WEBVTT 1 00:00:00.040 --> 00:00:02.759 People are starting to understand the network effects, the incentive 2 00:00:02.759 --> 00:00:06.599 mechanisms of tokens, the networks effect, of liquidity, and of 3 00:00:06.639 --> 00:00:10.679 having open networks. Basically, everything can be turned into a 4 00:00:10.679 --> 00:00:12.599 tokenized market. Then all of a sudden, you have a 5 00:00:12.679 --> 00:00:15.800 much more direct way to express viewpoints than you've ever 6 00:00:15.839 --> 00:00:16.320 had before. 7 00:00:16.480 --> 00:00:18.920 Let's say it's twenty thirty or twenty thirty five. Do 8 00:00:18.960 --> 00:00:22.280 you see the majority of companies and brands have let's 9 00:00:22.280 --> 00:00:24.879 say their own layer twos, maybe their own tokens, and 10 00:00:25.120 --> 00:00:27.760 add more value to their brands and companies. Do you 11 00:00:27.760 --> 00:00:29.519 think that's the world we'll headed two? 12 00:00:29.719 --> 00:00:35.280 I think so. 13 00:00:35.359 --> 00:00:37.719 This episode is brought to you by v Chain. V 14 00:00:37.840 --> 00:00:40.799 chain is one of the top layer one enterprise blockchains 15 00:00:40.880 --> 00:00:43.960 in the crypto asset class, and they are getting adoption 16 00:00:44.159 --> 00:00:46.920 by many big brands and companies around the world who 17 00:00:46.960 --> 00:00:51.039 are building Web three and decentralized application technologies. I've been 18 00:00:51.079 --> 00:00:53.399 a vet token holder for many years. In fact, I 19 00:00:53.520 --> 00:00:57.039 started investing in v chain back in twenty eighteen, and 20 00:00:57.119 --> 00:00:59.439 some of the key features of the v chain blockchain 21 00:00:59.439 --> 00:01:03.799 includes secure, affordable, scalable, fast, and sustainable. Some of the 22 00:01:03.880 --> 00:01:09.359 companies and brands working with vchain include Jivon, Chi, Walmart, China, BMW, 23 00:01:09.640 --> 00:01:13.480 Bostont Consulting Group, and many more. Most recently, they partnered 24 00:01:13.519 --> 00:01:16.640 with Dana White in the UFC, and Dana White even 25 00:01:16.719 --> 00:01:20.159 said recently that he purchased over a million dollars of 26 00:01:20.200 --> 00:01:23.680 the VET token, and v chain also recently launched staking 27 00:01:23.760 --> 00:01:27.120 where you can stake the vet token and earn great rewards. 28 00:01:27.319 --> 00:01:29.159 So if you'd like to learn more about v chain, 29 00:01:29.239 --> 00:01:33.239 go to vchain dot org. Link will be in the description. Hey, folks, 30 00:01:33.319 --> 00:01:36.040 welcome into the Thinking Crypto Podcast. I'm your host, Tony 31 00:01:36.159 --> 00:01:38.560 Edward and joining me today is Rob Haddick, who is 32 00:01:38.560 --> 00:01:42.760 the general partner at Dragonfly and Dragonfly is a crossborder 33 00:01:42.799 --> 00:01:44.640 crypto venture fund. Rob. 34 00:01:44.680 --> 00:01:47.799 Great to have you, Thanks, Tony, appreciate you inviting me on. 35 00:01:48.359 --> 00:01:51.239 Yeah. Absolutely, I'm looking forward to learning about the various 36 00:01:51.280 --> 00:01:55.640 investments that Dragonfly has in the crypto space, most recently Polymarket. 37 00:01:56.200 --> 00:01:58.200 There's some big news there. You guys of course are 38 00:01:58.239 --> 00:02:00.359 invested in that, so I want to dive into the 39 00:02:00.400 --> 00:02:02.760 details there. But let's kick it off with your background. 40 00:02:03.000 --> 00:02:04.680 Tell us a bit about where you're from and what's 41 00:02:04.719 --> 00:02:05.760 your professional background. 42 00:02:05.920 --> 00:02:09.400 Yeah, so originally from like outside Dayton Ohio in between 43 00:02:09.439 --> 00:02:11.479 Dayton and Cincinnati in a bit of a rural part 44 00:02:11.479 --> 00:02:16.159 of the country. Grew up, you know, I think the 45 00:02:16.159 --> 00:02:18.680 way a lot of people do and kind of suburban Midwest. 