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Confidential DeFi? Why institutions need privacy to go all in on crypto · The Starting Block

0:02
Welcome back to The Starting Block.
0:03
It is a Thursday and we've got a
0:05
jam packed show for you today.
0:06
Back to complete regular programming
0:08
with the block briefing, Market
0:10
Pulse, and the hot seat today.
0:12
So really excited to give you
0:14
a full bang worth of your
0:16
buck on today's show.
0:18
If you're joining us for the first
0:19
time, welcome to The Startling
0:20
Block. This is our new daily show.
0:22
We've been going for nearly three
0:23
weeks now. We started things off
0:24
three weeks ago with a very special
0:26
live interview with Binance
0:28
founder CZ all the way in Abu Dhabi.
0:30
And I produce at Nye Jordan.
0:32
Traveled a long way to get
0:34
this show off out of
0:36
the starting blocks, and it's been a
0:37
fantastic journey since.
0:39
So if you're joining us for the
0:40
first time today, we've got three
0:41
segments on the show, the block
0:42
briefing, which is essentially a
0:44
news bulletin radio style of
0:46
the top headlines in the last 24
0:48
hours, and we move into a market
0:49
poll segment where we'll tell you
0:50
what you need to know in
0:52
crypto markets and
0:54
wider sort of macro trade fire
0:56
markets as well.
0:57
And then we'll move into our hot
0:58
seat segment, which our interview of
1:00
the day with a big newsmaker.
1:02
Or industry figure.
1:04
So today we have the team
1:06
from Bitwise joining us for the
1:07
Market Pulse. And then I've got Rand
1:08
Hindy from Zama to talk to us
1:10
about confidential DeFi and
1:12
privacy narrative in general.
1:14
But first things first, let's kick
1:15
off the show with the block
1:17
briefing. We'll be jumping into our
1:19
first headline of the day.
1:20
We start with the potential FinTech
1:22
mega deal, Stripe and
1:24
private equity firm, Advent
1:26
International have reportedly
1:27
offered $53 billion
1:29
to acquire PayPal.
1:30
That's according to Reuters.
1:32
The crypto world is watching this
1:33
one closely.
1:34
Polygon Labs global head of business
1:36
Aishwarya Gupta told the block
1:38
yesterday that the majority of money
1:40
will live and move on blockchain
1:41
within a few years.
1:43
And a deal like this, he says,
1:44
simply speeds up that transition.
1:46
Both companies are already deep in
1:48
stable coins.
1:49
Stripe is among more than 140
1:52
firms behind the upcoming
1:54
open USD stable coin
1:56
alongside Visa, MasterCard and
1:58
BlackRock.
1:59
To Washington where crypto market
2:00
structure legislation could be
2:02
about to clear its biggest hurdle.
2:05
President Trump is set to meet today
2:06
at 2.30 Eastern time
2:08
with Republican senators, Bernie
2:10
Moreno and Cynthia Loomis
2:12
plus White House crypto advisor,
2:14
Patrick Witt and Chief of Staff,
2:16
Susie Wiles.
2:17
On the table, the ethics language
2:19
that's been holding up the Clarity
2:20
Act, lawmakers concerns over
2:22
Trump and his family's own crypto
2:24
ventures.
2:25
Solana Policy Institute, President
2:27
Kristen Smith.
2:28
Calls the meeting critical to
2:29
getting the bill passed, saying the
2:31
goal is to pitch ethics ideas and
2:33
get the president's sign off.
2:34
She's calling it a hugely positive
2:37
move.
2:38
So do keep an eye on the Block's
2:40
platforms throughout the day today,
2:41
US time, as our team will be
2:43
covering that quite closely.
2:45
We should have updates on X,
2:46
otherwise you will find a story on
2:48
our website later today, that's
2:50
theblock.co.
2:51
Moving on to our next story, a
2:53
landmark moment for tokenization.
2:54
The DTCC, the clearing giant
2:56
behind virtually every US securities
2:59
trade, has begun its first limited
3:01
production trades of tokenized
3:02
stocks and treasuries.
3:04
JP Morgan successfully tokenized
3:06
a portion of its Invesco Triple Q
3:08
holdings, and shares of
3:10
Microsoft, Circle, and major ETFs
3:12
are among the first assets going on
3:14
chain.
3:15
Crucially, this isn't a wrapper
3:17
tracking a stock's price.
3:18
DT CC's tokenized shares are fully
3:20
interchangeable with traditional
3:22
ones carrying the same ownership
3:24
dividend and governance rights.
3:26
And the tokens will be used for
3:28
collateral transfers, repo
3:30
transactions and equity trades
3:32
settling on DTCC
3:33
infrastructure.
3:35
In staying with Wall Street,
3:36
BlackRock's digital assets under
3:38
management took a hit in the second
3:39
quarter amid the broader crypto
3:41
downturn this year, but its on-chain
3:43
ambitions have not shrunk.
3:45
On the firm's earning call, CFO
3:47
Martin Small reiterated a
3:49
$500 million revenue target
3:51
for crypto related businesses by
3:53
2030.
3:54
And laid out a vision where
3:55
BlackRock products are natively
3:57
accessible inside digital wallets.
3:59
His words, investors should never
4:01
need to leave their wallet to
4:03
allocate, rather, across crypto,
4:05
stablecoin, stocks, and bonds.
4:07
The world's largest asset manager is
4:09
betting the dip is temporary and the
4:11
convergence will be permanent.
4:13
Then a big shakeup at Coinbase's
4:15
base. This news came in late
4:17
last night, European side.
4:18
Jesse Pollack, the creator of the
4:20
base blockchain, is stepping back
4:22
from leading the base app team.
4:24
And handing the reins over to Jordan
4:26
Fish, better known right here
4:28
on X as Kobe.
4:29
Fish joined Coinbase late last year
4:31
when the exchange bought his ICO
4:33
Launchpad Echo for roughly $375
4:36
million.
4:37
In a candid post on X, Pollack
4:39
admitted the first quarter of 2026
4:41
was, quote, a punch in the face,
4:44
with base's bets on Farcaster,
4:46
Zora, many apps and creator coins
4:47
having, in his words, disintegrated
4:50
completely. It's a rare public
4:52
mea culpa and a big test for Kobe.
4:54
We have reached out to the Coinbase
4:55
and Base team, so we're hoping to
4:57
get Jesse on the show
4:59
tomorrow.
5:00
Keep your eyes peeled on our social
5:02
media or mine at gaza underscore
5:04
jenks.
5:05
We'll let you know if we do have
5:06
Jesse coming on the Show tomorrow,
5:08
it would be great to chat to him
5:09
about the announcement and the plans
5:10
moving forward.
5:11
Now to some security news.
5:13
On-chain perpetuals exchange
5:15
Ostium paused all trading after
5:17
an attacker drained roughly $18
5:19
million in USDC
5:21
from its OLP vault on Arbitrum.
5:23
Security firm Blockade flagged the
5:25
exploit, saying the attacker used
5:26
future-dated Oracle reports to
5:28
create artificial trading profit and
5:30
trigger a massive payout from vault.
