Latest / The Paul Barron Crypto Show / Institutional Ethereum Launches!🚀Private Yields Incoming!💰Zama CEO INTERVIEW

Transcript

Institutional Ethereum Launches!🚀Private Yields Incoming!💰Zama CEO INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Institutional eth has arrived and this means some big changes
• 0:03
  Speaker 1: in the market. Today, we're going to be breaking all
• 0:05
  Speaker 1: that down with a special guest. You guys don't want
• 0:08
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• 0:10
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• 0:35
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• 0:36
  Speaker 1: So don't get scared that you think, oh, this is
• 0:39
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• 0:45
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• 0:48
  Speaker 1: All right, So today I want to bring in our guest,
• 0:50
  Speaker 1: and the idea behind this was to take a look
• 0:54
  Speaker 1: at institutional eth and some of the features that are
• 0:57
  Speaker 1: happening out there in the market. So joining me is
• 0:59
  Speaker 1: ran Hin who's the co founder and CEO over at Zama.
• 1:02
  Speaker 1: Great to have you, RND, how are you.
• 1:04
  Speaker 3: Thank you, Paul, very good, Thanks for having me.
• 1:07
  Speaker 1: Okay, so listen, a lot is happening right now. Ethereum
• 1:11
  Speaker 1: is moving quickly into the institutional phase. This first X post,
• 1:14
  Speaker 1: I wanted to kind of get your opinion on some
• 1:16
  Speaker 1: of this institutionally finally live, as we're already seeing multiple
• 1:22
  Speaker 1: platforms out there in the essence of institutional eth. I
• 1:25
  Speaker 1: want to get your take on the idea of institutional
• 1:29
  Speaker 1: eth launching in such a broad base right now.
• 1:32
  Speaker 2: Where do you think this is going?
• 1:33
  Speaker 3: I think this is a right move. Ethereum for too
• 1:36
  Speaker 3: long was focusing on small markets. I would say things
• 1:43
  Speaker 3: that are obviously not currently moving the needle. There is
• 1:46
  Speaker 3: one thing that is a huge trend right now is
• 1:50
  Speaker 3: the institutionalization of crypto. So you know, big financial institutions
• 1:55
  Speaker 3: starting to use stable coins, real world assets, moving a
• 1:59
  Speaker 3: lot of finance on shape and Ethereum is one of
• 2:03
  Speaker 3: the rare places where they can do that with security,
• 2:08
  Speaker 3: so it makes total sense if they want to build
• 2:10
  Speaker 3: use cases for trillions of dollars then they need to
• 2:14
  Speaker 3: focus on institutions.
• 2:16
  Speaker 1: Right now, there's three entities right now, so you've got
• 2:18
  Speaker 1: eth labs, institutional eth and then of course, now what
• 2:23
  Speaker 1: we're talking about is layering in even the etherorem Foundation
• 2:26
  Speaker 1: into this, so this becomes much more broad based.
• 2:30
  Speaker 2: You look at this.
• 2:31
  Speaker 1: Being backed by you know, you've got it right there,
• 2:33
  Speaker 1: bitmind sharplaying Joseph Lubin. I mean, these are pretty much
• 2:37
  Speaker 1: legends in the ecosystem right now. Where what first of all,
• 2:41
  Speaker 1: do you think this is going to have an immediate
• 2:42
  Speaker 1: impact or is this something that you think is going
• 2:45
  Speaker 1: to work its way in to the market over time.
• 2:48
  Speaker 3: I mean, I've been in crypto since twenty thirteen, and
• 2:51
  Speaker 3: what's happening right now is very different. It feels like
• 2:56
  Speaker 3: the old guard has gone and there's a new wave
• 2:59
  Speaker 3: of entrepreneurs of investors starting to comme un chain through
• 3:04
  Speaker 3: institutions and I would say tritional finance. Those guys backing
• 3:09
  Speaker 3: them is just a testament to where blockchain is going
• 3:13
  Speaker 3: overall as the future place where finance is actually going
• 3:18
  Speaker 3: to be operating.
• 3:19
  Speaker 1: You guys are already starting to show some pretty significant
• 3:23
  Speaker 1: growth right there.
• 3:24
  Speaker 2: On unique depositors. You can kind of see it.
• 3:26
  Speaker 1: You guys follow along over on Dune Analytics on this
• 3:29
  Speaker 1: as well. When you see this and now you think
• 3:32
  Speaker 1: about the thoughts of what's happening with OUSD, the announcement
• 3:37
  Speaker 1: this week, the impact on other stable coins, including Tether.
• 3:42
  Speaker 2: I saw Palo tweeted about it.
• 3:43
  Speaker 1: Jeremy Alaire ends up putting out geez a ridiculous post
• 3:48
  Speaker 1: here in terms of length, it's kind of a keldr.
• 3:53
  Speaker 1: It was trying to address a lot of the issues
• 3:55
  Speaker 1: that were the market was pushing back on. If you
• 3:57
  Speaker 1: guys haven't been watching the circle stock, it's been falling
• 4:00
  Speaker 1: pretty significantly after this announcement. He said something though that
• 4:04
  Speaker 1: was down here towards the end that I thought was interesting.