46 00:02:19.879 --> 00:02:22.639 Ended up making my way to New York after college 47 00:02:23.240 --> 00:02:26.439 when I was twenty two and kind of have never 48 00:02:26.520 --> 00:02:29.560 left so been. Now I'm in Brooklyn, but you know, 49 00:02:29.599 --> 00:02:31.240 I've been kind of fell in love with the city 50 00:02:31.280 --> 00:02:36.039 the last the last you know, thirteen fourteen years or so. Professionally, 51 00:02:36.479 --> 00:02:39.080 you know, I came to New York to work in finance. 52 00:02:39.400 --> 00:02:42.479 I was had one of my first jobs was was 53 00:02:42.479 --> 00:02:47.080 at Goldman, where I was doing essentially looking at a 54 00:02:47.120 --> 00:02:49.560 lot of internal M and A and looking at a 55 00:02:49.560 --> 00:02:52.199 lot of the kind of internal strategy of what Goldman 56 00:02:52.360 --> 00:02:55.479 was doing to start. So this was right after the 57 00:02:55.599 --> 00:02:59.000 global financial crisis. It was during a period of time 58 00:02:59.120 --> 00:03:01.879 where Goldman was really leaning into becoming a bank holding 59 00:03:01.919 --> 00:03:04.240 company and was really looking at you know, consumer banking 60 00:03:04.319 --> 00:03:07.199 and low cost of capital solutions, and so I spent 61 00:03:07.319 --> 00:03:09.080 a lot of time thinking about kind of like consumer 62 00:03:09.080 --> 00:03:12.759 fintech at the time. And during that period of time, 63 00:03:12.800 --> 00:03:14.960 it was also uh, this is you know, call it 64 00:03:15.000 --> 00:03:18.319 early twenty tens when you know, Bitcoin started to gain 65 00:03:18.439 --> 00:03:20.800 a little bit of interest across you know, the Wall 66 00:03:20.840 --> 00:03:24.520 Street or across you know, uh, you know, Silicon Valley 67 00:03:24.680 --> 00:03:26.719 had gone a little bit more mainstream. You know, Bitcoin 68 00:03:26.759 --> 00:03:29.360 went to three hundred dollars and everybody was, you know, like, 69 00:03:29.439 --> 00:03:31.240 oh wow, this is amazing how this thing come out 70 00:03:31.240 --> 00:03:34.560 at thin air and become more three hundred dollars. And 71 00:03:35.479 --> 00:03:38.319 Goldman actually set up an initial kind of working group 72 00:03:38.639 --> 00:03:42.759 that was looking at crypto. It wasn't uh, you know, 73 00:03:42.840 --> 00:03:45.439 necessarily hey, like you know, Goldman is going to be 74 00:03:45.520 --> 00:03:47.039 doing you know, all of the things they do today, 75 00:03:47.039 --> 00:03:49.919 and they involved in toganization, but it was a little 76 00:03:49.919 --> 00:03:54.039 bit of a focus on things like maybe there is 77 00:03:54.280 --> 00:03:56.280 you know, support that we should be doing for like 78 00:03:56.319 --> 00:03:58.840 OTC for the clients, you know, maybe we should be 79 00:03:58.879 --> 00:04:01.280 thinking about how to you know, provide access, et cetera. 80 00:04:02.080 --> 00:04:03.360 And so I was involved in some of those early 81 00:04:03.360 --> 00:04:05.120 discussions at Goldman and that was kind of my first 82 00:04:05.159 --> 00:04:08.919 foray into crypto and to bitcoin and got really interested 83 00:04:10.039 --> 00:04:13.039 then things at that period of time at Goldman where 84 00:04:13.639 --> 00:04:16.240 we started looking at tokenizations. So people might remember in 85 00:04:16.240 --> 00:04:19.560 the twenty fifteen twenty sixteen era, when you know, I 86 00:04:19.560 --> 00:04:23.160 think there was the initial like digital ledger technology or 87 00:04:23.240 --> 00:04:26.040 DLTS for you know, putting in like essentially a lot 88 00:04:26.079 --> 00:04:29.839 of tokenized things on chain, which obviously is still finally 89 00:04:29.839 --> 00:04:32.800 happening