RWAs Hit $22.5B ATH, Circle's USYC Overtakes BlackRock's BUIDL, Gold $5,100, Ethereum Post-Quantum

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[music] [music] How about the [music] [music] mother? [music] >> [music] >> I'm off the [music] >> [music]

[music] >> JP Morgan, Black Rock, DTCC, Fidelity, the entire thing was just institutions. It's [music] just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. [music] You said it. finally said it. So, boys, boys, boys, we're boys. [music] [music] [music]

>> [music] >> I'm about the [music] [music] I'm the one. [music] [music] >> [music]

>> I'm above the [music] [music] >> [music] >> The rollup is headed to the [music] top. If we're not already at the top, we're going to the top. We're on fourth floor today. We're going to be on floor one and then we're headed straight to the moon boys.

>> Yo, happy Monday. A lot of green out there today. Yeah, the ticker looks pretty green, doesn't it? Ticker looks pretty green. While we're on the ticker sponsored by KHI, the prediction markets here, we've got some new prediction markets. And if you you realize we don't have Wimbledon 2025 scrolling across the screen anymore, we've got uh will the Federal Reserve hike rates uh in the January 26 meeting? Will Trump create a national Bitcoin reserve uh in 2026? Will Trump buy Greenland? Currently at what is that 36%.

>> Uh will Trump nominate Rick Ryder as the next Fed chair at 48%. That's a Black Rockck guy. I think that's bullish for Bitcoin. Uh so yeah, we revitalized the K sheet ticker. We got a lot of green out there on the Coin Gecko ticker. Um we had some advertisers leave the bottom thirds. We had some advertisers join the bottom thirds. >> So yeah, >> it's a lot of fun. It's a lot of fun here on the rollup. How was your weekend buddy? >> It's good, man. I'm excited to be back. Monday morning here in Hawaii. Uh, gold is at $5,035 per ounce. Silver is at 108.

And nobody wants to buy the coins. Socks looking ready to go to new all-time highs. And nobody wants to buy the coins. >> Why would you want to buy the coins? Um the last couple days we've had a recurring point on the show with several of our guests which has been the the lack of quality assets in the space. >> And so part of the NEO finance thesis here is that the tokenization of stocks and private credit and metals which is now the tokenized uh gold market is now a $4 billion market thanks to both the further tokenization as well as the price appreciation of gold. These are assets that will come on chain and so we won't be forced to buy [ __ ] coins. We'll

be >> the best several different tokenized options and quality assets. >> Maybe tokenized gold is the problem for Bitcoin. Maybe it could be. It very well could be. >> Look, man, my uh my my asteroid mining thesis is in full swing. You're just a no cool when you're on the gold side. So, it sucks, man. >> Sorry about that. >> I'm a no side. >> I for your loss, sir.

>> I I do think gold has a lot of room to run, but I get in trouble when I start to chase, you know, like >> what's that? >> FOMO is the mind killer on gold. I mean, you don't want to buy that thing right now. >> I just I run into trouble when I chase. I think I bought Zcash at the pico top. >> Nice. I'm still I'm underwater on Zcash. That thing was a >> Get me out of there. I'd be so out of there so quick. [laughter] >> Hit me out of there. >> Zcash to gold is probably a good move here. Um let's uh let's see what we've got in our headlines here. We'll run through.

>> Yeah, man. Bring it up. >> Cards token has RWAS, gold, Ethereum, all this stuff. So, let's go. Uh Neo finance is on the tip of the tongue is on the tip of the uh conversation once again here on Rollup TV. Guys, if you're watching on YouTube, the seven of you so far, hit like, hit subscribe, say what's up in the chat. We'll say we will be there. We will be hanging out. Um yeah, stablecoin cards are going semi-atomic. Yo, we here. What's up, man? Um, so Cards for the Win is a really cool uh basically newsletter about stable coins. They want us to subscribe. I don't think we're going to subscribe right now, but basically a

stable coin card primer. Stable coins are going semiaomic. Um, and it just keeps happening. Gold before 5K. Gold 5K before ETH was crazy. Yes. Feel like that was kind of obvious at a given point though. I mean, >> I I think it's important or obviously we got stable coin cards up here. We'll talk about gold a little bit later in the show, I guess. But I I have I think it's interesting to explore why gold is appreciating so much. But first, >> stable coin cards. >> Uh the fanatics guys really want us to sign up. Maybe we should tell them that their UX of forcing us to subscribe instead of just getting to read the free content isn't really helpful to our show. So, uh, Primer Fanatics, boys,

we're just going to skip you guys and skip your free marketing because, uh, well, yeah, we're not going to sign up for your for your newsletter, but mahalo, much love. >> Uh, Fanatics is launching a uh a fan cash rewards card. Um, and yeah, this is just going to keep happening. Let's move on, though. Um, sorry guys. In your fan cash newsletter, your paid newsletter, like who pays for newsletters anymore? Um, >> what what we got next? I mean, generally we've got Yeah, let's keep let's keep going here.

>> Sorry, fanatics. Once [laughter] again, it's not going to work here, guys. >> Art everywhere hit 22.5 billion all-time high. Treasuries, of course, being 9.7 billion. Commodities, gold barely existed 18 months ago. Uh, Tref is racing to catch up. We We don't call it Trefy anymore. We call it Legacy Finance. Um, yeah, I mean, look, if you look at the actual chart, it's pretty insane there. There is just immense growth here in the um, RWA space. And yeah, it's pretty bullish. You You love to see it.

Earlier, you were saying that maybe this isn't so bullish. I I think you know there's there's something to say here about like there's the assets and then there's the protocols and the idea is that obviously if we um if we ramp up activity and all money is on chain and all finance is happening on chain and transactions go way way up then in theory a lot of the blockchains are going to be collecting a lot more fees. You're going to have rent seeking happen at the wallet level. you'll have thriving businesses as infrastructure, you know, for this financial this tokenized financial system.

>> Yeah. >> You know, at the same time, a lot of that activity is a result of not the tokens themselves, but it's a result of the quality assets that are coming on chain >> like like gold, like RWAS, private credit, all these things. Um >> I just mean that like tokenized gold onchain maybe is bearish because you could just buy that instead of buying Bitcoin. So, I I I think If we if we're getting into the gold thing now, the reason my understanding of why gold is appreciating so much is kind of stemming from a lot of what we heard at Davos, not as a base layer, but that was sort of when it got brought into the public. You had this Canadian uh guy, forget his name, but the new

prime minister over there is saying >> that there is this rupture of the global monetary order. And we can see that it's not just rhetoric like political rhetoric, you know, because Trump is, you know, talking about Canada as the 51st state. There's actual data that is showing how central banks are decreasing their US dollar reserves and increasing their gold reserves. >> Oh, yeah. >> So, >> yeah, go ahead. >> No, Tether bought uh four uh4 billion dollars worth in uh Q4 last year. >> Tether's not a central bank, but yes, they did buy a lot of gold. and China.

Um there was a chart that I think it was Infinity Hedge or Zero Hedge, one of these guys posted how the central banks used to have um I think 60% of their reserves and it has slid significantly in the last like three to five years. So this is a macro trend where the US is is nationalizing a lot more of its economy, right? It's bringing manufacturing, it's bringing all these things. And we talked about this around the time of the election and the inauguration like the globalists lost, right? And I think one of the benefactors of the globalist regime was the US dollar as this global reserve currency. Now we're realizing that, you know, America

doesn't want to be dependent on some of these other nations for manufacturing. And so we're taking a lot of that home. And vice versa, what's the counter? Like we were importing all these goods and we were exporting dollars, right? And if we're now not relying on these these external countries for their goods and their manufacturing, they're not going to be relying on us for their currency, right? So now this trade imbalance is starting to shift and they're saying, "Okay, well, America's doing their thing. We're going to also take sovereignty in our own hands. We're not going to be relying on the US for economic policy and for these these reserve currency. We're going to kind of go back to a more sovereign store of value for our central bank.

>> Yeah. >> In gold. And then >> I get that. >> We're we're seeing retail sort of pile on top. >> Yeah. I mean, look, uh I just wish that I had actually deeply read that rise of of America book more closely uh in 2020 because I would have been buying at least even if I just put like 10 grand into uranium. Uh it's like a 7x from there, 8x from there, copper, the same thing. Now all these things are happening and it's like I'm just glad that I got in on gold and silver and then obviously Bitcoin and crypto and now I I did get a pretty good entry on uranium. I'm already up like 25% on or something um maybe 15%. Just picked up some copper as well. I feel super late to the copper trade again. I was like that was a 2020 it. So it's just crazy

everything that we tal that he talks about the rare earths the the precious metals um the energy all of it is just like coming to fruition. uh uh crypto as well. >> But this is a very slow game. This is something that >> Yes. That's why it's no rush plays out. >> But like the that the first the entry is where the gains are made. >> Yes. Absolutely. >> Investing is what I've learned like the entry really matters and like I mean >> yeah there's a there's still a lot to be had on the on the copper and uranium trades I think but not exactly sure where where it goes. So look there's the chart for the artic value. Uh it's absolutely up and to the right. It's the best uh chart in the entire space. Let's move on to gold. Um we have something uh

upcoming next. We've got our our uh gold hits a new alltime high uh over at 5100 per ounce. Pretty insane run there for gold. So the question now like if the premise is that there is a reshaping of the global monetary order, central banks are dumping the dollar and they're investing in gold. The idea here is like will we see a catch-up trade? >> And I hope so. >> Yeah, >> maybe not. Maybe it's just absolutely maybe we >> I don't know. But uh I came on here to talk NEO finance. Uh >> tokenized.

>> If you look at the weekly chart, looks really bad. So we got a we have a week to save the Bitcoin monthly or else boys and girls. GG's. I just don't think it's that I I just don't think it's that bad. I think you're >> I mean look dude we are going to get all the rate cuts in the world. We have the best setup ever like >> they're talking about or ripping they're talking about intervening in the Japanese currency market. What is in what does intervening mean? The definition of intervening is print money. So this debasement trade that is leading to gold going exorbitantly high there's so there's a lot of over it's not 100% overlap. There's a lot of overlap for sure,

>> but there's a lot the overlap is in the debasement. The the part that I is not overlapping with Bitcoin and could maybe lead to like not as much. I think there is some catchup to be had. >> Yeah. >> But maybe it's the reason it's not going to like go back to the same Bitcoin gold or ETH gold ratio is because of the accumulation you're having. Like I don't think central banks El Salvador is still uh an enigma. Like I don't think like the central banks are going to be getting Bitcoin. Like they're talking digital asset stockpiles. They're talking national Bitcoin reserves. El Salvador is one of the only ones still to have done that.

>> Yeah. >> I they're the central banks are going into gold and so maybe this is a stepping stone for something that plays out over. >> No, for sure it is. It is. It's for sure Bitcoin is the next logical step. But we thought Bitcoin was a we thought Bitcoin was a logical step after the US dollar fell from the global currency status. >> Yeah. Just because you're a zoomer. It's because you have known we we have no actual real world experience in investing and we think our little coins are the savior for everything. It's like no no no. The big boys play a different game. When they want to store value, they that's why they're buying gold.

