The Rollup TV: Wednesday, August 20th

Transcript

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Stop. [Music] GM, let's go. Andy's muted. We're five.

We're 50K. Fired up. Where we at? Bang. Confetti for the boys. It's been a journey. We're just getting started. Welcome to the Rollup TV. It's August 20th. Andy's gonna figure out his uh technical difficulties behind the scene. We've got a killer show for you guys today. We're going to come uh with multiple two guest slots. We've got uh the Arbitum co-founder Stephen Goldfeder uh announcing and talking about the acquisition of ZeroDev, a smart account platform. You can tell the direction that they're headed in. Uh we've got Fabriio and Matt from Legion on crypto M& M&A mergers and acquisitions. We're

going to get into the wormhole and Stargate bidding war, man. And he's going crazy back there, but I can't hear him. I'm just gonna keep going. Uh, and then we've also got the founder of Infinifi, uh, Rob coming on the show as well. And we're going to cap off with Russin from Extended, the new Perf Protocol on Starket. I'm stoked. Market's bouncing. The roll up has hit 50K. We had a bunch of clips pop off uh over the last couple days. Shout out to Naval that is uh the true OG, absolute legend. remember following his uh how to get rich uh thread, one of the best threads of all time. Uh a lot of that is still very

relevant today. >> Uh and especially amidst the market cycle where we are now, DJ Spartan made a comeback. Very very interesting times. Jackson Hole on Friday. Things happening in the macro markets, things happening in the crypto markets and we are going to talk about all of it. Uh, this is the place if you want to learn about crypto and you guys want an edge on your own personal side. This is the place to find it. Andy, do we have you? Are you here? Are you with us?

>> Yo. >> Yes. >> Welcome. >> Beautiful day in Hawaii. >> And he made it. >> Let's get it. >> Um, >> today you got the How you doing, man? I'm good. I'm fired up. I had a double colada today. So that's about seven shots of espresso. Um few more than I usually do. And so I'm fired up. I'm ready for a good day. I feel like we're on a roll now with these streams. I was a little rusty coming back, but I feel like uh I feel like I'm back in the groove. How are you feeling?

>> Yeah, Rob, just give me a sec, bro. >> All right, buddy. We're back. >> Um, all right. So, Rob, what's your take? Brian Pellegrino just put out a tweet saying, "Uh, yeah, that's not going to happen." With regards to uh he literally just said, "Yeah, that's not happening." 9K 9K likes offer to buy wormhole. Escalate it. Holy [ __ ] Thread guy. Agent Chud laugh laughing. Luigi laughing. What's your take, Rob? Is what's what is wormhole's thought and position here?

>> I think it's interesting to point out obviously uh Stargate is a protocol that was born out of layer zero. Uh layer zero incubated it. It got spun out. It is essentially its own entity because it is a DAO that's governed uh as such. And so now it's effectively like they've gone rogue. Layer Zero has lost control of its own kid and now they're trying to figure out where should they go? Should they stick with Layer Zero? I believe I saw Layer Zero submitted $110 million bid for Stargate.

>> For Stargate. >> Yep. Uh Wormhole came in with a last minute bid. Um this was the Wormhole Foundation came in uh and submitted a bid while the vote to approve or deny uh Layer Zero's bid was going on. Yeah, I know that like it's just happening right now right? >> We're in the midst of it right right now. >> Um >> crazy. >> I think this is great. I mean, we're seeing action play out. Uh you don't see a lot of uh Dows uh that are talking about it. I you don't see a lot of M&A conversations happen in the wild just in public, but because this is onchain and it's token holders that are making these decisions, we're able to see this play out in real time.

>> Dude, I'm looking at a beautiful rainbow right now. Uh it's coming off the half of the horizon on on the ocean and it just you know it's got me thinking that you know maybe uh maybe maybe wormhole is trying to you know cause some chaos in the universe you could say. >> Um you know I think uh I think this you know I don't know it just interrupt always has the spiciest drama but there's just no way that um there's no way that layer zero loses this in my opinion. the the like like how Okay, so so Brian just put out this tweet saying uh that's definitely not going to happen.

My take is basically look um if Wormhole is going to bid to stir the pot to kind of shake the you know kick the the uh hornness nest all layer zero is going to do is just try to try to um outbid them. So maybe this does turn into a bidding war. What would be absolutely insane is that if actually this wormhole move made Stargate rethink that they could get a better offer from layer zero, decline the proposal or like vote against this proposal, which I'm not even sure if that's would able to be happen to happen because I still think that a lot of the Stargate token holders are layer zero either shareholders, equity

holders, owners, etc. But if Stargate holders somehow rallied against this, said no to hear Wormhole's offer, forced Layer Zero to offer more, that would be a crazy outcome. My take on this is that uh this is just classic competitive fighting and I think that, you know, we'll probably see more of it in in the space. >> I think it's great. I love it. We love competition. We're not afraid of it around here. And so to see obviously two competitors wormhole uh and and layer zero go after it. Obviously these guys are competing competitors in the bridge landscape uh there's a price at which yeah Stargate is going to reconsider uh layer zero's offer if they think they can get more if Wormhole does end up

acquiring Stargate. That's where a lot of the bridge volume happens on layer zero. That is retail the community community facing product. Everything else is labs happens behind the scenes. So, wormhole could increase their volume, right? Obviously, they've got quite a bit of uh Ethereum to Solana volume happening. Now, interestingly, uh the Wyoming stable coin that we talked about last stream, uh layer zero is instrumental in uh >> they are getting transfer. >> Well, layer zero is basically an asset issuer now. I mean, that's kind of what they are.

>> I mean, you can just think, you know, layer what is layer zero uh effectively, right? It's a It's a native asset issuer that isn't beholdened to one particular chain. >> Well, you love to see it. Fun fun times in the space. Shout out to the rollup for hitting 50K. That was a vibe. Um I'm going to hit 70K in the personal soon. I dropped a couple little updates on my account as to what's coming. So, we'll get the confetti. Also on track to have a pretty big year to end this year strong. We got a couple big deals in the pipe. Uh and some prediction market stuff that could be coming soon, guys.

So, uh, let's get a money rain for the boys. Boys are cooking. Market's green back. Um, >> I got one more piece of, uh, interop news. >> That's coming soon. >> Hey, um, shout out to a cross, the third, uh, the third head of the the the beast here in the >> which seemingly lost his battle just so so badly. I'm sorry. I just say it. >> Across is no longer in the inter picture. why they are for like the multi-chain users and and I really like them and I love heart I love Amanda I like the team's great they failed to capture the asset issuance tokenization

institutional market and that is where uh all the value is and uh they are not even in the picture anymore for uh crosschain they're not in the picture for the work that's being done with securityize and and on avalanche and kick AKR and Apollo. It's really just layer zero, wormhole, chain link, and it's really those three. >> I'll tell you why you're wrong. Because >> I'm not wrong. >> All of the all of the RWAs and stable coin issuance for the most part is happening on Ethereum.

>> If it continues to happen, I mean, look at RWA.XYZ. Our favorite RWA billion dollar more than double second place, which is the L2. And as long as this activity continues to happen on Ethereum and its L2s across is the leading provider for Ethereum inter >> and stands to benefit and gain the most from the transfer of RWA and stable coins within the Ethereum ecosystem. >> You're you're you're just wrong. I mean, you're just wrong, but >> that's all right. Also, I think I think intents are also like they they're still really good, but I don't know how I I think that there's more critical flaws in the design than previously uh

thought. >> So, >> maybe we'll kind of see >> for now layer zero has 88% uh for its proposed acquisition of Stargate. And so, >> wait, layer zero has 88% controlled. >> Uh this is a snapshot vote that is currently ongoing. It ends on the 23rd of August. It's been going for about uh four days. So, we're about halfway through this vote. It's a week long. And this is Layer Zero's proposed acquisition of Stargate. Um they have all of the things that talk about why Layer Zero is the right uh entity.

>> Yeah, we'll see, man. I think if these I think if Stargate community turns it around and thinks that they can get more money from Wormhole, then they might try to they might try to pull it off. So, >> see, I don't know if you can revoke your vote and with >> and they're they're at 600% of quorum. So, may have came in. >> And when did you say this? >> Uh this this uh vote ends on the 23rd. >> Okay. All right, guys. We got uh Fab and Maddie in the back. Uh they are the founders of Legion. Today, Legion announced their raise. Uh we're gonna get the guys up here to to congratulate them, get the get the download. What's going on? So, let's get the boys up and

uh let's have a stream. I think the guys are on their new equipment. It's good to see you. Um and yeah, boys, welcome to the stream and congrats on the race. >> Thank you. Thank you. Bloody good to hear be here and good to see you again, fellas. And uh this mic microphone was recommended by Andy. So, >> yeah, fab. Dude, it's good to see you in the flesh again. I mean, it's been a while. I uh I've missed my Bali waves this this year, so I need to get some. >> Still time for the year. Still time for that in the rest of the year. >> All right, guys.

>> Surely you're headed to Singapore for tokens so >> Oh, yeah. Of course. Of course. We're going to throw you guys the confetti, the money rain. Congratulations, guys. Huge day. You guys raised $5 million for some of the best investors in the world. Uh Brevin Howard um and others. Um, guys, how did you pull this off? Coinbase Ventures, GSR, uh, bunch of angels, Crypto.com, Coinbase Ventures, Cyber Fund, Systemic Ventures. Uh, $5 million raised with 1.25 reserve for the public. Uh, I think it's your first time raising, boys, but you clearly have product market fit with your product.

Uh, maybe just give us your your what is Legion and how did you guys pull this off? >> Absolutely. Fab, do you want to do you want to take that one? >> Yeah, for sure. I mean, um, I guess just on the round, yeah, Van, Brevin, how are the two leads? Um, we've got a bunch of the Western exchanges on board, Kraken, Crypto.com, Coinbase Ventures, etc. And to be honest with you, we've been working on a fundamental step change in what Legion is since January. The the fund like the funding is nice for sure, but it's kind of just the start of the journey. We've got a ton of things to to roll out um for the rest of the rest of the year. But basically TLDDR on Legion essentially we are a public fundraising platform. Um the premise of Legion in the early days was we're going to take

the same two-way optin you have in private markets today. You know founders will sit down with a VC firm etc. You'll chat to each other. You'll like each other. You'll invest. Not all financial capital is created equally. They typically write checks but then they'll also do introductions or you can leverage their brand or they'll provide liquidity. whatever it might be, we're going to take that same two-way optin and apply it to the public market. So, not a crazy concept, not a different idea, but that's largely based on this premise of this legion score mechanism that we have. Um, we put out our white paper over a year and a half ago now, geez, it feels like 20 years um with the idea of meocratic fundraising um based on what value people can bring. So, that's a TLDDR and basically what Legion is today. And as mentioned before,

there's going to be a uh a huge coup of how public fundraising is done on chain moving forward for the rest of the year. Yeah, this is just this today's announcement of the raise is just the first of of many huge updates that people will be very surprised about, I think. >> Yeah. So, Maddie, you guys kind of started as like, all right, uh there are these this kind of return to ICOs. People want to invest into early stage uh projects. Uh there's not that many great ways to do it. Um it was just it's really just been Ekko and Legion with two different models. uh Legion being a bit more lenient towards projects allow or allowing projects to select who they want to invest uh in terms of which communities that's gone well. You guys have done a ton of raises. So what is

the now that you guys have raised 5 million bucks what is this money going to be spent on towards the product vision? What is the product vision? Um, you know, I I see in this tweet you guys are talking about um, you know, building the most trusted brand in onchain capital for formation and bringing promising deals to public and institutional investors. What does that mean? How are you spend the money uh, to fulfill your your your vision? >> Yeah, great question. I mean, as Fab mentioned, right, at our at our heart, we're a platform for onchain fundraising, right? Anybody can kind of see the deal. Anybody can apply to participate. I I really got drawn into crypto back in the just the start of like the ICO craze back in the you know 2017 late 2016 days. Um and that was

some of my favorite times in the space because there were these amazing opportunities that anyone could kind of you know get into obviously that gave way to bots to sibles to mercenaries right to a lot of the problems to scams. And so what Legion is doing is fixing a lot of those problems, fixing the scams by kind of, you know, uh, requiring projects to have certain disclosures, only working with the top tier projects, making sure those projects the holistic launch is well-designed, right? So not just narrowly looking at like, oh, this is a launchpad for selling a token. No, that's the wrong mental model, right?

