves some of the key issues we had which were user moderation and then longtail user retention. So excited to be here and um bringing it back in in a different light. >> Beautiful man. I mean just can you can you provide some stats? I remember, you know, you you were telling me a little bit about it, but it it was essentially hundreds of millions of monthly active users. You guys reached college campuses and you were able to provide a voice where everyone was on an equal playing field because Yik Yak was anonymous. Um what did you learn, right? What what what went well? What didn't go well? Um

yeah man. >> Yeah. So, it's um I mean we the main learning was it was the format itself was insanely viral. So it was it was launched at a couple of colleges that were initially targeted where me and the founders went to school. Um and we saw that once we hit a critical mass on a specific university, whether that was a Greek life organization or a sports team, we could overtake an entire campus in a single day. And that in that era um very few apps have been able to do that. It went from like 30 in the app store to number one like um very very quickly. And the reason for it was it really resonated with a lot of users. Um but it was also a double-edged sword. Like it some of the reasons for virality was it it did cause a little bit of chaos and

uh we we did not anticipate that um level of chaos that we created and there's a lot of investment on engineering on moderation and tooling around that um and that was that was one of the issues longtail is that um people didn't understand the power that comes with the anonymity um and we're being reckless in addition to creating interesting content. So um overheard actually solves that from the moderation perspective um via community incentivized rewards. So users who report so every post on overheard acrru value in the form of USDC based off how many views a post gets. So, if a post is malicious and someone reports it and it's against our terms of service, which

would either be hate speech or illegal content, um the rewards from that post, no matter how many views it got, would be slashed from that the creator and redistributed to the people who reported it, which has really created a nice moderation loop and created a very healthy foundation for the application itself. >> I lost you there. I think you're muted. >> Yeah. Yeah. Yeah. Uh what is the original monetization tool for um for the post? Is it on base and content coins? That's the idea. That's where uh incentives are generated and fees are generated passed to the to the creator, but if it violates rules, all of that gets redistributed. Is that is that the

idea? >> No. So, it's it's fundamentally different than content coins and what most of like crypto Twitter is familiar with with trading fees and virality feeding it. So we take a very traditional fairly boring web 2 model um advertisement and leverage the dollars from that passing it back to the users. It's it's a business model as old as time where brands are always willing to pay for attention. So if I have a top post on the app, let's say it's I love the rollup or something and it has a thousand views on it, there would be an advertisement bidding on that post. um what could be Circle, Ether, those are some of our advertisers and the dollars that they are spending for that visibility flow directly back to the user. So, it's um it's a nonspeculative

revenue source, but just very sustainable, passive and and tied to um that not traded fees. >> Beautiful. Awesome. And and how has adoption been going? Uh like what what are some uh you know user activity metrics that you guys have? How much in advertising dollars you guys bring to the platform? I I'd imagine this is kind of kind of a two-sided marketplace here. You need to get some creators coming on uh some guys with reach uh to get some distribution and then and then advertisers want to advertise on you. Yeah. You can monetize more. Yep. >> Exactly. Yeah. So, we launched the product in June um initially as mobile applications to just kind of get it out into the wild and school is not in progress in in June. So it's like it was basically purely our test credit and we

initially launched in Brazil um primarily because of a strong Tik Tok distribution reach there and some relationships I had and so very very slow starts over the summer. Um it's been growing very quickly month over month around 40% now have about 40,000 daily active users on the application um and around 200,000 monthly active um which puts us at believe one of the the largest if not the largest social app in in crypto. um primarily made up of normies um not your typical crypto Twitter DGEN and yes the more users the product has the more advertising dollars we make which is kind of compounds on the the flywheel because more ad dollars we make the more our users make and it's a positive uh reinforcement there like

to date we've done or like every single day can be between like two to $3,000 in ad revenue so it's like it's not massive but it's not also insignificant I would say >> yeah and So I mean there's a lot of learnings that you you had from uh Yak. Um and so you know h how do you intend on uh give me give me one second cha I think my thing might have I think I might have froze. Leo can we go standby real quick?

