Rollup TV: SmartCon NYC Day 2

Transcript

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How [music] [music] we threw down two [music] days live stream we got an event planned Q4. [music] Stay tuned. We're going into the events business. Robbie Andy the boys two straight days [music] live stream roll up TV number one spot [music] [music]

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>> [music] [music] >> How the [music] [ __ ] [music] [music] We'll see you around the timeline. Feels good to be back. Bang. Live from SmartCon day two, guys. >> Welcome back.

>> First up, >> nice little dead cat bounce last night. [laughter] >> Yo, >> always got to start about the market. >> Nice little dead cat bounce last night. Thank you to everybody who saved their liquidations and their longs. >> Life is more than green and red. >> 1.35 billion. There's a lot of candles yesterday. >> There's a lot of colors out there, >> guys. I'm glad that we all survived. I know it was a long night, but we made it. >> How did you survive? How did you get through the night, Andy? >> I I slept 10 hours last night. I fantastic. Had zero alcohol. Feel great.

>> That's great. >> Yeah. Feel fantastic. >> I'm highly caffeinated and high le highly leveraged this morning. [laughter] >> That's my new thing. Highly caffeinated and highly leveraged. >> I am uh lightly caffeinated and I'm I'm comfy in spot. >> There you go. We've got a great show for you today. Sergey is coming up in just a few moments. he's going to be joining us. Uh tons of great announcements coming out of SmartCon, Chainlink confident confidential compute. Uh chain link is breaking into the privacy game. Also chain link runtime environment. We're going to be speaking with Sergey about these announcements as well as uh all the things that he's been making happen in DC and all the other great things coming out of SmartCon. What are you most excited about for our conversation, Sergey? Yeah, I mean I'm

really looking forward to hearing uh first of all it's his first time on our show. So, you know, that should be really exciting having him be on the show for for the first time. I mean, generally speaking, when it comes to chain link, it's just there's only a handful of teams that are leading this institutional push in our space. And I mean, frankly, Chainlink is the the biggest and strongest. And so when it comes to actually having having the the conversation about what's happening in DC, what's happening with the big banks, why do they want what chain link is building and really like just like it's the clearest understanding from Sergey about why are they building these institutional smart contracts and what that means for uh you know this industry, right? like because they are

they've effectively taken the idea of a smart contract and they've recind of redefined what it means from just like a piece of code into this entire kind of like multiaceted onchain and off-chain uh you know complex system and so I think I'm excited to understand you know more about that institutional smart contract uh process >> most successful things are not simple as much as we want them to be right the world is not simple the world is very complex and that's why that that's why we've seen it give give way to all of the all of the things that are possible and I think you know often times we try to reduce uh the complexity of things so that we can understand them but in

reality the world is complex finance is complex technology is complex and when we're trying to connect offchain and onchain systems it would be a lot more simple if finance was just rebuilt onchain entirely onchain that would make things a lot more simple, but the reality is that we're replacing the technology and the plumbing of finance piece by piece. And I think that creates a very complicated system underneath because it's made up of both off-chain and onchain systems. Chain link is navigating this complexity and bridging the two worlds together. really pun intended or not intended linking them together because they're now made up of these really complex pieces of in of

infrastructure. Chainlink runtime environment for example allows companies uh that are operating at the scale of Swift DTCC these global banking and and money financial infrastructure pieces. it it enables them to uh interconnect both off-chain and onchain systems, build custom workflows, connect to chains and any external system. So when you're building a technological environment that has the level of generality that chain link is building where you can connect any system to any other system, it it's a very complicated thing because you have to take into account so

many different styles and flavors of architecture. Y >> and I think um that is that is not an easy thing to do. Chain link is doing the hard work to bring these two worlds together. >> Well, that's that's the exciting part, isn't it? Is that they're um these this convergence is happening, guys. I mean, right here at SmartCon Day 2, I mean, I'm looking around and I'm looking at badges and I see DTCC, I see S&P Global Ratings Agency, I see Black Rockck, I see JP Morgan, I see the biggest names in finance are at this event. And guys, like it might sound like we have a large bag of chain link or we have all this chain link sponsorship, but like the reality is we're out here on our own

making this stuff happen. And we are extremely extremely bullish on the crowd that they've put together. We are in the networking lounge. We are literally in a lounge sponsored by Fidelity. >> Yeah, >> guys, we are at a crypto conference and this networking lounge is sponsored by Fidelity. We are entering a different era of the space and it's just guys, I know the markets now. Trust me, I am the first one to be upset that I did not sell more higher. I mean, Hyperlquid did not make any new new lows. other coins did take. May >> may I pull you out of this rabbit hole?

>> But I must say I got a question. This is this is the super cycle that is happening and we must zoom out. >> It is it is a new era and we see Sergey walking up. So we're going to bring him on in just a moment. But I think it's really important to think about what it's going to take to succeed in this new era. The hackers, the cipher punks, the guys in their basement that are coding their brains out. These were the guys that were succeeding over the last decade. >> Yeah. Are those also the guys that are going to succeed in the next decade? I'm not so sure. I think it may take a a different skill set in order to succeed in this next era of digital assets and and finance because these two worlds are finally converging. Guys, >> we're going to be right back with an

incredible segment from Chainlink founder Sergey Nazerof. As we said, Chainlink is leading the way right from the front lines of this convergence as these two worlds collide. Guys, we'll be right back with Sergey Nazerof. Don't go. See you guys in a second. Hey hey hey.

grand. All right, guys. Welcome back to

SmartCon Day two here in New York City. We have the Chainlink CEO and founder Sergey with us. What an event. Day two. What are your what are some of your reflections from day one? U we have JP Morgan, DTCC. We've got some of the largest financial institutions in the world here at this event. So, how are you feeling about it all? >> I mean, I'm feeling very positive. So, chain link already powers the majority of DeFi globally and on top chains like Ethereum, uh, over 80% of all DeFi. So, the chain link standard and the reliability that it provides has already kind of made DeFi grow significantly and made it made it a reliable resource for, you know, capital to flow into. Now,

what I I think we're doing here at this conference is we're we're continuing our work with the DeFi community, but to your point about JP Morgan and the DTCC and the UBS and and a bunch of other, you know, of our top users, we're starting the process now of making chain link ubiquitous in the institutional world. And I I think the thing people don't yet fully understand is that if there's a single standard powering the DeFi world and the institutional world, then it actually really benefits the DeFi world and our industry as a whole because it makes the movement of capital from the institutional side into DeFi much more seamless and efficient and lowcost and easy to do.

>> So that's really kind of the third step in what chain link seeks to do. You know the first step is enabling DeFi and and our industry to build advanced smart contracts. The second step is now institutional smart contracts and the third step is the merging of those two worlds into into a single efficient global financial system. So I think the fact that we have these, you know, the largest really financial institutions and the most advanced ones from a blockchain point of view, you know, working with us here at the conference speaking about our work, talking about going to the next stage in our work in many cases, um some some of them already on production. I think that's very very positive.

>> Yeah, absolutely. You've already executed some incredible achievements along with both the DeFi world and the financial world. UBS executed a live tokenized fund transaction via chain link uh and that's through your digital transfer agent. Can you describe what this digital transfer agent does for the world of finance offchain and and speak to the ubiquity that you mentioned how this can bridge the gap between offchain and onchain? >> Sure. So a transfer agent is something from the traditional financial world that effectively eliminates double spends in the traditional world. So if I want to give you equity, equity ownership of some stock, someone needs to check that I have the equity be and

then they'll give it to you. So I'll give it to them, they'll double check and then they'll give it to you. So the transfer agent is responsible for these transfers and they are essentially the way to stop double spends. They've been around for decades. Um, and it's it's a part of the system that essentially blockchains kind of end up doing on their own because we can all tell what everyone has. But there's a lot of laws and requirements on the traditional side that mean that transfer agency has to exist and has to be part of transactions. So instead of just kind of waiting for the laws to change, what the chain community has done is is we've generated smart contracts that successfully replicate transfer agency for tokenized things.

>> And then we've turned that into an open standard, >> the DTA, the digital transfer agent standard. That standard is powered by CRA, the machine link runtime environment and some of the Navlink, the data oracles that provide data into the transfer agent. And then uh UBS, which is the largest bank in in Switzerland, one of the largest banks in the world, has a tokenization team that's now rapidly growing. They've been working with us for a number of years and now we've gone to production with them using the digital transfer agent because the digital transfer agent unblocked them from doing these transactions because it solved this um essentially legal problem right of I need to do transfer agency in I need a transfer agent to do transfer

agency in order for my fund tokenization transaction to happen and you know they don't want to build that there's really no one else building it in an open reliable way that chain link has built And so we built it, you know, we built it, we made it open, we gave it to them and uh we're seeing a lot of adoption of it, but it's it's really just one of one of the many building blocks that chain link is providing to the institutional world. And then as UBS and others are on the digital transfer agency standard and they're kind of utilizing chain link for these fund tokenization movements and operations, you you really get to a place where you have a larger and larger group of institutional assets that can then flow into DeFi.

>> And so on the other end, we're we're trying to work more and more with DeFi to get them uh ready to accept those assets, but once again under the conditions of the institution. Right. >> Correct. because if they can't meet the conditions of the institution, you know, identity conditions, uh, anti-money laundering conditions, uh, transfer agency conditions, they won't be able to accept the assets. They won't be able to participate in in that universe of assets. >> So, that's, uh, this is a step in that direction in fa in in favor of DeFi. It looks like a big institutional step and it is a big institutional step. There's a lot of institutions that are going to use the transfer agent, I think, but it also builds um kind of a universe of

assets that'll be easy for the DeFi users of chain link to gain access to. >> Yeah. And I think it's really important to understand this institutional smart contract idea, right? Because I think a lot of us in the space who've been around understand what a smart contract is but don't understand the necessary complexities required to actually make a smart contract that will work to kind of bridge this gap. Right? It's not just some code on on a mainet as a smart contract. It's it's oracles, it's interoperability, it's compliance, it's privacy, it's security. And so I know that with CR and with your uh confidential uh compute you're really focused on kind of building this like stack you know in full. Um you know you

mentioned that the central bank of Brazil has been uh you know you've just announced a collaboration with them. Perhaps you could speak on that in the lens of of the understanding of the institutional smart contract. >> Sure. Sure. So, so smart contracts I I've been working on them since basically they they came into any kind of existence even before Ethereum. And um initially smart contracts were very simple. They were about essentially token ledgers or decentralized exchanges or voting contracts on a single chain.

So you didn't need data, you didn't need bridging. Then you saw the appearance of DeFi and and the multi-chain world which means you needed uh data oracles and bridging oracles which chain link is leading provider of of of those types of oracles for for different categories of transactions and you end up in a world where um for me the definition of a smart contract expanded to include all the code on all the different chains and the oracles. >> Right? >> So that's what we what's that's what we define as a smart contract. It's not just the code on the first chain. It's the code on all the chains and all the oracle networks powering all that code.

That's what a smart contract is. >> And so an institutional smart contract would be a multitude of those different contracts. For example, the transfer agency contract as well as the any navl link the data oracle to give the valuation of the fund to the transfer agent. Y >> so it can strike the value of the fund and it can decide how many shares to give you for the money you send it. >> Right. But then you'll also have a bunch of kind of cross-chain contracts to get the fund to other places. So now the bridging oracles and the contracts on the other chains are also representative of that contract.

>> And then you have uh AML KYC identity oracles for compliance so that you can send the fund somewhere. So now the contract also has identity oracles. So when I say in when we say institutional smart contracts, what we really mean is really advanced and complex contracts composed of many different um chains and their contracts as well as the many different oracles that have to work with those contracts with the central bank of Brazil and the central bank of Hong Kong and in the the largest bank in Brazil.

that was uh actually really interesting because it was a transaction between two jurisdictions which with two sets of laws >> correct >> that used CCIP for their crosschain and the sending of uh two CBDC's the e-hong dollar and the drex the uh Brazilian realale >> y >> from the Brazilian central bank and then it also used CRA to synchronize with all kinds of other systems around things called electronic bills of lighting and Swift messages because you know the other thing that oracles uh do and are going to be respons and are responsible for is the synchronization of all kinds of real world systems >> back with the contracts.

>> Correct. >> And so this transaction with the central banks was about trade flows. >> It was a transaction where soybeans from Brazil are being sold to Hong Kong basically. And um you you had to do a lot of other things in a trade flow that had to do with bills of lighting, accounting, all these things. And so the chain link runtime environment ran a workflow to do that in addition to the crosschain, >> right? Got it. >> Um and so the institutional smart contract in that case is the contracts on the different chains of the central banks and the commercial bank. It's also the oracles providing the data and the identity and all the other information.

And it's also the chain link runtime environment workflow that's synchronizing the bill of lighting and all the other activities. So that's an institutional smart contract in the sense that it's uh well it's doing institutional things and it's very complex. It has a lot of different parts and a lot of different pieces on multiple chains >> and it speaks to the reliability that you had mentioned earlier that not only are gei systems relying on this technology we you mentioned or we we announced lido partnering with chain link CCIP uh for wrapstate ETH that was announced today. It's also the institutional partners in the financial world in Wall Street, the the largest names in finance and central banks that

are also relying on this technology. Um, recently, a couple weeks ago, AWS pretty much broke half the internet, but chain link continued to persist, continue to to stay online and continue to facilitate transactions. What is it about chain link that makes it so robust and so resilient against some of the things that even AWS falls to? How does chain link stand up in in the face of that? >> So it's decentralized and the system has a lot of backups. >> Um a lot of the other I think all the other bridges went down from AWS for multiple hours. CCIP didn't go down.

>> Uh the data oracles didn't go down. a lot of other types of data oracles or we know many people's internal internally built data oracles went down which which stopped their protocols created issues created mispricing the inability to move around assets across chains because AWS went down I think created a lot of issues for people because and imagine if if AWS outage happens during a crypto market volatility event >> you have to move things but you can't move things because the the bridging provider you you use keeps saying the word decentralized or reliable, but then they're down for hours when when it actually matters. And so what Chainlink is is actually built for and and what our what our top priority is in the

community and in how we think about building things really is this reliability and security. And the way to think about it really when when you build reliable systems is that you're not building the system for the 363 days of the year when everything is smooth, >> right? Yeah. So anybody almost anybody can build a system that does something when the world is smooth. Yes. >> When when when you know market prices are not highly volatile across all exchanges, right? Which is why chain link is considered the global price in DeFi and why it secures approximately 70% globally and over 80% on chains like Ethereum. It's because it's not because of the 363 days when everything's okay.

is because the two days where everything turns upside down and the world goes crazy. Um that's really what what chain link is is built to to try and approach in the best possible way with with the most thoughtful approaches and that's what really high-end protocols like a appreciate. So CCIP is the only crosschain system of a now for Lido it's the crosschain system of Lido. Generally speaking, what we find is that as protocols start to hold more value and they start to be responsible for more people's money, their sensitivity to reliability and security goes up.

>> Yes. >> So, anybody can go build some centralized service, make a website, call it decentralized, you know, mismanage the security of their keys and and people don't notice because whatever. And it'll work 363 days out of the year. But once you secure tens of billions of dollars like AB, like Lido, like these financial institutions, you also think about the two days of the year. >> Yes, of course. >> And from what I can tell right now, from what I know of the other systems and the AWS situations, I think is clear proof of this, clear immediate >> relevant kind of recent proof. I don't see another system right now that can deliver data, crosschain connectivity,

identity, and all of these kind of oracles at all, much less deliver them in a reliable way. >> Yeah. >> And uh like for example, chain link right now is the only system of of its type that's ISO and sock compliant. So ISO and sock are these global standards for reliability and security where you have to take a lot of internal steps. You have to get an audit from um an auditor like Deoid or Ernston Young. They have to review how all of the processes work in your system. They have to review you know key management processes, security processes, data processes. Chainlink right now is the only system of its type that has that certification which I can tell you to the institutions is useful.

>> Of course. >> Um in fact we actually surpass that certification by quite a bit is is the actual reality. >> Congratulations. Um, so I think people and and and by the way, people don't fully value this the 363 days. >> No. Right. >> Because everybody kind of looks the same. Oh, this thing over here says it's decentralized on the website. >> Correct. >> And they were able to do an airdrop to juice their numbers, you know, and so it looks like they have volume. What a what a success this thing is. Oh, and they mismanaged their keys and they and they day trade on their keys. Oh, that doesn't matter. Look at their volumes.

And it says decentralized on the website. Yeah, >> but you know the two days when it actually matters, as long as chain link is the thing that works, >> I think we're doing the right thing instead of um you know, instead of doing whatever the hell >> some of these people are doing, >> especially year after year after year, those two days add up. >> Yeah, those those two days are actually, in my opinion, how you get to that 70 80% market share. Yeah, they are the defining moments of the industry. >> Yeah, that's right.

>> And we all remember >> who screwed us over and who didn't let us cover our margin and who did and institutions remember that, funds remember that, liquid funds remember that. So, so we just have a couple minutes left. We had Zach on yesterday and we asked him kind of like, you know, what do you think we should ask Sergey? He said, "You guys ought to ask Sergey why personally he still loves coming in and and and working on Chainlink day in and day out. It's been a 10-year run now. It's been some from the inception of smart contracts. It feels like we're at that that that point in the industry where it's all becoming I mean, look

around. It's it's it's happening. What is it that still gets you out of bed in the morning? what what are you so personally excited about with chain link right now? >> So, I think it's it's an amazing opportunity. Uh basically, there's not going to be many chances for anyone and I and I feel very lucky in this sense to work on something that can define uh how the world works and chain link really is a set of standards for how transactions work. So how data works on all the chains, how crosschain works on all the chains in a reliable way, how identity works on all the chains, how synchronization between chains and and existing systems works. And to me being the the person who is involved with a

with another smart group, other smart people, a large group of smart people that can create that type of standard the way Linux is a standard or HTTPS is a standard or TCP IP is a standard. I don't think that comes along more than once in someone's life. And and even if it comes along once, it's extremely extremely good fortune in my opinion if you can be involved in building something like that. And so I'm very lucky to be involved in in building something that right now is is on the trajectory to be something to be a standard, right? To be a truly global standard. it is already uh the global

standard in DeFi for data and for other other key operations. Um now the challenge is as our industry goes from being a niche industry to powering global finance can we take the chain link standard and take it beyond DeFi >> to be the institutional standard and then when DeFi and the institutional world merge into one financial system can that happen over the chain link standard right so that's kind of the um the challenge >> that we're now now now now trying to do we're trying continue to grow, continue to make DeFi succeed, make sure that you know folks like Lido have secure bridges, make sure A and others have reliable data, make

sure they have all the all the key building blocks they need to build the next iteration of what they want to build, provide all the building blocks that institutions need. And then and then this the really simple theory is that if we can do these two really hard things of powering DeFi and powering institutional smart contracts then the third step of getting them to interoperate with each other should be should be actually nor natural and organic right >> and we are already seeing some of that because some of the users we have on the institutional side and the many users we have on the DeFi side are already finding it pretty easy to interoperate trade with each other, right?

>> Which is amazing. >> Yeah. Which is >> I mean, you're doing it for all of us here. I mean, it it there's obviously a it's a winner takes most market here for oracles, for for data, for smart contracts, but I mean, >> if you guys keep winning, our entire space wins, >> and I think that's like that is the message that you've gotten across very well here today. >> Yeah. So, I'm also a huge fan of our space. That's another another >> Oh, we know. I've been I've been in this industry for over 15 approximately 15 years now. >> And um I got to tell you, if you can believe in this industry when when when everyone thinks that you're a drug dealer because you you work on Bitcoin.

Like when I started, blockchain as an industry didn't exist. It was only Bitcoin. And when you would tell Bitcoin to people, the only associated news story was Silk Road. >> So when I would people ask me, Sergey, what are you up to? And I would say, I'm working on Bitcoin stuff. and they would say the drug thing, >> right? So if you can work on something [laughter] when when that's, you know, that's what people think you're doing, you can definitely work on it when all the world's largest financial institutions want to want to work >> are in the room with us. Conviction grows stronger. Sergey Nzro, thank you so much for coming on.

>> Thank you. >> Absolutely pleasure. Chain like standards for coming to us. >> Thank you so much. >> Thank you very much. Thanks for being at the conference and thanks for having us. >> Absolutely. Love to have you again soon. Yeah, >> my pleasure. Thank you. Cheers. Thank you. See you again soon. Great conference SmartCon. >> Wow. Day two getting kicked off. Thank you, Sergey. All righty, guys. Man, Rob, initial takeaways, key thoughts here. >> Yeah. Yeah. Absolute pleasure. We'll see you next time, Sergey. >> All righty, guys. We've got a slam slate. We got to do a quick recap of what Sergey has just said. I think the mo the the most impactful and influential >> take here is that if we can get this standard across the line for DeFi, >> then it will facilitate the absolute

abundance of moves of capital movement from institutions on chain. Like when I'm thinking about how we're arguing about, you know, which bridge or which which Oracle or which DeFi app, it's like no no >> perhaps there is a model in which we think about how can we bring the industry together to align on a winner or two >> and then we can just back a winner or two all the way and then that allows the entire industry to flourish and grow. And if you think about how this industry is likely to grow, it probably already happens like that by natural market forces, >> right?

>> But that is exactly what is happening and chain link is the clear clear winner there. >> And if they keep winning, all of us, your bags will keep pumping. >> It's the compounding effect. And we're seeing this in the stock market. We're going to see it play out in crypto. The concentration is continuing. These deals are being made between one another. the the the top players in the stock market and the top players in DeFi are continuing to compound their market dominance and I believe this will continue to happen. My one takeaway that I think is really really important to understand about Sergey's conversation with us and the chain link standard is that chain link is one of the unique companies approaching this convergence from both ends. Right? You've got the DeFi horses that are running really fast and they're

doing amazing things. A is one of them there and you heard Sergey talk about A and there's there's kings of DeFi, kings of crypto and they're doing great work on pushing crypto and digital assets further and further into Wall Street. We're also seeing we're also we're also seeing Wall Street companies push further and further from their perspectives closer and closer to the crypto companies and we're seeing these two worlds collide. It is very rare >> that a company approaches this convergence from both ends. Correct. >> Chain link is pushing on the DeFi side, but they're also pushing on the Wall Street and the institutional side, and they're literally closing the gap with their own with their own forces. They're not relying on anyone on the other side.

They're not relying on anyone on the DeFi side. They're making it happen themselves and closing this gap. And you heard Sergey talk about it. As this gap closes because they are the ones to close it, the next third thing that occurs is the natural integration of these two worlds. when they are able to interoperate that becomes natural and organic and born out of the integration that we're seeing because we have companies that are pushing on both of these ends. So >> the integration [snorts] is happening right before our eyes and and chain link really is becoming the ubiquitous standard that is bringing these two worlds together and I I I do think that that market dominance will continue to compound. Sergey is doing incredible things in DC as well. We didn't get a

chance to ask him, but I I really do think we'll have Sergey on again soon. And they're going to have a friend. >> I have a friend who's been holding channeling since 10 cents >> and uh he's in Brazil right now. I introduced him to his Brazilian girlfriend [snorts] and uh he is literally holding a lot of chain link for many, many years now. And he'll just never sell. He'll just never [ __ ] sell. >> He is rising up the ranks of the link marines. >> No, he's just never going to sell. He's never gonna sell. >> That's the other thing about this community is that they are so they are so strong in their desire to never ever sell.

>> This speaks to Zach's segment yesterday which was that there is a mission a mission and a vision beyond linking blockchains together. That that is such a minute portion of the chain link standard. Now >> once you take into account the digital transfer agent that is literally helping UBS and central banks move currencies between >> yes >> uh domains. >> Yes, >> they are linking not just blockchains together but they are linking central banks together. And again, this speaks to the convergence of these two worlds that because chain link is helping link central banks together separately, because chain link is helping link blockchains together, when it comes time

to truly integrate these two worlds and link central banks with blockchains, they're both already using the chain link standard. >> Correct. >> And th this is going to become a very natural and organic integration like we heard Sergey talk about. And I think this is the vision that early link marines early believers in chain link they saw this vision they saw that >> and it's coming to fruition now. >> It it certainly is coming to fruition and I I think Sergey put it extremely well which was that you know if you believe in this vision back when Bitcoin was the Silk Road and this was a drugfilled only used industry only used for crime.

>> Yeah. >> The conviction to have that to have that belief back then it's so much easier now. Still not easy. >> Fidelity sponsoring. You're a little too zoomed into the charts. If you think a little shake out to 99k is going to is going to shake. Shake believers out of this. Still early. You >> Fidelity D. >> It's not your altcoin. That's that's going to go down. >> The largest banks in Switzerland, the largest banks in Europe, the largest central banks around the world are making it easier to believe in this vision because now they are endorsing this vision.

>> Yeah. it. They were never part of this vision back when Bitcoin and blockchain was just used on the Silk Road for crime. No, >> they are now jumping on the bandwagon. The largest banks, central banks and institutions in the world are jumping on the bandwagon and they are endorsing and emphasizing and reinforcing the vision that chain link believers had. Yes. >> 10, 15 years ago. >> Guys, we're going to take a quick break. Then we have our next guest, Cory from Dolomite up. Uh we're going to keep this party rolling. See you guys in just a sec. Uh that was an awesome segment. Uh looking forward to keeping this thing going. So guys, just give us one second.

We'll get this set up for you and we'll get Corey going. Hey,

hey, hey. Heat.

Heat. So, you guys uh just just had an

announcement and are launching something that will in in theory makes uh Dolomite a little bit more bare market resistant uh as well as maybe the uh the broader asset class. Just give us give us a one two. What did you guys launch and uh and what's the J? >> Yeah, so we just announced a $10 million private placement with uh Stewards, which is a company that's going to be uplisted on the NASDAQ very soon. And this, I think, represents the first time that a DeFi governance token is going to have like public market exposure. um and surely one of the first ones that are like, you know, pure DeFi tokens. Um also one on the smaller side. So we'll be able to work with them in a very synergistic way to be able to take some of their um real world asset part of the

business, tokenize that, bring that on chain, bring in uncorrelated assets that are not speculation driven, crypto driven, and instead bring them into the DeFi world and offer some uncorrelated yield to uh to our users. Yeah, I mean I think uh we've seen this first debt cycle kind of play out. I know this isn't exactly a treasury company, but it's a similar idea, right? Where it's like we're trying to effectively get public market exposure for these assets, right? That was like the big like if if I had to put 2025 into like a single phrase, it' be like crypto finally gets public market exposure. Um you know that has really been the theme here for this you know last six to nine months. Um you know

what importance does this have for a project like Dolomite you know in your in your vision what does this now enable you guys to do? >> Well I think the most important thing for for Dolomite in particular here is like you look at Ethereum Bitcoin and the treasury companies that exist there. These are very liquid, mature markets with tons of participants. And what we wanted to do with Dolomite was to bring something more synergistic in. You know, these are not uh strict investment holding companies anymore. You know, we're looking to work with more operating companies that are able to dip their feet in crypto now for the first time as the regulatory environment has gotten, you know, much friendlier. And it kind of goes into some of the stuff we talked about previously when I was on the role like what institutional DeFi

looks like. You know, this is it. You have companies that are coming in that they know when they get involved it's 1 plus 1 equals three and they want to have a piece of the upside here. So this private placement allows them to have upside exposure on our governance token do and then take all the activity they want to bring to our platform and benefit from it just as much as us as the platform does as well. >> Yeah man, we had a what a crazy 48 hours for DeFi. Unfortunately, we saw balancer with a massive exploit. We also saw Stream Finance and XUSD go down and people did a lot of losses there. You know, I think we're kind of questioning the questioning the the security of the

entire ecosystem after these two protocols uh you know went down. Notably, Barrett chain has gone through a chain halt and has as of today basically um secured the assets from a white hat uh that they had lost and they are restarting their chain. This affected many other chains as well. Um you know how do we how do we regain trust? How do we regain the uh feeling for users on chain that it is safe to be on chain? You know, from a builder's perspective, what you know, how do you react to this? I think there's like two different pieces to kind of pull out here. Like the balancer hack was extremely unfortunate given how mature of a protocol it was. And they did a lot of things right where they actually had

um pause features built in that after a certain amount of time uh the pause feature would turn off given like the protocol maturing. You know on Ethereum mainet they were obviously way past that point. It really caught people off guard. And this really boils down to like a bit of an architectural issue. Like some of the DeFi protocols wanted to introduce very novel concepts, but they backed into how they built the solution in a bit of a strange way. And it gets technical because you're then evaluating code and assessing the quality of it and things like that. And I don't want to put the Balancer team down because they are key innovators in the DeFi space. You know, they're a great team. But when you look at the architecture of how something like Balancer v2 was built versus how they built V3 and improved upon it or even

compared to other protocols like Uniswap, it's night and day. You know, there really is a big difference with how some of these um these protocols were implemented and how they're able to secure them not only through security audits, but also through um what I would call math. The idea that they basically have very strict proofs or invariants and say like if any of these core features are broken, our protocol is not secure. And a lot of protocols that get built don't necessarily have these core features in place of you know this is what it takes for a protocol to be secure and if any of these things are no longer true then it's not and you have to test against those things very rigorously. It's a very specific engineering part of the process that a lot of protocols miss in the early days that we've grown a lot more a lot wiser

from over the years. You know the stream financing is a bit of a different scenario. Yeah. and that you're looking at really a more of like a fund manager type setup where like you put funds in, they're basically allocating into good opportunities that you yourself don't have the time or experience to go do. And when you look at situations like that, it's important to consider like, okay, if there is a fund manager involved, like really running this, you want the same equity level protections that you get from like a security um that would like typically be in like ChatFi. And like that's really what uh what's brokered like the growth of traffic over time is trust. We're missing that in DeFi because you know we have a low period where a lot of things are going smoothly, everyone's happy, something bad happens, that trust

erodess away. We need to bridge that gap and I think see, you know, if we're going to go with more of these custodial services that produce yield, we need to see more protective measures in place that deal with all all of the edge cases. Yeah. And not necessarily keep them as open-ended as we've seen >> with with you guys going onto a publicly listed exchange and and launching some of, you know, some of these financial products. I is there a an air of legitimacy that you bring to the protocol? Because what what we've seen is a lot of the assets go into more legitimate fields be in public domains, but we haven't seen that trust or legitimacy extend to the protocols, right? Is that is that a bear on the engineering? Is it is it a call for

greater regulation? How do we how do we signal to the broader market that okay these are the protocols that have met those engineering standards have the checks and balances in place and the math that you talked about these are uh the safe and the trustworthy protocols with a regulatory stamp is that you know is that sort of regulation in progress or generally how do you see DeFi progressing so that we do give a little bit more a little bit more credentiality or consumer protection to the end end user It's tough because like as we know like Solidity, smart contracts and everything, they're so open-ended. You can build almost anything with them. Uh and certainly as like new things get built, there's going to be like new standards that pop up and there's a bit

of like a learning as you go process that happens with all of this. Um I I don't think that necessarily like credentiing is the way to go about it, but I do think like the protocols that are really well engineered have high quality bug bounties in place. they're able to properly articulate what some of these core invariance or rules are for how their protocol functions. You know, if I say the words xy equals k to you guys, you probably know I'm talking about unis swap. Like these are just things that like kind of get ingrained into the um into the analysts of the world, like you guys that are really deep in the trenches that know what's going on in DeFi.