• 4:07
  Speaker 1: It says, oftentimes when these things get formed, which he's
• 4:10
  Speaker 1: talking about OUSD, everyone feels like they should just put
• 4:13
  Speaker 1: their logo on the list, kiss the ring. Interesting use
• 4:16
  Speaker 1: of term, make noise about the openness, But typically those
• 4:19
  Speaker 1: same firms will turn to their operating units and make
• 4:22
  Speaker 1: the best decisions for their customers, which often means partnering
• 4:25
  Speaker 1: with the market leader. So what are your thoughts about OUSD.
• 4:29
  Speaker 1: Do you think this is going to be a market
• 4:30
  Speaker 1: leader soon.
• 4:31
  Speaker 3: I think there is space for multiple stable coin leaders.
• 4:35
  Speaker 3: You should look at technology in general. There's always two
• 4:39
  Speaker 3: to five companies which share the market. You don't want
• 4:44
  Speaker 3: to single company sharing it. Sure, that's not good, you know.
• 4:47
  Speaker 3: I mean this whole point of competition is you've got competitors.
• 4:50
  Speaker 3: So the more people try to compete on a global scale,
• 4:53
  Speaker 3: the better for users of stable coins. It will force
• 4:57
  Speaker 3: everyone Circle stripe better to build the actual infrastructure that's needed.
• 5:03
  Speaker 3: So I tend to agree with Jeremy, however, that consortiums
• 5:07
  Speaker 3: rarely deliver the way that companies do because honestly, of
• 5:12
  Speaker 3: complicated governance. So it really depends whether OUSD open USD
• 5:17
  Speaker 3: will be a consortium or it will be a standard.
• 5:21
  Speaker 3: If it's a standard, anybody can adopt it, anybody can
• 5:24
  Speaker 3: use it. It creates interpearability, it creates a level playing field.
• 5:28
  Speaker 3: That's good. But that's not a threat to Circle because
• 5:32
  Speaker 3: Circle has something that Jeremy again talks about in his tread,
• 5:35
  Speaker 3: which is important. They have distribution, they have liquidity. Network effects.
• 5:41
  Speaker 3: You know how in social media we talk about network effects.
• 5:44
  Speaker 3: When your friends are social or in social media, it's
• 5:46
  Speaker 3: harder for you to churn because well, you have nobody
• 5:49
  Speaker 3: else on other social media to talk to. It's kind
• 5:52
  Speaker 3: of the same with money. If the money is in
• 5:54
  Speaker 3: one place, it actually attracts more money to that place.
• 5:57
  Speaker 3: All that's to say that I don't think Circle is
• 5:59
  Speaker 3: a risk, but I do think OUSD will be a
• 6:03
  Speaker 3: major contender in a growing market.
• 6:05
  Speaker 2: Look at PYUSD. That's PayPal.
• 6:07
  Speaker 1: I mean, that's kind of the ultimate distribution. But they've
• 6:10
  Speaker 1: struggled to really get a footprint hold in terms of
• 6:14
  Speaker 1: stable coin market.
• 6:15
  Speaker 2: So I think the question is trust.
• 6:18
  Speaker 1: Who is the market going to come in and trust
• 6:21
  Speaker 1: who are they going to believe has the best stable
• 6:23
  Speaker 1: coin because let's face it, the Genius Act has made
• 6:26
  Speaker 1: this somewhat illegal now for stable coin issuers to actually
• 6:30
  Speaker 1: pay you any interest on anything, So you're kind of
• 6:33
  Speaker 1: stuck there. But then you have this with Scott Melker
• 6:35
  Speaker 1: talking about this one hundred and forty the largest firms
• 6:38
  Speaker 1: and finances organized to capture that yield for themselves with OUSD.
• 6:43
  Speaker 1: And if Clarity gets through in this the talking about
• 6:47
  Speaker 1: the Clarity Act here, that would pretty much close the loophole,
• 6:51
  Speaker 1: which means I think they are either front running the
• 6:54
  Speaker 1: fact that Clarity is going to fail or they just
• 6:57
  Speaker 1: don't care. I'm not sure which it is. What do
• 6:59
  Speaker 1: you think about clarity right now? Do you think this
• 7:01
  Speaker 1: is going to possibly get through or not?
• 7:04
  Speaker 3: I really hope so. I think one of the things
• 7:06
  Speaker 3: holding back the crypto market right now and keeping us
• 7:09
  Speaker 3: in this sort of sideway state for a while is
• 7:14
  Speaker 3: the lack of regulation. I think, you know, the US
• 7:18
  Speaker 3: making a clear statement through regulation that crypto is now finance,
• 7:24
  Speaker 3: and finance is now crypto. That will I mean, I
• 7:28
  Speaker 3: think the crypto market is going to be nothing in
• 7:31
  Speaker 3: comparison to what's about to happen as soon as the
• 7:34
  Speaker 3: US passing regulation. So everybody wants it. People want clarity.
• 7:38
  Speaker 3: They want clarity in both senses their regulation and you know,
• 7:41
  Speaker 3: the ability to operate without having to second guess what's
• 7:45
  Speaker 3: going to happen in the future.
• 7:46
  Speaker 2: Yeah.
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  Speaker 3: So if it doesn't cast now, I think it's just
• 7:48
  Speaker 3: a matter of time before it does, it will happen.
• 7:51
  Speaker 2: Okay, Well, I hope you're right.