All right, guys. We're back. Thank you for bearing with us or bowling with us or alpacing with us today. Um, it's been a little hectic. It's a Friday. It's Halloween. Uh, Sherpa is in his alpaca helmet. Um, and so we were talking about, you know, all all the success that you guys had at Yikiak. you were able to get massive distribution and now you know you're solving a lot of those uh a lot of those pain points uh with overheard you you learned a lot about you know the social dynamic and how you were able to kind of level the social playing field you know what what what

stage are you guys at right now uh you talked a little bit about uh the ad packages that you have available and uh and that's kind of more on you know on on the advertiser side but you're also getting uh more creators onboarded onto of the platform. How can people get on board and what are the opportunities available for them to earn some of these advertising dollars uh that that you know you guys have been able to generate? >> Sure. So, it's super easy to get on the platform. You just search overheard in the app store. You can download it and and start jamming yapping um saying what you want and the depending on where you are in the world um there's more users or less and that'll essentially determine how many views your post can

get and how much you can earn. um different differentiating fork, we have a a feature in the app called herds, which is the easiest way to think about it as like a subreddit where people can talk about specific uh topics, crypto, sports, confessions, etc. And those are no longer constrained to location, but opened up globally. And that's where a lot of like the bigger view posts come in. Um people can be earning up to like 50 bucks a day there. It's nothing like you could earn as a creator coin, but it's just because the trading fees don't piggy back there.

>> Um, some expansion that we're diving into, this is a little bit of alpha, haven't said this publicly, is um, we're actually going to be leveraging ZKTLS for like um, authenticated herds. So, like an example that we'll probably be rolling to beta is basically anyone in the crypto industry could join a herd. So you could verify that you're a cryptobuilder, have a badge that you work at Binance, the rollup, Coinbase, etc., but have the cover of anonymity to really create some interesting um discussion points. >> Wow.

>> And that's something I'm super excited about. >> That is really cool because you could verify that you you are part of a certain circle uh with some credentials, but you don't fully give away your non. This feels like Wikileaks on crack. This feels like I can verify my involvement in a particular company and then I can start to expose inside behavior about that company. If you know it comes to that and there's some sort of thing that occurs inside and and you know you need a way to trust people that they are inside this is a way to do that.

>> Yes. um this would be a way to basically give authenticity and credibility to anonymous things and the the content like this has never been possible in a trustless way. Um >> right. So, super excited to roll this out and like outside of like a corporate version like you can use it for like medical advice or something like Reddit there's tons of like mom subreddits or doctors where people are in theory giving advice but you don't know how credible they are where you could actually leverage ZKTLS to then say this is an actual pediatrician or this is a a dentist and create these very unique discussion points um while making the content creator and the responder feel safe that their identity is protected.

Yeah. Wow, man. We've got a segment on the show that we do once in a while. It's called rumor mill where sometimes, you know, people will text us things and we know who they are, but they don't want to be exposed. And so, they'll, you know, we'll we'll kind of display their alpha up on the screen. But I'd imagine that we could do some really interesting things with broadcasting and shedding some more light on some of the things that are put forth in these herds. And they're done anonymously but verifiably. >> I and and whistleblowing is a little bit dark. Like it's not it doesn't have to be you know dark secrets that we're exposing. It can be like there's some real alpha here and people want to talk

about it and share it but you know they're maybe not you know Twitter is just maybe too public of a square in order to share some of these things. How what are some other use cases that you see? whistleblowing was just the most wild one that came immediately to mind. But what are what are some use cases that pop pop up in your mind when when you're putting these things together? >> Yes, I mean controversial topics will definitely occur. Um that's just part of the part of this existence of the internet. Um like the medical advice or authenticity I think is another one. Another great is like you can take like a rate my professor type website experience like no one actually knows that those users truly go to those school. Um, you can have authenticity that people went to University of Alabama or went to uh Georgia, etc. Um,

you could have specific herds to just a company as opposed to overlapping. So, you could have a this basically becomes like a glass door and like glass door had like a really big data leak a long time ago. Um, and it's no longer trusted as like for job reviews, interviews, and leveraging ZK tech. Everything is now secured in a a safe manner. So there's a lot I think on the the corporate side and also a lot on educational and then just um information in general like you could have an investing one too like you could have um in order to join the sub community you must zk proof you have a million dollars of net worth um and I think it the content that be can be created it will be the first time it's a

forum like this has existed >> there's a there's a project I think it's called two cents.mmoney and it does that it It's >> it's verifiable net worth and you can effectively do some things like this and and basically, you know, put out a prediction, right? But if you have a $10, you know, if you got a hundred bucks in your bank account, no one's really going to take it seriously. You got $10 million, but you've got some crazy take, right? You know, you can you can do that as well. I think some sort of integration here because you guys have this vertically integrated into a a a larger breadth of social interactions that are possible >> that this could supercharge some of the

other things that you guys are doing and it really complements the entire stack. How where do you see most of your users coming from? Is it is there geographical regions or is it are are you attacking the same collegate sort of age group or do you do you see yourself drawing from you know Reddit or Twitter where where do you where do you see these funnels uh beginning? >> Yeah. So to date everything has been our we've only attempted to grow in two markets which has been Latin America um and Indonesia. So our initial push was in Brazil and that was just because we had fairly well good understanding of the market and had confidence we could get users there. Um crypto was newer um

