Latest / The Paul Barron Crypto Show / Avalanche Is About To Catch Fire🔥AVAT CEO On Tokenized Stocks

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Avalanche Is About To Catch Fire🔥AVAT CEO On Tokenized Stocks · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Is Avalanche on fire and is it ready for a takeoff? Today,
• 0:04
  Speaker 1: we're going to be breaking that down because there could
• 0:05
  Speaker 1: be some things brewing within the Avalanche ecosystem that could
• 0:09
  Speaker 1: start an interesting move overall. Before we get started, I
• 0:13
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  Speaker 1: to get a little bit of a discount. Let them
• 1:12
  Speaker 1: know we sent you. I want to bring in Bart Smith,
• 1:15
  Speaker 1: who is the CEO of the Avalanche Treasury Company, to
• 1:18
  Speaker 1: kind of break it down and get going. We've had
• 1:20
  Speaker 1: you on the show before, Bart, so welcome back in.
• 1:23
  Speaker 2: Thanks, Paul. Thanks for having me again.
• 1:26
  Speaker 1: So let's get into a few things. First of all,
• 1:28
  Speaker 1: I'm looking at the chart. What is going on here?
• 1:32
  Speaker 1: This is AVAT today. And as you can see down here,
• 1:36
  Speaker 1: just in July, pretty much has bottomed out and has
• 1:39
  Speaker 1: absolutely exploded over the last several weeks. But Avalanche in general,
• 1:45
  Speaker 1: still a little bit behind some of the other major
• 1:48
  Speaker 1: blue chip tokens that are out there. What is happening
• 1:51
  Speaker 1: right now with AVAT to cause this kind of movement?
• 1:54
  Speaker 2: Well, I think this.
• 1:56
  Speaker 3: The last year, really going into the summer, the overall
• 2:00
  Speaker 3: environment for crypto was terrible.
• 2:02
  Speaker 4: Right.
• 2:03
  Speaker 3: And so, you know, I often joke that in a
• 2:06
  Speaker 3: year ago, we thought we were getting Kevin Hassett and
• 2:08
  Speaker 3: the Clarity Act and we got Kevin Warsh and a
• 2:11
  Speaker 3: war in Iran.
• 2:12
  Speaker 2: Right. So not exactly what we bargained for.
• 2:15
  Speaker 3: So, you know, that was compounded by the fact that
• 2:19
  Speaker 3: AI just soaked up all of the growth capital and
• 2:24
  Speaker 3: for infrastructure and chips. And there was this great mania
• 2:27
  Speaker 3: around that. And growth capital is not infinite. So for
• 2:31
  Speaker 3: all of those reasons, there was just no bid for crypto.
• 2:37
  Speaker 3: One of the benefits of the permanent capital vehicle structure
• 2:42
  Speaker 3: that you and I spoke about a year ago is
• 2:45
  Speaker 3: that when I own an ETF and if I'm running
• 2:49
  Speaker 3: an ETF and someone gives me a bunch of cash,
• 2:51
  Speaker 3: I have to go out and buy avax that day
• 2:55
  Speaker 3: whether i want to or not and the inverse is
• 2:57
  Speaker 3: true when people are scared and fearful and they're selling
• 3:00
  Speaker 3: i have to take those shares and i have to
• 3:02
  Speaker 3: sell the avax underneath them give them cash back right
• 3:04
  Speaker 3: and that helps to in my opinion amplify some of
• 3:08
  Speaker 3: these already volatile parts of this kind of nascent technology
• 3:11
  Speaker 3: so one of the nice parts about uh owning a
• 3:14
  Speaker 3: treasury is it's a permanent capital vehicle. So I don't
• 3:17
  Speaker 3: have to respond to, you know, fear and exuberance in
• 3:22
  Speaker 3: the market. I can take an intermediate to long-term view. So,
• 3:25
  Speaker 3: you know, when, when we did our business combination, we
• 3:28
  Speaker 3: started trading in June, there were a lot of investors who,
• 3:31
  Speaker 3: who didn't want to own Avalanche and they sold. And the,
• 3:34
  Speaker 3: you know, in our opinion, the share price of our
• 3:37
  Speaker 3: stock went well below its intrinsic value. And in an
• 3:40
  Speaker 3: environment where everything all day long was talking about, AI
• 3:45
  Speaker 3: and other asset classes, you know, they just kind of
• 3:49
  Speaker 3: live there for a while.
• 3:50
  Speaker 2: But now you're seeing.
• 3:51
  Speaker 3: As tokenization is starting to have real world utilization and
• 3:56
  Speaker 3: people are coming back and saying, wow, like I actually
• 3:59
  Speaker 3: believe that that Innovation is going to be part of
• 4:03
  Speaker 3: the crypto narrative and this idea that AI and crypto
• 4:07
  Speaker 3: are going to help one another. All of those things
• 4:09
  Speaker 3: have led to a bid in crypto. Avalanche has made
• 4:14
  Speaker 3: a bunch of great announcements that we can talk about.
• 4:16
  Speaker 3: And all of that has led to people saying, you
• 4:18
  Speaker 3: know what, there's this undervalued asset out there that gets
• 4:21
  Speaker 3: me exposure to this technology.
• 4:23
  Speaker 2: So I'm going to buy it.