This is a whole new way. This is like the IPO version of a token sale, right? In fact, kind of the the the the vision, the world we're building towards is where teams are doing kind of a merge like the the future of IPOs and the future of ICOs kind of merge. That's the world that's coming together that we're building for. And so onchain fundraising, expect that to be a bigger thing. Whether that's tokenized equity, whether that's pure kind of DeFi, you know, governments to tokens that we know today, whether that's real world assets, all of it's coming together. That's why we've raised from kind of both the trady and the crypto native investor sets we have. Uh we've been meeting with regulators having conversations if you if you see the article in fortune right it's a pick of fab and I right before going

yeah rocking the suits. Yeah, crypto is growing up, right? And we're saying, you know, we we love crypto for what it is, but um but we need to kind of, you know, adopt safer rules that prevent some of these scams and then help real human beings who are ready to add value get access to these early investments that only that otherwise only VCs, you know, bots, you know, would have would have access to. I think just to put that in in color a little bit is like looking at from an IPO perspective in 2024 there was north of $126 billion in IPO proceeds, right? You compare that to 2024 for public token sales, it was south of 100x of that, right? So there's still a ton of room to grow, but we've been like permables on on blockchains

being, you know, the best tech for global capital formation, right? Programmable, it's on 24/7. It's global by nature. As Matty said, we very much see the convergence of that being unlocked by a lot of the new regime changes, the regulation side of things. So, you you're all right. We we had suits. Um I'm not a suiting or wearing guy, but uh we uh as many said, things are changing. So, >> so a very tiny small part of the of the budget, the raise goes to suits. Yeah. For everybody. >> Congrats, guys. So, you guys now have several of the top uh centralized exchanges on your cap table. We saw uh Crypto.com, Coinbase, Kraken all participated in this round. And so when we're thinking about the entire capital

formation life cycle, now we've got ICOs, IPOs, like you said, these two are converging. And then you also have the listing uh partners on your cap table at the other end of that at the other end of that life cycle. So when you're kind of talking to builders and you're and you're talking to founders and you're explaining to them, okay guys, look, you should raise on Legion because X Y and Z, you know, how do you how what is the pitch to those builders and those founders, you know, kind of uh persuading them aside from going to, you know, the typical capital formation round raising round, you know, do your ICO on Legion and and go through our capital formation cycle.

>> Yeah. Yeah, I mean I'll give my two cents, you know, fab give your your elevator pitch as well, but for me it's super simple, right? You you launch with Legion. You can hand select the most in a data driven way based on onchain, off-chain, social, developer kind of stats about people, hand select the right, you know, token holders for you to launch, get the widest distribution, work with the right market makers, get the right liquidity, and really optimize not just again, not just selling a token, but launching your project, right? That is the end vision where almost like for those who are familiar with Tradfi, right? You have these underwriters of IPOs that are coordinating everything and making sure this this stock coming to market is ultimately a success. That's kind of

what we want to do for for ICOs, right? Underwrite ICOs, if you will. Um, not the terminology that everybody gets in the space, but for TRAI people that seems to resonate. >> Yeah. I mean, I'll just quickly add to that by it's spot on, but um as said before, we've got a ton of things to announce for the rest of the year. Uh I'll have to I'll hold my tongue, but you'll see how a few things might be changing in in the coming coming few weeks. >> Oh, Andy can't hear you, but I think you've got a good question that you're cooking up.

Nope. All right, we'll we'll keep it rolling here. Um, so that that makes a ton of sense when you're talking to founders and builders. I'm curious, maybe you can shout out like what are some of the most successful launches, ICOs that have taken place on Legion so far? And then thinking forward, what are some some of the sectors that you guys are most excited about? >> Yeah, sure. Um, I mean, so far some of the the most successful ones, uh, one of the ones that I think the most recent one to to go liquid to launch their token was Giza, uh, AI agents type of platform that has done some numbers. I know a lot of people who are who are fans of theirs. Um they they did a sale on Legion um at like a 45 million uh same valuation which is true of almost

every sale on Legion. You're getting the same valuation as VCs or better. In the minor cases where there's an exemption to that, you are getting materially better vesting and that's always transparent, right? It's always transparent. Here's what you're paying. Here's what other investors have paid. Um but yeah, we're super fans of that transparency, that disclosure. And we see teams like Giza, you know, we're excited about Almanac sale coming up. Um they've also a superpower AI agents platform. Uh this the fuel sale that we did that really kicked off our user growth late last year. Um that did a 4x after the sale. So people are people are starting to realize that you know when you look at the top tier projects and you set them up for success um there's a lot of benefit to getting the right people not just widely distributing your

token without any kind of selection uh process involved. Yeah. And I think I just maybe want to add to this as well. Like we we talk about VCs, we talk about like public, we've never like there are good VCs, there are bad VCs, there's good public, there's bad public, right? Where for us like you actually need a mix in your cap table, right? I think we've been mega bullish on having the public involved in a meaningful way. Um and that should join force from the type of value that you know a VC might might add to. So I think for projects we want to optimize the chance of success. Being a founder is not an easy job. being growing a successful thing is not an easy job but um yeah we basically just want to clarify that we do have our own public round um coming up too. So looking

forward to that. Yeah, that's that's going to present quite the opportunity for uh Legion's community, our community, everyone who's watching to participate in the same round that these VCs we named all these centralized exchanges uh as well as FAC and and the others. Uh you know, these guys got in, they're participating in the round. Everyone listening has the opportunity to do so as well. Um I'm curious, is there any sectors that you guys would would sort of differentiate and pick out? Okay, this makes sense to do maybe the more traditional way and then some other sectors that make more sense to do in this more democratic, more open-ended uh ICO style on Legion.

>> I think it's a fair question. I mean, I think, you know, obviously there are certain types of products that lend themselves, you know, well to a consumer focus, right? And so consumer apps would definitely be like an obvious choice for get wide distribution, get like, you know, token holders, your community become evangelists of the product as well, right? Getting it out there. It's something they can use, right? Which is which is largely a part of hyperlquid success, right? Is that everybody uses the product as well, right? So they really understand it. They real they feel attached to it. I think that and then also um B2B more you know institutional plays that are generating a ton of revenue where it's just like okay I'll I'll stake the token and get you know distributions like those those

are the kind of the two metas I see being the most successful at the moment and so I think those would what what we'd be focused on at least for the you know for the short term but we're not trying to be focused on only on a certain vertical right we're trying to be as agnostic as possible you know facilitate capital raise formation for for where the next wave of innovation is coming and that could be very soon. You know, robotics and neural interfaces and all these cool tech pieces that might have native tokens, might have tokenized equity, might have something in the middle that hasn't even been discovered yet, but the fundraising will happen on chain, right? That will be the rails that powers it.

>> Yeah. This is the idea of internet capital markets, the early stages of it before these things go public and they really participate in a liquid market. This is the private market that you guys are helping to democratize and open up to the entire world. And I I think this is indicative of a greater trend where more and more things are becoming financialized. There's more and more that's happening. And now it's great. I mean, I think we may feel similarly about accredited investor laws and maybe >> like laws in general, they're they're there to protect us, right? Why can't we protect ourselves?

>> Not really sure sometimes. So, how do you guys think about the future of capital formation? Like maybe a more general question here. You guys may see this similar trend when you're opening up uh the investor pool to people who may not be as experienced with this. Is there any any tools, any research that you would recommend to people, not from a from a financial advice sort sort of angle at all, but from an you know, educate yourself sort of angle, do your own research angle. uh what can people do to to support themselves and make sure that they're poised for success here? I think that's a great question and crypto has always had an ethos of like you know be be responsible for your own actions right like educate yourself

and I think um as we go longtail and wider mass distribution we do have to balance that a bit we realize right that not everyone for instance should be self-custodying like their entire net wealth right in in a wallet where if they lose the they lose the key they're screwed so I think there's a there's a healthy trade-off and that balance is yeah something something along the lines of of uh what we've put together for for some of the some of the investor sign up process of gauging how well does someone understand the basic concepts of you know crypto and do they really understand the risks involved and at the end of the day if they say I'm a consenting adult this is something I understand the risks I want to get into it regardless I would totally I think most people in crypto would agree leave

the government leave the regulation out of it let them do what they want to do >> yeah definitely I mean yeah I'm not going to comment too much on on this because it's a funny topic, but uh um switching gears a bit towards the kind of uh birth of of Legion in into now. I'm curious like how has been how has it been working with the Deli team kind of like incubated if you will with Anil and the rest of the team there? How have they helped you guys grow to where you are now? How' they help in the Rays?