• 7:53
  Speaker 1: I guess in a way, I look at this and
• 7:55
  Speaker 1: I think the strength of the banking community, this alignment
• 7:59
  Speaker 1: now with all these organizations, now you've got a stable
• 8:02
  Speaker 1: coin that somewhat is aligned with what the Genius Act
• 8:05
  Speaker 1: was rolled out to be, so that itself kind of
• 8:08
  Speaker 1: kills the idea of privacy.
• 8:10
  Speaker 2: And I know you're addressing that.
• 8:11
  Speaker 1: We're going to talk a little bit about that here
• 8:13
  Speaker 1: in a bit, but before we go there, I want
• 8:16
  Speaker 1: to jump to the DeFi component because there's been some
• 8:19
  Speaker 1: announcements with Meta mask and I've got a clip here
• 8:22
  Speaker 1: of Joe Lubin talking about this. I want to get
• 8:25
  Speaker 1: your opinion on this. Let's go to that clip.
• 8:28
  Speaker 4: It is my bias that in the traditional economy there
• 8:31
  Speaker 4: is essentially always an adversarial relationship between the corporation and
• 8:38
  Speaker 4: their consumers or their users making as much money as possible.
• 8:42
  Speaker 4: That's an extreme statement, but in our world of decentralized protocols,
• 8:48
  Speaker 4: is your ability to use stable coins, use debit cards.
• 8:54
  Speaker 4: I think it's hundreds of millions of MasterCard merchants worldwide.
• 8:59
  Speaker 4: I saw that number. I was like, can't be hundreds
• 9:01
  Speaker 4: of millions, but hundreds of millions of merchants around the world.
• 9:05
  Speaker 4: Your money is always being put in the best yielding
• 9:09
  Speaker 4: situation automatically. If you want to engage in prediction markets
• 9:15
  Speaker 4: and purps. It's also just one click. It's all sitting there.
• 9:19
  Speaker 3: Who is this particularly for.
• 9:22
  Speaker 4: I think it's going to be so compelling that that
• 9:25
  Speaker 4: there isn't anything that's going to rival in.
• 9:27
  Speaker 1: So what Joe is talking about there is this huge
• 9:30
  Speaker 1: announcement with MetaMask with yields at like four percent. They
• 9:35
  Speaker 1: have obviously the credit card debit card type model that's
• 9:37
  Speaker 1: already built into it. Basically, it puts you as a
• 9:40
  Speaker 1: consumer to become your own bank. Do you think that
• 9:44
  Speaker 1: is the end of institutional finance or trad fi? Who
• 9:49
  Speaker 1: is charging you for these kinds of accounts out there
• 9:52
  Speaker 1: managing your own money? You even look at Steakhouse Finance.
• 9:55
  Speaker 1: They even kind of mentioned this right here, the meta
• 9:57
  Speaker 1: mask money account Live. You can go in and earn
• 10:00
  Speaker 1: on stable coins directly inside the money mass curated. This
• 10:02
  Speaker 1: is Steakhouse and Morpho. I mean, come on, these are
• 10:05
  Speaker 1: very respected names in the market.
• 10:07
  Speaker 3: What do you think it's interesting? So I'm originally from Lebanon,
• 10:11
  Speaker 3: right And in Lebanon a few years ago we basically
• 10:14
  Speaker 3: had a meldown of the local economy and overnight, you know,
• 10:18
  Speaker 3: the central bank basically said, hey, by the way, all
• 10:21
  Speaker 3: the dollars that you're holding in your bank account and Lebanon,
• 10:24
  Speaker 3: well they're gone. We're not going to let you take
• 10:26
  Speaker 3: them out. And for the first time, you know, people
• 10:29
  Speaker 3: realize what it really meant to not own the money
• 10:33
  Speaker 3: in your bank account. There is a gap in the
• 10:35
  Speaker 3: market for self custodial banking, which, if you actually think
• 10:38
  Speaker 3: about it, is what banking was back in the days,
• 10:41
  Speaker 3: you know, I mean, banks were just deposit boxes. You
• 10:45
  Speaker 3: went and put your money and you could get back.
• 10:47
  Speaker 3: Somewhere in the sixties and seventies we moved to like
• 10:51
  Speaker 3: a fiat based economy and everything became fractional reserves. And
• 10:54
  Speaker 3: then now like your money is actually not in the bank,
• 10:56
  Speaker 3: you know, because the bank does tough with your money
• 10:58
  Speaker 3: to loan it to do things, which has enabled credit
• 11:01
  Speaker 3: markets to exist. Like sore our benefits to that. The
• 11:03
  Speaker 3: economy will not have grown without that kind of system.
• 11:08
  Speaker 3: But people do generally want to own their money, and
• 11:11
  Speaker 3: that's exactly what stable coins, what you know on chain banking,
• 11:16
  Speaker 3: self constrigo banking enables. However, it does have one problem.
• 11:21
  Speaker 3: You can have a credit card, you can pay you know,
• 11:24
  Speaker 3: you can earn yield on your money, but everything you're
• 11:27
  Speaker 3: doing is transparent. Every time you're spending at one of
• 11:30
  Speaker 3: those hundreds of millions of merchants, people know what you bought,
• 11:33
  Speaker 3: the know how much you bought it for, you know
• 11:35
  Speaker 3: where you bought it from. That is a problem. It
• 11:37
  Speaker 3: does not make sense. There is a missing piece here,
• 11:40
  Speaker 3: which is privacy. Unless you give people the same level
• 11:43
  Speaker 3: of privacy as they get to expect from your existing banks,
• 11:48
  Speaker 3: un chain self custogial banking will never be a serious competitor.