• 4:25
  Speaker 1: All right, so a few things to unpack there, because
• 4:27
  Speaker 1: I think you're right. There has been quite a bit
• 4:30
  Speaker 1: of a pivot here within the industry. Part of that
• 4:34
  Speaker 1: is aligned very closely with AI. We'll talk about agentic
• 4:37
  Speaker 1: as well, Here's Ryan Rasmussen. He hit on something. And
• 4:40
  Speaker 1: just so you guys know, this is Bitwise, one of
• 4:41
  Speaker 1: the researchers over there. And I'll show something here on
• 4:45
  Speaker 1: the image. This is the post-clarity crypto rally that they're
• 4:48
  Speaker 1: talking about. And if you look at the layer 1s
• 4:51
  Speaker 1: and layer 2s, you'll notice that near, of course, large position,
• 4:55
  Speaker 1: but avalanche over hyperliquid, lighter, XRP, Solana, and ETH. So
• 5:00
  Speaker 1: a significant position here as we continue to see assets
• 5:04
  Speaker 1: going in that direction. When you look at the crypto
• 5:07
  Speaker 1: rally in general and how institutions are playing into this
• 5:11
  Speaker 1: versus retail, when you kind of compare the two, institutions
• 5:15
  Speaker 1: kind of lead a little bit early. Do you think
• 5:18
  Speaker 1: retail is prepped to come back into Avalanche now?
• 5:23
  Speaker 3: I do. I think you're going to continue to see
• 5:25
  Speaker 3: more wins for the Avalanche community in the institutional space.
• 5:31
  Speaker 2: I think one of the things has been very heartening.
• 5:35
  Speaker 3: Is that the ecosystem has been focused on institutions and business.
• 5:40
  Speaker 3: You know, Avalanche is built for business, right? And that
• 5:43
  Speaker 3: is the utilization case. And so there was an announcement
• 5:45
  Speaker 3: last week that New York Stock Exchange had done, you know,
• 5:49
  Speaker 3: a request for proposal.
• 5:50
  Speaker 2: They looked at you know, probably a dozen L1s.
• 5:54
  Speaker 3: And they were talking about how the Avalanche checks all
• 5:57
  Speaker 3: the boxes, right? It allows them to customize their compliance,
• 6:01
  Speaker 3: their KYC. They can spin up their own chain, but
• 6:04
  Speaker 3: then it connects to this high throughput, decentralized EVM compatible chain.
• 6:09
  Speaker 3: So the archetype of the New York Stock Exchange is
• 6:13
  Speaker 3: very similar to the archetype of CME or NASDAQ or,
• 6:18
  Speaker 3: you know, And then you go down the line to
• 6:20
  Speaker 3: asset managers that are announcing that they're going to be
• 6:22
  Speaker 3: building on top of the Avalanche chain. New York Life
• 6:26
  Speaker 3: just made a huge announcement. So the archetype of that
• 6:28
  Speaker 3: looks a lot like BlackRock, which has their biddle that
• 6:32
  Speaker 3: they distribute on Avalanche. So I think what you're starting
• 6:35
  Speaker 3: to see is that these big institutions and massive TAMs,
• 6:39
  Speaker 3: massive verticals are choosing... Avalanche and people are saying, well,
• 6:43
  Speaker 3: if they're going to choose it, it's likely that at
• 6:46
  Speaker 3: a minimum, it'll be in the top two or three
• 6:49
  Speaker 3: that other big institutions are looking to. And therefore, you
• 6:54
  Speaker 3: can imagine as 27 and 28 and 29 roll in,
• 6:57
  Speaker 3: you're going to see Avalanche winning more and more of
• 7:00
  Speaker 3: these mandates.
• 7:02
  Speaker 1: Just because are you are you is this real? Because
• 7:06
  Speaker 1: I think a lot of people were looking at this
• 7:08
  Speaker 1: and trying to trace this down. to understand if this
• 7:11
  Speaker 1: was actually, because reports were coming out that this is
• 7:14
  Speaker 1: being considered not necessarily as a full-on done deal. Do
• 7:20
  Speaker 1: you know?
• 7:20
  Speaker 3: Yeah, it was not announced as a done deal. It
• 7:23
  Speaker 3: was announced that they believe that Avalanche checks all the boxes.
• 7:27
  Speaker 3: They did not go as far to say they're going
• 7:29
  Speaker 3: to choose it. I think the market reacted to say
• 7:32
  Speaker 3: that if they think that it's going to work for them,
• 7:36
  Speaker 3: not saying that they're going to choose it, it's going
• 7:38
  Speaker 3: to work for a lot of other things.
• 7:40
  Speaker 4: Yeah.
• 7:40
  Speaker 1: Yeah, for sure. Other things that are happening is, as
• 7:44
  Speaker 1: you guys know, liquid staking, Benkei. This, of course, exploded
• 7:47
  Speaker 1: right now. If you look at just the expansion that
• 7:49
  Speaker 1: we saw on Benkei over the last day, pretty significant.
• 7:55
  Speaker 1: And if you compare that to where staked AVAX has
• 7:58
  Speaker 1: started to move, it's actually been trending up. So this
• 8:01
  Speaker 1: is another positive for Avalanche in general, especially if you
• 8:05
  Speaker 1: look at the seven-day change right there, plus 26%. So
• 8:09
  Speaker 1: with all that, when you look at staked AVAX in
• 8:13
  Speaker 1: general and you compare to some of the news that's
• 8:16
  Speaker 1: been coming out, this is something I think that starts
• 8:19
  Speaker 1: these early cycles to move forward. Does this impact institutional
• 8:24
  Speaker 1: investors in any way?