but people still had an understanding of it and then Indonesia for example we organically gained traction there and we decided to just lean in to that market is like my learnings from other social apps etc is like you have to kind of just pour a little bit of gasoline on a fire otherwise it it sizzles out. Network effects are your true mode within social. We we did a little small push in the US about a month ago on one college in the US and the product wasn't ready honestly. So people in the US truly have no idea what USDC is like outside of crypto Twitter. So we um people were earning rewards and they would claim them but then they didn't think it was real. Like the number one

support question we had was what is this USDC? Is it monopoly money? >> Like they didn't understand that it was spendable. So, like we're adding some UX updates right now that fully abstracts it even further. So, instead of calling it USDC, it's just digital dollars. >> You'll be able to cash it out to your Venmo account, cash out to your Apple Pay um and truly spend it. And then that'll create that like reward loop um that we've seen success with in these other regions. But, um we're waiting. We do want to push in the US, but we need to um need to complete the the user experience to actually make the rewards feel real to these users. And so you're okay with users taking dollars off the platform, right? That there's not really a benefit to you uh trying to build out more features of like trying to get

people to like keep their money on the platform because a lot of times with crypto you you want to try to incentivize sticky TVL, keep users using the platform, keep users on and keep money in their accounts. But this is kind of a one directional flow. You'll get advertisers that are paying for visibility in this content. The creators can cash out. That really doesn't pose a detriment to the virality or the network effects here. >> No, no, not at all. I think longtail like we will care more about people keeping money on the platform. But right now, we want to provide value to them.

>> We basically take from the advertisers and give to the users. Um, and this I think once we scale larger, um, it opens up some very unique advertising products where we will want to keep money on products. So, if I'm a user in the US, let's say I earn $30 for posting something funny, I get an ad for um, a hat for my favorite sports team. If I have that money still in my wallet and I can leverage the the new payment protocols X 402. >> Yeah. >> Um, you can basically just buy that right then and there. And like my belief is >> um those ads will convert extremely well for DTOC brands because users are basically have what they view as monopoly money to spend and the brand advertising knows that they can actually

monetize them. So those are different ways. So it'll be a non traditional crypto way of taking TVL, but it's new types of products um that are really possible once you hit social scale that no one's done before in crypto. >> Yeah. Yeah. The guy that was on before you was the founder of X42, [laughter] >> Eric. >> Good timing. >> Yeah. Um, and it makes tons of sense exactly what you're saying. You have you have dollars right then and there. It's it a direct channel to to buy the thing. Um, I Yeah, that great episode actually just right before you guys you guys would hit it off. Um, Coinbase guy that that invented it, Eric. Um, so Sherpa, you

guys, you know, have built this there's a social algorithm where you guys are showing certain advertisements to to certain users. What could you give us kind of like a like a like an insight or visibility into the blackbox of the social algorithm as it exists on overheard? Like you know, we can sort of get a sense of it on Twitter and sort of get a sense of it on Instagram and YouTube and Tik Tok, but being the founder, can you, you know, if I'm a creator on overheard, how do I go viral? Sure. Yeah. So, it's uh I mean it's fairly simple like um it's very much user curated. So, we have basically it's a time decay based off of interactions on post which could be up votes, comments, etc. And then the exist both within your local feed is also within

like your your herd feed. So, it's um if a post goes live, it has some sort of score. It's multiplied the more interactions it gets. Um and then it services to people that um basically have a vector map to that. um for relevancy. >> So, it's um it's it's probably simpler than a lot out there. I mean, we're only a couple months old and >> it's it's user gener it's user curated for the most part. It's taking what's hot and servicing it to people that um that want to see it. >> Yeah. Very, very cool. Uh Sherpa, I think that's all I've got for you now, but um I'm really excited to link up. Uh it's always a fun time and uh would love to have you on again as you you continue to build out the platform. like you

said, we're just so it's still so early when it comes to the adoption and the and the user awareness of some of these things like USDC. Um, and that is an integral part of the entire stack. Uh, so please uh any closing thoughts and then also please uh tell our audience where they can find you and they can learn more about Overheard and download it and get involved and start posting. >> Awesome. Yeah. Well, thanks for having me on the show. Yeah, the closing thoughts will be just check the app out. Um it's uh we spent a lot of time on the UX to give it true like web two polish that hasn't been seen much in in web 3 and um I we hope you enjoy it like the the alpha is going to be the ZK community hurt. So um that's going to be