>> And like you know there unfortunately is a bit of like you know you have to get into the weeds to see all this stuff. It's not going to be like the most easy thing for ordinary people to understand. But we also have to remember like even trady is not the most approachable for people which is why we have you know financial advisors and brokerages and things that you know introduce the the training wheels necessary for people that or also just guard rails for people to just like dive head first into the world of finance and crypto because of its permissionless out of the box you know by default lacks these things and like I think over time we're starting to see more of these things get built out there. Corey, um, you know, just kind of last thing from me for you when you're

looking forward for Q4 into Q1 for for Dolomite. You mentioned some of the the skittishness in the market. Um, you know, how do you think about your progress from a protocol perspective going forward with regards to the larger DeFi market? You know, what what are some of the core objectives for the team? Yeah, I think we're really looking to diversify into real world asset listings on dolomite. You know, we've seen like the lending markets become relatively uh uh uh homogeneous with each other where they're all listing the same things. The yield is all derivative of largely Athena's uh Athena's yield that they out output from the basis trade. And we see some people trying to run like slightly more efficient

versions of that in order to produce like marginally higher yield. And the correlation is going to one on all of this. And the only way that we could properly move away from it is working with outside institutions that have, like I said before, uncorrelated sources of yield that we could list and work with and get them into the crypto market in a way that we can um, you know, hopefully marry Trady and DeFi together in a way that really makes sense. >> What what is the RWA strategy broadly? I mean you guys in in order to you know process lending markets uh you need efficient oracles efficient liquidations and a lot of these things are are just beginning to come on chain you know are are there any missing pieces of infrastructure that you need or do you pretty much have everything and you're ready to roll

>> I think from a tech perspective we really have everything we need and we're ready to roll um it really boils down to you know setting up the the uh risk analysis on these assets initially the right way you know in the ideal world you're working with assets that relatively correlated with each other. So, the chance of liquidation is low. But if there is a liquidation, you know that there's a market maker or some kind of entity that's able to process liquidation. Um, and it doesn't necessarily happen immediately. Like these are not assets that are going to have a flash crash over an illquid weekend where you can't unwind them necessarily, not withstanding a technical risk or smart contract level issue. From a financial perspective, we're like, we're thinking about things that um that move relatively slow. you see the train coming before it hits you

and not necessarily like you sitting there like what the heck just happened. Um and broadly speaking like we talk about real world assets like it, you know, that in of itself is a very broad and wide asset class. Um, when I think about real world assets, I'm talking about tokenizing cash flow, typically things that are uh what I would call yield native that can be uh properly brought into a money market because uh like yield is a core part of whatever product it is that you're looking at whether you're tokenizing equity rights for a property you're building or you're show selling ownership of a you know cash flow on a business merchant cash advance. Um, you know, there's also like a lot of things I've been learning throughout this process as well of like different parts of the real estate stack

that you could potentially tokenize and the rights that come along with it. But at the end of the day, like people mostly just care about the economic substance that comes along with it and what are the basic protections that I have with it in case the the different ways that this uh that this asset could blow up. >> Yeah. Um, and as long as we can codify those from regulatory perspective, really the tech is there to go ahead and process it, everybody can really start bridging the gap between like off-chain yield with the onchain world and things get very interesting. >> Cory, thank you for your time, man. And congratulations on this announcement and the success of Dolomite. Uh, it's it's going to be a great SmartCon. I'm sure you have a lot of meetings, people to talk to, etc. Um, keep it up, man. Keep

up the good work. >> Thanks. Thanks for having >> a pleasure. Thanks for coming on. Hey hey

hey. Hey. Hey.

Hey, hey hey. Hey,

hey hey. Hey,

hey, hey. Heat. Heat. Heat.

Heat. Heat. Heat.

All [music] >> righty guys, we are live from SmartCon. Welcome back to AI Supercycle. This is episode number nine. We have Terren Quark who is building the human layer for web 3. Again, AI Supercycle is brought to you guys by Near. Check out Near.ai for their private chat product.

And of course, again, we have Terrence today joining us, the co-founder of Humanity Protocol, bringing this kind of human centric world to this AI world that we're bringing in. Today, we're live from New York City. Terrence, good. >> Thank you so much for calling in, Terrence. It's an absolute pleasure. Welcome to the show. >> Thanks for having me. Thanks for having me. Wish I were in New York. >> Yeah. Yeah, I am. And today was a big day for humanity. Um, you guys have just announced a partnership with Mastercard. I'd like to get into that, but I think before we do, maybe you could just paint this picture of this kind of futuristic a AI agentic world that we're entering in when it comes to payments, when it

comes to identity, and really kind of where humanity protocol fits in and just generally what your thesis is. >> Sure. Uh so I think you know I I'm I'm a consumer of AI. I use Chachi PT, I use Grock, I use all this stuff every day. Um I think there there's a a lot of people in tech uh are very excited about the possibilities um for AI uh for AI in the traditional tech world or even in the blockchain space. But I think for us we are trying to create infrastructure that solves some of the problems um that will come out because of AI right if you look at you know the last couple years it's already becoming very difficult for

us to differentiate online what is a human being and what's not um with text it's it's pretty much impossible uh you know bot accounts on social media on Twitter Facebook LinkedIn you know um it's already impossible to tell um and then recently with deep fake photos, images, you know, Sora. Um, it's it's becoming impossible to uh to tell whether essentially something is is a person or not, something is real or not. Um, and so what we're trying to do with humanity protocol is essentially leveraging blockchain uh to create a trust layer for the internet, not just necessarily for web 3, but for the entire, you know, for the entire internet world. Um and the the premise

for us is you know fi starting with figuring out whether somebody is a human being or not. Uh but using that as a basis for verifying many different attributes of a human being. So it might be your education, it might be your employment status, KYC identity, national uh nationality. Um, and then as as Andy mentioned uh just a couple hours ago, we we announced a big partnership with Mastercard where uh they're issuing banking credentials on humanity. So there's the ability for people to even verify their off-chain assets uh you know your credit score, how many shares of Tesla you own in your bro brokerage account. All of this done in a privacy

preserving way such that ultimately the you the data uh own you know is is is owned and controlled by the users themselves. um and they get to share with whoever they want whenever they want uh in a privacy preserving way. Um so that that's that's sort of what we're doing. And the reason why we think this is important is because I don't think enough people think about sort of when AI is everywhere. Uh the the challenges of making sure that uh people are telling the truth, a lot of people are already not telling the truth online. Um it's pretty sorry, give me one second.

It's uh it's pretty trivial. uh to it's pretty trivial to uh to create a social media account, LinkedIn account, put whatever the hell you want on there. So, it's it's already very difficult to verify things, right? Yeah. Um and then beyond beyond that, right, we think when you when you have AI agents roaming around, how do you allow these AI agents, even if you give them permission to access uh some of this data in a in a in a permissioned way? Um, you know, these are all the things that we're trying to solve for.

>> Yeah, >> my camera's a little bit [ __ ] it. >> No, you're all good. >> You're good, Terrence. Um, so yesterday we had uh Adrian Wall uh who was speaking to the UN about uh digital sovereignty uh and he's been a real big proponent of this and he kind of spoke about taking back control of our data. you know, he he really helped to explain the why why this is important. How big data companies are profiting off of our data, not kicking back anything back to the to the people who rightfully own that data, us as the individuals. It it's really you guys at humanity that are doing that are that are solving the how, right? the technology and the infrastructure that is being put into place ultimately to help uh reconfigure

the digital sovereignty of the world and re uh reestablish our data in the rightful owners. Could you talk about how uh h how this partnership with Mastercard ultimately gives people their data back? um how how do we open up the data flow so that we have custody over our own our own data rather than um you know just opening up permission uh kind of giving giving these companies permission to access our data and then they you know they get a foot in the door and they get access to everything. Is it piece by piece? How do how do we how do we make sure that you know we custody our own data and then what once we have it what what what can we do with it? What what does this unlock for the end user?

>> Yeah. So I I I think there there are two two things that we're solving for, right? Uh and I mentioned for humanity where we're doing a bunch of different types of credentials, but using this Mastercard thing and banking credentials as an as an example, um there are two things we're we're solving for. One is how do you uh allow somebody to prove something uh and we how do we ensure that it's holy [ __ ] Give me one second. Uh sorry, this thing is Okay. Um, so yeah. So, so we're solving we're solving for two things, right?

Number one is how do we ensure that it is uh somebody's telling the truth? Essentially, if I tell you that I have a million bucks in the bank account, um, how how can you how can you verify that? Sorry, this is like this is really not working. Uh, little technical difficulties, [laughter] boys are all right. Okay. Uh, sorry. Okay. Hopefully hopefully this doesn't fall anymore. Um, but yeah, so I was saying, right, like how do you know that I'm telling the truth? If I tell you that I have a million bucks, um, you know, how how how how can you know that that that's that's uh that's real? Um, that's number one.

And number two is provided that I do have a million bucks, how do I allow third parties to access this information u in a verifiable way without me oversharing things? Right? I might I might just want you to know that it's a true or false statement that I have a million bucks in the bank account, not necessarily the exact amount that I have or other pieces of information that comes with, you know, me screenshotting a bank statement of which, you know, back to the whole truth piece. I could easily photoshop that also, right?

Right. So what we're creating is essentially uh a network where trusted parties for example Mastercard maybe it's your university maybe it's the company that you work for can act as identity validators to issue credentials so that certain pieces of information are uh verified to be true encrypted stuck onto the blockchain and then ultimately me as the human being uh I get to share this information uh peacemeal with whoever I want and that's done through APIs, SDKs. We're rolling out smart contracts across a number of different blockchains um for applications to be able to to make use of this, right? And and I think if you

think about even just in the web three space, right? Uh one, you know, for for something like banking credentials, what is interesting is for example, if I have a bank account with HSBC or, you know, Wells Fargo, uh I kind of managed to prove that I'm not sanctioned. I kind of managed to prove that I am KYCed individual. Uh, I could potentially prove Gosh, this is like beyond insane. Uh, let me see. Give me one second. [laughter] [gasps] Sorry. Sorry. This is like acting. This is like Okay. I think >> Okay.

>> Yeah. Sorry. >> We love you, Terren. >> Yeah. Yeah. No. Sorry. [ __ ] Where the hell were I? >> Right. So you were describing how how you're helping to enable uh these solutions and and give people custody of their own data. >> Yeah. Yeah. Yeah. Sorry. Sorry. The camera is the camera is confusing me. Um so yeah, so I was I was saying like you know if if you know in in in the web three space, right? like you get to you get to be able to prove for example you're not sanctioned you're KYC uh maybe it's you know unlocking uh under collateralized loans non personal loans uh without necessarily putting you know um collateral because I prove that I have x amount of money in in the bank and these credentials we can make sure

that it's refreshed uh in real time right or even looking at you know the RWA space looking at stable coin payments a lot of you know countries are looking regul ated uh rails for stable coins, right? And a lot of the uh a lot of the RD R RWA platforms right now still going through traditional KYC routes, right? What if we could actually have reusable credentials simply saying, "Hey, you know what? Terrence is KYC already with JP Morgan. Um and so, you know, we trust that he's not sanctioned and uh you know, if if need be, we can get that information from him uh you know, uh whenever we want, right?" So, so that sort of thing. And this actually also translates into into the web two world, right? Where you know there are

many different situations where somebody has to prove uh where they went to school. Currently the way you do it is you have to have a company and call up your university, ask them to issue graduation uh certificate officially. That takes a couple weeks, couple hundred. What if you know there's a a reusable credential saying that you know Terrence actually went to this university, graduated with this GPA, right? or you know for example maybe it's even asset proofs when you're renting a new apartment you have to prove how much money you have or your income statements right right now there are two problems with that number one it's very cumbersome number two you're sh oversharing on a lot of information that you might not want to share or need to share and number three what you're sharing if you're malicious might not

even be true because you can just photoshop and create a fake statement right so so we're solving for sort of the access uh problem we're solving for the uh the convenience problem as well as we're solving for you know truth >> right um and the platform that you guys have to help bolster this truth and bolster this is is human ID right this is kind of the core technology piece of humanity protocol uh that you've integrated into Mastercard um a little bit more about this partnership you guys integrated into um Mastercard's open finance connectivity platform. Could you

just describe what the integration process was like? You know, when you were kind of going through the early innings of this partnership with Mastercard. We heard yesterday actually, you know, when some of these institutional partnerships happen. It's almost like a consulting relationship. You're coming in, you're teaching the company about uh you know what decentralized identity can provide to them. Is that how this started? Do you guys help enable and and help teach Mastercard some of the some of the primitives that are available on chain and then start to show them the technology and show them what's possible? Maybe you could just tell the story and walk us through the steps of closing a massive institutional partnership with Mastercard.

>> So this just took a long time, right? I mean it took uh it took almost like a year of uh discussions and and uh integrations and developments. I mean, Mastercard historically, people know them for their uh credit card business, >> right? >> But obviously there's uh their their open finance sort of arm of the of the company essentially facilitates data sharing between banks. >> Okay. >> So, uh right now, uh for the human ID, if you actually go to our web app, which is app.humanity.org um and sign up for an account, uh Annie, I think you have an account already. So, if you actually literally go to go to the site, um what you'll see is the ability for you to connect any bank uh

starting with the US. We're starting with the US right now, and then we're going to be expanding into Europe and then the rest of the world uh over the coming months. You will already be able to uh connect any through the Mastercard uh data connectivity platform, any bank uh in the US and be able to prove a number of different things, right? Maybe it's even as simple as proving that you have uh over x amount of dollars in in your account. Um and so what what is happening there is then automatically once you do that uh a credential is being issued on humanity protocol uh and signed by Mastercard to know to verify that this credential is true. Um and then through zero knowledge proofs uh

with our SDKs and APIs uh a third party will be able to ask you for permission to check it to check against that information. And for us the ambition with the with the human ID is to say down the road imagine it's not you know a Facebook login or a Google you know a Facebook connect or Google login you know where uh where you're signing up into websites and applications and whatnot. We ultimately want to build out sort of a human ID. But the difference between a human ID and a Facebook connect is that the information number one is verifiably true because there are you know these are these are credentials being issued by trusted parties. Um number two is that you as a user gets to connect and own this data so that nobody

ever gets to see it without your permission. Right? And then the third thing which is interesting is we want to make sure that this is this almost becomes a complete data enrichment platform. Right? So instead of just you know maybe it's a Facebook connect where they get an application might just get your your email or your name. Um in this case uh imagine an application that even might say hey you know what uh if you prove that you're a millionaire or if you go prove that you are a Maria Bonboy member uh platinum status uh you get certain discounts um because you've shared this information right so I earlier I was mentioning there's there's sort of fraud prevention preventing scams all that sort of stuff as one of the use cases but down the road we see

ourselves as actually building a decentralized identity graph where everybody gets to own and control all the data that is verified about them and they get to share it whether it's because they need it for from from regulatory perspective or maybe it's because they're incentivized to share it because they might get you know uh discounts deals etc etc. >> Yeah. And back to back to what you were asking in terms of, you know, sort of the Mastercard thing. I think uh it took took quite a fair while. You know, historically they've um on on on the data on the data side of their uh of their company. They haven't worked with any uh blockchain companies before.

Historically, it's mainly working with different sort of uh banks for uh for sharing information. uh maybe it's other other other financial institutions um in order for uh for these institutions to be able to check for user data across uh intra banks. Um but you know what we we managed to to convince them is that this unlocks a massive opportunity um not just for sort of the web 3 space where a lot more finance is coming on chain but also um for you know sort of the web two space uh as we move into an AI world.

>> Yeah. Yeah. and and I'd like to get a bit deeper into that because I think you hit two important points that you guys had in mind with this partnership as well as in general just with the philosophy that you guys carry at humanity which one being this user ownership of this identity layer of this human ID um just of the general data that you own and that's a big kind of theme here in this little subshow of our show here that being the kind of number one and Number two being privacy. When you're thinking about the kind of agentic future when it comes to identity, how do you envision this playing out with regards to this user

ownership as well as privacy with regards to identity? Like what is the future of digital identity right now? And are we set up right now to own it? And is it going to be private? I mean, right right now, right now, I think right now it's not set up to I think right now it's not set up for anybody to own it, right? If you think about who own who owns your identity right now, it's it's sort of your big tech companies, right? You know, you have your Facebooks, your Googles, um your Apples, etc., etc. I mean, the government issues you your passport, but um they have far less information about you uh than your uh your tech companies, right? Um, I think th this this actually poses a couple different problems in in

the future. I think number one, as I said, there's the uh the challenge of truth. You know, anybody can create any sort of account uh on any of these platforms in order to pretend to be somebody uh or just feed it with uh with fake information. Um the number two problem is that even if you're feeding it correct information, um all of these tech companies do not actually have an incentive. um they because they've spent so much money and so much effort uh gathering this information from all of us, they don't really have an incentive to give you back the control over this data and identity, right? They it is absolutely in their uh interest to try to monetize this and currently it's largely being monetized through um it's largely being monetized through uh

through advertising and attention, right? essentially selling selling your attention to uh to different companies that want to uh want to reach you, right? But as you can as as you're already seeing, you know, like some of the AI companies are now taking this data, right? You know, all the stuff that you're posting on Reddit um you know, is being used for for trading LLMs on uh on Open AI, right? So I think for us the the whole idea is that uh you know there needs to be sort of a decentralized solution where people ultimately control all this data and this data needs to be verifi verifiably true. Um and so we we actually think this is you know in fact a a trillion dollar opportunity if you think about the size of you know your Googles and

your metas uh currently. >> Yeah. Yeah. I mean, because right now the amount of funding that the let's call it like the centralized AI world has is probably a thousandx that of this kind of like decentralized AI world it has. And it seems like there's like this kind of altruistic kind of wanting to win for the people mentality with the decentralized AI folk, whereas the centralized AI, they just want to keep shipping, scaling, get better products, better products, better products. Um, but we're kind of running into a headway here where OpenAI is set to go public at a trillion dollar valuation, $1 trillion IPO, and Elon Musk and Sam Alman are feuding

on the timeline about kind of what the future of AI is. They're going back and forth. Sam Alman's pulling back his Tesla order. Elon's freaking taking away power from Altman. There's just a whole kind of uh Genghask Khan versus Alexander the Great type of battle happening here. But I I think that is even missing the forest from the trees which is that if we can't figure out a way to make this kind of future more o more userowned and more private then I think the ramifications for all of us are it it gets dystopian quickly.

>> It gets I mean it gets dystopian very quickly. I I was on an interview uh just two days ago with uh with somebody else and uh you know we we actually think that the challenge is now this sort of AI revolution it's it's getting into a a even worse scenario of where uh all of us are getting these dopamine hits because you know the technology is easy to use. we find it very useful um and historically sort of similar to your iPhones, your your your your Android phones and you know your social media networks where um it's convenient and so you're sort of willing to share everything with it, right? And then at this point, you know, you're starting to see different sort of applications where people are connecting their they're

connecting their Gmail accounts, they're connecting their calendars, they're connecting all their messages, you know, and and just sort of willingly hand that information over. uh to tech companies that are working on on on on supposed solutions or AI solutions for uh for for them, right? And so for us uh we we do think in terms of uh in terms of data privacy, in terms of identity, um this is something that absolutely needs to be uh be solved. >> Yeah. Um, this is this is really a fork in the road because we're at a point now where uh these teams either get our data and they're going to try to monetize and profit off of it or we have custody over our own data and we can choose what we

do with it. So I I I'm somewhat concerned of the world where everyone gets gets a hold of our data, but also the the idea of the world where we each have our own data. it's verifiable and we can choose who to share that with I think is extremely important. Um, but we've seen security leaks, hacks. I mean, for a long time, uh, you know, the reason that a lot of this is still on paper is because people are still somewhat skeptical of the internet and of databases. Uh, you know, because every once in a while we see this huge database leak. And so, could you just tell us like how do you ensure that, you know, this is secure? Walk us through what is it ZK? maybe you could just talk to us about the security of the protocol

to kind of put our minds at ease uh so that we can make sure that you know when we're when we're uh giving someone access to our data it only stays accessible by them. >> Yeah. So what we're what we're actually doing is we're not putting the data on chain right you know so what what is actually happening yeah is a little bit similar to how you're most you know at least uh most tech companies where they are doing it correctly uh they never see the uh they never see your password >> uh they never they never they never you know it's it's it's entirely encrypted right so and it's not reversible uh without a key so a little bit similar to that essentially for any sort of data any sort of credential that's being issued uh the data is encrypted

uh what we do is we actually store it on decentralized uh storage. Um right now we've uh we've actually migrated. We also announced a partnership with Walrus um which is actually built on sui uh like a couple weeks back and so the data is actually encrypted stored on uh stored on walrus uh and then what is happening is we're issuing a credential on chain um that is uh that represents uh some form of encrypted data and then what we're doing is essentially using zero knowledge proofs to allow uh a third party to be able to uh to verify that this credential is valid. uh provided that the user gives permission.

Um so at any point in time uh none of the data is on chain. The user al ultimately gets to control uh the credential. Um and nothing can you know that there's there's no possibility of uh of a data leak. >> Yeah, that makes sense. Um I also think that there's incredible opportunities here. Uh, you know, I was listening to uh the the recent Elon Musk, Joe Rogan podcast, and Elon makes, you know, a a really strong emphasis for ultimate truth seeeking AI, right? And he sort of describes how Gemini Open AI, you know, they have these implicit biases.

They're, you know, treating the founding fathers as these diverse women. And then if AI, you know, is allowed to kind of think uh non-truths, well, there's a really, really uh dystopian scenario that results from that. And so we need a truth seeking AI in order to combat those other AIs. Um if we have private AI near has been an incredible partner in this as they have private and userowned AI as well. I think you know we're entering this this world where AI agents are becoming more ingrained into commerce and the and the agentic economy is becoming full force with X42 and MCP and all these all these protocols that link these things together. they're going to get access to our credit cards.

You know, some of the time they're going to need our passport. They're going to need our driver's license. They're going to need our social security numbers. And so, when it comes to AI's sharing data with one another, like how do you how do you see this playing out in the agentic world? Do you see, you know, I give my personal AI access to my data through humanity ID, human ID? Can that AI go and share my data with every every all of the other AIs? like how how do you see our data proliferating through the economy and through the internet as we kind of delve into this agentic world?

>> I think in the agentic world uh you know I I've I've sort of spent most of my time still focusing on sort of building the solutions for the human world. Um but you know we do do the team does think a little bit about how this works and how this potentially could play into the agentic world and and you're right right you know the idea is that ultimately um ultimately you know the user same thing right needs to give permission um needs to give permission to an AI agent in order to make use of that information. I think the the the challenge actually becomes when you know uh somebody uh not fully understanding the the boundaries and the power of that AI agent shares that information and as

you said maybe then that AI agent goes rogue and starts uh blacking that out right um and so one of the the other things that we do think about is that down the road because we've built essentially a blockchain for credentials >> there is an idea that there might even be identity uh and credentials being issued to uh to AI agents to sort of uh to sort of force uh some degree of responsibility between whoever created this agent and uh and uh and and the agent itself, right? So saying that, okay, you know what, this AI agent is is running around going rogue uh doing stupid [ __ ] Um but at the very least we can we can we can verify that okay this this AI agent is technically created and uh operated by

by Andy and so Andy should be held responsible right so so I think these these are sort of uncharted territories um at least for now but I I I do think you know whether it's us or whether it's somebody else uh you know solutions need to be created pretty soon. >> Yeah. Yeah that makes complete sense. Um, Terrence, do you have any stats? Uh, like how many people have onboarded to the platform so far? What, you know, how many data points have you collected? I I mean, >> I'd have to this is such an incredible TAM. >> We we have uh we have around a million and a half people who have verified to be a human being on humanity. We have uh I think just over around 10 million credentials that are being that that have already issued. um as as I

mentioned uh the Mastercard uh on on the banking or financial services um uh credentials I don't know what the number is because it's the product has only gone live I think in the last two hours um but you know uh different sort of credentials in terms of socials and even if you go to our our web app you already have the ability to prove out your uh um a bunch of different things right you know your your travel status your loyalty status we're rolling out KYC nationality education very soon.

>> In the Mastercard partnership, um it's only been live two hours, right? So, it's too early to tell how many users will be onboarded, but Mastercard has millions and millions of users, right? Almost everyone has a Mastercard credit card or is connected to someone that does. >> No. So, so, so, so this so this this partnership is not just for anybody who has a Mastercard. this part this partnership to start is actually credential issuance for anybody who is has a US bank account right >> so the large so technically it's it's it's all 300 something million people in the US who can be onboarded and the goal for us is to actually allow for these credentials to be used in a wide range of uh applications maybe it's you know you signing up for for a crypto exchange

or maybe opening a bank account um or maybe it's uh getting a personal loan onchain or offchain So it's it's many different types of use cases uh that we're enabling. >> Does does it onboard these guys by default or does it it just opens up access for them to onboard their banking details? It opens up right now it open right right now it opens up the uh the ability for people to onboard their uh their own banking details and then for us the goal is the goal is to allow uh different sort of companies to also make use of this to onboard uh users right as I mentioned it might be it might be you get what I'm saying right like there

might be a fintech that says instead of me going out and KYCing every one of our users uh why don't I just check if this is already on board is KYC with one of the 25,000 US banks, >> right? >> That's what we we we fundamentally uh enable. >> This is really similar to the agentic use case. It it's enabling second and third order effects of this data, right? Where where banks can now access this data and and then those banks can go maybe, you know, down the line to issuing loans. The data flow, the pipeline here ultimately starts with human. It starts with the individual, right? But then humanity is the one that sort of opens up this this landscape in

this world of partners that can then leverage and use this data in a very secure way. Absolutely. >> Well, Terren, man, congratulations on the big day. I'm sure you're slammed. We're going to let you go. Thanks for calling in, being a part of this. Uh >> absolutely. Thanks for uh thanks for thanks for having me. But as I said, given that you guys are in New York, Annie, I did I just sent you a message uh with a with a photo. >> Time Square, baby. >> You guys do have some time. Swing swing by Time Square and because I'm I'm I'm not there. So would love to uh to get a few more pics or videos from that. >> Yeah, we'll have a look. We are live from New York. Terrence, thank you so much for coming on, man. This has been the AI super cycle with Terrence Quac

from uh humanity. Congrats on the partnership with Mastercard and uh Terrence, we're we're going to see you again soon. Thanks, brother. >> Awesome. Thanks a lot, guys. Trust in T. See you later, man. >> Alrighty, guys. We're going to take a quick two-minute break and then be back with some other Chainlink team members as well as the rest of the slate today. See you guys soon. Hey hey hey.

Hey, hey hey. Heat.

Hey Heat. Heat. Heat.

Hey hey hey hey hey hey hey hey hey hey hey. Heat. Heat.

Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Hey hey hey.

All righty, guys. Welcome back to SmartCon Day 2. We have a 5 hour marathon from noon to 5. Then we're going to host Teddy at our event in I think it's in Nomad at 5 to 10 p.m. So, we've got another 10 hours left on this day. I'm coffeeied up. Teddy's fired up. Teddy, welcome to the show. It's good to have you, >> man. Hey. Yeah. Thanks for having us, guys. This is a great setup and uh we're [ __ ] stoked to be here. >> Yeah. Yeah. You guys are uh firmly in the convergence of these two worlds. Fidelity is uh sponsoring the room that we're in now. It's institutional season here happening on chain. You guys are at the forefront. um just tell us like the status update on RWAS.

>> Yeah, I mean I think it's uh you know if there's any time to be an RWS, it's definitely now, especially as everything's going in DeFi, as you guys have seen on crypto Twitter. I think it really just speaks volumes to like what we've been building over the last, you know, one and a half years or so. And I think we've been on this institutional arc lately where we've been working with a lot of institutional folks both in the US and in Asia and in the UAE. So it's great to kind of see the two worlds kind of coalescing on our chain specifically. I mean, we're the only chain where you can, you know, collateralize an Apollo private credit fund or a Wizry private credit fund, loop it on Morpho and actually increase your yield that way.

And, um, I think, you know, the entire crypto space is really starting to see the benefits of that and it's, uh, you know, it's great to be out here and I mean, we were just meeting with a lot of our other partners too and talking about future deployments on the plume. So, yeah, it's it's definitely the time to be an art. >> Bullish, man. Very, very, very bullish. Are are institutions the ones that are looping or is it retail that wants access to institutional products and then they go and they rehypothecate and they go and try to try to juice the yield. >> No, that's a good question. I think it's it's kind of both. So like you know our Nest product is where all of our institutional assets flow into and this Nest product itself is integrated into all these different distribution channels. So you can think of like OKX,

you know, we announced something OKX a few months ago. the different exchanges, different custodians, different wallets, different funds, different communities, they're all plugged into Nest and then when they invest in these vaults, they can take that LP token out and go to [ __ ] Plume and there's different markets for all these different collateral assets. So on the retail side, that's one thing, but for the Ared asset, Aredex asset that we just tokenized um with, you know, the centrifuge and the in the Grove team, that'll be the first case of institutional RV5 looping on on our chain. So Grove will be, you know, looking to um uh loop this asset on on Morpho. You know, it's u probably a few weeks out, but you know, I think that'll be the first case of an institutional use case like that. And I think that's kind of setting the standard for a lot

of our other partners that we've been speaking with. >> Yeah. So this Grove company has been growing a lot. like this DeFi native almost like a credit uh vehicle if you will or like like perhaps you could explain a bit about what exactly Grove is and and how you guys work with them. I've just seen them been on this like meteoric rise and and just kind of understand what the hell is going on there. >> Yeah, so Grove is so you they're one of the subdows of uh Maker obviously and they um they're basically helping them allocate some of their funds to different RWA assets. Uh I think they were looking at a lot of like T- bill type products before um but now they're looking at private credit type assets as well and a credit X on plume was you know their first major deployment for uh

from like the growth side and you know we're more than ecstatic to have them choose us to be their home for this. So I think uh you know they're really making a name for themselves. They're really looking to deploy into different strategies as well and different asset classes. And so I think uh you know this is only just a start. A codex was just to start with us and grove and they're looking at other different types of partners as well and asset classes. >> I'm I'm curious to hear your your take on this the value acral pipeline as we tokenize more of these funds and these portfolios more assets come onchain. >> Yeah.

>> I kind of hear the the tale of two stories on on one hand RWA and assets on chain continue to grow. Tokenization continues to expand. We're bringing more and more of these assets on chain. But on the other hand, we we're just seeing like asset prices, crypto assets just not really follow suit. These two seem somewhat disconnected. So when I think about I I think about it as the value acrruel pipeline, right? We tokenize more assets um that comes onchain. In theory, this value is going to flow into crypto as an asset class. Is that the right way to think about it? How do you see uh these two worlds? How do you how do you kind of equalize and balance these two things?

>> Yeah, it's a good question. You know, for us it's interesting because we right now are the largest chain by art wallet holders. We're larger than, you know, Ethereum, Salana, all these other chains combined. So, we're sitting around like 280,000 wallet holders. And I think the reason for that is because we have an ecosystem of different products that feel more like cryptonative products, right? by, you know, issuing a lot of our assets through our Nest protocol and having users deposit get an LP token out, use it without the DeFi ecosystem, they feel more at home um for these types of use cases. And I think before us, there was never really that kind of convergence between the two worlds of Trifi and DeFi. And I think, you know, for the broader crypto market, I think it is kind of uh I mean, we've we've

been seeing a lot of blood bath, you know, in the markets. Equities are kind of still okay. cryptos down a lot, but I think the beautiful thing about art of is um you know these assets are really stable and I think as the DeFi markets kind of take a [ __ ] to be honest. Um you know a lot of folks have actually been reaching back out to us and you know asking us for different yield opportunities what you know what assets we have in our pipeline how can they get exposure to these assets and I think it's only going to grow like you know in uh in Asia we announced our partnership with Ant Groupoups web3 wallet topnod and they want to plug into our institutional grade assets as well. So I think Plume is well positioned to be in this spot where we're almost seen as the

bridge from like the east to the west, right? We have the US institutional grade assets, but we have a lot of buyers in Asia and these folks want to get access to everything that we're bringing on chain in a more cryptonative way. So I think for us it's uh for art at least it's it's up to the right but I think for the broader market you know it's uh it's still going through some pain. >> I'm I'm curious what you think about this evolution. So today, Ripple announced a $500 million raiseing >> at a $40 billion valuation, >> which I I guess is like not a token deal. Maybe like it's more of an equity deal, which maybe >> makes me think that the >> like the underlying holding company of Ripple was going to do an IPO maybe.