• 8:27
  Speaker 3: I think the idea that you can use this as collateral,
• 8:30
  Speaker 3: that is a functional asset as part of an overall
• 8:34
  Speaker 3: portfolio that you can do in a decentralized manner, that's great.
• 8:37
  Speaker 3: That is the exact kind of progress that we need
• 8:41
  Speaker 3: to see. I think that that is more of a
• 8:45
  Speaker 3: retail driven or maybe even crypto native exposure. The institutions
• 8:52
  Speaker 3: are going to have to understand that a little bit better.
• 8:54
  Speaker 3: There's a lot of conversations that we're having. that you
• 8:56
  Speaker 3: can stake this asset to secure the network, you get
• 8:59
  Speaker 3: compensated for that, and that still becomes a usable asset
• 9:04
  Speaker 3: in other forms. And so that education on the institutional
• 9:08
  Speaker 3: front is ongoing, and I believe is going to take time.
• 9:11
  Speaker 3: But the growth of it provides the test case that
• 9:17
  Speaker 3: you can show institutions that will draw them in.
• 9:21
  Speaker 1: You also have some things happening right now in terms
• 9:24
  Speaker 1: of upgrades that are happening. Helicana, of course, is launched
• 9:28
  Speaker 1: and in the process of, but you've got several upgrades
• 9:31
  Speaker 1: that are driven. These are six avalanche community proposals that
• 9:35
  Speaker 1: are coming in. You have the continuous execution, auto-renewed staking,
• 9:39
  Speaker 1: uptime requirement, reduced minimum staking duration, the dynamic minimum gas.
• 9:44
  Speaker 1: Any of these that are maybe more important than others
• 9:48
  Speaker 1: or that could really maybe maximize the opportunity here with Avalanche?
• 9:54
  Speaker 3: I mean, the continuous staking is just an administrative burden
• 9:58
  Speaker 3: is removed, right? And so, that to me is just
• 10:01
  Speaker 3: a natural, you know, operational upgrade. In general, there is
• 10:07
  Speaker 3: a push and pull between the economics of all of
• 10:11
  Speaker 3: these L1s, that the inflation rate, you know, is a
• 10:15
  Speaker 3: headwind on prices and that you know, you want to
• 10:20
  Speaker 3: reward people for dynamic behavior, right? And not just setting
• 10:25
  Speaker 3: a staking and leaving it. So I think what you're
• 10:28
  Speaker 3: also trying to figure out, which is related but different,
• 10:32
  Speaker 3: is many of these L1s slash their prices down to
• 10:36
  Speaker 3: make it next to free to transact on that.
• 10:39
  Speaker 2: And that allows, you.
• 10:41
  Speaker 3: Know, nascent businesses, applications are building on top of the
• 10:45
  Speaker 3: Avalanche ecosystem to grow without a tremendous amount of cost.
• 10:49
  Speaker 3: At some point, there is a push and pull from
• 10:51
  Speaker 3: that dynamic about trying to have revenue accrue back to
• 10:56
  Speaker 3: the chain in the form of Avalanche. It is used
• 10:59
  Speaker 3: to burn tokens because unlike many other chains, there is
• 11:02
  Speaker 3: a fixed number of AVAX tokens. So trying to create
• 11:07
  Speaker 3: a balance between allowing businesses to grow on the ecosystem
• 11:12
  Speaker 3: without burdensome fees But then when you have adoption and
• 11:16
  Speaker 3: there's a lot of economic activity, that economic activity leads
• 11:21
  Speaker 3: to burning of the tokens so that the value of
• 11:24
  Speaker 3: the AVAX token goes up. And I think this is
• 11:26
  Speaker 3: going to be an ongoing community discussion for Ethereum, for Solana,
• 11:31
  Speaker 3: for Avalanche. And this is one of the things over
• 11:35
  Speaker 3: the next couple of years, as I believe the different
• 11:38
  Speaker 3: constructs of L1s are going to, for the first time,
• 11:41
  Speaker 3: actually matter. These types of decisions are going to be
• 11:45
  Speaker 3: very important.
• 11:47
  Speaker 2: And so, you know, you're.
• 11:48
  Speaker 3: Seeing already that the use cases for blockchains as far
• 11:54
  Speaker 3: as implementation goes are very different. than they were even
• 11:59
  Speaker 3: 12 months ago. And those are gonna require different technological
• 12:03
  Speaker 3: capacities of different L1s. And so the technological choices and
• 12:09
  Speaker 3: the inducement choices that they make as far as how
• 12:13
  Speaker 3: much the chain costs to use and how much someone
• 12:15
  Speaker 3: is paid to secure that chain, all of those dynamic
• 12:20
  Speaker 3: things over time are gonna continue to evolve. And the
• 12:23
  Speaker 3: ecosystems who do that right are more likely to win.
• 12:28
  Speaker 4: Yeah.
• 12:28
  Speaker 1: Well, I think you're right. The key here is innovation.
• 12:31
  Speaker 1: I've got a clip here in a little bit. We'll
• 12:33
  Speaker 1: play with Charlie, who is going to be one of
• 12:35
  Speaker 1: the new leaders within Avalabs. And I want to get
• 12:39
  Speaker 1: your opinion on it. Before I jump to that, I
• 12:41
  Speaker 1: want to leap over to what happened, of course, on
• 12:44
  Speaker 1: the BitCat saga, which is the hack we just announced yesterday.