now but was been a topic for a long time. 90 00:04:33.240 --> 00:04:35.439 And then you know, kind of spent the next I 91 00:04:35.519 --> 00:04:37.399 ended up leaving Goldman, spent a little bit of time 92 00:04:37.399 --> 00:04:39.720 in private equity, a little bit of time at a 93 00:04:39.759 --> 00:04:42.519 merchant bank looking at fintech, and really spend those those 94 00:04:42.879 --> 00:04:45.839 number of years being interested in crypto and doing crypto 95 00:04:45.879 --> 00:04:48.439 on the side, but really focused on you know, fintech 96 00:04:48.519 --> 00:04:52.600 more broadly until twenty twenty and twenty twenty one when 97 00:04:52.639 --> 00:04:56.079 DeFi Summer came around and I looked around and I said, 98 00:04:56.240 --> 00:04:58.160 this is incredible, Like, you know, what is happening with 99 00:04:58.199 --> 00:05:00.560 smart contracts, what is happening with reinventing, and you know, 100 00:05:00.639 --> 00:05:03.240 financial market infrastructure is something that I need to be 101 00:05:03.279 --> 00:05:07.160 a part of and really to the dive in full time, 102 00:05:07.240 --> 00:05:10.839 you know, first initially launching crypto at a big traditional 103 00:05:10.839 --> 00:05:13.040 hetch fund called Golden Tree Asset Management, which has about 104 00:05:13.040 --> 00:05:17.040 fifty billion of AUM, and then having met the folks 105 00:05:17.040 --> 00:05:19.639 at Dragonfly and realizing that I wanted to get even 106 00:05:19.680 --> 00:05:21.959 deeper and not just be call it the crypto guy 107 00:05:22.000 --> 00:05:24.279 at a trad fi fund, but be you know, entirely 108 00:05:24.399 --> 00:05:27.519 at a crypto fund and made the jump to become 109 00:05:27.600 --> 00:05:30.079 one of the gps here at a Dragonfly in early 110 00:05:30.120 --> 00:05:30.560 twenty two. 111 00:05:31.000 --> 00:05:34.360 That's incredible and Rob your journey from trad fight to crypto, 112 00:05:34.439 --> 00:05:37.319 it's very analogous as to what's happening right now with 113 00:05:37.920 --> 00:05:40.279 some of the biggest names getting involved in crypto, even 114 00:05:40.319 --> 00:05:42.480 the big banks. You know, what is it like looking 115 00:05:42.519 --> 00:05:46.199 back at when you you know, first discovered crypto, Goldman 116 00:05:46.279 --> 00:05:47.879 and things like that, and where we're at now. It 117 00:05:47.879 --> 00:05:50.319 seems all of Wall Street, all the banks, all these 118 00:05:50.360 --> 00:05:54.439 firms are jumping neck deep into crypto. Yeah. 119 00:05:54.600 --> 00:05:57.360 The really interesting thing about it is that a lot 120 00:05:57.360 --> 00:06:00.519 of the themes have not changed. Right, So I talked 121 00:06:00.519 --> 00:06:04.519 about it, right, which is okay. People understood that, you know, 122 00:06:04.560 --> 00:06:07.439 when smart contracts were happening, when ethereum was coming out, 123 00:06:07.639 --> 00:06:11.839 that theoretically you could reinvent the way money moves. It 124 00:06:11.879 --> 00:06:14.519 could be you know, programmatic, it could move instantaneously, it 125 00:06:14.600 --> 00:06:17.040 can you had a fast finality, right Like this is 126 00:06:17.040 --> 00:06:20.360 really interesting for also the ability to swallop different asset classes, 127 00:06:20.639 --> 00:06:23.160 you know, directly in a permissionless way or a permission way, 128 00:06:23.160 --> 00:06:27.240 but across you know, actors who otherwise theoretically would not 129 00:06:27.560 --> 00:06:31.959 be interacting with each other. That story around Internet money, 130 00:06:31.959 --> 00:06:36.079 around Internet capital markets, like that story has been something 131 00:06:36.120 --> 00:06:39.000 that we've been focused on for you know, over a decade, right, 132 00:06:39.680 --> 00:06:44.040 But