>> Yeah. >> Or some sort of public launch. I think that that was part of the news. Um you know, securityize just announced that they're going to do this spa into this IPO and they're going to have a securitized token, right? So we like we're entering this world where where we're going to have these IPOs and potentially these onchain ICOs and like this split equity ownership divide here. You know the easiest example to point to is is unis swap where uni token is this kind of like governance token that does not have any rights to the protocol nor to the equity nor to the cash flows. All of that kind of goes to the uh I guess to the labs entity. How do you kind of see this evolution playing out when it comes to artic companies like securityize like ripple like plume like

what is this this bifurcation that's happening for we want this public market access but we also want to have this kind of like token ownership uh vehicle how is this going to play out >> yeah it's an interesting divide that we're seeing right now but I think it's something you know I feel like in every cycle there's like a new meta right of some sort and I think um with the securitized team you know thing what they're doing going going public and you know what you just mentioned about ripple I think it's a very interesting angle that we're seeing as well and you know there's a lot of folks that actually have you know expressed interest in you know some of the plume equity side of things as well so I think moving forward it really depends on what you can offer on the equity side of of

of a business like you know you know crypto projects generally are split between foundation and labs right for us you know we actually see a lot of value in both entities uh on the lab side I don't know if you guys just saw Um, but we announced our transfer agent license that we got from the SEC. So, uh, that was a hu Thank you. Thank you. That was a huge effort from our side, especially with our general counsel leading the way there. But, um, I mean, we even talked about the coin article. You know, there's a lot more on the road on the road map for us after the TA license and I'm sure you guys know what other two licenses are next. So, I think that brings more value to the equity side of a business. So I think it really depends on the strategic nature of what

different companies are looking to achieve and how they're looking to build you know equity value within the company. But it's definitely something that is interesting that we're seeing at this level. >> You know we we've seen the rise of these stable chains. This is a little bit more on the stable coin side of things where uh plasma arc right at a circle like the stablecoin issuing companies but also some just pure stablecoin infrastructure companies are are launching their own chains. We've also seen just recently the rise of RWA chains effective. Plume I I'd put into this category and and there's a couple others in this category I'll just throw them out there like Canton and Providence which have gained a lot of assets but have seemingly come out of nowhere. And so I'm just curious

how you're looking at the landscape in general. Maybe you can describe how this landscape is shap shaking out. Are certain chains being used for certain kinds of RWAs? You know, it's almost like with this Canton sale like they're like they're at like a 40 bill like on the OTC charts like 20 billion FTVs hitting people are selling and buying like >> they've got I think >> and then there's a general has 9,000 RWA 9 >> 91% are transferable >> right so so there's some very esoteric types of assets that are being deployed on these RWA chains do you have any insight can you just share what what is happening in the RWA landscape >> yeah I mean I mean I think the landscape is pretty simple You have the general L1's, L2s that are all trying to move

into the art of your narrative because it's hot. You have these like larger fintech companies creating their own chain almost as like a payment processing rails and basically to just do whatever they need to do internally on their own network and really own the entire stack. And then there's folks that are building arts like us, but there's not really many that are relevant in that sense because I think >> for a lot of these folks, they either are on, you know, they either are on like the super institutional side of the spectrum or like the very deen side, but none of these chains are able to kind of coales the two worlds. So like the Cantons of the World and Provenence like they're super institutional. Actually, Canton's been around for I think like almost a decade.

>> I don't think anyone's really heard of them until recently. >> And no one uses it, right? But they have a lot of assets on the chain. >> Exactly. So what's the purpose? >> The biggest thing is like it's super [ __ ] easy to bring anything on chain to be to be honest with you. I think it's becoming more commoditized. But the question is how do you actually get real users to buy these assets and use them within DeFi as you would in any other ecosystem, right? And so like you know for us we when we first started Plume a lot of folks were like hey look we tokenize these assets on these other chains. It almost was like a permission black box and like we had no volume, no real users. like how do we actually access the rest of the ecosystem and the

only answer is by building a chain like gluten where it's an open permissionless chain at the end of the day however we have the compliance stack needed for anything more institutional grid right so we have sequencer at the uh sorry we have AML at the sequencer level we have KYC blacklisting whitelisting fusions capabilities through NAS and by putting those two worlds together you can actually basically start seeing uh a chain that represents almost like a regulated DeFi automated And that is something that the world hasn't seen before. And that's the, you know, the angle that we're we're headed towards now.

>> You guys are taking the right approach. I just I can't wrap my head around why someone would put something on chain if there's no one that's going to use it for anything. It's just an accounting. >> It's just a new accounting mechanism, right? It's like just another form of Microsoft Excel, but it doesn't really unlock the power of blockchain. So you you guys, like you said, you're you're bringing these two worlds together, the buyers, right? The east and the west. uh you're putting institutional products on chain from the institutions in the west and connecting them with buyers. That's really it feels like that's where the value is is connecting those two worlds together. >> Can you give us a sense of what's coming up next? I know Teddy, you're always cooking, man. Like there's there's things in the pipeline. Give us a sense.

>> All right. All right. Well, there's a there's a lot coming up. I would say, you know, our team right now is at Hong Kong Fintech Week. I was actually supposed to be there, but I didn't go to, you know, hang out with you guys. >> Yeah. Appreciate that. >> Exactly. But, uh, so there's a lot going on in Hong Kong and Singapore for us. Um, we're also growing in the UAE as well. We were in an accelerator program called Hub71. We're meeting a lot of different issuers there and different buyers as well. And honestly, um, you know, there's a lot of announcements on the Nest side that's pretty pretty exciting. I, uh, I'll share more in a few weeks, but we're basically taking Nest to a more broad extent. You know, a lot of different ecosystems have been asking us for help on the RWBA side.

They want exposure to our assets. Maybe they don't want to deal with the long sales cycles of these inst folks or they just want like a more D5 play within RTAs. And so you'll be seeing a lot more coming out of the nest side over the next, you know, four to six weeks. >> Awesome. >> We got a G plume from Thiago. G Plume. Drew. Nice. >> G Plume. >> Drew likes the Nest. He's he he's saying that he likes the the Nest product. Teddy, thank you for your time, man. See you tonight at the event. It's going to be a banger, guys. If you're in New York City, >> you're not going to want to miss this. >> Come take a shot with me and Teddy tonight. Let's go.

>> We will not let you down. >> All right. Thanks, boys. Quick break and we'll be we'll be back after a quick lunch. We got a 5 hour marathon coming right up. Thanks, guys. See you soon. Heat. Heat.

Heat. Heat. Heat. Heat.

Heat. Heat. Hey,

hey hey. Heat.

Heat. >> [music] >> All right, guys. Welcome back to our day two live stream from SmartCon. You're watching episode 9 of Stabled Up, our weekly stable coin show covering the future of the digital dollar. of course powered by our friends at FRA with FRXUSD, one of the most battle tested stable coins in all of crypto as well as the upcoming FRANET. Guys, we're here

with Cody Carbone, the CEO of the digital chamber in DC, a friend of the show now knowing that he is close with Perryanne Boring, who is >> basically the reason why Rob and I started to do this kind of crypto education work back at the University of Florida. She may not even realize it, but she was instrumental in helping the Gator Blockchain Club, which is where Andy and I met, just two enthusiastic guys looking to learn more about the space. Uh, and then she invited us up to DC for the DC blockchain summit in 2018. >> Middle of the bare market. [laughter] >> The club had literally gone from like five >> dudes to like 100 people, women. It was full up. And then by May 2018, it was back down to five of them.

>> Well, we share that then because Marian is the one who got me into blockchain. She picked me out of Trafi. I was working in DC, came from Capitol Hill, went to Ernston Young. She grabbed me out of the trap by world, got me into this space. I owe her everything as well for >> what was the story that she told you to bring bring you over and show you the light? Like what what were some of the early days back in 2018? Cuz I remember like the feeling in the room. It was like, wow, people are actually taking this seriously, but it really feels like that the the room we were in in 2018 at the digital chamber was where this entire industry kind of grew out of at an institutional level. How did she bring you over from earn?

>> So I was coming from that very DC centric background. I was working on Capitol Hill previously and it was right in 2019 when Facebook was launching their stable coin at the time Libra DM >> and she came to me and I was watching these hearings in House Financial Services and she was like this is real. This is now meeting the moment that we're talking about this in DC. She had already been advocating for 5 years at that point and she said this is time. This is the future of finance. I just remember sitting there I'm like all right what are we talking about? And then it took some time for me to get there to be a believer. COVID hit. I got interested in investing. I started looking at Bitcoin. I started looking at Ethereum and Salana. And I was like, "All right, where is this going?"

Started reading books and I remember the initial conversation I had with Perryanne. I was like, "All right, I see this is the future now." >> But it was it was that moment coming to me when I saw that Washington was meeting digital assets for the first time. And at that point, no one knew anything except Perryanne. Yeah. >> And then I I I followed here I am. >> Yeah. And and I think as of now people are attributing a lot of the the uh reason as to why we have the genius act and why the space has grown so much to Trump the administration and that's there there's no doubt that has been impactful but there was a lot of leg work that was done between that 2018 blockchain DC blockchain conference that we were all at to now right 7 years later we have the genius act right 2025

tell us a little bit about what happened in the postcoid 2020 21 to 2024 era. Look, Gendzler was in office, Biden was in office. There was still things happening behind the scenes, but it was almost like hush- hush. Like, you couldn't really come out and really be be full trailblazers until 2024 5 when Trump got elected and ultimately kind of opened the Overton window to make it okay to talk about things. What What was part of the reason why we have Genius Act? What happened in that era, that 2020 to 2024 era to ultimately get where we are today?

>> A lot of doors shut in our face. >> Yeah. >> There is this perception that this is an overnight success, right? That Trump came in in January and the Congress came in in January and all of a sudden they were going to be pro crypto. >> We were spending days, hours on Capitol Hill knocking on doors just trying to educate. Yeah. >> For so long. We were just an education organization. We wanted to find one to two champions. That was the goal. And we started to get them. We started to get Jared Polus who's now the governor of Colorado. And then it was Tom Emmer. And then it was Kirsten Gillibrand. Then it was Cynthia Lumis. We just started to add to this roster of champions over time. Thinking that one day there will be this galvanizing moment where we have leadership at the top in the Oval Office

who will be pro crypto. We'll have a majority of pro- crypto champions in both the House and Senate and we can actually enact real policy change. So those years were just trying to find one to two. We always say if we can get to 10 champions, we'll be in a good spot. If we can get one bill introduced to just start the dialogue, I have no expectations that it'll pass. But if we can just get it introduced where it's like, okay, there's there's digital asset work here. Then the last Congress, it started with let's have a digital asset subcommittee in House Financial Services. We'll get bills introduced. We get bills to pass one house. So, we started to make progress slowly knowing that enactment was unlikely because we didn't have leadership at the top. The Biden administration didn't like this.

We didn't think they would sign a bill into law, but we knew one day there would be a moment. And so as we were adding champion after champion from 2018, 2019, 2020, that one to two became 10 to became 20 to becoming, you know, over a hundred members of Congress, almost two over 200 members of Congress supporting the Genius Act in the House. >> 68 senators, both Republican and Democrats, supporting the Genius Act in the Senate. Now we're at this moment. It's like, okay, we have a majority of Congress. Crypto has had its day now, and now we have to execute and continue to push things forward. >> Yeah. And you guys are doing just that with this streamline act that you've recently been uh you know pioneering for AML in crypto as a whole. Crypto has been known from the outsiders as it's it's anonymous. There's this thing that

it's crypto's anonymous which is so far from the truth because if now you know if you have any inkling you can go and see everyone's addresses on most big chains except for some of the private ones. Obviously it is you know numbers and letters. So you can't really attribute an actual name to it or an identity to it, but but Krypus the furthest thing from anonymous yet that is kind of like the current I don't know idea in in the outsers's heads. Talk to us about the streamline act, what this uh means for stable coin regulation, what this means for crypto as a whole and why this is important for you guys.

>> Streamline act is an incredibly important bill. Right now uh most of the KYC know your customer rules are from the bank secrecy act of 1970. They don't make sense. They're very antiquated. You're right. There's a ton of misconceptions about the anonymity of digital assets in the blockchain. If you are buying your assets like my mom or dad on Coinbase or Kraken or Crypto.com, you are fully KYC. You put your driver's license there. >> If you ask a law enforcement official if they like when people trade or if there's elicit transactions in digital assets versus cash, 100% they'll prefer if it's done on the blockchain because they can see it and they can find those people. But if I was going to give you $500 right now or give $500 to of cash to a terrorist group, they're never

finding that. >> They love it. So what the Streamline Act is trying to do is to modernize the bank secrecy act secrecy act compliance regime to fit where we are in this new innovative cycle. Right now banks, crypto exchanges, they have to file a suspicious activity report for almost everything. >> Yeah. >> They have to file thousands and thousands of them. If you go talk to the regulators who are supposed to follow these reports, they have a log that is hundreds of pages deep that they are not getting to. Those reports are not cheap. No >> for the banks or the exchanges to file.

They cost thousands of dollars per report. If you want to be a legitimate player in the digital asset space right now and you want people to trade using your platform, you have to have a compliance team that is costing upwards of a million dollars. That's for the smallest exchange. How does innovation grow when the entrance to the market costs a million dollars? Insane. The streamline act will remove a lot of those necessary unnecessary requirements that the Bank Secrecy Act of 1970 comply uh that put into place. The Bank Secrecy Act of 1970 said any transaction over $10,000 needs to reported to the regulators. $10,000 >> that bought you a house. That bought you a house back then, >> right? $10,000 right now is is nothing to a lot of people. And so it's crazy

that we're still going past this regime of 50 years ago. We have to modernize it. The Streamline Act needs to pass. We're very supportive of it because I think stable coins only work if you can have new entrance to the market to innovate and to compete. >> Tell us about what the perception of stable coins, how it's evolved because you were around before stable coins were a thing, before the Genius Act existed. And so you saw it from the beginning of its life cycle to ultimately becoming enacted. How did the perception change? Now people, Secretary Besson's talking about $3.7 trillion of stable coins by 2028. We think that we'll get to double digit trillions by 2030.

This is where we're headed and this was totally unfathomable a few years ago. Talk to us about why not only is it fathomable today, but it's actually becoming expected and and it has the majority support of people in DC. So, stable coins started as a very theoretical concept to people in DC. They thought it was just a crypto asset. They thought it was volatile like uh like Bitcoin or Ethereum. And so, a lot of members just associated with, oh, it's just another crypto asset. So, that's how we're going to treat it.

>> Then they started to understand, okay, this is tied to the dollar. That's interesting. Like, this could lead to dollar growth. Terra Luna didn't help in 2022 algorithmic stable coins. That is what most people thought a stable coin was, algorithmic stable coin, what it was for a few years. >> But the growth of the dollar and the purchase of US treasuries and the growth of companies like Circle and Tether globally, that was really interesting to a lot of lawmakers. They didn't know how to regulate it yet. They didn't know exactly what the use cases would be yet. Then there started to be more use of US dollar back stable coins in other jurisdictions around the world. That was really exciting. There was these countries like Argentina or Brazil or Turkey or Indonesia that didn't have any

way to access the US dollar, but they were able to do so now through a US dollar max stable coin. And they were using it as an inflation hedge. They were using it as a store of value. They were using it for payments. The US government when Trump came in and Besson to your point saw that US dollar treasuries were being bought by these stable coin companies around the world and the US dollar was being used as the primary for primary form of payments and transactions in these jurisdictions where they thought were how could we can never reach them right >> that was very exciting for them because that is how you can expand the strength of the dollar around the globe >> especially when you have competition from China and the bricks coalition of China getting close to Russia they're trying to have an alternative currency

to the US dollar. That's when it when it became the narrative became less about just remittances. We'd always go in and we talked to lawmakers about, well, it's really great if you have an immigrant population in your district. They could send money back instead of going to Western Union. Western Union's taking 9% off the top. It takes three to five days to get there. They're sending money now through USDC. That's much more exciting to them, >> right? >> When it became about dollar growth, >> of course, boo boosting the US dollar all of a sudden. And it wasn't just about remittances or use cases here and here or how this could be used for quicker, more efficient payments. That is when every one of the administration and everyone in Congress woke up. Okay, this is a way we can now compete. This

is now about it's not just about technology. It's about economic security. It's about national security. It's about economic prosperity. It's changed the entire shift. And all of a sudden, it became stable coins are something we must lead on. We need to have the dollar be the the reserve currency of the world in every jurisdiction. The best way to do that and the best way to buy more short-term US treasuries is through stable coin pump uh companies. Tether is one of the largest purchasers of US treasuries in the entire world more than most nations now >> just behind Brazil number 17 the entire world.

>> It's insane. And so once it became about economic security all of a sudden the light bulb went off across everyone's uh in DC's you know in p. That's when it became very bullish and the White House started saying, "Okay, this is priority number one out of the gate." Senate Banking, House Financial Services. You're going to tackle stable coins. We have to strengthen the dollar. The White House was there every single day as a uh as the negotiations of the Genius Act picked up and we have to pass this bill now. And that's what they did. And now we're in the implementation phase. >> We've got 18 months from enactment back in July where we can finally start to implement this and rulemakings will come out. And hopefully in, you know, 14 months from now, whatever it is, we will start to have Genius Act compliant

stable coin issuers and stable coins will continue to proliferate and grow to those trillion dollar numbers that we expect. >> Yeah. Yeah. And I mean, I think it's so incredible how the industry had such a negative perception following FTX, following Luna, >> and stable coins single-handedly took the perception for the outsiders, for the legislators, for the institutions and completely flipped it forward. For the legislators is about extending the US dollar's hedgeimonyy, the dominance. For the institutions, it was about the yield, the amount of money that Tether is making on a yearly basis. just about this idea of better uh a better financial system and it completely took like now it feels like back in 2018 there was like bitcoin not blockchain or

blockchain not bitcoin now it feels like there's like stable coins not crypto happening it's almost like another like you know split happening here um I don't mean to put you on the spot about this market structure bill >> but my goodness we are ready for the market structure bill aren't we guys any intel that you can share about your optimism or pessimism about the timing about the implementation details. Where are we at with the market structure bill for for crypto? >> Well, I'm an eternal op optimist uh that I'll probably get some eye rolls from the the listeners and the viewers. Uh I am optimistic that we'll get a market structure bill done this Congress. Now, that has already gone from this summer to this year to now this Congress.

>> Uh it's going to be really tough. The government now is at the longest shutdown in history. >> There is no sense of when the government will open back up. That definitely impacts market structure negotiations. It is not priority number one for a lot of these lawmakers right now, but there is progress still and there are conversations that are happening. Senate banking uh Republicans released a draft a few months ago. They are now negotiating with Senate Banking Democrats. Okay, that's a good spot to be in. Senate A is going to release a draft hopefully any day now. DC famously misses deadlines. They were supposed to release their draft on Halloween.

Halloween has passed. There's no draft yet. We're hoping it's this week and maybe next week. >> The Senate took a a different approach. We passed the bill out of the House overwhelmingly bipartisan support. That's great. That's a massive win. The Senate didn't want to take that bill up. Wants to do its own thing. The House was working together efficiently on this bill. So, you had House Financial Services and House A, the two committees of jurisdiction over this this text working together on one product. In the Senate, I just mentioned there's two competing efforts. So, Senate Banking is doing their own thing. Senate a doing their own thing. We have a lot of steps that need to happen before this bill can get across the finish line. The two committees are going to have to come together and put one bill together. So, that'll be one thing. They then have to

send it back to the House because it's a different bill than what the House passed. The House then has to pass that bill and they have to reconcile to make it one bill. And then they both have to pass it and send it to the president's desk. >> That is a lot. >> Yeah, that is >> that is a lot. >> And when does this Congress end? >> Uh, next December 31st. So, December 31st, 2026. But 2026 is an election year, >> right? >> When it's an election year, members of Congress don't like to spend time in DC. They want to spend time at home. They want to campaign. Politics becomes the number one issue. Politics drives policy. Usually, it's not the other way around. And if politics comes into play here, that'll be very messy for the market structure bill. It has to be

bipartisan. I have a I get this question a lot like, well, can't Republicans just pass this by themselves? You know, they need 60 votes in the Senate. Republicans only have about 50 53 seats. So they need about seven Democrats, six or seven Democrats in the Senate. So they need Democratic support. There's a contingent of 12 Democrats right now that are working really really hard to get to a bipartisan agreement. They see the potential and why we need a market structure bill. It's great that the market regulators at the SEC and the CFTC are doing their thing and they've been awesome. That's fantastic. But we need a bill to administration proof this technology. We need to ensure that in four years, whoever become their three years now, whoever is the next president is not going to say, "You know what? I'm anti-crypto. I'm going to take down

everything the SEC did and everything the CFDC did." Because they can do that like this. >> You get legislation passed. They can't do that. So, I'm optimistic we'll still get to yes because there are members of Congress who are adamant and motivated that they're going to pass a bill. I just the timing is keeps getting delayed and that sucks. And and like you said, 2026 could pose delays as these politicians are going home. They're campaigning for reelection. Do you think politicians will be able to campaign on crypto as a decision and and a particular policy to sort of propel them into a re-election? For instance, you know, are we going to see Democrats trying to fight crypto and trying to say to to their constituents, hey, you know,

we're against this crypto thing? They're probably going to lose a lot of votes, right? It's a not it's a not insignificant portion of this last administration that helped, you know, Trump get elected. And so, do you think we're gonna end up seeing Republicans continue to to to preach this message and potentially see Democrats flip into pro- crypto in order to win over more of their constituents? Can they win an election that way? >> 100%. The largest donors to the 2024 election by an industry was crypto. >> It's incredible.

>> It wasn't banking. It wasn't traditional financial services. It wasn't the real estate sector. >> It was both sides. It was crypto. >> Crypto. We just released a poll several weeks ago and it looked at crypto voters. >> The majority of crypto holders who vote are single issue voters. They vote with their wallet. >> 100%. Which is totally me. >> And the most the most shocking part about this is when you ask them their political ideology, they lean left. >> Yeah. >> They lean Democratic. >> Middle left. But just whoever is going to support crypto, I'm not it doesn't nothing else matters. That is where the majority of the ind industry is. And so if if Democrats or Republicans are smart and they see that there is this huge contingent growing every single >> young people too, right?

>> Young people, young voters that are singleisssue voters that it doesn't matter what their Democratic ideals are or their Republican ideals are that they're voting with their wallets now. >> They are going to vote for who is pro crypto. It can absolutely carry the election. I think it's a huge part why Republicans have such a massive weight. If you look at one specific race, not even the White House, the Ohio Senate race last year, it was Sharon Brown who is the leading senator on the Senate Banking Committee that is leading the market structure bill. He was the chairman last time. He went against Bernie Mareno who was pro crypto, a former member of actually the digital chamber.

>> Nice. >> He he he was one of the first people ever to tokenize car titles on the blockchain. He ran on a pro- crypto message and he overtook the Senate Banking chair because shared Brown was anti-crypto and crypto voters or single issue voters again knew how important the Senate Banking Committee was. Yeah, >> they can it can swing elections. So 100% if you're a Democrat or Republican running for the White House, running for Senate, running for House, running for school board >> across the country, you should be pro crypto because it will help you in your election. >> Yeah, it will. One of the things that we've heard from previous conversations is that look, you know, the the Democrats want consumer protection.

that's their main hold out when it comes to clarity as well as the rest of the regulation here. Look, regulations are what provide consumer protection. So, the fact that we had no regulations back during the Biden administration and the Gendler administration when you know there was zero regulation, there was zero consumer protection. That's when the Democrats were in office. Why aren't they fighting harder to get some regulation? Even if it's not clarity, even if it's something else or clarity's reconfigured in some way, why aren't they pushing ahead some sort of regulation for consumer protection? >> I think Rob likes Trump. [laughter] I think he swings right. This guy likes Trump. Come on, tell us you love Trump.

>> I'm pro crypto as well. I look, I I think >> single issue voter. >> Yeah, I think most of the people in this room probably are. >> Yeah, it's uh I I couldn't agree more. It is asinine to me that the solution to something you don't like or something that you want more consumer protection is is let's do nothing. That doesn't work anymore. There was this contingent of the Democratic party and I and I should say this is a bipartisan issue. Yeah. All those Democrats supported the Genius Act, supported market structure, but there is a contingent of the Democratic party still that believes digital assets is a fad. It is a trend and it's going to go away. It's bad for the economy. It is bad for consumers. It is bad for constituents. and they are trying to tell their constituents how to use their money and what to spend their

money on. People don't like that. People don't want the government to tell them what they should spend their money on. And so their solution instead of regulating it, to your point, to provide the consumer protections while they're sitting on the Senate floor like Senator Elizabeth Warren and screaming crypto is so bad. Look at all the scams and fraud. Well, her solution is do nothing. >> Yeah, >> that makes no sense. >> That's not the solution. The solution is regulation. >> The solution is regulation. And so if there if that faction of the Democratic party could join the other 18 20 in the Senate and the hundreds in the House on the Democratic side who are trying to push for those consumer protections through passing legislation, through rulemakings and regulation, we'd be in a much better place. All 100 senators

should support digital asset legislation. Whether they hate the technology, they may never want to invest in Bitcoin. They may think Bitcoin is a scam. So be it. But their constituents are buying it. Their constituents are trading it. They're experimenting on DeFi protocol and dexes now. >> Yeah, >> they should want to protect them and that means passing consumer protections through legislation. It makes no sense to me. >> Yeah. So, no brainer. >> You kind of coming back to the implementation of the Genius Act kind of full circle here. We just have a couple minutes. >> You know, you mentioned that we're in this like 18month or so implementation phase. I'm curious to understand the perspective from DC about non Genius compliant stable coins. So, uh, notably there's genius compliance stable coins,

right? Fully backed. Uh, reserves are kept on public balance sheets. They're updated. There's a whole list of things, right? >> Fracks as an example, a genius compliance stable coin. >> They don't pass yield back to their holders. These types of things, right? >> Uh, and then there's these stable coins that are like completely non genius compliant. I like we basically call them like yield bearing stable coins. >> They're just basically meant for looping, for yield bearing. They're they're sometimes like mechanically pegged to a dollar. They're sometimes backed by other stable coins. They're kind of a mixed bag. What is the stance from DC on these kind of yield bearing non genius compliant stable coins?

>> Per is a great example of a genius compliant stable coin once they can be genius compliant when the implementation phase is done. Yield bearing is a really interesting conversation. >> You put it right. Yeah. Okay. >> Uh yield bearing stable coins were explicitly prohibited in the Genius Act. That was done at the behest of the banking lobby. >> Right. >> The bank said there is no way we're going to allow stable coins to be able to generate yield and send that back to consumers because that is competing directly with our entire business. >> Correct. Right >> now there has been more debate after that about well what are rewards? What are rewards and these interests that if you're on Coinbase and you hold USDC.1%.

>> Um so that's a very interesting debate that's going on right now. I think what Congress started with these paymentbacked stable coins onetoone highly liquid backed by short-term treasuries because it was the easiest thing for them to understand. It was the lowhanging fruit of the digital asset world of the stable coin world. I think what you're going to see maybe not over the next several months but over the next several years in congresses is okay what is the next iteration of a stable coin look like? Can we relitigate yield bearing and see if there are other opportunities to maybe put those into the US financial system? Can we look at other types of backed stable coins? Can we look at goldbacked stable coins, other commodity backed stable coins,

other cryptobacked stable coins? Right now those are not allowed under the Genius Act. >> I think the the market will dictate >> what DC does as often happens. there was such a explosion uh of US dollarbacked stable coins and these onetoone payment stable coins that the government had to respond and now we are seeing what happens when the government responds the market is taking off I think if the market is telling Washington hey we are demanding yield back stable coins that'll be very fascinating to see how the government pivots if the market is saying hey we demand goldbacked stable coins or bitcoinbacked stable coins it'll be very interesting to see how congress pivots I think that's the next iteration I think we will see bills

start to be introduced later this Congress, next Congress once the Genius Act is fully implemented and we can just see okay what does this look like right now? That's always how Washington is thinking. I think that's next but I think it's not a few months away. It's a few years away. >> Think thinking of what's next. Has the banking lobby shown any any indication that once Genius Act is implemented they will also join the stable coin force? >> 100%. They have to. >> It's all about competition. That is why they wanted to prohibit yield backbearing stable coins is because they want to issue their own stable coins and they want to make sure that they're still giving yield on their deposits >> and that they're the only ones that are able to give yield.

>> The only ones. Yes. This is all about owning the market for them. They want the mom and pop to go to not go to Coinbase or Kraken and go buy FRA and hold Fracks and transact in FRA USD. They want them to go to City and they want to go to JP Morgan and just experiment with them. They want them to feel comfortable where they've already gone forever. They are terrified of this new upstart that is competing with them. So, the bank lobby is very in protectionist mode right now. But I have no doubt in my mind that the first people once Genius Act implementation is through that are issuing stable coins will be the largest banks.

>> Yeah, that's yeah, I mean that's that's bound to happen. Um, another interesting happening in the last month or two has been I think the CME announced that they're going to be doing settlement in stable coins for some of their markets. And I believe the NASDAQ is getting ready at some point, maybe the next year or two, to transition, but basically 247 markets. So, it's funny how we thought that, you know, crypto was going to become more like Tradfy, but it's really Trafy is just kind of coming to to terms that 24/7 markets, instant settlement.

These things are just far more efficient and better than the current. >> We we've got the CFTC looking at tokenized collateral right now. They've got a request for common out there. You're completely right. I laugh at every crypto conference I go to and I was like, "Wow, there's a lot more suits here." >> Yes, >> there is a ton more suits here. And it's because Trady has come to crypto and not the other way around. Crypto has started to compete on a scale that traded, >> right? They forcing their hand to pay attention, >> forcing their hand. And so when it comes to this uh 247 trading to stable coin settlement for certain derivatives markets, what what needs to happen in DC for that to happen in like like what actually needs to happen for that to be implemented to see stable coins, you know, when I'm trading Amazon on my

Schwab account and for that to settle to USDT or something. >> You don't need necessarily need legislation for that. That can just be guidance from the regulator at the CFTC saying, "Okay, this is okay, but here's how you do it. Here's how we we want you to do it. Here's the disclosures you need to provide to us to make sure that everyone can be safe. Here are more consumer protection authority. Here's more enforcement authority for the CFTC to make sure everyone is safe and compliant. But there can be some rules of the road that can just come from the regulators. That just takes a quick stroke of the pen from the SEC or the CFTC. You don't necessarily need legislation for that. So, I imagine some of those developments that the market are driving will force the agencies to respond. We have never uh been more

blessed at the agency heads right now at the SEC and CFC to have pro crypto y champions there that want to see these innovative 247 trading. They've already been exploring it. They've already had comment letters on it. The CFTC had a comment letter on 247 trading just a few months ago. All it needs is a quick stroke of the pen from those agency heads. That can happen like this. And I imagine once the government opens back up, you will start to see over the next year as legislation slows down. But where will can we see policy progress? It'll be from those agencies that can move unilaterally quickly. >> Yeah. >> And I think it's important I mention that the the nomination for the CFTC is Michael Celig who's pro crypto.

>> Yeah. Former chamber member. >> Yeah. I mean pro crypto, >> right? He he's coming directly from he's chief counsel at the SEC crypto task force. >> He worked at Wilky Far before this and his whole client book was crypto companies. >> He is a subject matter expert. >> What what what is at the top of his mind? Is it uh stable coin collateralization for some of the CME contracts? What what what are some of the things that are on the top of his priority list so that when he does get in there, he's going to start to make these changes? >> It's a great question. I I think he's got to get confirmed first and so he's probably thinking about that number one.

Um some of these rulemakings that are out there on like 247 trading on collateral probably top of his list. He's going to be very influential in the market structure bill. So those legislators who are trying to write the rules of the road for the CFTC and the SEC, this market structure bill would give spot market authority over to the CFTC. It would have to appropriate a ton of money over the CFTC to now handle a brand new industry. He's probably going to be very very uh focused and play influential in that legislative debate. He's going to be giving guidance and technical assistance to the lawmakers who are drafting this bill. That's probably priority number one is okay, how can I get this bill across the finish line so I can have all this authority to now create a regulatory structure for the digital asset.

>> And how can businesses and position themselves for the clarity act to go live in the implementation phase? We saw stable coin issuing companies start to come to America, start to coalesce around DC so that they were in position to capitalize on Genius Act. How can businesses also capitalize on Clarity Act when it is uh enacted? Well, uh, shameless plug would be join the digital chamber. >> There you go. Shout out. [laughter] >> Uh, we can be helpful there. But no, you have to spend time in DC. Yeah. You have to get with this legislative text intimately. You have to know everything that you're going to need to do to be able to comply day one. I remember meeting Sam at FRA at the Bitcoin conference a few months ago, and it was before the Genius Act passed, and he

said, "I know every single provision that is in that bill because we want to be able to comply right out of the gate. If you're going to be successful as market structure is going through, you have time right now. You have to be in DC. You have to be talking to the lawmakers. You have to be talking to the regulators. You need to be set yourself up for success and say, "I know every single provision that my business is going to need to comply with, what licenses I'm going to need to apply for so that you're at the starting gate that once this bill is enacted and implementation is done, you're the first one that can be compliant. You have to know the bill intimately and you have to know the regulators >> and we've seen that from the leaders in DC. they actually get out in front of

the bill and they're helping to shape it. So, not only are they, you know, learning it, understanding every provision in it so that they're ready when it goes live, they're helping actively shape this bill. >> That's and that's what we've been doing. So, for the first time in the 11-year history of the digital chamber, we can be proactive. >> We can finally say, "Hey, here's what we want in the bill." Because the lawmakers are listening to us. It is not that where we just have to be reactive and just take the onslaught of enforcement actions or everything that's coming at us. We are sitting down at the table with the lawmakers saying, "Okay, here is what we want." And they are listening. Here is what we need to make sure that we can comply but also continue to innovate and grow in the US.

