Speaker 3: Hey, folks.
Speaker 1: We are recording at stable Coin Summit NYC, co hosted
Speaker 1: by PayPal and Borderless XYZ. And joining me is Ezra Solomon,
Speaker 1: who is the strategy lead blockchain and DeFi at Fireblocks. Ezra,
Speaker 1: great to have you.
Speaker 3: Very excited to be here. Thank you, Ezra.
Speaker 1: I've covered Fireblocks over the years as far as news
Speaker 1: items on the podcast, and I'm really excited to speak
Speaker 1: with you to hear about all the cool things you
Speaker 1: guys have been doing and what you're building and so forth.
Speaker 1: So tell us a bit about your background and how
Speaker 1: do you end up at Fireblocks.
Speaker 2: Yeah, absolutely so. I've been at fireblox for four years now.
Speaker 2: What I do now is focus on our blockchain and
Speaker 2: DeFi strategy. So what that entails is a, you know,
Speaker 2: thinking about what do we need to prioritize next, what
Speaker 2: blockchains do we need to integrate based on what our
Speaker 2: customers are asking for and which DeFi protocols do they
Speaker 2: need to connect to.
Speaker 3: You know, B is actually.
Speaker 2: Working with these partners to go to market, and then
Speaker 2: C is actually working with the customers themselves and whether
Speaker 2: it's for a blockchain helping them to deploy, or for
Speaker 2: a DeFi protocol, helping them to build new products.
Speaker 1: And give an overview of fireblocks and the services you offer,
Speaker 1: you know, things along the lines of infrastructure and so
Speaker 1: on and so forth.
Speaker 2: Yeah, absolutely, I mean I think it's super interesting because
Speaker 2: Firebox is one of those companies that it's like one
Speaker 2: of the larger companies in the space that very few
Speaker 2: people know about, and you know, I think that's a
Speaker 2: testament to the fact that we've done a great job
Speaker 2: providing infrastructure for many of the participants in crypto. So really,
Speaker 2: the way I think about fireblos is what we do
Speaker 2: really well is first and foremost security, right, But when
Speaker 2: you think about the use cases in crypto, there's key
Speaker 2: management and then there's asset orchestration. Right. So key management,
Speaker 2: the use cases for that include just custody, which is
Speaker 2: you know, the most obvious one, but then there's smart
Speaker 2: contract deployment management, and that's sort of what represents tokenization
Speaker 2: when you think about managing smart contracts.
Speaker 3: We're very good at that type of thing.
Speaker 2: And the orchestration is more about how do you plug
Speaker 2: in all the different APIs for all the venues you
Speaker 2: use and facilitate the movement of stable coins. So I
Speaker 2: think those are the two areas that we've done very well.
Speaker 2: And I think because of that, we've been able to
Speaker 2: work with many of the largest FinTechs in the space,
Speaker 2: the market makers, O DC desks, and many other types
Speaker 2: of participants in order to sort of underpin their infrastructure.
Speaker 2: You know, Ultimately, the mission of Fireblocks is to provide
Speaker 2: the safest and easiest way to interact to digital currencies
Speaker 2: and uh yeah, and that's what we do.
Speaker 1: And that's so critical to the growth and maturation of
Speaker 1: the asset class. You know, you mentioned to FinTechs and
Speaker 1: these institutions, many of them they can't you know, go
Speaker 1: through the process of building all these things that they
Speaker 1: need a solution like yours and so on that note,
Speaker 1: have you seen over the past year a lot of adoption.
Speaker 1: It seems like a lot of traffic companies crypto is
Speaker 1: a high priority.
Speaker 3: Now, yeah, I mean, we definitely have.
Speaker 2: And the way I think about it is, at the
Speaker 2: end of the day, we want our customers to excel
Speaker 2: in what they do best, which is build their business.
Speaker 2: And I think in the early days, and you know,
Speaker 2: we were talking before this about how we've both been
Speaker 2: in the space for a long time. I remember in
Speaker 2: twenty seventeen, everyone would be talking about how the best
Speaker 2: way to secure your crypto would be to just stick
Speaker 2: it on a ledger in a vault under a Swiss mountain.
