Speaker 1: There's many cases why a private company is private. A
Speaker 1: lot of it has to do with the CEO just
Speaker 1: doesn't want it to be publicly traded. There are many
Speaker 1: companies in the private space that, technically speaking, if you
Speaker 1: compare them to a lot of publicly traded companies, are
Speaker 1: way more valuable, have much more revenue, many more clients,
Speaker 1: and yet they are all still private. The question is why,
Speaker 1: and there's many reasons why. One of them could be
Speaker 1: that the CEO does not want to have secondary shares trading.
Speaker 1: The CEO wants to have very strict control over who
Speaker 1: are their shareholders.
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Speaker 2: welcome into the Thinking Crypto podcast. I'm your host, Tony Edward,
Speaker 2: and we are recording at Station three in New York's
Speaker 2: Financial District. And my guest is you've all Ruse, who
Speaker 2: is the co founder and CEO of blockchain firm Digital Asset.
Speaker 2: You've all great to have.
Speaker 1: Oh, it's great to be here. Thank you.
Speaker 2: You've all. You're only a few blocks away from here.
Speaker 2: We're down in Wall Street, right in front of the
Speaker 2: Charging Bull, and you're building a solution for banks and
Speaker 2: trad fi to be able to tokenize and build different
Speaker 2: things on blockchain. It's great to have you and I'm
Speaker 2: looking forward to learning more. Absolutely, let's kick it off
Speaker 2: with your background. Where are you from, where'd you grow
Speaker 2: up and how'd you get into the blockchain space?
Speaker 1: So I was born in Houston, Texas, but you probably
Speaker 1: can tell from my accent because I didn't grow up there.
Speaker 1: I grew up in Israel, and then I came to
Speaker 1: study electrical engineering in the US at Georgia Tech. And
Speaker 1: then from there I started my career at Citadel, moved
Speaker 1: to DRW Trading, which is the company behind Cumberland Mining,
Speaker 1: and then Digital Asset. Wow.
Speaker 2: Along the way, where did you discover bitcoin and crypto?
Speaker 2: And what was your aha moment?
Speaker 1: You know? Interesting, I was making markets and ETFs and
Speaker 1: at that time I wanted to do something a bit
Speaker 1: more entrepreneurial, and I was very lucky to have you know, working,
Speaker 1: you know, for Don Wilson, the founder of DERW. And
Speaker 1: that's how DEERW Ventures got started. And really you can
Speaker 1: think of DEERW Ventures as kind of an investment arm
Speaker 1: of DEERW And as you can imagine, things that they
Speaker 1: would be comfortable investing are things that have some kind
Speaker 1: of a tangent or some kind of relationship to Deerw's
Speaker 1: core business. Now, DERW is a trading firm, and today
Speaker 1: it's much more than just a trading firm. They trade
Speaker 1: pretty much every asset class, but they also make investments,
Speaker 1: they do real estate, they do a lot of things.
Speaker 1: But roughly at the year that we started the ventures,
Speaker 1: team Dew start making markets in bitcoin and that's how
Speaker 1: you know, Cumberland got started Cumberland Mining and already in
Speaker 1: twenty thirteen, remember, we started looking at investments in the space.
Speaker 1: I think I led around in a company that wanted
Speaker 1: to allow credit card purchases of bitcoin in twenty thirteen. Wow,
Speaker 1: so early, way too early, way too early. But yeah,
Speaker 1: I mean that's that was just kind of the foray
Speaker 1: into the space. And then just started thinking about the
Speaker 1: space more generally. We started thinking about what would clearing
Speaker 1: for bitcoin look like twenty thirteen, fourteen, Yeah, all kinds
Speaker 1: of things like that, And yeah, that's that's just how
Speaker 1: I got into the space.
Speaker 2: That's amazing. You're you're an og I mean, twenty thirteen,
Speaker 2: twenty fourteen and looking to build these incredible products. Do
Speaker 2: you see trad fys, you know, rally or moving into
Speaker 2: this industry as a natural evolution of financial markets?
Speaker 1: Absolutely, and you know again, you know, definitely fourteen was
Speaker 1: too early for some of the things that we're doing today.
Speaker 1: But you know, if you really like, I put bitcoin
Speaker 1: for me is a unique asset class, and I put
Speaker 1: it in its own category by itself, and I part
Speaker 1: that aside. But when you start thinking about smart contract chains, really,
Speaker 1: what are they trying to do is a lot of
Speaker 1: them will say we are the new financial rails. And
Speaker 1: the aha moment or the point where you get excited
Speaker 1: is if you actually start thinking about what does it
Speaker 1: mean to do a securitized loan in the real world?
Speaker 1: And for those that don't know, what is a securitized
Speaker 1: loan is I want to get a loan, and in
Speaker 1: return for that loan or to secure that loan, I
Speaker 1: give some kind of an asset to kind of guarantee
Speaker 1: the loan in case, you know, I don't make good
Speaker 1: and the loan. The best example that most people would
Speaker 1: know about is a mortgage. A mortgage is a securitized loan.
Speaker 1: You effectively pledge your title of your house that if
Speaker 1: you don't repay the mortgage, the lender can can take
Speaker 1: over your house and hopefully sell it and cover cover
Speaker 1: the loan. And that's just one example, but there's there's
Speaker 1: many other examples, and and those things usually require you know,
Speaker 1: lawyers and back office and middle office and just quite
Speaker 1: an enormous amount of costs associate, and then you look
Speaker 1: at ave and you're like, oh, I'm just going to
Speaker 1: pay a few pennies dollars to pay for gas fees,
Speaker 1: and voila, I perfected a security into a secured you know,
Speaker 1: secured loan. So I think that, like, if you just
Speaker 1: look at the chasm that exists between these two examples,
Speaker 1: this is kind of what we wanted to feel like.
Speaker 1: Our view is that's where tradify and crypto come is
Speaker 1: really just saying like, can we actually do all of
Speaker 1: this activity that we do today at a fraction of
Speaker 1: the costs and when the front, when the cost goes down,
Speaker 1: are we introducing new products that till today we just
Speaker 1: couldn't even imagine would be financially feasible to do?
Speaker 2: And also is it expanding the markets to be more
Speaker 2: global as well? Because certain assets are not accessible to
Speaker 2: certain people in different countries or jurisdictions, but if you
Speaker 2: put them in a tokenized format, it brings in more liquidity,
Speaker 2: more bridges, and so forth.
Speaker 1: I think I think that all of these things are
Speaker 1: back to the same problem that I just stated. I
Speaker 1: think it's just taking a different lens. I mean, if you,
Speaker 1: if you want to do if you and again I'm
Speaker 1: coming at it purely from you're not trying to do
Speaker 1: that because of a regulatory arbitrage. Let's just put that.
Speaker 1: Put that aside, like you're actually trying to do all
Speaker 1: the activity according to the rules, like because I think
Speaker 1: that there's there's a lot of regulatory arbitrage that happens
Speaker 1: in the space, and there's no there's no necessarily a view.