• 12:49
  Speaker 1: And of course, it's gone through. Avalanche was involved. And
• 12:51
  Speaker 1: I say Avalanche. AVAX, the token, was involved in this. And, uh,
• 12:56
  Speaker 1: it looks like North Korea made a big mistake because
• 12:58
  Speaker 1: they went out and tried to sell this over on Pharaoh.
• 13:01
  Speaker 1: And of course, Pharaoh responded and in a very interesting way.
• 13:06
  Speaker 1: And that was by jacking up the fees whenever these
• 13:09
  Speaker 1: bad guys were out there trying to dispose of it.
• 13:12
  Speaker 1: And you can kind of see the fee movement right
• 13:14
  Speaker 1: there on the dynamic pricing. So in essence, what Pharaoh did,
• 13:18
  Speaker 1: and we've had the, you know, lame hillbilly on before. And, um,
• 13:23
  Speaker 1: they've basically repurposed that back out to the community. And then,
• 13:26
  Speaker 1: of course, there's a man kind of playing with this,
• 13:29
  Speaker 1: you know, don't bet against the family. But I think
• 13:32
  Speaker 1: these kind of things, it just shows that there is
• 13:36
  Speaker 1: a community, there's a degen opportunity here, I think, within
• 13:40
  Speaker 1: the AVAX ecosystem that could really start to maybe put
• 13:45
  Speaker 1: Avalanche back in the spotlight because we've seen the success
• 13:49
  Speaker 1: of Solana. You have seen the success to a certain
• 13:52
  Speaker 1: extent with Ethereum within Robinhood chain. And I think we're
• 13:55
  Speaker 1: going to see more of that. But I want to
• 13:58
  Speaker 1: caveat that with a clip, Bart. And then I want
• 14:02
  Speaker 1: to get your response after this clip.
• 14:03
  Speaker 2: Here we go.
• 14:04
  Speaker 1: What is your mandate?
• 14:05
  Speaker 3: How does that differ from your predecessors?
• 14:08
  Speaker 4: My vision is, again, to talk about the solutions that
• 14:11
  Speaker 4: we are providing as real world ways to solve problems.
• 14:15
  Speaker 4: This is not innovation for innovation's sake. but we're playing
• 14:18
  Speaker 4: with serious people who have serious problems and they need
• 14:20
  Speaker 4: to understand us as a mature organization that thinks the
• 14:23
  Speaker 4: way that institutions do.
• 14:25
  Speaker 2: And that's my focus.
• 14:26
  Speaker 4: Those organizations that will look at the failure of Clarity
• 14:29
  Speaker 4: Act and decide to take their foot off the gas
• 14:31
  Speaker 4: in innovations, we're never going to be leaders in this
• 14:33
  Speaker 4: space anyway.
• 14:36
  Speaker 1: All right. So that's Charlie Cooper, one of the new
• 14:39
  Speaker 1: leads at Avalanche. And there's a couple of things here
• 14:43
  Speaker 1: that I get concerned with. One is when you talk
• 14:45
  Speaker 1: about innovation for kind of this next generation of finance,
• 14:50
  Speaker 1: because it's mostly in reality institutions, which are most likely
• 14:55
  Speaker 1: going to be the slowest to react. A good example
• 14:58
  Speaker 1: of that, this, of course, is Securitize's launch of ARK
• 15:02
  Speaker 1: just this week. And what I noticed here, Bart, was
• 15:07
  Speaker 1: that the threshold to entry, the barrier to entry is
• 15:11
  Speaker 1: still there. KYC layered up upon layers of I mean,
• 15:15
  Speaker 1: it's just so complicated to get and do this. This
• 15:18
  Speaker 1: is why I think we're losing this next generation investor.
• 15:22
  Speaker 1: And that's including the degens, you know, that are coming
• 15:25
  Speaker 1: into this. Can Avalanche reposition here and recapture that spark?
• 15:30
  Speaker 1: Or do you feel like they have relegated to an
• 15:33
  Speaker 1: institution play?
• 15:36
  Speaker 3: I think very much that both of those things can
• 15:38
  Speaker 3: happen in parallel, right? So on one hand, there is
• 15:41
  Speaker 3: the kind of the, as you call it, the degen
• 15:43
  Speaker 3: kind of native community that is still vibrant and growing.
• 15:48
  Speaker 3: You know, on the other side, and I think what
• 15:50
  Speaker 3: Charlie is focused on is that if you are an
• 15:53
  Speaker 3: institution who is utilizing this blockchain within your business model
• 15:58
  Speaker 3: and your strategy, it is enterprise software and that's how
• 16:01
  Speaker 3: they use it. So those two things, it's the same chain,
• 16:04
  Speaker 3: but they're very different. So an institution can go to
• 16:07
  Speaker 3: GitHub and download Avalanche software, and they can spin up
• 16:11
  Speaker 3: their own L1. And if they don't tell anybody that
• 16:15
  Speaker 3: that's their L1, we see that there's another L1. We
• 16:17
  Speaker 3: don't know who it is. And that is a walled garden.