Speaker 2: That was like the whole thing, right, and our founders
Speaker 2: sort of said, well, people are going to be using
Speaker 2: these assets, right, Like, what we need to do is
Speaker 2: build a solution for digital assets in motion, and that's
Speaker 2: sort of what the base is for most of the
Speaker 2: use cases that we power. So and now when you
Speaker 2: think about today, all these different institutions and enterprises that
Speaker 2: want to get into the space, they want to use
Speaker 2: their assets, they want to do things with them, and
Speaker 2: I think that's again like that's what we excel at.
Speaker 2: But they don't want to hire teams to build out infrastructure.
Speaker 2: I mean, first of all, it would take them years.
Speaker 2: Second of all, we've seen that happen before, and it's
Speaker 2: not very secure.
Speaker 3: In many cases.
Speaker 2: Some companies have done a very good job at it.
Speaker 3: It's not impossible.
Speaker 2: But what companies want to do is they want to
Speaker 2: purchase secure software that's been battle tested and then build
Speaker 2: products on top of that. So as we've seen the
Speaker 2: acceleration of stable coins and I think one of the
Speaker 2: exciting and interesting stats that we've put out lately is
Speaker 2: Fireblocks is helping to facilitate fifteen percent of total stable
Speaker 2: coin volume. So as you see players want to get
Speaker 2: more into this space, we've been a natural step for
Speaker 2: them in order to do that securely and safely, but
Speaker 2: also importantly is quickly.
Speaker 1: Yeah. Absolutely, And stable coins I've heard is set being
Speaker 1: said over the years that it's the killer app of blockchain.
Speaker 1: It kind of was the first example of tokenization, right
Speaker 1: putting fiat currency on chain. Now these institutions are tokenizing
Speaker 1: gold and money market funds and much more so. Are
Speaker 1: you seeing a lot of demand for stable coin services, Yeah.
Speaker 3: And I think the way we think about it too well.
Speaker 2: First of all, I think the reason why stable points
Speaker 2: are picking up is because A the value is clear, right,
Speaker 2: I think you can very easily see where you can
Speaker 2: plug stable coins into your business and get immediate value.
Speaker 2: But b now there's some sort of structure around it
Speaker 2: with Genius, and we now have a better sense of
Speaker 2: what you need to do in order to be a
Speaker 2: participant in the stable cooin an ecosystem.
Speaker 3: But what we're really.
Speaker 2: Excited about is you can almost think of a of
Speaker 2: stable coins as a trojan horse to get infrastructure into
Speaker 2: some of these banks, because for anyone in sales that's
Speaker 2: worked with banks, it will take you years to get
Speaker 2: through a sales process or procurement process and eventually to
Speaker 2: work with some of these participants. And in order to
Speaker 2: do that, you need stakeholders that think that what you're
Speaker 2: providing adds value to the business. And now that you
Speaker 2: have stable coins where all these you know, banks and
Speaker 2: institutional participants want to get started, you can now give
Speaker 2: them the infrastructure that they need in order to start
Speaker 2: tokenizing assets and distributing them. So I think, you know,
Speaker 2: especially once we get the Market Structure Bill passed, we're
Speaker 2: going to start to see more and more of these
Speaker 2: use cases flush. But again, like the first step for
Speaker 2: these banks is they need infrastructure in order to participate,
Speaker 2: because without infrastructure, there's not really anything you can do.
Speaker 2: Stable coins will be first, and then I think we're
Speaker 2: going to start to see an uptick in tokenized stocks,
Speaker 2: token ized treasuries, and all sorts of other interesting assets.
Speaker 1: Yeah, the tokenization race is heating up. I mean, it
Speaker 1: seems almost every Wall Street firm or bank is now
Speaker 1: looking to tokenize something and they're using different blockchains, you know,
Speaker 1: a multichain world. So how are you supporting the different
Speaker 1: blockchains into your system because there's so many And obviously
Speaker 1: you can go down the market gap and say okay,
Speaker 1: here to top five, but there are other chains further
Speaker 1: down the list that are doing unique things as well.