Speaker 1: But even if you're trying to do things in a
Speaker 1: regulatory compliance manner, if you just take some kind of
Speaker 1: a developing country, the amount of cost that it would
Speaker 1: take you to actually offer the product is again extremely expensive.
Speaker 1: And that's back to my point about financially feasible. So
Speaker 1: the short answer to your question is absolutely, yes, it
Speaker 1: does break the barriers, but I think it comes from
Speaker 1: the same place. I think that the cost of distribution
Speaker 1: as a result of this technology goes dramatically down right
Speaker 1: as a result of how easy it is to do
Speaker 1: things that that by itself allows many more people that
Speaker 1: till today we're not able to make investments in all
Speaker 1: kinds of assets. Now it's possible. I'll give another example,
Speaker 1: even within the United States. I mean, there are a
Speaker 1: lot of products that when you actually start thinking about
Speaker 1: what is the cost of putting a trade purely from
Speaker 1: a processing perspective, unless the trade is in significant amount
Speaker 1: of dollars, it's just not The economics is not there.
Speaker 1: So again, the reason why you know, Robin Hood and
Speaker 1: the likes were able to offer you know, zero commission
Speaker 1: trades and equities is because equities have become so efficiently
Speaker 1: the trading a thousand shares versus one hundred shares versus
Speaker 1: fifty shares versus half a share. From a marginal cost perspective,
Speaker 1: we're just the same. So you know, you could actually, again,
Speaker 1: like I said, come up with new business models that
Speaker 1: till today, we're just not feasible. So yes, it breaks
Speaker 1: the barriers internationally. But I actually think that there's a
Speaker 1: good amount of asset classes or use cases even within
Speaker 1: the United States that today would not be very accessible
Speaker 1: to a lot of people, that potentially a few years
Speaker 1: from now would be very much accessible.
Speaker 2: Would an example be like the Empire state building getting
Speaker 2: tokenized and people being able to invest in that.
Speaker 1: Yes, yes, and no. I think that a lot of
Speaker 1: times people confuse the reason why certain things don't trade
Speaker 1: and they think it's just because they haven't been tokenized yet.
Speaker 1: I'll give an example. There's many cases why a private
Speaker 1: company is private. A lot of it has to do
Speaker 1: with the CEO just doesn't want it to be publicly traded.
Speaker 1: There are many companies in the private space that, technically speaking,
Speaker 1: if you compare them to a lot of publicly traded companies,
Speaker 1: are way more valuable, have much more revenue, many more clients,
Speaker 1: and yet they are all still private. And the question
Speaker 1: is why. And there's many reasons why. One of them
Speaker 1: could be that the CEO does not want to have
Speaker 1: secondary shares trading. The CEO wants to have very strict
Speaker 1: control over who are their shareholders, right like, There's many reasons.
Speaker 1: So just because I tokenize a private company doesn't mean
Speaker 1: that I have changed the paradigm of why that happened.
Speaker 1: So that's why I come at it from. We want
Speaker 1: to make transactions from a cost perspective as close as
Speaker 1: possible to zero, and it opens options to do things
Speaker 1: that today would be very expensive. And your example was
Speaker 1: a very good example. So if the owner of the
Speaker 1: Empire State Building wanted to allow random Joshmo being their
Speaker 1: owners and wanted to allow very easy, simple cheap trading
Speaker 1: around ownership of Empire State Building, it's a great opportunity
Speaker 1: and you could do that. Then you could access liquidity
Speaker 1: globally in all of the things that we just discussed.
Speaker 1: But it's because the owner of the Empire State Building
Speaker 1: wanted to do that, right, And I think that sometimes
Speaker 1: people think that it's like the reason it's not happening,
Speaker 1: it's because it hasn't been tokenized yet, and that's just
Speaker 1: not true.
Speaker 2: And then there also has to be demand for the asset,
Speaker 2: right because New York Manhattan prime real estate values always
Speaker 2: going up. I don't necessarily want to have farmland in Alabama,
Speaker 2: but I want a building that's being built in a
Speaker 2: scarce environment exactly.
Speaker 1: I think that that's just normal normal. This is not Again,
Speaker 1: I think that a lot of those things sometimes people
Speaker 1: conflate them that it's because it hasn't been tokenized yet
Speaker 1: or digitize it, and I just think that it's kind
Speaker 1: of like similar to what I was saying, there's market
Speaker 1: dynamics that are independent of has it been tokenized or not,
Speaker 1: is there a supply demand for it? I think that
Speaker 1: maybe the positive side of the argument is I think
Speaker 1: that if you look at composability and some of the business,
Speaker 1: this goes back to the business model, right, Like, if
Speaker 1: you create something like a token, it's not just the
Speaker 1: fact that you could buy and sell the asset more efficiently,
Speaker 1: but now I can actually pledge maybe my ownership of
Speaker 1: the Empire State Building is collateral against the loan, and
Speaker 1: I can do a lot of other things that it's
Speaker 1: just beyond just trading. So I think that there's there
Speaker 1: is a lot of positive on one side. I just
Speaker 1: I'm just saying like a lot of times the owners
Speaker 1: of these assets or these companies look at the whole
Speaker 1: equation and it's not just because of tokenization that they
Speaker 1: didn't do something like a private equity firm could allow
Speaker 1: their LPs to trade their shares or their LP holdings
Speaker 1: if they wanted. I don't think that that's a very complicated,
Speaker 1: complicated thing to do. Yet they haven't done that, and
Speaker 1: in many cases there are reasons why they haven't done that,
Speaker 1: and it's not just because blockchain wasn't available.
Speaker 2: Yeah, that absolutely makes sense. Tell us about digital asset,
Speaker 2: why you decide to start to firm and what your
Speaker 2: mission is.
Speaker 1: Sure, I think that the view and why we call
Speaker 1: the company what it is is because at the end
Speaker 1: of the day, we believe that we're already there. But
Speaker 1: I think that it will even get more in that direction.
Speaker 1: Is that everything in the world will have a digital
Speaker 1: asset representing its value commodities. Right, so you have on
Speaker 1: one spectrum data. Data is becoming kind of like the
Speaker 1: new asset class, and data only exists for the most
Speaker 1: part in digital form, but all the way to commodities, right,
Speaker 1: like even commodities, right Like, you're not you're not going
Speaker 1: to today. I mean you trade commodities, you know, exchanges,
Speaker 1: you're not actually moving the physical asset. In some cases
Speaker 1: there's physical delivery, but most of the activity that happens
Speaker 1: does not happen. So our view is that everything will
Speaker 1: become a digital asset, and you know, we want it
Speaker 1: to build a chain that will accommodate heterogeneous set of
Speaker 1: users and applications. And I think that that's very important
Speaker 1: because I think the crypto approach till today was we're
Speaker 1: just going to tell the world how it should operate
Speaker 1: and either you fit into that into that mold or
Speaker 1: you owned and as a result of that, it really
Speaker 1: kind of created not that you don't have a heterogeneous users.