Like just like what's that whole process been like from start to where you are now? I can I can uh take a stab at that initially. Yeah, I think uh terrible guys. Uh they're superstars. I think like where we work on a dayto-day basis with the team, right? I think from day one um we have them like lending a hand on on a ton of different things, right? Our um like the Pure Allegian team is still pretty small. We like to both Mar and I like to stay very lean, right? Only grow when you know it's a necessity.

sometimes we're we're punching out 20 hour days, seven days a week. So maybe it is a necessity in some parts. Um but yeah, I think like broadly speaking, they're an extension to a lot of what we're doing. Um you know, if they weren't here, we'd obviously continue to operate and and do our own thing. Um but yeah, they definitely do add a lot of value. They've been around the space for a very long time. If you're familiar with how Deli actually originally got started, you'll know that um they were just a bunch of friends that met. they came together, you know, their ex Bloomberg, ex-traditional finance, had a had enough of it, and then um basically pulled their own capital together, um were thinking trying to raise a fund, it wasn't really working, and then they kind of just went all in on Thor chain

in the early days and they kind of hit it big and then they said, "All right, this is actually like something we can be on to here." And in some ways, we kind of want to recreate that same story. You know, you had a ton of friends coming together that they weren't a big name, they weren't a huge brand, but they were super smart. They were writing really great research reports. And as soon as they did hit it big and they developed a name, they're like, "Oh, looking back, like, oh, why didn't we have access to this before?" And um that's kind of the core ethos of a lot of what uh we're trying to do with Legion. So, yeah, we kind of came together, Maddie, myself, and the and the team, we know each other for a while, see the the good times and the

bad times of the the terrible blow up and um figured, you know, capital formation is something we're super interested in. Gabe Shapiro is a big um proponent of that as well. And yeah, we're basically here to a lot of the kind of code design and thinking we've done until this point. Yeah. Yeah. Yeah. Yeah. I mean, it's definitely like I mean, having that experience in your back pocket is super super helpful. Um, you know, also with with the raise, too. I'm sure it was quite helpful to have that kind of uh just, you know, just them in your corner. I'm actually curious from a race, I've never raised for anything like, you know, substantial like this. I'm curious how how your experience was and if you have any advice for other founders who are

raising right now or who are looking to raise. >> I mean I got one one quick piece of advice. Do not skimp on the lawyers you work with to close the round. It is it can be very very painful very drawn out if you if you skimp on it. So we yeah we maybe made some uh some some missteps early on in the process but got it got it got it figured out got it worked out. Got it quickly closed. But um you know you got to spend money to make money as they say or to raise money at least. So that is another aspect of the problem that we ultimately want to solve with Legion. >> So right now the raising process is like like I think the the appetite is like somewhat there not nearly as hot as it was in the past. Did you guys find that

it was that it was more difficult than you expected easier than you expected or just about where you guys thought? I think maybe my take on this is that um I mean I've done I've been part of a bunch of different projects at at different stages, right? And I think a lot of this just comes down to relationships, right? If you're building a relationship over time and you're getting to know a lot of these capital allocators, whether they are actually professional VCs or angels or just you know each other, right? I think the earlier you can start those relationships and the better relationship you have, the much better chance they are to kind of back you going into something. I think you you probably face a lot of friction when you don't have a big brand, when you don't have very good relationships with a lot

of people and you're trying to come in. You might have a fantastic idea, but you know most of this stuff people are looking for social proofing. They want to know that oh this is like a really exciting deal or these people found this interesting. You know they use trust by proxy. So there's still some like fundamentally the private market itself the fundraising process 100% needs to be fixed. We're seeing some teams uh even like Metal X from Gabe for example is kind of trying to shore up a lot of that like that in itself 100% needs to be fixed. I think if no one else has fixed it in a year or so I think Maddie and I will have had enough of it. We'll go back and and try to take a stab. Um but yeah, I think it's just like find your first believer. Uh once they're in your

corner, you've got your leads, then I think the rest of the stuff is just like be strategic. You know, you don't want to rush into everything. Um, I think it's like, you know, some people do add a ton of value, some people extract value, some people tell you they'll add value and then they don't. Uh, do reference checks, make sure you've got a good cap table because like really the whole idea of this and the whole idea of tokenization is coordinating real world behavior at scale. If you can distribute that incentive alignment to people that are on board and want to push the mission forward, right, then that's just like super helpful for anything that you're doing. Um, if you have people working against you or very neutral or not super bullish, it uh just adds a bit of a weight when you don't necessarily

need it. Yeah. Yeah. Yeah. It's funny that you guys to raise for Legion, you had to go to the private markets to raise, which is normal, but then you've set out you've set out this $1.25 million available, which I assume you guys could raise that amount through Legion. Is that correct? Or is is that alpha? Because that's just like second order thinking here. It's not not a crazy thought here. >> Uh yeah, probably not the craziest conclusion to draw. Um yeah, I mean there's there's regulatory hurdles, right? Like that that was the that's been the irony from day one, right? To like open up the the the market. We have to have capital to fix the regulations and then Yeah. So, but yeah, that's our

goal and that has been our goal from day one is, you know, live by our ethos, be kind of community owned. Um the idea here is that community is also a co-lead of this round writing a bigger check than either of the either Vanek or Brevin who also co-led the round. So, um, stay tuned on the on that and the timing, but I think you're on the the right track. >> Yeah. >> Yeah. We are bullish as hell on public fundraising, right? We're going to walk the walk and talk the talk, right? We're not just going to say it's good and then go out and only do private round stuff. I think that would fundamentally mean things are broken. We're uh >> and we have and we have all this data like we we're itching to use uh some of the some of our product. I'd say yeah,

we have all this data. We It's on. >> Exactly. We could we know who's going to add value. So what it' be kind of silly not to use that information some way. >> How do you guys think about the last thing I know that you guys probably got to run. H how do you guys think about the difference between some of like the the infoi mind share value of certain influencers or groups or people on Twitter versus like uh other metrics of value that are provided via like GitHub scores or uh experience or onchain experience? Like is there a hierarchal order that you guys view somebody's value and their social capital when it comes to being on the cap table? Like is there a way that you guys prioritize

this personally or with Legion? >> I mean first super quick for myself. I mean there's no strict priority because it all depends on context, right? Maybe you're a B2B product and you need like you know very large institutional introductions and developers. So like the mind share stuff matters less. Maybe you're a consumer app, the MindShare app and like DJ onchain activity matters the most, right? So, it's all contextual to what the project ultimately needs. >> Got it. Cool. All right, guys. Well, appreciate your time. Congrats on the race and um see you guys in Asia in a couple of weeks. It'll be a vibe for sure.

>> Yeah, we got an event on. Come on down. >> There we go. We're throwing off a wave after. Yeah. Yeah. Something like that. Um yeah, we're super stoked. You're going to you're going to hear a ton of like pretty exciting things. We've been working seven days a week for a bloody long time. Tell you that. I know. And >> when when we were in Bali, we we were both up till 2 a.m. daily. >> Yeah. >> Now, it's been a whole year. So, >> that's true. Always love to see you fellas cooking. The rollup's crushing it. We're uh we're super stoked to see that. So, uh big love and um yeah, looking forward to the future.

>> All right, boys. Speak soon. >> Appreciate it. >> Cheers. Give him a follow. >> Yes, sir. >> You're a builder, founder, send him a DM. >> Legion.cc, baby. >> Thank you. Thank you. Cheers. >> $5 million raise. One last money rain for the lads. All right, guys. Um the uh it looks like the wormhole and layer zero uh situation is is growing. We've got Thread Guy saying, "Fuck it, Pellegrino mode." Brian quote tweeting that with a fire. Uh then he's going on some other stuff. It looks like our team just got our clip out. Not sure the copy represents exactly what we meant to say, but that's all right. Um, first to comment on the uh, situation here. It's

the rollup TV. We got Stephen from Arbitum Offchain Labs up next with Derek from ZeroDev. Um, basically what happened recently was uh Offchain Labs acquired uh ZeroDev um and they are looking to build smart accounts. So I think this I think one good question for this is like dude I'm so tired of having different USDC balances on different chains. You know I think another good question is the approval the multiple approvals on Ethereum versus Salana. That was a debate. Um, and yeah, I mean, I think building a unified development platform is more about what matters here for the

guys. So, >> oh yeah, more M&A uh wormhole and layer zero in a bidding war. Stephen from Arbitum was able to get it done. Derek uh from zero dev, they were able to get it done quick and easy. Um, so we're going to hear all about uh the M&A process. maybe they could uh give us a take on this whole wormhole situation after we uh talked about all the exciting things that ZeroDev is going to bring to Arbitum. Um very exciting times these guys are getting ready in the back now. We're going to bring them up. >> Yeah, we should definitely ask them about that actually if they've seen it.

>> Oh yeah. Um I think these guys are almost ready to go. We're gonna give them just a moment. Uh >> yeah, Rob. >> Oh yeah. Um, yeah, pretty pretty funny uh set of events this morning on the on the timeline with the with the layer zero and wormhole uh uh debacle here. >> There's always something. >> Yeah, there is. All right, guys. We've got Stephen and Derek in the back. We're going to bring them up uh and we're going to talk uh the recent acquisition. We're going to talk UX solving some of the big problems in crypto. Stephen, Derek, pleasure to see you guys. Thanks for coming on.

>> Hey, it's great to be here. Nice to meet you, MD and Robbie. Welcome guys. Stephen, good to have you back. Uh Derek, welcome to the show. And guys, congrats on the uh on the acquisition. Uh and uh all of the success so far. Uh you guys get a big confetti burst and uh we're going to we're going to get into it. Um there's a lot of uh MMA happening uh not just in the crypto markets, but in in in the industry in general. And so maybe we'll we'll cover a little bit about what's happening on the timeline now. But before we do, um guys would love to hear how this went down and why it went down. Um you know, Stephen, maybe you could start and tell us a

little bit about what you saw in Derek in zero dev and why it was such a a great fit to bring that into the arbitrum family. >> Absolutely. Uh there are two ways that I think about what we do here at offchain labs. One way is viewing the people and you know we are the most talented technical and nontechnical people in the space. Um really an incredible group of people, amazing minds and what we try to do is really work with the absolute best. And there's no question when you look at that lens. Derek and team uh you know really u not only fit well with the team but also extend our capabilities and are super smart, super talented but also bring a wealth of experience and areas that you know we are are you know are only venturing into now. So that's

like one one viewpoint. But the second one, you know, Offchain Labs is interesting as a scaling company at least primarily as our as our first uh um you know our first uh endeavor. And the thing is if you look at all of our competitors, the they're kind of built scaling into their name and built sometimes even the word optimistic or the word ZK or Snark or Stark, right? Very very like focused on one mission. Offchain Labs is kind of like, you know, a little bit more generic in its naming. And it's not accidental because I never thought of ourselves as, hey, we're the company that's going to scale Ethereum.

I thought of ourselves as, hey, we're the company that's going to solve the hardest problems facing Ethereum and more broadly facing the adoption of blockchain systems today. If you fast forward, if you rewind, sorry, seven or eight years ago, that problem was scaling and I think we uh contributed heavily to that, but we as an ecosystem have largely solved that. Um, but what happens is, you know, we're never done. Like when's the last EIP? Never. When's the last, you know, AIP? Never, right? We're always, what happens is you solve one problem and then what was previously the second largest problem is now your biggest problem and you have to solve that as well. And that's how I think of it. If you look at offchain labs, we started off, you know, at layer two, right, at the rollup scaling layer layer. With our prism acquisition a few

years ago, we moved down to layer one and said, "Okay, hey, we need to like build these things together. We need to solve things like, you know, blobsp space and data availability in Ethereum." and we couldn't wanted to contribute heavily to that and just do Ethereum development and now we're actually moving up in the stack and saying okay we've solved you know this problem but now first of all the second problem is larger but also we've created some problems problems of fragmentation right now there's all these uh which I don't think is like the largest problem in the world but the idea is that we have to solve that and um so naturally you know you're seeing us expand above the you know higher up in the stack to uh a integrate these things and build them together but also to really tackle some of the hardest problems. You know,

Derek and team are the foremost experts and pioneers when it comes to smart accounts and the things that you can do from a UX perspective uh from an interop perspective both you know within the chain uh UX but also different chains together are really um you know I think incredible today but we're only scratching the surface and naturally as we don't just focus on one part of the stack but build these things together I think we can ultimately do so much more. Right? If Derrick's sitting in his own company and I'm sitting in my company and we're not coordinating, then you know there might be features that we could build together that are ultimately going to going to not connect as well.