• 11:51
  Speaker 3: You need a layer of privacy.
• 11:53
  Speaker 2: All right.
• 11:53
  Speaker 1: So you're hitting on of course, and I know you're
• 11:56
  Speaker 1: talking your book. I get it, you know, in the
• 11:58
  Speaker 1: sense of what Zama does. And speaking of that, you
• 12:02
  Speaker 1: can kind of go over and learn a little bit
• 12:04
  Speaker 1: about Zama here. By the way, they're not a sponsor.
• 12:06
  Speaker 1: We asked him on the show just to understand what's
• 12:08
  Speaker 1: going on with E. But you guys, of course, are
• 12:10
  Speaker 1: already partner with Steakhouse and you're doing something that, to
• 12:14
  Speaker 1: your point, is very important, and that is this confidentiality idea.
• 12:19
  Speaker 1: So the idea of going in and transacting in USDC
• 12:24
  Speaker 1: and being able to shield those activities, that's essentially what
• 12:27
  Speaker 1: you guys do. So how far into the ecosystem. Are
• 12:32
  Speaker 1: you guys today, Is this going to be something that
• 12:34
  Speaker 1: you think all players out there in the market are
• 12:37
  Speaker 1: just going to adopt, and whether it's you or some
• 12:40
  Speaker 1: other platform out there that's doing this.
• 12:42
  Speaker 3: The good way to think about what we build is
• 12:44
  Speaker 3: a layer of confidentiality for financial transactions on chain. So
• 12:49
  Speaker 3: you can take any existing stable coin, any existing digital
• 12:52
  Speaker 3: asset on Urbua. Took a nice gold bitcoin USDC and
• 12:57
  Speaker 3: you can turn it into a shielded asset. Every future
• 13:00
  Speaker 3: transaction you make your balance, the transfer amount will be hidden,
• 13:05
  Speaker 3: so people don't know how much money you have, they
• 13:07
  Speaker 3: don't know how much you're paying, they don't know what
• 13:09
  Speaker 3: you're trading, buying, selling for how much. All of that
• 13:12
  Speaker 3: basically becomes invisible, but it's all on shape. So you
• 13:16
  Speaker 3: have all of the nice properties of public blockchains like
• 13:19
  Speaker 3: Ethereum with the privacy that you would get from an
• 13:22
  Speaker 3: off chain finance show service provider. A good analogy I
• 13:28
  Speaker 3: guess is HGTPS for financial transactions on chain right, and
• 13:33
  Speaker 3: HGTPS is a great way to think about is https
• 13:37
  Speaker 3: was invented for e commerce. People back in the days
• 13:40
  Speaker 3: of the Internet did not have a way to share
• 13:44
  Speaker 3: credit card information on this global public shared network, but
• 13:48
  Speaker 3: they kind of wanted to you know, people wanted to
• 13:50
  Speaker 3: transact globally HTTPS as a way to solve that problem.
• 13:57
  Speaker 3: And what Zama is doing today is basically the same
• 13:59
  Speaker 3: thing for financial transactions on public blockchains.
• 14:03
  Speaker 1: Kind of the SSL of the new financial networks out there.
• 14:08
  Speaker 1: If you look at how the Internet has used this
• 14:10
  Speaker 1: kind of tools set in the future, So I think
• 14:14
  Speaker 1: this is one of the things that everybody is going
• 14:16
  Speaker 1: to be looking at very soon. You have to remember,
• 14:18
  Speaker 1: for most of you guys watching right now, most banks
• 14:21
  Speaker 1: are not using this technology yet it looks as though
• 14:24
  Speaker 1: they're going to be using it very quickly, so you're
• 14:27
  Speaker 1: going to see this confidential issue start to arise very
• 14:31
  Speaker 1: quickly as you start to utilize this infrastructure globally, whether
• 14:36
  Speaker 1: it's on Ether or using stable coins within your bank
• 14:38
  Speaker 1: or outside your bank. And DeFi these kind of things
• 14:41
  Speaker 1: are going to be hitting for sure. I want to
• 14:44
  Speaker 1: leap over to stretch for a second, because this of
• 14:47
  Speaker 1: course has been on the top of everybody's mind right now.
• 14:51
  Speaker 1: With what's going on with micro Strategy, they of course
• 14:54
  Speaker 1: jump their dividend to twelve percent. Do you think people
• 14:57
  Speaker 1: are going to trust, stretch or defile. Right now, where
• 15:01
  Speaker 1: is trust being generated from?
• 15:03
  Speaker 3: Yeah, you know, that's a good question. I think. I
• 15:06
  Speaker 3: think micro strategy as a vehicle for owning bitcoin through
• 15:09
  Speaker 3: equities made a ton of sense back in the days,
• 15:13
  Speaker 3: right if you had a four one K account and
• 15:15
  Speaker 3: you wanted to buy bitcoin with it, you couldn't, right,
• 15:18
  Speaker 3: But then you know, we started to have the bitcoin
• 15:21
  Speaker 3: ETFs from black Rock and the other folks. So the
• 15:25
  Speaker 3: value of holding bitcoin through micro strategy is not the
• 15:29
  Speaker 3: same as it was five years ago. Quite frankly, I'm
• 15:33
  Speaker 3: a little bit lost with the levels of financial engineering
• 15:36
  Speaker 3: behind it. It's just very difficult unless you're.