Speaker 1: You do have heterogeneous users, but the way they use
Speaker 1: chains is very homogeneous, which means that if I'm regulated
Speaker 1: or I need privacy, I really have to do a
Speaker 1: lot of things off chain because I don't have a
Speaker 1: solution for it.
Speaker 2: Right. Well, with that said, I know there are different
Speaker 2: innovations happening, such as zero knowledge proof where you can
Speaker 2: use certain public blockchains and have that in place. Do
Speaker 2: you think it's not up to part yet? That's why
Speaker 2: you guys built a Canton network.
Speaker 1: So you know, I have this discussion. I was just
Speaker 1: two three weeks ago, I was on a panel at
Speaker 1: a conference about privacy and the reality is so, first
Speaker 1: of all, maybe full disclosure, one of my co founders
Speaker 1: is was on the research team that created zero knowledge
Speaker 1: for us. I mean, he was one of the authors
Speaker 1: of one of the libraries that is being used today, Zerologist.
Speaker 1: So it's not that we don't have admiration and respect
Speaker 1: for the technology. I think that our view is if
Speaker 1: you take zero knowledge proofs as they are, which is
Speaker 1: effectively a black box where you just trust the output
Speaker 1: without having a need to look at the inputs. That's
Speaker 1: our interpretation of what zero knowledge is is that if
Speaker 1: you are a regulate identity, I just don't see how
Speaker 1: within the next five years they get comfortable saying I'm
Speaker 1: just going to accept that I don't get to see
Speaker 1: the activity that has happened. Let's say I'm a stable
Speaker 1: coin provider. I don't get to see if there's aml
Speaker 1: or activity happening in my black box. I'm just accepting
Speaker 1: that all the transactions are fine, or I don't know
Speaker 1: if there's a bug inside my black box because the
Speaker 1: output just keeps on saying that everything's fine. And that
Speaker 1: happened already twice it happened. See cash had that bug,
Speaker 1: Solana had that bug, And I just think that it's
Speaker 1: a serious risk and the integrity of your ledger if
Speaker 1: that's if that's the case, So we just we just
Speaker 1: wanted to come up with a different architecture that says
Speaker 1: that to us, privacy is not how do you hide
Speaker 1: the inputs from everyone, but it's actually how do you
Speaker 1: have a disclosure on a need to know basis? Meaning
Speaker 1: if I need to see the inputs because I actually
Speaker 1: I have a regulatory requirement to verify that there's no
Speaker 1: AML happening, or I need to see the inputs because
Speaker 1: I'm an issue of an asset I need and I
Speaker 1: need to make sure that there's integrity for the asset
Speaker 1: that I am supposedly the issuer of. Then I need
Speaker 1: to see all the transactions. I cannot have someone not
Speaker 1: I cannot not see the transactions. Or if I need
Speaker 1: to disclose some of the activity to regulator because I
Speaker 1: now want to comply with the Genius Act or with MICA,
Speaker 1: I can do that. And for the most part, what
Speaker 1: you will see is that a lot of the zero
Speaker 1: knowledge solutions now are effectively creating some kind of a
Speaker 1: disclosure mechanism to selected parties. And then I say, well,
Speaker 1: if you're doing that, why are you using zero knowledge.
Speaker 1: So it's not that we're against the technology. That we're
Speaker 1: actually very much in favor of the technology when it
Speaker 1: comes to scaling. That's actually a really good place to
Speaker 1: use the technology. It's just that our view is that
Speaker 1: if you want to have Ledger integrity under all scenarios,
Speaker 1: or you want to comply with the regulation, you need
Speaker 1: to have selective disclosure, and we think that you can
Speaker 1: design an l one protocol with selective disclosure without having
Speaker 1: to use zero knowledge, which is expensive computationally does not
Speaker 1: have a general purpose programming language, like there's all kinds
Speaker 1: of things and you could just do something today.
Speaker 2: So on a note continuing on our top big why
Speaker 2: Canton network give us the details of the blockchain? So
Speaker 2: layer one does it have a token? How are you
Speaker 2: achieving the consensus? What type of protocols are using?
Speaker 1: Yeah, so the network does have a token, which hopefully
Speaker 1: we'll be listed later this year. The idea of the
Speaker 1: token is a utility token in the network. I think
Speaker 1: there's a few elements that I think are very unique
Speaker 1: to Canton that are different and we'll talk about We
Speaker 1: did a fair launch. We didn't do a pre mine.
Speaker 1: I know, very uncrypto of us not to kind of
Speaker 1: sit on the entire float of the coin, but we
Speaker 1: thought that that would be much more palatable if you
Speaker 1: want to bring large institutional players with you. And so
Speaker 1: far it seems like it's working, but the consensus of
Speaker 1: the network is kind of broken into two layers, and
Speaker 1: that's kind of how you solve for privacy. There is
Speaker 1: what we would call the supervalidators on canton, which is
Speaker 1: the equivalent of miners or validators on ethereum. They're blinded
Speaker 1: to the transactions that they're processing. So their job is
Speaker 1: to timestem transactions, be censorship resistance meaning no validator can
Speaker 1: sensor transactions, and a guarantee that all stakeholders to a
Speaker 1: transaction have received their transaction. So the reason for that
Speaker 1: is that let me actually go to the next layer
Speaker 1: of consensus and then and then we'll come back. Then
Speaker 1: there's a second layer of consensus, which we're saying if
Speaker 1: you are the stakeholder of the transaction, it's really the
Speaker 1: end parties that need to agree on the business logic. Meaning,
Speaker 1: if if I want to process a stable coin transaction
Speaker 1: and I have a sender or receiver sending a coin
Speaker 1: to one another, most people that hold the coin don't
Speaker 1: really need to know that that transaction took place. They
Speaker 1: don't care that right, it's not relevant to them, it
Speaker 1: doesn't have an impact. What they want to know is
Speaker 1: that they have consensus between them and the issuer. So
Speaker 1: in that case of the transaction, there will be consensus
Speaker 1: that this is a valid transaction between the issuer of
Speaker 1: the stable coin, the sender, and the receiver, and the
Speaker 1: network can dynamically create these subgroups of consensus across the
Speaker 1: stakeholders of a very specific transaction. Maybe the best analogy
Speaker 1: for that is think about like the network is creating
Speaker 1: dynamically these L twos just for a specific transaction. So
Speaker 1: it just says, hey, just for this specific transaction, the
Speaker 1: three of us, the four of us, the ten of us,
Speaker 1: the thousand of us need to agree that this transaction
Speaker 1: is a valid transaction, right, and canton can just dynamically
Speaker 1: create these groups all the way to everybody on the chain.
Speaker 1: So you could actually have public data where you're saying
Speaker 1: everybody needs to agree. And this is kind of similar
Speaker 1: to what happens and the thing or on bitcoin. But
Speaker 1: the idea is that and this is where I go
Speaker 1: back to my point about heterogeneous is it's not a
Speaker 1: one size fit all and it's not kind of static.
Speaker 1: Create an L on L two, and now I have
Speaker 1: the group within this L two that don't have privacy
Speaker 1: between one another. The reality is when you actually look
Speaker 1: at the real world, the layers of privacy or the
Speaker 1: privacy perimeter changes even through the life of a transaction.