But as we build the entire stack together, I think ultimately it's going to be better for users, for arbitrary users, for Ethereum users, and for crypto users generally. >> Derek, when I think about um some of the largest issues that we face on chain, you know, you you think about having multiple USDC balances across different chains. uh you think about uh the the approve function on EVM based chains when you do transactions so basically two signatures or two ledger taps uh you think about gas fees um you know as you guys have pioneered smart accounts bringing them into off-chain labs how are like you know what is your focus on uh you know these problems or other kind

of user experience uh improvements that you aim to bring here to offchain labs as well as the broader uh ecosystem at large. Um you know, how are you going to help the end users, the developers uh to you know kind of help make this a more unified experience? >> Yeah. Yeah, that's a great question, Andy. You know, so so so I think uh to Stephen's point, um I I think like one thing that people don't realize about UX is that when it comes to web 3, UX is is not something you can solve at a single layer, right? right? You know, so so for example, if you think about like the problems you mentioned, the issues with the fragmented balances, the issues with for example just like really uh slow crosschain transactions, the issues with for example like gas fees and whatnot.

Um those things that actually require fundamental support not just at the wallet layer but at every lay layer of the stack such as like the solvers such as such as the trend itself. Um so zero death like as a company like we have been focusing singularly on the smart account layer, right? And you know I think it's fair it's fair to say that we've become one of the most successful solutions in that in that layer but you know before before I started talking with Stephen with Steven and offchain labs I think we really started to feel the limits of how much we can do by just innovating at that layer alone right so this so this why like why why connected when I connected with Stephen uh we really I think like um resonated on that vision of like solving web through UX

through one single unifying stack, right? You know, so at Option Labs, my biggest like my biggest um mission is to really innovate not just at the wallet layer, but really across the stack and think about UX holistically, you know, and essentially just like drive updates from like every layer of the stack like the like the chain layer, the intense layer, the solver layer, the bridging, the wallet UX, the smart accounts. And you know by doing so I think that we have the opportunity we have the opportunity to to offer the most compelling UX solutions you know to to the to the most valuable you know to the most valuable companies in the world.

>> Yeah. I think I think to put it more kind of uh uh tangibly for our audience for the users of arbitrum or orbit chains or just EVM L2s in our community. How do you guys foresee this uh collaboration, this acquisition, this merger to directly impact my experience using arbitrum 1 or using an orbit chain or using an L2? How do you how how will I feel this from a user perspective? What is the timeline for me to feel this? You know, how do you guys what is the vision for the end users to feel this or you know, on the contrary, for developers to feel this? How h how does that timeline look? So I think I think like really tangibly right you know so I

think uh you can expect first of all cheaper transactions secondly you can expect that uh a lot of like the complexities around transactions will be abstracted away such as like gas fees right like like very soon you know when you use most of the the applications that you use uh you won't really like either you won't really be paying for gas or you'll be paying for gas in the token that you are already using meaning that for example if you are trying to for example like using uh if you are trying to use USD DC to buy NFT, you won't have to own both USDC and ETH, right? You can just do a USDC transaction and the gas fee will just be taken out of USDC, right? You know, so so that general category is what we call gas abstraction, right? And and then the

second thing is that you will find crosschain transactions to be way more seamless than before, right? You know, because like because right now people just take it for granted today that if you want to use a app on another chain, you have to first bridge tokens to that chain, right? you know and sometimes you have to bridge more than one tokens because again you have to bridge both the gas token and the token you actually want want to spend right so very soon all the EVM chs at the very least you know but we but we but we even have the um have the idea to expand that to non EVM chs but basically like all the chains will feel like one unifying chain right like you can like if you're on USDC you're on USDC right it doesn't matter if you're only on arbitr or on on

some other chain you can spend USDC where wherever you want right you know so that's at the inter layer um secondly like just you know anal like just on the um the wallets authentication layer very soon like managing get managing seed phrases will be like a thing of the past right like it will be super super common place for people to manage their uh what is through things like social things like phone numbers email pass keys and the really important thing is that's we can achieve that without sacrificing security meaning that um like like you can you can literally set up like um recovery/guardian setups that are as advanced as you need, right? you know.

So, so for example, you know, like a large like the the users of a large banking application might set up like you know their like their save like some you know or some some other multic you know as a way to recover their bank wallets whereas like the the user of a consumer app you know might just be using like their Google to login right you know so like so we so we are also implementing you know authentication recovery in like a very granular way such such that it's going to fits all types of of applications right you know So because it's not good enough to just be to you know to make what is easy it also has to it also has to be secure right you know so we so we're really trying to essentially achieve both ease of use and security when it comes to the

when it comes to the one UX. >> Yeah. So those are those are kind of the top examples. >> Stephen you you have this saying that I that I'm uh that I'm blanking on that that this is just hitting on it. It's like Derek's ex he's your chain your rules. >> Derek is saying your chain your rules right now. >> Absolutely. And by by the way, you know, one of the things which I think is important um you know that Derek mentioned is with zero deving pro projects and actually also more broadly we're not only thinking about the arbitrum ecosystem. Um you know I like to give this other example is in my town there are two pizza shops. um they hate each other but I like both of them right and like I'm not in any like I don't believe that users or even

developers you know want to limit their interop or limit their user experience to the set of chains that also made the same technical decision as they did right maybe like to orbit chains right like I think they're your average user is going to want to cross these uh boundaries all the time whether it's uh using an orbit chain and also using base or also using an OP chain or also using dare I say Salana right the idea is that um and And our goal is actually to create a unified uh experience certainly for all arbitum chains, certainly for all Ethereum chains and even more chains, you know, more broadly. So, we're viewing this as really a way to create, you know, better UX uh for for the entire uh crypto ecosystem. And um there's already so much that you can do.

You know, to Derek's point, if I'm a user on say Arbitum One and I and I have USDC and I want to buy say an NFT on APC chain and the and the gas steer is an Ape, there's just a lot of steps in this process. And if you're a savvy user, you'll know, okay, I can use a cross for this or layer zero for this and I can do you can you can figure out the steps, right? There's there's ways there are tool there's tooling to help that, but ultimately it's at the UX layer that a lot of this just doesn't uh exist today and it's complicated. If you're not a Savvy user, not know, you'll just look at this say, I don't I don't even know what to do. I don't know how to get those assets there. And there's really no reason that we can't simplify this. I

think this is actually a mistake we make sometimes in the Ethereum community. Um, and I come from a research background, so I'm comfortable saying this, um, because I put myself included. Uh, sometimes we look at things more from a research perspective and think, okay, all we need to do is get the smartest people in a room for a couple of hours and get a whiteboard and we'll build a protocol that solves interrupt or solves fragmentation. But the reality is I would say that 10% is the D protocol, 90% is the work that Derek and team are doing and will be doing more of is actually packaging this up for smart wallets and smart accounts, packaging up and delivering it to users in ways that they can actually use this and over time we'll improve that 10%. So we'll swap out some of the underlying infrastructure as you know we have

better intent protocols or better other protocols to actually fill some of these needs. But there's already so much that we can do today. Um but it lies today in the realms of you know different tools that s you need to be savvy to know how to use. What we intend to do is package this up for users and give you these abstracted experiences. You don't actually need to uh worry about these details or be in the know of exactly what tool to use for you know what the specific workflow that you want to do today. >> This is a very forward thinking approach. Um, Stephen, you mentioned uh thinking about what is the 90%, right?

And I think this is increasingly more and more important as we're starting to onboard the next wave who may not be as cryptonative as some some of us as power users or early entrance that were, you know, farming and DeFi and all this all these things back in 2020. Congrats again your partnership with Robin Hood. They're bringing in all of their distribution channel uh and now putting a lot of that on chain and on arbitum. And so Derek mentioned custody, self- custody with pass keys. This is convenient but also secure when you're thinking about building for the next wave. H how does your approach change?

is does it go from the 10 percent to the 90% when you're building for people that were were in crypto and D5 protocols very early on and now we're just used to these more consumerf facing financial applications does your approach to what you're building and what you're focusing on change more to that 90% generally how are you thinking about this >> yeah the way I think about it is you know the fundamentals cannot change and shouldn't change right so we're not going to make things less secure and for the power users that want to know the specific details and all the technical details and want to manage their seed phrases, for example, that experience isn't going to go anywhere. You know, good a good um analogy is gaming. Back in 2018, a blockchain gaming uh the games were pretty terrible. And the

reason is the only people excited to play these games were Ethereum people that were excited about Ethereum, right? It's like, "Oh, cool. I can now play a game on Ethereum." And that was their their goal. It wasn't try these games weren't trying to appeal to mainstream gamers. Today we see actually really really good games you know being built on chain and there are still benefits of building those on the blockchain but as a prerequisite in order to build these for a broader audience what you have to do is make all that stuff added but optional to go into the details right so you don't need to actually like set up your metam mask to play the game but hey if you want to take self- custody of your assets that's an option that's available so I think it's actually solving these two together it's getting

giving an excellent UX to to users and also giving optionality for users to go deep more deeply if they want to. But for those users that don't want to or can't because let's be honest, we're not going to get to Robin Hood scale with everyone managing their seed phrase and knowing all the technical details of of every, you know, which wallet and even which chain they want to use. You know, I give this other example which is imagine you go to YouTube and you have a uh you know, you want to watch a video and this popup, you get this popup that says, "Hey, would you like to watch your video today on AWS Amazon servers or GCP, Google servers?" and you as a user are just like, I don't know what that means. I really just want to watch my video. And I think today there is this

ultra focus on back-end infrastructure. And maybe it's ironic for me to say it because, you know, I represent some of that backend infrastructure, but I'm also realistic that in order for that backend infrastructure to to succeed and get past the point of the saturated crypto insider market, you know, as you will, those who, as you said, were around and know how to uh, you know, use the blockchain, you know, uh, intimately, we actually need to, uh, build abstracted experiences that attract others as well. And hey, if they want to go deeper, it's it's absolutely available for them. But the key is, and this is what Derek said, we have to give them an experience that doesn't sacrifice their security, right? So, we have to build good UX around what we're building in ways that it's accessible, but still doesn't sacrifice their security. If they just want to stop