the infrastructure was not ready. The people understood that 133 00:06:44.079 --> 00:06:46.439 this could happen. The blockchain would enable us, but they 134 00:06:46.480 --> 00:06:49.720 did not understand, you know what, that what we needed 135 00:06:49.720 --> 00:06:52.279 on the infrastructure layer was not yet ready, and that 136 00:06:52.279 --> 00:06:55.639 it would also take longer, I think to build than 137 00:06:55.680 --> 00:06:59.439 people expected. And so it's been amazing to see that, 138 00:07:00.079 --> 00:07:03.959 you know, the initial vision is now really actually happening, 139 00:07:04.279 --> 00:07:07.120 but the initial vision hasn't actually changed that much, which 140 00:07:07.120 --> 00:07:10.839 has also been interesting to see. Because people understood the 141 00:07:10.839 --> 00:07:13.959 benefits of the technology early on, they just needed to 142 00:07:14.000 --> 00:07:16.759 get to a place where you know, we could start 143 00:07:16.800 --> 00:07:20.480 to actually achieve you know, those those those milestones, and 144 00:07:20.519 --> 00:07:22.759 so in many ways reminds you of some of the 145 00:07:22.800 --> 00:07:24.759 early Internet and some of the early writings of the Internet. 146 00:07:25.120 --> 00:07:27.560 And I don't think I think it's it's quite analogous. 147 00:07:27.839 --> 00:07:31.759 But now that acceleration is really happening in terms of 148 00:07:31.839 --> 00:07:36.399 corporates and banks and just you know, everybody across you know, 149 00:07:36.439 --> 00:07:39.800 the financial sector and the payment sector, realizing that this 150 00:07:40.160 --> 00:07:43.480 is potentially for many use cases, you know, a better 151 00:07:43.560 --> 00:07:46.319 way to move value, to move money, to move information 152 00:07:46.759 --> 00:07:48.480 than the current leglacy systems. 153 00:07:49.040 --> 00:07:50.959 Talk to us a bit about you know, at the 154 00:07:51.000 --> 00:07:52.720 time when you were at Goldman Sachs and they were 155 00:07:52.759 --> 00:07:55.759 exploring these things. At one point, Larry Fink, for example, 156 00:07:56.000 --> 00:07:58.800 a black rock called bitcoin it index of money Laundering, 157 00:07:59.000 --> 00:08:01.800 and they were saying, Hey, the blockchain is great, We're 158 00:08:01.800 --> 00:08:03.279 going to use that to build. But they were looking 159 00:08:03.319 --> 00:08:07.600 to do more of a private, permissioned blockchain versus public blockchains. Right, 160 00:08:07.800 --> 00:08:10.480 but we've seen that flip that they've kind of capitulated, well, 161 00:08:10.600 --> 00:08:14.879 bitcoin has a fit, it has the digital store value component, 162 00:08:14.959 --> 00:08:17.800 and then we need to plug into public blockchains. What 163 00:08:17.879 --> 00:08:21.120 did you see along the way, was that things were 164 00:08:21.120 --> 00:08:22.560 discussed at Goldman and so forth. 165 00:08:22.879 --> 00:08:26.600 Yeah, absolutely, So you may remember, or maybe maybe you don't, 166 00:08:26.639 --> 00:08:29.240 but I think it was twenty fifteen. A woman named 167 00:08:29.319 --> 00:08:33.080 Lithe Masters who was at the time she was like 168 00:08:33.080 --> 00:08:36.159 one of the eight most senior people at JP Morgan 169 00:08:36.480 --> 00:08:39.960 and she i Think ran their consumer banking business, and 170 00:08:40.039 --> 00:08:44.320 she left JP Morgan to go run a thing called 171 00:08:44.440 --> 00:08:47.360 R three or Digital ass Holdings, right, which was one 172 00:08:47.360 --> 00:08:51.639 of the first companies like providing these essentially these permission 173 00:08:51.720 --> 00:08:54.840 private blockchains. And she went on the front of Bloomber 174 00:08:54.879 --> 00:08:58.559 I think with Bloomberg business Week, and the headline was blockchain, 