Speaker 1: I'll give you an example. When you send money, generally speaking,
Speaker 1: you the sender and the receiver would know about the transaction.
Speaker 1: The payment processor would know about the transaction. Let's say
Speaker 1: you use the bank. The bank would know, the cender,
Speaker 1: the receiver. Right. But then there's this line in the US,
Speaker 1: it's called the Bank Secrecy Act that says, if you
Speaker 1: send over ten thousand dollars, now the regulator needs to
Speaker 1: know about the transaction. So here I gave you an example.
Speaker 1: How yeah, most times only three people would know about
Speaker 1: the transaction, but under circumstances, circumstances something you need for
Speaker 1: people to know about the transaction. So how do you
Speaker 1: create something that is more dynamic that rather than the
Speaker 1: chain is like I said, very static model. It's actually
Speaker 1: the smart contract that tells the chain. I need you
Speaker 1: to change the privacy model or the consensus dynamically based
Speaker 1: on the state of the transaction. That's what really what
Speaker 1: Canton does under the hood is the first layer of
Speaker 1: consensus is giving you the timestam guarantee, the censorship resistance,
Speaker 1: but also this guarantee that I have disclosed the information
Speaker 1: of the transaction to all the stakeholders that now need
Speaker 1: to agree on the consensus, do we agree in the
Speaker 1: business logic of the transaction. And that's how the miners
Speaker 1: or the supervalidators in Canton are actually blind to the
Speaker 1: transaction that are kind of like similar to the ISP's
Speaker 1: on the Internet. They're just managing forwarding transactions for you
Speaker 1: and giving you that guarantee.
Speaker 2: You know, you mentioned the groups that are formed these
Speaker 2: dynamic transactions. Are they temporary or can they be open
Speaker 2: for a long period of time?
Speaker 1: Oh? No, They're open for a very long time. Yeah,
Speaker 1: because again that transaction could have multiple steps, So it's
Speaker 1: not that you create really an L two and then
Speaker 1: you kill it or anything. Those groups exist for for
Speaker 1: a long time. But I just wanted to give kind
Speaker 1: of like an e mental model to how it is.
Speaker 2: So if Goldman Sachs and JP Morgan wanted to have
Speaker 2: an open line for whatever transaction.
Speaker 1: Set of transactions, yeah, that are the same in nature,
Speaker 1: they will have it.
Speaker 2: Interesting who are the validators on the network? Is it
Speaker 2: financial institutions?
Speaker 1: All of the above, both crypto firms and tratfi. Wow, yeah,
Speaker 1: very interesting.
Speaker 2: I mentioned Goldman Sachs. I read that you guys raise
Speaker 2: one hundred and thirty five million dollars led by Goldman
Speaker 2: Sachs to Dodel Securities. Tell us about that fundraising and
Speaker 2: you know why did they take a bet? Is it
Speaker 2: because they see what you're doing and they agree with
Speaker 2: the vision and they want to participate it.
Speaker 1: Well, yeah, So just before I forget, I just want
Speaker 1: to go back because I said one of the interesting things.
Speaker 1: The other thing about the tokeonomics of Canton that we
Speaker 1: think is something that is really needed is when you
Speaker 1: think about a lot of the tokenomics of the networks
Speaker 1: that are out there today, they're effectively only rewarding the
Speaker 1: infrastructure providers. And at the end of the day, if
Speaker 1: you think about like the end of time for a chain,
Speaker 1: most of the value is actually coming from the users
Speaker 1: and the applications. It's not from the infrastructure providers, right,
Speaker 1: Like it's you know, it's not the it's not the
Speaker 1: validator on ethereum that goes to conferences and think about
Speaker 1: new business model. It's right, it's it's Stanni from Ave
Speaker 1: who goes at I just was at a Goldman conference
Speaker 1: with him, so shout out because what he built is amazing.
Speaker 1: But like he goes to conferences, he thinks about new
Speaker 1: business model. He pays for developers to build a new
Speaker 1: smart contract, like he's doing a lot of the hard work.
Speaker 1: And I think that like if people like him did
Speaker 1: not exist, there is no value to an l one, right.
Speaker 1: So the toconomics of Canton in the early days rewarded
Speaker 1: the infrastructure providers because if they were not there, you
Speaker 1: wouldn't have the infrastructure. But actually over time the toconomics
Speaker 1: shifts to reward the users and the apps, so most
Speaker 1: of the block rewards would actually go to the user
Speaker 1: and the applications that generate the activity on the network.
Speaker 1: And I think that that's you know, really helping the
Speaker 1: organic growth of Canton because a lot of businesses are saying, well,
Speaker 1: if I'm going to build a business, to think about
Speaker 1: it like interchange on credit cards or right, like so
Speaker 1: MasterCard and Visa don't get most of the interchange. It's
Speaker 1: the card issue where it's the card processors those that
Speaker 1: actually generate the activity that get most of the interchange.
Speaker 1: And Visa MasterCard benefits because it's a it's a scale business, right,
Speaker 1: so there's a ton of volume, but they are not
Speaker 1: the ones you know, going and making the activity happened
Speaker 1: at a high level. So that's I just think was
Speaker 1: a very unique, unique approach and you know, it's it's
Speaker 1: evolving and it's it's interesting to see people really trying
Speaker 1: to take advantage of it in the Canton ecosystem. To
Speaker 1: the fundraise, so we actually raised. The initial announcement was
Speaker 1: one thirty five, but then easy uh CZ's family office
Speaker 1: joint so it's one forty five was the official official
Speaker 1: number and it was led by Cumberland and Trade Web
Speaker 1: that's who led it. But but the likes of Citadel Securities, Goldman,
Speaker 1: BNP I, MC, Optaverer, DTCC Circle, Paxos Republic and sorry
Speaker 1: for Lot. Yeah, those that have missed have participated. And
Speaker 1: I think that what they've seen and you know, not
Speaker 1: going to talk on their behalf, but I think what
Speaker 1: they've seen is again kind of back to where we
Speaker 1: started this is there's now activity that is happening on
Speaker 1: Canton that is really kind of like this intersection of
Speaker 1: we can bring crypto based activity into trad fi markets
Speaker 1: and when you think about that, like just yesterday we
Speaker 1: announced with DTCC the first you know, unchained treasury and
Speaker 1: I'm saying it very carefully not tokenized treasury, but it
Speaker 1: was a repot transaction on a Saturday between US Treasuries
Speaker 1: and USDC on an application built by trade Web. So
Speaker 1: trade Web effectively built like you could think about it
Speaker 1: like a uniswap or whatever, a dex or however you
Speaker 1: want to think about it, they build effectively a very
Speaker 1: you know, very efficient way to swap assets. It's really
Speaker 1: a securitized loan that's a repot transaction. And now a
Speaker 1: market maker can go into the weekend with a yield
Speaker 1: bearing asset not tokenized meaning they're not taking some intermediary
Speaker 1: counterparty risk of a broker dealer that token is, but
Speaker 1: actually a treasury held at the DTCC holding the yield
Speaker 1: into the weekend, and if now suddenly there's some spike
Speaker 1: in crypto market in real time, they can convert their
Speaker 1: US treasuries into a stable coin, do their cryptoactivity, and
Speaker 1: when they're done with it again, you know, return return
Speaker 1: the long back and get their US treasuries and you
Speaker 1: could really like really like laser precision manage the yield
Speaker 1: on your asset and then when you again take a
Speaker 1: step back, because we're kind of very like day to
Speaker 1: day looking at crypto market, but if you just look
Speaker 1: at the US Treasury market from a repo perspective, I
Speaker 1: think it's about five trillion dollar volume a day, just
Speaker 1: put it in perspective, and I think globally it's about
Speaker 1: ten trillion a day. So I just think that when
Speaker 1: you start kind of saying, like, hey, if I can
Speaker 1: ring you know the avis or the decks as the
Speaker 1: uniswaps to these kind of volumes, I think that that's
Speaker 1: really the big opportunity. And this is why you're seeing
Speaker 1: everybody's talking about token is securities now, and that's that's
Speaker 1: really where where I think that the real, the real
Speaker 1: pot of gold is.