Speaker 2: Yeah, So I think where we hyper focus is what
Speaker 2: our customers need in order to be successful. So you know,
Speaker 2: any any emerging chain, for example, there are a couple,
Speaker 2: there's some that we're announcing soon. By the way, that
Speaker 2: as you start to see, especially in the areas that
Speaker 2: we find are to be like strategically important, whether it's
Speaker 2: like banking or payments, some of these chains have significant traction.
Speaker 2: And for us, it's really important to integrate these blockchains
Speaker 2: so our customers have access to them. And I'll go
Speaker 2: back to the point of us providing infrastructure to make
Speaker 2: it easier for our customers to launch products. Another issue
Speaker 2: with holding the infrastructure yourself is you have to think
Speaker 2: about all these blockchains right.
Speaker 3: Like you're seeing now.
Speaker 2: I think one of the biggest trends, which I'm very
Speaker 2: excited about, is privacy, right because there's so many use
Speaker 2: cases that require privacy, and you know, some of these
Speaker 2: some of these banks, for example, are not going to
Speaker 2: launch payments applications where everyone can see all the transactions.
Speaker 2: It's just not realistic, right Like I think, I think
Speaker 2: the transparency of blockchain is great, but we also have
Speaker 2: to meet some of these participants where they are, so
Speaker 2: you know, we we listen to what our customers need
Speaker 2: and ultimately make sure that we integrate these things so
Speaker 2: that when it gets time for them to launch these products,
Speaker 2: we have the solution set for them.
Speaker 1: You mentioned privacy. Another component of that is security, So
Speaker 1: tell us a bit about fireblocks and how your approach
Speaker 1: security to make sure all this is working well and
Speaker 1: assets are protected and so forth.
Speaker 2: Yeah, I mean it's it's a really tricky question. We
Speaker 2: think about it as like a multi layer security solution
Speaker 2: because there are different layers of the stack where you
Speaker 2: can have attackers target you, and we need to make
Speaker 2: sure that every single part of that stack is secure.
Speaker 2: The base layer is key manage and that's where we
Speaker 2: have our MPC technology. You have segregated keys and that
Speaker 2: helps to keep the keys secure where there's no single
Speaker 2: key at any point that can be compromised. But then
Speaker 2: on top of that there's policy engines and governance layers
Speaker 2: and the ability to whitelist certain addresses and smart contracts.
Speaker 2: We have the Fireblocks network, which almost builds this closed
Speaker 2: environment where you know, all of your participants and the
Speaker 2: folks in your organization are not going to be able
Speaker 2: to send assets to an asset to an address that's
Speaker 2: not approved. And then on top of that too, if
Speaker 2: you think about user management, I mean, these are like
Speaker 2: very basic things that large institutions and enterprises need that
Speaker 2: they're accustomed to with like their aws. Instance for example,
Speaker 2: is who's able to even get into this system? And
Speaker 2: then what are the roles of each of these folks
Speaker 2: that can access the system. If you're on the finance
Speaker 2: team and you just need it for accounting purposes, you
Speaker 2: should be a viewer. You shouldn't have keys, right, So
Speaker 2: we think about all of that in order to make
Speaker 2: sure that regardless of who you are in the organization,
Speaker 2: you have the right level of access. And then your
Speaker 2: access is in like a reapproved environment.
Speaker 1: That's really great, and you know, as it relates to
Speaker 1: private permission blockchain that some of these institutions have in house,
Speaker 1: and then they're looking to bridge it to public chains.
Speaker 1: Are you facilitating any of that? Does your service is
Speaker 1: a conducive to that type of thing?
Speaker 2: Yeah, I think so, And I think the way I
Speaker 2: think about it is we provide connectivity to all those
Speaker 2: different blockchains. So what we do with our customers has
Speaker 2: helped them think through. Okay, first let's look at the
Speaker 2: use case, right, what are the requirements for this use case?