5:32
On-chain data shows the stolen funds
5:34
are already being swapped into Ether
5:36
and spread across multiple wallets.
5:38
The timing stings here as well.
5:40
The exploit comes just weeks after
5:42
Ostium announced a partnership with
5:43
the NASDAQ to power equity
5:45
perpetuals.
5:46
The team is still investigating the
5:48
situation.
5:49
Then some stablecoin intrigue out
5:51
of a Boston courtroom.
5:53
Newly public arbitration filings
5:55
reveal Circle suspended a
5:56
customer called HECA Funds back in
5:58
December, 2023, after
6:00
concluding the Malta-based arbitrage
6:02
fund may have been manipulating
6:04
markets to benefit Tether, Circle's
6:07
biggest rival.
6:08
Circle determined Tether was the
6:09
fund's dominant backer with a
6:10
position of roughly half a billion
6:12
dollars.
6:13
The document surfaced as
6:15
Circle petitioned to
6:17
confirm a February arbitration award
6:18
where the retired judge sided
6:20
with Circle on the remaining
6:21
contract claims.
6:23
It's a rare look inside the
6:24
stablecoin wars and the USDC
6:27
versus USDT rivalry
6:29
heating up.
6:31
And finally, Visa is mapping out the
6:32
AI economy and stablecoins
6:34
are at the center.
6:36
In a new report with analytics firm,
6:38
Artemis, Visa splits
6:40
the coming wave of agentic commerce
6:42
into macro commerce where
6:44
AI agents book your travel or
6:46
manage subscriptions and micro
6:47
commerce, frequent sub-dollar
6:49
payments between software systems.
6:51
For things like API calls and
6:53
compute. Visa says traditional card
6:54
rails work fine for the big stuff,
6:56
but fixed fees make sub dollar
6:58
payments uneconomic.
6:59
And that's where stable coins on
7:01
cheap fast blockchains come in.
7:03
The card giant sees machines paying
7:04
machines in stable coins.
7:07
So very bullish outcome
7:09
from that report.
7:10
We'll be moving into our market
7:11
pulse segment very shortly.
7:14
Don't go away. We'll right back.
9:23
Welcome back to the starting block.
9:24
Thank you for staying with us.
9:25
We're moving straight into our
9:26
market poll segment, and it's great
9:28
to have the team from Bitwise
9:30
back. We've got Luke Deans, who's
9:32
their senior research associate
9:34
at Bitwise Europe.
9:35
So this side of the pond, not from
9:36
the US side.
9:37
First things first, Luke, how are
9:39
you? Thanks for joining us.
9:40
Yeah, I'm great. Thanks for having
9:41
me on, Derek. It's a pleasure.
9:43
Just a quick one, how long have you
9:45
been at Bitwise and what are you
9:47
primarily focused on?
9:48
So I've been a bit wise coming up
9:50
to around a year now.
9:52
I'm mainly an on-chain analyst,
9:54
but I specialize in all forms of
9:56
markets, whether that's derivatives,
9:57
bond markets, and have an
9:59
enthusiasm for the macroeconomic
10:01
side as well.
10:02
Beautiful. So you're you're well
10:03
placed to give us a proper market
10:05
update today.
10:06
Let's talk about Bitcoin and the
10:08
general sort of crypto markets.
10:09
We saw Bitcoin reclaim $65,000
10:12
yesterday.
10:13
I think it's slightly down today
10:14
ahead of the opening ball in the
10:15
U.S.
10:16
I think this is coming off the back
10:18
of our CPI
10:20
data this week.
10:21
But you give us to read on how
10:22
you're seeing things.
10:23
Yeah, it's an interesting one for
10:24
sure, because we definitely had a
10:26
softer CPI print, and I
10:28
think that is primarily
10:30
resultant of the fact that
10:32
the US ceasefire between Iran
10:34
and the US resulted
10:36
in oil actually dropping in price.
10:38
But as we've seen, that ceasefire
10:39
has now broken down, and oil is
10:41
now ratcheting back up higher.
10:43
So I think we can't be reactionary
10:45
and think that, okay, we've had a
10:46
soft CPI print now, we're out of
10:49
the woods yet, this is a turning
10:50
point, the geopolitical situation
10:51
still remains very tense.
10:53
And energy remains the fundamental
10:55
input to pretty much the entirety
10:57
of modern society.
10:58
So if we continue to see energy
10:59
ratcheting higher, we can expect
11:01
inflation to also follow suit.
11:03
So right now it's just the data
11:05
point and we really wanna see a
11:06
trend.
11:07
On the Bitcoin side, I think
11:10
we saw a bit of relief, but that
11:11
can be attributed to many things.
11:13
It could be due to us being
11:15
in the downturn, it could be to the
11:17
CPI print, but ultimately
11:19
from both a technical and a
11:21
non-chain perspective, I don't think
11:22
we're out of the woods yet.
11:24
When we look at the daily and the
11:25
weekly timeframe, we can still see
11:26
that we're in this lower low and
11:28
lower high structure.
11:29
So from kind of a local and a macro
11:31
positioning from a technical
11:32
perspective, we simply
11:34
haven't reached the required price
11:36
levels to get out of this kind of
11:37
risk off zone.
11:39
And on-chain analytics is really
11:40
interesting because we can leverage
11:42
the open source nature of the ledger
11:44
and actually look into the
11:46
UTXOs, where were they purchased?
11:48
Where were they sold at?
11:49
How much profit or loss was that
11:51
taken? And how long were those coins
11:52
held for?
11:53
So it really gives us a pretty
11:55
unique perspective onto
11:57
positioning and profit and loss.
11:59
And what we actually see is,
12:01
when you look at all coins on the
12:03
supply and you remove coins such
12:05
as Satoshi's or early miners,
12:07
so we're just looking at this active
12:08
portion of the supply, that
12:10
aggregate cost basis or buy-in price
12:12
is around $76,000.
12:14
And this is a very significant level
12:16
because from a statistical
12:19
perspective, When you look at the
12:20
amount of days that price has traded
12:22
above or below this level, it's
12:24
about 50-50 either side.
12:26
When you at the ratio between price
12:28
and this level the median value
12:30
is 1.01.
12:31
So by all statistical purposes,
12:33
this is essentially the closest
12:34
point that we can get to a market
12:35
midpoint.
12:36
So this is controlling our kind of
12:38
macro bound. We want to see price
12:40
actually accelerate beyond this
12:42
because it's telling us that the
12:44
average active investor is now
12:45
back above breakeven.
12:47
And markets are the world's greatest
12:49
voting machines. They are reflecting
12:50
human behavior.
12:52
So to actually enter this risk on
12:54
area, we need to actually see
12:56
portfolios improve and investor
12:57
stress decline.
12:59
Now, interestingly, we can use a
13:01
form of cohort analysis on this as
13:02
well. And there's this cohort known
13:04
as the short-term holders.
13:06
And we denote them as coins
13:08
that have been held for less than
13:09
155 days.
