Visa Stablecoin Strategy, N3on Crashout, AXL Acquisition, JPMorgan MMF on Ethereum & Nexus x Rialo

Transcript

[music] [music] [music] How about the [music] [music] >> [music] >> I'm the mother back [music]

back. [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. You finally said it. So, 80 bullets. I'm bullish. [music] We're bullish.

>> [music] [music] >> down. I'm about [music] [music] the >> [music] [music] >> How about the Buff?

[music] >> [music] >> I'm above the [music] [music] >> [music] [music] >> Corola 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. >> Yes, sir. Welcome back. Happy Monday, December 15th. I'm here solo dooo. Rob's in New York City with his girl. Taking a couple days to enjoy the sights. I'm here watching the one minute chart on Trading View wondering where it all went wrong, guys. I'm just had a great weekend. Hope you guys did as well. I um I have not really been paying attention too much to the charts. It's just I was the bearish one with Vance and Mike last week. I got thrown under the bus. I'm looking at the markets now. It really doesn't look great. Um, guys, I don't know. I really don't know. But, uh, what what I do know is just as long as you

sticking with the program, the institutions don't care. Tom Lee bought another, I don't know, $400 million of ETH. Michael Sailor bought another billion dollars at 92,000 per Bitcoin. I don't think they care. I don't think you should care. But what is happening is is the institutions are sell or buying, retail selling. I know you don't want to be on the wrong side of that trade, but guys, I don't blame you. It's looking it's looking interesting out there. I think there's a lot of tax loss harvesting happening um amongst other things. So, we'll we'll kind of see. We have a pretty good week. We have a awesome guest, Lark Davis coming on tomorrow.

Uh we've got some sick other kind of uh uh like AI tokenization stable coin guests coming on as well. So, should be good. Today's going to be uh back to the roots. So, if you guys weren't with the rollup before we kind of started this whole streaming thing about nine months ago, we we kind of got our bread and butter by doing a lot of um technical conversations with builders. I would say uh we were in the weeds always 2023 2024 talking about uh the newest developments in you know the modular blockchain space in the uh different types of interperability different types of um you know UX improvements and protocols

and so in in light of that the bull market came obviously it's some would argue it came and went already that that fast um and we've kind of gotten to much more into the news and into the finance and into the institution utional crowd and we have some amazing news for you guys for next year for the fans of the show. Stay tuned for that. Uh that is being sorted out as we speak. But you know today's conversation is going to be more around the more around the tech more around kind of the cryptographic primitives that that are underpinning a lot of what we're doing. And I anticipate if we do get into a longer slower bear period for Q1 of 26, we'll probably spend more time talking about

the tech. So, that's kind of where my head's at, guys. I'm feeling good. It's Monday. It's really like the last full sprint week until the end of the year. I think a lot of teams are trying to capitalize on what's happening. Something to uh bring up for you guys, though, you know. So, we have a lot of Telegram chats in the back of the um you know, back of house with different teams. Probably have, you know, well over a thousand Telegram chats with different teams from the last six years. And I must say guys, it is that time of the cycle of the market where we have seen multiple, you know, probably a a hand or two hands full of teams where their marketing department is getting restructured and they're having these

organizational restructurings and they're kind of changing the dynamic of their teams and thinning out and leaning out. And guys, usually that is a leading indicator of where people think the market's going to go or it can be also a lagging indicator for where the market's been. So that happened the last couple weeks and so I was just, you know, I pay attention to these things as running some as being, you know, deeply involved in the space. You kind of have a nice opportunity to really see what's happening in the internal level, not just like with the price, but all the other factors that make up the market.

Excuse me. And I think um yeah, it's pretty clear that there's restructuring. Let's call it that. So, just wanted to put that in front of you guys. Guys, we got a bunch of stuff to to cover. Let's go ahead and get get into it before we get Jen and Jen's and John up today, our cryptography guests. Um we're we're going to work through a couple different things. So, why don't we flip over to our boy Neon um who has launched a memecoin and is uh mentally struggling. What a shocker. [snorts] What a shocker. Um, so Neon's taking a mental health break uh phase of his scam according to Beanie. And this is after explicitly promising parabolic returns

to the buyer of his coin. You don't hate these people enough and for sure don't hate the mega influencers that promoted this and are now radio silent enough. Neon tweets, I love you guys so much. I'm laying down in bed thinking, why did this happen to me? I would do anything to be able to get up and stream right now. I'm going to sleep for 24 hours straight and hope I wake up a new man. I'll see you guys soon. Don't forget about me, please. We have too much [ __ ] coming up this month for this to be happening. And as you can see, I mean, the price is only down like 10% in the chart. But yeah, man. I mean, look, we were going to try to have me on on the show. Um, we knew that it was going to be about this coin because we were going

to angle it kind of against this um because we figured this was going to happen. But I think we can firmly firmly say the celebrity streamer coin meta is a terrible fa failed experiment. We can say that Trump and Mellennia literally ex exterminated the trenches, exterminated them, completely killed them. We can say that every celebrity coin pretty much up to this point has been an absolute money grab scam. Even Iggy Aelia's coin that was like she was at least part of the culture and of the vibe on crypto Twitter. Yeah, still pretty much a scam. So, every single celebrity coin has came every single celebrity or streamer that has came into this industry has simply came in tried

to extract value from memecoin participants and then their charts all look the same and then they've left. They literally ran the same playbook. They they sniped the launch. They pre-sale their friends. They all pump it up one time. They get exchange listings. Then they p uh pursue to just dump it on everybody. Trump started it with the most giga giga giga exit scam launching all the way to $80 billion. The short vesting. The rest of these guys didn't even include vesting. They just kept whatever tok tokens that they had and dumped it on everyone's head. Guys, I would never touch a celebrity coin like this again.