Speaker 2: If you're building a pilot and you have a closed
Speaker 2: environment and you want to do something on like hyper
Speaker 2: ledger Basu, great, we can help you with that. If
Speaker 2: you do it in an EVM standard and you can
Speaker 2: sort of poort those smart contracts over to a public
Speaker 2: EVM blockchain, great we can help you with that too.
Speaker 2: So it really depends case by case, But the answer
Speaker 2: is yes. And again, like I think where it's really
Speaker 2: important to focus is is taking the business requirements of
Speaker 2: some of these banks and saying, you know, there's tons
Speaker 2: of options out there and it can get super confusing,
Speaker 2: and especially now a stable coins there's specifically there's stable
Speaker 2: coin chains. Yeah, and it's like which one do you use? Right?
Speaker 3: Like, that's the question that we get all the time.
Speaker 2: And I think the reason why they're so many is
Speaker 2: because they're all building different solutions, right, Like Tempo, for example,
Speaker 2: is building the ability to use any stable coin as gas,
Speaker 2: right and like that is theoretically really interesting, or to
Speaker 2: have gasless transfers. So it's all about mapping those requirements
Speaker 2: over to blockchains. And I think one of the nice
Speaker 2: things too about a lot of these blockchains being EVM
Speaker 2: compatible is that you're not locked in forever, right, Like
Speaker 2: there's I mean, there is a switching costs associated of course,
Speaker 2: but if you build all your smart contracts with the
Speaker 2: EVM standard and you decide, okay, I want to pour
Speaker 2: it over somewhere else, you.
Speaker 3: Can do that. So we do help our customers with that.
Speaker 1: Yeah, yeah, I mean interopability, it's so important in a
Speaker 1: multichain world. And somebody's stable coins and you mentioned they
Speaker 1: exist on different blockchains, Well maybe this month, I want
Speaker 1: to use this chain versus the other, and you got
Speaker 1: to be able to facilitate that.
Speaker 3: Yeah, that's exactly right.
Speaker 2: And there's tons of really interesting solutions out out there,
Speaker 2: Layer zero, chain Link, they're all doing an incredible job
Speaker 2: of building introperability as well. And our perspective is just
Speaker 2: let's connect to as much as possible. And I think
Speaker 2: where I hyper focus looking at blockchain and DeFi is accessibility. Right,
Speaker 2: So there's some stuff we build natively and then other
Speaker 2: stuff there's access to via like DAP connectivity the same
Speaker 2: way you'd think about MetaMask, and we just want our
Speaker 2: customers to be able to do what they need to do.
Speaker 3: Yeah.
Speaker 1: Absolutely, Yeah, I mean what you guys are doing is
Speaker 1: such a core component for adoption, and this year we're
Speaker 1: expecting a lot of adoption. We're at the cusp of
Speaker 1: getting crypto marcrostructure pass. It seems like it might happen
Speaker 1: sometimes as quarter. What do you think is going to
Speaker 1: be the impact of that legislation being put into place?
Speaker 2: Look, I mean, I think the big gap that we've
Speaker 2: had is legislation. I think in order for especially for
Speaker 2: institutions and banks to get involved and get comfortable, they
Speaker 2: need a framework that they can follow.
Speaker 3: So I think what.
Speaker 2: You've seen historically is a lot of the FinTechs that
Speaker 2: are a bit more comfortable taking the existing laws and
Speaker 2: then building their products in a way that they think
Speaker 2: best represents the law.
Speaker 3: They're comfortable to launch that.
Speaker 2: But the banks that are saying no, we need very
Speaker 2: specific laws in order to get comfortable doing this. So
Speaker 2: the interesting competitive dynamic that I think we're going to
Speaker 2: see is is once we do have market structure passed
Speaker 2: and you have banks come in, you're gonna actually start
Speaker 2: to see a lot of these FinTechs and banks compete
Speaker 2: directly because if you can offer similar products, if you
Speaker 2: can offer a wallet for stable point deposits, and then
Speaker 2: you can offer an integration to a lending protocol or
Speaker 2: yield in some capacity, and then you can integrate in
Speaker 2: a debit card for spending, a lot of these capabilities
Speaker 2: are similar.