• 15:40
  Speaker 1: Really really deep into You're not the only one, the
• 15:43
  Speaker 1: only one, trust me.
• 15:44
  Speaker 2: We've talked about smart people.
• 15:46
  Speaker 3: I don't know, man come old fashion, but I like
• 15:49
  Speaker 3: when things are simple. Simple is simple to understand. You
• 15:53
  Speaker 3: understand the risk, you understand where the yield is coming from.
• 15:56
  Speaker 3: I think, DeFi interestingly might be complicated or someone who's
• 16:00
  Speaker 3: new because of the user experience, but the actual exposure
• 16:05
  Speaker 3: and the actual risk model and strategy you're exposed to
• 16:08
  Speaker 3: is fairly simple. Like you know exactly what you're getting
• 16:10
  Speaker 3: because it's on chain.
• 16:12
  Speaker 1: First of all, I'm looking at your website. You've got
• 16:15
  Speaker 1: a twelve percent ap y right now. In general, I
• 16:18
  Speaker 1: mean this is obviously going to be very you know,
• 16:21
  Speaker 1: enticing for most How long? How long is am I
• 16:24
  Speaker 1: going to be able to get this? What does this
• 16:26
  Speaker 1: look like long term? Is this something that you guys
• 16:29
  Speaker 1: are going to be able to deliver on?
• 16:30
  Speaker 3: The division we have for Zami is that we want
• 16:32
  Speaker 3: this to be the place where you can access all
• 16:35
  Speaker 3: kinds of on Chaine finance products. Whether you know you
• 16:39
  Speaker 3: want to buy crypto, or whether you want to buy
• 16:43
  Speaker 3: art WA's or whether you want to put money into
• 16:45
  Speaker 3: a vault created by an on Chaine asset manager. You
• 16:50
  Speaker 3: should be able to do all of that confidentially. So
• 16:52
  Speaker 3: people shouldn't know what your portfolio consists of and how
• 16:55
  Speaker 3: you're rebalancing your positions, you know, so you need trade privacy,
• 16:58
  Speaker 3: you need strat privacy. So this is really a primary
• 17:02
  Speaker 3: objective of this. This first vault that we launch with
• 17:05
  Speaker 3: Steakhouse is really more of a of a proof that
• 17:09
  Speaker 3: you can earn competitive yields on shielded assets just as
• 17:15
  Speaker 3: good as you would an unshielded asset. So the reason
• 17:18
  Speaker 3: the thing you have to think about is if I
• 17:20
  Speaker 3: can make just as much money on confidential USDC that
• 17:24
  Speaker 3: I'm holding versus just playing you as DC, why not
• 17:27
  Speaker 3: hold your assets confidentially? And this is what we want
• 17:30
  Speaker 3: to get to, you know, we want privacy to get
• 17:32
  Speaker 3: to a point where it's such a no brainer that
• 17:35
  Speaker 3: nobody thinks about it. It's just how you do it,
• 17:37
  Speaker 3: because why not there is no downside anymore.
• 17:39
  Speaker 1: Well, I think to your point, once people realize that,
• 17:43
  Speaker 1: that's the real question. But again it goes back to distribution.
• 17:46
  Speaker 3: You know.
• 17:46
  Speaker 1: It's where even though metamsk kind of controls the web
• 17:51
  Speaker 1: three community and the crypto friendly and native community to
• 17:55
  Speaker 1: a certain extent, I don't even think that they get
• 17:57
  Speaker 1: the crypto curious. Just yeah, the cryptocurrey are usually a
• 18:00
  Speaker 1: coinbase or cracking or maybe Gemini somewhere like that, at
• 18:03
  Speaker 1: least here in the US finance on the in the
• 18:05
  Speaker 1: Asian markets.
• 18:06
  Speaker 2: But I don't know.
• 18:07
  Speaker 1: I'm still concerned as to whether or not we're going
• 18:10
  Speaker 1: to see major adoption curves regardless of the offering.
• 18:13
  Speaker 3: We will, so it will not be by connecting your
• 18:17
  Speaker 3: hardware wallet or you know, it'll be a different user experience.
• 18:21
  Speaker 3: I think people are going to access those products through Revolute,
• 18:25
  Speaker 3: through all Right City Bank, right like they're going to
• 18:29
  Speaker 3: access it as the access existing financial products. DeFi is
• 18:33
  Speaker 3: going up the stack to become more and more like finance,
• 18:37
  Speaker 3: and finance is going down the stack to be more
• 18:39
  Speaker 3: and more like DeFi, and somewhere in the middle, what
• 18:42
  Speaker 3: we call aunching finance, which is neither DeFi or trat
• 18:46
  Speaker 3: fis something kind of in between. You know, you might
• 18:49
  Speaker 3: have KYC permission product. You know, it might be tokenized,
• 18:53
  Speaker 3: but with someone issuing this token behind all of that
• 18:56
  Speaker 3: is going to happen in the next four years. So
• 18:58
  Speaker 3: I don't think there's going to be DFIVE. This is
• 19:00
  Speaker 3: not DeFi. I think we're just going to call that finance.