• 16:20
  Speaker 3: They can pose that any way they want. They can
• 16:23
  Speaker 3: title whatever information they want for people to see and
• 16:26
  Speaker 3: who sees it. And that's what institutions need. Ultimately, that
• 16:30
  Speaker 3: connects to the C-chain, which is the totally decentralized high
• 16:34
  Speaker 3: throughput EVM compatible chain. And so I think that both
• 16:38
  Speaker 3: of those things can exist, that people can use the
• 16:40
  Speaker 3: chain for many different reasons. And the decentralized community that
• 16:45
  Speaker 3: exists there and continues to grow can have the benefits
• 16:50
  Speaker 3: of that autonomy and that more libertarian kind of ideal.
• 16:54
  Speaker 3: And then there are businesses who need to use it,
• 16:56
  Speaker 3: who have legal and regulatory obligations that they need to
• 17:00
  Speaker 3: code in their KYC and code in their AML. And
• 17:03
  Speaker 3: What they're telling me when I talked to, you know,
• 17:07
  Speaker 3: I sat down with the CEO on Tuesday of a
• 17:10
  Speaker 3: major national exchange. And they need to have, they can't
• 17:16
  Speaker 3: accept the KYC of Solana or the compliance that's baked
• 17:22
  Speaker 3: into Ethereum. They need to customize their own because rules
• 17:26
  Speaker 3: in the US are interpreted, right? And so one firm's
• 17:30
  Speaker 3: interpretation of a rule and a guideline may differ from
• 17:32
  Speaker 3: another firm's firms and they both might believe that they're compliant.
• 17:36
  Speaker 3: So for all of those reasons, the customization and the
• 17:39
  Speaker 3: enterprise software facet of Avalanche is necessary for them, which
• 17:44
  Speaker 3: is why we're so confident that we're going to grow.
• 17:47
  Speaker 3: But they're connecting to a decentralized marketplace. And that decentralized
• 17:51
  Speaker 3: marketplace still has the native degen community in it. And
• 17:55
  Speaker 3: they don't have to compromise. So like Securitize is a
• 17:59
  Speaker 3: regulated on-ramp, right? And so they're going to need your
• 18:02
  Speaker 3: social security number and their date of birth and picture
• 18:05
  Speaker 3: ID and all of that.
• 18:05
  Speaker 2: And that's fine.
• 18:06
  Speaker 3: For a lot of people, they don't mind that. And
• 18:09
  Speaker 3: then for others, there's going to be other opportunities. And
• 18:11
  Speaker 3: the CFTC's actions over the last 18 months have codified that.
• 18:18
  Speaker 1: Well, okay, so the CFTC has codified that. Okay, this
• 18:21
  Speaker 1: is an argument that we get into a lot here
• 18:24
  Speaker 1: on this show, and that is that our belief, and
• 18:27
  Speaker 1: I think it has already started to show in terms
• 18:30
  Speaker 1: of how the market is moving, but our belief is
• 18:32
  Speaker 1: that this cycle, you are going to see a major
• 18:37
  Speaker 1: transition happen, and it's primarily going to happen in the
• 18:44
  Speaker 1: the degens, which are usually under the 40, I hate
• 18:47
  Speaker 1: to use age, but it's usually the under 40 crowd,
• 18:49
  Speaker 1: because I consider myself a degen, but mostly under 40.
• 18:53
  Speaker 1: Me too. And they're going to be, I think, finally
• 18:57
  Speaker 1: at a state where they're going to compete on the
• 19:00
  Speaker 1: financial scale of the boomers. And the boomers, of course,
• 19:04
  Speaker 1: is where all the capital is. I get that. But
• 19:06
  Speaker 1: that's a short-lived leash before these institutions either have to
• 19:11
  Speaker 1: adjust or or they lose. It's just that it's going
• 19:15
  Speaker 1: to be that simple. They are going to have to adjust,
• 19:17
  Speaker 1: or they're going to lose. The rumor mill is out
• 19:20
  Speaker 1: there saying the SEC is gearing up to revamp KYC requirements.
• 19:24
  Speaker 1: I think this is another facade. It's not going to work,
• 19:29
  Speaker 1: and it's going to continuously deter real investors coming in
• 19:33
  Speaker 1: from the youth of really understanding what blockchain is, and
• 19:38
  Speaker 1: especially on tokenized stocks. I mean, come on. This is
• 19:40
  Speaker 1: This is a next generation that is not going to
• 19:43
  Speaker 1: go to Wall Street to invest in stocks. I just
• 19:46
  Speaker 1: don't see it. Everybody we talk to, everything we're seeing, Now,
• 19:50
  Speaker 1: some people might say, Paul, you're in a bubble. But
• 19:52
  Speaker 1: I don't think so. I think we are seeing maybe
• 19:54
  Speaker 1: a transition here going forward. I want to play a
• 19:57
  Speaker 1: clip for you and then get your opinion on tokenized
• 20:01
  Speaker 1: stocks for Avalanche. Here is Farrow talking about this.
• 20:05
  Speaker 5: We were supposed to announce that the tokenized stocks were
• 20:08
  Speaker 5: live at the summit. But we had some issues, so
• 20:12
  Speaker 5: we pushed it back a little bit.
• 20:14
  Speaker 1: I hope it will be within a month.
