Latest / The Paul Barron Crypto Show / Solana Army Of 10,000 Stocks Coming!🔥Backpack CEO Interview

Transcript

Solana Army Of 10,000 Stocks Coming!🔥Backpack CEO Interview · The Paul Barron Crypto Show

• 0:03
  Speaker 1: Thousands of stocks are coming on to Solana and it's
• 0:06
  Speaker 1: gonna come via the Backpack Project and we're gonna break
• 0:10
  Speaker 1: that down for you guys today. So it's gonna be
• 0:12
  Speaker 1: a unbelievable episode. Before we get started, I do wanna
• 0:16
  Speaker 1: thank our sponsor today and that is ProtonMail. You guys
• 0:19
  Speaker 1: should be getting into security. And the reason is because
• 0:23
  Speaker 1: ProtonMail is doing a fantastic job at protecting your privacy.
• 0:27
  Speaker 1: This is the go-to place ever to get privacy set
• 0:31
  Speaker 1: up for yourself. And you can do that starting with email.
• 0:34
  Speaker 1: So begin there. If you want to do this for
• 0:36
  Speaker 1: your business or your personal account, very easy to do.
• 0:40
  Speaker 1: And one of the biggest things you can get into is,
• 0:43
  Speaker 1: of course, Proton Unlimited. Proton Unlimited gives you a whole
• 0:47
  Speaker 1: slew of things you can use, including mail, calendar, VPN,
• 0:52
  Speaker 1: also getting Drive. It's almost like a Google replacement. And
• 0:55
  Speaker 1: the best thing here is you get Sheets and also
• 0:57
  Speaker 1: password protection. This is one of the best tools out
• 1:00
  Speaker 1: there for security, especially in times like this when there
• 1:05
  Speaker 1: is so much junk and scams coming through your mail
• 1:09
  Speaker 1: right now. Use Proton Unlimited. Use our link down below
• 1:13
  Speaker 1: to get a little bit of a discount. Let them
• 1:14
  Speaker 1: know we sent you. I want to just showcase a
• 1:17
  Speaker 1: little bit here on the Backpack chart here on CoinGecko.
• 1:19
  Speaker 1: You can kind of see a little bit of the
• 1:21
  Speaker 1: explosion that we have been watching here for the last
• 1:24
  Speaker 1: few weeks. Armani Ferrante coming in from Backpack. How are you?
• 1:28
  Speaker 2: Thanks, Paul.
• 1:29
  Speaker 3: I'm doing great. Thanks for having me.
• 1:31
  Speaker 1: Yeah, so we got a lot to talk about today.
• 1:32
  Speaker 1: We're going to get into a little bit about the
• 1:36
  Speaker 1: overall project itself. I want to jump over to RWAs
• 1:40
  Speaker 1: in general. And right now, not necessarily on the listing here,
• 1:45
  Speaker 1: but how long do you think before we might see
• 1:48
  Speaker 1: Backpack show up here?
• 1:50
  Speaker 3: Yeah, yeah, it's a great point and a great question.
• 1:52
  Speaker 2: So, I mean, you can look at tokenized stocks through
• 1:55
  Speaker 2: the lens of TVL, but then you could also look
• 1:57
  Speaker 2: at stocks through the lens of liquidity, execution, and volume.
• 2:03
  Speaker 2: And those are two very different perspectives when evaluating any
• 2:08
  Speaker 2: type of project, right? It's very easy to get, maybe
• 2:10
  Speaker 2: not easy, but it's a different ballgame to get a
• 2:13
  Speaker 2: lot of TVL, maybe not a lot.
• 2:15
  Speaker 3: Of market activity.
• 2:16
  Speaker 2: What we've really focused on is building market structure on Solana.
• 2:22
  Speaker 2: We were the first tokenized stock project to finally bring
• 2:26
  Speaker 2: a token that's one-to-one redeemable for a bona fide security entitlement.
• 2:32
  Speaker 2: And although that might sound like maybe legal mumbo jumbo,
• 2:35
  Speaker 2: it has very real consequences when you actually look at
• 2:39
  Speaker 2: the way these markets are traded. And the most important
• 2:42
  Speaker 2: consequence of this is that you can actually trade between
• 2:46
  Speaker 2: Solana and DeFi and NYSE, NASDAQ, traditional financial venues where
• 2:51
  Speaker 2: all the liquidity is, and you can do it at
• 2:53
  Speaker 2: the speed of a token. And so when you actually
• 2:57
  Speaker 2: look at the markets that are trading on Solana right
• 2:59
  Speaker 2: now with Backpack Securities, you get 10 times better execution
• 3:04
  Speaker 2: than the next kind of competitor. And there's a bunch
• 3:08
  Speaker 2: of good examples of this. If you can look at
• 3:10
  Speaker 2: like the Blockworks data, they've done a ton of data
• 3:13
  Speaker 2: analysis in terms of actually what price do you get
• 3:16
  Speaker 2: filled at. And what we're seeing is that it could
• 3:19
  Speaker 2: be anywhere up towards 45 X better pricing real on
• 3:23
  Speaker 2: Solana with backpack securities relative to what's happening on Robinhood
• 3:27
  Speaker 2: chain right now.
• 3:28
  Speaker 1: Okay, so break that down a little bit. Why why
• 3:30
  Speaker 1: yeah be that big a difference?
• 3:33
  Speaker 2: So it boils down to the simple feature that these
• 3:37
  Speaker 2: tokens give you the actual stock and so you can
• 3:41
  Speaker 2: buy a token on you go by SpaceX on Solana
• 3:44
  Speaker 2: today and and sell it on NASDAQ by putting it
• 3:47
  Speaker 2: into a brokerage. You can transfer it to your Fidelity account.
• 3:50
  Speaker 2: It is a real stock, a redeemable for the real
• 3:54
  Speaker 2: stock by any definition of the term. And when you
• 3:56
  Speaker 2: have that one feature, which for contrast, that's very different
• 4:01
  Speaker 2: than a lot of the other things that you're seeing
• 4:03
  Speaker 2: in the market today, which they're known as these debt securities.