13:10
And there is statistical reasoning
13:12
for this as well.
13:13
We see that these investors are much
13:15
likely to spend their coins and are
13:16
very sensitive to price.
13:18
So when you look at their cost
13:20
basis, that's around 69.5k.
13:23
So this gives us a range
13:25
from 69.50k to 76k,
13:28
controlling the local and the macro
13:29
bounce. So from both a technical
13:31
perspective and a non-chain
13:32
perspective, we haven't really seen
13:34
that risk on that we would like to
13:36
see to say that this isn't a relief
13:37
rally or a dead cat bounce.
13:39
But there's still time for that to
13:41
be proven wrong.
13:41
It's just too early of a data point
13:43
for us to believe that.
13:45
On the volume side, we're not
13:47
actually seeing volume support at
13:49
all, whether that's across varying
13:51
market sectors, the spot market,
13:53
futures market, on chain,
13:55
options, ETFs.
13:56
They're all, when looking at the
13:57
last year of data, below their 10th
13:59
percentile. And we all know that.
14:02
Upwards moves are further supported
14:04
by volume. They have a lot more
14:05
staying power.
14:06
So we're not really seeing a
14:08
clear breakout on that side yet, and
14:10
it does definitely seem more akin to
14:11
a relief rally.
14:12
But we'll have to wait for the data
14:13
points to really roll in.
14:15
Beautiful. That was a really
14:17
fantastic breakdown of the
14:19
entire sort of spectrum of the
14:20
markets then as it relates to
14:23
Bitcoin, really.
14:24
Just two more questions for you.
14:26
Obviously, there's been a lot of
14:27
focus on the Kevin Warsh Fed over
14:29
in the United States.
14:31
They're expected to hold rates
14:32
somewhere between 3.5% to 3.75%
14:35
at its end
14:37
of July meeting.
14:39
What's Bitwise watching for in
14:41
that decision? And do you think it
14:42
could have a significant impact on
14:44
how the markets react.
14:45
Yeah, I think it's an interesting
14:47
one, to be honest. And it kind of
14:48
builds on what we've just spoke
14:49
about here in terms of not being too
14:51
reactionary.
14:52
We see new data come in and
14:54
the financial markets themselves are
14:56
doing a lot of the tightening.
14:57
We're seeing the dollar is rising.
14:59
We're seen yields across the bond
15:00
curve are also rising as well.
15:02
We're see credit default swaps
15:03
across the AI sector is also
15:05
climbing. So there is a degree of
15:07
financial tightening going on.
15:09
And when we take into account the
15:10
geopolitical situation, we have an
15:12
active situation with the US-Iran
15:14
conflict right now.
15:15
That is extremely volatile.
15:17
So I think actually holding is
15:19
the right decision.
15:20
And letting the data points roll in
15:22
and further understanding the
15:23
situation makes a lot of sense.
15:25
I think when we look from a bit more
15:26
of a macro perspective,
15:29
when we looked at the geopolitics
15:30
situation, we are moving past
15:32
pre-globalization, at least from
15:34
my opinion.
15:35
When we look at the Russia-Ukraine
15:36
war, what we saw was
15:38
the sanctioning of Russian
15:40
reserve assets and their ejection
15:42
from the SWIFT system.
15:43
This is largely a Pandora's box
15:45
moment. It's a crossing of the
15:47
Rubicon. You can't go back.
15:48
It tells us that if you are not
15:50
an ally of US or Western hegemony,
15:52
you can be explicitly removed from
15:54
the system. So I think that was the
15:56
first inflationary event.
15:58
Secondly, COVID showed to us and
16:00
kind of revealed the truth of the
16:01
world that supply chains
16:03
are extremely fragile and more
16:05
fragile than people believe.
16:06
And thirdly, with the US and Iran,
16:08
we're having something akin to the
16:10
Suez Canal moment here with the
16:11
Strait of Hormuz.
16:12
And what we see across all
16:13
hegemonies is that naval
16:15
dominance is imperative, as that is
16:17
how you actually insure and back
16:19
up global trade across shipping
16:21
lanes. And that's what the US have
16:22
been doing all of these years.
16:23
But this is an active threat exactly
16:25
to that, right at the heart of,
16:26
essentially, the energy supply.
16:29
All of these are inflationary.
16:30
And essentially, what we're seeing
16:31
is peak globalization is moving
16:33
past us.
16:34
And we're moving into a paranoid
16:36
world. And that is just basically
16:38
causing friction and rising
16:40
inflation.
16:41
When you mix that with the local
16:42
ongoing situation with US
16:44
and Iran being active right now,
16:47
I think actually holding makes the
16:48
most sense, especially after that
16:50
soft CPI print.
16:52
And I think they're just going to
16:53
need to wait for the data to roll
16:54
in. It's going to not be too
16:55
reactionary.
16:57
Beautiful. Final question.
16:58
Spot Bitcoin ETFs
17:01
flip back to inflows after a 10-day
17:03
$2.7 billion outflow
17:05
streak, which I was following quite
17:06
closely the last three weeks.
17:09
Is institutional money coming back
17:10
in or are they still on the
17:12
sidelines? How are you seeing this
17:13
one?
17:13
Yeah, that's a great question.
17:15
And we actually ran a study on this.
17:18
The result is actually quite
17:20
intuitive. We found out that
17:22
flows follow flows and flows follow
17:24
price.
17:25
And that's exactly what we've been
17:26
seeing here, anecdotally.
17:27
Since we've in the bear market from
17:29
October or from the crash in
17:31
November 2025, we
17:32
can see that there's been
17:33
significant outflows, and definitely
17:35
the largest on record.
17:36
And we can that flows have been
17:37
compounding with flows, prices being
17:39
lower, enticing net outflows
17:41
essentially.
17:42
And what that actually kind of tells
17:44
us is that this institutional
17:45
investor, they are definitely price
17:47
sensitive.
17:49
And until we actually break above
17:50
those levels we were talking about
17:52
before, kind of that risk on
17:54
kind of thresholds that we're
17:55
looking at, I wouldn't expect the
17:56
institutional investor to get
17:58
involved with market when there's
17:59
already other trades on the
18:01
table, especially within the AI
18:02
complex, that are much more enticing
18:04
to the eye.
18:05
We're also seeing this across our
18:06
digital asset treasury companies as
18:08
well, such as Strategy, their
18:09
Bitcoin accumulation engine.
18:11
Has definitely turned off with
18:12
stretch depegging below 100.
18:14
So they're pretty constrained
18:16
on that front.
18:17
So the institutional bid is actually
18:19
devoid at the moment.
18:20
And I don't think that's a problem.
18:22
It's the institutional bit is
18:24
definitely more reactive to price,
18:25
but that is not what actually puts a
18:27
bottom in the market in the
18:29
Market Bottom is actually put in
18:30
from long term value oriented
18:32
investors who passively soak
18:34
up coins that were bought at the top
18:35
of the market, and they're
18:37
gradually transferred to those who
18:38
are patient to wait.