• 20:18
  Speaker 5: But essentially, the way that it was going to be
• 20:19
  Speaker 5: done originally cannot be done in the same capacity because
• 20:23
  Speaker 5: of legal constraints. So there are things that are happening
• 20:26
  Speaker 5: to open that up and allow for us to have
• 20:29
  Speaker 5: these stocks with various differences is about the most that
• 20:34
  Speaker 5: I can say. Also, I know that you all probably
• 20:36
  Speaker 5: saw that Arena came over this week as well with
• 20:39
  Speaker 5: a large liquidity pool. They will be one of our
• 20:41
  Speaker 5: first ecosystem partners that will be pairing with the stock.
• 20:45
  Speaker 5: They want to push some stuff out to AVAX. And
• 20:46
  Speaker 5: so I'm pretty excited about that.
• 20:48
  Speaker 2: All right.
• 20:49
  Speaker 1: So you got Arena looking like it's getting into the game.
• 20:54
  Speaker 1: You've got Farrow, which is announcing that tokenized stocks are
• 20:57
  Speaker 1: coming to Avalanche. You think this makes a major move
• 21:01
  Speaker 1: forward for Avalanche? Avalanche as a whole to get tokenized
• 21:05
  Speaker 1: stocks in the ecosystem?
• 21:08
  Speaker 2: I do.
• 21:09
  Speaker 3: I think to your original question, there is going to
• 21:13
  Speaker 3: be this classic innovator's dilemma, right? The establishment is going
• 21:16
  Speaker 3: to fight really, really hard to lean on regulatory capture
• 21:22
  Speaker 3: to try to protect the moat that they have. At
• 21:25
  Speaker 3: the same time, there's so many signs that they are
• 21:31
  Speaker 3: This is organically going to happen. People, like in that
• 21:35
  Speaker 3: last quote, they believe that there's going to be an
• 21:37
  Speaker 3: unregulated kind of venue that you're going to be able
• 21:40
  Speaker 3: to trade stocks in. And so the CME has done
• 21:42
  Speaker 3: this a bunch. Like Terry Duffy, on one hand, says,
• 21:45
  Speaker 3: I don't want these regulations. And then, you know, a
• 21:48
  Speaker 3: month later, he asked for an exemption for the very
• 21:50
  Speaker 3: thing he said shouldn't exist. And so you're going to
• 21:53
  Speaker 3: see a lot of that over the course of the next,
• 21:56
  Speaker 3: you know, call it 18 months. I believe that you're
• 21:59
  Speaker 3: going to see 23.5, if not 24.5 this year in
• 22:06
  Speaker 3: regulated stock trading. They can't do 24.7 on the old infrastructure.
• 22:11
  Speaker 3: So they're going to have to build a new infrastructure
• 22:14
  Speaker 3: to go 24.7. It's going to be tokenized. And Avalanche,
• 22:19
  Speaker 3: with all of the good news that you've seen over
• 22:22
  Speaker 3: the last, call it three months, is very, very well
• 22:25
  Speaker 3: positioned to, if not win that vertical, to be one
• 22:28
  Speaker 3: of the winners.
• 22:29
  Speaker 2: Yeah.
• 22:29
  Speaker 1: All right. So a couple of things there. You're talking
• 22:32
  Speaker 1: about the DTCC. You're talking about 23.5 or 24.5 at best.
• 22:38
  Speaker 1: And let's just be honest, guys. This has been coming
• 22:41
  Speaker 1: for two years for TradFi. And if you're in TradFi,
• 22:46
  Speaker 1: I can't say that you didn't see this coming because
• 22:49
  Speaker 1: if you didn't see it coming, you're incompetent. And now
• 22:53
  Speaker 1: you're either uneducated or you're not willing to innovate. That's
• 22:56
  Speaker 1: the real question I have is are they willing to
• 22:58
  Speaker 1: innovate and be able to bring the right kind of
• 23:01
  Speaker 1: people on? Because if this ends up as a flop season,
• 23:04
  Speaker 1: you know, for some of these institutions that are going
• 23:06
  Speaker 1: this direction and you continue to see the market outplaying
• 23:10
  Speaker 1: them on the two days they're not trading, that to
• 23:13
  Speaker 1: me is a problem. you know, down the road. It's
• 23:15
  Speaker 1: a huge problem. Yeah, it's a huge problem.
• 23:17
  Speaker 2: It's a huge problem.
• 23:18
  Speaker 3: I mean, if you look at Hyperliquid, you look at Robinhood,
• 23:22
  Speaker 3: you know, Bybit CEO came out yesterday and said, you know,
• 23:27
  Speaker 3: people want to have, they want to access commodities and
• 23:32
  Speaker 3: crypto and stocks and prediction markets and which is a
• 23:36
  Speaker 3: larger portion of the pie for young investors that you're
• 23:39
  Speaker 3: talking about.
• 23:40
  Speaker 2: They're utilizing prediction markets.
• 23:42
  Speaker 3: They're speculating on different asset classes. And they want to
• 23:45
  Speaker 3: have one place where all of that is.
• 23:48
  Speaker 2: And so.
• 23:50
  Speaker 3: The broker-dealers and the exchanges that cater to baby boomers
• 23:54
  Speaker 3: and the previous generation, because that's where all the money is,
• 23:58
  Speaker 3: what will be really interesting will be that transition of
• 24:00
  Speaker 3: wealth that's occurring over the course of the next decade
• 24:03
  Speaker 3: as it goes to this younger generation.