I I I think it did still catch a lot of people offguard that they reverted to the thing that was the predominant reserve currency back in 1971 rather than kind of moving in a chronological sequence. >> Nah, I don't think it caught anybody off guard who actually has manages size. Maybe it caught like the crypto whales offguard who are managing nine figs, 10 figs, but anybody who's managing like high 10 figs, 11 figs, this makes sense. Well, then I think we ought to be looking at some of the same >> going to happen when it comes, right?

Like when if Bitcoin pumps, it's going to be the same freaking narrative. It just hasn't as soon as Bitcoin starts to move, it'll be like, "Oh, of course the debasement trade is on. >> The debasement trade gold is coming next." But like the >> whole central banks leaving the the US dollar as a reserve currency is not going to be the same narrative as to what goes up. Let's get to what's next because this is what's causing a problem here with Bitcoin's narrative is this quantum stuff. People are really uh confused about the quantum side of things. They don't quite understand what how Bitcoin is going to solve for this.

Let's move to this because Ethereum seemingly is going into uh a more postquantum direction from this one million impression post by Justin Drake. And so today marks an inflection in the Ethereum Foundation's long-term quantum strategy. We formed a new postquantum team. Um, after years of R&D, EF management has officially declared postquantum security a top strategic priority. You got to think, is this a response to the negativity in the Bitcoin meme in the Bitcoin quantum space or is this a proactive response?

Our journey began in 2019 with the ETH 3.0 quantum quantum security presentation. Um, and look, it's been central. Look guys, so Bitcoin has this narrative right now amongst all the big asset managers that it's going to have this massive quantum issue in the future. It has this narrative that uh uh Bitcoin is going to be the algorithm is going to be taken down by quantum computing and it's not investable long term. And so I think there's a real narrative overhang happening here. And so Ethereum is trying to come out and basically be like, look, we're going to be postquantum secure. We're a proof ofstake network. We're not relying on Shaw 256 algorithms like Bitcoin is in terms of proof of work and look, we're

gonna do it and we're going to make sure that we are post quantum. Then you got guys like Vance talking about how ETH's going to flip Bitcoin because of this. You've got Ethaxis being excited about this. And then you've got the Bitcoin core devs saying, "We're fine. Nothing's gonna happen here. We're good. We're all good." So, you've kind of got this weird classic dynamic between Bitcoin and Ethereum communities where quantum is this narrative overhang on Bitcoin. And I'm not sure that asset allocators of size really want to get into Bitcoin with this narrative overhang because I don't think they really even understand it well enough to.

>> So, um couple weeks ago, uh we did have on um Project 11. Yeah. which raised uh I believe it was something like 20.5 million uh to solve this problem and we discussed how immediate this is and you know it it's a slippery slope because you don't know exactly as far as predicting when this happens but what we're the conclusion that is being drawn is that it's not a a zero to one it's not a flip which is and everything changes. It's, you know,

I it's incremental in the sense that we will see it coming. And I think this is true also of AI and a lot of like really really impactful technology shifts. And so when it comes to, you know, Bitcoin and protecting against quantum, there are teams that are raising a lot of money and going out and they're doing this. And I think, you know, if you look at where the pinnacle of quantum research is today, you have to say there's good guys and there's bad guys. And just because someone has a quantum computer doesn't mean that the first they're going to thing that they're going to go do with it is hack Bitcoin.

There's a lot of things out there that could benefit from quantum. And once we have something close, we know that we're going to get push back from the quantum secure community. And so it's really a fight against good and evil. And there's a lot of money and resources being fed and poured into the good people fighting this fight. Um, we also know now that this is no longer a scientific uh discovery question where it's, you know, trial and error and we're testing things and like pouring things in beaker bottles. No, this is more of an engineering problem. And so, as we throw more resources at this, we will get closer and closer. There's again, there's two sides to that. One good the

good side is that we will see it coming because we're going to continue to push closer and closer. The other side is that, you know, the scientific discoveries are sort of out there. Um, and so, you know, in the scientific community, a lot of this is open source. You can kind of get your hands on the latest research. And it's frankly whoever at this point has more money and time and manpower to pour behind their position and in quantum and that's what we'll see play out. >> But like I guess my question is like does it matter? Like do you think that this is actually driving flows or do you think it's just like a narrative?

>> Um >> if you're a boomer like you're a big asset manager and you read a report from >> I don't know some like like like some research company that it's a good >> and it's like oh Bitcoin has this massive quantum threat. Are you kind of like rethinking your allocation plans or you just kind of like >> it's a good it's a good question. I I think the scale to which the quantum problem is right now. >> Yeah. >> For Bitcoin is about the same as the asteroid mining problem is for gold. I would >> I probably agree. Like they both sound extremely far-fetched to me.

>> I agree. I agree. I I think there are some allocators that are seeing this and taking precaution and maybe, you know, thinking twice. Um the the the point where I think this analogy actually holds up is that both of them are inevitable. Like they will Yeah, I do. I I think at some point we will start mining asteroids and at some point like we already know that gold is in some of these asteroids. >> We are going to do that at some point once we get drones and those drones go to space. Like it's not that far off. >> Sounds so crazy, man.

>> At the same time like we see quantum advancements happening every year. there's a [snorts] significant incremental progress towards a quantum computer. Whether that falls into the wrong hands or not, we don't know. But I I I would say that, you know, both of these are at the same um like potential risk right now, but both of them are going to get increasingly more important. And so, how do you weigh this as an asset allocator? I think someone has to take into account what is the what is the risk that this could happen tomorrow? And I think there is a greater risk of that with quantum because it's a little bit more unknown.

>> If we're going and we're mining asteroids, people like we'll see the spaceships rise up. We'll see Elon talking about it. We'll see the drones get deployed. Like we'll know more of what's happening behind the scenes because we'll watch it unfold. And I think that means it's a bit more predictable. And so I think people that are asset allocating to gold can see this and they're like, "Okay, we'll have a little bit more heads up and we can reposition accordingly once we see those signs." >> Yeah, >> quantum there's a risk that this thing just sort of appears. At least that's the narrative. I don't think it's going to happen like that again. Like I think we're it we're going to see the signs.

We're going to see it coming. But because it's a little bit more vague, um I I think people see it as a little bit more unpredictable and risky and so they're taking a bit more precaution. >> All right, guys. Let's move off of Quantum. Um move back into into some of the NEO finance uh conversation here with NYC and more. Uh this this kind of hit hit the wire last week with regards to the tokenized stock movement. Uh, Ando puts out why is the NYC going 247 a big deal? Ono's president Ian Debode explains how the move to 247 will unleash adoption of tokenized stocks.

for you know from my view what they did with Bitco last week was the most impressive tokenization experiment in real time that I've seen uh in in the last six to 12 months which was just purely all right as soon as the IPO is live on uh the stock market on the NYC we we we have a tokenized version on multiple chains Ethereum Salana and others that anybody in the world can buy on a DEX with decent liquidity with a Wi-Fi connection and and a Rabby Phantom wallet and you can get exposure to this asset without having to go through a brokerage, all the traditional KYC processes and all of that. And so I I just thought that what Honor did last week with the tokenized Bitco

and and it's a sign of that tokenized equity movement that you're talking about with with regards to quality assets, >> meaning that like we're going to just get more of these biddable to uh like tokens on chain that aren't necessarily like uh like crypto projects, but more of like actual companies. Now, like did I bid it? No. Did did it perform well on day one? No. But but the idea here is that now anyone has access to that um you know available day one. Now the next logical step here is how do you how do you give people access to preIPO >> markets at scale at size? How do you allow me to buy into Bitcoin before it

launches and then how do I then sell it when it launches for a profit? Right? almost like uh pre-sale style on stocks on chain. Like if we get a pre-sale market going on chain where like actual institutional investors can only like imagine you didn't get into any of their funding rounds but then you were able to like buy a pre-sale on chain that was marked lower than the launch price and you're and then people on chain start to make profit without like that institutional people couldn't. That's like a massive uh wall that will be smashed through. And so that is what I'm looking forward to. But yeah, I thought this was great. I thought the 24/7 shift is is awesome. And yeah, I just have a lot of positive things to say about that

launch last week. >> I'd love to see it. I just don't think it's going to happen anytime soon. I think in order for a company like Bitco or any company that's going and and IPOing, they're going to have to set aside an allocation of their company's shares to essentially do an ICO and do a public sale on chain. And I think that would require massive amount like regulatory shift. There's so much so much red tape and bureaucracy when companies are IPOing that, you know, it would have to have a carveout for all these S1 filings to then allow a price discovery mechanism on chain. I just think that a lot of these companies see a lot of value in IPOing. And yeah, they can go and they can natively issue

stocks on chain. Like we've gotten that far and that's great, but as far as a pre-sale, uh, I don't know. No, we're going to have to >> just like pre I think they might be on hyperlquid as well. >> Well, these are derivatives and that's totally cool. Like we can do that. We can have an oracle price and and resolve it based on this and have a funding mechanism and a funding rate and that works. And then once the IPO is live, we can pull that price on the NIC and we can use that price as an oracle price in the hyperlquid market and turn it into a a spot market. That's how hyperlquid hip three markets work. And that works because the preemptive price is the pre-sale is a derivative. It what you're

talking about is physically delivering them the asset, not a paper contract derivative of the asset. And that is where I think it's you have to set aside that beforehand and you're setting that aside knowing that there's going to be a different price and you know there's going to be some price dislocation between the New York Stock Exchange or you know the public market and the onchain market which I think requires a lot of uh market structure clarity which we maybe we do get in the clarity act which I think is going live sooner than we think but that you know is still going take some regulatory uh changes but I I think it is something that you know if you take a second look at it

you don't need the price dislocation before the thing actually launches like now we have Bitco tokenized stocks we have other tokenized stocks on chain and then you also have uh you know the publicly listed uh equities trading on markets that creates some of the like if you if you look at some of the largest wealth effects that have taken place in crypto It's been a result of take SPF take Arthur Hayes they both started by buying Bitcoin in one jurisdiction flying to another area of the world and selling it in that jurisdiction.