18:41
This has been the case cycle upon
18:42
cycle. And mechanically, this isn't
18:44
just idiosyncratic
18:46
to Bitcoin. This is something we see
18:48
across all assets.
18:49
It's just on-chain data allows us
18:51
to see this in color for the first
18:53
time. And what we see is
18:55
top buyers by
18:57
the top, they're light morphed to
18:58
the light. They see prices above
18:59
100K. They want into the market
19:01
and they can't handle the downwards
19:03
volatility. And they eventually exit
19:05
and leave the market.
19:06
We can see that they're under a lot
19:07
of pressure. They have a lot of
19:08
unrealized losses.
19:10
And they realize that potential and
19:12
crystallize the loss.
19:13
And on the other side of that trade
19:14
is someone who is price insensitive
19:16
and is willing to pick up that coin
19:18
at a perceived discount.
19:20
They believe in the long-term
19:21
valuation of the asset.
19:23
So eventually, the sell-side
19:24
pressure that is built up at the top
19:26
gets exhausted against this
19:27
wave of demand. And it's a small
19:29
demand because anyone who's in the
19:31
asset at this point in time truly
19:33
believes in it. There's really not
19:34
many left. And this is the case
19:35
across all bear market bottoms.
19:37
It's the tourists are removed and
19:39
only essentially the
19:41
investors with conviction remain and
19:43
eventually these long-term holders
19:45
and value investors soak up that
19:47
sell-side pressure until there's
19:49
none left.
19:49
And we're actually seeing that on
19:51
chain. We're seeing losses
19:53
across each consecutive drawdown
19:55
are beginning to diminish.
19:56
So we saw around two billion in
19:58
November, one billion in February.
20:01
The loss spikes are diminishing,
20:02
which tells us that the marginal
20:03
investor, the marginal seller,
20:05
sorry, is getting absorbed by this
20:07
kind of passive background demand.
20:09
And like I said, it's a process,
20:11
not an event.
20:12
And it's that gradual demand that
20:13
eventually absorbs all of the
20:15
supply.
20:16
And suddenly, it is just simple
20:17
supply and demand mechanics.
20:19
Eventually, you are left with just
20:20
the value-oriented investors.
20:22
The sell side is diminished.
20:23
And all that is left is buy side.
20:25
So the market must go higher to
20:28
unlock supply.
20:29
And mechanically, this is what puts
20:30
in bottoms every time.
20:31
It's not the price-sensitive
20:33
investor that we see on the
20:34
institutional side.
20:35
Wants to maximize gains, it's
20:36
actually more the buyer
20:39
of last resort, the one who wants to
20:40
step in front of the FTX train, the
20:42
ones who want to step in front the
20:43
COVID train. They are the ones who
20:45
we actually expect to put in the
20:47
market floor.
20:48
But the institutional bid, I'm
20:50
certain, will come back as soon as
20:51
we move back into more animal
20:53
spirits and risk on conditions.
20:54
And I think that's a very natural
20:56
process that we've been seeing.
20:58
Beautiful. Luke, thank you so much
20:59
for your time.
21:01
Really, really enjoyed our market
21:02
pulse today and full of great
21:04
insights. We'll surely have you back
21:05
if you'll oblige us.
21:08
100%. Thank you.
21:09
Yeah, thanks so much for joining us.
21:10
Keep it locked on the starting
21:11
block. We're gonna take a very short
21:13
break. Then we'll be jumping into
21:14
the hot seat with Rand Hindy,
21:16
of course, who is the CEO and
21:18
founder of Zama.
21:19
Don't go away. We'll be right back.
23:55
Welcome back to The Starting Block.
23:56
We're jumping into the hot seat with
23:58
Ran Hendy.
23:59
He's the CEO and founder of
24:01
Zama. Ran, it's great to catch up
24:03
with you again.
24:04
It's been, I think, a few months
24:05
since we saw each other in person.
24:06
First time on the new show, so
24:08
welcome to the show.
24:09
First things first, how are you?
24:10
Thank you, I'm very good, I am very
24:12
good and very happy to be here too.
24:16
Ran, let's jump into Zama
24:18
very quickly for the audience out
24:19
there that might not know much about
24:21
the protocol. Can you give us a
24:22
quick TLDR of what Zama is,
24:25
how you built it, and where you guys
24:26
are at?
24:27
Of course, Susama
24:29
is a confidentiality protocol for
24:31
on-chain finance.
24:32
It allows you to pay people
24:34
to trade on-chains, to
24:37
stake money, to earn in vaults
24:39
without anybody knowing how
24:41
much money you have, how much you're
24:42
moving around, or even the direction
24:44
of the trade you're making.
24:46
So think of it as a layer of
24:48
encryption for financial
24:50
transactions on public chains like a
24:52
theorem in Solana.
24:54
Beautiful.
24:55
Very short, sweet to the point.
24:58
I remember talking to you about.
24:59
To you about much more else to say
25:00
than, you know, include the money,
25:02
right? Like it's a self-sufficient
25:03
pitch at this point.
25:05
Yeah, exactly.
25:06
I mean, I just think back to the
25:07
conversations we first had about,
25:09
you know, FHE, you know, I think
25:11
it's almost like two years ago.
25:12
With
25:13
where we hadn't arrived
25:15
at this kind of realization of
25:16
that's how simple it is, is the
25:18
ability to encrypt our money and
25:20
have a layer of privacy that,
25:23
you know, frankly speaking
25:25
should already be there.
25:26
Can you talk a little bit about the
25:28
evolution and this privacy like
25:30
narrative and meta that we've
25:32
seen over the past year
25:34
and why you might think that's been
25:35
gaining such a hit of steam.
25:38
I think privacy is not a new topic.
25:40
People have been talking about this
25:42
forever.
25:43
And if you look at off-chain
25:45
finance, so Tri-Fi,
25:47
I suppose, things are private.
25:50
When you make a transaction
25:52
with your credit card, sure,
25:54
Visa sees it, then your bank sees
25:56
it. But your neighbor and random
25:57
people in the streets cannot
25:58
actually see it.
26:00
In fact, I've actually went in the
26:02
street and I walked up to someone
26:03
and I said, can I see your bank
26:04
account? And they thought it was
26:05
weird. Like, they almost called the
26:07
police on me.
26:08
So how did we come to
26:10
believe that this was normal in
26:11
blockchain?
26:12
You have to understand the reason
26:13
why transactions on
26:15
public blockchains are public
26:17
is because when people launched
26:19
them a decade ago,
26:21
in order to have consensus, so in
26:22
order to agree on the state of the
26:24
blockchain, well, people needed to
26:26
share the data that they used to
26:27
compute this data.
26:28
And so, you know, there needed to be
26:31
public availability of the data in
26:33
order to have a consensus for a
26:34
public blockchain.
26:36
What's different today is that we've
26:38
got cryptography, we've got new
26:39
technologies like ZK,
26:41
like FHE that we use at Zama,
26:43
which allows you to compute on
26:45
encrypted data.