A streamer coin, a celebrity coin. Look, my call to action. If you're someone who is famous, you want to get into this space, you got to talk to guys like Koopa Troopa. You got to talk to guys who are actually going to show you how to build a brand in this industry without just launching a coin and exit scamming. Guys, I know it's really enticing to just launch exit scam coins, but I'm telling you right now, if you're watching this and you're thinking about getting into crypto, do not do this playbook. It is not going to work anymore. So, sorry, Neon man. You're the scapegoat here, but it had to be said. Um, hope you hopefully you can figure it out, but I don't don't know I don't know who who's the marginal buyer

for for this token. I really don't. All right, guys. Uh, let's move on to some more positive kind of like this is so this is the barbell here, right? So, this is what's happening in the trenches and onchain neon mental health exit. Now, let's flip over to what's happening in the institutional world, and you'll see it's a completely different world. So, JP Morgan launches a tokenized money market fund. Um um they are going to bring a a and they're going to do it on Ethereum. Um and effectively what they're going to do is they're going to bring their $4 trillion of asset management onto Ethereum blockchain.

They're going to seed with a hundred million dollars of their own capital and then they'll open it to outside investors tomorrow. So this is literally the biggest cognitive dissonance that is happening in the space right now guys and it's those these two tweets are the perfect example of what's going on. So on one hand you've got celebrity streamer exit standing people and on the other hand you have JP Morgan institution saying hey guys by the way we're launching our tokenized money market fund on Ethereum and we're going to do it we're going to bring a 100 mil of our own money on chain and we're going to open it up to our clients as of Tuesday. Oh wow. Okay. So like these these forces are coming at each other in

like a different way. And so the way that I would like explain this basically is there is a contractionary force occurring in the cryptonative project participant speculator onchain protocol landscape where there is a trimming of the fat happening that is going to cause a you know a couple handfuls of winners to really rise to the top and a lot of losers. So that's kind of like the contractionary maturation phase that is happening on the cryptonative side of things. Then on the institutional side of things, there is this massive expansionary regime happening where there are people they are JP Morgan

coming into the space. There is large institutions like Sailor and Lee buying tons of Bitcoin and ETH. There are large fintech companies, Stripe, CLA, chains, stable coins, etc. tokenization. Larry Frink wants to tokenize everything. This is the cause of the cognitive dissonance on CT right now. And I'm telling you guys, it is easier to be on the side of, oh, we're getting mass adoption right now.

Yes, I need to be a bit more selective with my picks in the market and I need to be managing my risk, but my goodness, guys, we're are at the beginning of a multi-deade bull run. don't [ __ ] this up versus it's all over. My altcoin is cooked. There's never going to be another opportunity. I think I think that's just not how you can look at it, guys. So, that is awesome. Shout out to JP Morgan. Let's keep it rolling. Uh there's more institutional news. There is even there's even more to it. Um let's talk Hyperlquid here now. So, Bitwise just filed its amendment for the hyperlid ETF uh which added the 8A thing, the fee and the ticker B hyp. Usually that means launch is imminent. Stay tuned.

Hyperlquid ETF would be absolutely electric. Um this is th this means that we are literally going to see the rise of boomers buying our bags way higher than what we bought them at on public exchanges. And it's freaking amazing. Face orange. We got a little chat guy going on. So, look, I'm stoked on this. I hope it goes through. I've been quite critical of Hyperlid as of late, and I think they deserve it. I think that there's competition coming. I think that people are not expecting anything to take Hyperlid spot. Lighter is coming and there are other platforms coming that are going to take some

attention, mind share off Hyperlid. I remain bullish but the thesis has definitely changed and as an investor you need to be able to adapt to the changing of the thesis. All right, let's move on to Visa. I think this is probably the biggest news of the day to cover. Um and it is again part of this barbell where um Visa expanding its its uh stable coin strategy. So Visa is expanding its stable coin strategy here. Um it's absolutely fantastic to see um Grialo.

Griallo, what's up, man? Uh Visa launch a stablecoin advisory practice to help institutions build stable coin strategies. Pretty cool. I mean, uh this just basically means that Visa realizes that they need to accommodate stable coins, um and that they're going to bring them into their everyday world. Um so I'm pretty bullish on this. Um, and yeah, I'm uh I'm looking forward to to seeing uh Visa kind of I mean basically what I think this means for Visa is hey guys like uh there's a lot of demand from our client

side to take payments in stable coins and we need to figure it out. Like I think basically a lot of these institutions are in the oh damn we need to figure this out phase, not like the oh let's just kind of dillydally and figure it out as we go. I think they feel the pressure. Like think about it, right? If you're a payments processor and you're sitting around and you're trying to figure out what's going on with your stable coins with your stablecoin strategy, uh you're getting pitched by these different, you know, cryptonative firms, these payment chains like Polygon, who's a partner of ours or Frack or Tempo or Plasma, and you're looking around and you're like, "These guys are promising instant settlement,

no fees, or very very little fees, 24/7 access, and they want to expand the US dollar dominance, which means that they're going to get government backing. So, if you're Visa, you're thinking to yourself kind of like, um, what the hell is going on here? We better have a stable coin strategy or uh, we're going to be in trouble. And so I think it's more of a reactionary um a reactionary kind of phase ra like or a reactionary kind of action rather than it is more of like a proactive action. I could be wrong but I think they feel the pressure which I think is bullish. Again guys the barbell continues to get further and further apart. The cryptonative e the

cryptonative contraction of the space is just so much different than the institutional expansion. And again guys, I I I just want you guys to be on the side of institutional expansion. Just think on the side of institutional expansion. All right guys, last one here. Um this is more about kind of like the state of the sentiment in the markets. I think there was an important tweet to cover. Let's pull this up here and I think we have our guests ready to go. So this one is for most crypto founders the peak is pre-TGE.