• 19:03
  Speaker 1: Let me jump over to this because this also happened
• 19:06
  Speaker 1: on ethereum. UBS just tested their public Ethereum for banking.
• 19:11
  Speaker 1: This really surprised me in the sense of that the
• 19:14
  Speaker 1: test went very well. This is basically allowing a bank
• 19:18
  Speaker 1: to use public ethereum rails bank level rule checks, You're
• 19:22
  Speaker 1: going to get approved wallets, all that kind of stuff.
• 19:25
  Speaker 1: What are your thoughts on this, I mean, do you
• 19:27
  Speaker 1: think this changes the landscape of because there's a lot
• 19:29
  Speaker 1: of chains out there that are trying to do this
• 19:31
  Speaker 1: very thing that now this is completely open on.
• 19:35
  Speaker 2: So what do you think.
• 19:36
  Speaker 3: I think there's a very interesting sentence here when they
• 19:38
  Speaker 3: say that it doesn't have to be on closed private blockchains.
• 19:43
  Speaker 3: Back in the nineties, people were using something called intranets.
• 19:47
  Speaker 3: An intranet was a network of computers within your own organization.
• 19:53
  Speaker 3: It was private because nobody could access it. It was
• 19:55
  Speaker 3: secured because nobody could access it, and you could connect
• 19:58
  Speaker 3: your company's intranet to it other companies intranet to collaborate.
• 20:02
  Speaker 3: This is the same as having private blockchains in every
• 20:05
  Speaker 3: bank talking to each other for interbank trades and settlements.
• 20:09
  Speaker 3: Yea ethereum solana. Public blockchains are like the Internet, one
• 20:14
  Speaker 3: global public network, one global market everybody can actually participate in.
• 20:20
  Speaker 3: And you should look at the impact of the Internet.
• 20:23
  Speaker 3: The Internet is what enabled e commerce, Amazon, Google is
• 20:27
  Speaker 3: what enabled chagpt. Claud from in Tropic like, these things
• 20:31
  Speaker 3: are running on the Internet, and I believe that the
• 20:34
  Speaker 3: key technology that enabled it was encryption, because without encryption,
• 20:39
  Speaker 3: you wouldn't be able to send a prompt to chagpt
• 20:42
  Speaker 3: with everybody seeing it. So here's a question. If you
• 20:45
  Speaker 3: can have encryption on top of public chains like Ethereum,
• 20:49
  Speaker 3: the same way you have ahggps on top of the Internet,
• 20:53
  Speaker 3: how big is that market going to be?
• 20:55
  Speaker 2: Well, it's huge, no doubt.
• 20:56
  Speaker 1: It is a monster market, and I think it's probably
• 21:00
  Speaker 1: the one thing holding back most of the adoption curves
• 21:03
  Speaker 1: that are coming of the people who don't necessarily know
• 21:06
  Speaker 1: about it yet. For the for the people that are
• 21:09
  Speaker 1: very educated on this, they understand it's coming and they
• 21:12
  Speaker 1: understand their's framework already being developed on this, Which brings
• 21:15
  Speaker 1: me to the topic of ether. If eth gets into
• 21:18
  Speaker 1: a situation where privacy now becomes part of the network,
• 21:23
  Speaker 1: what does that do? Who are the biggest losers out there?
• 21:26
  Speaker 2: Do you think?
• 21:27
  Speaker 3: I don't think anybody loses. I think the market becomes
• 21:30
  Speaker 3: one hundred times bigger with privacy than without. So you know,
• 21:34
  Speaker 3: if anything, we're going to be talking about trillions in
• 21:37
  Speaker 3: onnching finance in four years like we're talking about billions today,
• 21:41
  Speaker 3: and people causually say, oh, yeah, I got one hundred
• 21:43
  Speaker 3: billion dollars of TVL in my DeFi protocol, because that's
• 21:47
  Speaker 3: going to be how big the market is going to
• 21:48
  Speaker 3: be once we enable institutions, asset managers, traders to do
• 21:53
  Speaker 3: so with confidentiality, which speed, with cheap fees and access
• 21:59
  Speaker 3: to global market.
• 22:00
  Speaker 1: Yeah for sure. I'm looking at what AVE has done.
• 22:05
  Speaker 1: Ave Horizon now one of the several initiatives enabling securities
• 22:08
  Speaker 1: back lending. Okay, so let's just remember guys r Toba
• 22:13
  Speaker 1: back loans now on Ave growing consistently, and if we
• 22:16
  Speaker 1: get security back lending at scale, what does this mean
• 22:20
  Speaker 1: for someone like a Robinhood. Robinhood of course does this
• 22:23
  Speaker 1: right now. It's a big part of their revenue. What
• 22:26
  Speaker 1: do you think what happen to the traditionals out there
• 22:29
  Speaker 1: like Robinhood around stock.
• 22:31
  Speaker 3: Landing, They'll do the same. I think, you know the
• 22:34
  Speaker 3: look at this is a technology that can enable them
• 22:36
  Speaker 3: to offer those products in a seamless fashion.
• 22:40
  Speaker 2: Well they're offering them now, just at higher rates.
• 22:43
  Speaker 3: Oh yeah, yeah yeah, So I mean they have to compete.