• 4:07
  Speaker 2: where it might not be back to one-to-one, it might
• 4:09
  Speaker 2: be synthetic exposure, there might be derivatives under the hood,
• 4:12
  Speaker 2: or there's just no redeemable process. And so what this
• 4:16
  Speaker 2: means is that when you're trading backpack stocks, traders can
• 4:19
  Speaker 2: come in and they can do arbitrage. And so when
• 4:22
  Speaker 2: prices move on chain, what we see is traders come in,
• 4:28
  Speaker 2: they buy it on NASDAQ, they bring it on the Solana,
• 4:31
  Speaker 2: and they keep the prices in line. And so you
• 4:34
  Speaker 2: have this pipe of stock value flowing back and forth
• 4:38
  Speaker 2: between DeFi and TradFi. And it's that mechanism, that one-to-one
• 4:42
  Speaker 2: redemption right that makes efficient markets in kind of the
• 4:47
  Speaker 2: wonderful world of Salama DeFi.
• 4:49
  Speaker 1: How many stocks do you think are coming by end
• 4:52
  Speaker 1: of year? I'm looking at the DeFi Lama list right
• 4:55
  Speaker 1: here on total assets. And you can kind of see it.
• 4:58
  Speaker 1: It's flowing just constantly up here for Backpack. But what
• 5:01
  Speaker 1: does this look like end of year?
• 5:03
  Speaker 3: Yeah, end of year, it's hard to say.
• 5:05
  Speaker 2: I think we are going to go from 50 to
• 5:09
  Speaker 2: a couple hundred to thousands very quickly.
• 5:12
  Speaker 3: It's not going to happen slowly.
• 5:14
  Speaker 2: It's going to happen in one big jump, where overnight,
• 5:18
  Speaker 2: we'll have the entire US stock market on Solana, and
• 5:21
  Speaker 2: we will do this all around the world.
• 5:23
  Speaker 1: One of the things that we're watching, and I think
• 5:25
  Speaker 1: this is just maybe the evolution of traditional investors, People
• 5:31
  Speaker 1: that have been out there on the regular stock exchanges
• 5:34
  Speaker 1: or a brokerage forever, this changes up things pretty dramatically.
• 5:40
  Speaker 1: How complicated is it for me to redeem from Backpack into,
• 5:45
  Speaker 1: in this particular case, Schwab or Fidelity?
• 5:48
  Speaker 2: It's no more complicated than transferring from Robinhood to Fidelity.
• 5:52
  Speaker 2: We aim to make this a simple experience that should
• 5:54
  Speaker 2: feel familiar both to people in crypto and also to
• 5:56
  Speaker 2: people outside of crypto.
• 5:57
  Speaker 1: And you kind of see some of the charts here
• 5:59
  Speaker 1: we're showing just to give you an example of how
• 6:02
  Speaker 1: this potentially moves. What about the kind of investor? Do
• 6:06
  Speaker 1: you feel like this is an investor that would want
• 6:09
  Speaker 1: to move into a TradFi brokerage?
• 6:13
  Speaker 2: I think the core thing is introducing what makes a
• 6:16
  Speaker 2: blockchain special programmability into the stock market. And the moment
• 6:21
  Speaker 2: you have programmability, you have net new things that will
• 6:25
  Speaker 2: continue to be created. Everything as silly as pairing meme
• 6:29
  Speaker 2: coins against stocks, which you're seeing a ton of that
• 6:32
  Speaker 2: on Solana, a ton of that on Robinhood, to things
• 6:35
  Speaker 2: that are much more novel and exciting like programmable baskets,
• 6:40
  Speaker 2: the ability to automate money management on a ledger, the
• 6:44
  Speaker 2: ability to move assets. across boundaries and regions, right? Not
• 6:47
  Speaker 2: just US stocks, right? You can imagine Korean stocks, Japanese stocks,
• 6:50
  Speaker 2: Hong Kong stocks, everything on a unified ledger for a
• 6:56
  Speaker 2: new world of financial services that are being rebuilt from
• 7:00
  Speaker 2: the ground up on the Solana blockchain.
• 7:03
  Speaker 1: No doubt about it. I think this is maybe the
• 7:05
  Speaker 1: demise of traditional finance, unless there is a massive shift.
• 7:10
  Speaker 1: And we'll talk about the DTCC in a second. Before
• 7:12
  Speaker 1: we go there, though, I want to showcase a little
• 7:16
  Speaker 1: bit about when you compare the growth here that we've
• 7:19
  Speaker 1: seen in terms of asset holders by issuer. I'm looking
• 7:23
  Speaker 1: at the Robinhood chart right there. You kind of see
• 7:25
  Speaker 1: Binance and going in there, I'll reveal all those. So
• 7:29
  Speaker 1: they are fighting neck and neck. And then you guys
• 7:32
  Speaker 1: are in here and you're starting to explode. And this
• 7:36
  Speaker 1: is even more so than Coinbase, which has massive distribution.
• 7:41
  Speaker 1: Why is this flopping so hard is what I want
• 7:44
  Speaker 1: to know. Why is this not, you know, getting out
• 7:46
  Speaker 1: there with some of the bigger players out there like Robinhood, Binance?
• 7:51
  Speaker 1: I think you guys are going to be in the
• 7:52
  Speaker 1: in the hunt pretty soon. as well. What do you
• 7:55
  Speaker 1: think it is?
• 7:55
  Speaker 2: So you have to keep in mind that a lot
• 7:58
  Speaker 2: of these players, they're either the biggest, most well-resourced giants
• 8:03
  Speaker 2: in the space, or they've been around for years. We
• 8:06
  Speaker 2: launched our product, literally day one was the SpaceX IPO.