First of all, totally agree with that line. They feel like little snowflakes. They've raised a ton of money. CT glazing them 24/7 convince their geniuses. Why is that? One, because you get Kaido points, you get wall chain quacks, you get all this stuff pre-TGE. Plus, it is easier to be bullish on a project when they have not launched their token. The engagement on my pre-TGE lists continue to be spectacular. It is a neverending engagement farm to be bullish on pre-TGE projects because you get the most amount of hype. I agree. The downfall starts on day one of TGE when everyone dumps the token and engagement goes down. Slowly they realize no one gives a [ __ ] about

what they have to say. 225 views. 225,000 views. First of all, this guy CBB is like King Farm and Dump. Uh he's going to be a participant for the Arthur Hayes award. That's for sure. The the Arthur Hayes Pinocchio award coming soon on Rollup TV. Second, uh he's right. Uh the sad thing is that nobody gives a [ __ ] about these tokens after the founder launch. I'm thinking about some of these angel investments that we've done. all of the hype that these teams had before they launched their uh token was so incredibly high and like it's honestly just kind of depressing how the hype fades, your token chart looks sad and then you have to deal with that

reality at the same time. So yeah, man. I mean I just wanted to put this out there because I feel like Mega E's a big launch coming up. Monad was huge. It feels like nobody wants Monad to win. It feels like nobody expects them to win. It feels like I don't know, man. It feels like people want this industry to to not win anymore. It's honestly sad. Like, Senseman has got so bad on Twitter, so bad. It's just like, guys, it's the holidays, man. We're about a week away from freaking Christmas. Get cozy. Um, and uh get your head right, guys. So, we'll take a we'll take a quick break,

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Havachi is fast and private persp [music] glad to have you on. Um, Jen's Grath from Nexus and Jen, a new hire and new team member of Realo. Guys, happy Monday. It's good to hear from you. >> Happy Monday. >> Indeed. Happy Monday. >> Um, Jen's Jen, amazing uh name combination we've got going on here today. I'm I'm a bit bummed that I can't add to it. Uh, we've got some friends in the chat excited for this conversation.

Um, you know, so this one's gonna take us back into the weeds into some of the cryptographic conversation into the tech. Excited about that. Uh, before we do, just quick intro, guys. You It's your first time on the show. Both of you have quite the heralded heralded uh past filled of different technology accolades as well as achievements. I would love just a brief TLDDR so our audience uh has a bit of an understanding as to who they're uh hearing from today. So, Jan, why don't you start off? >> Sure. Um um Yan Caves you know like cryptographer distribute system privacy researcher. We also did a lot of like you know like actual practical building of of system and really care about

privacy and I guess Y and I also met when we wrote our paper together about privacy technology group signatures and here we are again something like I forget 25 years later since that paper and still working on privacy and making sure it happens. >> Yeah, that's that's very true. that was so like in the early days while I was doing my PhD and and I've stuck with zero knowledge proofs afterwards. So yeah, so my intro I'm Yens um I'm the chief scientist at Nexus and Nexus is building verifiable computation particularly very interested in verifiable finance um and building tools for that right now. Um and I've been interested in verifiability for all of

my academic and industry career. um developed a lot of fundamental technologies in zero knowledge. Bruce um invented pairing based snarks in 2010 and the most used scheme in 2016. Um so so that's my background. >> Yeah, man. I didn't real I mean I realized this morning that I was going to be speaking to the creator of Grath 16. Um that was uh that was quite the quite the achievement here. So uh stoked to dive into that. Um, Jan man, so let's let's kick off with the recent news, then we'll get into some of the technology. You just recently joined a company called Realo. They're building a

with a very unique perspective on blockchain design, really kind of centered around breaking this API problem down and really being able to integrate a lot of the current tech uh tech that exists on chain into, let's just say, the real world. Um, why did you make the this move? Why was Realo compelling? Let's get the news out of the way and then let's dive into the tech. >> Yeah, a lot of things. Well, I guess first of all, the company is called Subzero and Realo is really the product and you know like before real I was at the video foundation building the internet computer and after seven years of my job was done and I was ready for new adventures and you know like Subzero in particular realo you know really

targets to bring um privacy to web 3 also to bridge the gap between like web three and web two and uh you can't really do that without privacy. So having privacy like onchain privacy is really like an essential component. Uh and uh since as you said when I guess first started I actually went into crypto cryptography because of privacy because one fascinated me same for you had problem in zero knowledge proof like doing something without really proving or like revealing what you do like proving your over team without revealing your birth date and you know like my PhD was about ecash same thing and you know I think it's still not there in the

world and the We really want to we're at Subzero want to build real that bridges this gap so we can have you know real world application again which doesn't work without privacy. >> Yeah. Beautiful. Beautiful. And privacy has very much made its way back into the uh crypto discourse as of late. It's quite funny how some of these things that we talked about in 2016 2017 era that was when I first entered the space you know we got into the space reading books about you know like the Bitcoin standard and the truth machine and these types um kids nowadays they get into the space from memecoins so we're not going to get into that but let's just say we are uh we have a saying on the on the rollup called

return to fundamentals and I think privacy is a big part of that um so let's start there with this kind of evolution of ZK. Jensen, from your perspective, um you know, you've been working on some of these technologies for a bit as it relates to uh uh privacy. I'm curious about some of the of the latest works that you've been doing with regards to proving bottlenecks. Um we we've had a lot of the uh popular ZK VMs on on our show. What are some of the uh core proving bottlenecks that you're uh recently been working to solve? Um and just kind of generally how has that process been been as as of late?