there and say, "Hey, I don't actually want to go deeper and dive into the technical bits of of, you know, uh the exact uh transaction uh hash detail level of what I'm doing." >> Yeah. You know, and to to maybe like, you know, give another example to what Stephen was saying, right? You know, so just recently uh maybe last week, we launched a three-way collaboration between Germanite OCL and ZeroDev, right? You know, so like we are ZeroDev is powering the the past key logging for the Germanite news for the for the new Germanite wallet. So that's a great example of a very easy logging method that anyone you know with any you know with access to Face ID to iPhone can can use but it's actually also fundamentally secure in the sense that like there's

like there's no middleman sitting between the user and the blockchain right you because you know because we came up with a technology they essentially allowed the user you know they essentially allowed the blockchain to directly verify past key login through smart contracts and that's also another by the way like a great example of a something that's only possible because of the chain level innovation. Right. Right. Because uh during that flow, the very reason why the blockchain is able to verify past keys efficiency is because arbitrum actually implemented this new uh roll up improvement technology that allows the blockchain itself to to validate pass key signatures in a very gas efficient way, right? You know, so that's like a great

example of a very easy logging that's entirely non-custodial, super secure, and yet it's also only enabled because of of innovation at both the wallets and the chain level. >> Could could you maybe just elaborate a bit on the verification process? Just super curious. >> Yeah. I mean, you can get as technical as you like. Just Yeah. >> Sure. Sure. Yeah. So, basically like up until recently, right? you know like the EVM can only verify a few um signature a few signature types right you know so like the the you know you know when you hear terms like ECDSA you know so so so that's like the the signature algorithm that EVM is able to write so Arbitum is one of the first rollups to implement a

support for a different signature algorithm uh you know P25 P26 that is also the algorithm that powers pass keys so it just means that the signature generated by your, you know, your pass devices such such as your iPhone can now be validated natively inside the EVN as opposed to a much less gas efficient approach which is to you know implement that verification algorithm through smart contracts because so before so before this arbitrum updates it's it was also possible it was also possible to validate passive signatures onchain it it was just really expensive like like validating a single a single signature will cost like a million more than a

million in gas which translates to maybe like $10, right? Right? You know, so obviously like no one's going to send like a you know, $10 transaction just to, you know, just to validate the signature, right? You know, but after the after these updates, you only cost a few thousands in gas, which translates to maybe like one cent, right? You know, so that's like a literally a thousandfold a thousandfold improvements. That's made it possible for the first time to, you know, for you know, for users to use a consumer device to manage their wallets fully on chain in a fully non-custodial way without any middleman. Thank thanks for the explanation, Derek.

Guys, we only got a few minutes left before uh we have to let you go. I I'd like to quickly zoom out um and speak about crypto uh M&A in general and and how this process went down. We were we were talking a little bit earlier on the stream about the back and forth that Layer Zero and Wormhole are having in acquiring Stargate. And I'm just curious, maybe there's a piece of advice, you know, you your process seem to go so smoothly. What what would you guys recommend uh to to layer zero, wormhole, and Stargate when they're going through this M&A process?

>> From my perspective, it all comes down to alignment. Alignment of vision, alignment of people, and working with people you want to, and everything else follows from there. You can have two fantastic products, but if the people aren't going to get along and don't have a shared vision, like ultimately it's not going to work out. Uh and on the other hand, you can have uh two teams that might be vastly different, but if they're aligned on a vision and what they can accomplish together and excited about that, which uh you know, as Derek said before, uh I think we had very early on, you know, from the first meeting, you know, Derek uh you know, I don't want to speak for Derek, but he wrote recently in his blog post that they've had many acquisition offers in the past. Um but ultimately kind of, you

know, when there's chemistry and you're excited and uh something's going to work together and I think that's what we had from the very beginning. And um you know obviously these processes take long. There's legal diligence. There's a lot that goes into them. But ultimately if everyone's rolling in the same direction and aligned things tend to work out. We had that with Prism. We had that with ZeroDev. And so we're two for two in our case. At least that's from the offchain labs perspective. >> And Derek from the founders perspective then like is this what you thought that you were going to do when you created ZeroDev? You know I I I think in crypto the question is like launch a token sell out build un you know reach product market fit profitability etc. there's different kind of venues or they kind of come together you know what was this

what you expected what was your experience >> I think like I you know I expected to revolutionize web3 UX when I studied zero death and I really think that offchain labs will amplify that that that am that ambition right right you know so I think my advice to other crypto founders that that might be looking to be acquired would be that um join a company that you will actually be excited working at right you know because I think when you are getting acquired there are many different things you can you can optimize for right right you can obviously obviously optimize for profits you know just like how much money you're personally getting um and that's certainly like very that's certainly certainly certainly very very important but I think like ultimately you know I think when we decide to join offchain labs we are trying to make zero

dev 100x better right you know right you know that's you that's what what I'm saying to all our customers right now which is that with the backing of offchain labs zero death will be 100x better so I feel like you know my advice to crypto funders is just to you know if If you love your product, join a company that will actually make your products 100x better, you know, and it's very hard to find an acquire like that. But when you do, I think you will know it. >> It's got to make you feel good there, Stephen. Thanks, guys. >> Um, yeah, it's been a pleasure. And uh, congratulations on the collaboration. I look forward to it. And I you know as as onchain users of some time even small things like shifting from you know meta mass to rabby it was a was a big step

small things to using pass keys on infinex using face ID things that privy broad things that zero de like it's just really been fun to be a part of it and see it grow and I just keep looking forward to using more and more of these innovations that teams like yourselves bring to market um and make it and make it better for all of us. So genuinely appreciate your efforts in making uh all of our financial experiences which are now you know crypto is no longer plan B for a lot of us. It is it is very much plan A and so uh we appreciate all the efforts. >> Thank you so much for having us on and likewise more definitely more of that to come from us together.

>> Thank you NBA for having us. >> Yeah. Cheers guys. >> See you guys again soon. Congrats. >> Best of luck. >> Bye. >> All righty guys man. Cryp M&A is on. We've got all the big acquisitions like Stripe and Privy. I should have asked them about that. Then we've got the the onchain ones, the onchain wars happening with Wormhole. >> Uh it looks like our our team has just put out a clip that makes me look like I'm absolutely taking a a crap on across. Uh that's not great for my brand, so I'm gonna have to clarify that one.

>> Yeah, I was a little bit curious when you brought that up as well. The interop is just a it's just a hairy space. There's a lot going on there and it is very very competitive. Uh next up we've got um lineup is so stacked today. Let's see who who do we have up next. Rob from Infinifi. It's going to be another exciting conversation. Um, I think Stephen's advice on uh on when and who to to partner with on an acquisition makes a ton of sense, especially if you're going to be working. In Derek's case and ZeroDev's case, it was an aqua hire. So, he will continue hire >> continue to be working at Offchain Labs,

which makes it uh even more important to be aligned with the long-term vision and the purpose of the acquiring company. Dude, how about that XRP chain link clip yesterday? I think things hitting like 120,000 views. People are apt, dude. Chainlink God is just he is relentless on Twitter. >> Yeah, he is. He doesn't stop. And uh you know, sometimes the link marines, the XRP army, it's almost difficult to tell whether these guys are these accounts are real. That's just generally the case on Twitter.

>> But chaining God doesn't care. He goes at anyone bot, human, doesn't matter. Yeah, >> God is is slapping. >> No matter what you say, do, or anything, they he will he will respond even if you've never tweeted in in in your life. Like, it's just it's hilarious. >> All right, guys. Up next, we've got Rob from Infinifi, institutional DeFi player. Uh, new guys on the block. I have not really much clue as to what they're doing, but I know they were on DeFi Dad um the other week. So, I wanted to bring them on and talk to them about what institutions want to see in DeFi. I think the the subject of this combo is really like how is this DAT rush going to lead to institutional DeFi exposure?

What assets should we look to in invest in as a result? How will we think about this? Hib also put out the proof of stake re uh thought, let's say, yesterday. So, want to get Rob's take on that, too. Um, and yeah, guys, we'll get Rob up here in just a sec and be ready to rock and roll. Stream is flowing today. Feels good. Feels good to be back. Um, definitely shook off a little bit of the rust that we had and now we are smooth sailing. Looking forward to getting daily. uh feels like we're in motion once again.

>> Yeah. >> Yeah. I uh I'd love to get the followup on's uh uh revamp of proof of stake. And I think generally this is a a a concept that we could continue to to prove out which is people come on the show, they make a ton of predictions. We don't end up seeing whether these predictions pan out or not. And so we can kind of go go uh back and re-evaluate if we were correct. Arjun tweeted, "After careful consideration, I I have too thrown my hat in the ring. The Stargate team and ecosystem is world class and deserves the best outcome they can get from an acquisition deal. This is why I am declaring my personal intent to acquire

Stargate. I am willing to pay distributed amongst SG holders the total sum of 350." >> Ar character. Love that guy. >> All right. Well, we're gonna get Rob up. Uh we're going to talk institutional DeFi and uh get them get them ready to rock and roll. We got Rob and then we got Russlin. Two DeFi convos uh for the to wrap us up today. Uh been a fun stream so far. >> Let's one more thing on this wormhole situation.

>> Yeah. >> So wormhole quote tweeted their own after they they said we're going to put uh a bid in. They said, "Thank you to Stargate leadership team for reaching out and engaging appropriate consideration of our bid." >> Basically acknowledging that Stargate was considering Wormhole's offer. >> And then the founder of Stargate, the foundation lead of Stargate replies and says, "We literally not spoken yet. I gave you my Telegram. You haven't messaged me. Reply to my comment." >> Bruh. I just commented, "Buh in all caps."

>> So funny. >> All right, we got Rob in the back. Let's get Rob up on stage. Rob, welcome to the show. Welcome to the Rollup TV. First time. Welcome to the big leagues, brother. >> Cheers, man. There you go. >> Well, we we wanted to talk today about your take on some of the DATs and how these are going to extend into DeFi, what the institutions want, where there's good yields, what you guys are doing for them and for users. um and more. So yeah, man, maybe just a quick intro to yourself.

>> Uh Rob and I have no idea who you are, where you come from, if you're trustworthy, if you build good tech, but DeFi dad said so, so I'm here today to judge myself. No, I'm kidding. But uh yeah, intro and uh and yeah, let's let's jump Okay.

>> Love it. And uh Rob, tell us about your background. You mentioned this is your second big project. Been building the space four years. It's a great explanation of Infinifi, but what what were you doing before you got into crypto? And uh how did you end up here? Sounds fascinating.

Okay. >> Yeah. Yeah. Yep. Nice. What's been your best uh what's been your best DeFi yield farm ever?

Where's the where's the crazy gains came from? Okay. On Ethereum. Okay. Oh my god. Bro,

it wait. It was called Youth Nation Unification. Yeah. So he made you $89,900 off off of $100.

Wow. Wow. Our producers back there wondering why he's working a damn salary. The [ __ ] I'm wondering the same thing. So Rob, yeah, >> let No, please. I mean, just catch us up, you know, where where did we go, Andy? What what's on your mind? What are you thinking? I I mean, curious to see like where where you went from this validator to ultimately building your first project and and continuing to be a part of DeFi.