• 8:10
  Speaker 2: That was our very first tokenized stock. So we were
• 8:12
  Speaker 2: very new entrance into the space and we spent $ 0
• 8:16
  Speaker 2: on marketing and distribution. This is purely coming from one
• 8:22
  Speaker 2: I think that really the power of Solana DeFi and
• 8:25
  Speaker 2: you have to give the entire ecosystem tons of credit,
• 8:29
  Speaker 2: you know, everyone from the Sunrise team to Radium to
• 8:33
  Speaker 2: the rise of Stock.Fun and all of the crazy experimentation
• 8:36
  Speaker 2: that's been happening. But then also just due to the
• 8:39
  Speaker 2: market structure. Again, this is the only tokenized stock product
• 8:43
  Speaker 2: in the world that can flow back and forth between
• 8:45
  Speaker 2: DeFi and TradFi at the speed of a token. In
• 8:49
  Speaker 2: the exact same way you can on and off ramp
• 8:51
  Speaker 2: USDC through Coinbase, you can do the exact same thing
• 8:54
  Speaker 2: with a backpack security. And it's that unique market structure
• 8:59
  Speaker 2: that creates much more coherent, high integrity market activity where
• 9:06
  Speaker 2: markets can function the way they're supposed to function, which
• 9:08
  Speaker 2: is to keep prices in line.
• 9:09
  Speaker 1: Well, I think that's the key, is keep prices in line, flexibility,
• 9:13
  Speaker 1: global access. Those kind of things are really going to help,
• 9:17
  Speaker 1: I think, projects scale in general. Do you think Coinbase
• 9:20
  Speaker 1: is just moving too slow right now, if you compare
• 9:23
  Speaker 1: it to what's happening in the wallet space?
• 9:25
  Speaker 2: I mean, look, you've got to give Coinbase all the
• 9:27
  Speaker 2: credit in the world. They're a beacon of the industry.
• 9:31
  Speaker 2: And I have nothing but positive things to say. But yeah, sure,
• 9:34
  Speaker 2: I think they're slow. And it's my job to move
• 9:35
  Speaker 2: faster than them.
• 9:36
  Speaker 1: I'm going to showcase something here. We're looking at Metaplex's
• 9:40
  Speaker 1: Twitter account, MPL3643. This is permission assets on Solana. How
• 9:45
  Speaker 1: will permission assets on Solana work?
• 9:48
  Speaker 2: A couple of different ways to think about it. So,
• 9:51
  Speaker 2: you know, in crypto, really the industry expects the stable
• 9:55
  Speaker 2: coin model, where you have this bearer asset that you
• 9:59
  Speaker 2: can freely move everywhere. It composes with DeFi. I have
• 10:03
  Speaker 2: nothing but a self-custodial wallet, and I can trade something
• 10:05
  Speaker 2: that's privacy-preserving, pseudo-anonymous, and everything just works. That's the market
• 10:12
  Speaker 2: structure that exists today in crypto.
• 10:16
  Speaker 3: Everything has been built over the past decade. That is
• 10:19
  Speaker 3: one model. I think where the permissioned.
• 10:25
  Speaker 2: Tokenization is going to become increasingly important is in the
• 10:30
  Speaker 2: institutional space and importantly in B2B settlement, where things like
• 10:37
  Speaker 2: compliance requirements change all around the world and you need
• 10:40
  Speaker 2: to have this infused into the asset itself. So I
• 10:44
  Speaker 2: think this is going to become increasingly important as the
• 10:47
  Speaker 2: space matures and grows. and crosses the chasm outside of
• 10:50
  Speaker 2: DeFi and really, I would say, becomes ubiquitous throughout all
• 10:54
  Speaker 2: of traditional finance.
• 10:56
  Speaker 3: And so I only expect that space to grow.
• 10:58
  Speaker 1: Speaking of TradFi, I'm looking at this right here. You
• 11:01
  Speaker 1: got the DTCC getting ready to launch here in October.
• 11:07
  Speaker 1: If this goes out as a flop, and I'll just
• 11:09
  Speaker 1: say in the sense of where tokenized securities are going
• 11:13
  Speaker 1: to be traded in the future, Could it end up
• 11:16
  Speaker 1: not necessarily becoming the center that DTCC has been in
• 11:21
  Speaker 1: TradFi for so long because of the expansion that we've
• 11:24
  Speaker 1: seen in all these new markets? If that is the case,
• 11:27
  Speaker 1: do you think it'll be a wake up call for TradFi?
• 11:30
  Speaker 1: Do you think they'll go, oh, wait, the market's much
• 11:32
  Speaker 1: bigger than what we have here?
• 11:34
  Speaker 2: I think that wake up call has already happened. I
• 11:36
  Speaker 2: think you talk to everybody on the streets and everybody's
• 11:38
  Speaker 2: talking about tokenization and some people are building, most people
• 11:43
  Speaker 2: are partnering and everybody understands at this point that this
• 11:45
  Speaker 2: is the future.
• 11:46
  Speaker 3: Personally, as.
• 11:50
  Speaker 2: Somebody who's selling a brokerage product, I am super excited
• 11:53
  Speaker 2: about the DTCC model, not because I think it's going
• 11:56
  Speaker 2: to become really important for retail or because I think
• 11:59
  Speaker 2: it's going to be traded on the blockchains, but just
• 12:02
  Speaker 2: because I see with like, as clear as day, how
• 12:05
  Speaker 2: powerful it's going to be for just the intermediaries and
• 12:09
  Speaker 2: financial services. The most important, I think, point to make
• 12:14
  Speaker 2: from the perspective of a retail brokerage is just settlement times.
• 12:18
  Speaker 2: Like the moment you can move away from these bank
• 12:23
  Speaker 2: transfers that take T plus one, T plus two days
• 12:26
  Speaker 2: to instant settlement is That just makes all operations of
• 12:30
  Speaker 2: the business so much more capital efficient. And that is
• 12:33
  Speaker 2: going to have a 10x improvement to the operations of
• 12:36
  Speaker 2: every single financial services business all around the world.
• 12:39
  Speaker 1: I'm looking at your tweet here about what you can
• 12:41
  Speaker 1: do with your portfolio. So more from your stock portfolio.
• 12:44
  Speaker 3: Borrow.
• 12:46
  Speaker 1: You can trade on margin. You can hedge positions. What
• 12:50
  Speaker 1: else is going to be coming from a utility standpoint
• 12:54
  Speaker 1: within my portfolio on Backpack?