Similarly, I think you know we had this whole multi-chain interrop like uh sandwiching arbitrageing thing which market makers did extremely well on. Market makers took centralized exchanges and decentralized exchanges and arbed the two and made a killing. I think there's going to be a whole industry that's born as a and it's probably going to be mar um um capitalized by a lot of the sandwiching bots, the meb bots, the market makers that are onchain now. They're going to be doing tokenized stock and uh native, excuse me, public stock and onchain stock arbitrage. And I think that's a massive market that we haven't seen because a lot of these assets don't have don't exist in both

worlds. >> Yeah. I mean they don't and that's the beautiful thing and so >> I yeah man I mean once again praising for that launch I thought it was really really cool. >> Let's keep it going before we have our first guest in about five minutes. Um moving on to a unfortunate situation here in DeFi Matcha Meta Swapnet exploit. Um $16 million drained. I've been seeing more and more of these as of late actually. Um, so again, there was a swapet incident here on chain and yeah, I think I think if we scroll down here, we can get a bit more detail, but

effectively um just another exploit in DeFi. It's hard to write off some of the smart contract risk that still exists in DeFi. Um and yeah, I mean it just effectively again it's kind of comes down to these uh infinite approval uh uh situations and yeah I mean it's just that DeFi is still in this phase. The good news is a lot of these hacks are really small. Like 17 million is not a lot is not a lot comparatively to what we saw in 2021 2022 hacks, but it's enough to kind of set people off. Um and and just kind of turn you off. So I don't have much to say about this. I I'd like to actually

move into the next one, but I don't know if you have anything to say, Rob. >> No, not nothing to add for mine. I'm not too familiar with this project or or how it got exploited, so we can move on. >> Yeah. Yeah. Well, it's just unfortunate. Just always be careful, right? Like there's certain DeFi apps that you want to use and certain ones that you know you got to be careful of using. And the infinite approval is the big thing that you guys got to be careful about. Like when you go on Rabby and do the approvals, you got to be careful. So, let's move on to Circles USYC. Um, passes Black Rockck's build. Wow. How Black Rockck lost control of the $10 billion treasury market to circle for one simple mechanical reason. USYC hit 1.69 billion

AUM on January 22nd, narrowly topping those 1.684 billion. The real advantage is buried in the collateral rails. Interesting headline. Let's scroll down um and let our viewers understand. Pretty pretty insane uh headline though, I would say. >> Yeah. Let's see what we've got here. Tokenized US treasuries crossed 10 billion. Wow. All these guys want us to subscribe. Um [laughter] so something happening underneath this achievement circles USYC has edge plus black rockck as the largest tokenized treasury

product signaling that distribution rails and collateral mechan mechanics now matter more than brand recognition in [clears throat] determining which onchain cash equivalents win. Um and so I mean passed this let's see >> the gains were driven by simpler structure better exchange integration. Also there's a lower minimum for um USYC. So in order to deposit into USYC you only need a 100k uh minimum versus build's $5 million minimum. >> Um you also have an accumulating interest model on USYC versus a distributionbased yield. Um also USYC is available to non US investors whereas

build is only available to uh US qualified purchasers. Uh USYC was also able to have an early Binance offchange off exchange collateral uh which supported their uh adoption and really uh kind of uh improved it. Also of course USDC's ecosystem is very integrated on chain. Generally speaking, this just signals a growing competition in the tokenized treasuries market, right? I mean, there's just a lot to be uh seen here. And yeah, I mean, this is awesome. I mean, I love to see this competition. I I love to see that this is going to keep happening. And it it's kind of insane that uh Black Rockck is losing to Circle and Securitize and Black Rockck are

going to come out swinging. They're not going to let this thing shutter. But yeah, we we shall see. >> I we're going to see a lot more of this. Um, and so I think, you know, the question that people are going to ask is like, hey, I've been in crypto a long time. You know, I drank all the Kool-Aid of ICOs and ETH L1 killers and I bought the tokens and I did all this and now it's great. Institutions are here, but how does that really help me? like how like like what does circles tokenized treasuries fund do for me this guy that's been in crypto a long time like how do I like what do I do here and I

think I I I think a lot of people are thinking like you know this is great to see an adoption of technology but you know there's not a windfall that's going to come just because you're on the chain All right. I I do think if you're looking at, you know, where can you position to successfully capitalize on this trend because we know it's going to continue. Well, you can kind of take two different formats. You can take the format which is like look, these are good these are reputable companies providing good yield. Like I think Bidd tokenized treasuries like they're going to get you, you know, upwards of five, six, seven%. I think treasuries are you know somewhere around that four to 7% and if you have size then you can

capitalize and compound you know uh with a with a reputable product and you can even leverage loop these things up very safely right and so like a horizon uh there's other RWA lending markets you know you can get if you don't have size you can get size by leveraging up with DeFi products and we expect a lot more activity to happen there the other the other way to do and so you can get, you know, a nominal yield of probably upwards of like 15%, 20% maybe by leveraging. Um, do your own research, not financial advice. Don't listen to me about leverage. The other the other thing, uh, you know, option that you have here is >> this guy, guys, >> is is ETH, right? Like that is where a

lot of this is happening. Black Rockck has come out and said they think there's going to be one chain to rule them all. like you can still try to pick winners that you think are going to uh profit as a result of this trend and this is the category of assets that we think you know fall into NEO finance which is at the convergence of this this trend um and so you know if you listen to the show you've seen the likes of you know the Maples the skies right the ETH hyperlid like that is the things the assets that we repeatedly talk about um and there's a reason they continue to come up is because we believe that, you know, this is where the puck is headed.

>> Yeah. Yeah, man. I mean, look, this this competition is just going to keep heating up and uh excited to watch it play out and I I expect trillions. Like, they're at 1.5 and 1.6 billion, respectively. I think these things have a chance to grow by a matter of 50 to 75% year-over-year that this year, putting them closer to 2.5 billion each. How much do you think that like trickles down to like ETH or like if this, you know, if if Circle and Black Rockck were to tokenize their money markets on Canton or like another L Aptto or Avalanche? Like I >> that's the thing is I'm not really sure it does >> at all, >> which is the weird part or just like not

in the way that you would think like direct value acrruel to ETH like it's like fully like I don't I don't know. So >> it it's uh it's feels similar to Bitcoin in the sense that like yeah the the value of the chain is going growing because like you know you're you're growing this like thing is continuing to bulge but as it grows you have less velocity of these assets like you're seeing less back and forth in transactions and that's where these fees are taken. It's not like a hedge fund that charges two and 20 and just sitting there in the same asset. You don't have to make a trade ever. you're still gonna collect 2% like >> y >> that's not what happens here. So yeah I it still rem remains to be seen.

>> All right guys quick break commercial break and then we'll be right back with our first guest guest Kevin the CEO of Deli talking about the neo finance market map talking about neo banks uh he's a big kabull we're going to hear his thesis and more. Um be right back guys and let's get cranking with with our guest lineup for the day. Yeet is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game.

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Money shouldn't wait for Mondays. Following his real upgrade, Polygon is now one of the fastest chains for stable coin transfers and payments. Visit Polygon Technology to learn more. [music] All right, guys. We got Kevin Simbach, the COO of Deli Labs, friends of the rollup and of the show. Kevin's first time on the show. Um, we're talking Neo Finance Ka Neo Banks. Kevin uh felt a little bit snubbed by our Neo Finance market map that went painfully excruci excruciatingly viral without his lovely lovely bags on it. So, we've brought

Kevin on the show today to talk about the category as a whole and more. Good to have you, Kev. >> Yeah, thanks for having me. Great to be here. >> Absolutely, man. Yeah. So, I mean, tell us about KA. What is this? Why does it belong in the Neo Finance market map? And, you know, we we've been talking about Neo Finance for for quite a bit. So, excited for this one. >> Yeah, happy to tell you more. And let me just start off with the disclaimer. I I do hold some of the the KTA tokens. Deli as a a ventures team, we have not invested in them. I'll give you a little bit of the story on the investment history of Kea. So there is really no institutional connection between Deli and Kea. We've written about them a couple of times. So just wanted to get

those disclaimers out of the way. But I guess like just start to understand Kea, you really have to think about the context around institutions coming on chain. So Tradfi or I heard you say it earlier, we'll call it legacy finance. Now this trend is undeniable in terms of the institutional adoption that's going on. like whether you love it or hate it as a crypto native, that trend um is here to stay. And you've got these big institutions, some of which are going to come in and want to build their own chains. So JP Morgans of the world, um Stripe uh with Tempo is another good example, but there's tens of thousands of financial institutions in the world, and the majority of them, they're just not going to build their own chain. It just won't make sense. And so, um for

example, you've got a regional bank. Are they going to really use JP Morgan's chain? Probably not. And so the choices then are you use a public blockchain and we're starting to see more institutions starting to put value and do transactions on Ethereum, Salana. I'm sure you guys have chronicled a lot of that. We've all seen the post and headlines. It's it's actually, you know, pretty amazing to see how far it's come. So now let's talk about Kea because what they've built is really it's a purpose-built blockchain for this exact scenario of bringing the longtail of financial institutions that are looking to transact and bring value on chain.

And when I say purpose-built, there's four key things that I think make it stand out and what really popped out to me when it first got on my radar and I first started looking into it. One, um, of course it's credibly neutral. So, it kind of takes away that idea of of going on a competitor's chain. Um, it's highly performant. And when I say highly performant, we're talking multiple orders of magnitude better than any chain that exists out there. It's the fastest blockchain ever built. They did a stress test in partnership with Google. It was audited by, I believe, Chainspect. They recorded 11 million transactions per second. They've got 400 millisecond settlement time. I'm not talking block time, but settlement time.

And so it's the most performant blockchain that's ever been created that's gone live. It has compliance built into the core. And if you come from the legacy finance world or you you interact with them, you know how important this is. They're just not comfortable bringing a lot of use cases on chain without having the right compliance attributes. And Kea built that in from the start. And and there's a couple things we could talk about around that. And then the last thing is that it's designed to be um completely interoperable. And I'm not talking about like bridging from one chain to another.

I mean interoperable across all blockchains and off-chain payment networks. So you can do seamless compliant atomic swaps from effectively any asset. We're talking fiat into crypto coins and back and forth. Um that's kind of the the the things that it's designed to do. and they have some interesting tech that they've built that allows for this interoperability. And so all of that just kind of sets up Kea to be this this vision they have as being the unifying settlement layer across crypto and legacy finance. And there just really are not many projects out there that have this ambition and are so perfectly positioned for this institutional adoption of of blockchain.

>> I'll pause there. >> Yeah. Yeah. How would you compare something like Kea to something like Canton? Are they separate ideas? What what would you think of as like the core differences? >> Yeah, I mean Kon I look at them as bringing um certain asset classes on chain and being able to record like um all of the transactions associated with the digital versions of of those assets on chain. What Kea is trying to do is is a bit cover a bigger and wider canvas. So, it's um I'd say more analogous to being able to be like a big payments network like a Visa plus all the capabilities of being a bank itself.

>> Yeah. Yeah. This this neo banking category of like this uh convergence between DeFi and legacy finance at its core, better UX, users want to forgot password button, people want to have access to onchain yields and products. uh it's it it's happening but it also feels like there's a lot of uh competitive pressure specifically at this neo bank level. I think um I I I think we've seen like the rise of the fintexs and then kind of like the cryptonative neo banks as it pertains to like this neo banking category specifically like what is your broader view of of kind [snorts] of how this may shape out right like at the end of the day the yields on chain are all the same so there's a commoditizable layer there um that all a lot of these like apps on

on on your phone they look very similar right that they feel very similar they're all avail they're all free they have, you know, they're all in the app store. A lot of them have a Visa card. There's some competition on like cash back and rewards and loyalties. How do you see, you know, like I I just don't see there being 25 successful neo banks targeting the same, you know, niche of users. Like how do you see the neoank category kind of un unfolding over the next year or two? I'm not sure if Keith is really positioned here or if they are or just kind of like generally how you think about this from from the likes of like Plasma, Etherfi, Revolute, Venmo.