I think particularly interesting to this audience and uh yeah follow me at ox sherpa xyz or overheard xyz and be sure all the fun product updates there. Um but the majority of the community is is in app. um when we don't have your telegrams or that because the social products community should be the product. >> Yeah, I love it. Sure. But thanks so much man. >> All right, see you guys. >> See you soon. Cheers, buddy. Thanks for coming on. >> Thanks. Thanks for having me. [snorts] >> Beauty, man. Uh guys, Yik Yak was a uh I think they raised um 60 million from Sequoia. the they ended up getting acquired. Uh Sherpa is is a good friend

and uh he was founder of Yikyak. Um I believe it had upwards of 300 million uh monthly active users. So it is you know one of the staples of web 2. Um, and we've seen social platforms go gigafiral and sort of taper off um because there's strong network effects here uh as they sort of uh compound and compound um and and what happens here is that you know they they reach some social flywheel.

They get a lot of network effects but you see what happens to Vine uh MySpace Y and then Yik Yak was part of that same crowd. Um, and so we're really seeing web two founders, you know, the founder of Yik Yak now coming and, uh, and starting a web 3 product was really, really great to hear from Sherpa. Uh, speaking of a little bit more in the financial world, web two financial products like Robin Hood are partnering with web 3 projects like Arbitum. And our next guest is AJ Warner of Offchain Labs, who's going to be talking about uh all the things that are exciting at Arbitum and Offchain Labs uh and how they've been able to succeed in some of

these partnerships and uh and uh and yeah, we're going to bring AJ up in a little bit. I think we're just getting things uh I think we're just getting things set behind the scenes. So, we're going to bring them up in a little bit. In the meantime, guys, let us know in the chat. What are you guys going to be for Halloween? Happy Halloween. Give me one moment here. We're going to get things rocking and rolling.

>> Uh, yes, AJ. We can hear you in the back end, but uh we are just cleaning something up on our end, I believe, and then we're going to bring you up on stage. >> We're good. Okay. Uh let's bring up AJ and uh we'll have a fun uh fun combo here to uh to close out our show, AJ. Happy Friday. Happy Halloween. Welcome back. >> Friday. Happy Halloween >> TV. How you doing? >> Thank you. I was here a few What was it like? You had Carlos and Faro and was it like a month and a half ago maybe? It was fun. >> Yeah, dude. That was a That was a very fun episode. It was sort of a mashup. I think people joined late. People joined early. We had some tech things going on that time, too. We said, "All right, everyone come up. Everyone, let's just

let's just have a jam." Uh, and it was a great time. Um, and it wasn't too long ago. Uh, but I would love to to hear an update on how things have been going since. >> Um, it's been great. It's been really busy. You know, nothing stops in crypto. Nothing stops in arbitrum. We've been continuing to be very focused on our core mission which is continuing to bring the financial world onchain. um using our very unique product offering across arbitrum 1 and I think I probably told you this vision before where we have arbitrum one as like a core liquid decentralized secure public credibly neutral environment which tons of people can use and then how do you think about how your business evolves and launching your own chain and we think that arbitum

is just generally um the most flexible platform for that because you know you don't want to sacrifice and compromise on excellence and you know arbitrum one's a top five blockchain by economic activity um by basically all metrics across stable coin usage, DEX volume, perfect exchange volume, etc. And then you know top one, two, three um adopted technology stack for for people to build their own chain. So that unique value proposition has been something that's been resonating a lot especially with financial institutions. The other thing that I think differentiated arbitum is one of the things you're seeing typically right now amongst sort of non-cryptonative companies in particular is and it's kind of underrated. I think cryptonative people have been like maybe

um understating it is the EVM has turned into like a very serious moat generally like right now there's like EVM compatibility >> or Salana are like the two main choices obviously like Sooie and Aptos use like move but I think overwhelmingly you know the question that you see amongst like non-cryptonative companies are like if [clears throat] we have the EVM we have a ton of flexibility with what we want to do obviously if we're building on Salana it's building on Salana and rewriting it if we don't >> and what's arbitrum has done which is unique is we have obviously full EVM compatibility but at the same time at the same time we have also um full support for ROS C and C++ contracts

so if you are a traditional institution that like doesn't know solidity [gasps] you don't have to be only doing the EVM >> it's kind of the end of both worlds >> exactly right so like that matter Robin Hood a lot and stylus is still very early. It's only about been on mainet I think like around I think this year was this month was the one month one year anniversary >> and like we've had to invest a lot in tooling right because there's no other EVM blockchain that lets you read Rust contracts and C++ contracts in the same chain. So there's a ton that we've been working on with closed partners like you know Open Zeppelin and you know a lot of the block explorers and the indexers etc to be able to make this possible. But that's like I think a very core thesis that we have which is give the

developers what they want. Don't restrict them whether it's their own chain public chain their own languages solidity and um just make arbitum the playground uh for them for that innovation. >> Very cool. Yeah. And and I think what you're you're I'm hearing what you're saying is that this is not just something that you guys saw and it's kind of like a build it and they'll come, you know, way of complenting the EVM with some other Rust features. No, this is actually a product that's in in demand by enterprises that are coming and they're looking at web 3 and they want the flexibility of really all of what Web 3 has to offer. You guys are there to provide it for them.