• 22:47
  Speaker 3: I guess that's good okay for the market. I mean, eventually,
• 22:51
  Speaker 3: you know, people are going to settle where the market
• 22:53
  Speaker 3: considers to be sustainable rates. I wanted to say something
• 22:56
  Speaker 3: about art WA's because I think people are underestimating how
• 23:00
  Speaker 3: huge that market is going to be. We recently announced
• 23:04
  Speaker 3: a partnership with Apex Group, a huge asset servicing company.
• 23:09
  Speaker 3: They have this protocol called t rex where they're tokenizing
• 23:12
  Speaker 3: artable as. They already have one hundred billion dollar committed
• 23:17
  Speaker 3: to t rex. So we're talking about one company tokenizing
• 23:22
  Speaker 3: one hundred billion, Like, this is one hundred and fifty
• 23:25
  Speaker 3: trillion dollar market starting to move on chain artability back
• 23:29
  Speaker 3: loans is just one way that you can use as
• 23:31
  Speaker 3: artable as, but you can also package them into all
• 23:34
  Speaker 3: kinds of different financial products. You know, you could have
• 23:37
  Speaker 3: a vault that gives you exposure to US real estate
• 23:42
  Speaker 3: with an option hedging in case of like a market crash.
• 23:45
  Speaker 3: Like we're going to start to have derivative financial products
• 23:49
  Speaker 3: on steroids, Like we're going to see people deploy financial
• 23:53
  Speaker 3: products and strategies with code, something that was impossible to
• 23:57
  Speaker 3: do in tratify. And this is precise Slee. The value
• 24:00
  Speaker 3: of blockchain is composibility, is programmability, is the ability to
• 24:05
  Speaker 3: just launch something in an hour, not in weeks or months.
• 24:09
  Speaker 2: Well, I would agree with you.
• 24:10
  Speaker 1: I think we are going to see all sorts of
• 24:12
  Speaker 1: new instruments out there. It is just a matter of time.
• 24:15
  Speaker 1: We're seeing that starting to show its face right now
• 24:19
  Speaker 1: in defive and if you look at the meta mask
• 24:20
  Speaker 1: announcements alone, and then you've got this right here with
• 24:23
  Speaker 1: NASDAK and PITH, I mean the PITH and filtrating Nasdaq
• 24:28
  Speaker 1: right now.
• 24:28
  Speaker 2: What does this mean? What could this enable right now?
• 24:32
  Speaker 3: NASDAK on chain, I mean, it doesn't get bigger than that.
• 24:36
  Speaker 3: If you're thinking about trading equities, you know, we are
• 24:39
  Speaker 3: starting to see the inflection curve people have been talking
• 24:41
  Speaker 3: about on chain finance and tokenizing assets or for sure,
• 24:45
  Speaker 3: it's a decade in crypto, it's not a new idea.
• 24:47
  Speaker 3: There are three things that we're missing. First, the infrastructure
• 24:50
  Speaker 3: wasn't ready. It was actually hard to tokenize an asset
• 24:54
  Speaker 3: and to make it tradable in an easy manner. This
• 24:57
  Speaker 3: has been solved by Sulina with a fast chain, by theory,
• 25:00
  Speaker 3: by all the tooling, custodians, everything that exists to enable
• 25:04
  Speaker 3: that at scale. The second thing that was missing was privacy.
• 25:08
  Speaker 3: Right if you want you're a portfolio manager, you cannot
• 25:11
  Speaker 3: afford people seeing your positions or solving that problems. That's
• 25:14
  Speaker 3: basically done. And the final thing missing, the real catalyst
• 25:18
  Speaker 3: is going to be clear regulation in the United States.
• 25:23
  Speaker 3: Until the US is officially open for business with crypto
• 25:28
  Speaker 3: in a way that simple regulated, everybody can understand full
• 25:31
  Speaker 3: the rules and you'll be fine. Nobody's going to see
• 25:34
  Speaker 3: the risk, the regulatory risk of doing it. And that's
• 25:37
  Speaker 3: why clarity is so important or any kind of regulation.
• 25:40
  Speaker 3: It doesn't matter what's in it, we just need something clear.
• 25:42
  Speaker 1: Well if we can got Yeah, and the fact that
• 25:45
  Speaker 1: MIKA has already launched, I mean, this thing is now
• 25:48
  Speaker 1: out there and available in the EU one thing that
• 25:52
  Speaker 1: kind of surprised me, Well, it didn't surprise me, and
• 25:55
  Speaker 1: actually I was kind of delighted to see this, and
• 25:57
  Speaker 1: that was the announcement from Backpack. You know, they have
• 26:00
  Speaker 1: now secured a MEDA license. So this is interesting because
• 26:04
  Speaker 1: when you go down and look at the MIKA approved
• 26:07
  Speaker 1: perple liquidity and PERP platforms out there, you're going to
• 26:11
  Speaker 1: see some pretty amazing ones in here. And the fact
• 26:13
  Speaker 1: that Backpack is setting there right now at one of
• 26:16
  Speaker 1: the best rates with good liquidity, this could be very interesting.