There's kind of like separate categories here. Finex and cryptonative banks. Uh how do you think about this category? >> Yeah, I mean, first of all, I like the products. So, um I'm a fan of Ether. Been using their card for a little bit. Um, I know there's a bunch of others that have started to to come about, but most of these we have to just remember are just kind of wrappers around your crypto assets. So, they give you a vault, you earn some yield. When you want to go spend it, they link you up with a a debit card that pulls from, you know, a vault of some sort that they've got set up, allows you to spend. There's really nothing super special about that.

It just is sort of a a better user experience for people who keep assets on chain. Now, um, when we talk about Kea, um, they're kind of coming at this from a more of a a legacy finance perspective in terms of building their infrastructure. So, they announced a week or so ago that they're in late stage talks to buy an actual bank. So, that's something that we don't see neo banks out there doing. They're building these rappers around a user experience and giving people debit cards. They don't actually go and own and buy a bank. And what ke is trying to do is bring um an actual banking license to its product set. So they can have um the actual you know issuance of fiat banking accounts and then with that they can tie

that completely on chain and then open up the use cases for everything they're doing with the blockchain that they've built. And so it allows them to do something like they've talked about um the some products that they're launching that are in the works. one being key to pay. So very similar to Venmo, you've got sort of a username. You want to send somebody money, but you'll have the ability to send somebody any asset that you want. You can send them any currency. You can send them crypto. Um it's a a quick seamless transaction just like you see with Venmo today. They'll have a card that you can do all the same things that you can do with these other Neo Bank cards as well. They have partnerships with with Bridge and with Agora. So the seamless interaction between on and off ramps and into stable

coins and and out of stable coins will be far more seamless. So I think what they're going to be able to do is far more than what these kind of existing neo bankanks that we see today that more or less just offer a vault with a a tiedin debit card. >> Yeah. And and and you know you are pointing to this neo this kind of dispersion where there's a few different dimensions. we we can expect a lot of these neo banks to differentiate on uh one of them is you know are they going more into you know they're going to get a banking license they're going to be you know uh uh issuers of credit create these money accounts and kind of you know add to the credit supply um the other the other ones are you know you've got Robin Hood right which is kind of

playing with this financial super app concept you know probably won't end up getting a banking license but you know obviously has a lot of deposits held on its platform and then also offers a breadth of financial products and assets beyond just holding cash. And so this is another diff another dimension through which we believe a lot of these neo banks are going to differentiate. It's like okay are you you know kind of primarily offering these like yield savings rate sort of payment options or are you then offering a lot of financial services to go invest you know into speculative assets whether that be tokenized stocks you know public markets or you know the Bitcoin crypto assets uh

on chain does where how do you see this kind of falling out from you know any is there any anywhere else that think that there's differentiation points and then I guess where does Kita fit into this uh this stack? >> Yeah, when you talk about where Robin Hood's going and I think Revolute's probably in a similar category. They're kind of going after this super app concept. So they want to be the place where you store as much of your wealth as possible and you have the opportunity to put your wealth in any type of asset that you want and that's great but you're also um operating within Robin Hood's walled garden like they are you know the um complete owners of their platform and so they can do things like

what they did during the the GameStop era and and sort of control how everything works on their platform. What KDA is enabling is for this to come together in a you know permissionless decentralized setting. So Kea can go and build some of the core apps. They can have the banking license all of the blockchain infrastructure but at the end of the day it is an open network. So other builders can go and build apps. They can plug in. They can take advantage of all of the unique elements of the key to tech and their blockchain network. and you could theoretically build the super app in a more decentralized context on keto network.

So I think they're kind of both pursuing the same vision just in a in a different way. One being a fully permissioned walled garden network, the other coming at it more of a decentralized ethos and trying to build the core foundation of the infrastructure and then bringing together an ecosystem that allows for, you know, all of the the elements to come in. Yeah, I just wonder like how how much of these fizzle out in the coming years, right? Like if if the super app thesis is the is the objective for some of these companies with the largest distribution, then you ought to think that someone's going to win that and someone will create that kind of super app concept. And I uh yeah, I'm just not sure if if if it's going to be the

crypto native uh companies like Kea, like EFI, etc. going and winning distribution and winning these banking uh deals, buying a bank as you said or licensing agreements or if it's going to be uh the more fintechy companies with the distribution, getting the best access to crypto products first. It's kind of like this like uh they're starting on two ends of the spectrum and kind of racing to to the middle here. One thing that I think is particularly interesting though is that um I I think there's differentiation possibilities here on the types of users, right? So like there's uh like I think whoever wins the wealthy crypto user segment over the next 10 years is going to win big because you don't really need that many actual like quantity of users as long as the actual spend and the and the

actual um amount of dollars that people are transacting in their in their app is high per per customer rather than like of a a lot of customers with a small amount. I I just find that I think that everything everything else equal it like the winner is going to be the ones who is going to actually get a really strong grip on like the wealthier new investor class. Um less so the older investor class and less so just kind of like anyone around the world. I'm sure there's going to be like like there's huge neo banks in Brazil, for example, that have, you know, tens of millions of of of users, but again, like the quantity per user in terms of the dollar amount transacted is lower. I'm I'm

thinking that that the main edge here is going to be in who can get the younger generation wealthy kind of new money users to really be sticky. >> Yeah, I won't disagree, but I'll come at it from a a slightly different angle. Um, I think that the winner, at least in the the crypto side of things, will be who can appeal to to people that care about self-custody in a material way because at the end of the day and and you see where things are going with the fiat debasement trade, where things are happening just geopolitically across the world. I think that that's going to become more important. We saw the privacy trade be a big thing. I think more people are going to wake up to what the importance of self- custody is, at

least for a percentage of their assets. Now, if you care about self- custody, then a super app via Robin Hood or Revolute doesn't really work for you. Maybe that works for some of your assets. And so, I think there's a world where you can have multiple winners in the super app. I mean, first of all, there's a lot of people in this world. There's a lot of wealth. There's nobody. It's not a winner take all. There's going to be a bunch that can be very successful. And I think that there will be a growing trend towards super apps that can also accommodate people's desire to have self- custody. And that's where I think Kea has an opportunity to carve out space to be um working towards a super app ecosystem that also supports self-custody in a big way.

Uh Kevin, I would push back on that a little bit and just say that um you know where self- custody is important is in in areas of hyperinflation. Like Andy and I, we were in Argentina, maybe there too for Dev Connect, and we spoke to people that were like, "Yeah, stable coins are real. Self custody is real." Like there are oppressive governments out there that are are hellbent on taking as much power and money from the people as possible. and you know they will come for those people's assets. On the other hand, we've got you know we we've got sort of where most a lot of wealth is held in you know more stable government countries with more stable

governments. And so in order for I I think for both what you know Andy what you're saying and Kevin also what you're saying for that the these two things to be true there would need to be some cataclysmic event in a country that has a stable government now that does destabilize and that's where a lot of like this younger wealthy generation exists and lives and for those people to say yeah we don't have trust in our government to you know leave us alone and not seize our assets there there may have to be something that happens that causes this like paradigm shift in thinking because at the moment it seems like where self-custody is most important is in places around the world

where like there are unstable governments that have a higher likelihood of seizing their citizens assets. >> Yeah, 100%. It's definitely going to be more appealing to people in places that have that kind of risk. I think even in stable places like the US and other parts of the western world, you're still seeing people that do care about self- custody. Now, I guess I'll be on the side of I think that self-custody trend will grow over time. If we start to see more things continue to destabilize across financial markets and geopolitics, that trend of people caring about self-custody, I think will grow.

And that's where I feel like if you want to be in a growing market, if you want to build something, um, find out, you know, what people care about and try to build in that space. And if you're building a super app and you have an opportunity to seamlessly integrate self-custody options for some of your assets and be able to move seamlessly in and out of that for a lot of your financial needs. I think that's an attractive place and it's a niche that HDA or others might be able to carve out. >> Yeah, it's kind of a weird place to be in. Like we believe that the debasement trade is happening, right? Like we have Bitcoin as a significant part. Like all of these things, especially the gold trade as well. All of this is the debasement trade. And if you hold those assets, you're kind of you're kind of

betting on the destabilization of the world. >> Yeah. Kevin, did you hit the gold trade? >> I did for a bit and then I I I got out of it for most of it and then it just has continued to run and it never gave an entry. Like from four 5k when it started to run again, it just never gave an entry. So yeah, sadly I missed out. I I'm on the I'm on the copper train now. >> Nice. >> Nice. >> Are you more of like a longer term like B like like I guess where has most of your gains come from in your investing? Is it just from like these longer term holds that you guys have done through like the venture side? Is it through like like multimonth swing trades? Is it is it the majors? Like what what has been like your like the strategy that's

allowed you to uh kind of fundamentally hit big winners in in the market? Yeah, all of my big winners have happened when I've had conviction, held for a long time, and gone in with size. Yeah. >> And I'd say once, maybe twice a year, I kind of get something that feels like it matches that criteria, and I and I do that where I've I've undeniably, you know, no edge is doing short-term, low time frame trading. Like I I just don't mess with that at all. So I think it's just about finding the places where you have really strong conviction and then not trying to diversify too much like actually concentrating a bet in a place that you know a lot about and have high conviction and just you know going in with size.

>> I I agree. I we've I've retired from purpose trading. I've retired from short-term trading. The the best wins have always been from uh multimonth to year maybe 18 months max. you get a really strong conviction on something. But man, Kevin, it felt like during pump.fun and all this, the the market shifted from like being early with fundamentals to like, oh, I'm just going to be the first one into something and then like like be one of the first ones out. Um, so I'm glad that you're that you're here on on KA still still believing. Uh, I think we need a bit more belief in this market. when it comes to the broader market, um, you're starting to see that there's not that many tokens that you really want to hold

and you're starting to see that there's also like, you know, the Magnificent 5, 7, 10 being created here, I think, especially this year um, in the space. I I I I I don't mean to ask like is are we gonna see an alt season again, but I think like the more prudent question is like how has your how is your investing framework as far as allocating to the market in terms of diversification changed over the last five, seven years, right? You've been around for quite a while. I think you're part of the original seven there with with Deli. So you've seen a lot. What is like the diversification kind of allocation strategy change even maybe just in in the last one to two years? How do you

think about that going forward with your own with your own portfolio? >> Yeah, I wasn't fortunate to be part of the original seven that that got in with Deli. That would have been a great time, you know. >> Okay. >> Crypto, but um have benefited a lot from working with these guys over the last four plus years. uh in terms of diversification, I mean, I I spent 15 years before crypto in traditional normie kind of uh corporate roles across consulting and and big tech. And so I just put money into diversified stock portfolios and then had a bit of a [snorts] trading account on the side for things that I was I was really into. And I would say when I got into crypto, the biggest mistake I made kind of back in 2020, 2021 and stuff was just spreading

myself too thin. you know, I end up with smaller positions across too many coins. I'm not managing them very closely and figuring out and seeing what's going on and staying on top of them. And now I find myself um being much more concentrated and I want to have good information advantages or or edges around the things that I hold. And when I look across the crypto landscape, I don't see too many things that I truly want to hold. I mean, there's this the sad reality of of where we are with all coins right now. So I I have like many people over the past one one to two years have diversified out into bit more stocks, metals, AI and and private investments outside of of crypto. And

then I've kept my my crypto investments quite concentrated. Kea being one of them. >> Yeah. Yeah. Yeah. Yeah. No, I I hear you, man. I hear you. Um Kev, last thing for you. When it comes to Kea, is this a multi-year trade for you? Is this a what's your time frame on on on this thing? >> Yeah, for me this was never one that I was going to get in, ride a quick pump, and get out. I felt like I I really resonated with the vision that they had. Um, and I believe I kind of treated it like a a VC investment. >> Yeah.