>> A lot of them don't know that it's an option. That's part of the work that we have to do, right? Like again, they talk to EVM blockchains or they talk to Salana and they think that it's a much more limited set of options. And then when I tell them that like look, if you want to interact with a or Morpho or Uniswap or any of these EVM based applications, but also don't want to tell your, you know, your time your team they have to rewrite everything like you can have the best of both worlds. That's like an eye openening moment for them um as they assess sort of arbitrum across a number of different dimensions. But again our whole thesis is the world we found powered by better decentralized systems censorship resist

sovereign systems but at the same time we have to make it possible for like existing infrastructure to be able to support that. And if the if our requirements are that everyone has to learn solidity in order to be able to enter in that world, >> it's just going to be more challenging, right? And we want to be able to be as flexible as possible. We want to be able to have systems like privacy or compliance systems. Like every application is going to need a different thing >> and you know our goal with arbitum is just to be able to continue to provide all the different features necessary.

>> Yeah. Very cool. And you know this is something that is happening on orbit. It's happening on stylus but you know arbitrum one continues to chug along. Um two billion transactions quite the milestone. Uh this was accomplished uh about a week ago and so you guys are upwards of two billion and and looking at at three billion and beyond now. What is it what is it like to accomplish this milestone? Um I I'd imagine the topography of arbitum has changed quite a bit as of recently. Maybe you could just kind of take us through, you know, from one billion to two, how how have things evolved?

>> So, the first three years took us took us three years to get to the first billion, >> right? >> And then it took us a little less than one year to get to the second billion. >> There you go. So just like in terms of growth, you know, we've obviously 3xed or we continue to increase like you know that that that growth and we're going to continue to increase it and I hope it takes even less time um to get to the next billion transactions and and further and further. Um arbitum has changed a lot in the early days of arbitrum. It was a time where I would say the core value proposition of arbitum was that it was a cheap EVM layer 2 technology and people liked that because Ethereum was extremely expensive,

right? And they needed somewhere to go and like you know Polygon was able to fill that. Avalanche and Arbitra and you know a couple of these other either L1 or L2 EVM architectures sort of provided this like natural resppite um when Ethereum was very very expensive obviously Ethereum it continues to scale as well and obviously Arbitum's built on top of Ethereum um but the value proposition of arbitrum has evolved to the point where today I would say especially on arbitrum one it's standalone DeFi environment stands itself whether it's an L1 or L2 architecture as a market and industry leader and that has evolved into like the evolution for just amazing applications wanting to

just tap into the arbitrary network of liquidity and we've seen this across a number of different dimensions. So in traditional assets obviously we're working closely with Robin Hood they're issuing all their tokenized equities products right now on arbitr we're going to migrate to their own chain but we're seeing it across other NW you know axes as well money market funds with you know all the major players we're you know seeing more institutions bring on private credit or other forms you know one of my favorite projects which I'm not sure how familiar you are with is called USDA >> which is you know they went live about two months ago they've got like a cap still through their beta period but they have 600 million in liquidity and it's basically infrastructure for backing infra you know GPU loans right >> for people who want to sort of you know

lend against that and again that's a totally new type of market like this is something that crypto uniquely enables >> and we want all of these things to be living on arbitrum so that's one area I would say of growth that we've been seeing another area is within the stable coin space >> so a lot of blockchains either have a lot of USDT or they have a lot of USDC See, Arbitum is unique in that it is this sort of credibly neutral playground for where people want to source their liquidity because they like and have confidence in arbitrum.