The lawmakers are approaching us before the bill goes to a discussion, before the bill is introduced. That is something that has changed dramatically over the last two, three, five, 10 years where now we can be proactive and the industry has a legitimate say in all of the bills that are being. Cody, who are you looking for to join the digital chamber? Is it founders, builders? Is there a certain segment of the industry, businesses? How can they find you? And who are you looking for? >> Anyone that's building on blockchain. Our entire goal at the digital chamber is mass adoption. We just want to ensure that builders, developers, the largest projects in the world, the smallest project in the world can grow in the US.

We are US focused. We are federally focused. We're doing a lot more at the state level as well. We want to export US ideals and policies overseas. We think we're going to have the leading regulatory framework right here at home in the US. Anyone that is building on blockchain, whether you are an exchange or you're cryptonative company or you're now a traditional financial institution or you're a consumer, you know, payment consumer payments oper uh operation or consumer goods. If you're McDonald's and you want to offer, you know, you want to have people can buy a Big Mac in Bitcoin, come work with us. We can help because you're going to have policy issues. It doesn't matter who you are.

If you are building using blockchain technology, we can be helpful. Jody Carmon, thank you for your time, man. Amazing. Number nine, guys. We'll be right back. Quick standby. We have our next guest coming up, guys. Thanks so much. See you in a second. >> Boom. Boom. Boom. Boom. >> That's awesome. crazy.

Hey Heat. Heat.

Heat. Hey Heat. All right, guys. We are back for another

conversation on policy. We have Adam Minhart, the head of public policy at Chainlink. We're here at SmartCon Day 2. I mean, I'm I'm looking around. I see JP Morgan. I see DTCC. Fidelity. >> I see Fidelity. I see validators. I see market makers. I mean, it's what a conference. >> Yeah. I mean, exactly. uh you really see the convergence of tradi crypto you got defi here um I think chain link is positioning themselves in the middle of the all really is connective tissue so uh great conference lots of people we have people from the fed here the white house is here today so we got government as well yeah incredible what is the what is the public perception you know NDC the Fed the white house um maybe you can just shout out who are some of the

people here and what are they bringing to the table that the crypto ecosystem is looking for as these Two worlds collide. >> Yep. Uh couple different lanes in DC. Um the Federal Reserve is here. Dave Mills spoke uh he did a fireside with Ryan Levelvel from Chainlink. Um the discussions with the Fed have really centered around kind of modernizing payment systems. So really the plumbing of financial markets uh and how to make those interactive with blockchain with DT. chain link really sits in the middle of a lot of this technology whether it be crosschain interoperability compliance proof of reserves um all types of uh of middleware that make these systems interoperate so those are

the conversations there I think with other agencies the white house is here today as I mentioned I think it's more through the policy lens of talking about legislation happening on the hill and you just had Cody on probably talked about market structure that's obviously a hot topic a lot of discussions going on around there. Last night's elections obviously will have >> insane will have an impact on a lot of this in terms of the posture, not just the shutdown, but all these little policy items with of which crypto is one of them. So, uh I think for chain link, it's looking at potentially the government as a as a customer. Yeah. And as a partner, but then also doing policy work with people like the White House and and the Senate and the and the House. One of the things that I think

was significantly underrated was the Fed displaying and putting economic data on chain. This was something that I think flew under the radar. It didn't get enough uh attention and press. And this is something that I think is just the beginning. They're kind of dipping their toes in the water. I think it was the the commerce secretary Howard Lutnik that helped make this happen. Uh they used chain link to put this data on chain and it wasn't particularly the the fact that they stamped a transaction with economic data. I get it. It's a relatively simple technical thing to accomplish, >> but what it shows is the relationship that the government has with the onchain providers, chain link specifically, and it shows what is possible once the data is onchain. We can use this data in

markets. It can settle prediction markets. It can be used in financial products. There's such a plethora of open access and financial products that can be born out of this that I I'm really really excited. I'm curious how that relationship came to be. How have you been able to to to set such deep roots in DC and in the government to ultimately flourish into this financial eosystem? >> Tell me a bit about your background as well. >> Yeah. Yeah. I mean, I'll touch on the Department of Commerce work we did and kind of what we're doing there and I'll touch on kind of some of my background as well. Um, for commerce, they had reached out to us. They clearly uh were looking at ways that they could demonstrate their uh interest in working with crypto, with blockchain. Clearly

the secretary has a strong personal interest in this. Um obviously chain link puts offchain data on chain. That's really the core service they provide and what they've become known for. Um >> for us we worked with them to go through which data elements made the most sense. The most notable for them is really their GDP data, their quarterly GD GDP data. >> Like you said it's not technologically a massive leap. They have data in the right format. They have APIs that you can kind of plug into. There is backend work to be done. There are gas fees to be paid every time you're writing to a block, too, which is which is something I don't think.

>> Trust me, we've paid a lot of those. >> Yeah, I can imagine. >> We paid a lot of those. >> Um, so putting it on chain to your point, uh, prediction markets obviously I think that's where everyone's mind goes to is this stuff can be now easily picked up through crosschain settlement for uh, prediction markets, poly market, koshi, others in that space. To me, it's really the nonprediction market use cases that are most interesting. We are talking to other agencies. There's weather data, there's rainfall data, um there's crop data that can be used for parametric insurance products where things can be smart contract based. They can pay out uh based on certain events happening. So, there's lots of different

ways this government data can be used. For us, we love the idea of encouraging the use potentially looking at things like a hackathon. Yeah. When the government reopens and when you have a bunch of developers looking at new data sources and incentivized at a hackathon, >> right? >> You never know what they're going to come up with. So, I think for us that's what's exciting is getting this data on chain, getting a lot of creative minds to look at it and think about, hey, what like what can we do with this stuff? Yeah. So um we're hopeful when the government reopens we look at other agencies and continue the work.

>> Yeah. We we learned yesterday that uh Sergey uh sort of gave birth to the idea of chain link via swift hackathon is when he he he started and uh that was really important to his entire founders journey and the b and and the story of chain link that was kind of his background. I'm also curious about your background how you ended up here. >> Spent some time on Capitol Hill time on Capitol Hill Stripes and ultimately got to the dark side. I mean, >> I showed you though. This is the light side. That's the dark side of Capitol Hill. That's in DC. You've left that now. Now you've seen the light. >> I have seen the light. [laughter] Um, [clears throat] it's been an interesting journey. I started off at the Federal Reserve. So, I was actually in their payments area. Um, but then I spent uh

more than 15 years on Capitol Hill >> all working for a member on the financial services committee, which now has jurisdiction over digital assets. So, very relevant there. um left and worked for Croup where um I wanted to do more work on crypto. It was very new at the time and I think there was some reluctance in big banks thinking back six seven years about you know hey should we engage in something that we're not sure where it's going to go. So I left Croup and I went to Stellar uh layer 1 blockchain uh ran global government affairs for them and then uh went to a firm called FS Factor stood up a um uh their crypto practice doing government relations and uh policy

work represented Stellar, Salana uh Avalabs Hideera Kil IOHK uh some others in the space and then uh you know chain link and I started talking. They had never really set up had a person in DC to own all of this stuff. They' kind of stayed away um with the change in administration. They were thinking a little bit more do we need to be in these discussions. They're a large company. Uh you know 600 700 employees that hadn't really had had a strategy.

So great opportunity. Glad I did it. Love their um love where they sit. They sit in between all these pieces. Yeah. So it gives you the ability to do DeFi, to do Trafi, to do lots of different things. So yeah, it's been a really cool cool >> What would you say are the like the biggest wins that you've had in DC the last six to 12 months or or at least like like the biggest strides that Chain Link has taken? >> Yep. Um a couple things come to mind. I think you know Sergey was at the White House for the Genius uh bill signing. That was great. Got to got to shake the president's hand and kind of shows how far we've we've come. uh chain link's oracle network while technical was included in the white house's uh report

on uh that the executive commission on crypto assets put out. So we were on page 12 of their report uh using showing the chain link network as an example of oracle systems and the importance that so to me that was very uh kind of telling about the position that chain link is playing in DC. More recently, we're included in the meetings between the uh uh Senate Democrats, Senate Republicans just two weeks ago. Sergey and I were in those meetings uh talking with them about market structure legislation. So, I think those are some examples that kind of show how we've elevated Yeah. uh gotten the top tier kind of uh access and brought into these really uh uh priority discussions with

policy makers whether it be about kind of chain link from the product side or chain link's perspective on you know what what should we do on market structure how are we going to move this thing so >> one of the things I appreciate about about yourself and Sergey is that uh you know I I watch some of these like the white house dinner with the crypto dinner that you know Sergey was at um and he was fearless I I mean, I I remember Trump said something like, "Hey, you know," he kind of gave a few a few remarks. He asked, you know, David Saxs to say a couple things and then he kind of opened it up and he said, "Hey, you know, any of our industry leaders speaking to the rest of the people in the room, does anyone else want to say anything?" Everyone else kind of looked

around. Sergey spoke up. He jumped in and and it really showed the fearless nature of of him himself, him as a person and also Chainlink to really be a voice of the industry. H >> has he changed a little bit? Has he came into his role? Because I, you know, when I first encountered Sergey, he's kind of a technical guy, right? Building, you know, some of the most complex architecture of this industry >> and now he's he's up there with politicians and and speaking his mind >> and just the Chandling brand too, right? He's like this 4chan, this Marines, >> also just like very anti- athority, anti-government, which all of us kind of have a bit in if you're in the space, but it's really kind of flourished now.

has >> so how how is chain link and Sergey as a how have these guys evolved uh to ultimately come into their own >> I the way I look at it um and he is such a OG in the space with some of these other players so he has instant credibility with the community >> um I think what he brings to the meetings is that authenticity and the credibility of like okay here's someone who's been doing this for almost 20 years which is forever in our industry um you his entry points are uh before 2010 right in this space. So I think that authenticity and credibility is a differencemaker. When people meet with them, they know they're meeting with someone who just hasn't come to it

recently. They didn't get appointed. They built it. They built something real. So I think that really translates well in these meetings. Uh for him to help move the needle, his ideas get I think a lot more >> I don't I don't want to say others don't get respect, but I think his carry some weight because he's seen it. He he's he's immersed right in the culture of crypto in ways maybe that others are not. Um and he he's he's very he's not DC which actually in some ways makes him perfect for. [laughter] >> So uh when you bring someone like him in people are like okay this is a different perspective. So it's there's a different uh way of listening I think people have when they're

>> Has he broken any unwritten rules in DC? Have you had to coach him up at all? [laughter] Yeah. Um, you know, I try like, you know, I've been I was on the hill for a long time and I've been working with executives, you know, from from Cityroup Yeah. to, you know, prior roles and then, you know, working with a range of them across crypto. You know, I what I often tell him is at least at the beginning, the the most important thing in DC, and it's really no different than >> any other area of life, whether it be sales or just like your neighbors, the most important thing is that people like you.

>> Yeah. and you know they want to do business with people that they like. I mean humans our brains are wired >> for that sort of uh kind of reaction feedback loop. Exactly. So you know what I'll emphasize is you know this is really about them liking you and when he's authentic >> it can you can get really really >> Yeah. It's hard not to like the guy. >> Exactly. I mean, you really get some like depth of relationship with senators, with people in the White House who are like, "Hey, I can connect with this guy, >> different background, but he's he's open to these sorts of >> I'm curious [clears throat] a bit about like the Chandling brand itself. Like how like how do you see the brand developing now?" Because I I look around here and it feels like Chainlink is

ubiquitous with the largest financial institutions in the world. Wasn't like that a couple years ago. >> Totally. It is where it is now, >> guys. Chainlink just announced, this was 2 minutes ago, Chainlink and Apex Group. Apex Group is a $3.5 trillion asset serer uh announces stablecoin infrastructure. Apex group in Bermuda. Apex group is going to be using CCIP. This just came across the newswire. They probably announced it two floors down from us in this. >> This is like a perfect timing for this question like what is so this is the brand today.

We are working with the biggest asset, you know, managers, capital allocators in the world and we are in the in the room. What is the next stage like? What is chain link in 2030? >> Yeah. Um I I feel like in 2030 we are connecting most institutions, government entities, corporate America that wants to do stuff on DT, wants to use the blockchain. I think we're always going to provide Oracle services to DeFi, but I think where Chainlink is going is heavily institutional, Trady. I mean, they're always going to have that legacy with DeFi, but yeah, it's it's hard not to get it. DTCC, Swift, the Fed, I we're [snorts] next to like a Fidelity uh you know, like area. So,

it's like you you see where the where the mind share at Chain Link is going. And a lot of it is really um it is it is the different products we're selling crosschain and CRA and CC. A lot of it's also customizable figuring out ways that they want to use the blockchain and can we help find those solutions. So I think that's where it's going. It's it's it's interesting because you're kind of sitting in the middle of it >> and you want to be agnostic, >> right? Of course. >> Uh in DC people often associate you with are you with the banks, are you with DeFi, are you with this? So um so we're in all we're in all >> trying to be kind of yeah neutral and agnostic and so would you say like there's an equal focus on like the

institutional capital allocators and the policy makers and you know kind of other other buckets I know you're obviously very focused in DC but holistically like what is going to take chain link to the next level from your perspective. Yeah, I think I think in DC I think one the shutdown's got to end, right? I think it's been 40 days now. >> Yep. It's it has been we're going to hit the we're going to hit the record or today we hit the record for the longest shutdown ever. That's a whole another conversation, but we'll see. I think the elections last night maybe make this shutdown go on a little bit more. Um but we'll see how that plays out. I think the shutdown's got to end. We have to restart a lot of the conversations we're having with these government data data uh government on bringing offchain data

onchain. To me, it really is these government places. It's not just in the US. >> Um it's internationally. It's state and local. Uh we're working with a company called Balcony that's digitizing >> real estate property records. >> Had them on yesterday. >> This is Yep. I mean, this is also kind of what governments can do with DT. To me, like from my perspective of the government lane, that's where we're going. It's not just about finance. It's about making government processes more efficient and lower cost and looking at really blockchain as a technology, not as a financial use, which is the crypto side. I think that's really what a lot of people think about. They don't think about hey >> you you could uh you could just make my data operations much more efficient.

It's certainly not as like sexy to talk about it as crypto, but I think it's it's in many ways more impactful. Yeah. For government. Um, so there's lots of different areas I think that are ripe for for this sort of uh uh kind of modernization. >> Yeah. Go ahead. >> No, I was just going to say one of my favorite things about about the space, crypto and blockchain, is that it always feels like there's another big winner, right? Whether it's on the trading side, the investing side, or just like the general growth side. However, it feels like right now in since Trump's been in office and for the next year or so, there's this time period where like there the the current incumbents are capitalizing on the kind of floodgates

being opened and that there's almost going to be a closing of the door in terms of, you know, for lack of a better term, who's in bed with the institutions, who's in bed with the policy makers, who's in bed with the governments globally. And so, it really feels like now is like crunch time. Yeah. where you know if you're trying to launch a chain link competitor or a L1 in you know this year next year or the following year you've missed this entire window here where the Lindy effect is working in your favor. Do you agree? How do you see? >> I totally agree and I think you know >> President Trump winning has opened the floodgates in the US and quite literally to become the crypto capital of the world. I know it's rhetoric but I think it's real. It's happening. what's happening in the US is actually pushing

other foreign governments to think about things differently. We've seen in the UK, we see in Europe with Micah reopening it and rethinking about it. Um so I think now if you are not in the game in a forceful way on the playing field, >> uh the deals are happening now happening now the relationships are happening now with all the people in these rooms whether it be Black Rockck and JP Morgan and City. Uh those relationships are happening. Those initial agreements are going to set the blueprint. Correct. Really for how this whole financial system looks. Um everything could be digitized and tokenized. In five to six years, trading could look totally different.

>> And I think it goes for all parts of this industry too. It's like it goes for the your partners. It goes for your whoever is doing your audits. It goes for the media. It goes for the PR, the journalism, the it's it's all being kind of like in like written in stone a bit. There will still be some winners. There will still be some huge uprisings of like companies that come out of nowhere. Yeah. But if you're not here right now in the moment in the space, >> we're going to look back in in two three years and be like, "Okay, these are like these are like the winners. This is the space." And the thing is, it's like >> all of the all of the TRFI, the traditional media, the traditional companies, they're going to look at the winners or the the longstanders and, you

know, we'll we'll look at each other and be like, "Yeah, you guys were there." >> You know what I mean? And there will be kind of like this insider outsider thing happening. >> And then, you know, that's always been the case in this industry. It's always been that way. Like very kind of like clicky. If you're in the inside, you're kind of in. If you're not, >> but I think even more so now because the stakes have gotten so much higher. >> They have. >> And the and this this adoption only happens once. Yeah. >> It doesn't happen again. I mean, there's phases, but it it so just to say that it's very important time. >> Yeah, it is. It's critical. Um, I think we're g we're seeing it play out with layer 1 blockchains, L2s. I think we know who the main players are. We know

what we know that financial institutions are gravitating towards certain chains. >> We know there there needs to be connective technology, >> ideally chain link to make all of this work in a uh compliant interoperable way. So, I do think that's going to lay the framework for all of this. >> People will come in, but it's going to it's going to be tough to break through. Um, you know, I think a lot about what happens to the kind of the OGs of this industry. Looking at a place like this, my mind goes to I, you know, you think tra I think Trap is going to adopt the best of crypto and probably integrate it >> into their into their processes in a regulatory compliant way. That's why

bills like market structure are so important because without that, I think trades. can just take all the open source code and just take it >> you want to buy Bitcoin. I'll just I'll buy the Fidelity Fidelity >> from you know through my Fidelity account funded from my JP Morgan checking account. >> I'm doing crypto >> or Fidelity stable coin and Fidelity chain which I'm sure a lot of these things will still happen >> but >> without the market structure bill which will allow them to adopt what what we've already built then there becomes this highly competitive pressure that is yeah [snorts] not the world that perhaps we'd want. No, I mean exactly you go back to the whole point of this. We see the rise of such massively centralized actors

both like from the space itself uh but also externally now that are coming in taking the best of this centralizing [snorts] it. I mean it really does come down to issues like market structure and genius. I mean to me the the real tension is really about KYC AML. It's a you know it's a boring topic but that's what everyone has to kind of get their brain around is you know how much KYC AML do we accept in the industry and at what points of entry is it just the off and on ramps how do we define those so like that's the issues that we're really uh I think are coming to a tea >> y >> if we don't JP Morgan's already doing it is already doing it you want to buy

Bitcoin you can buy it through them in a regulated fashion so it's a really interesting time >> yeah it is It's really where uh the men separate from the boys and uh that is going to continue to compound. If you're in the room, then you're going to you're going to have those relationships and you're going to be part of the group that can write the regulations. Yeah. Right. You're no longer, oh, when's the clarity act coming? When's the genius act coming? We want to understand these rules, understand the provisions, and then go help to implement them. If you're in the room now, you're helping to write them because they need to learn from this industry >> and you can do it in your favor in some capacity.

>> Exactly. with what aligns with your vision for the future. >> Exactly. Right. There's a lot of positive intentions. You can help formulate those so that everyone has something to rally around. >> Yep. Definitely. And I mean I think for you know we count ourselves in in uh kind of like the broad industry sentiment on a lot of this is we don't want too heavy of a regulatory hand which our view would be it would quash a lot of the innovation. You know the internet wasn't regulated heavily. Um, and you saw a lot of innovation spur, some good, some bad, but that's the price of often of innovation. So, I think when we think about DeFi in particular, I think we think take a step back. In Europe, they basically put DeFi to the side. They studied it. Um, I think that's where we should end up here

and not be too heavy-handed. >> Yeah. >> But you you do have Tracky. >> They're coming in. >> They're they're here. They're in the room. >> They're regulated. They're here. They're ready to do business. >> Yeah. They're using Fascinating time. >> Thank you for your time, man. >> Thank you guys. >> Appreciate your work. >> Thank you. Thanks. Definitely. >> Guys, we're take a quick standby break and we'll be back here for the next one. Um, and we have about two and a half hours left. So, guys, see you in a second. Hey,

hey, hey. Heat.

Heat. Heat. Heat.

Hey, hey hey. All righty, guys. Welcome back to

SmartCon Day two. We're live. We have Scott Distra from Space and Time. They just unveiled their V2. We're going to talk about that. We're going to talk about ZK. Privacy is quite hot. >> You're a big ZK guy. >> Private the privacy is like everything right now. It's like privacy. It's like the [laughter] meta con [clears throat] starts tweeting and all of a sudden it's like, okay. So, here we are. Uh, congrats on V2. I know you guys have been shipping a lot. >> We have. >> Um would love to just get the quick rundown. What is V2? Why is it better than V1? >> Where do you guys kind of see this going?

>> Yeah, first of all, happy to be here. Nice to see you guys again. It's been a while >> and you guys have been crushing it. So, it's great to be here at SmartCon 2025. So today we launched space and time version two which is not just like allowing smart contracts to ask questions about data from their own chain like a ETH contract asking what's going on on ETH >> or you know you're taking out a loan on base and a base contract uses space and time to say have you paid off loans already in the past. >> V2 is allowing financial institutions to create their own tables load their own trad like in a decentralized way own their tables own their data and then connect it to their smart contracts. You can think of it as like a landing zone for financial data from financial

institutions. So like if I want to go mint rwas from like my T bill balances or my equities balances from my traditional accounts in a traditional broker, I need to get that data out of those accounts to a smart contract. Like if I want to mint Tesla stock from my Tesla equity holdings, how does my smart contract know how much to mint? Space and time V2 acts as an intermediary. >> Make sense? >> Yeah, it does. And so I mean this is sounds similar to like what chain link does, right? Um where you're linking together different blockchains also between off-chain sources and onchain sources.

>> How do you work with chain link to help enable a lot of this industry? >> It's a question a lot of people ask like wait connecting offchain data to smart contracts like that's chain link bro. >> Yeah that's hilarious. [laughter] >> Here's the difference. Chain link is not like a SQL database. You can't ask like historical questions like like I don't use chain link to say has Scott's wallet paid off x amount of loans already. >> Okay. >> Chainlink provides like the a current price fee or like a current data point like what's the current price of Avac right now across 18 exchanges.

>> But what if I want to look into the past? >> Yeah. >> Like you're going to take out a loan. I want to know have you already paid off loans and give you a better borrow rate. I need to look up the history of your wallet's loan payoff. So it's basically times like chain link if it were a database that could look into the past and run SQL. >> Understood. And so so let's just say V1 was more for let's say cryptonatives or for onchain users. V2 is you've fully seen that this is going to have to be for institutions. It's like getting all this trad we use the word tradey data and like I don't know they like sometimes who is it like the swift people the swift guy [laughter] was like I hate the word trap by >> that is not a word that that that we use

now >> finance it's just onchain finance >> yeah [laughter] >> um like they have every institution every bank every you know money market >> has all these accounts with all of these financial assets sitting in traditional databases and I and say traditional databases because they are. >> Yes. >> And so there's like if to program some simple logic on chain, something as simple as if my total volume of Tesla equities that I mint today is above, you know, a billion dollars, do XYZ.

>> We'd have to look back at the last 24 hours to see the total minted. Like even that simple of a look back requires space and time. and we return back a ZK proof to their smart contract that says, "Hey, you've been to these this many Tesla equities in the last 24 hours." >> Yeah. >> Okay. And I mean, you use that as an example, the tokenized equity products that are starting to pop up across different chains. What is the institutional and the RWA strategy with V2? Are you guys helping the tokenized equities? Are you guys helping uh some of the private credit firms generally? What are some of the sectors that you're targeting with with V2?

>> A a lot of T- bill to stable coin mints. >> Okay. And uh I wish I could name names, but we're working with a couple large American banks already. Um a lot a couple of them were like introductions from chain link. >> It's not public yet. >> I was [laughter] looking over looking over at my marketing team. >> Uh well, we're working with like US Bank on one project and they're connecting a lot of like offchain. Um they're creating money markets actually. >> Okay. >> Um and then um a lot of like lending protocol. I've been talking about lending a lot, right? Because they need to know. And then and then anytime like there's this massive wave of ono style projects that are bringing equities of course tokenization and you you could use a chain link for that. You don't need space and time to relay the current

price of Tesla. But what if you want some logic that says if this happens in 24 hours or like you know uh I only want people trading in this market if they own my NFT or my own my they own like some owner you know all these this logic that you want to program in space and time helps provide the data. >> Take a leap with an analogy because it feels like chain link is like Bitcoin and space and time is like Ethereum. Like it kind of [laughter] like is like the if and then statement. >> Chain link's like Ethereum and we're like Salana. >> [laughter] >> It kind of feels like the like like you're saying the the expressiveness of what's possible with the price feed data is really opened up. There's a whole creative landscape here once you strap space and time together with chain link.

>> Just think about like T bills, right? >> Yeah. >> Like if I've got a couple billion in T bills and I want to mint them as a new stable coin like a USD one or something. It's how do I get all the information about how much T bills I hold to a smart contract to mint them? >> Like chain link can just relay that the current state. >> But what if I want some simple logic that's like all right uh I only want to mint up to this amount per day regardless of how much T bills I hold. >> You need like more data. You need more details. >> So Scott, one of the things that and and I feel like we can get a little more technical because you're one of the more technical folks that we've had on over the last couple days. state bloat was

this big technical boogeyman in the room for a long long time. I take it because you guys are using historical data and you're manipulating it. You're helping use it for a lot of the functions that you have in DeFi. You require a lot of state. You have to have all this historical data. How do you prevent state bloat from kind of gunking up the the database, >> right? Cuz fusion time is a chain. >> You guys are smart. This is like actually a big focus of ours. Like a lot [laughter] of hard work that we're doing right now to prevent state bloat. Yeah, good question. And it's funny. So, so like dancer is just hard work like a like bunch of technical zk dorky [ __ ] But, um, it's funny you bring up state bloat because when we first launched space and time and we're kind of

starting to go viral on mainet, >> totally >> uh blew up up like started retweeting about our tech saying this would be a good solution for state bloat on Salana >> cuz they're trying to solve the same problem from a different angle. And he's like, hey, space and time's done all this hard work >> for them. >> Exactly. Yeah, >> space and time has done all this hard work, all this hard research on solving the state bloat problem for our own solution. It's like we should use that for for Salana. So we kind of began the discussion with like Salana Foundation like engineering from that. >> Yeah. Very cool. >> And so you you guys were able to kind of just like work through that issue and >> using ZK ZK compression and stuff like that.

>> Exactly. Yeah. Yeah. Makes sense. >> Cool. >> We compress like each table down to like a single hash which is solves the whole problem. >> Yeah. How I'm curious about institution institutional. It almost feels like the same same kind of slur as trady these days like like offchain >> the most used word of this entire conference. offchain is probably a better way to put it. When you're looking at the offchain uh data sources from US bank, other banks, right, you're gonna there's so much data, right? So, how are you now applying ZK to that data, right? Onchain uh composability is actually an easier problem to solve rather than offchain. Offchain is so disparit. How are you bringing together all these data sources and then applying ZK compression to ultimately make this

so that you can use the data for something productive? >> Yeah. So, so ZK proves that the answers that we're providing to our customers are not wrong. >> Okay? >> Like space and time as a chain make sure the data wasn't tampered, >> right? >> But we use we prove the answer. It's like like a l we go back to the lending protocol example. A lending contract asks space and time, you know, what's the total volume of loans that Andy's wallet has paid off. We're using ZK to prove that that answer is correct. And we compress ZK also compress like all the the raw data underneath so it doesn't take like 10 years to prove it.

It takes like 10 seconds. >> Yeah. >> And then furthermore um on the like on the ZK side you guys talked you guys mentioned privacy at the beginning. >> Yeah. It's very important right now. >> So we're proving that we're not lying but we can also hide information. What if you like a table of credit card scores >> and I want to say hey if my credit scores as a user as a wallet if my credit score is greater than 700 you know give me a loan on chain you know maybe a under collateralized loan I don't want to reveal a whole set of rows of people's credit card scores to the blockchain so ZK can like hide it like I can use ZK to return back an answer yes or no without revealing any of the underlying data keep it all private >> so does the actual space and time

network is this just to to store and to like settle these ZK proofs. >> It's storing all the raw data underneath and then it's doing all the compute to deliver data to smart contracts. Kind of like chainly like chain's like these 30 oracle nodes offchain. >> Yes. >> That are listening for data from Ethereum, >> right? >> And then coming together to like create a response and return that response to a smart contract. We're doing the same thing. We're returning our response plus a ZK proof. Yeah. >> So your contract asks us a question, we give you back the answer and a proof. So it's like it's modular in the sense that it's pretty much specifically for this uh data storage and execution of these proofs. Exactly.

>> It's not really for like a generic DeFi chain. >> It's not like come like come like trade on on the sushi swap. >> There's no dexes. There's no sushi swap on space and it's really strictly specific. >> Yeah. Yeah. >> Yeah. Exactly. Interesting. >> All it does is secures data like stores the data and then builds DK proofs to return data to clients that >> and what what would you say you're struggling with the most right now? like like what has been like the hardest kind of like thing to figure out? >> I think I think we're actually up against the status quo. >> Think about how many data providers we now have in crypto.

>> Of course, >> I mean there's a like a I saw a sub squid. >> Like you got a sub squid scrolling across the bottom. We love sub. They're great by the way. >> Um you think about how many sub squids there are now out there. >> Yeah. >> Like quality teams providing data APIs. >> Whereas our business is not just providing data, it's proving it. It's we're the uniquely equipped. We're the only ones that do this that actually ZK proved that we're not lying. >> And I think people are like struggling to wrap their like you asked the hardest thing we we face. It's just people like I'll just keep it all centralized like I'll just use an offchain data API >> and I'll just forward that to my smart contract and I kind of cross my fingers >> which is what most teams do today.

>> Man Sergey was on here and he was talking about how chain link continue to run even despite AWS going down and breaking half the internet. So it's all decentralization theater. We say these are roll-ups but they go down when AWS goes down. That doesn't make sense. >> How and so using ZK using this this you guys are part of the decentralization infrastructure so that this entire industry can offboard from AWS. >> Yeah. >> Yeah. >> Exactly. Like you can't send you can't have like a critical path for your smart contract be relying on something that can go down on a regular basis or worse just like an API run in some dude's basement.

>> Yeah. >> You know. So would you say that um your biggest focus right now is on getting more uh like chains, partners in institutions that want to use your your product to effectively, you know, bridge this gap between DeFi, Treadfi, like like where's your head at for like, okay, this is where we at on V2 now. We, you know, we we need to go do X, Y, and Z to be able to get this thing going. >> It's a good question. It's it's like education, >> right? Cuz I mean you guys probably had this you probably when you first heard of space and time you're probably like what the hell is that figured out?

>> What is like a ZK proven database right? So how do you take that education not just to DeFi players but to like us bank? It's hard. >> It's a lot of just like hourlong calls where I'm whiteboarding basically trying to explain hey you got all your T bills over here in this database. >> Yeah >> and you want to mint them on Ethereum as a new stable coin. >> How do you what sits in the middle? what pulls the data out of your source database and sends it securely over to your smart contract. >> So, I'm sure you saw uh was it PayPal USD or was it Paxos USD? One of these stable coins that minted $300 trillion on chain, right? You saw this. Yeah.

Yeah. So, PayPal, PayPal USD. So, I Right. So, I take it, you know, there is sort of this disconnect between the blockchain and their database where they could utilize some sort of space and time ZK proof to verify that, oh, we actually have $300 trillion of T bills if we're going to mint $300 trillion of stable coins. >> Exactly. And the status quo that we're up against is teams like that saying, "Hey, we have a big engineering like we're a big engineering firm. Right. >> We just build our own. We build our own oracle.

>> Yeah. >> And then this that's what happens. You do right? >> Yeah. Yeah. >> So, are your blocks on the chain mostly just comprised of like uh like like Merkel roots of the historical data or >> just like Ethereum? Yeah. >> It's just like a [ __ ] ton of Ethereum data. >> Just like a bunch of like just roots like a special one we invented. >> Very cool. How have the ZKVMs sort of help >> risk zero succinct? Yeah. So I love talking about them because what they're doing is kind of complimentary, right? >> So succinct, SP1 and risk zero, they're building a space and time for generic programs like like >> it's it's literally space and time but not for running SQL database queries for running any kind of script.