• 24:05
  Speaker 2: Who aren't signing up to Schwab and they're not signing
• 24:08
  Speaker 2: up to Fidelity. They have a Robinhood.
• 24:10
  Speaker 3: Account and they have a card from Rain that's backed
• 24:13
  Speaker 3: on the Avalanche ecosystem. So they can have a financial
• 24:17
  Speaker 3: world that is entirely excluded from the traditional finance wing.
• 24:23
  Speaker 3: And the only way that I see that the CMEs
• 24:28
  Speaker 3: and NYSEs and NASDAQs and Morgan Stanley's and UBS Wealth
• 24:32
  Speaker 3: Management's can compete is by acquisition.
• 24:36
  Speaker 1: Well, that is one way that it could happen. An
• 24:38
  Speaker 1: acquisition path is a possibility that is, you know, in reality,
• 24:43
  Speaker 1: that's been kind of the era of tech where they've
• 24:45
  Speaker 1: been able to suck up some of the innovation that
• 24:48
  Speaker 1: has been coming at them. Even if you look all
• 24:50
  Speaker 1: the way back in meta and its acquisition of Instagram
• 24:52
  Speaker 1: and understanding that short firm was coming and now it's
• 24:56
  Speaker 1: here and it dominates, you know, social. So, yeah, that's possible.
• 25:00
  Speaker 1: I don't know if they're smart enough yet to do that.
• 25:02
  Speaker 1: It's not an offensive statement. It's just being able to
• 25:05
  Speaker 1: look at their past history. And unfortunately, I still am
• 25:09
  Speaker 1: not sold on what TradFi is doing just yet. Now,
• 25:13
  Speaker 1: maybe there will be some changes that will change my mind.
• 25:15
  Speaker 1: But right now, I'm a little bit concerned about that.
• 25:17
  Speaker 1: Let me ask you this, because you've got possibly new
• 25:20
  Speaker 1: leadership now starting to dictate things over at Avalanche. Emin
• 25:25
  Speaker 1: has been one of those founders who you know, that
• 25:28
  Speaker 1: has a lot of the cue of where the community,
• 25:30
  Speaker 1: I think, comes from to a certain extent. But I
• 25:33
  Speaker 1: want to go back to something that occurred with Godzilla.
• 25:38
  Speaker 1: And this was a good example. Godzilla, this happened over
• 25:42
  Speaker 1: a 14-month period in the launch. I think people would
• 25:46
  Speaker 1: look at this and say that was a failure, when
• 25:48
  Speaker 1: in reality, what it was the problem was always was
• 25:52
  Speaker 1: that it was the freedom of movement and the fact
• 25:54
  Speaker 1: that it isn't and was not there. And had it
• 25:57
  Speaker 1: been there, this would have been a completely different outcome.
• 26:01
  Speaker 1: So my question, has Avalanche learned the right thing from
• 26:06
  Speaker 1: this and saying, hey, you know, we just have the
• 26:08
  Speaker 1: right tools in the bag here, but the opportunity here
• 26:12
  Speaker 1: was huge. And have they given up on, you know,
• 26:15
  Speaker 1: gaming in general? What do you think?
• 26:19
  Speaker 3: I don't believe that they're giving up any verticals. I
• 26:22
  Speaker 3: think that there are there are clear benefits to payments
• 26:29
  Speaker 3: and to the movement of credit from a blockchain that
• 26:32
  Speaker 3: has been proven.
• 26:33
  Speaker 2: It's not even debatable anymore.
• 26:35
  Speaker 3: And, you know, you even have the U S treasury
• 26:38
  Speaker 3: and the president United States coming out and saying block
• 26:40
  Speaker 3: stable coins are going to be a.
• 26:42
  Speaker 2: A very important part of our national security policy, right.
• 26:46
  Speaker 2: Of guaranteeing dollars.
• 26:48
  Speaker 3: So the, anyone who has ever traded from like a
• 26:52
  Speaker 3: trading desk perspective in us equities is understands what a messy,
• 26:58
  Speaker 3: inefficient process stock settlement is and how many mistakes are
• 27:03
  Speaker 3: made every day and that are manual that blockchain would
• 27:06
  Speaker 3: make so much faster and more efficient. So in all
• 27:09
  Speaker 3: of these cases, and I can name half a dozen more,
• 27:12
  Speaker 3: private credit issuance is just fundamentally better on a blockchain.
• 27:18
  Speaker 1: Yeah.
• 27:19
  Speaker 3: The gaming experience, I don't know that it's fundamentally better
• 27:23
  Speaker 3: for users. There are a whole bunch of reasons why
• 27:26
  Speaker 3: people would want to do them on a blockchain. I
• 27:28
  Speaker 3: don't think that the TAM is as big, and I
• 27:31
  Speaker 3: don't think that the benefit to either side of the
• 27:35
  Speaker 3: consumer or the producer is necessarily as obvious there. So
• 27:40
  Speaker 3: I don't believe that they're giving up on gaming. I
• 27:42
  Speaker 3: think Avalanche, that was an area where Avalanche... had a
• 27:46
  Speaker 3: significant market share. And I think that they'll continue to
• 27:50
  Speaker 3: focus on that. But the opportunity set right now in
• 27:54
  Speaker 3: tokenization of equities and tokenization of credit and stable coins
• 27:59
  Speaker 3: and all of the things that surrounding cross-border remittance, all
• 28:03
  Speaker 3: of that is a now time. The competition for that
• 28:08
  Speaker 3: is rife. And it's the next 18 months is going
• 28:13
  Speaker 3: to prove You know, what chains are going to be
• 28:17
  Speaker 3: the real benefactors of this and which ones are going
• 28:19
  Speaker 3: to miss this opportunity?