Speaker 2: What would you say to some critics who and this
Speaker 2: may not matter to you because you're working with institutions,
Speaker 2: not the general public, but may say, Okay, I value decentralization,
Speaker 2: You're not decentralized enough. But it doesn't. But again go
Speaker 2: back to my initial point, that's not necessarily valid. If
Speaker 2: the institutions have the consensus.
Speaker 1: I would I would. I would like the critics to
Speaker 1: tell me, uh, if they know of a more decentralized
Speaker 1: network than Canton. And I'm actually that serious. I mean,
Speaker 1: if you look at all of these L two's that
Speaker 1: are popping up or even these quote unquote l ones
Speaker 1: that are being announced. They run an as centralized sequencer.
Speaker 1: Sure everybody can deploy their smart contract to it. But
Speaker 1: if organization that run a centralized sequencer decided I don't
Speaker 1: want you here anymore, they get booted out without any questions.
Speaker 1: So I don't know. I mean, we run today, it's
Speaker 1: probably close to thirty supervalidators that are all equal in importance.
Speaker 1: There is no supernodes that you know are much more
Speaker 1: important for the consensus. There is no proof, you know,
Speaker 1: proof of steak like I matter more. So I don't know.
Speaker 1: I mean you could, you could, you could, you could
Speaker 1: go into this rabbit hole, and I don't because what
Speaker 1: does it matter At the end of the day. What
Speaker 1: people are looking for is a system that works, uh,
Speaker 1: and I think will give you know, the value that
Speaker 1: people are looking for and the soundness of the assets
Speaker 1: that exist there, and that, to me is a much
Speaker 1: more important thing. And that's why you know, the un
Speaker 1: chained security to me is an important deal. Is we're
Speaker 1: not tokenizing anything, You're actually holding the asset. You don't
Speaker 1: need to say, what do you have in your broker dealer?
Speaker 1: Do I now need to wait for you know, PwC
Speaker 1: or Deloitte to do an audit of what you have
Speaker 1: in off chain in supposedly your broker dealer account and
Speaker 1: do I trade a derivative on the product or do
Speaker 1: I not? Is it a total return swap? Is it
Speaker 1: a future contract? Like? What is it exactly? And I
Speaker 1: think that for the most part, the retail client they
Speaker 1: just want to have access. I think the problem is
Speaker 1: if something were to blow up, and there have been
Speaker 1: a few RWA projects that I won't mention that did
Speaker 1: blow up because they made a lot of statements about
Speaker 1: what it is that you're trading and then you found
Speaker 1: out and that wasn't really it. So you know, I
Speaker 1: think that, you know, critics of decentralization for the most part,
Speaker 1: are coming at it from what bags they hold angle
Speaker 1: and not necessarily from being really pureist about the centralization,
Speaker 1: because I will tell you the crypto community right now
Speaker 1: is who arab behind a lot of L one announcements
Speaker 1: or L two announcement that have a centralized sequencer controlled
Speaker 1: by one company, Yet they don't go and you know,
Speaker 1: scream decentralization.
Speaker 2: Yeah, now that's how it goes into crypto market. Bag holders,
Speaker 2: you know, trying to push their narratives, and that's fair.
Speaker 1: I mean to me, that's actually okay, that's that's fine.
Speaker 1: I mean, no different than companies. You know, the job
Speaker 1: of the CEO and their investor is to you know,
Speaker 1: share their their investment. That's totally fine.
Speaker 2: Absolutely. Can you list the different use cases that institutions
Speaker 2: can use the Canton network for is stable coins, it
Speaker 2: can go through the list of items.
Speaker 1: Yeah, I mean I can tell you what assets currently
Speaker 1: exist on you know, within the Canton ecosystem. I think
Speaker 1: that you mentioned in the beginning that this is for
Speaker 1: banks and institutional players. I don't I don't agree on
Speaker 1: that statement, mainly because we have gone after those players
Speaker 1: because at the end of the day, those can bring
Speaker 1: the highest amount of assets to be consumed on the network. Right,
Speaker 1: So if you again look at the DTCC or we're
Speaker 1: working with I Capital or you know, life insurance or
Speaker 1: mortgage company. Like, if you look at all of these
Speaker 1: large institutions, they are in control of a significant amount
Speaker 1: of assets that if those assets became natively available on chain,
Speaker 1: a lot of builders can come and build products both
Speaker 1: for institutional players but also for retail, right, I mean
Speaker 1: at the end of the day. I mean, you know,
Speaker 1: it is large institutions that control the equity market, but
Speaker 1: retail are very interested in token is securities or on
Speaker 1: chain securities, however you want to call it, right, So
Speaker 1: it's not that it's not that we've built this, but
Speaker 1: believe that at the end of the day, if you
Speaker 1: can pass the smell test with large regulated institutions, you're
Speaker 1: also kind of creating a moat around these are where
Speaker 1: you have the safe assets that it's not going to
Speaker 1: have like a rug pool or something like that. Like that,
Speaker 1: that's really the motivation to go the harder out is
Speaker 1: because you can create much more longevity and trust trust
Speaker 1: in it. That's really so listen, I think that you know,
Speaker 1: we just may the announce it around US treasuries mainly
Speaker 1: because again more of like the twenty eighty rule, with
Speaker 1: just twenty percent of participant, you could get an insane
Speaker 1: amount of volume on chain, which is really what everybody's
Speaker 1: trying to do. They're trying to bring as much activity.