• 12:56
  Speaker 2: Yeah, so we have an entire portfolio margin system where
• 12:59
  Speaker 2: you can trade spot, spot margin, borrow lending, perpetual futures, stocks.
• 13:04
  Speaker 2: all in a single unified account. And so you can
• 13:07
  Speaker 2: see more listings from us. You can see more regions
• 13:09
  Speaker 2: that we're going to be opening up. We have the
• 13:10
  Speaker 2: US stock market right now. We're going to be opening
• 13:12
  Speaker 2: up the stock markets all around the world. And importantly,
• 13:15
  Speaker 2: we're going to bring in this not just for our product,
• 13:17
  Speaker 2: but we're going to be using this infrastructure that we've
• 13:19
  Speaker 2: built both on the engineering side, but also on the
• 13:22
  Speaker 2: global licensing side as well to be able to power, hopefully,
• 13:26
  Speaker 2: as many DeFi applications as we possibly can. And that's
• 13:30
  Speaker 2: probably the thing I'm the most excited about.
• 13:32
  Speaker 1: Armani, you put out a tweet. Robinhood isn't sugar daddy.
• 13:37
  Speaker 1: And you think about Robinhood chain in general, was that
• 13:41
  Speaker 1: more of a fad for degens or how do you
• 13:43
  Speaker 1: think this plays out for Robinhood?
• 13:45
  Speaker 2: I don't think Robinhood was a fad. I think you
• 13:47
  Speaker 2: have to give them all the respect in the world.
• 13:49
  Speaker 2: This tweet is me being facetious. I think the core
• 13:53
  Speaker 2: point here is that incumbents, they're great, but you know,
• 13:58
  Speaker 2: there's always room for young startups to come in and
• 14:01
  Speaker 2: compete by building a better product and the tendency, you know,
• 14:05
  Speaker 2: especially when these huge corporate conglomerates come in, uh, into
• 14:10
  Speaker 2: kind of a space that's fast moving is to assume
• 14:12
  Speaker 2: that they are just going to run away with a show.
• 14:15
  Speaker 2: And you saw that when a Robin hood launched, right.
• 14:16
  Speaker 2: They launched and they got the respect they deserve. There's
• 14:19
  Speaker 2: a huge amount of activity. And basically, the narrative at
• 14:22
  Speaker 2: the time was, well, Robinhood is just going to win because, well,
• 14:25
  Speaker 2: they're Robinhood. But that is never the way innovation works.
• 14:28
  Speaker 2: And that is kind of the point of that tweet.
• 14:31
  Speaker 2: It's like you compete by building a great product, and
• 14:34
  Speaker 2: you should not be afraid of the incumbents.
• 14:36
  Speaker 3: And you have as much of a right to win
• 14:38
  Speaker 3: as they do.
• 14:39
  Speaker 2: And just because they're a big $ 90 billion company, it
• 14:44
  Speaker 2: doesn't mean you can't build a better product.
• 14:46
  Speaker 1: Right now, they're going gasless. This gets in a lot
• 14:49
  Speaker 1: of traders, which helps kind of expand the network in
• 14:52
  Speaker 1: the sense of people using it. But I think, obviously,
• 14:55
  Speaker 1: you guys have done a really good job on moving
• 14:57
  Speaker 1: into this direction. Here's a tweet, though, and that is
• 15:01
  Speaker 1: the announcement of the SEC clarifying that token buybacks announcements
• 15:06
  Speaker 1: from issuers of decentralized crypto assets do not constitute a
• 15:12
  Speaker 1: promise of essential managerial efforts. So That means, I guess
• 15:16
  Speaker 1: that's good. Are we going to see more of this incoming,
• 15:19
  Speaker 1: do you think? More token buybacks?
• 15:21
  Speaker 2: I think this is overwhelmingly good for the space. I
• 15:25
  Speaker 2: think one of the big themes that we've seen in
• 15:28
  Speaker 2: tokens over the past year has been the rise of,
• 15:32
  Speaker 2: I guess, what people facetiously call the revenue meadow, which
• 15:35
  Speaker 2: sounds so hilarious to anybody that's trading stocks. But for
• 15:38
  Speaker 2: the longest time, altcoins or tokens have been these memes.
• 15:42
  Speaker 2: They've been promises. And people are tired of empty promises.
• 15:46
  Speaker 3: Show me the money.
• 15:48
  Speaker 2: Show me the intrinsic value. And just because something is
• 15:51
  Speaker 2: tokenized in crypto, it doesn't make the discounted cash flow
• 15:54
  Speaker 2: valuation model go away. I want to buy assets that
• 15:59
  Speaker 2: have real cash flows behind them. And I think that
• 16:02
  Speaker 2: is the message that's being sent. which is to build
• 16:05
  Speaker 2: real products, real services for real people that can sustain itself.
• 16:10
  Speaker 2: And with that comes great assets, great tokens, and great
• 16:13
  Speaker 2: market structure.
• 16:14
  Speaker 1: I'm looking at also voting rights. The SEC was issuing
• 16:20
  Speaker 1: Tesla a no action letter. This was clearing the way
• 16:23
  Speaker 1: for them on their voting program. And then Vlad put
• 16:26
  Speaker 1: this statement out and says it should be easier for
• 16:29
  Speaker 1: them to vote their shares, which is in essence getting
• 16:32
  Speaker 1: to a point where we could see maybe gamification around voting.
• 16:36
  Speaker 1: If that were to happen, do we start to see
• 16:40
  Speaker 1: a lot of this taking place and kind of a
• 16:43
  Speaker 1: voting season starting?
• 16:45
  Speaker 2: You're already seeing this gamification play out when you look
• 16:48
  Speaker 2: at the quarterly earnings calls from Robinhood or Coinbase. They're
• 16:54
  Speaker 2: literally streaming it in the same way like a gamer
• 16:57
  Speaker 2: would stream it or in the same way like an
• 16:58
  Speaker 2: NBA superstar would do post-game analysis. And it's really all
• 17:02
  Speaker 2: about engagement with the shareholders. And I think that's only
• 17:06
  Speaker 2: a positive thing. So I think we're absolutely going to
• 17:08
  Speaker 2: see more of it, uh, as you know, these more
• 17:10
  Speaker 2: modern companies are actually reaching out and, and, you know,
• 17:14
  Speaker 2: doing direct, uh, uh, communications with our audience.