Yeah. Um, okay. So, so first of all, I mean, look, I also got into to this uh world because I was interested in in privacy, right? But I think there sort of like two aspects to it, right? There's a verifiability dimension, this privacy dimension. And I personally, I actually think I'm more excited about the verifiability dimension, right? Of course, the cool thing about zero knowledge proofs is that you get both of them, right? you. So, but you know, if I had to sort like choose one or the other, I would probably go with the verifiability aspect. I don't know if you disagree with that, Yan, or agree with with that, but I think that would be maybe an interesting thing for us for us to talk about. Um, so, so anyway, yeah. So, so verifiability is like very

much what we do at at Nexus, right? And, and our goal is to really do verifiability at scale, right? So, we want to do verifiability internet scale. Um and we're sort like targeting first the financial sector, right? But but the hope is also to go beyond that and really have everything that is digital also be verifiable. Um and that means that everything should come come with proofs. Um right now there are like you know very huge computational overheads right. So if you take the best CKVMs right now and and you compare you say like let's do a computation just for like native computation risk five computation or something like that right and let's prove that right the cost of

the proof is like 10,000x or 100,000x the cost of just the native computation right so it's really expensive right and the question then becomes which kind of things can you verify well either they're so small so you don't care about that overhead right or things where you really want to you know the privacy so you're willing to pay that cost right and and basically the more we can squeeze down that cost of proving right the more things can we unblock that we can um do verifiable computation over so um so there are various u bottlenecks I think if we look at sort like a modern CKVM like the one we have at at Nexus

right I think about half the past is actually in something like permutation arguments, lookup arguments. So, so like inside this machine, you have to prove that you know something that happened at one point in time is consistent with something that happens at a later point in time in the computation. Right? If I read write something to a particular address, I should be reading the same value later on the next time I access that address. Um, and this can happen everywhere in the computation trace, right? So, so these kind of proofs have to sort like be sort like global in some sense have some sort of like global pro invariant that they satisfy and those are expensive proofs to to compute the recent works that sort of like try to

improve them and and actually seem to get some some performance benefits right so as long as we sort like keep improving on that one right then we will be able to have more efficient proofs um another cost for us is is the cost of committing to value so there's some sort Typically the way it works is that you so like do the computation. You get so like sort of data from every cycle the CPU has computed right and you have to commit to this so you can prove things about it later on. Um and those commitments come with a cost. So again people looking at how can we create the most efficient commitment schemes and bring that cost down.

>> Yeah. And Yan, I'm curious if you have anything to add there, as well as just like generally how you think about measuring ZK performance um in in in a similar train of thought with regards to the different types of this or different parts of the stack that kind of make up the full life cycle of a of a proof. >> Yeah, I guess maybe let's go a bit back very end sort of open versus like what privacy versus verifiability, right? And maybe we should, you know, like privacy means a lot, right? Or like can mean many things. Let's say that uh because it means a lot to both of us. That can mean many things. So, you know, like some people mean anonymity really where

there's like everything is hidden. You don't really see what's going on, right? And if you see things like Monero, it's completely anonymous. Then you have things like Ccash or actually can have a choice how much you how much you know like anonymity you want to have. I can say some transactions are private sometimes some are not and and ccash does them use your knowledge proof to actually prove that everything is verifiable right uh but that's very specific that in general a general application I mean you need to have the this balance between like what what data you can reveal and what data you cannot reveal right I mean and so this is balance between price where you know like full transparency or

like full anonymity and depending on the application you want to be somewhere in between, right? Like if you especially like financial, you know, when we go more to trafi or other applications, it's all all the same, right? You want to sort of be able to build your application in a way that both protects the price on the one hand and enables the verifiability on the other hand, right? And I guess it's you know like let's say you know like all the performance things aside right I mean I guess if I have a full-blown application I want to do all all in zero knowledge maybe that's not quite possible today but then there's of course other privacy technologies right like I mean full encryption multi-party computation or

even like people use TES to do some stuff in there so there's a whole tool box to use but because my point is really like and that's what we're trying to build at Subzero in realo that you're you're able to have this full spectrum right that the network provides you the primitives and then when you're an application developer then you can develop your application on top of that and and then just pick the tools and also really achieve all the verifiably verifiability that's needed also for compliance and so on so forth on the one hand and then also have the verifi verifiability because today if you use stratify right I'm like it's essentially fully trust to like a central party and and the beauty and power of of Bitcoin

or or blockchain or like distributed networks is really that you have this verifiability which instills more trust but also more security and so now in order to bring this like higher security higher level of trust to digital applications we need to have these both things right so we need to have this privacy for certain things there might be things that are completely hidden Maybe you just know what functionality does. So let's say for instance there's like a blockchain network right now it wants to bridge over to some traditional system. Obviously there is some authentication involved in there. So it just you know like an API key or so it's like the traditional mechanism that's uses is used. Um, and there's of course

many better ways to do that, but just the fact is like today in in the like web two world, APIs, API keys are used to access these things. And now if you want to do like a blockchain network that uses an API key to access the traditional service you can't do that without, you know, price without price or that whole computation being hidden, right? it and then you need to have like you know like have the API key in some encrypted forum and then feed it to like the like an onchain program and then the question is of course now how can you do this access to the traditional service and you know you could do it with full fully home encryption doesn't quite work so I guess here like things like TE is actually come in handy because now you