>> So, the lore behind Kea is they fair launched their token, believe it was March of last year, and they did it at a super low value, just kind of stealth launched onchain. 40% of the token supply dropped. A lot of people They thought it was a scam. Then it turned out that like legitimately they were backed almost entirely by Eric Schmidt of former CEO of Google as their primary investor. They've been building since 2022. And the more I got to learn about it, I said, you know, this is going to be volatile. I'm just going to put some away, treat it like a VC investment and expect that liquidity will come in three to five years. And so that's that's how I I look at that one.

>> And what would make you change your mind on this position? Yeah, I mean I I do follow what the team does in terms of you know their roadmap. Are they executing? And whenever I see execution plans start to go off the rails. So they're not hitting milestones on their road map. They're not communicating very well with the community and sharing updates. They kind of go quiet for a period of time. There's no, you know, new announcements of of things that they're working on. I kind of look at the execution speed and the quality of what they're executing. And as long as I see that, it's still, you know, is is wowing me. And the thing of just last week of of acquiring a bank and what that adds to capabilities kind of is another one where I say, "Okay,

that seems like they're still, you know, they're still cranking." Um, so yeah, when I see execution just sort of fall off and teams go quiet, that always makes me nervous. >> Yeah, man. >> Kevin, give us a a quick sense of, you know, what 2026 has in store for for Deli as well. Yeah, man. I mean, things have been quite good across the division. So, the consulting business that's tied into Deli Digital, the research platform, um, has been working with more teams and really helping around things like economic design, doing uh, tools to help teams really think through how to properly launch a token. We saw last year so many token launches just go miserably poor. We saw the ones that

worked out well, you know, tended to have some interesting dynamics around supply control that that may or may not have been kosher. I think teams still just can't figure out how to properly launch a token and and manage that process very well. So, our consulting side is very busy helping lots of teams trying to think through that. And then on the venture side, we continue to be active. We look at pretty much everything that comes through. I think we're more selective on cryptonative deals these days, as are many of the VCs that I continue to talk to. We just want to see um the bar raised and we want to see valuations come down to you know a bit more realistic levels. I think they got a little bit inflated in the 2023 24 era and and maybe a little bit of correction in 25 but yeah ventures is is

is still quite active and then um on the deli lab side we are focusing our our efforts on a couple of projects we've incubated and uh legion being one of them that's kind of like our baby. There's a couple of others, one we're going to be announcing more about. It's a probably the the most ambitious project I've ever seen come through crypto that has to do with AI data centers and a tokenization element um with that. So, we've been working behind the scenes on a couple of really interesting projects that we'll be announcing more about later. >> Very cool.

>> Awesome, man. [snorts] >> Man, Legion's epic. I'm so glad that they've had so much success. And for a while their Echo was kind of like uh you know on their tail and then now that they've gotten acquired it feels like there's like Coinbase hasn't done an ICO through their platform in the last two months. Um Legion's kind of the one like the one I don't know they're kind of like like the last man standing. So yeah. >> Yeah. If you like what Legion has done for helping bring capital formation to crypto, you're going to love what they do next. So stay tuned.

>> Love it. Kevin, man, thanks for your time. Have a great week. H have a strong week. Have a strong first half of the year. We'd love to have you on in a couple months. Get a get a refresh on Kea on the offiance category and just see where we're all at. >> Yeah, really appreciate it. Thanks for having me. >> Thanks, Kevin. See you next time. >> All right, >> there you go, Rob. You You got your question answered about what is Kea? I mean backed by Google, Eric Schmidt buying banks like we know that in order for a neo bank to have any sort of edge they have to they have to have distribution like a lot of this is going to be what is a neo bank you know they're going to be providing payment

rails and they're going to be providing some pretty stable source of yield maybe that comes from offchain maybe it comes from onchain a lot of these apps are going to look really really similar so how do you differentiate right if it's not tech and it's not product and it's not a user experience. like it's the only the only differentiation is you have to you know get that into the hands of the most people >> people right which is why the super app thing is a little bit scarier for any of the crypto neo banks because if it really just is a distribution game then well uh yeah we're looking at Robin Hood we're looking at um then Melo we're looking at Revolute we're looking at some of these others but I I don't think they have as much distribution globally which is where I think a lot of the edge

can come from and then again I I I truly just think that the actual crypton native user ers that are wealthy will drive a lot of value for something like like Ether, like these other neo banks compared to like the >> less financially savvy average neo bank or or fintech user. >> I I I'm starting to see uh a divergence between neo banks and super apps like >> kind of though they're all they're trying to play the same game. I I'm telling you that like the fintech super app is the game that all the fintexs are are trying to play and the crypto native are uh neo banks are trying to do the same thing. Earn, spend, save, transfer.

>> I Yeah, I mean a super app is going to verticalize the most, but I I think they're going to have the most trouble doing it. Like if you do have a super app, you're going to end up with like everything on one. It's just there's not a lot of winners in that game in the super app game, but I could see how there is more winners in the neoank world because you end up kind of chomping off and carving up this market with more niche. Um, and I do think that there's enough uh segmentation in the market with regards to assets. Like, >> yeah, >> the user experience for uh an app that gives you just just plain cash plus yield is going to look a lot different

from the one that gives you access to, you know, private credit for different forms of yield, gives you different like different levels of choice, >> right? And so yeah, I I think within neo banks, if if we end up kind of going in the financial super app world, there's going to be very very few winners. And I think you're the the cast of characters, the fintexs, the Robin Hoods that you mentioned are most likely to win the super app game. >> But if the if the game is more like this neoank world where look at banking right now, you have too big to fail banks and then you've also got a long tale of community and regional banks. Yep.

>> And and so I I think if it's the neo bank world, we end up looking a lot more like the current banking world. If we go and you know, these guys don't want choice and they just want simplicity and that's what this world ends up looking like. Super app, Robin Hood, that's where we're headed. >> Yeah, we got Moody coming up. Um the lead developer at Cubo Protocol. Let's bring him up. We'll talk things we snubs dexes in the neoinance market map. Not sure Moody's going to be too happy about that. We'll get his perspective on on on the category, hear what he has to say about what's going on on the Cubo side and more. Moody, what's up man?

>> Hey, thanks for having me on. >> Good to see you, buddy. >> Pleasure. >> Are you a NEO finance bull or is this just not going to work for you? >> Uh, to be honest, I don't I hadn't heard of it, [laughter] >> but I could I could be convinced. So Moody, we're uh we we've sort of seen like this convergence where you know for a while there was web two and web 3 was sort of this evolution of web two. Um but more recently we've seen how like Vitalik is talking about lowrisk DeFi. We're talking about how a lot of these tokenization platforms are bringing stable coins and rwas and different sources of yield on chain. And we believe that for this to what this looks like in a mature sense is it looks like

a lot of the companies with massive distribution of the current legacy financial world, Wells Fargo, Bank of America, like the massive Robin Hood, a lot of these guys with massive distribution end up tapping into DeFi in the back end, you know, as they're kind of forced to innovate and pay higher yield to their customers. And that's what we're calling neo finance kind of this convergence of like legacy finance distribution in front end with high yield defy composability in the back end. Tokenization is sort of the like the the upgrade that allows this convergence to happen. And so neo banks are a part of this. That's what we were talking about beforehand. Stable coin tokenization. All this is a part of this. And and actually we've had people reach out to us and be like we and we

released this market map with all these categories kind of laid out but we didn't include decentralized exchanges kind of we've had people reach out to us to be like where are the dexes like >> why are they not included in this grand landscape of of where you know this this space is headed and so you know kind of putting aside the term itself I'm curious as to where you see decentralized ex exchanges fit into this broader landscape of legacy finance, stable coins, like how these things are fitting together in the in what we're calling the neo finance world.

>> Yeah, I mean I I can definitely see that and I I agree with that. I I feel more and more like I'm working just like on regular like fintech backend stuff than I do like in some separate category of crypto. especially as crypto becomes more mainstream and more widely adopted. It's uh you know I could see Dexes fitting in especially well for things like currency exchange like uh you know rather than going to an airport you know paying some absurd fee you can you can do it with some decentralized exchange and pay a much lower fee. Um and uh yeah I mean it's it's the liquidity is there and it's free to use. So, I mean, not free, but it's much lower cost to use uh

especially because a lot of these rails um are just more efficient uh in crypto. So, yeah, I think I could definitely see it just being tapped into as the back end for for some of these apps like Robin Hood. Uh and yeah, I mean to me it feels it feels kind of like that's where things are going with Coinbase and and Bass. like the Coinbase could just end up being a front end for the Dex is on base and I think in a lot of cases it is like you can buy some things on a drrome now uh from Coinbase. So um so yeah I mean the argument makes sense to me. Um, >> yeah.

>> Have have you thought about uh getting more distribution for a Cubo through some of these types of uh frontends like right like I think another part of this thesis is that uh for better for worse DeFi power users clicking their ledgers on hot wallets and connecting their MetaMask and and Rabbi is not sufficient to scale this ecosystem further right to where we want to go. It's, you know, we've seen this play out, right, with Coinbase is Bitcoin back loans with Morpho on the on on the Coinbase platform. You've got Hyperlid plugged into Phantom. You've got Lighter is going to be powering Robin Hood's per platform. Uh, from what I understand, how do you think about the distribution strategy for a Cubo? Uh, and where do you guys see the next set of users

coming from? Because frankly, uh, you know, as I said, for better, for worse, it's likely not going to be, uh, from the onchain, you know, ecosystem as it is today. Yeah, I uh I totally agree with that. I think that's kind of like the the key of like our our V3 is that we we can't can't do the distribution. We don't have control over the user. In a lot of cases, it's going to be a web two user that's using Robin Hood. Uh so actually we we completely remove the DAO from the core contracts. There's no revenue collection from the core contracts in V3. Um, and basically if you're a Robin Hood or a Coinbase, you can white label our core contracts and and just deploy

some of our our pre-built code on top of them. And so if you want to build a DEX or or an exchange that's uh based on AMMs, you can do that using Echo's code, Echo's deployment and get all the advantage of the infrastructure we've built and the integrations uh without having to uh basically integrate directly with a DAO or or work around like a protocol fee like you would with Uniswap. Um that's actually not even built into the core contracts anymore. So it it's moved up a layer into the social layer uh with our new version. So we're hoping to get like distribution to these these uh these new users through through partners now. So uh we have like an open source

proprietary license which uh which says that if you don't collect any revenue then you don't have to pay any fees at all but if you do collect revenue from whatever you build on top of Echo then you have to share some of those fees with the DAO and it's negotiable. So you know uh if you already have distribution then that that fee share might be much lower than it is if you are deploying a DEX to a new chain for example or building a new brand. Um so yeah it's it's I definitely like I think it's really hard to be an upstart in crypto and try to build your own distribution channels especially when so many people are like vertically integrated. Uh so you know working with partners is kind

of kind of the goal of the next version. Very cool. Um, Moody, you were you were at UniS Swap and, you know, really integral in in UniS Swap V3. Um, what do you think of the the the beef out there between Alex from Aerodrome and Hayden from Uniswap? Like, and generally h how do you how do you see kind of the DEX wars playing out? >> Uh, yeah. Yeah, I mean I think I see a lot of valid arguments from Aerodrome, but I still I don't know if I'm like fully bought into uh like the Drrome style economics for the token. Um