Speaker 1: And I will say that when you look at at
Speaker 1: institutional use cases to begin with, during bear markets and
Speaker 1: not just cryptobear markets, actual markets, the repo market is
Speaker 1: still ten trillion dollars a day. It doesn't go like
Speaker 1: from ten trillion it goes down to three, you know,
Speaker 1: it doesn't happen. So I also think that you create
Speaker 1: much better longevity to the chain that you are effectively
Speaker 1: hedging your activity that you're not going to just be like,
Speaker 1: we definitely want to have retail active on Canton and
Speaker 1: we want to benefit from, you know, these trends in markets,
Speaker 1: but you also want to give retail like the confidence
Speaker 1: that hey, by the way, when bad stuff will happen,
Speaker 1: and it will happen a question when, right, there's actually
Speaker 1: substantial activity that is not going to go away, right
Speaker 1: because it's still going to be mission critical to some
Speaker 1: of the players that are participating. So you know, yeah,
Speaker 1: there is no NFTs or meme coin trading on Canton,
Speaker 1: not because you can do that, but just we haven't
Speaker 1: focus and we just didn't think that that is going
Speaker 1: to be our difference right now.
Speaker 2: Well said, And I have my own personal feelings love
Speaker 2: hate relationship with meme coins and that market, but it
Speaker 2: is what.
Speaker 1: No judgment, honestly like it. It's like it's like you
Speaker 1: build a tech company and you're gonna have ideas of
Speaker 1: what is your tech good for and what is it
Speaker 1: not great for? But at the end of the day,
Speaker 1: like I personally don't don't do gambling, but at the
Speaker 1: end of the day, I view it as a bona
Speaker 1: fide activity and people do that and there's interest and
Speaker 1: there's demand for it. I'm not gonna I'm not gonna
Speaker 1: judge and everything. I personally don't trade meme coins, but
Speaker 1: not because I have necessarily a negative opinion about it.
Speaker 2: Right, So on that note, and in addition to what
Speaker 2: you mentioned earlier about transactions happening over new weekends, with
Speaker 2: this technology, it will allow for twenty four to seven,
Speaker 2: three hundred and sixty five day markets, no opening or closing,
Speaker 2: bell nu moral holidays and these things. What is is
Speaker 2: that the future markets and these different Not every asset
Speaker 2: will trade like that, but a lot of it will.
Speaker 1: Is that the future. So I'm not going to give you,
Speaker 1: like necessarily a prediction, but yeah, I think that the
Speaker 1: ability to move value twenty four to seven is in
Speaker 1: our future. And the reason I stated it that way
Speaker 1: and purpose you said no opening bill, no closing bil
Speaker 1: I mean, listen, I think that there are there's value
Speaker 1: in a lot of that activity that happens in markets today.
Speaker 1: Like a lot of times, I'll give you another example.
Speaker 1: A lot of times people will say, when everything moves
Speaker 1: on blockchain, everything's going to settle real time. And if
Speaker 1: you peel the onion a bit and you kind of
Speaker 1: understand how markets work, you understand that the reason why
Speaker 1: things are so cheap to trade right now is because
Speaker 1: market makers are willing to give you really tight spreads,
Speaker 1: really tight spreads. But you now need to understand what
Speaker 1: are the economics for market makers. A market maker is
Speaker 1: effectively selling you in insurance because they're willing to take
Speaker 1: both sides of the trade at any given point of time.
Speaker 1: So they're taking risk on where they would be able
Speaker 1: to offload the trade. Right, so they're charging you effectively
Speaker 1: a premium for that risk. That's the insurance. Right, they're
Speaker 1: charging an insurance premium because they're willing at any given
Speaker 1: point I have to take that thing. Now, if you're
Speaker 1: saying to a market maker that generally speaking will go
Speaker 1: flat at the end of the day, meaning won't have
Speaker 1: to settle anything, and therefore, from a capital requirements perspective,
Speaker 1: it's very efficient, meaning you want them to make the
Speaker 1: same return on the risk that they're providing you for
Speaker 1: having these tight spreads, And now you're saying, nah, you
Speaker 1: need to have the capital to settle every transaction. Inherently,
Speaker 1: what I believe will happen is spreads will go wider.
Speaker 1: That's not a good outcome. You don't want spreads on
Speaker 1: most US equities to go wider. So this is not
Speaker 1: me saying that you should remain a TPLESS one or
Speaker 1: Tpless two or even t zero. I want to have
Speaker 1: technology that allows you to settle everything in real time,
Speaker 1: but also allows you to net transactions once an hour
Speaker 1: and subtle things once an hour, because maybe that's the
Speaker 1: right spread between not settling and getting the benefits of netting.
Speaker 1: So if I'm a market maker, as long as I
Speaker 1: go flat every hour, I can still run the same
Speaker 1: business as I run today and still provide these really
Speaker 1: tight spreads. And so to me, the reason I stated
Speaker 1: with I think that you will see activity happening twenty
Speaker 1: four to seven is we should understand why some of
Speaker 1: these behaviors in the market, like an auction like clearing
Speaker 1: and settlement exists. There's actually benefits to these things. And
Speaker 1: for the most part, you're saying that in crypto, a
Speaker 1: lot of exchanges don't put every bitcoin transaction on chain.
Speaker 1: Why do they not do that, Well, because they don't
Speaker 1: want to pay the fees for every transaction, right, so
Speaker 1: they internalize the flow, they net it, and then every
Speaker 1: once in a while, well they'll they'll put a transaction.
Speaker 1: And that's kind of my point is like a lot
Speaker 1: of these financial activities have a reason that some of
Speaker 1: them have positives, some of them have negatives. Our view
Speaker 1: is that that technology will allow you to move value
Speaker 1: twenty four to seven and we will see how markets
Speaker 1: evolve as a result of that.
Speaker 2: I read recently partner with chain link, tell us a
Speaker 2: bit about that, and you know your plan to work
Speaker 2: with other blockchains, interoperability and all these things.
Speaker 1: Sure, first of all, from a chaining perspective, listen, Serge
Speaker 1: have built a tremendous brand and reach, and you know,
Speaker 1: our view is that if you move assets or you know,
Speaker 1: going to do you know, derivatives or all kinds of things,
Speaker 1: you will need to have data come in and out
Speaker 1: to your network. You'll want to do that. Just recently
Speaker 1: the proof of reserves. There's a lot of things that
Speaker 1: you can collaborate, so you know, very excited to be
Speaker 1: working with them, and I think there's more coming down
Speaker 1: the pipe. So that's I think that when I look
Speaker 1: at chain Link, I look at them more as the
Speaker 1: service that they offer, not necessarily intropability with another blockchain,
Speaker 1: and just thinking about kind of the network that they build,
Speaker 1: the products that they offer, and what you could do
Speaker 1: with them. That's more how I look at it. Generally speaking,
Speaker 1: around intropability, I think, first of all, everybody will have
Speaker 1: their own definition of what intropability means. I think for
Speaker 1: the most part, most intropability stories today are message based.
Speaker 1: There is no real intropability, Like two protocols at the
Speaker 1: protocol layer are joined at the hip, which is fine.