>> Um, so for example, we've got about $5 billion of liquidity and hyperlquid all sourcing USDC from arbitrum, >> right? And then we have the USDT0 protocol which is you know the interoperability protocol associated with tether where arbitum is the hub chain >> which means that if you go from like different like tron to unit chain for example that actually settles on arbitrum one [clears throat] >> okay >> and you see like you know most times USDC and USDT are like these very competitive environments but they've both are using arbitrum for like core business operations right like hyperlquid's probably you know seven or eight% of all USDC in circulation >> because of the value proposition of of arbitum one which is secure

credibly neutral liquid decentralized and again in some ways I would just say like Lindy like people have a lot of confidence you know might not be the sexiest blockchain on a day-to-day basis but like if you talk to builders they're like okay that's a very co confident place for us to build that it's not going to turn into a desert it's not going to be falling behind on a technology perspective so that's something that I think is like maybe very underappreciated about sort of how arbitrum one has evolved. Mhm. >> Um and the third I would say and this is I think been unique to Arbitrum since the beginning is this constant sort of um breeding ground for the best DeFi builders, right? So if you looked at arbitum one in its infancy like GMX is probably like the best example of like a DeFi primitive that like really did well

and we're seeing it now like with USDA. I think Osteium has been really taking off a lot because of like their focus on on pers for non cryptonnative assets. We see other arbitrum native DeFi products doing well like variational is a new one that we're really excited about that's been building a very interesting purpose model um and and even like Pendle right so Boros which is Pendle's new product for funding rates and row which is doing a very similar idea like they're all choosing arbitrum as their first chain some of these are going to go multi-chain in nature some of them might stay on arbitrum but a lot of them are choosing arbitrum for that reason there's a lot of it's a very strong place where you know a lot of this probably goes to the team that that

works with me that really helps and supports these builders helps solve their earliest problems but I think it's a very cultural um I would say defining characteristic of arbitrum is that this is where if you can you know I've had DeFi builders tell me this the reason they like to choose arbitrum because they can get a sense of product market fit if you can succeed on arbitrum you can succeed anywhere right >> and that's a sign of the competitive nature of the chain of like really good products. So, so like we're going to continue to do that, you know, we're continue to focus on that. Like Ethereal, which is, you know, really strong Perpex team that's building with using USDE as the as the base rate.

They're an L3 that settles to Arbitum one. So, they're sourcing again all the liquidity coming on chain from Arbitum Hyperlquid Lighter. I think if I remember correctly most their deposits are coming from arbitrum today into the so that you you see this as a consistent theme playing out um throughout the arbitrum defy ecosystem about just supporting um you know the growth of DeFi applications. And then our goal is to merge all of these really strong builders we have with our reach and distribution of traditional financial institutions and fintexs that can both bring users capital liquidity as it becomes easier for them to get on chain.

>> Um that was one of our thesis and I know I've been rambling so interrupt me if you have any questions. >> No, this is great. like Offchain Labs just recently acquired ZeroDev um which is like a really strong you know smart account account abstraction platform and our goal was like how do we figure out a ways to accelerate getting a lot of these enterprises on chain. We want these people to be able to meet our D5 builders. We want to be able to compound and continue to accelerate and grow how quickly these two worlds can converge together. Have you seen an acceleration of enterprises uh coming to arbitrum and asking to build maybe on the heels of Robin Hood and that announcement and now ZeroDev is is on your team to support that income that those incoming projects

and enterprises. >> Yeah. So we had a pretty strong pipeline I would say even before the announcement went live. It's probably given us like some validation I think >> but um I think that you're seeing is also a huge trend increase >> right >> in what just as a function of sort of the regulatory environment just like you know established standards getting more clear um we're seeing both in fintex and like traditional asset managers like a huge huge evolution a lot of that I think is attributable to Robin Hood maybe on the arbitrum specific side but broadly I would say this kind of started once Black Rockck launched the money market fund. Um, and we've been sort of steam, you know, like like just rolling

down a hill since. >> Yeah. Um, you guys are um, you know, in the top 10 when it comes to rollups and chains and things, but more more broadly, you know, when when I think about some of the early rollups, not all of them have survived. Uh, you know, some of the chains that are right there are newer chains that recently got a pop. and we'll see how Lindy and how resilient those chains hold up. You guys were one of the few that, you know, they, you know, you've you've been up there since the beginning and you've stayed up there. Um, look, I'm old enough to remember when you came on and, uh, you know, we had an optimism representative and and look, that's not much more of a debate anymore, right?

So, you know, you guys have stayed um up towards the top of those rankings and and and I think part of why, if I had to kind of put it out there, is because back then, you know, it was a big general rollup sort of push and you know, while you guys have gaming and and you've got, you know, some applications in the ecosystem, you guys became known as the home of DeFi and and that really served you well as DeFi I continued to grow and really never left even you know yield farming all this things have evolved things have changed but DeFi is you know alive and well on arbitum um and now you you you alluded to it with

RWAs and the advent of you know more and more of you know stablecoin super cycle is here these things are are continuing to grow so I'm curious I I just pulled up RWA.xyz XYZ, you guys again are firmly among the top uh when it comes to RWAS. And so my question is given how uh important DeFi is to Arbitum, how are you looking at incorporating RWA Defi RWI if you will into the existing DeFi stack on arbitrum? How important is that to you going forward?