I it's it's I'm much more convinced than I was at like Uniswap, you know, a few years ago. uh it seems like they're able to gain traction on a lot of new markets very quickly with the with the controlled emissions. Um and uh and yeah, so I I I'm I'm honestly still on the fence about, you know, which which way is better. I do find um the unis swap style economics a lot simpler to understand. uh you know you have revenue from that goes to the protocol and you have these emissions from incentives or whatever uh or you know funding the team development it

seems a lot uh simpler to me that the LPs collect their fees directly um but yeah I'm I'm interested to see interested to see what happens when airdrome comes to mainet I also am building echo with that in mind so I because you know there is no protocol fee built into core. You can build whatever economics you like on it. You could collect all you could keep all the users LP fees and give them a token instead. Uh everything's possible with the infrastructure we've built. Um and yeah, the goal is that they're all built on top of the same infrastructure and that just makes everything more efficient for everyone, gives better pricing, uh creates network effects, reduces duplicate work. I mean, you

know, you don't want to have 10 forks of the same code on the same chain. it's just a waste of gas and the money goes to arbitrageers uh and mev bots. So, so yeah, I'm hopefully hopefully we're positioned so that you know regardless of who wins it doesn't make a difference. >> Yeah, man. >> Yeah, go ahead, Andy. >> Oh, no. I was just going to say um just kind of about the the DAO shift. Is this because of like the token equity dynamic or the Dow governance dynamic or like what what has charged this decision to kind of change the way that the fees are being structured?

>> Um I would say it's a couple things. One, it's extremely difficult for us to get distribution as a new brand in crypto. I think it's very hard to sell users that you know this is trusted and secure. Uh also the token is already out there so you know people aren't there there's not some like uh lottery style return where you know maybe the token will aird drop and you'll make a million dollars or whatever that that I think that uncertainty actually is a big draw for these new applications. Um and since we've already launched the token we can't we can't do that. Um so so that's one thing and the other thing is actually just demand from you know people on starknet for example have

reached out and said hey I want to build something with drone style economics uh on starknet but you know I can't build a whole amm in Cairo that's going to take me a year plus especially if I don't have the experience so switching the model of echo so that it's uh a platform where you can build your own decks on top just made a lot of sense to me uh it it sort of solves both problems which is like distrib distribution. You know, we can we can work with a partner like Sushi, get them to build on top of Echo and and take a fee cut um and they deal with distribution and branding and marketing um and even go to market in some cases. You know, it uh and uh and yeah, the other part is uh um yeah, I don't know whatever I just

said. [laughter] Cool. Um, you know, we've been thinking a lot of sort of this this onslaught of what we think are more quality assets in the space. You know, you were kind of ahead of this with, you know, some revenue share programs and baking that into a Kubo, the token. Um, otherwise, like there's a handful of companies that are starting to realize that it's kind of table stakes at this point. And then you've got, you know, the the the larger tokens, ETH and Bitcoin and and some of the L1s. Otherwise, there's not a whole lot of tokens that are like investable out there. And so, you know, we believe that it's kind of this again this neo finance push, but a lot of these institutions coming into the space are going to bring assets with them that

ultimately appeal to a wider class of uh asset allocators and investors, whether it be RWAs or these tokenized yield products or tokenized stocks. um tokenized gold is like a four billion dollar industry now on chain. H are do you think there's any sort of DEX mechanics that are required like to adapt our thinking given that you know a lot of new asset classes are coming into the space. Um, I mean, the way I think of a deck like Echo is it's just it's just like it it's you you can it's you can sort of choose how much you want it to be like

an order book versus an AMM just based on the tick spacing. You can choose you can choose a very small tick spacing. Uh, and uh I think I think they're very flexible because of that. And uh and so to me it kind of I I'm not sure that something needs to change. I mean I know that they don't work exactly like order books or centralized exchanges. Um but they're they're sort of they're adapted for like a constraint compute environment. So they're not going to work the same. Um but like you can get a lot of very similar functionality just with a DEX which has extensions. uh like we even have a limit order extension on starknet which let which pulls your

liquidity whenever your order is fully executed. So in some ways that works very similarly to uh to um to an order book but you know I just I don't see I don't see that much demand for it. I mean we deploy this limit order thing and it's not really used that much. We just have a handful of users on starknet. So, uh, so yeah, I'm not sure what needs to come. I mean, it's I don't think we need like, uh, you know, like market hour extensions or anything like that. Like, it's I don't think we need to emulate, you know, Tradfi to to make it work. If anything, Trady is starting to take inspiration from DeFi and uh looking towards doing

uh um I think 247 trading or maybe 245. I'm not sure exactly what's happening, but uh but to me like innovation has moved much quicker on on chain than it has offchain, which makes sense because it's anyone can deploy a contract in seconds. >> Yeah. I mean, I think there the the tokenization, the RWAs and the stable coin sectors are primarily where a lot of the ma like the actual major flows are coming from. How do you see the evolution of uh tokenized asset trading on a Cuba, whether it be gold, whether it be to tokenized equities? What's kind of like like your road map or plan or

how much emphasis and focus do you want to actually put on, you know, the these newer asset classes coming on chain versus traditional crypto assets? >> Yeah, I mean, if if I was uh good at BD, I'd probably focus on that. I'm I'm good at dev and I mostly focus on dev, but that's uh that's definitely I mean the amount of volume that's traded in those asset classes is orders of magnitude higher than than crypto. So uh yeah, if you really want to grow, you know, 100x, that's probably that's probably where you have to focus for for someone as big as UniS swap especially.

Um so uh yeah, I mean for us, we're trying to get a foothold in the market. We're trying to build a brand. Um, and so yeah, we're you know, we're trying to like prove value and and grow our brand where where possible. You know, I think uh it's especially relevant today for things like buybacks which are coming online for uh companies like Optimism. We we have extensions that others don't and that that's where we're sort of focused is uh you know distributing something like T-W for buybacks. Uh I think it's a very elegant solution. It's worked very well for us for two years and uh and so yeah, I mean we've we've made a couple of pushes to to get people

to use it and you know uh I think just if if we can get one big partner there that that'll make a big difference in terms of proving usefulness. Um but uh but yeah, I I like our our strategy, our business strategy has basically changed from we're going to try and do BD and get partners to uh or or like direct liquidity providers or or uh or like new markets or new tokens. Uh we've changed from doing that to like try to get people to, you know, build their AMM on top of ours and they'll have their own uh distinct use cases. So you might have an AMM which is focused specifically on stable coins but

it's built on top of Echo's infrastructure. Um you might have one that's uh focused on commodities like gold and that's that's that's a step or one which has some extensions but it's all in the same same stack same infrastructure. Um, I think stable coins in particular, you know, we could see some traction uh for for new stable coins, especially because we have uh extensions which which let you distribute fees directly to the pools that just came out. Um, and uh and that could be really useful for something like Bold and Liquidity. Um, >> yeah.

>> Yeah. Moody, what's on the agenda for you guys for the next three to six months, Q1, Q2? close us out here and any closing thoughts as to what's coming for Cuba. >> Yeah, so we just launched V3. Um we we launched on Ethereum and Arbitum. We're waiting for uh some updates to the OPS stack chain so we can deploy everywhere. So getting Echo infrastructure everywhere uh uh live and then integrated with things like Coin Gecko. Um we just had a Blockworks dashboard released. So uh so basically just making it available everywhere just increases the value of our infrastructure and that and that's what we're focused on. uh integration with aggregators like uh 1

in 0x parasop swap just the the basics on on mainet plus everyone else on all the other chains um is sort of the key key piece we're we're delivering in the next uh couple months and uh and then yeah after that it's really about launching launching with these partners and and uh and making sure that all these all these use cases have someone you know covering them. Um and uh and also helping them with their go to markets and and that sort of sort of thing.

Yeah. >> Yeah. Awesome. >> Appreciate it, Moody. [snorts] Um yeah, I mean you guys have been able to build, you know, I think the most gas efficient decks to date and so it makes sense, you know, as more activity comes on chain, they end up, you know, going into some of these extensions that that you're talking about. So, uh, great work on on the engineering side and, uh, yeah, always a pleasure having you on the show man. >> Thank you for having me. >> Thanks, Moody. Speak to you soon, man. >> We'll see you next time. >> See you. Cheers, buddy.

>> The distribution battle continues, man. It continues. >> Especially for Dexes, especially for PERS. It's huge. >> That's the question. I mean, it's like it's not only just like multiple chains, right? It's like it's full on, you know, multiple front ends and up and jump and and upstarting full venues. >> Yeah. Yeah, I mean you could even consider like some of the things that Moody was talking about as far as going and distributing his infrastructure at Kubo's infrastructure into different asset classes and kind of segment like just further entrenching and embedding a lot of this infrastructure deeper into you're right like a lot of the multi-chain but also the the legacy finance landscape as well. Um, and a lot

of that comes down to BD deals, distribution. like there's going to be some kingmakers of DeFi products, you know, with this vision of them in getting integrated and embedded into legacy finance and let let them do the distribution part. >> They're just going to end up either acquiring or buying or, you know, integrating a lot of these DeFi protocols that are going to end up some of these DeFi protocols are poised to do extremely well if they get the right integrations. >> Yeah. All right, guys. We have our last guest of the day, Jess Hgrave of Wallet Connect. They've just launched an epic new product for payments uh and point of sale. So, we're going to take a quick

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Havi is fast and private. [music] Welcome back to another episode of Stabled Up, our premier weekly show covering the ins and outs of digital dollars, stable coins, and the future [music] of decentralized finance. The >> show is made possible by FRA, and FRA is powering the financial engine of the internet, powering FRXUSD, and genius compliant stable coins. This is the stablecoin super cycle made possible by FRA. Now enjoy Stabled Up, our weekly stable coin show. [music] All righty, guys. Welcome back to Stabled Up, our weekly premier stablecoin show brought to you by our friends at Fracks, powered by FRXUSD,

FRAXNet, and more, a leading stable coin provider in the crypto economy for the last five plus years. Today we have Jessrave. We are going to be talking about stable coin payments at scale. Wallet Connect Pay has been a big big news in the in the NEO finance sector from last week. Crypto payments are scaling. Massive cryptocard volumes. Revolute and neo banks are issuing wallets to the mass market. Traditional banks are enabling retail stable coins and wallet connect Pay is going to be offering cashback style rewards and more. Jess, we'll get into all of it, but first of all, how are you? Big week.