Mhm. be before we before we get into Infinifi

everything I mean almost 100 million TVL and you guys are doing great things I am just quickly curious when you're when you're raising for a new project and and unfortunately an exploit occurred on maybe a previous project did did VCs care to did did they give that much weight was was that sort of a cause for concern or was it Okay. And both have operated without issue

ever since. And that was the real thing is we came to these VCs two years later after all this had happened with a sterling track record ever since with that proof that hey, you get knocked down in this industry, you got one chance to get back up and if you don't get back up perfectly, no one's ever going to trust you again. We got back up and we did everything right. We got multiple audits. We ran bug bounties. We had active monitoring solutions. And that's the same attitude that we've carried forward into Infinifi.

>> I actually think to a certain degree knowing that I'd been through that experience was considered an asset because they knew that when I said that I took security seriously that I meant it because I mean I'll I'll pay any amount of money to never feel that way again in my life. >> Yeah. >> We about a tenth of our raise, $300,000 on security for Infinifi. We got two audits, Sparfitit and Cantina. We got formal verification from Certora, which if you aren't aware is the diamond standard for security is a mathematical proof that your code is secure. We audit every single thing that we release, we actually have a spare bit on retainer now. So anytime we want to create

something new like add a new PT that doesn't have a handler properly even if it's just two lines of code we still pay for the review because if you don't do that the cost benefit never makes sense to gamble with security. You cannot play with those numbers. >> You cannot compromise on that. >> Yeah. >> Of course. Well, congrats on uh overcoming some of the early challenges and now congrats to uh 86 million TVL in infinifi.

Um Pendle is obviously a big, you know, partner and uh contributor to this new yield landscape. Uh and we were curious to talk about some of the institutional flows. Um you see all these things that are happening on Ethereum. There's entities, uh traditional institutions that are gobbling up ETH at every chance they get. And the theory is now that they're going to go deploy that capital and make it a productive asset. I'm curious when you're kind of crossing the chasm between DeFi and Tradi and Tradfi's looking to to harness some of the yields available in DeFi. What are you hearing from these institutions?

What are they looking for and how are you able to help them? >> Are we talking about in the context of the DATs mentioned earlier or just in general? DATs would be great also in general if you you know have any other institutional partners or conversations connections uh with in with beyond DATs. >> So really there's several things I'm getting texts from multiple people saying the audience is having trouble hearing me by the way. >> We solved it. >> Okay, perfect. Just wanted to let you know.

>> Thanks man. >> Yeah, sorry about that. >> No, it's fine. Anyways, with institutions where We're really seeing two things. One is the DAT angle, and that's a brand new angle. These guys, what they're looking for is quite different from the earlier conversations we've been having, which is more on the RWA side. I'll start with the DATs, then I'll hit, you know, jump right over to the RWA. The DATs are a unique group since they're kind of straddling the world between institutional finance and DeFi. they already are, you know, digital asset native, even if they haven't necessarily used DeFi, but they've got huge amounts of capital in digital assets now. And what they're

all realizing is, hey, we have this money. How do we set ourselves apart from all our competitors now? What's our edge? And so when I'm having talks with them, the conversations are typically around, hey, how can you help us earn yield on these assets? what we're able to offer them that no one else can and why I'm enjoying the conversation that we're having so far so much is because while they can get decent yields in other places in DeFi, they have to borrow against their base asset just to get those the capital to play within stables in the first place. And if you're using Bitcoin and you take your Bitcoin to a you're going to pay about four to 5% to borrow USDC against it.

Now you have to find a place to park those stables that is one scalable to the billions to tens of billions which a lot of the really high yield stuff is not not and two that is making a high enough rate of return that it's actually worth doing in the first place because if you're only able to find a place like another a that's also yielding four to 5% you can't do anything. You have no spread. You can't make any extra money and you can't set yourself apart. The obvious choice for them would be to deploy directly into Pendle or into Athena themselves since they both have the scale that these guys are after.

Unfortunately, since they're borrowing against their assets in this scenario, they need to be able to unwind that loop immediately. They have to be able to get back to their liquid capital and pay off that loan so they can rebalance that portfolio. So, they can't use things like SUSD where there's a 7-day unstaking period. And they can't use things like Pendle where your maturities are going to range for anywhere from one week up to 13. I've seen even 26 week PTS out there.

And so, they're in an interesting place because those are the best yields in DeFi, but they can't access them directly until I enter the picture. That's where Infinifi is able to offer them something useful. We're able to turn to them and say, "Hey, we can give you access to these ass." Oh, yeah. Yeah. Eddie, I I I love >> You're a [ __ ] funny guy, man. You're a funny guy, >> dude. >> I appreciate it. I like it. Keep keep it rolling. >> I I know I've got something cool here. >> All right, I'm bullish, dude.

>> First time I saw this thing, I was like, "Holy [ __ ] these numbers don't make any damn sense." >> Oh, yeah. >> And then I like triple checked it. I was like, "Oh, okay. Okay, numbers do make sense. >> But yeah, that's what we can offer them is we're a more liquid way to access Pendala since you know you deposit, we're deploying a portion of your capital to those assets. We're not deploying all of it and there's still money in the reserve. So when you need to rebalance, you can withdraw your liquid capital, do your rebalance, reenter the trade like nothing happened and it's all atomic and USDC.

So that works for them. That works for them very well. Now on the RWA side and I should add this last bit the angle there. Yeah, since we're making you know 8 9% it's not the 13% of Pendle itself but you're still making you know a 5% spread which is enough on the RWA side with those guys. We're going at it from a different angle and they're coming to us with a different angle. The reason that RWAs are working as well as they are in DeFi right now is that people onchain want high quality yields in traditional assets. There's a certain subsector of this industry that wants that and otherwise couldn't access

it in their native country. Like maybe you live somewhere that you can't get exposure to Apollo's acred. Maybe you can't even get US bills. So you're willing to go through whatever hoops you have to and maybe even get a little lower yield than if you did it directly in the states just so you can get access to that five to, you know, 10% yield. But that's still a pretty small group of people because, you know, that's that's not the best yields in DeFi by and large. And that's not a huge chunk of D5 participants who are willing to do the KYC AML needed to do that.

So these RWA players, they've come on chain and they're realizing, hey, you know, the flow from onchain to offchain isn't that strong. Well, how do we get people to come onchain from offchain? How do we get tradi capital to care about coming onchain? And there's so far been really just one reason that's leverage. A lot of these guys are super interested. Oh, okay. Not a lot. They have some participants from offchain world who would like to get higher leverage on their positions. Basically do like they go to a they you know say you borrow against SUSD in USDC you go get more SUSD and you loop that now you're making 50%. They want to do that on T bills or they want to do that on

Apollo's 8 credit or they want to do that on some other tokenized private credit fund. Maybe they want to do that with Fidelity position some other ETF. There's all sorts of stuff that there's like a subset of investors who want that leverage, but it's still not that large because that's a pretty high-risisk position to have to manage. Most these guys are used to margin calls, not instant liquidations. So, they do not love that they're in that position. And so, it's still a niche industry. And what they're looking for with their conversations with us is a way to unlock the rest of Trafi. M >> that's where we come in because with Infinifi we can hold assets like you know credit funds we can hold assets

like ETFs >> we can hold things that have you know a certain duration might be I think the shortest I've seen is 45day but more more typical is actually like 90day stuff it's considered short by trady standards. >> Yeah. A and uh you guys manage that risk through your own curated strategies effectively like you manage the duration risk of certain assets with regards to like their you know their price change basically or or the delta and the value that you started with compared to what you end with through your own kind of strategies basically.

>> Well with most of this stuff it's delta neutral. So if you're talking about tokenized T bills >> just yield neutral. >> You're talking about ETFs by and large those are also um fairly delta neutral. You'd have to see a pretty big hit >> for an ETF to have a significant draw down since they operate across a broad spectrum. So what we're doing here when we're working on the RWA side is we're taking their existing depositors and having them become duration depositors in Infinifi the same way that we take existing PT depositors and have them proxy their deposits through us and when they do that they get a higher rate of return they get on the raw PT

>> since what we're doing is we're taking you remember those liquid depositors who have that optionality well say 75% of their capitals in PTS. We're not paying them the interest that 75% of their capital being in PTS generates. We're paying them the interest that say 60% of their capital being in PTS would generate. And they're still getting a higher yield than they would on a so they don't feel short changed. And then we're taking that remaining 15% there. We're giving it to the duration depositors since they're in that junior chaunch. They're taking on that duration risk and we're giving them that premium over what they'd get if they were just in the PTS on their own.

So that's how those guys are making because they're getting money that's basically getting they're getting almost leverage but it's not leverage in the way we think about it. >> They're earning with like a buck 15 instead of a bucks worth of PTS. >> Yeah. How do you think um Infinifi goes from where you guys are now to like multiple billions in TVL um on on like a like how do you guys get to 10 billion TVL? Like what is the is it institutions? Is it retail? Like what is what partners do you need to work with? What levers do you need to pull? Like like what is the vision to get to 10 billion?

>> Yep. So we need to expand both our liquid and duration depositors in the short term and then in the long term it's RWA. Shortterm on the on the duration side we just keep hammering on Pendle and Athena users because they like us. They are getting higher rates than they would in just raw Pendle or Raw Athena. Pendle and Athena like it because they're getting more TVL as a result since we're putting all that liquid capital in there every time someone deposits on our illquid side. And so it's a win-win-win. You know, they their users get higher yield, they get higher TVL, and we get users and TVL. So, works for everyone.

We just keep expanding our market segment there. Keep informing more people, hey, if you hold a PT, you can get a higher yield by proxying that deposit through Infinifi. That's the message. On the liquid side, we keep bringing in people who, you know, maybe they don't want to hold PTS and SUSD directly. Maybe they want higher yields than they're getting on lending markets though. >> Keep appealing to them. We go after that DAT money. We work with, you know, DeFi native asset managers. Got a few of those in the pipeline already. People who those guys who like talked to me and said, "Hey, we love this product, but can you make it more liquid?" They're now one of my uh future clients because I solved their problem. So, we just keep

bringing in that capital. That gets us to about a billion. And that's me being fairly conservative here. Then we go from there. We keep doing this. We can pretty easily hit 10 just because Pendle, Athena, and A are all huge. And yeah, this is literally just rolling their capital into us, proxying it through us. >> But the real growth vector here where we go from 10 to 100, that's RWAS. And that's because we can take those trady guys who hold say an Apollo ETF or a token or a Fidelity ETF and by running that through Infinifi the same way we'd run those PT depositors through Infinifi, we're giving them a higher rate of return on the same exposure that they already have. We're taking them

from 10% APR on their ETF to 13% APR on their ETF. And we're in the early stages of setting up a proof of concept around this. We bring in the DATs. We help them do these uh these loops that I was telling you about. Help them run their cash and carry trades. We've get the liquid capital on that side from that. And now pretty quickly we're sitting at hundred billion dollars in TVL. My vision for Infenifi is to basically have all of Tradfi running through this. Have NEO banks be the ones giving me the liquid capital. >> There we go. >> Uh just, you know, replace the banks.