>> Yeah. Um, so I think that one of the things, you know, I think what you were just saying kind of overlaps what I was saying before is like arbiters almost become like a little lindy >> in DeFi. And yeah, that doesn't mean we're complacent. We're always hungry. We're never going to stop. Like it's insatiable. Like if you just think about sort of the TAM of what we're describing, which is the convergence of traditional financial systems coming onto blockchain activity, like this is trillions and trillions of dollars of daily economic activity. Yeah. >> Right. So, like we're no one's no one's not hungry on my team anymore. Like we're going to be relentlessly obsessed with trying to capture this. But I think that there was like a period through

2023 and 2024 where DeFi was struggling. DeFi founders kept getting like SEC notices. >> Everybody was like going to like nihilism and like meme coins and like arbitrum hasn't done well in memecoins. There's some detriment to that because it's a huge generator of fees for the network. It can bring users on. But from a brand perspective, like I think everybody understood because our team kept insisting that how do we support DeFi builders that this is something that we truly care about. And obviously we have our bets in other verticals like gaming and payments. But DeFi is a core component of what we're trying to build. And you can get a good sense of your partners in their conviction when things are not

at the top of the cycle, right? And it's like really important I think to understand that. I think that that's why like arbitrum does hold like USDA David the founder like we were we were chatting on a panel a few months ago and somebody you know he said one thing that really stuck out to and he's like, "Look, if I was trying to launch this product and I have a 10-year time horizon, the place where I know I'm going to have the most support for the next decade in the DeFi vertical is Arbitrate." So, that's why it was a no-brainer for me to mint my assets >> there. And that's like I think where we where we're at in terms of the convergence of RWAI and DeFi.

>> Stephen, our CEO, likes to say we're going to look back in 10 years and just going to laugh and it's all just going to be called finance. >> Yeah. >> Wasn't call it traditional finance and no one's going to try to do centralized finance. It's just going to be financial primitives >> and it's still only I know like rwa.xyz tracks these things. A lot of those statistics like arbitrum does well in a lot of them. >> Those those are like pretty nent numbers and also like >> kind of still irrelevant because the assets don't actually have any velocity to them. They kind of just sit as like >> you just mint an asset and like it's it's countered there. So I don't put too much stock or prioritization yet in those numbers or like trying to get to the top of that leaderboard.

>> Okay? Because my goal is still to like once there is velocity, how do I provide the most value to these issuers >> and for me that is still providing the best DeFi application experience, >> having the best solutions available to them, making those connections, making sure that the DeFi products are built in a way that can be compliant and compatible with RWA issuers because once that happens, >> these numbers are going to look like drops in a bucket. >> Right. Right. So for me right now I'm still much more focused on p pick um infrastructure picks and shovels >> than like on the RWA sides particularly like sort of conquering the leaderboard

if that makes sense. >> Yep it makes sense and [clears throat] look you guys you know the black rockck bit old fund uh you know securitize was the issuer but it lives on arbitrum. Um, I I had uh the head of innovation, Nick, from Janice Henderson. Uh, they have a AAA CLLLO fund. It's, you know, over a billion dollars in in value. Um, and he described it as a risk to not start going onchain, right? Because they've got 400 billion in assets and if they don't put even just a little bit of that onchain, they could get innovated away.

And so it it was ear early early on it was a risk to go on chain because you know even a billion dollars even if you have 400 billion it's still a lot of money and so it's a risk if you if you think it's just going to evaporate but that's not the case anymore. Now it's more of a risk to not start dipping your toes in. And so it there comes an inflection point where more firms realize this and more of them follow suit. And so I I'm curious just to double down on what you described as capital velocity because I I've sort of like heard and thought about this concept a little bit. That's normally a better measure of economic activity as I understand it. You want things you want people buying and selling things. You don't want just capital sitting there.

Is that something that you guys take into account at arbitrum? generally how do you how do you think through what the most important metrics are to measure the health of arbitum? >> Yeah, it's it's a great question. So, this is like a also like you know I think Salana's been talking about this a lot about obviously Ethereum has like you know 10 times the amount of TVL as Salana does but Salana's revenue is very similar and as a function of velocity. I don't think I'm on like the same page as Salana on this, but I think there is some truth to what they're saying. And my take generally on this is revenue is certainly very important, but understanding what's behind the revenue is also very important. And