>> Yeah. >> And the the catch is they're more powerful because you can run any logic whatsoever, but they're slower to prove. We like like like a succinct SP1 proof time is like opt often like 5 minutes which is great >> or you know a minute or something to pro to run like a complex program. We just hyperfocused on just SQL just data. You can't run like a generic rust script. All you can do is answer data questions and the benefit is you get like 100x performance improvement by doing that. >> We just figured hey let's keep this so simple. Yeah, >> let's we know that like chain link a lot of smart contract devs just need to get some data about some activity to their freaking smart contract. Let's make that crazy fast.

>> Not one minute, not 10 minutes, like 10 seconds. Yeah. >> So, it's like a generic LLM versus like a purpose-built specific LLM for SQL databases. Is that is that a fair comparison? like you have a hyper specific uh AI that is really really good and really really deep on one particular subject versus kind of like this broad chat GPT AI that's kind of good at a lot of subjects. >> Yeah, exactly. Like you have machine learning engineers that are still building custom machine learning models even in the the age of LLM >> because LM aren't perfect for everything, >> right?

>> Um so yeah, we just focused on on data. We just wanted to build the fastest freaking data prover you possibly could. >> Very cool. >> Is this your first time wearing a suit? >> [laughter] >> Yeah, first time, you know, since we're talking about Tradfi >> institutions about institutions, >> what's your what's your Q4 look like into Q1? How's the team? How's the, you know, obviously markets kind of all over? Yeah, >> things have been a little bit weird. >> Where's your head at? >> Ramping up SXT, which is the space and time token. Got to chill. Ramping up SXT burn like putting more in I said I almost said it again. More institutions.

putting more DeFi developers use spending SXT to get this data. >> Yeah. >> At the end of the day, like >> that's all that it doesn't matter how good your tech is if no one's spending the token to use the tech and burn it, >> which is what Chainley's focused on right now, too. Like they just launched their um was it their their reserve on chain? >> Yeah. >> To kind of show the world how much link is being spent in utility on >> on workloads for chain. >> Well, that's that's that's the whole thing now, right? It's like it's buybacks. It's like utility. It's just like uh I I think we're going to just see this continuous kind of K shape where it's like there's going to be tokens that rise, Bitcoin, really solid tokens, and there's just going to be some that like don't. And from the

founder perspective, I think all the pressure is on to make your token one that does rise. And I think the way they do that is is these buybacks, is these utility functions, is showing it publicly, creating that kind of narrative. >> Yeah, I think >> it's tougher than it has been in the past. Do you guys see that a lot of retail liquidity is getting replaced with like liquid funds like like hedge fund liquidity? >> Yeah, sure. >> And what I wonder is if that'll continue to mature the market and it'll like the market will continue to kind of price in >> utility tokens over the next year, right? Yeah. Yeah. Yeah. I think so.

>> Yeah. So, >> awesome. >> What's the rest of your day look like, man? >> Close us out, >> dude. I got a little mainstage presentation later today. I think I think I'm like the last one. and they put me last as everyone's like leaving with. Yeah, I think I'm closing out SmartCon. So, I'm looking forward to that. So, if you if you're around SmartCon, you got a few minutes to hear about space and time, come come see me at 4:30. >> Check it out, Scott. >> My man. Good to see you guys, man. Pleasure to have you on as always, man. >> Take care. Cheers. >> Thanks, Cat. >> Thanks. >> All right, guys. Um, >> yeah, we're going to bring up uh our next guest.

>> It's a marathon out here today. >> Oh, yeah. We're not stopping. We've got a quick one next. We're going to go with uh our friends over at Premia. Uh they've got Oh, let's go. Togla. Is Toga ready? >> Yeah. >> All right, let's get him going. This one will be a nice and quick one. Um >> Hey, how are you, man? >> Nice to meet you. Good to have you. >> Good. Good to meet you. >> Love to get you set up here. >> Good to be here. >> Oh, yeah. >> You guys are just rapid fire. >> It's nonstop. >> It's nontop. Yesterday and today, every time I come up, I see you guys.

>> Yeah, we actually we we didn't go to sleep. We've been here all night live streaming. >> Oh my [laughter] god. [clears throat] >> Yep. Um, man, give us uh give us your impression of SmartCon. I mean, Premia. >> Oh, we Yeah. >> We've uh >> you know, you you guys have been friends with the show for a long time. We've spoke with Cozy and a lot of the guys over there, DK. Yeah. >> Um man, give us give us the update because there's been uh several people from the team that have come on and you know, we we'd love to hear about what's been happening over the last recent months. >> Yeah, I mean, well, the conference has been interesting, right? Um you just see this like institutional presence. It's here, right? And you're just trying to see how they're putting the pieces together, how the kind of uh the red

tape that they have to get through. you kind of get a chance to kind of see all that firsthand which is uh been super cool. Uh for us we're kind of at a convergence at the same time uh the way chain link and everyone else is like how do we get the institutions on board and what is it that they need from us that we can kind of facilitate for them. Um, for us, we are a derivatives protocol, right? So, we focus primarily on options trading and we sort of came from more of the the grassroots DeFi uh side of things. And so, one of the things we noticed in the industry is institutions don't come to you, you have to go to them, right? They are not going to stick their neck out. They have certain things that they want to do, certain compliance

checks and measures and things that they have to kind of they essentially have to check boxes, right? And all those things have to be done before they can even integrate with you. So one of the first things that we did is we sort of altered the the platform to be more of an institutional grade uh platform. So one of the major things that we overhauled on our platform right now was uh portfolio margin. So capital efficiency has always plagued options. And so uh that was sort of our first uh avenue that we need. We need to cross that um that hump right uh get over that hump.

And so we're able to do that and ironically this week we're actually launching our product called Cayenne. So it is a full full uh portfolio margins uh derivatives platform that serves both perpetuals and options. And so this is sort of our stepping stone to kind of create that bridge with the institutional capital in the system. And essentially what we're trying to do is pave the way forward for us to um >> Oh [ __ ] >> [laughter] >> So, we're just trying to pave the way forward to like create a a sort of meet in the middle, right, with the institutions and um we're working on trying to solve different custody solutions as well and deal with just

that compliance layer that those institutions need. >> I got to ask you about this balancer exploit $100 million and then stream as well. >> I mean, obviously like the markets have taken a a tumble as a result of that or whatever else. >> I try not to look. Yeah. Yeah. I mean, do you think DeFi um do you think we'll have like some sort of confidence erosion as a result of this that'll be lasting or what's your take on like on? >> So, one of the things that we're trying to do to kind of create a higher level of confidence is uh better custody solutions. So, self-custody is one of the biggest things that we're aiming to to solve. Um Derit does a great job of this. This is

one example and you know um uh clear loop copper um they have these uh custody solutions essentially where you can uh keep funds offchain right uh keep funds in a separate smart account uh nothing that touches the specific smart contract where the smart contract doesn't become a custody it becomes a transactional layer right and and by having that it sort of uh creates another layer of protection and so when you have these these smart contracts that are honeypotss you're you're going to always have this problem right and that's always going to exist. And so, um, for us, we're looking for ways to implement, uh, cash settlement solutions where people can have obligations for for contracts come with, uh, uh, and that would still be, you know, through

smart contracts, the uh, the rule of law, right? Essentially, for how the the transaction should be governed, but the capital itself is not with us, right? the capital is with the counterparties and then we just become that intermediary that cause uh that uh swaps the funds between uh the counterparties themselves and so that eliminates those types of scenarios and so I know in lending it's a little bit of a different uh different ballgame different architecture and different structure but for us we we are trying to move away from custody of assets and so just to focus more on the transactional side things >> so I I got to ask you what are you most excited about about this Cayenne launch obviously It's been a long time coming for Premia. What is the what is the breakthrough here that you hope to get

out of this launch? >> So for us, we started off as a peer-to-peer model and then we evolved into the AMM model and then we sort of migrated towards uh the orderbook design. Um the the major leap here is capital efficiency, but the bigger picture to us is more of a foundation to be able to iterate off of versus having to reinvent the wheel again and and try to start over from scratch. In the last like five, six, seven years in the industry, the tech stack has evolved so fast and the industry evolved so quickly that you weren't able to actually even iterate on what you built, right?

because it just changed so so much to the point where you kind of said, "All right, well, we got to hit the drawing board again because there's this new tech that kind of changed everything, right?" Um, and I think you're seeing a little less of that now and a little bit more modular. I'm going to it's a bit overused today and yesterday, but interoperability, right? And that word kind of comes up a lot at this conference and I think essentially that's what it is, right? And that's going to be the focus uh for us is trying to figure out those connections and that interoperability where >> now we don't have to iterate and redes or we don't have to completely redesign our product. We can iterate off of it and sort of build those like u the

network effects right uh that'll get that volume that we want. >> Well to I uh we didn't have much time for you today. I I do apologize but I do want to say congratulations on this upcoming launch. >> I'm sure you're slammed. I'm surprised that you're here. I'm so cozy and the lads are just coding right now and just absolutely love it. >> I have been in a hoodie with monitors in front of me for about a year. So, >> it's good to have you out here. >> Uh thank you for for joining and again we've been supporters of Premier for like four years now. It's been great seeing you guys grow this thing come about. Um >> stoked for you guys and thanks for joining man.

>> Thank you guys. I appreciate it. >> Pleasure. Let's do a longer one. >> No worries, guys. Thank you. >> Congrats on the launch. Thank you. Cheers, man. See you next time. >> Boom. >> It's good to see Premia back like just firing. >> I mean, look, these guys aren't going anywhere. They've survived. Um, >> next up, Solomon from Aptos. Let's see. >> Man, this marathon continues. >> Oh, yeah, it does. >> Yeah, Premier, the boys, those guys are great. They've been building onchain for a long, long time. Good to see them rebrand and now take a more enterprise focused approach.

>> Guys, we have a another guest today from Apptos. We've got Solomon, the chief business officer. Um, we're firing. It's a great day. And yeah, we're going to take a quick one minute standby and then we will be back. See you guys in just a second. All righty, guys. Welcome back to

SmartCon day two. We've got Solomon Tes. Probably messed that one up, but we're doing our best here. Hour four. Uh we're going to be talking about RWA, Stema Coins. Man, first and foremost, what a what a conference. >> Yeah, absolutely. First time at SmartCon and it definitely won't be the last. I mean JP Morgan, DTCC, >> the Fed, Black Rockck, >> Pier Street, you name it, they're here. I mean, >> you guys are already working with a lot of these folks as well. >> That's right. That's right. We just continue to double down on institutional grade applications. It's not just limited to institutions. It's just anyone that's looking to scale. Apps is here for you to build.

>> I heard you're the uh king of BD when it comes to institutions. >> Oh man, I don't I live up to that comment. >> Let's peel our sleeves up. Get the fuse [laughter] on. Okay. >> We're all over your cooking. What what what has it been like, you know, now that you guys have the relationships with a lot of these enterprises and and some of the biggest firms in Wall Street in the world? Um what are the next phases? Right. First step, obviously, handshake at a conference like this, but when you guys really get down, you roll up the sleeves and you get down to business, h how do you continue the conversation to ultimately implement and and get a partnership done?

>> Well, first we try to find out where exactly are they trying to leverage blockchain? And one, we want to make sure that there's an actual fit because people sometimes just want to use blockchain in every single application. And we're trying to make sure that there's a practical use case. So one is your goal to enhance distribution of a traditional product for example like a money market fund or a private credit fund or is it something more back office where you're just thinking that hey this can actually enhance my margins if I start to put my payment rails on blockchain. Really getting down to the nitty-gritty and then also getting an understanding of their tech stacks and their limitations and is it a regulated application versus a less regulated application. And so we get granular. So we typically like to get, you know, very deep with our partners if they permit

it. Um, and then we also, you'll find this even with our team, the composition of our team tends to be a lot of folks that came from very traditional, you know, Trafi type backgrounds, whether it be on the money movement side or on the capital market side. >> Yeah, you guys uh recently processed eclipsed over 68 billion in stable coin transactions in a single month. That's one month, Andy. 68 billion. also >> might work. >> Buddy, you're not working hard enough. [laughter] >> Year's not over. >> So, where do we go from here, man? I mean, you guys are in the top three chains for RWA.

>> Clearly, clearly established as a leader in this category, >> right? So, how sustainable is this and how do we take the next step to ultimately take 68 billion and turn this into 680 billion, ultimately a trillion? >> Oh, well, we're very, very early on when it comes to this industry as a whole. So, these numbers are just the beginning. uh by all means and whether you're looking at USDC, USDT, USD, USDY and now USD1, we really view the best you know version of those products are on APOS. The fastest lowest cost version of those products on Apttos. So it just plays to our strength when you think of like high volume applications going wrong on Aptos. So that's just a way for us to differentiate oursel and if we control capital formation on chain, it's just very complementaryary to anything else we're trying to do. Okay, you now

want greater yield. All right, let's take you into RWA land and you can get yield through money market funds or private credit or get access to commodity exposure since we want to of course you know offer gold on chain or synthetic exposure to public equity. We want to basically provide diversification on chain. >> We we've really moved on from the times when TVL was the north star and the driving metric just put a bunch of assets on chain let it sit there maybe throw some token missions at it. Yesterday we had uh uh Sam tell us that capital velocity is extra important these days. It feels like a much more accurate indicator of the health of an economy, >> transaction flowing volume, stable coin velocity. What is the what's the north star over at Aptus? What are some of the driving metrics that you guys are taking

into account? You want to continually push that. >> It's definitely utilization. Like you said, we we're not really as focused on like stagnant metrics like TVL. We're really focused on volume. You notice that we're really proud of that 68 billion that you mentioned in terms of volume and movement of stable coin as well as even when we look at RWAS, we really take it a step further. We want to actually see that these RWAs are actually introducing some type of utility. Are these RWAs being used in a centralized exchange as as collateral um by you tokenizing? Are you enhancing the traditional yield that you were getting if they were not tokenized? So those are the metrics that we're really looking at.

>> Could you explain the RWA pipeline a little bit like the life cycle of an RWA? Because earlier we were talking about, you know, some of these these chains that have come out of nowhere, this Canton providence, right? They're they're >> chain. I mean, when you when you talk about just a lump of like assets that are just sitting there stagnant, that's sort of, you know, what what we're talking about, but you mentioned that there's collateralization possibilities as a result of tokenizing these RWAs. What are some of the possibilities that enterprises maybe don't come intuitively when you're teaching them and consulting with them about the possibilities of tokenization? How do you explain tokeniz collateralization of the RWA? Okay, it's tokenized. I think that has become somewhat common place even amongst you

know the Wall Street firms in the room. How do you extend the life cycle and the pipeline of the value that happens onchain after it's tokenized? Then what? >> Yes. So first the conversation starts with okay we want to tokenize with your your blockchain what is that going to mean from a distribution perspective this initial offering. So if we look at black rocks fiddle fund that's of course supported on apttos they're like all right we're going to put it on a >> how much of this is actually going to be purchased by your ecosystem by your partners um and so forth and then beyond that once you actually have done that primary distribution and of course the constraints of of who can participate is really governed by how they structure it. It's not governed by what we're doing on our side. If it's accredited investors, minimum check size, all that

is purely governed by the issuer that's bringing the product to market. From there, we're like, okay, do you want to offer some type of secondary, >> right? You know, liquidity this product. Um, whether it be through, you know, an alternative trading system in the US like a securitized has an ATS, T0 has an ATS. A number of different counterparties have alternative trading systems or whether you're looking to have it interact with DeFi. In the case of Black Rockck, they have Sbiddle, which is what they actually utilize to interact with more of the DeFi and enhance yield of that particular product. Then you want to take it to, you know, another environment like let's say a crypto.com or um, you know, Binance institutional if they're willing to support that asset as collateral in order for it to interact with that environment. So, it's definitely subsequent events as you look to get

this particular RWA to interact with, you know, native web 3 players in some capacity. >> You know, I'm curious, Solomon, um, this is coming from left field. Do you ever think, you know, maybe broadly, do you think that there's a there's a pitch for L1's to launch their own stable coin? Like why has Aptos not launched its own stable coin? >> So I think and I appreciate that question. I think a lot of layer ones have not launched their own stable coin just simply because they also don't want to be biased toward their own stable coin and they actually want to facilitate distribution of like one, you know, non-biased entity ideally. Um and so even us, we support multiple stable coins, right? So I think and there'll be localized stable coins as well that are paired to local fiat and so forth. Um

and so I think this the the long-winded answer essentially is you know there's there's is strategic benefits on a product byproduct basis. Yeah. Um but I do think that they're not also layer ones are not trying to comp compete with the partners that they're trying to facilitate as well. >> Yeah. Yeah. Makes sense. Um you guys have recently piloted a program with the Hong Kong dollar a electronic version of that. Mhm. >> Um maybe you could speak to us about the differences in the way that tokenization and RWA's stable coins broadly are approached in the east versus the west.

I found that the east to be a completely different culture when it comes to blockchain. I found it to be far more speculative, far more kind of community oriented, really still kind of sticky with some of like the OG uh protocols. And then in the west it's a bit more let's say focused on the tech. uh a lot more like of these like larger institutionally driven uh environments. Just from your perspective, what's been the differences? How has that project been going? Just generally curious on on the cultural kind of a you know. >> Yeah. So when you look at APAC just more holistically you see that they're actually adopting a lot of the you know the the USDTs and USDCs of the world like we were meeting with SBI recently and of course they were highlighting

their relationship with USDC that's now you know approved in Japan. Um but then specifically on the Hong Kong Monetary Authority that we're working with, we're the only blockchain working with HKMA on um their actual stablecoin efforts. Um also beyond stablecoin, we're working with them on fund tokenization as well with the hang bank along with BCG. Um because BCG has only endorsed one blockchain apps at this point. So we do a lot of co-pitching with that particular entity. So appreciate that. And so really the the delta is not necessarily how they're approaching it. It's just in that particular case with Hong Kong Monetary Authority, they're approaching it more from a uh CBDC perspective in that particular use case, but that's not consistent with all throughout APAC. So, it's very much depends on if we're working with a

actually a regulated body or like or an actual private institution and what their objective is. Um, and we can of course given our underlying tech, we could of course tailor our working relationship depending on what they're trying to accomplish. >> And you guys have a a implementation on a you guys have chain link. So you guys have you know there's a certain threshold where you need to cross as an ecosystem to be able to be considered I mean you could just say legitimate or like you know safe and secure right if you don't have a you don't have chain link it's hard to kind of like cross that that kind of defy threshold are you planning to bring some of these like tokenized funds like like this Hong Kong one buildable are these able to be used on a now or is there ways to use these

RWA in a defi today how does that kind of roadmap app look. >> Yes, you're naming some of our closest partners. So, we do have, of course, on the the chain link side, we do have CCIP integrated, so they're crosschain interoperability protocol. And then, of course, that's allows us to also it's very complimentary to our work with a so by all means, we definitely want to kind of bring all these RWAs um and of course there synthetic versions of them, the permissionless versions of them to interact with some of those different ecosystems. Um because it's really just a series of ven diagrams. There'll be permission and permissionless products and even on the permission products there'll be variations like I mentioned biddles from black rockcks siddle there'll be variations of it that are able to interact with the more

permissionless world as well so there's this convergence but it's all complimentary the short answer is absolutely we want to bring rwas to the picture both those relations >> and would you say like that at that the currents user set wants to take rwas and collateralize them and use them or you know maybe more generally who who wants to use black rocks will go, you know, borrow against it or loop it. Like who do you think that kind of consumer segment is? >> Well, so just because on the Black Rocks fiddle fund, they have a minimum check size of a million dollars, following checks of 250 grand, it automatically narrows the pool of which of people that can actually >> Is this guy calling us broke?

>> No, no, no. Obviously, obviously that you guys are both qualified for that. [laughter] Uh but so it immediately it narrows it down to more institutional players, wells like both of you guys that can participate in that. Um but then of course you're dealing with like you know Benji Franklin Templeton's money market fund. It's a 40act fund US specific and then you can have a couple hundred dollars and invest in that particular fund. Um so it just depends on >> it depends on the issuers's preference who they want to participate and of course we facilitate it accordingly. >> Yeah. >> Well we've said that this is sort of the time when the men are separated from the boys. the the companies that have a seat at the table now are the ones that are compounding on that opportunity to shape the way that this landscape evolves over

the coming months to years. What do you think is one of the more important qualities for chains to survive? Right? Because look, we've got thousands of blockchains out there now and you're meeting with institutions. You're hearing what they want. What are they looking for? Well, I take it only a few of the blockchains are going to be be able to offer the the enterprises and the Wall Street firms what they're looking for. What are those things that Aptos is offering that maybe not everyone else does? >> Yeah, that's a great question. Really, I think it's focus right at this point. You know, Avery, our CEO, put out, of course, the the narrative around, hey, Aptos is positioning itself as a global trading engine. And what does that mean?

We're focused on trading, money movement, and data infrastructure on chain. So, regardless of what engagement we're looking at, it has to fit within one of those verticals. And we structure those those partnerships in a way that's complimentary to one of those verticals. So whether it's in trading, we have decibel um basically our perex that we built that we're building with that particular team that will be institutional grade, right? It will have both traditional you know digital asset products but also have RWAS and so forth on that. So we're very excited about that. On the money movement side you already mentioned of course the momentum we're gaining with all these different stable coins and we'll really double down not just in trading but remittance, micro financing, crossber transactions, B2B transactions. Um we'll continue to really double down on that effort. And

then on the data infrastructure, we of course have Shelby or Jump crypto co-build that'll be basically the AWS decentralized or the Google cloud decentralized which is a net novel product right and so that if you want to build the next Netflix onchain that's a product that you have to utilize to in order to do so and also just data in general disclosure on chain intrinsic value on chain those are areas that we focus on. So really a focus on that allows us to really target those particular applications within financial services. And do you find the most asset managers and enterprises are are they looking for one flagship blockchain partner or you know if you take the other the alternative is black rockck right >> bidd is on several chains obviously a lot of bidd is on aptos but they've

taken a little bit more of an expansive approach when they're distributing their bidd product across multiple chains are more and more companies taking the bidd approach and going sort of uh they're they're going and proliferating across all of the blockchain uh ecosystem or are they looking for one standalone flagship partner? >> So, I think it really depends on the use case, but I think they're starting off on those regulated applications like Bidd, you know, Blackwell, they just moved $500 million to Apptoas fairly recently. Um they're looking for institutional grade and then beyond that, a lot of them are at least looking for a default chain because it's also very fatiguing to constantly integrate a lot of different chains, let alone sustain those chains on within your platform. So I think people are starting to get really thoughtful around which

chains they're going to support. Um and then from there default or preferred um is the type of relationships that we're typically looking to establish with different partners because it allows them to go deep us to go deep invest in the relationship >> and and are any of these companies serving as distribution partners or case study success stories, right? They come on, they look at Aptos, Aptos does great work for these companies and then they sort of spread to the rest of their their Wall Street friends and asset managers. Hey, we used Apptose, you guys should use Apptos, too. How does that relationship look as you guys are getting deeper and deeper into this Wall Street world?

>> Yes, another great question. Really, we're seeing a lot of that activity on the advisor side, like the different consulting firms. I mentioned BCG as one of them, but think of all their peers in the space that are also looking for institutional blockchains that they could bring to their partners. Um, and so we're flattered that they want us to do teachings for their particular, you know, teams and then we join them into different pitch conversations with their existing partners and so forth, existing clients. Um, so that's creates that echo effect. Also, legal teams also are looking for credible blockchains that they're trying to bring into conversations as well. Um, and so it really does create that virality as you start to do good work. And then certain partners that simply grow, they've migrated from one chain to our chain because they just hit a certain scale

where they just needed a lower cost, a faster chain. And so that is become a more recurring pattern that we've also been found. Is it is it an educational effort when when you're thinking through the advisory firms and as these end up trickling down to the financial adviserss and the asset managers? Is it is it just a matter of time before all of the asset managers are aware of the possibilities? And we we you know have have kind of explored where we're at. I think maybe you know that the the is it 5% of your of your portfolio belongs in Bitcoin or digital assets these days? That's where we're at. What what is pushing the needle so that we go from five to 10 to 15 to 20%. So I guess how we look at it is all assets are going to eventually be on chain some capacity. So

your whole portfolio right is going to be on chain. It's just asset class exposure. So if you're looking for pure play exposure like you're mentioning like crypto exposure then yes I think it will be like that maybe sub 5% is I guess the guidance. We'll have to have to consult with whoever your investment advisor is. But in general that's in that case I think you're right. But whether your portfolio has real estate or public equity or whatever the case may be it will all be on chain in our view. >> Got it man. I hope you enjoy wearing suits because you've got all the right answers, buddy. And I'm sure these institutions know. >> I wore this for you guys. >> Yeah, I appreciate that. Let's talk about a bit more of us something on the fun DJ side here, which is these DATs, these digital ass treasuries. Let's just

start broadly. >> Uh we've kind of seen this first wave. Obviously, Micro Strategy has been around what five years or so now. Obviously, these Ethereum DATs and then now this kind of whole host of of different uh different crypto asset debts. Where do you like it seems like we're done with the first iteration, but I think a lot of people are writing it off as if that was it and then now it's kind of like over. I I think that they might be a bit misguided. >> You know, maybe I'm teeing you up here. Where are we right now with this digital asset treasury kind of cycle and and like what is the evolution here? Because we haven't seen earnings reports from these companies yet. We you know, we haven't seen their balance sheets yet.

You know, it'll come each quarter. Where do you kind of think we go? >> Well, I'll lean in when I say we're definitely not over. There'll definitely be more DATs to say the least. Um, and then if you, you know, definitely have talked to all the different advisers in the space and there's a it's a healthy pipeline of DATs that are coming. I think you will see people become even more thoughtful around how they structure it and who leads it. Historically, a lot of these dats have been led by investors, third party asset managers and so forth. So I think you'll find that a lot of the foundations are going to take a stronger stance in terms of making sure that they're more actively involved in DAT formation. Um which I think will position a lot of these data to be more sustainable. uh >> is that like a control thing or is it

>> it could be a mixture of a number of different things more so I think of of a structuring thing and then also having the level of basically engagement and uh basically support the foundation because typically a lot of these dats if they have some level of foundation backing you can also have structure you know OTC agreements you don't just have buybacks you're not operating within a vacuum you can actually have fluid dialogue with the the foundation and the team around what's you know what's coming around the corner and allowing them to deisseminate that real time into the market um so It's more of a complimentary pillar if you will to the whole ecosystem and they become a nice participant within that.

>> And would you agree that like having some sort of public market strategy is now a non a non-negotiable in the sense that it's you know we've kind of exhausted a certain market of of buyers and sellers in the in the kind of traditional space and uh it's very clear that we need to now kind of take us a step into the the bigger stage. >> Yeah. >> Yeah. I think it's at this point if you're not if you're a layer one if you're just a web 3 player in general of a certain scale you're not thinking about a capital market it's a public market correct strategy I think you're way way behind and there's obviously time to catch up but you probably need to spend your holidays really thinking about it because I think right now we have over five different ETPs within Europe um exchange traded products you

know of course Bitwise is file an S1 for the ETF APAS ETF that government back on please >> that's right we're shut down over with right >> that's right and we're looking part of course of futures and all these other different product types you're mentioning. So, um we're definitely going to continue to create that connectivity with the public markets. >> It's been a very rapid fire round here. Um last thing for you, what are you most excited about, most bullish on? And what are you kind of bearish on or worried about or cautious in the current market? So I think what I'm most bullish on is I think over the next 12 to 18 months I think especially now with you know Clarity Act and you know Genius Act and so forth I think stable coins are just it's the strongest product product market fit in in our space. Everything

else is kind of looking for a home. Um and so I really am excited about how that's just going to go truly truly mainstream. Um and then I think it's going to be very complimentary. It's a common denominator across all use cases right. Um and then terms of um areas where I'm uh more cautious. I think um I think obviously gambling and speculation on chain is is great, but sometimes like when there's overlever and things along those lines, it sometimes sets the industry back a little bit too much. Yeah. Um because the space is so focused on trading and so that could be a major distraction sometimes to like other use cases. So I I think that being monitored and that kind of subsiding to some degree is probably healthy for the industry to grow.

>> Well, we're still facing the woes of 1010. That's right. We're still unwinding and going through the just general flow here. So >> things will take a bit more time and >> it's also a stress test. You know, it it gives us a sense of how resilient our system is. >> That's absolutely right. >> Yeah. Well, absolutely. >> Glad you guys are sticking around. You're surviving. Kudos and keep up the great work, Son. Thank you so much for coming on. >> Thank you for having me. >> Absolutely. Cheers. Pleasure, man. Yeah, you're going to be in that suit for a lot longer. I [laughter] can tell. You're firing. >> You kept them coming. >> All right, buddy. Thanks for coming. >> We'll see you guys soon. Thanks, Alvin. Thank you.

>> All righty, guys. Uh, another quick standby break and then we'll be right back. >> We got Omar's ready to go. We're going to get >> Oh, he's ready to go. >> I think we're going to get him right up. >> All right, we're just going to get him right up. We're not going anywhere. >> We're not going anywhere. >> We're not going anywhere. We've got Omar here. >> Come on up. >> Bring Omar. Bring him up. This guy's firing. >> What's up, guys? >> Omar, how we doing? >> Good. All right. Doing well, >> man. Okay. >> Yeah, that's right. I know what question you're gonna ask. >> Mr. Buck is firing on Twitter right now. [laughter] What is this guy doing?

>> Yeah. What is What is going on? >> Tweet tweet. Did you tweet something right now? >> No, no. His his his ZK utility tweet is just firing. >> It's good. >> Going viral. >> Something's working, >> you guys. You just months and months of preparation. >> What? I'm telling you, if was watching that chart and he was like, "We can't go below 3 cents, boys. We're going to [ __ ] We got to turn this around. >> I I kid you not, this has been in the making for many months. >> Yeah. Okay. >> We've essentially done an entire like >> I would say probably starting like Q1, we had a massive rethink like what are we doing? What is our product strategy?

What do we actually want to be defined for? What are what's our customer base look like? How are we going to make money at the end of the day? And how are we going to drive that money or value pool back into the token, >> right? And so you've seen that we launched Pvidiums. We've pretty much done hey we're going to bring banks on chain. We're going to bring institution on chain. There's going to be thousands of layer 2s all them powered by ZK. There's going to be interoperability between it. >> Um so we've had a very clear vision of that was the future. How do we get there and how do you execute on that >> is kind of what we've been building up over the last couple of quarters all year really. And this is the culmination of all that hard work. Also the Atlas

upgrade, massive upgrade, right? 15,000 plus TPS per chain, >> hundredth of a penny per transaction. >> Metallic love that one. >> Is a fan of Atlas. >> It enables so many new cool new things. >> As an L2, you don't have to boost up liquidity. Just tap directly into a L1. Automatically you got billions of liquidity. You can access for all your apps. Okay. Significant cost reduction taken out right there. Prividiums full private compliant bank chains. >> Yeah. >> On Ethereum. Um then the last part that we've been working on for the last couple months as well is okay so we figured out what are the 10x products we're going to build here's the here's the tech it's there now here are the products we want to do here's the go to market how do you make money on this now and how do you bring it back to

>> so let's talk value acrruel right I I think the engineers have been shipping but I there's a story to be told here now that the pieces are in place uh and there's now this new proposal for a tokconomics architecture that uh is a significant revamp from what you guys >> part one. >> Yeah, >> that might be alpha. >> That sounds like there's more to come. >> It's It's on the blog post. >> Okay. All right. It >> says part one. >> So, we're setting up the stage. >> So So, we're setting the stage. You now have the ZK value flywheel. ZK is becoming implemented into every piece of blockchain technology across the entire stack, both offchain and off-chain. ZK helps to connect these two worlds.

There's staking rewards. There's network growth. There's a ZK burn portion of this flywheel. and there's a ZK buybacks portion of this flywheel. The market really really likes this blog post. What do you think are the most significant highlights to come out of this and maybe you can just talk to us about how some of these pieces intersect and how this all comes together? >> Yeah, so I think the key focus here is normally uh protocol revenue is fully onchain, right? It's uh whatever is done to smart contracts, what our gas fees etc are. But a huge part of our market and our product is offjidium.