can do this computation this connection with traditional web on insider T for instance because fully homorphic encryption you would have to do this whole TLS it can be done right um but it doesn't really make sense so I think at the end of the day what we need is like this kind of toolbox and this is always hard right if you provide a toolbox to developers you need to make sure that it's you know generic enough but also specific enough so it's usable right and that's sort of the challenge we're up for when building real is that actually that we can provide this kind of services or these kind of tools to developers then they can build this uh real world application integrating with

with strat files or should we really get this verifiability that blockchain can offer to this space? >> Yeah, Jensen, anything to add there with regards to how Yan here is thinking about um integrating privacy and verifiability into what they're building with Subzero and Reala. Um I mean everything Yan says makes of course perfect sense right and and I wholeheartedly agree. Um and and and that is so like the beauty of zero knowledge proof that you can sort like very so like fine-tune the balance you know what you want to what kind of information is it okay to leak and and also what properties of that information instead of raw information can you can

you actually reveal right that you should have access to this particular system right or that you have a particular age or something else right um and I think it's very exciting right times that we're in out because people are like going out and and really looking at real world where can they find that kind of data they can prove things about, right? So, so an example would be that you take passport data, right? Which has a digital signature from the the state that you know that this is your name and this is your birth date and so forth, right? And then people use that to you know prove that hey I have a signature from the state that says you know I should be allowed to do this or I come from this country

and so forth right so they can sort like disclose very specific information they don't have to really show their passport anywhere right they can just disclose specific information right and I think this is something you know we are trying to to scale up I think both in real and and at Nexus right you know that you We want to, you know, make things as as trustworthy as possible, right? So, we want to use zero knowledge proofs and the verifiability that they give, right? Um, and then you also have the the the privacy feature, right? That you can also hide things that are not relevant or not needed in this particular

use case, right, to to disclose. Uh, so I think we're very much in in agreement here. >> Yeah. Yeah. guys. I mean, going to throw something else your way because, uh, you know, Yan, you mentioned Zcash and some of the primitives there and kind of building on how, you know, it's being marketed right now as quantum resistant private Bitcoin. It's like, you know, the thing that Bitcoin could never have done, right? It's like the the golden stepchild here. Um but but more more concretely guys from your perspective of building actual uh quantum resistant technology like how urgent is the transition to quantum safe cryptography for blockchains and which types of primitives need to be thought

through in in prioritization of this urgency. Uh is there a set of primitives that need to really be migrating towards this more quantum state cryptography first? How urgent is this dilemma? Is it multi-year, multi-deade? I know it's hard to say, but I'm curious both of your perspectives on this matter. >> Yeah, let me get my crystal ball. [laughter] I can see, right? But uh well, I guess I keep saying like we have at least five years time, right? I don't think like any quantum computer cracking cryptography will show up in the next five years. It might ever be might even be that it will never be there, right?

could be that we have quantum computers that are very useful but don't quite scale to the to the size that uh allows them to be to break the cryptography use right because uh we're already operating at like the atomic level here. It's not like when we had like the you know tube and uh the move of tube to transistors to integrated circuits which always like made it clear cleaner and more efficient and with quantum computer we are already operating at this level right so it's like hard to imagine that you could make this even smaller and smaller so I think that that's one against the um the limiting factors for quantum computer the other one is you know like for to

break crypto you need millions of physical cub Q bit and and the larger a quantum system scales, the more interaction it has with the envir with the environment and the more errors getting getting, you know, included. So that's why it might never ever exist a quantum computer that's actually good enough for crypto. But who who knows, right? I mean, like it's really like a crystal ball question, but um you know, like I'm good for the next five years and so I think we have time. Um and then of course the question is if you do something today you might miss like five years of evolution of quantum or postquantum crypto and and many of the cryptographic

algorithms that some of the blockchains today use. you cannot easily replace them with like postquantum securities like things like signatures encryption you can right but then if you talk about threshold cryptography or threshold signatures you can't you can't really I mean you can maybe simulate that by a set of signatures so there's many things that you can't really do yet also there you know like zero knowledge pros come in again to to make build some of those things um so I'm still sleeping like a baby I for now and of course you should build systems such that whenever it gets more urgent that you can sort of plug and play this cryptographic algorithms I

mean that that's like good design regardless you should never hard code you should always encapsulate your crypto so that you can replace it you have to think about key migration all of that anyways and then yeah let's see what you know like in again maybe in five years we have to talk about that but to It's not really urgent in many ways. It's like a marketing hype and you know we also have to distinguish between like signatures where you can replace them at any time and encryption where you know like you know if quantum computer comes let's say in 10 years then all the data that we encrypt today it will be readable whereas all the signatures we do we can upgrade right and uh so so it's also a bit different

here. Yeah. And then of course it depends on the use case whether you know the um encryptions we do today of the data is that still valuable or still makes a sense in 10 years. So it's not really urgent but maybe we should think about the encryptions that we do today. >> Yeah. Jensen anything to add? So, somebody hijacked the Yeah.