• 28:20
  Speaker 1: Stablecoin growth. And when you look at stablecoin growth, we've
• 28:25
  Speaker 1: had a couple of movements within stablecoin. Most of it's
• 28:29
  Speaker 1: been around DEX activity. There's been growth. But here recently,
• 28:34
  Speaker 1: not necessarily the case. And if you look at the
• 28:36
  Speaker 1: activity here, I mean, come on, this is the ranking
• 28:40
  Speaker 1: right there. That's Feral, Blackhole, LFJ. I mean, these are
• 28:43
  Speaker 1: all memes. you know, type projects that are driving growth
• 28:48
  Speaker 1: here on Avalanche. And that is to me where Avalanche
• 28:52
  Speaker 1: is missing the boat here. They've got to get back
• 28:54
  Speaker 1: into the degens and, you know, because I think this
• 28:58
  Speaker 1: is going to drive out this next generation investor. And
• 29:02
  Speaker 1: then that 30 year old is going to talk to
• 29:04
  Speaker 1: his dad. who's 55 or 60 and say, dad, no,
• 29:08
  Speaker 1: this is the way you trade. Let me show you.
• 29:10
  Speaker 1: And then his dad's going to start trading who has,
• 29:13
  Speaker 1: you know, a million dollars in his account at Schwab
• 29:15
  Speaker 1: and they're going to move. That's just my thinking. What
• 29:18
  Speaker 1: do you think?
• 29:21
  Speaker 3: I agree with you. The only, the real barrier, in
• 29:26
  Speaker 3: my opinion, And this isn't an area of failure for Avalanche.
• 29:32
  Speaker 3: It's an area of failure for the entire smart contract
• 29:36
  Speaker 3: L1 community. The user interface and the user experience for
• 29:44
  Speaker 3: crypto is still terrifying. The level of technical competence and
• 29:49
  Speaker 3: expertise that you need to have to efficiently manage use that. And,
• 29:55
  Speaker 3: and what I would say, and this is, this is
• 29:57
  Speaker 3: an interesting goes back to like the 2001, two, three,
• 30:01
  Speaker 3: four timeframe. I know a lot of people who aren't
• 30:05
  Speaker 3: under the age of 30, who were trading on trader
• 30:08
  Speaker 3: Joe on avalanche in 2021. And then, you know, obviously
• 30:12
  Speaker 3: activity there like ticked down and they had assets on, on,
• 30:16
  Speaker 3: online and, you know, on chain and.
• 30:19
  Speaker 2: They didn't use it. for like a year.
• 30:21
  Speaker 3: And then they went back to try to use it
• 30:24
  Speaker 3: and they had forgotten how to do it, right? And
• 30:26
  Speaker 3: so there is no call center there. So I think
• 30:30
  Speaker 3: one of the things that we need to do as
• 30:32
  Speaker 3: an industry is make the user interface more friendly for
• 30:38
  Speaker 3: a broader mass of people. And I think that that's
• 30:42
  Speaker 3: going to be an innovation that happens over the next,
• 30:45
  Speaker 3: call it one, two, three years that will just open
• 30:48
  Speaker 3: up such a wide, larger variety of users. I think
• 30:55
  Speaker 3: making the stablecoin activity and decentralized trading activity better is
• 31:01
  Speaker 3: part of it, but I think the user interface needs
• 31:03
  Speaker 3: to get better to grow our user base.
• 31:05
  Speaker 1: And I think that's where we are now. You've got
• 31:07
  Speaker 1: a certain degree of the population that will never make
• 31:11
  Speaker 1: it over, but it's okay. That's not a big deal.
• 31:14
  Speaker 1: There was a lot of that population that came onto
• 31:17
  Speaker 1: the internet, And it was mostly guys like me that
• 31:21
  Speaker 1: grew up on nothing but the Internet versus people that
• 31:24
  Speaker 1: did not. And I think that's where the line in
• 31:26
  Speaker 1: the sand draws right now. We are at a point
• 31:29
  Speaker 1: of reflection that, unfortunately, I think the market is moving
• 31:33
  Speaker 1: on without. It just happens to be that the old
• 31:37
  Speaker 1: guard has a very hard iron fist around that. It's
• 31:41
  Speaker 1: mostly because of the money that's being traded at these
• 31:44
  Speaker 1: higher levels. So I think that's going to change, man.
• 31:47
  Speaker 1: And I need you got, you got to skate to
• 31:49
  Speaker 1: where the puck is. So MN, if you're listening, innovate, innovate.
• 31:54
  Speaker 2: I will pass it along to him. All right.
• 31:56
  Speaker 1: Listen, Bart, it's been great having you on. Thanks so
• 31:58
  Speaker 1: much for coming in today. We appreciate it.
• 32:01
  Speaker 2: Thanks, Paul. Appreciate it. Well, happy to come on another time.
• 32:11
  Speaker 1: If you like this video, hit like and subscribe, drop
• 32:13
  Speaker 1: a comment down below, and also join our free private
• 32:16
  Speaker 1: member group. The link is in the description.