• 17:17
  Speaker 1: What about rewards like stock ownership rewards? Um, do you think,
• 17:23
  Speaker 1: or stock loyalty, I guess, rewards, do you think we'll
• 17:25
  Speaker 1: see that here's Kleinosaurus? They partnered partner with Jupiter. They're
• 17:29
  Speaker 1: going to make a visa. But the key is being
• 17:33
  Speaker 1: able to hold these kinds of assets. Is this going
• 17:37
  Speaker 1: to open up a whole plethora of opportunities here in
• 17:40
  Speaker 1: terms of rewards, marketing, all sorts of cool things with
• 17:44
  Speaker 1: some of these platforms?
• 17:45
  Speaker 2: I think it's an interesting dimension for marketing. Do I
• 17:48
  Speaker 2: think it's going to be a huge game changer for
• 17:52
  Speaker 2: these companies?
• 17:52
  Speaker 3: Probably not.
• 17:54
  Speaker 2: But it is going to make I think this concept of,
• 17:57
  Speaker 2: you know, loyalty and building cult followings behind brands, just,
• 18:01
  Speaker 2: you know, just another tool in the arsenal.
• 18:03
  Speaker 3: So, yeah, I think it's exciting and it'll be used.
• 18:05
  Speaker 2: I mean, you're already seeing that with stocks like AMC
• 18:08
  Speaker 2: is maybe the best example of this. You know, you
• 18:10
  Speaker 2: have AMC, Adam, Vlad Showdown, and they have a cult.
• 18:14
  Speaker 3: The AMC stockholders are a strong cult.
• 18:17
  Speaker 2: And I think that's, you know, a direct consequence of
• 18:20
  Speaker 2: the shareholder communications they do, which is pretty fascinating.
• 18:24
  Speaker 1: Get ready, traders. You're going to see all sorts of
• 18:25
  Speaker 1: cool things. We discovered your rates sheet on your website.
• 18:31
  Speaker 1: This is on Backpack. It's a breakdown of the treasury ETFs.
• 18:35
  Speaker 1: It analyzes rates and everything that moves them. You've got
• 18:40
  Speaker 1: everything from the treasury to the two-year, the 10-year, et cetera.
• 18:44
  Speaker 2: Yeah, so we're trying to build tools to help investors
• 18:47
  Speaker 2: make intelligent choices. And there's no more important signal in
• 18:50
  Speaker 2: the market than interest rates. This is just a tool
• 18:55
  Speaker 2: to be able to surface that information more effectively for traders,
• 18:59
  Speaker 2: help them make intelligent investment decisions, and maybe importantly, especially
• 19:03
  Speaker 2: for the crypto native audience, to surface some really important
• 19:06
  Speaker 2: primitives that might be obvious to folks in traditional finance,
• 19:10
  Speaker 2: but might not be so obvious to folks in crypto.
• 19:12
  Speaker 2: There's no better example of this than the treasury bond ETFs,
• 19:16
  Speaker 2: which tend to be high respectable dividend-paying ETFs where you
• 19:23
  Speaker 2: can get 3% to 4% by buying a relatively low-risk
• 19:29
  Speaker 2: treasury bond ETF, at least relative to something like lending
• 19:33
  Speaker 2: in DeFi. If you look on Aave right now, you'll
• 19:37
  Speaker 2: see comparable interest rates where you have a whole separate
• 19:40
  Speaker 2: risk profile, smart contract, tax, and the like. It's just
• 19:44
  Speaker 2: another tool in the arsenal for folks to get access
• 19:46
  Speaker 2: to alternative yield sources. I think this is actually something
• 19:49
  Speaker 2: that's going to grow pretty significantly on-chain over the next
• 19:53
  Speaker 2: year as these assets come on-chain and the universe of
• 19:58
  Speaker 2: ways to express the desire for yield.
• 20:01
  Speaker 3: Just continues to grow.
• 20:03
  Speaker 1: Coinbase, Mark has put this tweet out. It was basically
• 20:07
  Speaker 1: the launch of Coinbase clearing. We're going to see everything
• 20:09
  Speaker 1: settle in USDC. Is Circle the winner here or is
• 20:12
  Speaker 1: Coinbase the winner here?
• 20:14
  Speaker 2: So the clearing code here is a DCO. It's a
• 20:17
  Speaker 2: clearinghouse for derivatives markets. And what Coinbase is announcing here
• 20:22
  Speaker 2: is they finally got their own fully collateralized DCO, CFTC
• 20:27
  Speaker 2: regulated DCO. So this is going to be used for
• 20:29
  Speaker 2: prediction markets. So they can't use it for margin trading
• 20:32
  Speaker 2: at the moment. And this really shows, one, they're investing
• 20:35
  Speaker 2: heavily into prediction markets. You go on the app today,
• 20:38
  Speaker 2: it's literally the middle tab on the mobile app, front
• 20:42
  Speaker 2: and center. So that is a core part of Coinbase's
• 20:46
  Speaker 2: identity now, and they are investing heavily into it. And
• 20:49
  Speaker 2: so that's the first takeaway from this. The second one
• 20:51
  Speaker 2: is the fact that the markets are being settled in USDC.
• 20:55
  Speaker 2: And this is actually a really important change that's happening
• 20:59
  Speaker 2: to derivatives markets in the U.S., It might sound like
• 21:02
  Speaker 2: a really simple thing, but to go from cash to
• 21:05
  Speaker 2: a stablecoin, that's a big jump in regulated market structure.
• 21:09
  Speaker 2: It sounds so trivial, but it's such an important unlock
• 21:13
  Speaker 2: because the more USDC and stablecoins become normalized as a
• 21:17
  Speaker 2: USD equivalent asset for collateral, the more stablecoins are going
• 21:22
  Speaker 2: to continue to proliferate. And that is the backbone for
• 21:25
  Speaker 2: tokenization to proliferate. Because it's really stable coins as the
• 21:28
  Speaker 2: prerequisite for things like tokenized stocks to come into play.