>> Now we're talking. A and which so Pendle Athena core partners here. What what are the other core partners that you would need to get this vision through? I I think you kind of mentioned some, but rattle them off for us. Who who is important for Infinifi to get to 10 bill TVL? >> In the DeFi world or in the trify world? >> Both. >> Okay. Defi world, you get me. A I'm very happy. A looping immediately makes my liquid side blow up, which is exactly what I want. Already working with Morpho, good guys, good partnerships, moving quite well. But the borrow rates on a are tier and that is why SUSD has added what five billion in the past

month or so just because they can run really good loops there. In terms of the trady side, give me any significant NEO bank. Give me a Revolute. Actually on the DeFi side still give me a VA. I'd love to get the VA guys using me as a liquid management strategy. They're running huge strategies with the plasma money right now on a put that through me. I'll give you a higher rate trifide. I could get Revolute be very happy. Good neo bank. Probably the first one people think of when they think of a neo bank. If I get any credit union or any traditional small bank, fantastic partners on the duration side. Apollo would be fantastic. Fidelity would be fantastic.

probably the top two that I'm currently thinking about just because they have significant credit ETFs with good traction. >> Beautiful. Rob, last thing for you from my end. Um, when you were getting into DeFi and looking at the space as a whole, um, why why did you choose to to build uh, Infinifi? Why did you choose to build in DeFi? Um, and and do you feel that the opportunity that you first saw is still the opportunity that you're seeing today, or has that opportunity changed?

>> I've always been very sympathetic to the crypto punk ethos. That's what got me into Bitcoin in the first place. And so, when I heard about DeFi, I'd seen all the craziness with debanking in the late 2010s. I'd seen all the uh contention around the financial system and how it wasn't fair. I'd seen the the uh the one that was the most recent why I hopped back into crypto in the first place in 21 was uh GameStop and how rigged that whole thing was.

And so that combined with a natural predelection toward libertarianism catapulted me into DeFi. I wanted to build a system that was more fair, that was better, that was more um just based on merit. Meritocracy, that's the term. So, I think it's not the purest version of the original thesis that we have now. It's more of a synthesis of, you know, what happened with Tradfi coming in and DeFi staying, you know, pure crypto punk. It was never going to be pure cipher punk.

It was always going to have to meld with the existing order, but in doing so, it destroys the existing order, which I think is still a pretty damn good thing. Why' I build Infinifi? I built Infenify because I've been fascinated with duration assets for years. I think they're an under represented segment of the ecosystem. They're very prevalent in Trafi and no one else was focusing on them here. So, I thought, okay, I'll focus on them. Everyone was looking right, so I looked left. And for a long time, it did not work. For a long time, it was really honestly a bad idea. And I found myself questioning what what am I even doing?

But I was in the right place, the right time to have the right question asked, which is how do you make it more liquid? That is the fundamental problem of banking. That is the original problem that inspired people to pull their money >> in the first place a thousand years ago. And when I was asked it and tried to solve it, I came up with an completely new way of approaching it that no one else had thought of. That was Infenifi. And once I realized I've got a system here that gives everyone a higher yield, I had to build it. There wasn't a choice. It uh it's the natural next thing. This is what actually takes DeFi out to the masses. This is the kind of system that operates better than banks do. This does exactly what they do, but it does it without all the overhead and

all the middlemen. It's automated. >> Yeah. >> And that that aligns the original vision. I just had to be the guy to realize it. >> Dude, are are you from Texas? >> No, I'm from uh from Georgia, Atlanta in specific. >> Nice, man. Nice. I went to UF, so I don't know if you went to UG, but go Gators. So did Rob. >> I'm Georgia Tech, so I'll go right there with you on Yeah. Not a fan of UG. Go Gators. >> There you go. >> Go Gators. >> Rob, it's been a pleasure, man. Thanks for joining us. Hope you guys get to that 10 bill mark faster than you expect. I think some of these things, you know, like for on our show, it's been like five, six years, and last year has been exponential, whereas the first

couple years were slow. Same things happens in a lot of spaces. So, hope that you guys see uh an exponential growth curve coming soon. >> I appreciate it a ton. Thanks for having me. >> Cheers, Rob. Pleasure. >> Take care. speak soon. All right, guys. Um, sick convo. I think, uh, Infinifi is one of the newer, more interesting DeFi primitives. We we wanted to have Rob on because, uh, we hadn't heard about it. We hadn't talked to him about it and, uh, frankly, we thought it was, uh, going to be an interesting conversation that it was. Uh, sorry about the audio issues in the beginning there. It was on our side. It was working, but apparently on the output, we had some issue. That's all good. Um, we're going to roll into the

final guest, Russell. Russell is the founder of Extended, a new per DEX, which is basically the best business in crypto today. >> Um, I think there are no other businesses that are generating consistent revenue day in and day out like Perpex is. Perhaps prediction markets are up there. uh but we'll talk to him about his deployment uh their work that they're doing on Starknet, some of their features, just his general outlook on the space as a whole. Um and yeah, that that'll that that'll end up wrapping us for the day. And yeah, man, Rob, what's going on, brother? I think it's interesting when we hear about these DeFi yield generating protocols and we think back to when we got started

and sushi and yams and urine like generating 100 200% that now we look at what's going on today and we're thinking to ourselves yeah like why is DeFi still interesting and then we have Rob come on from Infinifi and tell us about going from eight and a half n% on Pendle and squeezing out 13%. And that is a massive appeal to institutions and just it's just such a different mindset now that institutions are deploying capital. I think stable coins probably opened up the door to institutional capital quite a bit. Now they're looking to monetize these stable coins that they that they have on their books.

And it it's so different from DeFi summer 2020 where it was it was a much higher capital velocity. You had much higher yields. they didn't last as long. Now we're looking to lock in the safest, highest yields on 90 days is considered short-term duration. I remember when when APRs would last four hours. >> Yeah. >> On ALGO stables. Such a just such a different >> such a different time. >> Yeah. I mean the the good news is that institutions have long time horizons. um meaning that we can have more sustainable uh you know flows. Uh but you know I'm not sure I'm not sure how you know I you

know I I'm not sure that we ever get that that run again but there's a reason why things happen once in inefficient markets and right I mean I think it's better in the past. I I think that that look for DeFi isn't exactly the look that we're going for anymore. Well, no. I I think times are changing, right? And so if we look at where the space is today, I mean, we have all this infrastructure and it makes more sense to build this to build sustainable business models for this infrastructure using more sustainable capital.

>> And so that's what the institutions are bringing us. They don't need as high of yields. Uh they're bringing uh solid sustainable capital uh to Ethereum and and you know, several several infrastructure providers and chains. Um, I'll double down on what you said earlier. Perpetuals markets are the most successful business model in crypto right now. We've got Russ that's going to be on in just a moment. I think we've got him ready behind the scenes. Why don't we bring him up when we can? >> Yeah, man. I mean, I think that uh I I think that these these markets are just going to consistently be uh growing. I mean, like, if you look at the per market share as a as a whole, um we're still early. We have Coinbase launched

their per in the US. Uh I think we're going to see more and more competition. It's almost like we have this like this uh battle happening from two sides of of the spectrum for who can dominate this market. One thing for sure is I think people are underestimating how big this market can get. We've got Russ on stage. Welcome to the show Russell and welcome to the Rollup TV. Congratulations on the extended launch. How you doing today man? Yeah, things are going well, man. It's been a good stream and um you you are our last guest, certainly not least. I think our audience would would appreciate getting to know you a bit before we jump into what you're

building. So, maybe tell us your crypto story, tell us your background. Um you know, why are you the guy to build a perstex? >> So, as for myself, basically, I joined crypto full-time in 2021, right when I joined Revolute. Revolute is the largest European neo bank. It also has a large presence in crypto with over 10 million crypto users. I don't think many people realize but in reality Revolute is one of the biggest globe crypto players globally, right? And probably the biggest crypto player in Europe and there I was the head of crypto operations essentially responsible for the P&L of the crypto department. Then I when I joined back in 2021 essentially crypto department was just a very small

team right with a very simple buy and sell product with a dozen of coins launched right and essentially my responsibility was to grow the department define the road map launch the products hire the team and I've been doing that for two years so when I was leaving effectively it was a relatively big business right even for the size of revolution of active monthly crypto users, right, who were transact transacting hundreds of millions of volume, right, on the spot. And uh essentially I left in 2023 along with a couple of my colleagues. So essentially in total at extended we are 10 uh 10 people team and eight of eight

of the team members are my former colleagues at Revelit, right? And effectively we decided to build extended, right? uh with extended we have a very uh simple idea right we want to build essentially a defy per exchange right with integrated cross asset collateral margin with per spot and integrated lending markets that's on very high level >> amazing I think you know we we see more and more perpetual exchanges uh and each time there's a little bit of a differentiator maybe it's a new asset class maybe it's a different functionality maybe it's a different user experience. What is the differentiator on extended versus some of the other existing perpetual

exchanges? >> Yeah, sure. So, look, the biggest item on our road map is to essentially launch cross asset collateral margin, right? Meaning that users will be able to post non-stable coin assets, right? including I know LBTC, WBTC, wrapped uh EF whatever whatever we support as a collateral to trade USDC side right and uh essentially that will also open up as an opportunity right to effectively launch a spot market later on and to have the unified margin across multiple essentially business lines right which will be per obviously what we currently have what will be spot right and then we also have will have an integrated

lending market. Once you have that core foundation, right, essentially you can add any other products on top of the unified margin if uh if if we decide to do so and the like differentiation from the compet. Yeah, you got to think that the experience built working in at Revolute provides you guys a just systematically internally a a differentiator from the way that you guys operate chemistry as a team also just experience building these products at scale. Um was there any was there any specific like story or experience working at Revolute that uh kind of led you to build extended? So, so you've got

this idea, you've you've got the the differentiator that you mentioned now, but kind of just like re even like rewinding a sec, was there a specific moment um or or kind of experience that you thought that this was the the right path and and how did you kind of gather your teammates to to make the jump? >> Yeah, there was actually like a very specific moment which I remember. So back in late 2022 right we as revolute were in discussions with many players in the space right discussing various like collaboration opportunities just exploring what we can do together etc etc and obviously as part of those discussions we also had multiple calls with FTX back then and I remember that basically we were just having all those

conversations I don't even remember like the specific topics or the opportunities that we're exploring but effectively the entire narrative was that they were ready to conquer the world, right? And the fact they were super positive, super bullish, optimistic like that they are the best, etc., etc. And then like just uh probably a couple of days after another call like that uh they crashed, right? And at that point like I just had a very simple idea, right? That basically you can recreate that experience, but you can effectively completely remove the trust assumptions from the operator of the exchange.