Speaker 1: I think that at the end of the day those solutions,
Speaker 1: this is not a criticism, So I think that it's
Speaker 1: really just what is intropability. So chain Link provides, you know,
Speaker 1: an introhabability solution. You have layer zero, you have wormhol
Speaker 1: There's just many, many solutions like that. One of the
Speaker 1: things that you know, we believe is that when we
Speaker 1: are asked to do intropability or to consider intropability, it's
Speaker 1: always what is the business reason to do that. I'll
Speaker 1: give you an example, if tomorrow one of our institutional
Speaker 1: players that receives collateral for some of their activities and
Speaker 1: they're doing the work on Canton said, you know, we're
Speaker 1: willing to start accepting Ethereum as collateral. Well, that's a
Speaker 1: good business case to do a native intropability with Ethereum
Speaker 1: because I would like for it to have no settlement
Speaker 1: risk or stuff like that that I can pledge you know,
Speaker 1: eth as collateral. Right. Like so, I just generally speak
Speaker 1: and think that the solutions that we have today like
Speaker 1: chain link are great or layer Zer, they're all great solutions.
Speaker 1: But at the end of the day, I think that
Speaker 1: sometimes people because there's just so many options today. I
Speaker 1: think the clients I understand why are saying like I'd
Speaker 1: don't want to make the wrong bet, and therefore, like,
Speaker 1: can you give me a solution how I can not
Speaker 1: feel like I'm too married to you and offer me
Speaker 1: all of these intropability stories, which you know I understand.
Speaker 1: But it's just like, as a business, you also need
Speaker 1: to think about where you drive revenue and growth, and
Speaker 1: a lot of times you would invest a ton of
Speaker 1: resources to do introperability without a concrete business case under it.
Speaker 1: It's just it's just a lot of times will end
Speaker 1: up in wasted wasted effort.
Speaker 2: And as far as wallet and exchange support, I know
Speaker 2: you mentioned the token is going to be launched later
Speaker 2: on anything you can share there or still too early.
Speaker 1: I don't want to front on it, Okay, So hopefully
Speaker 1: in the next in the next few weeks, we'll be
Speaker 1: able to share more.
Speaker 2: That's exciting. I'm looking forward to that. What's on your
Speaker 2: road map? You know, what can we expect in the
Speaker 2: next six months or so.
Speaker 1: Yeah, So, again, like I said, we want Canton to
Speaker 1: be the place for assets to be available again, not
Speaker 1: just issued. Right, I think that there's like four hundred
Speaker 1: trillion dollars worth of assets globally. We're just going to
Speaker 1: wait for new issuance to come. I might quit now,
Speaker 1: right Like, So it's really about how do we allow
Speaker 1: the four hundred trillion dollars worth of assets to move
Speaker 1: to be natively available on Canton. That's probably our biggest effort.
Speaker 1: There's a lot of development work on adding more features,
Speaker 1: support the complements, whether it's the wallets, the different vendor providers,
Speaker 1: DeFi protocols that that might be coming to Canton there's
Speaker 1: now a dex with privacy, so no sandwich order is
Speaker 1: none of that market manipulation that is happening like, which
Speaker 1: I think is like super exciting. So there's there's there's
Speaker 1: a lot, there's a lot that is coming and you
Speaker 1: know our you know, our main focus right now is
Speaker 1: the listing, but also some of the projects that will
Speaker 1: be and now soon in terms of assets that would
Speaker 1: be available on Canton.
Speaker 2: That's great. Tell us a bit about you know, when
Speaker 2: you go to pitch Candon to some of these major
Speaker 2: financial institutions and given your background, your pedigree in this market,
Speaker 2: are they more open now? Are they more interested, like, hey,
Speaker 2: we want to learn about this technology. We were looking
Speaker 2: to build solutions and things like that.
Speaker 1: Yeah, listen, I think maybe one of the things that
Speaker 1: people ask me kind of in the same realm of
Speaker 1: what you just asked, is is the new administration helpful?
Speaker 1: How is the new legislation like is it giving you know,
Speaker 1: I have to give a lot of credit to the
Speaker 1: administration and also the regulators that they've brought, which is
Speaker 1: I think a lot of the institutions that we work
Speaker 1: with and worked with in the past were always interested
Speaker 1: in the technology there's a lot of value we can
Speaker 1: demonstrate through things that have been in production for a while,
Speaker 1: the efficiencies and the value that it's not just in
Speaker 1: crypto like you could actually in real markets significant value.
Speaker 1: As with the use of the technology, the problem is
Speaker 1: in the past, they just didn't know, Hey, if I'm
Speaker 1: going to do this, would I get in trouble just
Speaker 1: from using it? And I think that you know, the
Speaker 1: Genius Act and the Clarity Act, that those are all
Speaker 1: tremendous and they're great and they're super helpful. I actually
Speaker 1: think that it's the posture of the administration and therefore
Speaker 1: of the regulator, in my opinion, that is much more
Speaker 1: helpful because I think that organizations today, at least what
Speaker 1: I'm hearing, are almost encouraged to use the technology, where
Speaker 1: in the past they were scared of even exploring the technology.
Speaker 1: So what we're seeing is not that organizations are suddenly
Speaker 1: interested in the technology. They're actually motivated to do the
Speaker 1: things that they have been wanting to do for many years.
Speaker 1: So that that to me is the more exciting things. Yeah,
Speaker 1: there are some organizations that, purely as a result of
Speaker 1: what's been happening in markets recently, are now kind of like, Hey,
Speaker 1: we need to figure out what we're doing here. But
Speaker 1: I will tell you, for the most part, we've been
Speaker 1: talking to most trat fire organizations for the last you know,
Speaker 1: five six years, and it's it's more of the posture
Speaker 1: right now that is is much more helpful.
Speaker 2: Yeah, absolutely makes sense because you don't have to worry
Speaker 2: about getting a wells notice so in a lawsuit. And uh,
Speaker 2: the sec in particular are very much more open door,
Speaker 2: more transparency e crypto roundtables. So it's a complete one
Speaker 2: eighty and uh, you know. And the next bill up
Speaker 2: is the Clarity Active Market Structure Bill. And to your
Speaker 2: point of the posture, those bills are going to take
Speaker 2: time to get to be refined. There's going to be
Speaker 2: more that needs to be added. I think the initial
Speaker 2: draft doesn't cover everything in the crypto market. So but
Speaker 2: the posturing is to your point, much better at this point. Yeah,
Speaker 2: where do you see this asset class in market and
Speaker 2: not price prediction? But let's say by twenty thirty, are
Speaker 2: we seeing trifi institutions running on blockchain rails? Retail also
Speaker 2: using stable coins to go buy coffee at Starbucks. Maybe
Speaker 2: they don't know it's being powered by stable coins, but
Speaker 2: your MasterCard. I just interviewed the EVP of mastercarda digital assets.
Speaker 2: They're looking to integrate all these things. Is this technology
Speaker 2: running behind the scenes?
Speaker 1: Good question, Listen. I think again, no price prediction. Like
Speaker 1: I said in the beginning, I think bitcoin put it aside.
Speaker 1: I think eventually when people ask me like, when is
Speaker 1: the time that you said we made it? And to me,
Speaker 1: it's when I stop having to be on a podcast
Speaker 1: to talk about consensus protocols and explain what blockchain is. Right.