175 00:08:58.600 --> 00:09:02.240 not Bitcoin, right, And all of the story across Wall 176 00:09:02.240 --> 00:09:04.320 Street at the time was that like, blockchains were going 177 00:09:04.360 --> 00:09:07.399 to reinvent the way financial markets were, but the tokens 178 00:09:07.440 --> 00:09:11.159 themselves were worthless crap that were being used on silk Road, 179 00:09:11.320 --> 00:09:13.440 and we're being used, you know, for money laundering. And 180 00:09:13.440 --> 00:09:16.720 to your point, that story has flipped absolutely because people 181 00:09:16.759 --> 00:09:19.919 are starting to understand the network effects, the incentive mechanisms 182 00:09:20.240 --> 00:09:23.039 of tokens. People have started to understand the networks effect, 183 00:09:23.039 --> 00:09:26.799 of liquidity and of having open networks. Right. I think 184 00:09:26.799 --> 00:09:31.399 about it again. There were private versions of the Internet, 185 00:09:31.519 --> 00:09:36.879 like intranets, right, that existed, and they served potentially a purpose, right, 186 00:09:36.960 --> 00:09:43.720 but those purposes were limited and there were they didn't 187 00:09:43.759 --> 00:09:48.360 accrue value in this way that you started to see 188 00:09:48.399 --> 00:09:51.039 the open Internet, right, which grew exponentially. 189 00:09:51.399 --> 00:09:51.600 Right. 190 00:09:51.639 --> 00:09:53.519 And we've seen the same things with blockchains, and we 191 00:09:53.600 --> 00:09:56.120 see the same things. Something with all technology is that 192 00:09:56.159 --> 00:10:00.840 once you allow for open, permissionless innovation on top of 193 00:10:00.919 --> 00:10:06.159 a network, you know, the ability to accrue value is exponential, right. 194 00:10:06.279 --> 00:10:11.039 And so these you know, banks, these asset issuers like 195 00:10:11.120 --> 00:10:15.399 Larry Fink, they started to realize as these networks grew, 196 00:10:15.639 --> 00:10:18.559 as Etheroeum grew, as Salona grew, as as you know 197 00:10:18.639 --> 00:10:23.480 the others grew, that there would be more value that 198 00:10:23.519 --> 00:10:27.080 could accrue to them, and that if they were to 199 00:10:27.159 --> 00:10:31.519 support permissionless networks. Now, what have we seen happen in 200 00:10:31.720 --> 00:10:34.039 you know, recent months, as we've seen a lot of 201 00:10:34.039 --> 00:10:37.480 people say, okay, well, like I believe that story, but 202 00:10:37.720 --> 00:10:41.120 I also believe that I need to you know, necessarily 203 00:10:41.159 --> 00:10:45.440 control the execution environment of how I go and deploy. 204 00:10:45.840 --> 00:10:47.600 And so we see people like Robin Hood say, well, 205 00:10:47.639 --> 00:10:50.639 I'm going to launch an L two that share security 206 00:10:51.159 --> 00:10:54.200 with Ethereum. But that allows me to have the ability 207 00:10:54.200 --> 00:10:56.600 to think through, you know, how am I going to 208 00:10:56.639 --> 00:11:00.759 actually have the right validator set, what type of transactions 209 00:11:00.759 --> 00:11:03.559 am I going to prioritize? How do I think about 210 00:11:03.559 --> 00:11:06.879 accruing economic value to myself versus my customers? You know, 211 00:11:07.000 --> 00:11:08.720 what are the types of things I don't want to 212 00:11:09.240 --> 00:11:11.519 operate in my blockchain. I think we're going to continue 213 00:11:11.519 --> 00:11:13.480 to see a lot of that, right, We're going to 214 00:11:13.480 --> 00:11:15.200 continue to see a lot of people will say I 215 00:11:15.240 --> 00:11:20.039 can build a better business utilizing and have interoperability with 216 00:11:20.080 --> 00:11:24.000 public blockchain. Mine will be public as well. But maybe 217 00:11:24.039 --> 00:11:26.480 I have you know, a permission validators set, or I 218 00:11:26.519 --> 00:11:29.399 have a permissioned way to think about sequencing transactions or 219 00:11:29.559 --> 00:11:32.840 at least incentivizing the type of transactions that I think 220 00:11:32.879 --> 00:11:34.240 are important for my business. 