>> line. I don't know if it was me or if it was our boy. >> Let's go for a Let's go for a quick standby. >> Yet 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. Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, if [music] you are still

using hot wallets in 2025, 2026, you are missing the entire point. Secure your coins. [music] Get a Treasure at treasure.io. Go anywhere onchain instantly with relay.link. Relay is closing in on 10 billion. >> Okay. Yeah. So, so I for a long time had 2035 as the date for quantum computers. uh but but I think we have a more urgent question that now on our mind right which which is the AI singularity there have 2030 right so that's going to come five years before

and >> probably going to upend many other things and break many schemes as well [snorts] right so so I think we live in very interesting times right and I think that >> you know so so and in some sense from a zero knowledge proof perspective I'm you know not too worried about quantum computers because many of the techniques that we're using anyway are actually plausibly postquantum resistant. We're just using them not for postquantum resistance but because they're the most efficient ones, right? So um and then there's a question of like I mean there are other cryptographic schemes like signatures and as Jan mentioned threshold signatures and things like that where there's like it would be nice

to have something that was more more performant. uh but but you know many things you can actually do with zero knowledge proofs and and many zero knowledge proof systems are actually postquantum resistance so like for for other in incentives right um but uh but I think you know for me postquantum security is not the top of the mind it's really AI and how we deal with that right and I think that also has huge implications for for privacy right um so one example I would give is that um if you think about you know the ability of AI to generate deep fakes right I mean I think we're going to enter a world where

everything we see is not something that can be trusted because it could just have been generated by an AI right so we cannot trust our senses anymore and the question is then what can you trust right and you can trust maybe digital content that has been signed or that has been proven correct somehow now right so verifiable content and and there's one risk I want to mention I I do agree mostly with Yan when he says well you know signatures we don't need to worry so much now because well we verify them now right and then we're good to go um whereas encryption is something that could be broken in the future by post

a a quantum computer um but one worry I do have is that that you If we have uh if we are able to break the the signature schemes, right, then we're losing the verifiability of the data. So we may actually have like a history of data that's been digital signed, but now well, we could break that. We lose that history and we can't recover it because now AI is so good at generating fake information. >> Yeah. I guess just jumping in here, right? like it what I had in mind really that like if quantum computers can come come close right you go and maybe hash all your signatures into a big hash tree or whatever like the world state before

quantum computers there you go right I guess obviously you would have to do something like that it's not right it's a good I I love your question right what what could we do I mean okay so let's say people have been using so like signature schemes that are not postquantum secure right? We can sort like see a full quantum computer coming on on the horizon, right? And what do we do to preserve our you know our signed history, right? Um and I would agree I mean if we could sort of get the world to come together and say look this is all the data we will take a make a a giant timestamp of that right on we're using some postquantum secure scheme right and and then we know that all of

this was something that happened before right and and then we can prove that you know these are the things that we had before and therefore it was like you know this was valid back in a day where we didn't have quantum computers and therefore it must be authenticated. >> We sort of have that, right? Like I mean many people consider Bitcoin as that thing, right? And I was, you know, seriously thinking about like really dumping stuff onto Bitcoin just so that you already have it, right? And then at least what you have in mind. There you go. You can can go back to that. And that's really I guess the beauty of Bitcoin compared to all of these proof ofstake networks where you just, you know, have that and uh wait a bit.

Actually the other point J you mentioned like all this just reminded me like the authenticity of the information it's probably expired like you know like many years ago I wrote a patent exactly about that right like right sign your streams from your camera and all of that right because they all have this little TPM chip but not all of them our computers now have right and I think stuff like that we'll have to do very soon and obviously we missed the point to another thing that we discussed like putting all the world's like Wikipedia somewhere pre AAI because guess we missed that. I'm not sure if somebody out there did that make it take a snap took a snapshot of Wikipedia. I would be very interested. Uh but yeah I agree that like one of the problems also

now like how to distinguish that and obviously blockchain again can help in one way or the other. It really shows like where we go with our IT system like blockchain or like verifiable computer trustworthy computer that is out there open verifiable is like tremendously important and you know like in my say 10 years you maybe 35 for for quantum computers but but really that look all of the world's IT systems actually will migrate over to blockchain driven things just because it's more secure it's more verifiable and uh you know like bit Bitcoin hasn't been hacked and also that's why I said we all now because we really want to bring those

secured systems uh to the rest of the world so that we have this higher degree of verifiability and uh also the security really against all kinds of attacks that still happen very much today. >> Yeah. Yeah. and and and I think ZK will play a a lot of that. Also, just you know what what I'm seeing is actually more of these AI uh tools that are actually able to go in and be white hack exploiters of smart contracts. Now, um so on on cloud code, you can now basically build your own AI that is able to read solidity and other kind of Rust languages and actually go and uh interpret smart contracts and find exploits in real time.

>> Yeah. >> Yeah. I think I mean that's also super cool and and you know I think also exciting times from the point of view that now actually you know like uh I mean I haven't coded in years right but now with AI I'm back in the game >> get back to the game >> same holds for other people and but also makes it easier to you know port applications port like web two applications to web three right because now >> yeah it's really good at writing code it's probably you know I'm not sure whether I agree with you that that that 2030 will be the uh the singularity also here. Maybe that never happens. Who knows, right? But yeah, >> but I guess uh at least for for writing code and like doing that it's uh really

nice and I think it will help uh making help help us make the decision from the transition from today's system into more system that are that are working differently because they use uh you know blockchain technology zero knowledge proofs and all of that. So I think >> while having all these things that we maybe worry about we're also getting into tools actually that should address uh some of the biggest problems that we do have today. Yeah, Jenz, I'm curious from your perspective, you know, in the same kind of line of thinking with regards to the influx of uh autonomous type of agentic uh entities, let's call them. Some some governments will be soon uh giving them kind of not citizenship

necessarily, but creating jurisdiction around these types of entities even uh they they'll likely have their own identification system and such. So it's really e accelerating here kind of as you see this happening onchain and as you see a lot of these agentic kind of finance and commerce happening you know I'm curious if your the evolution of ZK a and and what your perspective is now how it's changed and how you could anticipate it going forward being that we had a lot of custom circuit building for you know the last 10 to 15 years around ZK obviously this idea of a generalizable general general purpose uh ZKVM came about. Ton of you know