26:46
So your nodes in your public
26:48
blockchain can still reach consensus
26:50
without actually having to see
26:52
the ancient states they're
26:54
running consensus on.
26:56
And that's a very big deal because
26:58
the ability to compute
27:01
on private states is
27:04
not something that was available
27:05
before.
27:06
So you take just simply the fact
27:07
that, you know, Zema cracked a
27:09
hard cryptographic problem.
27:11
So now we have this technology and
27:13
you combine that with the
27:15
massive trend of tokenizing
27:17
and putting finance on chain where
27:20
people want privacy.
27:22
Because let's be clear, the more
27:23
money you move, the more
27:25
you risk losing money because
27:27
someone's going to front run you or
27:28
someone has information they
27:29
shouldn't have access to.
27:31
So it's extremely important.
27:33
Well.
27:33
It's necessary to have privacy
27:35
for finance to move on chain.
27:37
And so the convergence of those two
27:38
things, finance moving on chain and
27:40
privacy technology becoming mature
27:42
is what created this sort
27:44
of sudden explosive
27:46
growth around privacy
27:48
and the whole narrative around it.
27:51
Can we talk a little bit about, I
27:52
guess, what do we call these like
27:54
confidential stablecoins and like
27:56
confidential DeFi, but late
27:58
last month Zama
28:00
announced that you
28:03
would have confidential USDC
28:07
in a partnership with Morpho and
28:09
Stakehouse. Can you just break this
28:10
down for us, what it is,
28:12
how it works and why it's
28:14
so valuable?
28:17
I think when people think about
28:19
privacy, they think about Zcash,
28:21
they think about Monero, which are
28:23
fundamentally privacy networks
28:25
with their own coin, which itself
28:27
has privacy.
28:28
So Zcashed can be shielded into
28:29
shielded Zcached, Monero is private.
28:32
What Zama does is completely
28:33
different, right?
28:34
It's not a privacy coin.
28:35
It's nothing you L1, L2, but rather
28:37
it's a layer of encryption on
28:39
top of the existing public chains
28:41
like Ethereum, where you can
28:43
take any existing assets, USB-C,
28:46
USB-T...
28:47
Tokenized gold, RWAs,
28:51
even the Zama token itself,
28:53
and you can shield it
28:55
to a confidential version
28:57
of the same token.
28:58
So this is not a new asset.
29:00
Confidential USDC is just a wrapped
29:02
version of USDC where
29:04
your balances and transfers
29:06
become confidential.
29:09
And so because everything is on
29:10
Ethereum, because you're not
29:11
bridging to a new chain, because
29:12
it's the same underlying asset,
29:14
it means that you can make it
29:15
composable.
29:17
With DeFi the same way the
29:18
underlying asset is composable with
29:20
DeFi.
29:21
And as a proof of concept of that,
29:23
we launched the first Morpho
29:25
Vault with Stakehouse to
29:27
enable people to earn yields
29:30
on their confidential USDC.
29:32
So you deposit confidential USDc,
29:34
you get a confidential share of the
29:36
StakeHouse Morphovolt and
29:38
you just earn yield on it.
29:39
Exactly as if everything was public,
29:41
but it's private.
29:43
Does that change anything for DeFi
29:45
users and how they currently sort of
29:47
experiencing, you know, lending on
29:49
Aave or other protocols?
29:51
What's like the real kick here?
29:54
Well, clearly, I think we're onto
29:55
something, because the integration
29:57
we did is the most simple
29:59
one that you could do.
30:00
We haven't really gone really deep
30:02
down into confidential DeFi,
30:03
as in reinventing DeFi
30:05
to be confidential by
30:07
design.
30:08
We've literally plugged on top of
30:10
existing systems.
30:12
And the speed at which
30:14
this has gone
30:16
around, like the amount of interest
30:18
we're getting, the amount interest
30:19
Stakehouse is getting, is insane.
30:22
The Stakehouse Confidential USDC
30:24
Vault is, I think, top 10
30:26
biggest Morpho Vault for
30:28
USDC at the moment, which
30:30
is crazy if you think about it,
30:32
right?
30:33
So first of all, that shows that
30:35
privacy is no longer a friction
30:37
point, right.
30:38
You get exactly the same access to
30:40
exactly the financial products but
30:42
with privacy.
30:44
I think what this is really showing
30:45
as well is
30:47
that the market for
30:49
confidential on chain finance.
30:52
Is probably a thousand
30:54
times bigger than for
30:56
public on-chain finance.
30:58
Because again, go and talk to a
30:59
treasury company, go and to a fund,
31:02
go talk to any trader
31:04
and ask them, are you okay
31:06
making every single trade,
31:08
every single asset you own public?
31:10
The answer is going to be no.
31:13
Simple example, VCs.
31:16
VCs that receive tokens
31:18
from investment they've made, The
31:20
second!
31:21
They move those tokens to an
31:23
exchange to sell them, they get
31:25
front run, the market drops,
31:27
and they lose up to 30%
31:29
of the upside on their investment
31:31
because of the signaling that
31:33
it sends for a VC to sell their
31:35
tokens.
31:36
It's crazy, man.
31:37
20 to 30 percent missed
31:39
upside is the difference between
31:41
a fund that performs in
31:43
top, you know, decile and
31:46
a fund that's average.
31:47
If your fund does not highly
31:49
perform, nobody's gonna give you
31:50
money in the future to invest, which
31:52
means there is not going to be
31:53
investment in the crypto ecosystem
31:54
for innovation.
31:56
The whole entire space can
31:58
only exist and continue to grow if
32:00
investors can actually move their
32:03
investments and manage them freely
32:05
without having to worry about people
32:06
front running them.
32:07
That's an example of something we
32:09
saw.
32:10
Off the bat.
32:11
Done. Confidential distribution of
32:12
tokens to VCs, confidential
32:15
OTC settlement with market
32:17
makers, done.
32:18
Problem solved.
32:20
Right and and it definitely
32:22
seems like there's a lot of interest
32:23
here I mean I was looking at some of
32:24
the stats cumulative cumulative
32:26
total value shielded is roughly
32:28
283 million dollars 9,200
32:31
depositors, so that's a it's a
32:33
fairly large sample of people that
32:34
are shielding staple stable.
32:37
I mean Do you think
32:38
that's just a drop in the ocean?
32:40
It's just the beginning
32:42
If you take total
32:44
shielded plus total unshielded,
32:47
the two together is
32:49
half a billion dollars
32:50
at this point.
32:52
So technically, the Zama protocol,
32:55
with very, very minimal utility
32:57
at the moment, has moved
32:59
half a million dollar of
33:01
money in six months.
33:05
Keep in mind, up until we
33:07
launched the Morpho Vault, the only
33:09
thing you could do with your
33:10
confidential assets was hold them
33:11
and send them around, right?
33:13
So, you know, not really a very
33:15
strong incentive for people to
33:16
shield.
33:17
Now that we're starting to enable
33:18
yield and soon other financial
33:20
products, you'll be able
33:22
to do everything that you do on
33:24
blockchains today confidentially.