221 00:11:35.200 --> 00:11:37.480 Yeah, that absolutely makes sense. It seems like it's going 222 00:11:37.519 --> 00:11:39.720 to be a hybrid approach, right, a mix of both. 223 00:11:40.039 --> 00:11:42.799 But the public blockchains, to your point, has the true 224 00:11:42.840 --> 00:11:44.840 network effects, and you have to plug into that to 225 00:11:45.320 --> 00:11:48.120 kind of get access to the world because these blockchains 226 00:11:48.120 --> 00:11:51.279 are running like a global market real time twenty four 227 00:11:51.320 --> 00:11:52.519 to seven three sixty five. 228 00:11:52.759 --> 00:11:54.919 Yeah, and there's shared infrastructure that you know, you don't 229 00:11:54.960 --> 00:11:59.360 want to reinvent, right, Like you know, if ethereum has 230 00:11:59.480 --> 00:12:02.600 all of the infrastructure available for basically anybody in the 231 00:12:02.639 --> 00:12:06.720 world to access it, to interact with it, to and 232 00:12:07.240 --> 00:12:09.559 you know, all of the you know, kind of service providers, 233 00:12:09.559 --> 00:12:11.720 whether it's the wallets, whether it's the compliance, whether it's 234 00:12:11.759 --> 00:12:15.399 the uh you know, the on ramps off MPs. Anybody 235 00:12:15.440 --> 00:12:20.080 can also interact with this global permissionless ledger and pool 236 00:12:20.120 --> 00:12:23.320 of liquidity that you know, people have built a number 237 00:12:23.360 --> 00:12:25.600 of different novel use cases on top of and having 238 00:12:25.639 --> 00:12:28.080 access to that and being able to have interoperability with that, 239 00:12:28.519 --> 00:12:31.120 I'll add a lot of value to grow exponentially. But 240 00:12:31.320 --> 00:12:34.559 you know, you don't necessarily want to compete with you know, 241 00:12:34.639 --> 00:12:39.720 building your execution environment for your business with a block 242 00:12:39.759 --> 00:12:42.320 space that like might also have a meaning coin in 243 00:12:42.360 --> 00:12:44.639 it or you know, that doesn't allow you to think 244 00:12:44.679 --> 00:12:47.639 through you know, how you arrange like for you know, 245 00:12:47.799 --> 00:12:50.679 MTV and how you arrange for economics sharing, uh doesn't 246 00:12:50.679 --> 00:12:54.039 allow you to have you know, potential uh you know, 247 00:12:54.159 --> 00:12:57.399 prioritization of certain types of transactions like like those are 248 00:12:57.440 --> 00:12:59.240 the things that people are really worried about, and they're 249 00:12:59.240 --> 00:13:02.399 also worried about some regulatory concerns around you know, whether 250 00:13:02.480 --> 00:13:05.600 or not you know you're you know included in like 251 00:13:05.639 --> 00:13:10.039 an o faccationed transaction or invalidator set. But I think 252 00:13:10.039 --> 00:13:12.559 it's really more about like business reasons than it even 253 00:13:12.600 --> 00:13:13.559 is regulatory ones. 254 00:13:13.639 --> 00:13:15.240 Oh for sure, you know, as you were saying that, 255 00:13:15.279 --> 00:13:17.360 I thought about the early days of the Internet, my 256 00:13:17.399 --> 00:13:20.159 backgrounds in search engine optimization, and I remember we would 257 00:13:20.200 --> 00:13:23.000 talk about if you're in a shared web hosting server 258 00:13:23.120 --> 00:13:26.200 or whatever, it is, uh not being in lot on 259 00:13:26.279 --> 00:13:29.279 the same server as other sites at gambling or adult 260 00:13:29.320 --> 00:13:31.360 sites or something like that. You don't want to be associated. 