• 21:32
  Speaker 2: And so I think those are the two takeaways to
• 21:35
  Speaker 2: take away from that tweet.
• 21:37
  Speaker 1: OK, so we put out a video earlier. Well, it
• 21:40
  Speaker 1: was actually late last week. And it was in reference
• 21:43
  Speaker 1: to some of the moves that Canada was making around
• 21:46
  Speaker 1: the Canadian dollar. You had Tetra Digital also launching CDD.
• 21:51
  Speaker 1: stablecoin now on solana so remember this is a one-to-one
• 21:55
  Speaker 1: reserve similar to you know usdc they are canada is
• 22:00
  Speaker 1: making some good moves here how are you guys exposed
• 22:03
  Speaker 1: to this do you have a strategy for the canadian
• 22:07
  Speaker 1: markets what's what's going on.
• 22:09
  Speaker 2: Here I mean, for us, we have all the Canadian
• 22:12
  Speaker 2: ETFs that you can see on the exchange or in
• 22:14
  Speaker 2: the brokerage. But I'm just really excited about being able
• 22:18
  Speaker 2: to bring dollars from every currency on-chain because that's going
• 22:22
  Speaker 2: to fuel everything. It's going to fuel FX markets. It's
• 22:26
  Speaker 2: going to help for payments. Something as simple as swiping
• 22:28
  Speaker 2: a card and dealing with high FX rates when you're
• 22:31
  Speaker 2: traveling abroad, all of that is going to funnel eventually
• 22:34
  Speaker 2: down into stablecoins, make spreads tighter.
• 22:38
  Speaker 3: Bring down costs for consumers.
• 22:39
  Speaker 2: So it's going to have, it sounds like a simple thing,
• 22:42
  Speaker 2: but it's going to have large second order consequences, not
• 22:44
  Speaker 2: just for Canada, but for every country and every fiat
• 22:47
  Speaker 2: currency around the world.
• 22:48
  Speaker 1: How long do you think that is before we really
• 22:50
  Speaker 1: see that kind of integration?
• 22:53
  Speaker 3: It's not going to be a decade. It's not going
• 22:55
  Speaker 3: to be a year.
• 22:56
  Speaker 1: Less than five?
• 22:57
  Speaker 3: I think less than five.
• 22:58
  Speaker 1: What about less than three?
• 23:00
  Speaker 3: Let's say three to five. Three to five.
• 23:01
  Speaker 1: Okay. Speaking of TradFi, this is the Billion, if not, yeah,
• 23:08
  Speaker 1: I'll put it on the billion dollar question. And that
• 23:11
  Speaker 1: is around KYC. You got what is now former Commissioner
• 23:16
  Speaker 1: Hester Peirce warning that existing KYC and AML, these are
• 23:21
  Speaker 1: basically these honeypots of databases that are just, as we
• 23:25
  Speaker 1: get more AI and eventually even more complexity around that,
• 23:29
  Speaker 1: these are going to be targets and vectors to essentially
• 23:33
  Speaker 1: expose all of our information. When it comes to something
• 23:38
  Speaker 1: like zero knowledge proofs, are you guys going to be
• 23:41
  Speaker 1: one of the first? Do you think you'll beat the
• 23:42
  Speaker 1: major exchanges in doing this?
• 23:44
  Speaker 2: I think zero knowledge proofs around KYC and AML is
• 23:47
  Speaker 2: one of the most exciting things that can happen for
• 23:49
  Speaker 2: compliance just at large. I think the big challenge with
• 23:53
  Speaker 2: this is going to be getting the regulators.
• 23:57
  Speaker 3: Comfortable with it all around the world.
• 23:59
  Speaker 2: So even if the US regulators become comfortable with it,
• 24:02
  Speaker 2: and they have been, you cannot overstate how much credit
• 24:05
  Speaker 2: they deserve with respect to really pushing the envelope with
• 24:09
  Speaker 2: respect to financial innovation over the past several years. But
• 24:12
  Speaker 2: that's only one country, right? You have to do this
• 24:14
  Speaker 2: in Europe. You have to do it in Canada. You
• 24:16
  Speaker 2: have to do it in Japan. And everybody has different rules,
• 24:19
  Speaker 2: different regulations. different ways of doing things. And so there's
• 24:23
  Speaker 2: bespoke requirements around the world. And so I think it's
• 24:27
  Speaker 2: something I'm super excited about, but it will take time
• 24:31
  Speaker 2: for the world to get there.
• 24:32
  Speaker 1: Let's move on to another trend that's appearing, and that
• 24:35
  Speaker 1: is TCG. When you look at tokenized trading cards down
• 24:40
  Speaker 1: the road here, you got Coinbase. Your binder is about
• 24:44
  Speaker 1: to get a major upgrade, and they're talking about where
• 24:47
  Speaker 1: you'll be able to do rips like this. And we've covered,
• 24:49
  Speaker 1: we've had the cards guys on Do you think this
• 24:51
  Speaker 1: is just too much of a corporate spin for someone
• 24:55
  Speaker 1: like a Coinbase to go this direction?
• 24:58
  Speaker 2: You've got to respect people taking shots on goal. Is
• 25:00
  Speaker 2: the right product for Coinbase? Probably not. Are they taking
• 25:04
  Speaker 2: shots on goal and they're trying new things?
• 25:06
  Speaker 3: Yes. And you've got to love that. Yeah. So I
• 25:09
  Speaker 3: don't know. That's my take.
• 25:10
  Speaker 1: All right. You've got it right there. Cards, of course,
• 25:14
  Speaker 1: is really kicking it. We'll see. But they ripped. When
• 25:18
  Speaker 1: you see this market in general, let me ask you,
• 25:21
  Speaker 1: I mean, you probably are maybe not fully into this,
• 25:23
  Speaker 1: but we're going to see these assets being held in
• 25:26
  Speaker 1: wallets and areas like what you guys are doing on Backpack.