33:27
So if we could move half a
33:28
billion dollars in six months with
33:30
very utility.
33:32
How much flow of money?
33:34
Is going to happen once you have
33:36
full utility, swaps,
33:38
yields, transfers,
33:40
RWA's, payments,
33:42
trillions, honestly, like, you know,
33:44
people are scared of saying
33:45
trillions.
33:46
Trillions, right?
33:47
Like, this is actually going to
33:48
happen.
33:51
Yeah, I like that a lot.
33:53
And I mean, you would know better
33:54
than me when it comes to sort of
33:56
Vitalik's vision of the wider
33:58
Ethereum ecosystem and
34:00
what he expects from protocols and
34:02
platforms building. This is one of
34:03
the things, right?
34:04
Like inherent built-in privacy
34:06
that allows people to maintain
34:09
their privacy and transact
34:11
in this kind of manner.
34:12
And it goes a lot further.
34:13
Cause I mean if you had
34:16
roughly half a billion
34:17
dollars, in shielded and
34:19
unshielded stablecoins on the
34:21
protocol already just to move money
34:23
around. Now that you've unlocked
34:24
DeFi, it kind of seems like a
34:26
no-brainer.
34:26
Do you anticipate a lot more
34:28
of the DeFi protocols, et cetera,
34:31
to plug in this functionality that
34:32
you're building? And do you have a
34:34
first mover advantage?
34:36
You know, something that's
34:37
interesting is we don't need them to
34:39
do anything, right?
34:41
We can actually build
34:43
adapters, which allows you to
34:44
use your confidential assets on top
34:46
of existing non-confidential DeFi
34:48
protocols, just by
34:50
composing with them the same way any
34:51
DeFi protocol can compose together,
34:53
right. Composability is a big reason
34:55
why we have smart contracts.
34:57
Having said that, I think if you
34:58
want to have the absolute best,
35:03
Privacy, you definitely need to
35:05
rebuild some of the DeFi primitives
35:07
to be private by design.
35:09
Just plugging on top is never going
35:10
to give you as good of an experience
35:13
as rebuilding the whole thing from
35:14
the ground up. So this is where
35:16
definitely we wanna partner with a
35:17
bunch of these guys and build this
35:19
together.
35:20
It's happening.
35:21
I don't think anybody today says
35:24
privacy doesn't matter.
35:25
I think everybody wants it.
35:26
The question is what
35:28
shape and which
35:31
technology to actually use.
35:33
And I'm convinced that
35:35
there is going to be network effects
35:37
here, because if your money is
35:39
shielded with a specific
35:41
protocol, Zama,
35:43
if you want to move it to a
35:44
different protocol, you have to
35:45
unshield it first.
35:46
So there is a cost of transitioning,
35:48
which is not the monetary cost, but
35:49
it's a cost of privacy loss, right?
35:51
And I think, you know, at some
35:52
point, you just go wherever the
35:54
liquidity is. So, I do believe that
35:56
you should look at things four years
35:57
from now.
35:58
There is going to be one privacy
36:00
protocol, Zama, in
36:02
that case, that is going to be
36:04
encrypting 95%
36:06
of the financial transactions on
36:07
chain.
36:08
You know, there is only one HTTPS.
36:10
There is not 56 flavors of
36:11
HTTPs. There is one HTPPS
36:13
everybody's using.
36:14
There is gonna be one HTPS on
36:16
chain everybody's using, and
36:18
that's going to Zama.
36:21
When it comes to some of the other
36:22
options out there, because I mean, I
36:24
hear your case for Zama here,
36:26
but obviously Zcash had a load of
36:28
attention last year and a lot of big
36:29
names in the industry getting behind
36:31
that.
36:32
You have blockchain
36:33
protocols like Canton that have
36:36
a huge institutional backing
36:37
that are literally knocking on the
36:39
door of TradFi and are in Wall
36:41
Street having these conversations
36:42
with all these big fund managers
36:44
and huge amounts of capital kind of
36:46
saying like Hey, come in.
36:47
Come and build your financial tools
36:49
and infrastructure on our
36:51
rails, and you can have all of
36:53
this plug and play.
36:54
Is there gonna be some sort of a
36:56
competition here between different
36:58
protocols like that?
36:59
Cause you know, Zcash has a certain
37:01
group of people that believe in
37:02
that.
37:03
You know, there's the Monero people.
37:05
And then of course you just have
37:07
like the cantons of the world that
37:09
are gaining a head of steam and
37:11
momentum and have their ties already
37:13
to TradFi institutions.
37:15
Yeah.
37:17
So Zcash has space.
37:19
Zcashes encrypted Bitcoin.
37:21
Nothing more.
37:22
It's already huge.
37:23
But it's not trying to be more than
37:25
that. ZCash is not trying to
37:27
be confidential finance.
37:28
It is trying to be confidential
37:30
store value, private store value.
37:32
There is always going to be a space
37:33
for that. And as long as Zcache,
37:35
like Bitcoin, stick
37:37
to their vision and don't try to
37:39
be everything, there is going to be
37:41
a place for them, which is going be
37:42
huge. I do generally think that, you
37:43
know, Zcash could be worth a
37:44
trillion. Market cap in the future,
37:47
just like Bitcoin is going to be
37:48
probably worth 10 or 20 trillions in
37:50
the future, right?
37:52
So we're not competing with Zcash,
37:54
man. Honestly, I'm holding Zcach,
37:56
right? Like I hold Bitcoin.
37:57
That's it.
38:00
We might create like a
38:02
shielded Zcache pool on a different
38:04
chain. Why not?
38:04
You know, but that would probably be
38:06
for people who want to use their
38:08
Zcaches into DeFi, for example, that
38:09
would be more of a use case.
38:11
Canton, I think, is a very
38:12
interesting one.
38:13
So if you look at the way that
38:14
Canton offers privacy,
38:17
similarly to tempo zones and things
38:18
like that, they allow you to
38:20
create your own private
38:22
environments.
38:23
And within your environment, you can
38:24
decide the rules of who can access,
38:26
who can see the data, who can
38:27
transact.
38:28
Kind of like, do you remember the
38:30
intranets of the 90s?
38:32
So you'd have a company, company
38:34
would connect the computers with
38:35
their employees together, and you
38:36
could exchange data internally.
38:38
It was private, it was secure
38:39
because it was ring fenced.
38:41
Nobody from the outside could look
38:43
into it.
38:44
You could connect your intranet to
38:45
other companies' intranets.
38:46
You could exchange data and
38:47
collaborate, and people did that.
38:49
And it was relatively effective at
38:52
having two large
38:54
companies interacting together.
38:56
I think there is a space for that.
38:57
I strongly believe that
39:00
financial institutions
39:02
will probably run their own
39:04
local network, and
39:07
they will connect to each other
39:08
because it's how finance works
39:10
today, you know, if you look at.
39:12
A settlement between banks.
39:14
Not everything is happening on
39:15
Stripe, right? There is a lot of it
39:17
which is happening between banks
39:18
directly. They have their own
39:19
system.