261 00:13:31.639 --> 00:13:34.879 So it's very similar comparisons there. 262 00:13:35.200 --> 00:13:37.159 Yeah, and we're seeing a lot of people focused on 263 00:13:37.200 --> 00:13:39.600 those things. Yeah, and that's why, I mean, I think 264 00:13:39.639 --> 00:13:42.919 you've you've seen it, but you know, Circle and Stripe 265 00:13:43.000 --> 00:13:47.679 and robin Hood and you know, many more continued to announce, 266 00:13:47.759 --> 00:13:50.240 continue to come out of the wold work. It says 267 00:13:50.240 --> 00:13:52.159 we want to do this, we just want to do 268 00:13:52.200 --> 00:13:54.519 it in a way that you know, is optimized for 269 00:13:54.639 --> 00:13:55.240 our business. 270 00:13:55.600 --> 00:13:58.279 So, Rob, let's say it's twenty thirty or twenty thirty five, 271 00:13:58.360 --> 00:14:02.360 do you see the majority of companies and brands have 272 00:14:02.639 --> 00:14:05.720 let's say their own layer two or if it's like Avalanche, 273 00:14:05.840 --> 00:14:08.320 or they have their own subnet or Salona, you know, 274 00:14:08.480 --> 00:14:12.399 whatever the mechanisms are. These companies have their own layer too. 275 00:14:12.440 --> 00:14:15.879 Is maybe their own tokens. Because there's the clarity they 276 00:14:15.919 --> 00:14:19.320 can build more brand affinity, engage with their customers, have 277 00:14:19.399 --> 00:14:23.320 more retention, and add more value to their brands and companies. 278 00:14:23.440 --> 00:14:25.360 Do you think that's the world we're headed too? 279 00:14:26.000 --> 00:14:31.120 I think so. Yeah. My belief is that most of 280 00:14:31.159 --> 00:14:35.000 these organizations they want to have, they want to control 281 00:14:35.360 --> 00:14:38.960 some subsection of how they interact with blockchains, and for them, 282 00:14:39.039 --> 00:14:42.039 right now, it has been less about building an application 283 00:14:42.080 --> 00:14:45.600 and more about building an entire execution environment. It is 284 00:14:46.519 --> 00:14:50.559 easier today to launch a blockchain than it has ever been. 285 00:14:50.840 --> 00:14:55.279 The service providers you know, people or even the chains 286 00:14:55.320 --> 00:14:56.759 like an avalanche like to your point, but you can 287 00:14:56.840 --> 00:14:59.039 launch your own one on top of it is essentially 288 00:14:59.080 --> 00:15:02.080 like a piece of like enterprise software is stk's APIs 289 00:15:02.399 --> 00:15:04.440 that you can like you know, stand up pretty easily. 290 00:15:04.600 --> 00:15:06.960 Some companies say, hey, listen, like we're gonna roll like 291 00:15:07.000 --> 00:15:09.559 our own new l one, right like for instance, you 292 00:15:09.600 --> 00:15:12.000 know when you think about Tempo and Stripe. You know, 293 00:15:12.039 --> 00:15:14.559 the reason that works is because it's essentially a Paradigm's 294 00:15:14.600 --> 00:15:17.960 engineering team, right, and they are you know, deeply technical, 295 00:15:18.000 --> 00:15:21.039 and they understand wrath and like there's a there. They 296 00:15:21.039 --> 00:15:23.919 have the the technical expertise to do that. But the 297 00:15:23.960 --> 00:15:26.639 vast majority of these people are saying like, okay, well, 298 00:15:26.679 --> 00:15:29.440 I'm gonna launch an L two with you know, like 299 00:15:29.480 --> 00:15:31.879 a Conduit or you know, somebody who does you know, 300 00:15:31.960 --> 00:15:33.840 roll up as a service, and I'm gonna use you know, 301 00:15:33.879 --> 00:15:37.320 a DA layer like igen Da or Celestia, and like 302 00:15:37.559 --> 00:15:39.919 they have kind of the service providers there make this 303 00:15:40.000 --> 00:15:41.799 like super easy for me, or you know, like we 304 00:15:41.879 --> 00:15:44.159 talked about Avalanche where you can just they have essentially 