• 25:30
  Speaker 1: how much of the market do you think this could
• 25:32
  Speaker 1: really entice? Is this going to be a big market
• 25:34
  Speaker 1: or just a small market?
• 25:36
  Speaker 2: I was looking at tweets of Kevin O'Leary wearing a,
• 25:38
  Speaker 2: what was that? Like one, $ 2 billion, $ 2 billion Shohei Otani,
• 25:43
  Speaker 2: a one-on-one baseball card the other day. So, I mean,
• 25:46
  Speaker 2: there's clearly like, you know, a killer market for this. It'll,
• 25:49
  Speaker 2: It's got to continue to grow. I think NFTs had
• 25:54
  Speaker 2: their moment in the last cycle, and this is the
• 25:56
  Speaker 2: next natural evolution of that.
• 25:58
  Speaker 3: But collectibles aren't going anywhere.
• 26:00
  Speaker 2: And if anything, with AI, this type of social scarcity,
• 26:05
  Speaker 2: these collective stories.
• 26:08
  Speaker 3: I think it's just going to continue to grow. You want.
• 26:11
  Speaker 2: you know, a concept of what it means to, uh, uh,
• 26:14
  Speaker 2: have like some shared culture and story for what's happening
• 26:17
  Speaker 2: in the world.
• 26:18
  Speaker 3: And that's expressed through sports. It's expressed through art.
• 26:20
  Speaker 2: It's expressed, expressed through Pokemon and all these things. And
• 26:24
  Speaker 2: everybody can relate to that. Uh, even if you're not
• 26:27
  Speaker 2: a trader.
• 26:27
  Speaker 1: For sure. Let's talk about the, um, the backpack tokenomics.
• 26:31
  Speaker 1: I'm looking at, uh, you guys' reveal of this, uh,
• 26:36
  Speaker 1: and it gives us a, you know, a full breakdown here.
• 26:40
  Speaker 1: In general, explain this to me. How do you explain
• 26:43
  Speaker 1: this to people who are looking at Backpack as an investment?
• 26:46
  Speaker 2: Uber built this incredible business all around the world. And
• 26:52
  Speaker 2: one of the most important ingredients to building that business
• 26:55
  Speaker 2: was convincing all of these hardworking drivers to bootstrap their network.
• 27:02
  Speaker 2: Uber couldn't give the drivers stock. They're not an accredited investor.
• 27:06
  Speaker 2: There's all these securities laws around it. It's a great
• 27:10
  Speaker 2: example of how these old rules that were put into
• 27:16
  Speaker 2: place over the past century have really artificially restricted people's
• 27:21
  Speaker 2: ability to generate wealth. If you are working, if you
• 27:25
  Speaker 2: are creating value for a project, a company, a protocol,
• 27:30
  Speaker 2: you deserve a right to.
• 27:33
  Speaker 2: Take and participate in that upside. It should have been
• 27:36
  Speaker 2: true with Uber when you're driving cars. And it's true
• 27:39
  Speaker 2: on Backpack when you're doing things like providing liquidity and
• 27:42
  Speaker 2: genuinely contributing to creating this marketplace.
• 27:46
  Speaker 3: Of trading liquidity.
• 27:48
  Speaker 2: And so that is kind of the spirit with which
• 27:51
  Speaker 2: we brought these tokenomics. Actual equity in a company. We
• 27:57
  Speaker 2: might have been one of the first, if not the first,
• 27:59
  Speaker 2: to do something like this. where you can actually convert
• 28:02
  Speaker 2: the tokens into equity in the underlying company just by
• 28:09
  Speaker 2: virtue of contributing to the product and the network that's
• 28:14
  Speaker 2: being built. And then on top of this, these are
• 28:17
  Speaker 2: probably the most extreme tokenomics perhaps ever created. I've been
• 28:22
  Speaker 2: in this space for almost a decade now. I've seen everything.
• 28:24
  Speaker 3: Under the sun. I've seen booms. I've seen busts.
• 28:28
  Speaker 2: I've seen more kind of scams than you can imagine
• 28:31
  Speaker 2: by just looking at token charts. You know, it's the
• 28:34
  Speaker 2: same pattern, right? You spike it on TGE day one,
• 28:37
  Speaker 2: and that's the exit event. That's the exit event for
• 28:39
  Speaker 2: the team, for our investors, for whatever. And then it
• 28:42
  Speaker 2: just slowly bleeds down to zero. And so we asked ourselves, well,
• 28:45
  Speaker 2: how do you just do the opposite of that? How
• 28:47
  Speaker 2: do you like engineer a token for growth? So that
• 28:51
  Speaker 2: the token grows alongside the product where you can start small,
• 28:57
  Speaker 2: like any humble company. And then as the product grows,
• 29:01
  Speaker 2: as you hit your milestones, the token can grow, the
• 29:04
  Speaker 2: community can grow, the product can grow. so that you
• 29:06
  Speaker 2: can build something to hit escape velocity and stand the
• 29:10
  Speaker 2: test of time. There is zero team unlock in the
• 29:14
  Speaker 2: traditional sense. All of the tokens that will be going
• 29:18
  Speaker 2: into circulating supply up until a time that we hit, say,
• 29:21
  Speaker 2: an IPO is going to be unlocked purely for users
• 29:25
  Speaker 2: on the platform. So we did that first 25% on
• 29:27
  Speaker 2: our TGE that went to our users. We had this 37.5%
• 29:29
  Speaker 2: that will go as we hit large milestones. A great
• 29:36
  Speaker 2: example of this is once we open up the US.
• 29:39
  Speaker 2: So we've not served our core product in the US.
• 29:41
  Speaker 2: We've not served our core product in Japan. These are
• 29:43
  Speaker 2: huge markets where we only serve 48% of the world
• 29:47
  Speaker 2: right now. So a big part of our story is
• 29:50
  Speaker 2: going to be going into new markets with huge product milestones,
• 29:53
  Speaker 2: going to market and using that token as a growth
• 29:56
  Speaker 2: lever to be able to bootstrap these new regions where
• 29:59
  Speaker 2: we've never served users before.