again, I'm not trying to sort of like discriminate against like memecoin activity because like you know, first of all, it's fun, but it's also trading activity. like people I I genuinely don't care if people should be able to do whatever they want with their money. That's like part of the reason why I build in this space. >> Um but if most of your revenue is generated from that category, even if it's within DeFi, in my opinion, it's much less likely to translate into future revenue when the entire financial system is coming on chain because they're not like related. I don't think like memecoin trading is going to grow at the same pace if like the entire stock market

came unchained for example because >> they're not correlated assets per se. >> Okay. >> Right. So when I think about what how to position right now today revenue is certainly important. So like anybody who's saying like oh it's a revenue meta >> is like foolish. Like we're always in a revenue meta. Like every business is perpetually in a revenue meta right? That's foolish. Saying that like stable coin activity or TVL is not important is also foolish because when these things come on chain, it's going to be very important to have the right liquidity there.

>> So like that's equally important on a long time horizon. But specifically with like RWAs and what I was describing as velocity is you want to make sure that the form of TVL that you're projecting today is not like a vanity metric in the sense that it can't be a part of a functioning ecosystem, right? So like if it can't leave walled gardens or if it's just really acting as a ledger and can't even be moved in any way, right? Yeah, >> it's still great that these things are like, you know, um built on distributed systems, but the reality is like in terms of how I would weigh them, it matters less. So, what I really am thinking about is how do I partner with

the right asset issuers, the right relationships with traditional financial institutions and fintexs to be there for them as they continue to solve these problems >> and help them grow their business because if they if I can do that, I know that our revenues will continue to go up. Yeah. >> So, I'm not saying revenue is not important today. It's always important. >> But I pay a lot of attention to like the forms of revenue and like for example with arbitum, a lot of the revenue that we get on the network today is a function of trading of major pairs. >> Um, and the reason for that is like arbitum doesn't particularly have a strong like memecoin ecosystem, but I've heard from like a lot of large traders is that onchain you can get the most

liquidity on majors, >> right? on arbitrage and like whether it's arbitrage or just trading there generally knowing they can't get front run the way we've designed our system that's a pretty pretty critical um component of it and we're going to continue to do that as more and more assets you know continue to move on chain >> yeah appreciate that AJ Warner arbitum surpasses two billion transactions continuing its growth as the home for DeFi on Ethereum really appreciate you spending the time with us today happy Halloween what are you going to be for Halloween.

>> Um, it's going to be Shabbat tonight for me, so I'm going to probably just be staying home, unfortunately, this year. But, um, I'll see if we put on a funny hat or something. What about you? >> Um, I don't know. I got a skeleton somewhere on my shirt, I think, over here somewhere. Uh, >> I'm also a M Blue Jays. I grew up in Toronto. >> Okay. >> So, Halloween and World Series on the same night is like, uh, >> it's going to be weird. >> Yeah. Well, it'll be fun. Uh, have a good time, man. really appreciate you taking the time and and spending with us and uh yeah, we're looking forward to the next time you come on the show.

That's awesome. >> See you soon. Bye. >> See you. Bye. Thanks, AJ. [snorts] >> All right, guys. That's a wrap. Uh great show, guys. I mean, look, the Rollup TV is bringing you the best crypto native content on the planet. Where else do you have AJ, right? chief strategy officer, chief business officer over at Offchain Labs, uh, company behind Arbitum, $6 billion in liquidity, you know, the home of Hyperlid before Hyperlid had a home. AJ comes on, does deals with Robin Hood comes on, shares it with the rollup. Got Sherpa in the

alpaca helmet. You know, 300 million daily active users, raised bajillions of dollars from Sequoia and the best VCs in the Silicon Valley now building an anonymous social finance product on base comes on to Rollup TV to tell you guys all about it. Look, there's so many opportunities out there. You guys might think you're drowning, right? You're just all of these things. uh how do you po possibly parse through them? But look, there's so many opportunities out there. We're bringing it all to you.

Um X42, we got a little throw in for the developers here today. So guys, there's something for everyone. If you're a dev, go check out what Eric was talking about for X42. If you're a content creator, go check out Overheard. It's on base. Go rewatch the episode and the segment with Sherpa. He tells you exactly how to go viral on Overheard, how to start earning money as a content creator on Overheard, and all the things that they have coming out. Uh coming up next, I'm going to go link up uh with the alpaca himself next week. Uh Good idea Ventures might write a little angel check into that one. So, we'll be bringing even more of that to you guys.

Then obviously AJ, just a legend of the game. Um, and and a really really nice guy. Uh, to wrap up the show on a great Friday and a happy Halloween. Uh, my skeleton. Where's he at? Fear nothing. He's right there. Check him out. I think he's playing the piano. That's how we're going to end it, guys. Great show. Have a great weekend. We're going to see you next time on Rollup TV. [music]