>> Yeah, >> it is an enterprise licensed product >> and most banks, institutions, enterprises are very comfortable paying software as a service licensing fees. But the question was okay that is completely off chain. It's done through like you know contracts etc. How do you bring that back to a token? There's a lot of regulatory, you know, jiu-jitsu you kind have to figure out. And um and so that's the real meat of this is essentially is that those are the two real revenue sources that we are going to keep we're going to building. Sorry, we're going to build. Yeah, >> that's where the fly is going to come from.

>> As there's more chains, there's more interop fees. You know, chains communicating with each other one interop as well. As more priv being sold, more licensing fees, more offchain revenue. >> Yep. So that's essentially okay how are you going to make money right and that's how the products are essentially going to build that around then it is what are you going to do with that value grow so obviously you know we want to make sure that it gets converted and brought back into governance and the idea is governance is going to have three options that we thought of so far first option is hey uh you can set allocation of 30% goes to burn 30% goes to staking rewards 30% just goes back to treasury to do uh incentives and growth and

product development. By the way, uh I think that a lot of people also didn't realize we already have a staking proposal as well. >> So there is a staking pilot that is going to be starting very soon to test out the staking contracts, >> right? >> Yep. >> So all these things have you know we've been working all year on it now it's finally culminating together. >> So yeah so those are really the two key pieces >> the products. So, Atlas upgrade, Pervidium, CK stack, interop offchain revenue, onchain revenue. I think the offchain part is really unique. I don't think anyone is really doing that. We're seeing that, hey, if you want to go after enterprises, they're not really going to pay gas fee, etc. They're much more comfortable. Here's a contract signed, here's the or recurring revenue, etc. And it's massive market, right?

>> Yeah. >> Um, >> the only other team we've seen do that is chain link. Sergey was on here earlier and he was talking about how there is a lot of off-chain contracts that are signed for these price fees and for this data and they are starting this chain link reserve where they're bringing a lot of that revenue and they're putting it in the reserve. >> ZKync is the only other team that I've heard taking offchain revenue putting it on chain and putting it back into the token. >> That's why there's three parts. The first part sets up sets it up. >> Yeah. >> Right. This is this is what we're doing. These are revenue sources. This is how we're going to funnel it back. Uh part two is going to go into detail on the interop piece of it, the onchain revenue, how that's going to work, and

then part three will be the actual offchain. There's going to be a lot of different thinking that's been done on what are the legal structures you have to build out, what are the regulatory concerns you have to go through. Um and that that's really the meat of it. The meat of it is really how do you actually drive it back in a compliant manner. >> Yeah. Yeah. Okay. So part >> but also at the same time our token now is it's got our MA white paper as well. >> So >> okay wait you said like like the European standard >> MA Z token.

>> So that allows it to be a regulated asset in Europe >> essentially. Yes. >> Um so banks can kind of take it on chain etc. >> Yeah. >> Um but yeah that that's more another signal just to the market that we are going to do everything completely you know by the books. uh make sure everything is as regulatory compliant as possible. >> Yeah. >> Um and that requires a lot of thinking particularly with the offchain part. >> How do you bring it back into the token? >> Yeah. Yeah. Because you're bringing money, you're bringing like fiat money onchain, then you got to have it tracked and accounted for. Then the buy has to stay somewhere.

>> Yeah. >> Be you know, public, >> right? >> Exactly. So all that needs to be set up. So that's going to be, you know, uh part of the discussion that we're going to be having. So I I've been, you know, kind of harping on this that we're like entering this practical era of this industry where it's like we've been doing all these things that have been, you know, partly because of this regulatory environment has been so unclear for so long. We're past that now. And then now, you know, now we've had some highly successful protocols on chain do these buybacks, hyperlquid, even pump fund, right? There's these there are now tokens on the market that you can actually look at and be like I know that there is some sort of like there's like a little there's like a little uplift that I'm going to get. I

can go to bed at night knowing that someone's going to be bidding this because it's it's programmatically you know uh a part of the design. >> Yeah. >> It's public. It's accounting. It's trends. >> The entire industry is growing up into this practical era. It's great. And you know it seems like you guys have recognized this early on obviously earlier this year if not prior and have built all the way to you know kind of having this announcement now you know when it comes to the actual like practicality of of ZK the token ZK sync the network like how do you see this practical era benefiting you you know your product and others and then how do you see those who can't quite figure it out you know there's going to be a bifurcation here in

performance in some companies are going to shut down, some are going to win, that the fat is being cut. Just kind of talk to me about your your thesis about the evolution of of tokens and of this industry. >> I think before we even talk about the evolution of tokens, you also have to really focus on what is the end product. Um, is there product market fit and is it differentiated from someone else? If you cannot answer that then we shouldn't even be talking about token and value pool because there won't be any >> right >> and so uh majority of the focus we've been doing is on the product like what is it that people actually want what is it that banks want institutions want they need privacy they need scalability

they want connection to Ethereum they want to build on chain they want to build on Ethereum they want to build on their own terms though how do you build a product for them once you've got that figured out and once you have it figured out in a 10x way that no one else can really replicate then you can start thinking okay how do I then generate the revenue off this how do I then funnel it to the token etc um and I think all the best uh products in the industry are going to have a natural it becomes much easier to fit and figure out the value pro story once you have figured out the 10x better product >> story yeah >> uh so it's really about that and I think um you know uh there is you can say there is somewhat of a divergence in

having an industry obviously you know we're at smartcon on you can see literally every single major institution's here. There's a lot of interest. >> Um you probably don't see that in like the crypto Twitter crowd, right? It's um >> there is a Twitter is currently worried about the you know Bitcoin touching 99K >> four year cycle. >> Yeah. Yeah. Yeah. >> Whereas everyone here is like >> my sales cycles are five years. What you talking about? [laughter] >> Yeah. That's a good one. >> And you know that you trust me. >> I've been telling people hey my sales cycles are five years long but they're worth a lot.

>> Yeah. Yeah. Yeah. Um so yeah I think the industry is maturing uh quite a bit because you're having interest from very large players nation states even like uh recently we have you know the first Abu Dhabi bank IC and um and the sovereign wealth from the UEE launching their own chain through ADI they're going to launch their official Durham stable coin through their layer 2. So um there is a lot of interest from very serious real players all regul regulated with very large sizes that they measure things in v's >> not M's >> and they think in years and decades not months >> years and decades >> and years. Yep.

>> And they want to you know participate with people that are also very long-term. >> Yeah. >> And from there once you've got that match once you've got those products and once you're launching them the value cruel narrative starts to get much much easier. >> Um >> yeah about it. >> Yeah. So, you're not a fan of the four-year cycle? >> No, I'm not a fan of four year cycle. I think a lot of that was because, you know, previously people were still scratching surface of what is this? What do we do with this? >> Right. Right. What are we doing here? Right. Right. Right. I mean, I remember how we got to 2017. It was like I wasn't sure if we were going to make a comeback.

>> After 21, it was like, okay, we're screwed. We're we're down in the depths, but we're definitely making a comeback. this time. It's like bare markets could suck if if some if if there's a year-long bear, it's going to wipe, you know, people's portfolios. It would be annoying. But it's so clear that like it's going to be faster, shallower, and we're going to be all in the upwards trend. Not just from a price perspective, but just from the adoption, >> it's been it's yeah, >> adoption, the use cases, right? >> Coins have been massive. >> The way I said every I've been now in the professionally working in the industry for 10 years.

>> Yeah. was starting the ICO but I didn't see the point of it back then right >> in 2021 DeFi applications like >> I was like okay cool this is awesome >> there's actually stuff happening like there's these was a really cool use cases actually >> uh I'll tell you last three years I've been here it's been a 10x 10xing technology in terms of usability the scalability the user experience >> yes >> 10xing the use cases oh >> this year we figured out stable coins and money market funds and composability of RWA is a massive thing >> it's huge um >> and so I think we're going to continue seeing in my opinion 10x in terms of the use cases as well as the products and technology and like how it gets used.

>> So I would say ZKing started off as like this kind of techno hacker brand. >> Let's say late 2019 it was the cyberpunk Ethereum scaling zk. >> Fast forward to now it's like it's very clearly like on an institutional track. It's very clearly like a a a leader in institutional a leader in ZK. Where does the ZKYNC brand go in 2030? What what do we need the brand to be to get the goal or you know to achieve the goal that you know you want? Like what does that brand look like?

>> That's a good question. Um sometimes think about it like do you go down like the ads brand style? It's a very B2B brand and very noticeable there or do you go like the Apple style, right? It's like okay everyone knows this. It's a high-end full stack like end to end like yeah user experience, customer experience. >> Uh I don't know because like that's a 2030 is such far away. >> It's 5 years. It's not that far but it feels forever. It feels like >> does feel forever. I mean just one year. This year I felt forever. >> 5 years ago the ZK Sync brand was a bunch of hackers and cyber punks raised a bunch of money to bring ZK to Ethereum. Now it's like you guys are still obviously so tight with Ethereum, but it's almost bigger than just Ethereum. It's like you guys have built

your own kind of network of chains and you're you very clearly have a mission to just have this massive onboarding of of large players. >> You know, it's probably policy makers next. It's probably in it's more institutions. It's >> it's more institutions, more nation states uh with policy makers with central banks for example. Um in my opinion, in five years, I would like to see thousands of chains and then the whole concept of a chain goes away. It's just an application stack. >> Yeah. In my opinion, the the technology is growing so rapidly that you yourself are just downloading like the cell phone versions of the chain. Yeah. And it comes with all the decentralized apps that are running on their own chains and you don't have these 20 versions of the same stable coin or 20 different stable coins. It just shows up as like here's a

dollar or here's $100 you got. Right. The composability really just it just stitches all very well together. >> Yeah. >> Um and we just don't think about blockchains anymore. They're just servers. >> Yeah. at the end of day, but >> it's all verifiable by ZK. So I don't need to know what anyone else is doing or or care what anyone else is doing. >> I just know that the entire state is fully correct. So I can trust the system without having to trust anything. >> We've talked about how ZK flips and really breaks apart this entire mental model that we typically use when we think about blockchains from L1 to L2 to L3. Everyone kind of settles and it all flows back down to the L1. It's no longer like that. ZK makes it so that we kind of have these independent modules

of state and then they can just share ZK proofs with everyone. They're all just kind of in blobs that exist in in space. >> Exactly. >> And >> Yeah. And and so ZK is kind of powering like this new way of looking at blockchains and enterprises are taking this and they're running with it. And I'm I'm thinking about how how effectively what is the TAM for ZK? Like I think about ZK a lot when I'm thinking about kind of like the casino is funding the research lab. We kind of have a lot of speculation happens on chain but it's ultimately gave way to ZK. ZK feels a lot bigger than Ethereum. It feels a lot bigger than L1's and L2s. It feels like it it's the technology that is going to connect the Wall Street finance to the

digital asset world. In this proposal, uh, Alex, the founder of ZK, outlines onchain, uh, value and off-chain value. I'm curious which one you think is going to be bigger. Is it going to be the onchain value, the interop fees that are going to be accured from the process transactions through ZK, or is it going to be the enterprise contracts that ZK sync lands to build out this technology, build software as a service for these enterprises? Which domain do you think will be bigger for ZK? >> Fantastic question. And to me, if we go to 2030, the five-year route, I would say the onchain.

>> The onchain. Okay. So maybe for the next couple of years, it's the offchain as we're kind of getting going, but ultimately these converge. And >> because right now, um, building a chain, it's still a relatively expensive operation, right? There's still a lot of infrastructure required. I think we still have a whiles to go before it's literally like, you know, you boot up a new Excel file on your computer. >> Um, or you download a new application on your cell phone. We're not there yet. >> I think in a few years we'll get there. And that's when literally you just have everything just sending ZK proofs across instantaneously at the speed of the internet. Um, and that's when you have thousands, tens, and thousand tens, hundreds of thousands of just

>> what we call chains today. Yeah. but are just you know little mini apps or databases etc. They're all truly verifiable then done and that is I think when the onchain starts to just you know we just get that hockey stick completely exponential growth right there and that is also what we're looking for because that is purely just network effects at that point and network just grows on itself you don't ideally you don't need the BD team anymore >> right exactly >> worked myself out of a job >> hopefully you worked yourself into retirement we'll see so >> yeah I've made my job redundant >> ex [laughter] what I meant >> and so um like there's other teams that are building the in in the ZK world, you know, the succincts, the risk zeros of the world, but they're building this generalized form of ZK. I was speaking

with Alex uh at our event that we hosted together in in Korea, and he was describing some of the things that you guys have planned on the ZKVM front to actually make it a lot easier for some of these teams to build out ZK. Maybe you can describe how those uh developments are going. >> Yeah, so we also have a risk five uh system as well as part of >> um you can actually check it out on eat proofs. >> Sure. Right, the tablet of charts there. Um, it right now is tightly coupled with our overall execution environment and our stack. You couldn't necessarily use it in the same way you can like um brly or or succense provers as in you can't use it to build your own like off

applications and just verify proofs or use it for that. We are working to enable that as well. uh it shouldn't take that much of an effort on our end. Uh and then developers would be able to build ZK applications. >> Yep. Yeah. >> Right now like right now it's meant more okay here deploy a stack deploy a full chain >> eventually be like hey you want to build a ZK application as well >> here you go use the same air vendor proof system >> and and they almost don't even need to deploy to a particular chain. There's just a set of technologies that they can use in order to deploy their applications. These applications if it's a ZK app can just kind of exist. doesn't really even need settlement because it's gonna in it's gonna interact with all the other things that they need to

interact with and be composable with through ZK verifying uh proof state proofs and and submitting state proofs to the rest of the chains in order to interact. I just found that really really fascinating because it speaks to the endto-end model that you described to help developers help enterprises get off the ground. the risk 5 ZKVM is an important piece of that and now you guys are adding that as uh part of the uh early in the funnel early in the ZK pipeline uh piece of technology that anyone can use to to end up generating these proofs. Um and so it's really a ZK out of the box um tech really stack that you guys have enabled uh for both blockchain tech and nonblockchain tech.

I just want to make that explicitly clear that ZK >> it's not just onchain >> zk is bigger than blockchain. Yeah. >> Uh Omar, I gotta ask you about privacy. Everyone loves privacy right now. I don't know if you caught the Zcash pump. Not sure if you're in the trenches like that, but uh let's just say that privacy's back. Monero is ripping. Dash and Decarred have been revived from your 2017 days from the ashes. [laughter] >> Yeah, they're reminding Monero. >> Yeah. Wow. So >> that's OG. people are coming back to this idea for whatever reason and they're excited about it and and I think it it really comes back to like the core roots of of the industry which seemingly we go through these cycles where we kind of lose some of the core ideas and then we come back to them feel like we're

coming back to privacy in a big way. We'd be remiss to not talk about privacy with the lens of ZK with these providiums and with these institutional clients what it seems like and Mer has uh recently tweeted that like if there's a if the word public is before the word blockchain it's not going to work. How do you feel about the institutional appeal for privacy? It seems like it's a bare minimum. Uh when you think about the traditional financial system, all right, if I send you money, it's not like Robbie knows, vice versa. >> Your bank does stuff. >> The bank does know. Uh talk to us about the institutional conversation about privacy.

>> Yeah. So, um I'd say once again, like everyone says, privacy is a spectrum and it's also a spectrum in terms of requirements. um as they've seen on the public blockchain side, there's plenty of use cases that work out really well where privacy doesn't necessarily matter that much uh for now. But if you are a major corporation and you want to start moving a lot of your transactions on chain, let's say you're like an Apple or an Amazon etc. You want to start moving more of your treasury function on chain. You absolutely cannot move that in a public blockchain, right? Because as soon as people see all the different transactions that are happening, they can kind of make out one your financial network, they can probably also then make out potentially um your vendor relationships which you're paying for

different types of vendors, all that stuff. And these are essentially trade secrets or no one wants it on. >> If you're a bank, you absolutely do not want to be transacting on chain with your customer funds or different trades you're doing. Um and so that is where privacy comes into play. Okay, now the question is what level of privacy? Now for most of these institutional enterprises, you also need some level of auditability, some level of compliance and this is where Pvidium has come to play where it's a very pragmatic approach because it's a ZK polyidium. All it's really doing is what what it's doing is it's um allowing the owner or the operator of the chain to decide where does that data sit. So instead of you know posting it back to L1 as call data they can set hey this sits on prem

on my own databases on my own servers and I fully control everything um I can then set rules and permissions of who can see what data obviously if you're using my chain your user you can see your transactions if you're a regulator or third party here disclosures capabilities um and it's it's a very pragmatic web two style way of building access controls into a system as well as >> privacy controls into a system and I think that is very um you know we've gotten very good feedback on that because it's practical so it also goes through you know different IT compliance and infosc uh procedures at any major enterprises um so that's that level of privacy that we're bringing it's a chain level privacy not for everything

obviously on top of that you could implement zk privacy in it right that's very different um you could create dark pools if you wanted you could you know use u build different types of zk privacy like let's say identity verification etc. So there's layers of privacy you can also build in even within your peridium or even just your own roll out. >> Yeah. >> How important is privacy to enterprise uh companies firms? Is that something that more you know stems from the cipher punk days the retail guys that are looking for that privacy aspect or stable coin privacy something that we hear about a lot? What >> what's >> stable coin privacy? you know, when people are like doing payroll, they want to make they want to make sure that, you know, if they're part of the same

company, they, you know, have have some element of privacy to their payroll. Um, what what are some of the use cases that you're seeing as the most successful from enterprises? >> Um, anything internal, >> right? Okay. >> It's definitely needs privacy. So, for example, we're starting to work on different uh use cases of banks on tokenized deposits. >> Yep. this is pretty much a bank moving its core you know banking infrastructure bank payments chain uh that absolutely cannot have anyone viewing that data um so that's one example uh other examples might be um I wouldn't say supply chain but um let's say trade finance >> or something like that

>> so I would say the use cases are either uh banks or institutions are doing things internal they're upgrading their own internal processing systems to guys is a very good use case. I think um it helps a lot of our uh clients essentially be able to be okay we're upgrading the core banking system. We're going to start moving money around 247, but also at the same time we're going to make it composable different types of assets like money market funds or or T bills so we can do cash sweeps etc. Offer that to our corporate clients and then eventually also have a way to communicate with the DeFi world as well or things like repo etc or interacting with other banks cross border what have you. So that's internal use cases. Then there are also privacy needs for um

funny enough we've also found enterprises that want to launch multiple privilege >> because they need privacy between their different business units >> or between different jurisdictions and so they can't be in the same operating or execution environment. They have to have like uh air gaps between them. So different teams would need to run their own siloed or not really silos but their own prividiums themselves but they have interoper between them and they kind of operate as like it's one giant system but they've got privacy between their own internal teams. >> Yeah. Then there's obviously uh company to company, >> right?

>> They each run their and this is part of our white paper that we published um like two months ago um the Pvidium public versus private uh >> paper as well where we kind of showed how for use cases such as intraday repo or DVP each institution can run their own private peridium and they have private interop transactions between them. So a lot of different ways you can design these systems which is very exciting. So many different use cases that it could be used for uh one single chain for an entire company or many chains fully private for a company that's very large conglomerate global or you know just app chains between banks etc like transaction >> we're going to have a lot of chains there's going to be a lot of chain a lot

of private chains >> a lot of private chains >> Omar thank you for your time man it's been a pleasure congrats on the proposal congrats on the institutional adoption on Atlas on the providium success as well as air vendor you guys are really building out a full suite here of ZK products that uh you know I think will be used and will be part of that 2030 brand. So, >> thank you. Appreciate it. >> Cheers. >> Thanks, Mark. Pleasure, man. >> All right, guys. We're going to take a quick breather and be right back. We've got more segments to come. Thanks, guys. And we will see you in a second. Hey,

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Heat. Hey,

Heat. Heat. SmartCon day two. Welcome back. We are

here with Rodrigo. Congrats, man. An announcement just went live 40 45 minutes ago or so on AMP. Uh Rodrigo is CEO of Edge and Node and they just launched the world's first enterprise blockchain native database. Uh Rodrigo, man, tell us a little bit about what AMP brings to the blockchain ecosystem. >> Yeah, well, as we said, it's the first world's first u blockchain native enterprise ready database. And the the difference it brings is that we've uh we've kind of changed the game on how things are done. We took kind of our almost decade of experience of running blockchain infrastructure, encountering

all the problems, hearing the feedback, and we kind of started from scratch, rebuilt it from the ground up for the future. And so it enables things we couldn't do before. Um, it allows for um enterprises to run it on premise, for example. Mhm. >> It allows for verifiability, which is huge because you need sort of cryptographic proof that the data that's sitting on your servers matches what's on the blockchain itself. Um, and it's highly scalable. It it allows for the data to be delivered how the the end user wants it, which is something that's novel. Um, so we can deliver it in many many methods. Uh and it's able

to be used in like many different use cases primarily for like analytics, audit, uh compliance, things like that. >> Incredible. So, um enterprise really sticks out here. Uh we're sort of in this era of RWAS and you look around the room, we've got Fidelity, we've got DTCC, you know, there's quadrillions at stake here. A lot of this is currently offchain. Um it is still somewhat digital, but it's not onchain, right? and we're sort of at this interesting middle area. Talk to us about what enterprise ready means. Um how how do you take a traditional database and you turn it into one that is enterprise? How does it separate from the traditional systems?

>> Yeah, so like you mentioned just as context, we're at this major mega trend of like the tokenization of everything. Like you've got like uh Larry Think from Black Rockck just you know completely saying like everything's going to be tokenized. So yeah, the big story here at SmartCon and today is this whole movement of really, you know, after a decade or longer of of doing these systems and we're now entering a phase where traditional finance and enterprises are moving there. Um, so uh what was the question again? Sorry.

>> Essentially like what yeah what I mean you you sort of un you know sort of unpacked what this launch means to be enterprise ready. I'm also curious what what are some of the use cases that are enabled now that we have this system in this moment? >> Yes. So, um we've got uh audit for example, we've got compliance, we've got um the ability to track assets as they trade across different chains. So, one thing that's that's happening is like new chains are being added all the time. Different assets are being traded. Um so being able to analyze and you know watch and have observability over how that asset is going. Um and again the verifiability

of things. So in enterprises um having an audit trail of you know where the data originated from how it was manipulated. I mean blockchains bring that in terms of like you have the chain that's canonical but typically in current systems like you're just copying the data onto a database somewhere and so it's sitting in someone's cloud and so like a bank is being audited or it has it has compliance needs and so they've got a database sitting there and who's to say that data that's there is real or it hasn't been tampered or right >> and so

>> they have to you know I'm not even sure how they do it today in terms of like they have maybe controls or compliance controls but >> now what we're adding to it is this cryptog cryptographic proof so effectively >> we can we can compare hashes >> we can do zk proofs to say okay this data >> ver you know mathematically matches with a proof that never existed before so that's a huge bonus to um enterprises because top of their list really is compliance and security.

>> Yeah. >> I mean further down the list is like features and bells and whistles and cost. >> Compliance and security are like paramount >> and they get like these banks they could get fined, you know, if there's a data leak, if they're incompliant, you know, >> major financial repercussions and loss of trust, loss of business, and they just can't have that. and you're dealing with, you know, quadrillions of dollars trading and >> they just can't have that happen. Like this is the backbone of like the real financial system and yeah, >> zooming out a bit, I'm cur curious, what gets you most excited about to work on edge and node, you know, like what gets you out of bed in the morning. You've been building this for a while, you know, and you continue to to to build it and strive towards a vision.

>> What are you most excited about when you wake up in the morning, you go to work? >> Yeah. Well, you know, um the kind of backstory was I was the first employee after the founders back in 2018. >> Yeah. >> And so I've been on the the ride from the very beginning. Um and then I moved into the CEO role about a year ago. >> And really what's happened in the last nine months has been like a a kind of zero to one moment again. Like my entire um career up to this I was a serial entrepreneur. I founded three other companies. Working at edge of node in the graph was really like the first job I had for the first time. I had a boss [laughter]

>> which was uh which was interesting. And now I'm back in the boss role which is uh a more natural position to be in. And um and so yeah, I I've felt like we had to shake things up a bit. I think um there had been a bit of stagnation and so we came in and kind of did some cleaning house. We like paired back costs. We came in and said, "Okay, we have this we had this um idea for AMP, what is AMP today that was like being kicked around for a while."

>> Okay. >> But no one really fully committed to doing it. So then we had a a new CTO come in. We looked at it and said, "Okay, we need to go all in on this. Like we have something here. let's let's go for it. And so this year um early in the year we got really started on it in earnest and then we have this other kind of stealth project we just announced called Ampers that's in the agent commerce [clears throat] space that has just like heated up tremendously and so >> it's it's become like we we're back in startup mode like even though we've been around you know eight years and we have like 60 people and we've got this big kind of large network and we're doing trillion millions of queries.

>> Yeah, >> we now have like new things that are launching. It's like reinvigorated the whole team. People are jazzed, excited. I mean, today we were like high-fiving. [laughter] It was like, yeah. So, that's the fun part for me is like the creation aspect, the working on hard problems, solving them, and then it's exciting as you're getting like new deals, building closing business, like, oh, we met this person and they're so it's kind of that fun. It feels it feels a lot like being back in startup mode again, you know. >> Yeah. And you guys already have your foot in the door in so many different areas that um you're able to play startup on a really fun mode because you have all of these potential opportunities at your fingertips and

it's a matter of closing them, leveraging them to the best of your ability. Um you're also very intertwined with the graph. There's all kinds of uh product market fit that you've already had established with edge and node. Um and now it's about leveraging that and compounding that. Um and so you know part of part of the graph strategy edge and node strategy is the the proliferation of all this data making it ubiquitous across the entire blockchain landscape. Um and potentially preparing for the agentic economy AIdriven commerce is a really significant part part of your vision. Um, so I'm curious when you think about the AI economy, how do you think this space is going to

evolve over the coming months and years and how can we all prepare our ourselves and our businesses for this inevitability? >> Yeah, I mean this is a big one like uh I think it's hard to, you know, fathom and quantify the changes that are coming. We're starting to see it like you know Chad GPT when that was like the watershed moment and >> I remember early days when it came out it was like oh this is a toy and now it's like become an essential part of like many people's lives we use it all the time so then now we're just entering into this like aentic commerce thing and then just last week u Gartner put out this u tidbit in uh A16Z's uh state of crypto report that they said

uh they project that by 2030 agents will will drive $30 trillion of commerce. Like 30 trillion is like a massive number and that's in five years. So we're just on the cusp of that starting and so what do our lives look like? the the use case and like the example is always given is that you know you have an agent you talk to and you know you have like Johnny IV and OpenAI working on different interfaces and maybe it's you're not in an app or on a computer but you're talking to an agent that responds to you and then goes out and does the things you ask it to do like buy me a plane ticket and it knows all your preferences I know you like

window seats I know you don't like to take red eyes I know this and then it's going out and negotiating for you >> and then coming back. And that's just like one minor example. But then, oh, I'm looking for like clothing, you know, find me the best deal on like I need a a new navy suit and it's going to go out and shop and find for you. >> So, that that's a huge sea change where how we do things like anything that we can click around and do could be handled by an agent for us. So, it's more handsoff and it's going to be >> Yeah. And and how do you anticipate that edge and node will fit into this landscape?

>> Glad you asked. So we foresee that, you know, to get to this like $30 trillion number. >> We foresee that there's going to be swarms of agents, billions of agents. We're at about uh 40 or 50 million mobile wallets right now. >> Okay. So if you could if you take that number and project out where each person is going to have probably a dozen or more hundreds of a individual agents that are for specific use cases >> effectively then we are all going to be managing swarms of agents >> and similarly on the enterprise side on the business side they'll have lots of

different agents that do different things they'll have like an airline might have a booking agent and then like a customer service agent and and so the agent will come and find the best agent to do what it's wanting to do, right? >> Okay. >> And so what's come out this year is different protocols and standards. So the first one was like Google X or Coinbase's X42 which is like a standard for payments. >> Y >> Google's A2A is a standard for how agents talk to each other. >> What's coming now is uh ERC804 which is like a decentralized way of reputation.

So, as agents are now going to go out and interact and find each other, um there's a way for them to verify who they came from and how um if they are trustworthy, for example, or how many transactions they done, their it's sort of like a FICO score, credit rating almost. >> Okay. >> And so, >> but for AI agents, >> for AI agents, yeah. So where we we were early on all these trends earlier this year and we thought okay in a world we're still early and it again it may be hard to project out but in a world where there's like swarms of agents how are you going to like manage and control them? So we we came up with

this concept of um what we're calling amperand which is wallets for agents and dashboards for humans. Yeah. So basically you have like pane of glass and you have the ability to view each individual agent that's going out and doing for you and setting like spend limits. >> Um so you would uh fund your kind of master account and then you can >> give smaller amounts to the agents so they can't go out and like spend all your money >> recklessly. So the analogy I give is like if you have a teenager and you give them a credit card, it's like putting a spending limit on their card. Like you can only spend $5 per transaction or you can't spend more than like $100 in a day, right? I want to limit you.

>> So that's kind of like putting the spending limits. And then >> so of course you have the observability on everything they did on your behalf. And then um when this reputation systems get kind of baked in, we want to build that in so you can manage the reputations on like the the seller side of things. You can go in and view your reputation, manage it. I think there's a feedback mechanism that'll be >> baked into it. So say you get feedback on an agent, you're the developer of the agent, so you can like respond to it or improve it. So I think eventually like maybe amperand creates its own kind of algorithmic like FICO score or score for agents. So it'll tie in and be compatible with different marketplaces,

discovery mechanisms. So um and then highly compatible with the different standards that evolve like exor 2 and like new chains that come on. >> Um so uh and we're we're going to build in integrations with um tools that people use to build agents like lang chain, langraph tools, open AI. So as a developer is sitting down to like write an agent >> and they're doing kind of going through the docs >> they'll be able to say oh you need a wallet like click to amperand like that's where you'll create your wallet and then you'll be able to manage and view everything >> uh the agent does >> and that's on the developer perspective and then from the user perspective we

can see all of our agents that are doing things for us via amperand. >> Yeah. So you would log in um you'd have an account there and then you'd set up your agent. So basically have a wallet account. >> Yeah. Yeah. >> Um for each agent and then Yeah, that's where you would uh fund it with USDC or however and then kind of drop in each agent wallet like a a small amount of money. And we're talking about microtransactions. So >> um a lot of these transactions could be less than a cent. So like on X42 they do like a tenth of a cent is the lowest you can go >> and it's like a 200 millisecond like

settlement. So super fast low cost. So this could be like you are browsing and you load an article and it just happens seamlessly like instead of a payw wall and you have to like register for an account put in your credit card. Okay now I can browse the New York Times. >> Right. Right. This will be like you're browsing the web and it just happens and it deducts like a tenth of a cent and you loaded it and you just didn't it just happens like you didn't have to like click or agree it just is happening. So >> yeah, you don't need a monthly subscription to the New York Times. You can just go per article or stream per minute.

>> Yeah. >> And and it all just sort of streams out from the agent's wallet. So in Amperson for example like say you had an agent that was doing that then that's where you could view >> you know um the transactions. So if I guess the analogy really like if you had a MetaMask wallet and you wanted to view the transactions you go to like ether scans see everything it did. Yep. >> In this case this would be within a percent you're like oh I have that wallet that agent >> and then you'd click out and see all of its transactions and everything it did. >> Yeah. Incredible. Um Rodrigo thank you so much for joining. I think I think I'm all out of questions. I think you guys are building a really significant piece of the agentic economy. Um, and it's really really cool to see not just Wall

Street and digital assets converge at a conference like SmartCon, but also to get a sense of the agentic economy, AI agents and what AI is bringing to the table because that is a significant part of emerging technologies and where this world is headed. >> Yeah, absolutely agree and we're excited to be part of it. >> Yeah, congrats on the announcement. Thanks for coming on. It's a pleasure for having me. >> Cheers. All right, we're gonna keep things rolling. We are still live. Rodrigo, thanks so much. We'll see you next time, man. >> Um, okay, our next guest. And guys, I mean, incredible, incredible work here.

Um, this really is the convergence of uh three pillars of emerging technologies, Wall Street, finance, digital assets, all of this is coming together and we are at the forefront of it. Uh, we've got our next guest coming up. Uh, it'll be Benedto Beyond from Folks, I believe. Uh uh let's see. Let's see who we've got coming up. Coming up next. Hey there.

>> Hello. >> Good to have you. >> Uh, how you doing? >> I'm good. How are you? >> I'm great, man. It's uh, it's an absolute pleasure to have you on. Likewise, >> man. How how has uh >> give us a little give us a little intro. We've uh had you know quite quite the uh the marathon today. So I'd love I'd love a little bit of uh some context on on your background and and generally how you how you've arrived here today. >> Yeah. So I'm Jizu from Suho IO. Uh Suho is founded from 2018 based in Soul Korea. So it's [clears throat] like six seven years journey from blockchain space. But before that I was an early uh full sec engineer of outfit exchanges which is the one of the largest spot exchanges in the market. So let me briefly introduce to what we're doing.