• 30:00
  Speaker 3: You cannot VPN into.
• 30:02
  Speaker 2: Backpack today to circumvent our KYC. That does not work.
• 30:07
  Speaker 2: And so that's going to be the growth story. And
• 30:10
  Speaker 2: the team tokens are really simple. We have 37.5% of
• 30:15
  Speaker 2: the total token supply.
• 30:16
  Speaker 3: It sits on our balance sheet as a corporate treasury.
• 30:18
  Speaker 2: And those are locked one year post.
• 30:21
  Speaker 3: An IPO or other such equity event. So to get
• 30:25
  Speaker 3: acquired or whatever.
• 30:26
  Speaker 2: So we have to do all the hard work to
• 30:28
  Speaker 2: actually get to that moment, to actually do a public offering.
• 30:33
  Speaker 2: And then a year after that is the only time
• 30:35
  Speaker 2: we can get access to those tokens.
• 30:37
  Speaker 1: So what would be these growth triggers that you have
• 30:40
  Speaker 1: here on this? I've kind of highlighted this, it says,
• 30:44
  Speaker 1: progressively unlocked upon achievement of key milestones. Is that the
• 30:47
  Speaker 1: milestones you're talking about?
• 30:48
  Speaker 3: That's right. Yeah, yeah.
• 30:49
  Speaker 1: Okay.
• 30:50
  Speaker 3: Bringing derivatives to the US. All right. That's a great example. Yeah.
• 30:55
  Speaker 1: All right. Very cool.
• 30:56
  Speaker 3: Okay.
• 30:56
  Speaker 1: So how long do you think that we're going to
• 30:59
  Speaker 1: see until TradFi realizes the benefits of stock pairs? You
• 31:04
  Speaker 1: got this announcement right here, the Million Dollar Club on stock.
• 31:07
  Speaker 1: I mean, we're going to see more of this. What
• 31:10
  Speaker 1: are your thoughts about this?
• 31:11
  Speaker 2: I think the key thing that TradFi is already realizing
• 31:14
  Speaker 2: right now, and I'm seeing this every day, talking to
• 31:16
  Speaker 2: ETF issuers, asset managers, everybody is seeing tokenization and these
• 31:23
  Speaker 2: blockchain platforms as huge global distribution vehicles. They want inflows
• 31:31
  Speaker 2: into their funds. They want inflows into their currencies. This
• 31:35
  Speaker 2: is maybe one of the most underappreciated aspects of the stablecoin.
• 31:40
  Speaker 3: You're exporting the dollar globally.
• 31:41
  Speaker 2: You're asserting USD dominance over the entire world. Now, every
• 31:45
  Speaker 2: other fiat currency in the world is thinking, well, how
• 31:48
  Speaker 2: do I do the same thing? And you're seeing this
• 31:50
  Speaker 2: exact same story play out with all the stocks, which
• 31:53
  Speaker 2: is kind of the funny part of the whole Robinhood
• 31:55
  Speaker 2: versus AMT thing. I don't think the CEO fully appreciated
• 31:59
  Speaker 2: that this is actually driving bid demand into your stock.
• 32:04
  Speaker 2: And that is the most important thing that people will
• 32:07
  Speaker 2: start to realize, that it's only positive for their stock price.
• 32:11
  Speaker 3: It's only positive for inflows.
• 32:13
  Speaker 2: And it just opens up a huge market that otherwise
• 32:17
  Speaker 2: would not be accessing these assets.
• 32:19
  Speaker 1: Yeah. Just a matter of time. You've got Robinhood doing something.
• 32:22
  Speaker 1: They're rolling out now more agentic trading. You're talking about
• 32:26
  Speaker 1: an MCP, a server. How long before we see something
• 32:30
  Speaker 1: like this with Backpack?
• 32:31
  Speaker 2: Yeah, so we already have MCP servers internally. I think
• 32:34
  Speaker 2: the challenge with AI right now is the form factor
• 32:39
  Speaker 2: fully hasn't been figured out. So we've got some AI
• 32:41
  Speaker 2: features rolling out to really help you kind of get
• 32:44
  Speaker 2: a grasp on the market and to manage your portfolios.
• 32:48
  Speaker 2: But yeah, I think there's just going to be a
• 32:49
  Speaker 2: ton of really interesting AI stuff kind of coming down
• 32:51
  Speaker 2: the line.
• 32:52
  Speaker 1: But right now, can I plug in an agent into Backpack?
• 32:56
  Speaker 3: You could.
• 32:56
  Speaker 2: Yeah.
• 32:56
  Speaker 3: Yeah.
• 32:57
  Speaker 1: Is there plans for a built in tool like an
• 32:59
  Speaker 1: agent tool?
• 33:00
  Speaker 3: Yeah. So there is plans for built in like AI features.
• 33:04
  Speaker 2: Right. A good example of this is like you show
• 33:06
  Speaker 2: up to a broker and you want to ask a
• 33:08
  Speaker 2: question like, show me all the, you know, hot, you know,
• 33:13
  Speaker 2: high kind of, you know, five. plus percent dividend paying
• 33:16
  Speaker 2: stocks in this market sector. Those are the types of
• 33:19
  Speaker 2: things where I think- It's not signal, it's just report though. Eventually,
• 33:23
  Speaker 2: you'll get into a place where agents will be managing
• 33:26
  Speaker 2: portfolios and things like that. But I think it's still
• 33:30
  Speaker 2: a bit early before those products have taken off, but
• 33:32
  Speaker 2: I think we're definitely going to see more and more
• 33:34
  Speaker 2: of that.
• 33:34
  Speaker 1: All right, man, this has been a good one. I've
• 33:36
  Speaker 1: learned a lot about Backpack. We continue to watch what
• 33:39
  Speaker 1: you guys are doing, Armani. So we'll definitely have you
• 33:43
  Speaker 1: back on as things start to develop. We wanted to
• 33:45
  Speaker 1: thank you so much for coming in today. We appreciate it.
• 33:48
  Speaker 3: Yeah, thank you, Paul.