Meaning that all the transactions will be settled on chain, right? Like all the orders, trades, etc. Everything will be signed and effectively custody will remain with the users, right? And uh back then uh basically I just approached a couple of uh my former colleagues with that idea, the guys who I thought are the most relevant, right? So the guy who was building a revolute exchange, right? And then effectively the head of engineering of the crypto department. And that's how we started off, right? >> So funny, man. I mean, I was just with a friend yesterday who was like, "Man, I finally got my 10 grand from FTX. Took me uh so long." And I kept getting all these spam emails of telling me to

connect my wallet and claim this from this email. And just the lasting impact of FTX continues to just amaze me across different areas of the industry from builders like yourself. Yeah, >> that's quite crazy. Honestly, I stopped reading those emails, right? >> Yeah. And I still get them from Celsius scammers, people trying to scam me from Celsius. And I was like, dude, I didn't even have funds on Celsius. I mean, maybe I had an account, but All right, so let's get into extended. You guys chose to build this on Starknet. Why why Starknet? Why is why is this a good place to build? Um, and how does this enable the product experience that you're looking for?

>> Yeah, look, it's very simple, right? Like when it boils down to the core principles effectively we don't want to control the settlement layer right we want the settlement layer to be independent of us right meaning that essentially we don't want to build our own uh chain right on which the transactions will be settled we want it to be an independent ecosystem right so that effectively the trust assumptions with the user in regards to the user funds they are not with us they are with the chain right and we merely serve as an operator of the exchange we don't have access to the user funds right there no way we can effectively impact how the transactions are settled right then that's the first principle right the second principle is that we require

high throughput low latency right and the chain needs to be performed I think among the existing um chains right uh probably in the EVM ecosystem right starknet would be the only one which would be capable to meet our requirements in terms of uh throughput and latency So I can give you an example that when we started our migration on the first day when let's say I don't 10 or 20% of our users migrated right we're hitting 200 trades per second and I don't think we would have been able to settle that amount of trades right on any other public chain and we have a clear path how to 10x how to 20x it right so effectively

I would say that the choice p boil down boils down pure to tech right now. Obviously from the user standpoint essentially the way we designed it is that the user doesn't need to interact with starnet at all in case they don't want to right so essentially they can connect an EVM wallet they can do a deposit from any EVM chain right they can do withdraw to any support EVM chain effectively darknet for now is mainly a settlement layer right and probably like 95 or even maybe 99% of our it share of share 99% of our existing users, right, are actually non-startnet users who are just coming and trading on the exchange.

>> Got it. >> Got it. Yeah. I mean, I think there's pros and cons to the chain thesis. I just like like Hyperlid is the example of they launched their own chain. They wanted to do it all their own way. >> You guys are taking a different path. You think it's it's viable uh to compete with something that it's on its own chain basically. >> Yeah. Do you think like it's not a I don't think it's a better or worse solution, right? There are pros and cons to each of them, right? Effectively the way we see it is that the funds will be uh effectively secured by Starknet as well as the settlement will be secured by Starknet. Now imagine that let's say by the end of the year right we h we

have that cross asset collateral unified margin where effectively we support spot lending per and it's all on start the settlement of all those products on stark net right there is nothing blocking us to launch our own chain EVM compatible chain on top of that product while retaining all the user funds on the startnet right and then we could do also expose our margin logic let's say as an ERC20 token to that chain, right? So yes, like we've chosen a different path in terms of the settlement, but that doesn't block us to launch our own chain in the longer run, right? Which will be just on top of our existing solution.

>> And so could you could you break that down a little bit? If you have your own chain, but then you use uh another chain like Starnet for settlement, what is it that is go happening on on your chain? How do you how do you split the two? >> Yes. So basically currently the operator of the exchange is centralized right so we are running a centralized matching engine right centralized liquidation engine and then there are onchain validations of the trading logic which are happening on chain right now if we were to launch our own chain on top of starknet we could distribute the operator of the exchange right meaning that there would be multiple or many parties running the operator of the exchange which is matching liquidation

all the other services which are related to per spot borrowing and lending markets as well as we could have our own arbitrary logic which is happening beyond matching and beyond trading. >> Is this effectively an L3 like a a chain on top of starknet? >> I mean it could be an L3 right? It it could also work similarly to L1. It would be just uh basically a set of logic business logic which will be run in an arbitrary way right and the validators of that logic would be effective the validators of the extended ecosystem right >> Russ I'm curious how do you guys go from where you guys are today to a billion dollars a day of trading volume what is

that what is the path that you see this like what is going to be required of yourself to to to get there >> yeah Look, so I think it's a couple of things. If I think about probably it's three main things, right? What the first and the most important is that our exchange is stable, right? And uh we have decent liquidity, right? The second one is that we continue pushing on the product, right? And effectively continue releasing features that people like and use. So essentially the next feature which we're working on is that we will allow users to tokenize their vault shares like we have a vault on top of extended right and essentially users

will be able to use assets which are locked inside of the vault as a collateral on the exchange right that will be our first step to support cross asset collateral margin then as the next step we'll add other spot assets to be supported as the collateral right so effectively pushing through the road map and thirdly is just our approach to go to market, right? Basically, we're doing it purely organically. So, we're not doing any paid go to market like we're not paying affiliates, we're not paying market makers, etc., etc. We're just talking to the relevant uh people in the space, right? Trying them to get to use our products, explaining our road map, and I think we'll be pushing that road map uh further, right? So far, it's like it proved to work, right? We just need

to see 10x, 20x, 100x. >> Yeah. Yeah. >> And so when you're bootstrapping this initial ecosystem of market makers to provide liquidity, bootstrap trading activity, you mentioned you're not paying these guys directly. You know, is there an incentive mechanism at play here? And and what is what is the value propos? >> Yeah. So I mean to start with right there are three types of market makers on the exchange, right? One is our vault, right? The second one is our internal market maker which is independent of the vault, right? It's just basically we running a we run a market maker and thirdly there are external market makers right as for the external market makers basically there are two types of incentives right the

first one is rebates right and um the second one is points right I would say that we see a clear differentiation between the guys who are mainly who mainly care about rebates right and the guys who mainly care about the points right but they're both both types of players >> and then like it just organically scales right like >> as soon as you start getting more taker volume right more market makers come and existing market makers start scaling right so basically it just goes hand in hand right like because I think otherwise it would be super inorganic right imagine you had like I don't know the best liquidity in the space but if you don't have anyone to use that liquidity right that's effectively non required right

>> interesting how how uh so so so the space is very cutthroat, right? Like it is the most cutthroat space of all of all because it is the best business model in crypto. Are you a are you a competitive guy? >> I think I'm a very competitive guy. >> Are you ready to risk at all to make extended win? >> Definitely. I wouldn't do it otherwise >> because I don't think the the other founders care about anything else but seeing you guys lose. [Laughter] I mean from our side honestly we don't care much about competition right we just know that this is an amazing market right we know that the market structure will likely change in the long run because basically you have now hyperl

like 80 or 90% market share but if you look at the centralized exchanges right Binance is top 35% of per volume among CFI exchanges and I think naturally in the longer run effectively D5 per will get to the same state right just because it's such an such an amazing market. There will be new players coming in, right? Someone will win. We'll do our best to to be that player, right? >> Yeah. Yeah. Yeah. I agree. I mean I mean I think uh yeah, right now it's not really it's it's very much a one one person take all kind of market.

>> Yeah. >> Um but yeah, that that likely shifts as as as you say. >> Well, I'm curious how how you think about that evolution because usually it is a fly a reinforcing flywheel. you get you have more taker volume, market makers come in, then you have better prices and that attracts more taker volume. Uh, and so when you're thinking about the market share sort of starting to resemble centralized exchanges, how do you think like these winners, how do you think it breaks down where that market share starts to diffuse amongst the rest of the market? >> Yeah, look, it's a great question, right? I think that fundamentally there are a couple of things to that, right?

Like one there will be definitely users who are looking to find next hyperlid right and they are naturally the target audience of all the new perexis and all of all the smaller perexes right and obviously we're also targeting those users right because effectively they are ready to s sacrifice efficiency right for the long-term opportunity right let's say yes they will get a slightly worse liquidity right a bigger price impact but they don't really care because in the long run they effectively They're choosing who will win that market right that's one or who will be the second or third hyperl doesn't matter right then the second way to win I think is to offer something which others don't right and in reality I

think like you just need to try right and you need to see what products will effectively stick with the community right so for us we've done couple of things couple of things in the past right so we've essentially launched right five markets We saw that there is some update but it's definitely not sufficient right to to effectively win right then now we're tokenizing our vault share so potentially there will be users who will think okay I'll better go trade and extend it because I can put my money into the vault those money will be working right and they can use that as the collateral right then once we launch non-stable coin as the collateral will effectively cater to a different group of users who will think okay now I can use my I I can put my WBTC to use on

extend right and used as a collateral right so effectively you need to win through features right and finally I think you need to remain humble and focused on the product on the growth right like and be focused on the long-term success >> you need to be remain competitive highly cutthroat and ready to eat what you kill >> someone's got to chip away at that market share Russ I think I think it could be you guys um man thanks for coming on. Appreciate your time. Appreciate uh the work that that that you've done pushing this out into uh into mainet now. Uh looking forward to seeing the trading volumes grow, getting to that $1 billion a day mark. We all

know it's possible. Um and yeah, man, appreciate you. >> Thanks a lot. Thanks, Andy. Thanks, Robbie. Right. Thanks for amazing questions and um thanks a lot. >> Yeah, man. Keep that killer attitude up. I got keep that thing strong. All right. Sure. Thanks. >> Thanks, Russell. See you guys next time. Cheers man. >> Bye. >> Bye. >> See you soon. >> That's a good one. Uh, you know, we talked about Hyperlid Wave 2 last stream. Uh, I'm sure it's a similar similar audience that's going to have an interest in participating in the extended points program that I believe is ongoing.

>> Yeah, right now. >> It is. It is. I think that one lighter um, Pacifica, there's a couple really good purpose Texas with points programs right now. So, and shout out to them for for building on Starknet and uh stoked for them to just kind of grow through this next phase. Um, and yeah, guys, what a stream. It's been a day. We've got we we had three great we had four great guests, but really like six Legion founders, arbitrum co-founder, zero dev founder, CEO of Infinifi, founder of Extended, great stream, wormhole, and layer zero drama continues. We hit 50K on Twitter today. That's a vibe. Things are looking good. Things are looking up.

Um, and yeah, stoked to stoked to be here. >> Love it. Another great stream. Andy, you're a great co-host. Thanks for being here. Marcelo, shout out all the guys behind the scenes. >> Yep. >> We're going to see you again tomorrow, right? We've got another full slate booked tomorrow and we are just increasing the output of these streams uh by and large. So, >> yep. until our until our producer gets the audio right, we're just gonna keep adding the amount of guests on every single day and uh keep keep them on the books. So, apparently the apparently our audio is broken. So, we'll have to have a conversation after the stream, I think. Here. Yeah. Get him out of there.

All right, guys. Thank you so much. See you soon. >> See you next time. 50K.