hundreds of millions of dollars invested into building these out. Nexus being uh you know one of these uh in the stack here uh one of the top players kind of has taken custom circuits out of the limelight a bit here. Kind of made them perhaps less you know less necessary or perhaps really only necessary for very specialized proving scenarios. In the same sense, AI and agents are getting to be more specialized, getting to be more task uh pre-selected for a certain task rather than a generalizable kind of um construct here. Maybe you can like analogize the evolution of these two two uh technologies together from a kind of like specialized generalized back to

specialized in ZK perhaps and AI kind of generalized to specialized. Um, how do you see the different types of proving uh, you know, general purpose or special custom circuit evolving as it relates to the AI onchain evolution? I hope I made that clear enough. Um, I can reask it if if need be. >> Yeah. Yeah. I I think I think it's a beautiful question that you're asking, right? Um, and and it is I don't have a good answer to that, right? But I think you're you're quite right that there's been this trend towards let's build something general purpose in the CK space, right? And get as close to sort like a standard development process and and now maybe AI would sort of like take

it back to to more the the wild west, right? Where you can build something which is more custom based but maybe more efficient, right? Um so there's a good question of like what is the f what does the future of of CK hold? Um, and and I think what we're going to see is probably something along the lines of being more specialized. I I think there's there's another type of specialization, right? Which is I mean I guess when you have a CKVM, it also expresses here the computation I do and this is what I'm proving, right? work but what you see see perhaps is that it's really a question what is it that I

want to verify right and then you could use an AI to more specifically encode this is what I want to verify so there's also a question of what it is that you actually proving the first instance right which is going to to change with with AI um so so yeah um super good question I don't I don't have a a good answer to it um I suspect that in the near future I don't I think AI is going to be good enough for that and I actually think there's you know a a good case to make for for CKDMs as long as the you know as long as the cases you're proving is right you know where this is not the cost bottleneck right I think that makes a lot of sense and and you know if you look at what AIs are doing

now right they also you know they take out some standard tools they run those tools right and make things uh work right so I think there it ties nicely into the workflow u but then I think it's going to be a a landscape that's going to change a lot um uh as everything else in in in coding and when we're seeing this integration of ZK and and standard development right I think that's also going to be affected just as much by by AI >> interesting Yan anything to add there question AI agents go right I mean how in particular like like what's the count accountability what's and if I have an

AI agent that does something how can I later on you know how is that accountable how can it act on my behalf and uh normally I would say look here's a piece of code that does something for me and then I would really want to verify that this piece of code does what it does right uh very difficult for AI right because it's a bunch of matrices a bunch of entries in matrices uh very big and whatnot right and so can't really do that. So, [clears throat] and because we're getting back to look on one hand, zero knowledge proofs, but also there it just, you know, like I guess proofs there are nice in the sense that it deals matrices, but but at the end of the day, you really want to want to make

sure that this AI does, you know, really produce that and this, you know, can't be like tampered with. So we're really going to this like uh probably model where where AI has to be running somewhere in a trusted system again like a blockchain driven system most likely and you know I guess I would also want to make sure that maybe I'm using the same model as somebody else right so that we all use the same because that the more people use using the same model the more confidence can we have that actually this model really does what it's supposed to do right so because probably going to see standardized models that uh everybody can use running on chain And I can just, you know, like and then it will produce some proof that it did whatever it did

and I know because of my AI just paid my bills like my monthly bills uh approved them but then also like the underlying model that was used is also this the standard agent model right and um I guess there's a lot of these challenges that we're going to see and again I think you know secure systems blockchain driven system knowledge proofs will really play a large part for security things. I'm wondering so like there's an analogy I think to sort like the management literature right I mean how do you know that your employee are actually doing a good job or not right and and that's like a classical problem right and I think this is reemerging

just with AI instead of humans as as the employees um um so so you know one question you can ask to to which degree are the task that you're giving them verifiable in the end right then you don't need to verify that they're doing the right thinking. You need to verify that the output they're producing has sufficient quality, right? And that works for some tasks, but also as we know from the management literature, not all tasks fall in that category, right? And you really need to have some sort of alignment with, you know, the employee and and and the organization that's employing them.

>> But maybe we're better off here, right? Because like uh with AI at least I mean in theory depending on how complex the model is right but if it's simpler models you could actually look at the input data and the training right and say okay so this also was trained in on a trustworthy system and so we can say okay so it's probably going to be behaving like that because that's how it was trained whereas for your employees yeah it's going to be hard to like interview all the teachers and all the people they they Yeah, we started off this conversation talking about privacy and verifiability and I think uh we both agree of the importance of them. I think you know you made the point that you know there there's a case to be argued that

verifiability could be more important. Um I think with with what you guys are doing at Subzero with Rialo's extended execution, you guys are calling it Rex architecture. I'm curious how you see this architectural design concept. architectural design kind of do the old blockchainma tradeoff trade out I like to call it is what I like to call it everyone thinks in these trade-offs clear that you have to clear as an architectural design as an architectural design of onchain primitives but you know it does feel like the best tech is the ones that kind of almost evade them how how do you guys do that with Rex how do you think about this kind of uh

dilemma >> I'm I'm not sure whether I ever believe this dilemma Right. [laughter] I think at the end of the >> with [clears throat] ZK there is no trilma. >> No, but I guess I mean I guess it's another conversation. Maybe let's not go there. But like there's a lot of like maybe misconceptions that go into this drama. You know at the end of the day we're building trustworthy distributed systems, right? And then uh like always uh you know like you can build high performance things. I don't think that's necessarily the case that blockchains are just slow or certain knowledge is just slow. Um so so so much for the trma right but but I guess what you were

saying is really this like uh you know what is the uh you know how can you do this slide right how much price did you have how much verifiability do you have and I mean you cannot answer this in all generality because really it depends on the application right if you have so let's take so whatever some financial transaction I don't know onchain landing market and so on so forth, right? Uh if you want to want to do a good good lending market, then the question is like what what data do you take as input, right? And do you take a real world data as input? And then what's access to that uh input data, right?