• 26:22
  Speaker 3: Europe is great, but it's not as great as the
• 26:24
  Speaker 3: US if you want to build a company today, right,
• 26:27
  Speaker 3: and so until the US has its own version of MICA,
• 26:30
  Speaker 3: hopefully a little bit more business friendly, then we're still
• 26:34
  Speaker 3: going to have this sort of glass ceiling of how
• 26:36
  Speaker 3: big crypto can actually be. And what Backpack is doing
• 26:39
  Speaker 3: is great and you're showing that even a startup can
• 26:41
  Speaker 3: actually be compliant, so there's no excuse not to be Again, like,
• 26:46
  Speaker 3: until the US has a clear regulation, we're not going
• 26:50
  Speaker 3: to get the trillions moving on chain. That is a catalyst,
• 26:53
  Speaker 3: that is what takes us out of these bear markets.
• 26:55
  Speaker 2: So that's that's the key to the US.
• 26:57
  Speaker 1: And of course right now, if we don't see clarity
• 26:59
  Speaker 1: come through, and there's still some pressure because right now
• 27:03
  Speaker 1: and I won't get into clarity too d because we
• 27:05
  Speaker 1: do so much on that. It is a very complicated
• 27:07
  Speaker 1: political landscape right now and it's basically being money driven.
• 27:12
  Speaker 1: It creates a big issue for probably the most important
• 27:16
  Speaker 1: regulation that has ever went through DC, you know, in
• 27:20
  Speaker 1: terms of the capacity of growth, and that's the economy growth,
• 27:24
  Speaker 1: the potential for the finance sector, which has been led
• 27:26
  Speaker 1: by the US for a very long time. I want
• 27:28
  Speaker 1: to jump back to t rex for a second because
• 27:31
  Speaker 1: this interests me in the sense of could I ever
• 27:35
  Speaker 1: see something like let's just say tangib or other hardware wallets.
• 27:40
  Speaker 1: Could I ever see privacy on that confidential features?
• 27:43
  Speaker 2: Do you think?
• 27:44
  Speaker 3: Well? For sure? I mean anybody could integrate confidential tokens.
• 27:49
  Speaker 3: We have a very simple integration like we have like
• 27:53
  Speaker 3: a tool that people can integrate into any wallet, any
• 27:55
  Speaker 3: custody solution. Okay, it's very easy. It probably takes a day.
• 28:00
  Speaker 1: Okay, well tantum guys, if you're listening today, there you go.
• 28:02
  Speaker 1: You need to connect up with Sama things rolling here
• 28:06
  Speaker 1: because that would be a cool feature. My last question
• 28:09
  Speaker 1: to you is I compare so this is the Circle
• 28:14
  Speaker 1: valuation right now if you look at what their market
• 28:16
  Speaker 1: cap is. Market of course has been declining there for
• 28:19
  Speaker 1: obvious reasons to a certain extent on the market, but
• 28:21
  Speaker 1: also now with the os U o us D announcement.
• 28:26
  Speaker 1: My question to you is do you think they're an
• 28:28
  Speaker 1: acquisition target right now? Now?
• 28:30
  Speaker 3: I don't think so.
• 28:31
  Speaker 2: You don't think so?
• 28:33
  Speaker 3: Inesting, you mean buying this stock, buying from one buying?
• 28:37
  Speaker 2: Yeah, Circle being acquired? Yeah?
• 28:39
  Speaker 3: Oh wow, I mean sure, why not to suppose? I
• 28:44
  Speaker 3: don't think Circle is trying to Timing is everything, man,
• 28:47
  Speaker 3: I know, but I think I think Circle has a
• 28:49
  Speaker 3: decent shot at becoming a massive company. Again, think about it,
• 28:53
  Speaker 3: the market reacting negatively to open you as D launching
• 28:57
  Speaker 3: because it's scary, right, Like, you know, you've got a major, major,
• 29:00
  Speaker 3: consortium of major players trying to take a shot at
• 29:03
  Speaker 3: stable coins. However, you have to you have to take
• 29:07
  Speaker 3: into account the stable coin market is growing. So even
• 29:10
  Speaker 3: if OUSD takes one hundred percent of the existing stable
• 29:14
  Speaker 3: coin market, there's still going to be a tiny fraction
• 29:16
  Speaker 3: of the future stable coin market. So if you look
• 29:19
  Speaker 3: at the size the Circle can grow to in absolute terms,
• 29:23
  Speaker 3: there's a lot of room for them to grow. So
• 29:26
  Speaker 3: I just don't see if I was running Circle, I
• 29:28
  Speaker 3: wouldn't sell if anything like, I would just double down
• 29:31
  Speaker 3: on building more products, on being more aggressively partnering with people.
• 29:36
  Speaker 3: For you, SDC taking just a position that it is
• 29:40
  Speaker 3: the stable coin is listed in a US exchange that
• 29:43
  Speaker 3: brings a lot of value and trust well.
• 29:46
  Speaker 1: And USDC obviously the lead stable coin there in Europe
• 29:50
  Speaker 1: under MEKA guidelines, so that too is going to be
• 29:52
  Speaker 1: a big benefit. But I think it's growing into something
• 29:55
  Speaker 1: that maybe is even more exciting and more mature. We'll
• 29:58
  Speaker 1: find out very soon. And it's been great having you
• 30:01
  Speaker 1: on the show. Thank you so much for coming in today.
• 30:03
  Speaker 1: We appreciate it.
• 30:04
  Speaker 3: Thank you, Paul.
• 30:11
  Speaker 1: If you liked this video, like and subscribe, drop a
• 30:14
  Speaker 1: comment down below, and also join our free private member group.
• 30:18
  Speaker 2: The link is in the description.