39:20
That is fine. And I think Canton can
39:22
become a huge protocol solving
39:24
that very specific problem.
39:27
Zama is different.
39:28
Zama doesn't try to go on-prem
39:30
the way Canton does.
39:32
Zama's trying to add a little
39:33
encryption to a public blockchain
39:34
like Ethereum.
39:35
And this is a little bit like the
39:37
internet. The internet,
39:39
contrary to the intranet,
39:41
was one global public network
39:43
that everybody was using.
39:46
You could use and you could connect
39:48
to someone across the world on the
39:50
internet because it was just one
39:51
network. Think of it as an
39:53
intranets that everybody could plug
39:55
into.
39:56
This is Ethereum, this is Solana,
39:58
this is BNB chain, these are the
39:59
public chains.
40:01
What was missing on the internet in
40:03
the early days.
40:04
Was privacy.
40:05
If you wanted to do commerce, if you
40:07
wanted to buy something on Amazon,
40:09
you had to send your credit card.
40:10
Everybody would be able to intercept
40:12
it and see it and then, well,
40:14
not a very good idea.
40:15
So people invented HTTPS,
40:17
the ability to encrypt the data
40:19
you're sending, specifically
40:21
for finance on the internet.
40:23
They wanted to create a global
40:25
commerce network and
40:27
for that you needed private
40:29
transactions, private credit
40:31
card information encryption.
40:32
So once you had HTTPS plus
40:35
the internet together, that created
40:37
an explosive growth where
40:39
all of a sudden all commerce was
40:40
online because why not?
40:43
You could have it privately.
40:44
All of communication went online
40:46
because you can now send a message
40:48
to someone without people being able
40:50
to see the content of the message.
40:52
AI today would not exist without
40:54
HTTps.
40:55
You would never send a prompt to
40:57
Entropic if anybody on the internet
40:59
could actually see it and your
41:00
company definitely wouldn't do that.
41:02
So the internet is today what it
41:04
is because we added encryption to
41:06
it. And that's where we play.
41:08
We believe the same transformation
41:09
is going to happen, that there is a
41:11
space to create an internet
41:13
of value that everybody's
41:15
transacting on and you're gonna need
41:17
a layer of encryption like you
41:19
needed that for the internet.
41:20
And Zama is playing that very
41:22
specific game.
41:24
I found it very interesting, you
41:26
were one of the few people that
41:27
entered this kind of conversation in
41:29
the last few days when there
41:31
was a lot of screenshots shared
41:33
about Robinhood
41:35
Chain's fees generated in like five
41:38
days and you were kind of talking
41:39
about infrastructure not
41:41
really being a place where you're
41:42
going to make a lot money and at the
41:43
end of the day products and apps
41:45
are what make money.
41:46
Can you talk a little bit about this
41:48
and maybe how you tackle that from
41:49
your perspective because, like you
41:51
said, you've built an infrastructure
41:53
layer here, essentially.
41:54
That should plug into a lot of
41:56
different things.
41:57
Infrastructure, you know,
41:59
historically, if you look at the way
42:00
that value was created,
42:04
infrastructure was always the first
42:05
one to capture value.
42:07
If you look in the nineties, for
42:08
example, ISPs,
42:10
internet service providers, telecom
42:12
companies, they were huge.
42:14
And these weren't like the dot-com
42:15
era was driven
42:17
not just by e-commerce websites,
42:19
but also driven by telecom.
42:21
Going to incredibly stupid
42:24
valuation, because people are
42:25
investing heavily on infra, right?
42:28
And eventually people realize, oh,
42:30
well, you know, infra is
42:32
capex intensive, but a lot of people
42:33
are doing it, and it's a race to
42:35
zero, because you know well,
42:37
nobody wants to pay for pipes,
42:40
right, effectively.
42:42
So they found different ways of
42:44
monetizing. Initially, you now, for
42:45
your mobile plan, for example, you
42:47
were paying by minutes.
42:48
Than by text message.
42:50
And eventually it was free.
42:51
Then you were paying for gigabytes.
42:52
And now gigabytes is like, wow, we
42:54
have 5G, 6G.
42:55
You can't really charge people for
42:57
gigabytes, it has to be unlimited
42:58
because you're competing with
43:00
everybody else.
43:01
If you look at Verizon, AT&T,
43:05
Orange, those companies
43:07
are big, right?
43:09
But how big are the companies built
43:11
on top?
43:12
How big is Google?
43:14
How big is Meta?
43:15
How big as Entropic?
43:16
Those companies could not have
43:18
existed without ISPs
43:20
providing the infrastructure for
43:22
them to run on.
43:23
So you could say that ISPs
43:25
enabled Google to
43:27
exist, but Google is four trillion.
43:29
Verizon is what,
43:31
a couple hundred billion maybe?
43:33
I don't know, something like that.
43:35
And so when you look at this, you're
43:36
like, okay, so internet
43:38
infrastructure,
43:40
the layer on top, the applicative
43:41
layer was worth 10 times more.
43:45
Mobile, the application layer was
43:47
worth 10 times more.
43:48
TikTok is worth way more than Orange
43:51
or AT&T,
43:53
right?
43:54
Why would it be different for
43:55
blockchain?
43:56
And we're kind of seeing that today.
43:58
There's a race to zero in fees.
44:00
Ethereum, back in 2021,
44:02
if you did a DeFi swap, it was like,
44:04
what, $10, man.
44:06
Like, I remember- It was crazy.
44:07
I remember paying 200 guay
44:09
for a transaction.
44:11
Like today, like I'm complaining
44:12
when we go past like one guay,
44:14
right.
44:15
The truth is the race is going to
44:17
zero because capacity increases
44:18
exponentially, you know.
44:21
People just don't want to pay,
44:22
competition increases.
44:23
There's L2s, Robin Hood launching
44:25
their chain.
44:25
So the truth is gas fees alone,
44:27
paying for compute,
44:29
especially when your compute is not
44:31
going to be AI level compute, it's
44:33
going to financial transactions.
44:35
So small amount of
44:37
compute, you're never gonna be,
44:39
you now, a $5 trillion protocol
44:41
if all you're doing is
44:43
charging.
44:44
You know, zero one cents on
44:47
a billion dollar transfer of value.
44:49
It just doesn't work, right?
44:51
And so the money is really moving to
44:53
the financial stack.
44:54
It's moving to swaps, it's moving
44:56
to vaults, it is moving to stable
44:57
coins, to RWAs, because
44:59
here you can actually charge bips,
45:02
right? And bips scales much better
45:05
with value moving independently
45:07
of how often the value actually
45:08
moves, right?
45:10
And so I look at this, I'm like, OK.
45:12
So clearly there is more money to be
45:14
made on the financial protocol layer
45:16
than the base infrastructure
45:17
protocol layer.
45:19
Well, no reason why Zama should not
45:21
fall into the same bucket.
45:22
So you know what?
45:24
I'm building the protocol and
45:26
everything around it, assuming that
45:28
gas fees are going to zero.