>> It has been a big week. Um, one that we've been, you know, working towards for a long time. I feel like I've been working towards it for a long time. I've been thinking about crypto and payments for many years now. Um, and so very excited by it all. >> Great. Awesome. Yeah, Wallet Connect's been in in the in the stable coin space, in the uh multi-IG kind of wallet signing space, in the w in the wallet and kind of user interfacing space. But it really feels like this is like a very like one one-sided jump into where you believe the future is headed, which is payments for stable coins at scale. And I think yesterday actually or the day before, Santiago Santos put out a

article about why he thinks B2B stable coin payments are are going to absolutely explode. So let's just kind of start with some of the thesis here of the product, then we'll get into some more of the actual specs and details. Why are you so bold up on B2B stable coin payments? Why is this going to happen? Why is this going to work? Talk to us about why this specific niche is set to grow big time this year and into the end of of the decade. >> Like I think we see people moving onchain in all the various like form factors and across all of their business lines right now. So businesses are moving on chain and managing their treasury onchain. Um, as a result, people are going to be want wanting to

pay their suppliers, pay their employees with with um with assets that live on chain. We saw um the zero hash gusto announcement for contractor payouts. People are going to want to get paid in stable coins. And with wallet connect pay um you know really what we're doing is building on top of our existing network and our infrastructure which accesses about 700 different wallets u many thousands of applications already built on the network and makes a really seamless um payments flow for consumers so that when they go in store with Inenico partnership or with any of our other payments companies online um they're going to be able to pay for goods and services with those assets that they now hold.

[snorts] The uh Inenico partnership I think is is one that caught a lot of people offguard and and was a wow moment for the whole industry. Uh this is something that I know I go into restaurants and shops and I see this as the pay the point of sale provider and so to to associate that with wallet connect was was a big eye openener. Um give us a deeper sense of how it works underneath the hood you know I I tap my normal card. What are what is the process for on for businesses to onboard wallet connect pay? Are do we kind of get all the Ingenico ones by default?

Are they are are you going to be going to businesses and kind of picking them off? Um tell us a little bit more about about the ins and outs of this uh this product. So user experience connect pay you scan the QR code instead of a traditional like crypto experience where you're asked to connect your wallet and then sign a transaction. You're taken through what feels look and looks like a payments experience. So do you want to pay with this asset? Yes. Click pay. one and done. You don't need to think about anything else. Um and and you can pay with whatever asset is in is in your

wallet. On the other side, um we unfortunately it's not a tomorrow on all Inenico devices. Um uh but it will be a gradual roll out with with both their direct merchant partners and of course also with their acquiring bank partners and payments companies. So um they cover about 40 million uh terminals worldwide today. Um and you know we will hopefully one day be an all inico terminals but right now a merchant either needs to opt in um directly with withico or ask their PSP um and we hope that a lot more payments companies we've got several in the pipeline um but we hope that a lot more payments companies are going to switch this on in in the coming years

because we do see demand from merchants because they want to be able to offer this to their end users um gives them lower fees uh faster settlement times um often higher basket value um higher transaction value for end users. So tons of reasons why the merchants want it um and why those PSPs should consider enabling it. >> You've argued that that um the with regards to the payments for actual consumers to be interested in using uh some of these payments, right? Cashback style rewards is interesting and I'd like to get into that. But when it comes to the B2B payments landscape, when you're explaining what you guys have built to other enterprises and businesses, is it as easy as saying

faster settlement times, cheaper fees, instant, you know, instant payments, um, you know, more profits for your business, less money paid to a credit card provider, less fees paid to Stripe or like what is that conversation like as far as understanding and educating about stable coin based based uh, flows using wallet connect pay. >> So for most merchants, I think it's very unlikely today that any merchant is going to say, "Right, I'm only going to accept crypto." Um, that means that this needs to sit alongside their existing payment methods. And for a lot of merchants today, they will accept card, they will accept cash if it's in store.

If they're online and e-commerce, then they probably accept other things like Cler as a like buy now pay later method. they might accept other account to account-based payment methods like um open open banking in the UK or trul or or anything else. So already in existence are hundreds of different payment methods and very few of them are global mostly just the card networks and the alternative payment methods tend to be more localized but really wallet connect pay sits alongside all of those other payment methods. Um and that means that when we're talking to a payments company about enabling this we've got to speak their language. they actually shouldn't need to understand how crypto works underneath the hood. We should just be able to deliver the benefits of

this as a payment method to them and to their merchant. So, we plug into their existing systems. We give them the reconciliation data that they need in the format that they need it. Um, we handle all of the complexities of crypto ultimately just give fiat out at the back end to the merchant or to the payments company. And this simplifies their journey um in crypto completely. So really our goal here um is to put it in language that they understand which as you said is um this is cheaper, it's faster, it gives you these additional benefits uh it's global and and you can launch it really easily uh with wallet connect pay >> and and do you see a world where this evolves to um and I guess right now give us a before and after right we've got

fiat coming out when it hits the merchants but when it comes to the consumers that are coming at the point of sale are we expecting them to come with stable coins or do you think, you know, we can bring fiat to the point of sale to, you know, a regular consumer? It looks like they're just using fiat. Are we going to end up integrating stable coins in this middle part to improve settlement times, improve settlement costs? So, it looks like, you know, fiat in, fiat out, but we kind of move the money with stable coins in the middle. Do you think that's that's one of the end states that we ultimately get to? I mean, I think the ultimate end state is like all all pieces of the economy sit on chain. So, um people are paid in stable coins and we're seeing

that growing a lot today. Um so, they're getting paid in stable coins. They want to pay for things with stable coins and then those companies are paying their employees and buying from their suppliers and paying all their bills in stable coins. Ultimately, everything should sit on chain uh over the long run. Now today um typically we see most people who want to pay for stuff with crypto or with stable coins already have those stable coins. People aren't going through the painful on-ramping process um just to to make a a transaction that typically already have that. Um so that number of people is is growing. Um and I think actually if you if you look at it the other way round today many merchants want to take fiat out at the back end.

They don't have the right setup to be able to accept these payments directly in stablecoin. But they're they are moving almost from a separate thought process. They're moving their onchain um or or their treasury management onchain anyway. And so you can kind of close the loop in a way. And eventually we we may remove that fiat offramp um kind of component and the payment goes all the way end to end in in stable coins. So I think really the long the long-term game should be that we don't need any of those traditional rails. Obviously, that's a a a nice dream to have and um will be uh a long long time away. But I do think that a very meaningful proportion of payments, B2B payments, consumer payments, um salary payments,

payouts, um how people are managing treasury is going to shift onchain over the coming years. >> A study done recently by uh I'm looking at it now, Mckenzie and Artemis. So, you know, two two data providers in this consulting firm that said, um, granted the the stable coin industry right now is upwards of $380 billion. Um, most of that is currently in B2B transactions. That's accounts for 226 billion. Uh, remittances is 90 billion. Capital markets is 8 billion. Uh, true stable coin payments represent just 0.02% of the global two quadrillion dollar payments market. And so I I think you guys are currently sitting at where the

bulk of the stable coin activity is happening in the B2B payments category, but as we look at payments as a as a whole, that whole category of payments, where you know, do you see the puck moving next in terms of how we're going to because, you know, we agree with you. We think 100% of the four quadrillion or the two quadrillion dollar payments market will be on chain. But how do we get to 100%? Right now we only have a 02. Is it more growth in B2B? Do we ultimately get more remittances or is it more retail? How do you think the the stable coin market at large starts to cannibalize and supersede more and more of the global payments market?

>> Look, I think all of these things are very symbiotic and I think really you need all of the pieces in place to make it make sense. Um, does it make sense to receive all of your salary in stable coin if you have to offramp it all? Yeah, maybe for some people, but probably not for many. Whereas once you can actually pay for everything, then it might make more sense. Similarly, if you're a business, um does it make sense to move your treasury onchain if then you have to offramp again to pay your suppliers? Probably not. But if you combine the treasury and the supply chain payments um together might make more sense. So actually, you need a lot of this this stuff to come together to make it make sense for people. Um the other thing you need is the right

incentives and for people to um have the right motivations to do this. And that means giving them great user experience so that this isn't worse than what they have today. And I think until now crypto payments are arguably a lot worse than than a tap to pay card experience. So that's one of the things that we are really really focused on is making that user experience great. And then you need to think about who is incentivized to do what. And that's where some of the and it's really experimental at this stage, but that's where some of the like cashback experiments that we're running, these kind of like rewards uh or like interchange type rewards that we're giving to our wallet partners and to other people um as part of that flow hopefully create enough incentives to

make people change because we all know that consumer behavior can be really sticky. Um, and so we need the right motivations. Merchants offering you a discount if you pay in crypto to kind of change that behavior, for example. Um, lots of things that we can do there to to try and experiment with that. But that's definitely going to be one of the um, I guess challenges for crypto payments over the coming years is how do you um, take what people are used to and make them use something different. >> And to your point, incentives are a great way to do that. Uh, could you just could you give us a sense of the incentives that are out there now? and and tell us how are businesses and users able to take part in these incentives.

>> Yeah, so what we've just announced for like the launch of Wallet Connect Pay is that for the initial period end users paying with with Wallet Connect Pay in store um or online will get 2% cash back. Um and then we've got some other cool promotions I think coming up with a few merchants who are going to offer additional um discounts. We've got a few asset um like stable coin issuers for example who want to offer additional incentives for using their specific stable coin. So I think we're going to see that incentive pool um and and the types of incentives that we can offer grow over the next little while. Um how do people get involved? I think um if

they if they want to become a direct merchant um and re then they should reach out to us. We have a few partners that we're doing that with. We're getting great feedback from them. It's a great learning experience. So, if people really want to get started ASAP and their existing payment provider can't give them crypto payments and they should get in touch with us. Um, but also, but I would encourage merchants to speak to their payments providers, tell them that they're interested. Um, a lot of payments providers uh are interested in this, but they want to know that there's demand from their merchants. And so, um, you know, have those conversations with your with your payments partners.

>> Yeah. I mean this this article about what's stopping you from receiving stable coins is particularly interesting as well as it pertains to the incentives here because you know I think I think there's a still just this big education gap as well as just a convenience gap right so let's talk about what actually happens when uh you know someone goes through an inenico physical kind of like toast toast machine and you know taps to pay right you you tap to pay your credit cards come up you just click on Face ID scan. Done. Similarly, I assume how we want this flow to work for Wallet Connect Pay is either as you guys have a in a QR or a tap with a crypto card. Um, when it comes to actually using the

crypto that I have on a mobile app on my phone, how is that going to work from point of sale perspective, right? So, what is going to stop me from from being able to actually spend my stable coins that I have in a wallet connect app, in a MetaMask, in a Phantom, etc., or if I have like an EtherFi card or a Crypto.com card on my tap to pay? How like what's going to stop me from actually being able to do that in the real world as this like actually rolls out? Is there a specific requirement from the user side that I need to have in order to be able to spend uh my stable coins?