So su is building uh institutional grade FX infrastructure uh especially for the non USC stable coins. So simply it's a orchestration layer to converting dollar to local currencies. Yeah that's what we're doing right now. >> Yeah. Awesome. Um man so I was in Korea blockchain week uh a couple months ago. was incredible. Is it great? I mean, the vibes were great. It was incredible experience. Um, and it it gave me a sense of how intense the passion for this technology is. Um, I I really think that uh the Korean market does such a great job of doing their own research, whereas here there's sort of this speculatory air to things. Over in Korea, everyone is very dialed doing their own research. And so, maybe you

could give a little bit more um of a sense of how you're tackling the US market and then the Korean market. How do you see these as two separate things? Do you see one strategy that works for both? How are you able to bring these two worlds together? >> I think the uh the most differences between the western market and the Korean market is definitely the retail market. So basically Korea uh from regulatory perspective uh the governors doesn't want to let the institutions to actively jump into the crypto market because of the like side effect effects.

But at the same time like retail market like crypto exchange is explosively doing really well like from like trading volumes perspective as you know like so every crypto project really loves Korean market as a retail trading pocket market >> but institutional market is not that uh open but nowadays turning is turn to totally turn into 100% uh differences from this year because like government become more crypto friendly one so that's how the institutional market explosive as well uh So like with western market we think bridging between the institutional market with Korea and western like institutions going to be the one strategy we can achieve for our tractions and growth.

>> Yeah. Very cool. And so when you're thinking about the retail audience and the enterprise audience, you guys are building financial infrastructure for enterprises for the most part. What is what is the way in which you're seeing most enterprises come into the space? Is it tokenization? Is it RWAs? Stable coins? How have you been able to navigate the landscape and and where do you find yourself fitting into the market? >> I think there's a two types of uh institutional uh milestone here. The first one is uh of course like RWA and SEO the security token offerings. So all the security firms trying to onboarding those huge retails to buying those tokenized assets but at the same time like most of the payment service

provider and fintech services trying to lead the stable coin issues which is a Korean one. So that those two things are the most important part and we are targeting those stable coins market right now. >> Awesome. Okay. Because we've uh we've been told that this is the stable coin super cycle. Y >> would you agree? Would you say what what makes something a super cycle and would you say we are currently in one for stable coins? >> Definitely this is a super cycle for stable coin. Okay. >> More and more people's are demand stable coin for buying remedance like payouts and everything. So I think definitely it's a super cycle and what we see in this market is lack of narrative of FX.

So everyone talk about dollartodoll clearing and settlement but we are the only team who actually caring about the dollar to non dollar stable coins. So I think it's a cool >> Yeah. And and you know one of the announcements that came out I think it was the origin summit it might have been story protocols event uh the Korean government is looking at launching a Korean Juan stable coin you know over in you know here in the USDC USDT these these US back stable coins are really uh a focal point of the government's and the administration's focus when it comes to crypto. Um how do you see non US stable coins? How do you see them working with and interacting with US stable coins?

>> Got it. So we also have experience with the bank of Korea CBD's project by like tech provider. >> So we I think like we are well understanding about like Korean market and regulatory's view. Yeah. >> But at the same time like for those dollar stable coins for example like merchants in Korea uh if stripes and PayPal trying to attract the local merchants to use their stable coins and infrastructure but they doesn't want the dollar uh directly. they want Korean one because they're local Korean one. So there needs some like conversion between dollar to Korean one. So that's a the missing point and also the key point I think.

>> Yeah. Okay. And um you know when you're working with US stable coins, non- US stable coins, one of the things I I realized when I was in Korea was uh a lot of technologies, a lot of the tools are very vertically integrated. >> Yeah. >> For instance, like I got off the plane, I was trying to use Uber, didn't work. I had to go in cacao, right? Cacao maps, cacao taxi, all of these things. So, do you anticipate that the Korean want stable coin will become vertically integrated into the rest of the Korean stack or will it kind of operate independently? How do you think the stable coin will get rolled out and what is the infrastructure that you supply to the stable coin market? You mentioned the Bank of Korea. What is the tooling that you give to the Bank of Korea to

help them with their stable coin? So for the institution customers, we gave them some network for participating FX trades based on this data coins. So they can handle large volumes of uh conversion between currencies. So that's what we support and at the same time we gave the service provider to easily building some FX crossber like payments raidance at once with our SDK. So that's what we offer. Uh so I think I believe not just like the dynamics are suddenly changing everything but rather like just small part like travelers, visitors like foreigners payments going to be the first wave of stable coin uh services in Korea and we also do such visitors uh

payments for like government owned casino uh like beauty shops which like Chinese like Japanese and western people loves it. So we we applied in those like merchants. >> Are the rest of the eastern uh countries also looking at stable coins and and how do you see the stable coin market starting to evolve you know as more and more of these regions start to implement their own stable coin strategy? >> I think like more and more like com companies trying to build their own uh orchestration layer as a standard stacks. So the all the monies come from the like bridge and also chains. Okay.

So they want to like get some fee models. So that's why they focusing on orchestration layer. >> Yeah. >> So I think like that's a point for this market I think. >> Awesome. Okay. Um I've got one more question for you. I'm curious. Um, as you're looking at stable coins and what they can bring to the industry, like you might have seen the crypto market prices maybe, you know, are are not as positive as we'd like them to be after banks and nations and central banks, all of them are bringing liquidity and stable coins into the ecosystem. Where do you think stable coins go after they're tokenized and once they're on chain? Where do do they end up in per dexes? Do they end up which asset class do you think is positioned to have the most success as a

result of the growth of stable coins? >> I think like it's going to be a of course B2B remedance definitely. So like manufacturing companies and most of the commercial uh services suffering from the like the fees between the payments and also the wire transfer fee. So the most important and big volumes comes from those B2B cases. Yeah. And also uh those capital between uh based on capital efficiency. So more and more people's going to invest in more like onchain tokenized assets and also like liquid fund like that. So that's uh what we imagine for the future right now.

>> Incredible. Jesuit, thank you so much for coming on. Absolute pleasure. Best of luck in the stable coin super cycle. Keep up the good work, brother. >> Thanks so much. Yeah. See you soon. >> All right. Incredible, guys. We're rolling. We're staying dialed. Um, next up, we have got uh let's see. We've got We're gonna tell you, let's see. Let's see. Let's see. Nick Duke, where's Nick? Let's get him up here. He's coming right up. We're going to bring him on. Uh, and we're going to keep things rolling, guys. We are entering the final hour of our live stream from SmartCon. And uh

boy oh boy, it is a home stretch. A home stretch indeed. So, we're going to keep things rolling here. You know what? Why don't we hit a quick standby while we get Nick up? Unless Nick is right around the corner. All right, let's do a little standby. We'll be right back, guys. Don't go anywhere. Live from SmartCon. There we go.

Heat. Hey. Hey. Hey. Heat. Hey, Heat.

Hey, heat. Hey. Heat. Heat.

Heat. Heat. Heat. Heat.

All right, guys. We are back. SmartCon day two. We have our friends from Folks Finance, a project that's been building in DeFi for some time. >> Uh have been tracking these guys for a while. Uh I'm back in the studio. I registering two Diet Cokes. >> How's your SmartCon going? It's I mean there is just everyone in the room here, institutions, finance, JP Morgan, DTCC. How you feeling, man? >> There is us as well. Yes. It's great to be here. First of all, thanks for having me. And SmartCon as every year is great.

Uh it's my third one and um I really enjoy the New York edition cuz you can feel that in the US now is happening a lot of things. The audience is nice. The other projects that are here, it it's good to network and we have fun as well. >> Yeah, definitely. We definitely do. >> It's been a it's been a long day. >> It certainly has. I mean, it's been a long build for years, right? we've been building this industry and for so long it's been pushed outside the US and now crypto is back in the US. I mean could you tell us a little bit more about your founder story and just generally what's been what's been the journey with folks finance you guys had to go come back generally what >> uh we started to build it five years ago >> and uh I was working for the largest

web3 software house of Italy >> and the software house was one of the first dev shops on algorith so I was following defi on ethereum >> and I was like guys defi is going to build in every layer one why don't we build something here since we are strategic so that's how we started uh we built the first uh [snorts] like we we started as a lending protocol on algorith then we kept adding tools swaps liquid staking leverage trading leverage liquid staking on a front and some point we were like 90% of the TVL of the chain >> and we decided to expand and um you know being in a nonVM chain we couldn't just fork what we did so we wanted to

avoid the problem of rebuilding something from scratch and again being isolated somewhere and just crosschain technology were popping up at that time. So we decided to build this crosschain lending protocol using messaging layer. We use a chain link CCIP wormall and right now we are the leading crosschain lending in the industry. >> Look man I think everyone wants to know you guys have a very very big announcement very [laughter] very big what's going on tomorrow. Are we feeling bullish? Let's not bury the lead. Full launching tomorrow, November 6.

>> After over three years on mainet, five years building, tomorrow we are finally launching our token. >> Yes. >> It's the main venues are Binance, Pers, Alpha Kraken Koin. >> Yes. >> Yes. >> Awesome. Okay. So, tell us a little bit about the token, right? Tell us about the tokconomics. This is a very interesting point because this is where it's maximum attention on folks, right? You guys are right before the TGE and once you guys go live, you know, it's a little bit apprehensive. Maybe you can't talk about price so much. You can't talk about the chat is fired up.

>> The chat is fired up. >> They want to know, >> right? So tell us about the folks tokconomics. Okay. Cuz everyone wants to know. >> Yes. Let's go. Uh so >> we tried to make this as much as possible >> polite and nice and bullish. >> So we gave the largest part to the community 35%. Yes. Uh we had over time also buybacks of investors before getting to the TGE. So we tried to reduce the investors amount. >> Oh wow. Okay.

>> So like the investors are a bit more than 25 I think. >> Okay. Okay. >> And uh then we have the team 10% 3% advisor and all the rest is to build the ecosystem and the partnership. >> So it's yeah it's going live relatively uh under control. So we want to for us is like the token has to go live. We have to give the utilities. So we will implement uh perks in the app. We already have at the one discounts on the swap. But we will keep adding because we have multiple DeFi tools. So we will uh based on how many folks you hold, you're going to get discounts on the app. So it's for the users first and foremost.

>> And um of course like we are going to launch new things. We will add more. We're launching also mobile app. So the token is targeting to be used also in the mobile app. So many things. >> Lucky Depro, we see you love cash folks. Guys, the community is definitely excited there in the chat. They're rating. What do you have to say to the community who's watching right now? They're in the chat. They're excited about what's coming. What do you have to say to them? >> We are keeping building non-stop. I mean, we built for five year folks and uh we are very excited about we are in one new LST upcoming. We have also the crosschain lending version two because you know being the leader in the market

on crosschain lending for over one year now we learned a lot. We know what this new type of lending protocol can do better and uh we we're very bullish on it. We we are also integrating monodon day one. So it's a lot of things. >> We got a question from new type here. New type wants to know is there a folks wallet on the road map? >> There is the mobile app. Uh at the very beginning we'll have um the custody through Fireblocks. So it's MC but later on we we may think about that. It's just you know we do always think do things step by step because having too many things in house sometime it can be

dangerous. You know, there are big securityities concerns about wallets and >> Yeah. You guys are going to li go live on Binance, correct? >> Yes. >> Okay. There's been a lot of FUD about Binance. >> Given that you guys are >> That's a hard question. It's going to >> Well, I actually want to get the alternative, right? Because we've seen all of the negativity that's happening around Binance, but you guys chose to launch there despite all of that. So, what what's more the positive story that we can tell? >> I will be telling my personal like when doing the TG, I learned a lot. I never did a TG before but it's one of the thing that I didn't delegate >> cuz I felt like it's needed me fully on it.

>> It's a very important >> and I can tell you it's >> it's like negotiation it's business. So a lot of things that you read on the socials are true but if you are dumb and you do things that are dumb you can't blame on the others because they proposed you. It's business right? Everyone takes care of their own business. So I don't want to go too much in detail but I think like the TG overall it's it's like a product it's the token is going to be your product as well. So you have to think it smartly. It's not that you just launch the token or whatever.

>> Right. And and so you know there's a lot of tokens out there. How how is folks token a little bit more unique and different? How how do you stick out? >> First of all, we are launching uh as a crosschain token. Okay. >> So it's going to be native in all the chain that we support. So it's eight chains. We use warl entity. Yeah. >> And even the airdrop is crosschain. So you have the leaderboard, you you have the points. So based on this we calculate the points and then you select the chain which you want to withdraw. So already this is a lot of innovation. Uh but overall we will always try to add more perks into u our defy tools for giving discounts to the user. That's mainly how we we think about it.

>> I mean I got to ask how does Monad fit into the crosschain vision? Because you know a lot of people are very excited for everything that's happening on Monad. Why did you guys choose to build there and what has it been like building there? >> Yes. So, so for us uh every chain is like helping the other chain when we integrate. The reason why we built this crosschain lending is to allow people to do crosschain portfolio management better. Let's say like on a right now you it's the main stay of the lending but you're still uh all the time limited in needing to collateralize on one chain. You are limited on this those assets to collateralize and borrow. With us you can combine assets of different chain and collateral and more. And this

we saw that every time we add a new chain it actually grow the entire pie because then you just have more assets more chain more users and it is just helpful each other. It's a network effect which so every chain that we can add we add. How and so do you guys see do you expect the majority of activity to kind of follow like the power law where like you know 20% of the chains give you 80% of the volumes and transactions or how do you kind of see the evolution of the chain strategy right like let's say if there's a handful of chains that aren't really getting used why keep that instance why keep that uptime you know >> because there are still valuable collateral even if let's say maybe it's not a lot of activity but there are

maybe still investors who holds these assets. So >> it >> let's say I used it to have a lot of assets on the X chain, sorry on on the exchange, >> right? >> So because I don't want to have a wallet in each single chain, maybe I have the wallet in the chain I use the most. >> Yeah. >> But with folks right now, this you can do it very simply. So >> obviously there is a new chain, it's hype. It's good for us to integrate. There can have a lot of transaction, a lot of volume. But the others are not to to discard because of that. like we we believe that there is this help of having them all connected.

>> I think the community wants to know what you do for your hair. If is there a specific hair product that you use? >> No, no, it's a lot of people ask me this. Like [laughter] I was in Korea for Korean blockchain week and people come and they're like, "Is this real?" They touch it. I'm like, "Yeah, I'm just Italian. It's uh Yeah, I I just put a little bit of >> of cream." Yeah. >> Is there a a lot of crypto uh builders? Is there a thriving community uh in Italy? >> Yeah. Yeah, I will say it's not the biggest definitely, but there are builders. Yeah.

>> And you know, uh there is in every crypto project an Italian member like in the the crypto projects and the >> Yeah. the the the Italian defy mafia I like to say. But >> shout out to David. >> O overall I I think a lot of builders are Italian and they are in Italy or not. >> But we Italians we always love Italy. So we always come back. >> Of course. So token launch tomorrow. >> You know, we're in the middle of Q4. We're in the home stretch. What is your Q4 roadmap look like into Q1? Um what are you know, what are your main priorities from the uh product side as well as the marketing just kind of growth side.

>> So the version two of the crosschain lending is where we already focusing. We paused it on a bit because the last month has been crazy with the TGE. But uh we really believe that improving what we have right now can bring uh crosschain lending uh even more used and we can make it more scalable. We we also monitored like the last few days with all the problem we had with the defaults and the risk creators. We do think that there is value in uh decentralizing uh uh uh the pool strategies with the curators but the way it was done in this cycle was a bit too aggressive very

Taraluna style >> like you know not taking really care of the risk >> but this can teach us as lending protocols to build it better for the next time. I always hope that that every crash people learn but in the end no one learn but I I do take example from this. So I want my team to to understand what was happening wrong so we can build something that can leverage the good part and reduce the risk. So for us the version two we want also to have vaults. >> And so did you guys make f you guys made out of this October 10th um crash event fine? There was no issues with the program.

>> No bad. >> No bad debt, nothing. >> Yeah. Yeah. Folks uh was responding very good like in every crash that we seen. We are live on main since April 2022. >> Okay. >> And we always been Yeah. Yeah. >> So you guys never had you guys didn't have any issues with Athena's USD or anything? >> No, no, no, nothing yet. >> Okay. I hope it's not going to be but so far all good. >> Of course. Of course. >> Yeah. We take risk very very seriously and uh you know like sometime when talking with others even like with a lot of liquidity provider they come to you and they say hey look but I can go to your competitor and they have much better and then look what happened I >> yeah [snorts] >> you need to to consider this.

>> Yeah. Yeah. So once the tokens live, this will allow you to do uh certain emissions for depositors or borrowers like there's, you know, I I remember back when a first went to Polygon, there was like Madic token emissions on Polygon if you bridged over there. What's your kind of liquidity farming plan, liquidity uh emissions plan for the token? What's the best way to kind of be a part of the community to earn folks token after the launch? Yeah. So we have we had the leaderboard for I think one year >> and now the points reset once we took the snapshot and now it's running again. So you will be learn earning points if you will keep using folks even now. So I think that

the leaderboard is a very good point to look at and uh we will be also doing incentives for the markets that we feel that are needed. We always look at what generates value for folks, what generates values for the users and uh obviously we will use the incentives model like you know in the version one of the lending we were the first lending protocol introducing cash back over the loans >> as we always think like okay a valuable user is not the one that gets liquidated right >> is the one who repays the loan >> correct >> so we we we we think always about this >> sustainability of the protocol. That's why we passed like bad times and we

still are here >> of course. And so when you guys are thinking about your community right now, would you say that the majority of them are are kind of OG algorith is it's there like the crosschain lending keeps growing right and uh in the version two we will integrating al be integrating also nonvm chains. So we look at the scenario to merging all together. Yes. So EVM non EVM we want we will do rust integration. So we will have rust based chain move we are looking also at it. So we want to monitor how the things goes and yeah we want to be an omni chain for the lending. So you know that you have

portfolio management across chain you can use us >> and we will all power this with our mobile app with the debit card where it's going to be like he but the law are going to be crosschain so you can collateralize on every chain top up your card then spend >> love it folks token launching tomorrow I hope everyone else is ready >> I know you're busy last thing for you here >> yeah no problem >> um >> look man why are you doing this you've been doing this for 5 years >> what is your why, man? >> I ask myself. No, it's a >> me too man.

>> To be honest, um I love it. Like I love my team. For me, every time we succeed is succeeding together like sometime I saw my team going on stage winning competition and I'm like wow that's I'm so proud of what we are doing and uh you know I try to I'm I think like we we built this way of doing business that is like very friendly with each other, respectful and it reflects also in the community. So we always listen to the community. We give we receive feedback insults sometime. Why not? But it's when when you have this relationship with your users, with your team,

>> I really like it. It's give me pleasure. So that's why I do it. >> Well, man, best of luck. The community is fired up. You got Noaru, a couple other folks just active in the chat, man. >> Thank you for joining us. >> Are the fire community. Yeah. >> Tonight is going to be a busy night. I'm sure tomorrow I hope you get some sleep. Yeah, it's like one week that I don't sleep. Like >> 7 a.m. tomorrow. So, thank you for your time man. >> Thank you for having me. >> I hope you had a great SmartCon, brother. >> We'll see you next time. >> Much love, man. >> Yeah. >> All righty, guys. We got 1 hour left, two guests left. We're going to take a really quick pause here. 30 seconds.

We're going to be right back. See you guys in just a second for our last two guests. Thank you guys for being here. SmartCon Day two TV. We're fired up. Uh see you guys in a second. Last Hey, Hey. Hey. Hey.

Hey, All right, guys. Day two, SmartCon, last

hour of the marathon round. >> We've got Nick Duke, the head of institutional adoption and all things soul with the institutions. This guy looks good in in a trench coat in in a suit. He's got a nice watch on. I can tell it's not his first rodeo here in New York City. It's good to have you, man. >> Thanks so much for having me. >> It's good to have you, >> man. It's a pleasure. I think uh we've all seen a lot of the institutional adoption that's been happening on Salana. You've been at the helm of a lot of this adoption. We could talk about Western Union. We talked about um the ETF that's coming on. Um but let's start with the talk that you gave just a couple floors uh further down in this building. You had Galaxy on there. Um tell us what you guys covered when it

came to the institutional adoption and take us through the institutional journey that you've had on Salon. Yeah. So I think the title of the panel was something like you know why is Salana winning institutions and State Street, CME Group and Galaxy was on the panel and they were saying you know the thing that is really motivating them to lean into Salana right now is client demand. So you know they obviously see the tech is great, the ecosystem is great but the most important thing is you know flow and their clients are pulling them closer and closer into the Salana uh ecosystem and and that's just really exciting to see. Um, I started at the Salana Foundation in the summer of 2023. There was 300 million TVL on the chain. There's now something like 15 billion. It's almost

hard to believe. And I think we're just getting started. >> Yeah. I I'm curious when it comes to Galaxy and State Street, these these large institutions, and you're looking for flow. There's obviously a give and take here, right? I think the the adage is that sharks are going to go to where there's fish in the pond, right? And Salana has been known for a lot of retail flow. Does that help incentivize institutions to come in and serve their products? >> Yeah, 100%. I mean, I think the thing that's so unique about Salana is you got tons of of retail activity and you got tons of institutional activity. And the the beautiful thing, this was the vision all along of this idea of onchain NASDAQ and internet capital markets is bringing all market participants [snorts] globally together in a single liquidity

venue. And I think that's what makes it particularly um exciting and and ripe for more institutional growth. Yeah. And let's talk about the the general growth of stable coins on Salana. How has that been? I'm sure it's been exponential as well. >> Yeah, it's been a it's been a good year for stable coins. So, I think we started the year around like four some odd billion. Okay. >> We're around 16 plus billion today. Okay. >> Um we we we saw a nice little bit of growth around the Trump memecoin in in January prior to the inauguration. And then, you know, of course, um, memecoins kind of, um, tapered off a little bit.

Yeah. But you would have expected stable coins to have done the same, but no, that's not what happened. Stable coins kept ripping, kept ripping, right? And we're now 4x year to date. >> Um, you know, if you if you annualize that, that's 5x growth on a base of four billion. You know, I expect the year closer to 20 billion or higher. Yeah. And so if that growth rate continues, and I've got every expectation it will because the growth is steepening, we'll be at 100 billion stable coin sometime next year. >> Yeah. Yeah. I mean, which is is fuel for lending markets, for Jupiter, for Camino, for you know, insert DeFi apps here. You know, Secretary Treasury, um, Bessant wants us to get to 4 trillion or so by 2028, 2029. Um, you know, we definitely want to capture that. It's

funny to see Western Union announce a stable coin on salon because I when I first saw this I was like are they not just cannibalizing their own business right that it's a slow business they take nine or 10%. Why launch a stable coin? >> Yeah. Well, I mean, this is like classic Clayton Christensen innovators dilemma. If you don't eat yourself, somebody and I love seeing, you know, the likes of Visa and PayPal and and Western Union. Um, you know, being very active in the Salana ecosystem. And and the thing that's kind of uniform across all three of those, if you if you look at what they've written and said about why they chose Salana is when they looked at the available technology options, Salana was fe fastest, cheapest, and and and most resilient. And so they wanted to build on something they knew could stand

the test of time like them. You know, many of these are 100 plus year old brands. Um, and they chose to build on Salana. I think that says a lot about where Salana is as an institutional blockchain. >> I think we al we all saw the headline. There was also some FUD around how these deals get done, which I think people need to like take their thinking cap off and realize that business happens in certain ways, especially when we're trying to onboard adoption or sorry, onboard institutions. But like what is the actual implementation of that looking like? Um how does Western Union go from you know traditional money remittances payments crossber how do they implement a stable point into their rails is it is it an easy process is this a multi-year process like I think people are curious like what the headline really means what the

implementation is the timeline just you know anything that you can share >> sure and and it's different for every institution because each one has their own capability and you know some you know want to build it themselves some want to partner you know and there's so many that are building on Salana In addition to Western Union and PayPal and Visa, you also have Pyerve that uh recently announced their stable coins on Salana. Um and you know I think as as any um company does is they first evaluate you know what is their internal capability then they look out and say okay where are our gaps you know what do we need to build by our partner to do obviously you've seen folks like stripe you know be acquisitive with the likes of bridge um that type of activity is is is you know happening more and more it's

like M&A season in crypto right now and I think in part that's because these financial institutions see that they have to be playing in the space they've got to be here and you know some say okay well the fastest way to get here is to Um, you know, some have the capability to build like Franklin Templeton has built pretty much everything that they've done on Salana themselves, which is incredible. >> And so, um, you know, I I I think it's just dependent on the institution where they are and, you know, what they're looking to do. Um, but the most important thing to recognize is these guys are they're laying down track. >> They're hungry. They're hungry. If you don't have a seat at the table, you're in trouble.

>> You're on the dinner plate. [laughter] I'm curious who the next target is. You know, like you got Western Union, you've got some of the biggest remittances. you got the biggest payment providers. Can you give us any sense of >> Yeah. Well, you know, we've got a big conference coming up next month in Abu Dhabi. A lot of announcements December breakpoint um keep it close to the chest until then. >> Well, you know, there's new stuff coming out every week, right? But there's also, you know, we got to save some for for the big Breakpoint conference next month. So, I hope you'll join us in Abu Dhabi. >> There you go. Yeah, man. I gotta ask, right? So, we we saw Salana's rise in, you know, about fiveish years ago.

Ethereum killer. It was the next L1, right? like every other one now it's like it's very clear like internet capital markets it's institutional facing it's it's really cemented its place in the crypto industry what does the Salana brand look like in five years like what is that next evolution >> it's got to be ubiquitous right and and you know I think there will be parts of it that remain you know very front and center that people are using and know that they're using and then I think there's going to be parts that are going to be more um behind the scenes you know people that are doing all sorts of uh things on top of salon and not necessarily even knowing that they're using a blockchain because at at the kind of internet speed and scale that Salon operates at. Um the the beautiful thing is is that you know it works like

any other app that you use. And so we we want it to kind of just be something that's there in the background and tons of of of trading activity, payments activity, you know, anything you can do on the internet, we want you to be able to do it and build it on Salana. >> Yeah. And so that is that like more of a focus on like the policy maker side, more on the retail side, more on the institutional side like is is there is there a focus? I mean obviously you're quite deep on the institution side but to get to this ubiquitous state what do you think is required? >> Yeah. So I think there's a few things that have made Salana successful. One is the community. I mean, we're so grateful to have, you know, such an enormous global group of people that, you know,

love Salana and love building on Salana, love using Salana. Um, and I think, um, you know, we've we've done a good job helping activate those people to help bring others along. And one of these, uh, activities is called Super Team. I don't know if you if you're familiar with Super Team, but we have, you know, these these groups of, you know, dedicated, you know, Salana fans who help bring others along in their local markets all over the world in the UK and France and Germany and Canada and Nigeria and Japan and South Korea um and and many other Dubai and many other places. And um you know it's incredible you know when I travel around you know conferences whatnot I always make sure you know to meet up with the local super teams because you just feel the energy and excitement and the passion that

these people have and you know they're doing God's work bringing more people into the ecosystem and and helping with the education helping you know people make that first trade um you know on Jupiter or whatever and you you you know once you've used it it's like bam you know your eyes light up and and you're in in Salana for life and that's what we love to see. Yeah. And there's communitydriven efforts. There's also uh institutional efforts that you're spearheading. Um for a long time, Solana was, you know, the decentralized NASDAQ, right? NASDAQ at at internet speed, capital at internet speed. And originally, when I first heard that, I thought, oh, well, you know, Jupiter Camino, all of these DeFi apps that are going to rise to prominence and ultimately take a lot of the the capital and and and be the new uh financial

mechanism. But then we saw NASDAQ come and say, "Hey, we're going to go more into tokens. We're going to go do 24/7. You know, we're going to take settlement time from T plus2 down to same day." And now it feels like there's a reality where NASDAQ could deploy on Salana. So, which one of these visions is more accurate these days? Is it the DeFi vision or is it the institutional adoption of Salana into these existing systems? >> Stocks, you've got these things now. I mean there's no question the future of finance is going to run on Salana and I think it's all of the above. I you know I I think Salana can power all of this activity and more. You know today theoretical throughput is around 65,000 per second with Fire Dance for a new

independent validator client being built by Jump that will increase to a million. Um we've already seen that million um TPS in in in in test net devet and I and I fully expect we'll see it you know that utilization one day live on Salana you've got Albanglow which is an update to the consistency mechanism bringing settlement finality from 400 milliseconds to 150 milliseconds 200 milliseconds is actually an important threshold because the human eye is effectively instantaneous >> correct >> and so I I I think we're going to a place where you know the type of activity that we see like per on hyper hyperlquid type trading activity you see on NASDAQ. I think all that can be done on Salana in that in that unified liquidity layer with global market

participants 247 and that's the vision and you know a long way to go but you know we're making good inroads. Are you are you worried about um Salana's per uh platforms comparatively to hyperlquid or lighter? Like do you see that you know if we're trying to build this kind of like speed of light NASDAQ on NASDAQ? Well, I mean why do it on a general purpose chain with all this other stuff going on? Let's just build a more centralized version with less validators that's more juice up and just do it there and let's just do it over and over again and we'll just beat Salana. How do you how do you kind of like what is the team's internal kind of thought process?

Anatoli building his own purp, isn't it? >> Yeah. So, I'd say two things. One is only the paranoid survive. >> And second, >> cockroach mentality. >> The desert [laughter] cooking. >> Okay. Okay. Very cool. Well, look, look, I know you guys have, you know, ZK compression. You've got these kind of Salon L2 is like bullet, right? Is uh is is an implementation. Um but, you know, totally was worried on the timeline. He you know, he's actively expressing his worry about how Hyperlink is winning. I I think those worries are being manifested into um exciting developments that I would encourage you to come to Breakpoint. Um >> good thing we hold both. [laughter] >> And uh yeah, no, we're not sleeping.

>> All right. Well, let's talk debts. I know that that that the Salana Foundation has been involved in uh Kyle Soman's forward debt as well as a number of others. Um where we at? Uh where where is the Salana Foundation's mentality towards these treasury companies? um kind of what is the approach internally towards these recent developments? >> So I I think something in the order of magnitude of over $3 billion has now been raised um you know to buy soul. Uh these dats are are in many cases you know being very active uh contributors and and participants in the in the DeFi ecosystem. You know they're participating um as validators or staking you know they're they're they're they're using DeFi. Um, and so I think

you know very much a net positive for the Salana ecosystem. The other thing they're doing and and this is really cool is they're now helping tell that Salana narrative to Wall Street. So we talked about super team earlier and all these folks that are activated all over the world to help make Salana both global and local. I think one of the important things that the dads are doing is they're super team Wall Street. So earlier today uh DeFi DevCore, one of the Salana uh dads hosted an investor day and it was really well attended. I uh they were very gracious and invited me to to do a fireside chat with Joseph the the the the CEO and um you know they're now out here helping tell the Salana story to more people and it's just amazing. It's just amazing to see this grassroots type of activity. More

and more folks are entering the game and then obviously last week um >> folks got exposure to passive Salana via spot staking ETFs from Bitwise and Grayscale and that that was just tremendous. So, how were you guys able to get that through despite the government shutdown that's holding up a lot of these other ETFs? >> Yeah. So, you know, we didn't do anything bitwise and Grayscale had the um you know, the uh really um great idea. There's a a line at the bottom of a S1 registration statement that most folks include out of respect to the SEC that says something along the lines of this registr this registration statement will go effective, you know, when approved by the SEC.