45:30
So charging for privacy,
45:31
my model is we're not gonna do that
45:33
eventually, right?
45:34
It's going to be zero, that's it.
45:36
So the privacy part is gonna be
45:37
free. It's commoditized, it's free.
45:38
So might as well plan for it now.
45:40
What we're doing, though, is we're
45:42
building the whole financial
45:43
protocol layer on top.
45:45
We're trying to provide the
45:47
infrastructure for people to build
45:49
confidential swaps, confidential
45:50
vaults, confidential stablecoins,
45:52
confidential RWA's, because this
45:53
is where we can actually start to
45:55
build a viable long-term
45:57
revenue model for the protocol,
45:59
all of which, by the way, will
46:00
accrue to the protocol.
46:01
To be clear, 100% of all revenue on
46:03
the financial layer is going to go
46:05
to the protocols and to the XANA
46:07
token.
46:08
So, yeah, so I think, you know, I
46:09
encourage people to actually
46:11
enshrine in their protocol core
46:12
things. I think Ethereum should
46:13
enshrined swaps at the protocol
46:15
level.
46:16
I think they would make way more
46:18
money if AMMs were part of
46:20
Ethereum and accruing value ETH than
46:21
just charging and
46:24
exponentially decreasing amount of
46:25
fees for that.
46:27
Yeah. And I mean, like, that's one
46:28
of my experiences that I really
46:30
liked about Solana.
46:31
Like, if you play around a
46:33
lot with that, like swaps are just
46:34
super fast and like, you know,
46:36
like very, very seamless and
46:38
intuitive.
46:39
And, and I think you're right,
46:41
sometimes you need to consider
46:43
enshrining some things or just
46:44
making some things next to no cost
46:46
that are at a base level
46:47
infrastructure level in order
46:49
to power a lot of different Accept.
46:52
Accept that you're not going to grow
46:54
and that you know you're probably
46:55
going to grow you're going to go
46:57
with the market growing there's
46:58
always going to be demand for
47:00
compute capacity but you're gonna
47:02
take a small sliver of the
47:03
value right that's
47:06
the case if ethereum
47:08
and solana don't start moving
47:10
up the stack and charging fees where
47:11
value actually is long term
47:13
they're going continue to grow but
47:15
there's going to be someone building
47:16
on top which is going to 10 times
47:18
bigger
47:20
Yeah, for sure.
47:21
My last question to you, Rand,
47:23
obviously it's been a very
47:25
interesting kind of six or seven
47:27
months in France.
47:29
And it's funny on my previous show
47:31
at my old employer, we had this
47:32
conversation and you were the first
47:33
person that put it on my radar that,
47:35
someone at the French tax authority
47:37
had been the person that leaked
47:38
information on a load of,
47:41
high net worth crypto holders,
47:42
Bitcoin holders.
47:43
And then you had the spate of
47:46
kidnappings and range attacks across
47:48
France.
47:49
We had Francis Puglio from
47:51
bull Bitcoin on the show yesterday
47:53
to talk about his sort of legal
47:55
Case that he's put forward at the
47:57
concert data Against
47:59
decades and basically what he's
48:00
saying is they don't want to hand
48:01
over this information because they
48:02
believe it's gonna end up being a
48:03
Honeypot and it's just gonna
48:05
end leading to more people
48:08
Financial information being leaked
48:10
to criminals and more of the same
48:11
Are you concerned that
48:13
the way that the regulations are set
48:15
up across Europe for the
48:17
cryptocurrency industry?
48:19
Is leading in that direction and do
48:21
you think it's important that legal
48:22
challenges like the one that bull
48:24
Bitcoin is spearheading is
48:26
a move in the right direction?
48:29
Well, I love
48:31
Europe, man. I love Europe.
48:33
I think there are so many great
48:34
things here.
48:36
The only problem is that we
48:38
have leadership
48:40
in Europe right now,
48:42
which doesn't have a lot
48:44
of...
48:48
It doesn't reflect on itself that
48:49
much lately, right?
48:50
It still thinks of itself
48:52
as able to pull
48:54
off some of the most complicated
48:55
things ever, right.
48:57
I think people need to look at
48:59
the facts. The fact is we
49:02
suck at cybersecurity.
49:03
The fact that we suck
49:05
it controlling abuses,
49:08
we suck all of these things.
49:10
And so the more regulation we
49:12
create that puts power in
49:14
the hands of institutions in
49:16
Europe, the more we're giving
49:18
data for hackers to steal
49:20
and to exploit against citizens.
49:23
If, you know, if Europe was as good
49:25
as cybersecurity as, I don't know,
49:26
Google, right, then it'd be a
49:27
different story, but they're not.
49:29
And they've proven this, like, there
49:30
has never been more data breaches
49:32
than in the past, you know two
49:34
years.
49:35
France, France is good, by the way,
49:38
cybersecurity, they still got their
49:39
national database of ID
49:41
hacked.
49:44
The passport database, like this is
49:46
the one thing that makes you French
49:48
is the piece of paper that says
49:49
you're French.
49:51
Like seriously, you can't
49:53
even handle that. Like how can we
49:54
trust you with my private messages
49:56
and pictures of
49:58
me during the holidays?
49:59
Like I don't.
50:00
And so I think we're
50:03
geared for, I
50:05
think it's going to be a global
50:06
meltdown of privacy before
50:08
people realize that we have to
50:10
backtrack severely
50:12
into something that is a lot more.
50:16
But I think we,
50:19
especially in France, we like
50:21
to get slapped before we understand
50:23
we did something wrong, you know.
50:25
We're not very, we don't have a lot
50:26
of foresight on those things,
50:29
so I expect something bad is gonna
50:30
happen again.
50:32
Yeah, they say a lesson lived is a
50:34
lesson learned.
50:35
I feel like this is one that doesn't
50:36
need to be lived, you know?
50:38
I'd rather not, yes, I'd write it
50:39
out. Yeah, yeah, I think we'd all
50:40
rather not.
50:41
And yeah, we don't like to doom too
50:43
much, but some of the
50:45
decision-makings within the
50:47
EU and stuff makes one very
50:49
concerned from sovereignty.
50:50
It's going to get better eventually.
50:51
We just have to hold off a few more
50:53
years and then we're going to be
50:54
good.
50:55
Yeah, beautiful. And keep building
50:56
the tools that we're building.
50:57
Rand, thank you so much for taking
50:59
the time to chat to us today.
51:00
I think you're doing.
51:02
Really interesting stuff in the
51:03
space. And you've just been quite
51:04
the building and to see
51:06
the fruits of your labor in the last
51:08
six months has been fantastic.
51:10
So congrats to you and the team.
51:11
And we hope to have you back on the
51:12
show in the near future to
51:14
talk more about this subject matter
51:15
because it's definitely fascinating
51:17
and important for the industry.
51:19
So Ran, thank you so much.
51:20
Thank you.
51:21
See you soon.
51:22
Beautiful. Thank you very much for
51:23
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51:24
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51:52
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