So, I think there's a really important distinction between spending stable coins um on a like stable coin native or a cryptonative payment uh kind of method versus what we what we see in the market today as stable coin cards. Um if somebody's got a stable coin card today, um that's usually a Visa or a Mastercard. And what happens as part of that flow is that the moment that you tap your um stable coin card, those stable coins leave the onchain world. They go straight back into the old world and the rest of the payment flow is completed on those old Visa or Mastercard rails. It means that the merchant doesn't get any of the benefits, doesn't doesn't get cheaper payments, doesn't get faster settlement

time. They're basically just a Visa transaction or a Mastercard transaction that are pretty indistinguishable for the merchant from any other card transaction. So, those stable coin cards are great for end users because people want to pay with crypto, but they don't bring much benefit to the rest of of the ecosystem. Um, and they certainly don't keep assets on chain. Now, what we're trying to do with Wallet Connect Pay is keep those assets on chain for as long as possible. make sure that the endto-end payment flow can take place onchain. Um that means that when you scan your QR code with your wallet and you mentioned MetaMask, there are hundreds of others that this is compatible with. Um when you scan that QR code with your wallet, um the the

money is actually moving onchain. It's not being offramped at the point that you tap it. Um uh for some merchants it's going to be offramped but eventually we can just take that piece out and people can be settled um end to end on chain. Um for you as a user looks like you scan the QR code and then you're asked to basically pay. It's a one-click experience. Um I think over time we're we're hopeful that we can also translate that to NFC experiences. So it's much more of a tap rather than a QR code scan. Um although in some parts of the world the QR code is a very familiar form factor for payments if you go to Southeast Asia or somewhere. Um but we want to make this feel as uh as

close to a like web two payments experience as possible so that everyone um feels comfortable making those payments. >> Yeah. Yeah, I mean I think that uh the QR code on the in the western world is a bit is a bit less than like a bit less accepted than the tap. Um I think generally people want the the easiest flow. And I'm not sure like basically what what you're getting at here is that you want to make it so that the that the the stable coins stay onchain and the money stays in the onchain environment throughout the entire sales process into the end of the sale rather than having to do the off-ramp or on-ramp process.

Um, and so that would that then require the business that's accepting the stable coins to also be willing to hold stable coins in some sort of like uh wallet or account or or like if I'm a business and then I get paid in stable coins through wallet connect pay, I have to pay my employees, my property taxes, my rent, it aren't I just going to want to then offramp that as well and and pay that or is the idea then, you know, I guess in the future to be able to also pay your expenses with that same stable coins that you've just received. Yeah. So today we absolutely enable merchants to receive fiat out at the back end. Um to your point, not all of them have wallets and not all equipped to do that. Um and so we manage the

entire payment process onchain and then at the last mile we do a conversion to fiat to settle to those merchants. Now obviously the end state is that we don't need that. Um, and as more and more merchants also have the treasury management piece and um, everything else set up, um, eventually we can just take that out and kind of join the dots at either end so that the payments go in in in in stable coins and go out to merchants at stable in stable coins. Um, we'll already see merchants or some businesses anyway wanting to pay their employees. So again, it's about as moving as much chain as much of this onchain as possible. Um, and over time I think we'll be able to remove some of those fiat components, but for now it's really important that a merchant, if

they want to, can take fiat. What would you say is is one of the biggest gaps or or obstacles still today to completing this value chain onchain? Like what what is what are some of the things that you you know are still yet to be accomplished here that that we're focused on going forward? Look, I think there's there is a lot not all of it within the wallet connect domain. We're really focused on those like payments experiences, but I think um for example um true like payroll for employees is still has some work to do when it comes to things like taxes and reporting. Um a lot of like government tax forms just aren't equipped to

understand when somebody's paid out in crypto. works quite well for contractors but less so for employees in oftentimes. Um so some of that I think a lot of existing um like accounting uh you know tools, accounting setups, accounting methodologies even in top parts of the world need updating. Um you know it's it's very recently that we've got real clarity on like what is a stable coin, what counts as a stable coin in the US. That definition is still evolving in other parts of the world. So, um, for a for a business to kind of truly truly be onchain and not even need a bank account so that they can pay all their suppliers, pay all their, um, uh, their rent, pay their employees, um, etc., and

then be able to accept all money in in crypto, pay their taxes in crypto. We're quite a long way away from that. Um but I think what we will see is these two worlds kind of um slowly intertwining. Um today maybe like 1% is is taking place on chain. Maybe tomorrow that's that's 5%. Um and maybe in 10 years time that's more like 95%. Um but but that fiat world and the existing setup that we have um has to work hand inhand with the the onchain world. We see that more and more. And so it's important that these two things are seen as being able to work together.

>> Yeah. I I see it very very similarly to the way that we're thinking about legacy finance where we we believe that, you know, banks everywhere are going to be forced to innovate. They're going to be forced to pay higher yield eventually, whether it's a result of regulation or a result of them just getting, you know, innovated by some of these neo banks. Um and and as a result, they're forced to sort of, you know, change and adapt their ways. Similarly to to what you're saying, I it seems like as an industry, the way to think of it of this is look, if we can frontload a lot of stable coin users in the front part of that value chain, these people they want to pay at point of sale with stable coins, it'll slowly start to force merchants and eventually, you know, the the the

merchants at a higher level like the municipalities, the tax collectors, the property taxes, all of these things and the payroll as well as you mentioned will be forced to accept stable coins and be more stable coin centric if we frontload the first half of that marketplace because more people are using them and and so I'm curious if you're thinking about it the right that that same way and if if so where what are some examples of of ge geo uh jurisdictions that are doing a great job of this now you mentioned Southeast Asia as a form factor but where are some of the more stable coin centric places in the world so that we can kind of use those as as a shining example.

>> So I think we're seeing two types of jurisdictions almost where stable coins are are kind of growing very fast. One is actually where like the existing financial system is not doing so well and people want to trans you know uh they want to move into stable coins sooner. So somewhere where people actually want to reduce their exposure to the local currency and want to hold their assets in a dollar denominated currency for example, there's a real pull there from the ecosystem to have stable coins because that's what people really really want. So we see that in um Latin America and and a few other countries um around the world. On the other hand, um we also see jurisdictions

where actually at the government level, they're very pro prostable coins, pro- crypto and want to see this happen. Um the US obviously has made big moves there in in recent years. Um but also, you know, the EU put out some announcements today. um not crypto or even payment specific but talking about like EU tech um to move away from like the dependence on on some big US companies. So I think there we will start to see um you know EU uh native payment rails um accounttocount payments or crypto payments start to be something that people become more interested in. Um similarly there are some other like very forwardthinking um

places around the world where crypto really has to be like legal tender like El Salvador and and other places. So um it comes both top down and and bottom up I think in terms of different places around the world driving forward uh that adoption. >> Yeah. Yeah. I mean, last thing from my end, Jess, with regards to the adoption side, um, and globally at at Davos last week, Jeremy Lair, the CEO of Circle, really had a big big headline hit with regards to how he sees agentic payments happening with stable coins o over the next five years. Really just this is going to be a massive use case for stable coin payments. I think of like micro payments on the internet. I think of using uh you know subscription based payments all these different types of

stable coin flows in an agentic sense. How are you building wallet connect pay and just generally how are you thinking about your strategy as the agentic kind of payments flows start to trickle in over this year next year I imagine next year we probably see some agentto agent payments happening. How do you how do you think about this from a business strategy perspective and uh from from a product perspective? Yeah, look, I mean, wallet connect has always been this like network that allows wallets to communicate with apps, and you can translate that pretty directly, which is that agents will probably have wallets uh that want to communicate with apps. And so, um I think a lot of this is is very aligned with with how we've always seen the

world. Um it's just that instead of the you uh Andy controlling the wallet, it will be your agent that is controlling the wallet. Um, obviously we need to make those messaging types compatible. Um, but everything that we do is sort of in line with that, in line with things like the X42 standards and others. Um, and really, you know, we have a a great history at Wallet Connect of creating standards that are open source. We write the a lot of the chain agnostic standards. Um, we've written several EN Ethereum improvement proposal standards and we create a lot of our own standards for how our wallets and apps should interact with each other on an open source basis. And I think that um

there's some great work being done and and obviously lots more to do. Um, but that it's it's really rooted in creating these standards that it's going to make it easy for people to to build on these systems. >> Yeah, ma makes a lot of sense. Uh Jess, just give us give us some closing thoughts here and tell us where, you know, Wallet Connect is headed after this. You guys have, you know, this flagship partnership and uh are doing tremendous work. Um any key milestones uh as far as uh you know, direct merchants or how much volume you'd like to see going through Wallet Connect pay uh throughout 2026?

Well, across the Wallet Connect network, so not payment specific, but across the wallet connect network. Last year, uh we had just over $400 billion of of of transactions taking place. So, for the network, I would love for us to to build on that this year and we're ahead of plan, I think. Um although we're only at halfway through through January. So I think we at the network level will continue to see that growth for wallet connect pay it's very hard to know because this is still such a nent industry but I think if you look um at people's willingness to pay with crypto with these crypto cards albeit um those numbers have gone up significantly and so that demonstrates to me that people want to be able to pay with crypto. Um,

I think we'll have our first merchants with in with the Enenico partnership coming online hopefully um at the end of this month or or early next month. So, we'll start to see that. We've already got a few merchants um direct with us live. There's a great coffee shop in Lisbon that people can go and use the new Wallet Connect Pay experience with. Um, and of course we've got all the existing partnerships that we have with other payments companies where you can use that more traditional wallet connect flow but still execute a payments experience. So um, you know, for me 2026 is about bringing more people uh, a great payments experience and more merchants who want to accept crypto. Um, whether that's with us or or generally I

think that's the direction that we're all um, all pushing towards so that we can keep more things on chain. >> Yeah. Philip just market brewing >> trillion dollars >> quadrillions. Thank you for your time. Congrats on the wall connect pay announcement. Looking forward to the moves in in 2026. Uh it's funny how we've came from payments being such a a big part of the foundational infrastructure of blockchain back in 2017 2018 when Robbie and I joined almost like forgot about it all as if it was too boring for the last six to eight years. And then now we're back and it's like okay we're gonna get back to the most important things that we can do guys onchain at scale. Um so Jess again thanks for coming on and congratulations.

>> Thanks so much for having me >> guys. We'll take a quick break and we'll be right back and end off the show today. Thanks Jess. See you guys in a sec. >> Ye is built for big moments. the most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. [music] Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, if you are still using hot wallets in 2025, 2026, you are missing

the entire [music] point. Secure your coins. Get a Treasure at treasure.io. Go anywhere onchain instantly with relay.link. Relay is closing in on 10 billion transferred. Go to relay.link to bridge your Allr All righty guys. That's the show for today, Monday, January 26th. Great. Three guests, big news. Silver has the biggest volume ever.

Maximum volume. It's like taking over. It's a five sigma event. >> You know why uh I'm bullish on the catch-up trade >> is because because remember like the central the central bank thing, >> you know, you could say that gold's run up >> is dominated by central banks accumulating gold failure of the US dollar reserve currency. But if that was the case, like we wouldn't see copper and palladium and silver and uranium. those wouldn't be going up, too. Like, this is a general thing. And I I do believe that like Bitcoin's Bitcoin's got just as much sauce as copper. And >> guys, it's a big week. We need a we need a strong close here from the crypto coins this week or else

>> or else >> or else Andy's gonna go back to surfing and streaming and we wouldn't we wouldn't want that. Come join us. Enjoy the green candles with us, Andrew. >> Guys, thank you for being here today. Hey, we'll see you tomorrow. Mahalo. [music]