>> The Securities Act though doesn't require that. Basically, there's a way that you can file an amended registration statement, and if the SEC does not act in 20 days on it, it automatically goes effective. >> Yeah. >> And so, these guys had already been working with the SEC for many, many months leading up to and before the government shutdown. And so, the registration statements were near complete. You know, they were substantially substantially complete. And so, they refiled the amended uh S1s without that sentence and instead put this this registration statement will automatically go effective in 20 days.

shut down of course >> and you know SEC um uh didn't stop it and so you had Bitwise go out last Tuesday with B Soul and then Grayscale on Wednesday with G Sold and >> how important is staking to those ETFs and and how from from your institutional conversations how important is yield to to these assets? >> It's so huge. I mean I think Salana as an asset is a really compelling story because you've got both high growth um you know Salana last 12 months revenue is something like two billion um and you know when you look at the multiple relative to the market cap I don't know what it is today 80 some odd billion maybe you're looking like 40x multiple I mean that is not dissimilar to the magnificent seven companies and the growth rate of salon is much higher >> um and then when you look at the yield

which for both bitwise and gayscale around 7% so bitwise launched with 100% % staking. Grayscale just amended to go from 75% to 100% staking. So you're getting 7% yield with, you know, an incredible technology growth story. I think that is a really unique asset to have both high growth and high yield. >> Incredible. Nick, man, take us home. It's been a quite a long conference, an incredible journey uh for Salana. You guys are continuing to pioneer in both Wall Street as well as uh consumer finance is is probably what I'd call it.

Internet capital markets is the cornerstone of both of these demographics. I know you can't you're keeping those partnerships close to your chest, but give us a little bit of sense of the excitement leading into Breakpoint next month. >> Yeah, I mean I I think that excitement was was seen on the panel today. You had State Street, you had Galaxy, you had CME Group all talking about how they're totally bowled up on Salana. I think, you know, I'd encourage folks to listen to the to the panel that I I imagine Chain Link will put out at some point and um that'll get you pretty pumped up to to come join us in Abu Dhabi next month. >> Boom. We are pumped up indeed. All right, Nick, thank you so much for coming on.

>> Great work. >> All righty, Rob. >> Yeah, day two. Uh, >> it's getting quiet in here. >> It is. It is. Teams are starting to filter out. >> It's getting quiet in here. >> You're good to go. Unless you want to stick around. Help us run this last half hour. [laughter] >> Cheers, brother. It was a good conversation. Thank you so much. >> All right, guys. I think we have Patrick coming up next, the co-founder of Cipher Audits. He's in the house. He's drinking. Yeah, dude. >> Yeah, >> that's a must on Twitter. [laughter] >> Yes. Yes.

>> Yeah, Nick. >> You can hire him. Just kidding. Yeah, you can. It's all yours. >> All right, guys. We've got Patrick in the house. He's fired up. Um, >> man. Patrick, >> how are you doing? >> Doing all right. How about y'all? Y'all been up here a while, huh? >> All day, brother. >> All day. We've been here since 10:00 a.m. >> Oh my god. We've been talking the whole time. >> The whole time. Good for you. Good for you. >> Yeah, Patrick. I mean, so look, you're building in web3 security. I got to start, man. How the hell did Balancer get exploited, >> dude? How did that happen? >> All right, so so actually I was literally reading uh Balancer posted like a preliminary postmortem like maybe like 20 minutes ago, and I was reading that on the way over here. Uh it sucks.

Um it sucks. It was awesome. So, for those of you who don't know, Balancer got hacked for like 120 $130 million recently. Uh, on an older codebase that have been around for 4ish years. Um, and it it sucks when a when a codebase that mature gets hacked, it it's it's terrifying because it the question is, okay, like is any of our our oified or long mature code bases safe? Um, so how did it get hacked? Um, a lot of people have been uh posting what they think are postmortems, but you know, just uh heads up to everybody out there, be very careful of the Twitter koss and clout chasers who post postmortems who don't know what the hell. Can I swear on this

or no? >> [ __ ] yeah, you can. >> Who don't know what the [ __ ] they're talking about? Uh, most of them don't know what the [ __ ] they're talking about. Uh, the usually what you want to do is wait. >> Safer audits, baby. Bullish. Let's go. Usually what you want to do is you want to wait for like a legitimate security firm or like the protocol developers themselves to post the postmortem. Uh and and that'll actually tell you what you what you need to know because it's really important that we actually know what happened because that will tell us, you know, what we need to fix in the industry, right? If it's a re-entry issue, okay, cool. Like how do we fix re-entry issues? Is it more tools? Is it more uh human resources, etc. It's looking like it was some type of

precision rounding. um error, you know, how do we make sure we have better tools, better humans to fix that? But yeah, don't uh if you if you click on someone's bio and it's like, oh, I'm like a social media manager and they're telling you postmortem hacks, that's your red flag that they might not know what they're talking about, >> how does a rounding error cause $120 million exploit? >> Yeah. Well, so so again just to just to clarify, uh it was just a preliminary postmortem. So like there could be more details, but we have seen precision errors cause huge huge amounts of loss and um the way it works is you know like a me crypto is very very specific. Every amount of money adds up. So if you do a transaction and the protocol, you know,

loses, you know, a single way or like a half a cent and a hacker is able to figure out how to have the protocol lose a half a cent millions of times, >> all of a sudden they make a [ __ ] ton of money. So you know, flash loans are tools that we have as well that doesn't exist in the fintech, the classic fintech world where you can like find a tiny little hole. Like the analogy I make is like imagine like you have like a hose like a precision rounding area is like a tiny tiny little hole in it and then they just take you know flash loans they take a jackhammer and just slam that [ __ ] open it up and uh you know you just keep repeating repeating repeating and all of a sudden you have $128 million lost.

>> Yep. Makes sense. Um I mean it what was it $4 billion was lost to hacks. I think it was 22 or 24. Generally we have seen these things become less severe and less frequent. Yep. >> Is that the case? Are we just hearing less about it? I mean, amongst kind of the bull market, these things get swept under the rug a little bit. Has ha like has the hacking industry started to die down or is it still very much alive? >> It's it's an amazing question. You know, if you had asked me this a month ago, I would have said uh our smart contracts are actually getting pretty secure and hackers are looking elsewhere and then this hack happens and now I look like an idiot if I say that. Um but yeah, so so chain analysis is a is an analysis firm.

They do some phenomenal metrics on like hacking data and um yeah like the average for the last couple years has been around like two and a half between two and a half and$4 billion dollars. Um you know we saw like a dip in 2022 2023. Um but the dip was also like at the same time the markets collapsed. So people were like wow we're getting hacked less. It's like no there's just like less money in the ecosystem. Uh what we're actually seeing is pretty much like as more money comes in the industry, we see more money flow out from these hacks. Uh I still actually do believe we are getting better at smart contract security uh you know this balancer hack is you know putting an arrow in that but a lot of the the hackers these days they're kind of following more

traditional cyber security hacking routes. So uh on my talk earlier today I ranted about private key safety and you know not your keys not your crypto yada yada yada. Uh because these days it's the it's the Koss who get the fake Zoom link. Yeah. >> They click it, they download a key logger, they download a a MetaMask hacker, everything [snorts] get goes out the window. Um that's what's becoming more common because hackers are going, you know what, smart contracts are hard. There's a lot of math there. There's a lot a lot of logic there, but people are idiots.

>> People are a lot easier to hack than logic. So we're we're seeing more of that happen, which is uh which is super frustrating. um because those are the ones that are arguably like easier to prevent with education with good processes. You know, >> hardware wallets, >> hardware wallets are very help. Multisig is even more important. You know, one of the other um it wasn't necessarily a hack, but big oopsy daisies. I don't know if you guys have been talking about this was uh PayPal. >> Have we? >> Okay, you have been talking about this. I just said PayPal and you immediately So, >> we're just going to admit the entire global GDP.

They really [ __ ] up. They could have paid off the US debt. that with the fake money they they uh they mint it on nowhere but so it's a big it's a big daisy right and um >> it's just it's just immature ops uh for I mean again you know I don't know the whole story and I'm outside hindsight 2020 yada yada yada but you really should never have a single address have the power to mint $300 trillion because they could fatfinger an oopsie if they accidentally download a link boom you know you you we have we have all these mature processes that should be followed and some orgs aren't following them. I think classic fintech for whatever reason they're like trying to get into crypto but they're not talking to people

who have been doing this a long time and so they're getting wrecked because of it. Yeah. >> Um but it sounds you know this is why SmartCon's a great event. It's because we are kind of combining hey classic fintech listen to the people who've been you know doing this [ __ ] for a while now. >> Yeah. I I'm curious you know we operate on chain. um there's businesses that operate what what is what are some of the things that someone can do to protect themselves, right? If it's just like without, you know, and maybe we'll just stick to the retail use case, not so much the institutional use case because that's where things can get really really secure, really complex, but you know, just the the average user watching at home. What are, you know, the two or three things that they can do

to protect themselves? >> Yeah, great question. So, it it really depends on your on your threat model. So, I'm going to say for like the average person who has built up some savings and they they are kind of cipher punk. They want to be custodial. They don't want to have it on an exchange or actually I guess before I even go down that route, uh maybe consider holding your funds in an exchange. Um it's I hate saying it because I'm cyber punk and I'm like everyone should should know about their keys, know about their uh their wallets. A lot of people aren't going to learn, you know, what it takes to like hold that responsibility. And that's it breaks my heart to say that because I'm like I'm like, you know, not your keys, not your crypto. If it's on an exchange, it's not really your money,

blah blah blah. But, you know, I've seen so many people just be very flippant with their keys. Again, they click the malicious Zoom link, they download the malicious software, and I get DMs from people, and it breaks my heart. They're like, "Hey, I lost my entire life savings because I downloaded some bad stuff." And I go, "I I don't know how to help you. Um, that sucks. you know, here's here's the local law enforcement. We can try to trace, you know, we can do our best, but you might be [ __ ] out of luck. Um, so if you're not willing to do that work to really understand this technology, you know, maybe leave it on the exchange. Now, if you are willing to do that work, you know, let's talk and and hell yeah, good for you because again, the the downside of that is,

okay, if you put all the money on the exchange and the exchange is named FTX, you know, you're [ __ ] there, too. Um, so I would say like, but yeah, learn this stuff. It's not that hard. Um but like and take the responsibility like hey like your private key is literally the access to your vault the access to your wealth empire. So hardware wallets are a phenomenal first step. Absolutely. Like that is the minimum you should be doing is hardware wallets. Um much better than software wallets. You know I know a lot of people like their MetaMask their Rabby. Um but anything that's uh not a physical device is easy to hack. Again, we go back to this malicious Zoom link idea, like you shouldn't be clicking those. But if you do click them and you have all your money in like a MetaMask or like a god forbid, like a

website wallet or something, uh, and you download some software that is a key logger and you type in your password, now they have access to your password. Maybe they swipe your encrypted key, boom, they decrypt your key and they steal all your money. So having a separate physical device, you know, like a Ledger, a Treasure, Lattis One, Keystone, you know, you name it. There's a lot of great wallets. Well, I have issues with hardware wallets, but that's another conversation. Um, hardware wallets are phenomenally better. If you want to go a step further, um, this is where you do need to get a little bit more technical. Uh, using a multi-IG wallet like a safe. This will help prevent the fat fingers like $300 trillion or a fat finger of like giving away all your money. Um, you do need to be a little bit more technical to do

that. So, there's a little bit more training. Something that we offer on Siphon Updraft if people are interested. But yeah, the minimum you can do is first off, am I going to take the time to be secure and actually understand private key safety? If no, just stay on exchange. Don't trust yourself. If yes, and I hope the answer is yes, then the the first thing the minimum thing you do is get a hardware wallet, start there. Um, and then keep learning, you know, as you learn. Maybe do multiig, maybe do uh um different types of backup or social recovery, etc. There's lots of things you can learn, but >> that's the first question. Am I gonna take the time? If no, stay on the exchange. If yes, start with the hardware wallet. Go from there.

>> Did Did you grow your Twitter account with doing like security tweets and stuff? >> How did you grow your Twitter account so much? >> Uh, big nerd. I'm a big nerd and I post a lot of big nerd stuff. >> Um, >> like you're like a large nerd. >> Well, I'm I'm also kind of a large nerd. Um, >> just just making sure we're >> Yeah. Yeah. No, but uh just like my goal since day one is like make products, make content that help people in the space. Um and I'm I'm I'm honored that people have taken, you know, the education and tools that I've made and said, "Hey, like we like this." Uh and yeah, just keep posting nerd [ __ ] Although the most frustrating part for me is when I post like a stupid meme and it gets way more likes than like a

research project that I took like four weeks to do. Um you know, but that's life. >> [laughter] >> I totally get it because I can tweet a oneliner that'll go viral and then you put you write an entire article and it gets like onetenth of the engagement. >> So, >> yep. >> I'm curious uh about the talk that you gave downstairs. Yeah. >> Can you give us a sense of that? >> Yeah. So, it was it was mostly around um private key and wallet safety. Uh it's kind of a big tangent I've been on recently. Um, a lot of the audience here at SmartCon is like enterprise classic fintech and I wanted to kind of tailor a little bit more to them like here what are the what are some of the pitfalls that you as an enterprise are going to run into. So maybe less for like the

retail users out there, but you know um uh developers when they develop like a common pitfall is they say, "All right, take your private key, put it in plain text, and then stick it in this script." And again, what we just talked about, you know, you're the instant you do that, you're now at risk of again like accidentally sharing your screen with your private key or downloading that link again. You never never want to have your private key in plain text. So many businesses um they haven't had the they haven't got the scars and they go yeah like I'll just put it in plain text. It's easier to get my script running. They'll deploy to the cloud. So like a lot of automation needs a private key and they don't understand like how easy it is to get wrecked. Uh we talked a little bit more about you know even the

hardware wallet side because uh you know if you have a you know bybit I talked a lot about Bybit for those of you who don't know BBbit was an exchange that got hacked for $1.4 billion dollars. It is the largest heist of all time, which is crazy. They actually were doing everything right. They had hardware wallets, they had a multi-IG, they had a very sophisticated ops um process, but um somebody did a man-in-the-middle attack, sent like a malicious transaction to their wallet. They couldn't read like what the wallet was saying cuz it's like complicated hex data, and they were like, "Uh, yeah, like yeah, that's probably correct." And they sent it, and boom, it was a malicious transaction for $1.4 billion.

>> But it was a multi-stick. So, wouldn't multiple people have had to approve that? >> And multiple people did. >> That's what happened. Multiple people. >> You do like blind signing or whatever. It's like, you know, like when you're clicking on your ledger, it's like click click click. It's just a bunch of ones and zeros. I mean, I've been there so many times where it's like, I think this is what I did. Hold on. Let me just re let me just press no. Go back. Click click the button again and just make sure that cuz like I'll like, you know, step out, go to the bathroom, come back, and I'll be like hm. >> Yep. Well, so the the the tricky thing with that too is um you know your your website could say one thing, but if somebody gets in between your website and your wallet, your wallet could say

another thing. So if you can't read your wallet, you sent like that's what happened. But these are these are obviously very sophisticated. These are very tricky hacks that happen like to get in the middle there. Um and like again like hindsight 2020, but uh you know being able to verify the data is is a more advanced uh trick, you know. So, I'm on I'm on a number of security councils for different like layer 2s and every single transaction I send on my hard wallet. I'm like I [ __ ] you not. I sit there and I read every every freaking character and I know what it does and I have a bunch of tools that I use and we we teach this on cipher updraft how to how to verify all this but I check to make sure that the hex data on my wallet is doing exactly what

I want it to do. Uh it's a little bit more tedious but I'm in the security field so if I [ __ ] up I look really stupid. Yeah. Um but uh you know unfortunately there there are some technical hurdles uh for a lot of people these days. Um and I'm I'm hoping wallets interfaces get better where you know instead of all this hex [ __ ] it just says like oh you're swapping USD for ETH. You know Ledger just came out with a tool. It was it was a bit controversial but I'm happy that they're making progress because it does have a way to just say hey you're swapping ETH for USDC and it says that right on the hardware wallet. So that's really good.

It ma it makes these transactions and just self-custody in general, blockchain finance in general, using the chain itself makes it a lot more approachable for a lot of people. >> Yeah. >> Um like this hacking economy is still very much real and it it's still on the scale of billions of dollars. >> I remember when you know the theory was that a lot of this was coming from North Korea, Lazarus group. Is that still the case? Do we have any more insight into where these hackers come from? uh all over the place. North Korea is a big one. Um so like the Vbit one, $1.4 billion dollars that was that was confirmed. Uh North Korea, North Korea, Lazarus, you know, North Korean hackers.

Um you know, but we get we get hackers from all over the place, you know. Uh a fantastic documentary just came out called Code is Law. Talk about um I forget where the guy was from. Uh but he wasn't North Korean. Um he was just a hacker. Uh I think he was Canadian. I I forget. But um yeah, they come from all over the place. Um North Korea definitely is like like state sponsored like they their nineto nine not nine to five their nine to nine is to steal money. >> Yeah. >> Like wake up >> try to take people's money go to sleep.

>> Pays them to hack other countries. >> Yeah. Well, uh yeah, nobody would ever admit that. I mean every every nation has some level of espionage or like you know sabotage that they're doing. Um, but uh, yeah, it's it's a real threat. >> Yeah. Wow. This documentary looks pretty nuts. >> It's it's very good. And it it goes through the history. So, I guess I'm going to shill the documentary real quick. It goes through like a history of like a lot of the most influential hacks out there, what the security industry learned from it, and then more importantly, like, hey, this thing of code is law. Is that real? Because like, if you hack my protocol, I'm sending the cops after you.

>> Yeah. We've had this conversation before. is like what is what are the ethical um the ethical requirements of someone if you're leaving money on a table. It's kind of like if someone drops a $20 bill on the street and no one's around acting like it's theirs, is it ethical to pick it up? >> Yeah, it's it's a it's a good question. It's something that So, so um there are some cases um going on right now and in the courts I think that are going to set some really interesting precedents. So, one of them is the um index finance hack that's still kind of going through uh that's still going through the the the law. Um Mango Markets um that's actually uh I think I think don't quote me on this. I think he got convicted and then he appealed and the next judge

overturned it saying like >> the code let him do it so like whatever. Um so it is like it is an interesting question. We're still trying to figure it out but then some other people have gone to jail. Yeah. >> Um >> we're we're we're figuring it out. We're figuring it out. >> Yeah. Um maybe give us a just give us a little bit of an update on the business side. What are some of the >> maybe you don't want to mention the clients that you work with that's a >> Yeah. I mean, you know, share some success stories for anyone who's listening. They run a protocol and they're they're looking for some audits. >> Yeah. So, yeah, definitely hit us up. So, our two main lines of business for the Cipher team is security audits and we also have our education platform where we do sponsorships and we have ads

and jobs and all this other stuff. But that's the the place to go to learn anything technical, web 3. You want to become a security researcher, developer, cipher updraft is for you. Uh and then also if you want to make sure your codebase is really really good and very secure, cipher audits, that's what we do. So yeah, we work with some phenomenal teams, some phenomenal partners. Some of them are here, you know, world liberty finance, and um you know, MetaMask, ZK Sync, Consensus is Lineia. Um we're very very lucky to work with some of the best in business and we're very proud of that. Um and uh you know making sure that you know one not only one protocol at a time is safer but also we take all of our learnings put it into our education products so security researchers can say oh okay I'm going to

learn from siphon team who works with the best projects out there uh to be more more safe you know one of my favorite ones is the MetaMask um 7702 upgrade a little bit more niche a little bit more nerdy a little bit more technical but if you use the MetaMask uh smart accounts it's us who audited them >> very >> which is very exciting. Yeah, thank you. Yeah. Yeah, we're we're very lucky to work with great partners. >> Patrick, man, it's been a it's been a pleasure. It's been a marathon for us. >> Yeah, you guys are probably [laughter] Yeah, appreciate it. Love your Twitter, man.

>> Keep keep up the tweeting, man. We'll just keep we'll just I just like your Twitter man. >> All right. Likewise, dude. Likewise. Thank you guys for having us. >> We'll see you next time. Thanks, Patrick. >> All righty, guys. We're gonna hit a standby and then uh >> quick break before our money moves fast segment with Sam from Polygon uh talking about their upcoming upcoming work. Guys, we'll be right back in one second. Thank you guys for being here. It's been a day. >> Money moves fast. Coming right up. Hey,

hey hey. >> [music]

>> Yeah, I think we've uh taken the approach of fortunately we have a lot of folks that know the traditional system, know some of the the pain points and limitations and we've taken the time to to really get to know our enterprise customers and solve problems for them. Um a few examples like Stripe uh notoriously is uh use polygon as the primary gene. um longtail they want to make payments a lot cheaper for small to mediumsiz businesses. So their core business is SMB um if you are using stable coins with their payments uh interchange and transaction fees are lower. Another example a top uh three money remitter is using polygon. Um so there's uh something called preunding.

So if you're a remittance company you're holding dormant capital in currencies and bank accounts across the world to make sure that you're able to ledger transactions. So it could be dollar to um BRL as an example. That BRL needs to sit in Brazilian bank accounts in order to complete that transaction. What stable coins allow you to do is release some of that capital, limit some of the prefunding requirements and make everything happen 247. Um another good example, Flutterwave, we just announced a partnership with them. They're the largest African PSP. Um the use case there some of their merchants such as Netflix and Uber large enterprises they are accepting payments in Naira which is the local currency in Nigeria they don't want that FX exposure. So as soon as

they accept the Naira they're immediately swapping to a stable coin USDC or USDT. Now Flutterwave is going to be building on Polygon to solve that last mile where you're taking stable coins swapping to dollars and sending to Netflix and Uber bank accounts. So yeah, so there was a lot of risk because when you took custody of those assets, call it, you know, one of these Brazilian currencies or Nigerian currencies or any any currency that had directional exposure, they the settlement time was like two, three days in order for them to get out of that currency. Stable coin brings that settlement time way down.

>> Exactly. Near instantly. >> Yeah. Talk to us about the uh the Rio upgrade for Polygon. I I I know that this has just gone through in the last week or two. uh you know sometime in October big upgrade for the payments focus uh for Polygon. Talk to us about what lower finality means for these stable coin payments and you know why this is so important. >> Yeah, to put into perspective we're now at 5,000 TPS. Uh as a comparison, Mastercard's average TPS is 5,000. Visa is usually around 6,500. So now we're comparable with large payment networks that we know are billion billions and trillions of dollars of transactions.

Um, so Polygon now is at the level where we have this distribution with enterprise, but we're ready to take that next step and truly scale um, this new pavement rail. Um, we're really here to just enhance the current systems um, and the current infrastructure that they have and make things more fast and efficient. Um but yeah >> and on a similar note also with techn you know the technical architecture of this is that stablecoin TVL is up 45% on polygon but transaction fees are still at the minimum for these payments. Uh a lot of that is thanks to blobs and and ethereum also scaling h how do you balance scale and also sustainability when you're thinking about polygon's fee

structure. You want to make sure that you're collecting but also you want to make sure you're providing a good service to your customers. Yeah. How how do you strike that balance? >> Yeah, I think um again I think we're kind of rooted in solving problems uh for our customers and we understand to optimize uh for payment specifically. Um we want this to move um at very low costs. So I think that's really our number one priority. But we're thinking about um other revenue streams. We're working on a lot of um onchain products. So different use cases such as FX onchain, such as onchain credit which is getting a lot of uh a lot of demand and that solves a weekend settlement crunch.

So right now notoriously you receive a settlement from Visa, Mastercard, let's just say you process $10 million on a Friday, you would receive that settlement next week on say Monday or Tuesday. So onchain credit um with some yield components to it is something that we're building on chain and I mentioned yield. So we're working with a lot of our fintech partners. Lemong is fintech in Latin America that's going to be offering high yield savings accounts uh to their end users on Polygon. So there are other streams and other products that we're bringing on chain to think about revenue. Uh but ultimately when it comes to moving money, we want to make it uh extremely fast and extremely cheap.

>> Yeah. As a as a Jets fan, you're not used to winning, but I think you're winning right now, man. >> Absolutely. Yeah. >> Yeah. How does [laughter] it feel to be a winner? It feels great, man. Yeah. Yeah. >> I mean, we are winning as an industry. I mean, just holistically, like you said, when we kicked >> How about that Baker Mayfield guy, right? >> Yeah, he's pretty damn good. >> I mean, [laughter] come on. Come on, baby. >> He's a guy. >> He's a gamer. Yeah, >> Baker Mayfield. He doesn't go down easy. >> I think he's actually joining the Polygon payments team after Yes. Keeps winning. >> Okay. So, keep winning.

>> Exactly. Yeah. All right. >> And so, here at here at Sarcon, it's very sudy, right? It's very financeoriented, I think. I think we talk a lot about technology and a lot about the actual tech behind you know what's happening but it seems like here the tech is almost and as expected with like you know chain abstraction account abstraction like this whole idea of kind of like this defi mullet of like all this stuff happening behind and on the front you don't really realize it really feels more real here today you know from your experience in interacting with you know the large institutions of the world the money movers the fintexs, how much does this really matter to them? How much does Polygon's technology

really matter? How much does blockchain matter versus the like the end outcome, right? Like basically what I'm getting at here is like how much do they really care about the tech versus just what they want? Yeah. I think a lot of these companies, whether it be um a Robin Hood or Revolute or whether it be a Stripe, they're worried about their end customer and they want to provide the best experience to merchants and then downstream to their users. So, I think frankly a lot of the uh the blockchains have gotten uh as far as like the TPS and the performance, they're all very good, but some of them are specializing and we're specializing in payments. And the way in which I we like to think about it is we want to tap into these large distribution channels that already

have a really good front end and just power their backend and make it more uh streamlined and efficient. We talk about supercharging fiat. >> Uh so whether it's a settlement, whether it's a payout, um users expect their money to be instant just like they expect a text message to be instant. So, we're kind of at that point in which for us, we want to identify the problems that we want to be that go-to provider and that consultant as these companies move on. >> Yeah. A lot a lot of times like you're you mentioned dormant money that's sitting on some of these remittance platforms. A lot of the the aspect of payments isn't necessarily, you know, one payment going some from point A to point B. It it's, you know, what you do with that money when it's not being moved.

>> Yes. >> What do you do? How do you provide yield? like h how can we maximize the output and the productivity of the money that is just kind of sitting there waiting to be transferred or remitted? >> Yeah. So I think um we definitely think about treasury quite a bit and we are starting to see payment companies um and remittance companies starting to launch their own super app and like what that looks like. Um, we all know the top remittance companies, whether it's Western Union, whether it's Moneygram, notoriously, they've they're very good at peer-to-peer payments, but they're not providing additional financial services. You're now starting to see these companies launch digital wallets in which on the back end, it could be an RWA or could be just a stable coin in which the user is earning yield, but on

the front end just appear like your everyday stable uh um your everyday savings account. So I think what some of the companies are doing very well is on the front end the users see exactly the same but they're just replacing the DeFi mullet earlier. Um that's a great analogy like on the back end just more efficient rails um and better systems and better architecture. >> Yeah. Yeah. I mean when I'm thinking about the most unsexy boring use cases of crypto it's what we were you know learning about in 2017 and 2018. It's it's it feels like you know as you said when we kicked off like this is the moment that we've been waiting for.

>> You know it almost feels like whatever we've been doing for the last like you know six seven years you know it was always just stable coins and payments and and you know these types of basic things. >> Yep. Yeah. The fundamentals were always speed and efficiency of transactions right but then access inclusion. >> Yeah. So for us like the way we like we have this narrative of of modernization with a purpose. Yeah. So like downstream like I'll use the Flutterwave example again like downstream once they launch a B2C product on Polygon that will be giving access to the dollar whereas traditionally the systems have worked really good in a few markets let's just say the US, Europe, UK but now everywhere uh to everyone all at once um

they're going to have access to the dollar. They're going to be holding a currency that holds value. Yeah. >> And uh level the playing field. I know a lot of folks in this industry have said that for a while >> and it's been pretty incredible to see the support for the highest form of power in the US being the the government, you know, on 60 Minutes last Sunday, Trump has has basically said that he just wants to win crypto. Yeah. Um stable coins are clearly a way for the US to extend the dollar's, you know, hedgeimony globally. >> Yeah. >> And dominance. >> Yeah. So it's it's kind of like we have all the firepower needed to make this happen and and and then it's teams like yourselves basically going out and implementing that in a private kind of commercialized fashion.

>> Yeah. >> You know we have Secretary Bess saying I think $3 trillion in stable coin supply by 2028. >> You know I think that we can get to 10 trillion in the 2030s. >> Hope so. >> Where where does Polygon fit in this? you know, where does where does the the competitive landscape shake up here for for these payments exchange for these kind of like RWA stable coin chains? How do you how how do you plan to kind of win and dominate into the 2030s? >> Yeah, I I think ultimately we talk about just access and inclusion. I think we're a pretty purpose- driven organization and I think uh leading with that ethos, hopefully the rest will will play itself out. Uh but right now we're really just focused on on payments and providing access and inclusion to to people that

need it most. I think I mentioned it earlier like traditionally the infrastructure today or the systems today works for a few markets. Uh but now we want it to work everywhere and for for everyone. So um I I think right now we're trying to solve problems and we're just uh we're just crossing the starting gate. >> Yeah. But uh I think we'll do we'll do pretty well if we just stick to our our ethos and solving problems for for large enterprises and institutions. >> You know, one thing you mentioned about capital velocity is kind of I I thought about this before where you know it's difficult for for a company to really monetize and and continue to maintain monetary velocity because one thing about velocity is that

it's in motion. So it's going maybe from Polygon to somewhere else. When you think about capital velocity, I I agree that's a much more uh uh accurate indication of the the health of an economy because buying and selling things, you don't want just a bunch of money sitting in one place. You want it you want transactions flowing back and forth. And so do you think about the velocity within the Polygon ecosystem like we can bounce back and forth but it all stays in Polygon or do you think okay we've got all of these chains all of these providers we want to maximize the velocity that you know is is of the entire industry. How do you how do how you think about this?

>> Yeah, so it's a few points. Um, blowing on the prior point regarding Polygon specifically, we want to tap into these large distribution channels. So, we go on our mobile phones every day. We use Robin Hood. You mentioned Venmo earlier. We want to be in those conversations in which when they make a move on chain, we want to tap into those distribution channels um where transactions are happening on the Polygon network. Um now as far as interoperability uh we do have a product called a layer very early days but basically it's a unified uh settlement layer so unifying liquidity across change chains to ultimately have that uh unified liquidity to disperse um respectively. So, we are thinking about interop, but I think right now um we're

we're probably 5 10 years away from really scaling that technology. And I think folks at Polygon might have a different answer to that question. Uh but right [clears throat] now we're focused on a network of of solving problems and and having that distribution um on our network. >> What do you uh what are you most bullish on right now and what are you uh bearish or cautious about in the industry? Um, so I'm I'm very bullish on some of these just I'm just bullish on these larger enterprises starting to adopt stable coins. I just think um I got into this industry with a very purpose- driven mindset and right now this is coming to fruition. So someone

in Africa or someone in Latin America now have access to a dollar just by downloading a digital wallet and being able to use it for goods and services. I think that's super exciting and it makes the the world a better place. Um, what am I bearish about? Um, I think right now there's actually a very strong narrative behind privacy and I think we're very very early in the technology. So, while I think there's uh a lot of capital now flowing into I think we're seeing like Dash and Dash like we're seeing a lot institutional money pumping in I just think these networks and these protocols are very very early. Yeah. and being able to solve for full anonymity of both the transaction and the sender and recipients. Still very very early

days. Um but I do think at Polygon we are um set up to to solve for this. We are having conversations with enterprises and kind of whiteboarding what this solution looks like today. Right now and it's we're in its early stages. We're about to uh to get to the point where it's enterprise grade and ready for uh deployment. But uh the amount of capital flowing in right now is pretty crazy. >> Polygon historically one of the strongest ZK teams in the space. I remember speaking with Jordi Bolina when he was at Hermes.

>> We're super excited. We'll get >> it's interesting. We were talking to a bank the other day and folks were some of the folks on the team were talking about privacy but the head of blockchain there was saying uh the public nature is actually a feature. So like traditionally if you're sending a wire or you're sending an a sender and recipient don't really have a chance to to track that payments. They don't know when it lands. They don't know where the status is. They would have to call their bank. Hopefully they get someone in customer service that's friendly and is willing to answer their questions. But now if you're doing that same transaction on chain, you can see that the it's pending. The transaction is it's on its way and then it's ultimately received. So banks are actually seeing it as a a feature. So I think there's uh

there's some companies that are focused on privacy, but I think um focusing on this decentralized nature as a feature and something that's being embraced both by banks and enterprises. >> Sam, thanks for your time, man. Looking forward to the growth of Polygon, the growth of stable coins, the growth of payments, and the unsexy and boring stuff that we all came here for. >> I think it's sexy, guys. >> You think it's sexy? Well, you're also a Jets fan, so I mean what [laughter] God knows what's going on up there, but but uh it's our pleasure, man. Thank you. >> Thank you, guys. This is great. Thank you guys.

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