Speaker 3: So then that begs the.
Speaker 2: Question of you know, what are they going to do
Speaker 2: to compete? But you know, right now we're only seeing
Speaker 2: the more innovative, smaller companies that are comfortable building without
Speaker 2: clear regulation launching these products.
Speaker 1: Right it seems like there's a bit of a tension
Speaker 1: between the crypto native firms which have been ahead of
Speaker 1: the curve and the institution's coming in now. But eventually
Speaker 1: I'll pan out where everything will work out once the
Speaker 1: legislation's in place.
Speaker 3: Yeah, yeah, absolutely.
Speaker 1: Finally, what's on your roadmap for this year? What do
Speaker 1: you as much as you can share.
Speaker 2: Yeah, I mean I think what I would want to
Speaker 2: emphasize is Coinbase has done an incredible job building out
Speaker 2: this trade everything stack. You know, they're thinking about token
Speaker 2: ised stocks and borrow lend and all sorts of interesting
Speaker 2: things there. I think FinTechs globally are seeing that and saying,
Speaker 2: we can replicate this and give it our own you know, spin,
Speaker 2: or we can focus on the products that are most
Speaker 2: relevant to us in our region. And ultimately what we
Speaker 2: want to do, especially now that we've recently acquired Dynamic
Speaker 2: and Trust, so we have a different style of WALT
Speaker 2: that we can provide to our customers. We have a
Speaker 2: really nice reporting technology we can provide. We want to
Speaker 2: help those customers launch all these products. Right, So when
Speaker 2: we think about integrations to DeFi protocols, we're looking at, Okay,
Speaker 2: what do our customers need. These fintech customers in exchange
Speaker 2: is what do they need? Because what are their end
Speaker 2: users asking for and where's the threat where if another competitor,
Speaker 2: if there's launches these products, their users might leave. So
Speaker 2: they all want to launch these products as quick as possible,
Speaker 2: you know, as long as they can go through the
Speaker 2: regulatory process and get approval for it. So I think
Speaker 2: one thing I'll say, and this sort of like dovetails
Speaker 2: into our roadmap, is I think what we can expect
Speaker 2: over the next couple of quarters is many of these
Speaker 2: global FinTechs are going to start launching token is, stocks
Speaker 2: and borrow end and all sorts.
Speaker 3: Of interesting things.
Speaker 2: And I think the end users in many of these countries,
Speaker 2: especially in places like Brazil and Argentina, are going to
Speaker 2: get a much richer diversity of products and access and
Speaker 2: our goals to support all of that.
Speaker 1: That's amazing, and it's incredible at the pace at which
Speaker 1: it's moving. I mean just the other day we heard
Speaker 1: in New York Stock Exchange you're going to go twenty
Speaker 1: four to seven. It's a brave new world.
Speaker 2: Yeah DDCC as well, they're thinking about bringing stocks on chain.
Speaker 2: It's really incredible, you know, being in the space for
Speaker 2: you know, as long as we have some of these things.
Speaker 2: This is back when you know, someone at Blackrock mentioning
Speaker 2: bitcoin with send bitcoin up twenty percent. Yeah, and you know,
Speaker 2: now we're seeing you know, the all of the trad
Speaker 2: fi institutions in uh, you know the world really is
Speaker 2: starting to actually build production implementations of digital assets.
Speaker 3: It's really incredible.
Speaker 1: It's like something changed in the air, and all the
Speaker 1: stock exchanges, the banks, the fintech firms around the world,
Speaker 1: now they have a crypto strategy. Here's what we're doing.
Speaker 1: Is there. We're going to roll out this service and
Speaker 1: YadA YadA. It's amazing, Ezra, thank you so much, Thank.
Speaker 3: You for having me. Happy to be here.
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