Speaker 1: We don't talk today how the internet work. Would just
Speaker 1: accept it right, So to me that we made it
Speaker 1: is when people stop talking about the tech and it
Speaker 1: just gets used. You know, in twenty thirty do people
Speaker 1: do all of the things. I think they're doing it today.
Speaker 1: It's just question of how much. Right. So when you
Speaker 1: talk to institutional players today, they still talk about what
Speaker 1: is their cloud strategy? Does that mean that cloud haven't
Speaker 1: made it yet? No, It's just that these transformations take
Speaker 1: tens of years. It's just that, you know, our attention
Speaker 1: span have been reduced to a thirty cinc in TikTok
Speaker 1: or Instagram video, So we think that everything needs to
Speaker 1: happen in days, weeks, or month, And the reality is
Speaker 1: things that have been baking for one hundred years are
Speaker 1: just not going to be unraveled in a single year
Speaker 1: even a decade, right, It's just going to happen. So
Speaker 1: in twenty thirty, the stuff that is happening today will
Speaker 1: just happen more significantly more, And you're just going to
Speaker 1: see business models that you know, you haven't thought about, right,
Speaker 1: Like I always think that, Like to me, the most
Speaker 1: exciting is to work with organizations that are saying, you know,
Speaker 1: not how do I put my business on a blockchain?
Speaker 1: But if my business ran on a blockchain, and I
Speaker 1: rethink what is my business model? And I think that
Speaker 1: that's similar. Thing that happened with the Internet is a
Speaker 1: lot of companies took the availability of the Internet to
Speaker 1: say I'm just going to take my business and put
Speaker 1: it on the Internet. But then there are companies Amazon, Netflix, Facebook,
Speaker 1: you know, Google that just said like, okay, now there's
Speaker 1: this thing called internet, can we rethink the business model?
Speaker 1: And those are today the biggest companies in the world.
Speaker 1: I think very similarly, in twenty thirty, you're just going
Speaker 1: to see companies that we you know, had to either
Speaker 1: rethink their business model or new entrants that came and said, hey,
Speaker 1: now that this technology is available and so many people
Speaker 1: have their hands on it, can I come up with
Speaker 1: a new business model of something that we have accepted
Speaker 1: as just kind of granted today. But if you rethink it,
Speaker 1: I have you know, the next bank of the future.
Speaker 1: And you're seeing, you know, you're seeing some of these
Speaker 1: announcement of a digital asset first kind of bank for example,
Speaker 1: and things like that, and I don't know if that's
Speaker 1: going to be successful, but I think that to me,
Speaker 1: that's the interesting thing of what we're going to see
Speaker 1: in twenty thirty is what are the new institution or
Speaker 1: existing institutions that rethought their business model and now we're
Speaker 1: just accepting that as that's just it.
Speaker 2: Sure, what do you think about and are you looking
Speaker 2: at AI and integrating that into the Canton network, whether
Speaker 2: that's helping to increase some certain attributes of the network
Speaker 2: or helping these institutions to do more.
Speaker 1: So the two ways. You know, I think a lot
Speaker 1: of people talk about, you know, AI cannot cheat cryptography,
Speaker 1: and I'm not you know, I'm not going to talk
Speaker 1: about that, and not because I don't have I just
Speaker 1: I can't find I'm not expert enough in my opinion
Speaker 1: to kind of voice an opinion of that. But one
Speaker 1: element is that you know one of the attributes which
Speaker 1: are positives of a not connected system. A lot of
Speaker 1: times people will view reconciliation as a negative right because
Speaker 1: it's a cost and it slows down the system. But
Speaker 1: the reality is just if you think about it statistically,
Speaker 1: if there's a mistake, more than likely, if nine people
Speaker 1: need to do a process, the chances of all nine
Speaker 1: of them making the same mistake is very slim. And
Speaker 1: that's where our conscilliation kicks in. A few of them
Speaker 1: made the mistake, and a few of them say we
Speaker 1: think you're wrong, and then they go through the process
Speaker 1: of our conciliation they find the mistake. There's an inherent
Speaker 1: risk in blockchain where because it's a one shared source
Speaker 1: of truth, if a mistake have entered into the system,
Speaker 1: we just all accept the mistake as the source of truth.
Speaker 1: So a lot of we have a few projects where
Speaker 1: when we are creating the smart contracts that are coming
Speaker 1: from data from the outside world, we're using AI to
Speaker 1: kind of give levels of confidence that how we are
Speaker 1: creating the smart contract was really high quality data. Right,
Speaker 1: that's just one on one element and then the other
Speaker 1: element is well, now things can move in real time,
Speaker 1: you could make a lot of very exciting, very complex decisions. Right.
Speaker 1: The surface area of what you can do grows dramatically,
Speaker 1: and this is where again AI agents can help you
Speaker 1: make better decisions, but also take advantage of the fact
Speaker 1: that there's you know, much more things that you can
Speaker 1: do now in real time.
Speaker 2: Sure, and could the AI agents assist with a twenty
Speaker 2: four seven market That's.
Speaker 1: An example sleeping If you have now you know, and
Speaker 1: types of collateral that you can use in the system,
Speaker 1: what is the right thing to use when under what conditions?
Speaker 1: Because of the liquidity, what would be easier for me
Speaker 1: to liquidate? Like, there's just the complexity like right, Like
Speaker 1: I think a lot of times people you know underappreciate
Speaker 1: as a result of what we're doing here, the lexity
Speaker 1: of the system is just going to grow dramatically. Another
Speaker 1: thing that people should think about with twenty four to
Speaker 1: seven is, you know, if there's a run on a
Speaker 1: bank today, A lot of times those conversations of what
Speaker 1: do we do with that bank happen on the weekend
Speaker 1: when everything is closed, Well, what happens now when things
Speaker 1: are not closed? So the system is going to become
Speaker 1: much more complicated as a result of a lot of
Speaker 1: the positive things that are coming. And I think that
Speaker 1: that's again where AI can really be helpful.
Speaker 2: You've all great stuff. I got some wrap up questions
Speaker 2: here for you. First, if you could create your own metaverse,
Speaker 2: will the theme be damn where would you put your
Speaker 2: Oculus or Apple pro vision on?
Speaker 1: And with the amount of work it would just be
Speaker 1: like a deserted island with some silence.
Speaker 2: Escape right, be on a beach somewhere by yourself. Yeah,
Speaker 2: rapid fire questions favorite food Indian, favorite musician or bad radiohead,
Speaker 2: favorite movie.
Speaker 1: Pulp fiction, favorite book, favorite book a professional book? Is
Speaker 1: the hard thing? About hard things? I don't know too many,
Speaker 1: too many books? And the other category.
Speaker 2: When you're not working at Digital Asset, what are you
Speaker 2: doing for.
Speaker 1: Fun when I don't sprain my ankle running? Cycling and photography?
Speaker 2: Awesome? You've all loved what Canton Network's doing. Digital asses
Speaker 2: is doing. Love to have you back on as things progress.
Speaker 2: But thank you so much for joining me.
Speaker 1: Perfect, Thank you so much.