Because if for instance uh I could somehow pull in my credit card, my credit score, then that data should of course uh not be available to everybody, right? So now you have this lending platform the landing the core of the lending protocol that then does computers that data obviously here you will have to have a system where you can pull in my credit score somehow it's certified by a third party you know how to solve that let's not not quite go into the details here because we might get too technical but the idea is that there's some encryption that is somehow authenticated with your credit score and then that gets as input to the algorithm and then of course now the algorithm if you know because I decrypted credit score checks how well it is and

depending on that gives an updated risk rating you know like so so now we can sort of define and handle this application that okay maybe the risk grading you know just it's a threshold right just above and below it's the output and all the rest they said and then you can you know this is zero knowledge proof or however you want to do it can say okay here this computation that happened credit scoring went in authentication signature of the credit scorer went in in this computation and then what do you get on you know the risk algorithm that maybe is even hidden that's like another hidden parameter comes from your you know the guy who wants to to lend the money or to guess to provide the money to to be lent out and then the the you know like okay

above or below comes out or maybe a category so and I think that's really like like one of these examples where you see okay so how you would address this application and uh now like our goal has really now built the the rails so this can happen right so that you can actually specify that you can say here's program that stays hidden here's the inputs that come in encrypted so it's really about building a framework so so people can build this applications >> so it's perhaps worth also just mentioning right that that I mean we have a chance right and and you know I think Nexus is rethinking finance real rethinking finance right and I do think we some opportunities that we didn't

have in the past and something which maybe also can be helped with with AI right so so one thing that people have been thinking about okay look you know we can do like you know much smaller payments right because we have agents that can manage all the small payments and so forth right you know there's a huge cost if you have to send a bill out to somebody every minute right you know so that's why we get monthly utility bills right but now you know we live in a world where we actually have, you know, some pretty performant blockchain systems, right, that can handle this. We have agents that can act on our behalf.

So, you can sort like puzzle them out into more smaller pieces, right? And maybe we don't need the credit score in first place because now the risk somebody who's, you know, letting out the room is taking on is not like, you know, a month's, you know, utility bill payment or rent or something like that, right? But it's just like the cost for an hour or a day or something like that. >> Yep. And we can do that onchain as well hopefully with very little fees um and doing it in a verifiable manner. I think uh I think I have this term is called like organic AI which is that you want your you you want to know that there's a the training data that the AI agent specifically the one that is managing finances. You really want to know that

it's an organic organic verifiable AI agent in in the sense that its training data is what you know is what you think it is and you can verifiably confirm that before you start to allow it to move around whether it be your personal info, your financial info, etc. Guys, it's been an awesome conversation. Yan, congrats on the move to Subzero and your new role. Um, Jenz, I appreciate your time. Guys, we'll take a quick standby and be right back with the rest of the show. Thanks guys for joining. >> Thanks so much.

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[music] Get a treasure at treasure.io. Oh, no, that's the wrong one. All right, guys. Um, we have uh Circle and um kind of Circle is making some some moves in the space and I think we need to talk about it. Let's get to Axelr OneUp. I I think that's the most important one. We can talk about this gateway circle thing uh shortly after, but basically today Circle acquired um uh Axelar accelerating their crosschain capabilities. And yeah, I think that there's something to be said here about

these tokens just being uh or these protocols being bought out and the token holders just kind of being left for dry. I'm not exactly sure what the deal terms were for this specific deal. Um but let's talk about it. So basically what happened is um and we'll get it up up on the screen but basically uh circle has entered an agreement with the interrupt labs team to um to acquire uh who are the initial developers of Axelar to a leading interoperability stack to into circle to accelerate the next chapter of multi-chain

infrastructure with ARC and CCTP. We're excited to welcome new team members to circle family as soon as deal closes. The Axelr Foundation network and AXL token are not part of this acquisition and will continue to operate independently under community governance. What does that even mean? So guys, I think that this is basically saying that AxelR is no longer and the token is no longer. And if I'm a token holder of Axel reading this, I am not really feeling excited about it and I'm not

loving how it looks. And honestly, I'm probably I'm probably getting out of there. Um it re it really reads like hey we're taking over the core team that is managing this protocol. We're bringing them inhouse. We're going to take all of their development talent and use it for our you know our products and it sounds like the token is going to kind of get left for dead. So guys I would just be careful and I don't really know how to react to these. This is just really weird. It's just like a really interesting dynamic where there's these protocols that can get bought out but not the token. So my take is just I would keep an arms length from AXL. I'm curious to see how it reacted

to this news. Actually the whole market is down but that's okay. AXL I mean it's kind of sideways. I guess it's down today 12% but nothing is really new there. The whole market's kind of down. Yeah, guys. I don't know about this. I'm not loving this if I'm an AXL holder. Honestly, I I I don't think it's great. So, I don't know. It's just so weird that you can acquire uh all the tech from the labs company, but then you leave the token out. I don't really get it. I don't really get it. So, all right, guys. I think that's it from us today.

Um, we got a full pack stream tomorrow. It's a Monday. I got a ton of stuff on on my plate to knock down. So, I'm gonna see you guys tomorrow. Much love. Stay alive. Stay safe. Stay cozy. Happy holidays. We're getting closer. See you guys soon. Peace. [music]