305 00:15:44.159 --> 00:15:45.960 have a package for you that you could stand that up. 306 00:15:46.240 --> 00:15:48.639 Because that is so easy now and because it looks 307 00:15:48.639 --> 00:15:52.639 a lot like enterprise software and it allows for customizability 308 00:15:52.679 --> 00:15:55.200 that makes sense for people's business. I think most people 309 00:15:55.200 --> 00:15:56.480 are going to look at that and say, as long 310 00:15:56.519 --> 00:16:00.120 as I have interoperability with other you know, parts of 311 00:16:00.159 --> 00:16:03.399 the ecosystem, with other you know, corporations, with other you know, 312 00:16:03.519 --> 00:16:06.919 permissionless blockchains and liquidity layers, like I should just go 313 00:16:07.080 --> 00:16:09.600 and do that, right And I can do that like 314 00:16:09.679 --> 00:16:12.840 relatively easily without having to make turn my organization into 315 00:16:12.879 --> 00:16:15.679 an engineering one if they're not already an engineering organization. 316 00:16:16.519 --> 00:16:18.519 What do you think about a scenario like this, Let's 317 00:16:18.519 --> 00:16:21.480 say let's just use Amazon and Walmart for example, they 318 00:16:21.559 --> 00:16:23.720 launch your own tokens. They have done LT's, they launch 319 00:16:23.759 --> 00:16:27.120 your own tokens. Those tokens trade on the open market, 320 00:16:27.159 --> 00:16:31.159 they have value, and they form partnerships with let's say 321 00:16:31.200 --> 00:16:34.399 Starbucks and other retailers who do different things, and I 322 00:16:34.440 --> 00:16:37.039 can go spend those tokens there if I want to do. 323 00:16:37.080 --> 00:16:39.639 You think we're headed to that token economy and you 324 00:16:39.639 --> 00:16:42.799 have this interoperability and the retailers all are like, hey, 325 00:16:42.799 --> 00:16:44.679 I'm going to form a partnership and accept your token 326 00:16:44.759 --> 00:16:46.320 and you can use it here in YadA YadA. 327 00:16:47.600 --> 00:16:49.639 I think that the token questions a little bit more 328 00:16:49.639 --> 00:16:52.639 of a complicated one because there's a question around what 329 00:16:52.679 --> 00:16:56.240 does the token represent? Right, So does the token represent 330 00:16:56.320 --> 00:16:58.960 like equity and Walmart? Well, okay, like you know, maybe 331 00:16:59.000 --> 00:17:01.879 we believe that all equities on chain. I think there 332 00:17:02.000 --> 00:17:03.879 is a portion of the equity markets that will probably 333 00:17:03.919 --> 00:17:05.759 be continue to be tokenized over time. I think there's 334 00:17:05.759 --> 00:17:08.920 real incentives to do that for capital market participants. I 335 00:17:08.920 --> 00:17:11.400 think there's a question around the form factor that takes 336 00:17:11.440 --> 00:17:14.920 and the legality and the actual owners and the voting mechanisms, 337 00:17:14.920 --> 00:17:19.079 et cetera. But in that case, I expect that we 338 00:17:19.119 --> 00:17:20.920 will have tooknize equities, but I don't know if I 339 00:17:21.799 --> 00:17:24.680 would be shocked if they were able to be permissionlessly traded. 340 00:17:24.920 --> 00:17:28.240 Right now, there's the question of like, okay, well, is 341 00:17:28.279 --> 00:17:31.279 there like a loyalty mechanism or a stable coin or 342 00:17:31.319 --> 00:17:32.519 something like that, which I think is more of what 343 00:17:32.519 --> 00:17:35.319 you're getting at for like a Walmart. And I think 344 00:17:35.319 --> 00:17:39.480 it's very clear that there's gonna be a Walmart loyalty 345 00:17:39.480 --> 00:17:43.160 token right now. Maybe that is a stable coin, or 346 00:17:43.200 --> 00:17:45.559 maybe that is a points token that is like pegged 347 00:17:45.559 --> 00:17:47.519 to the US dollars, so it essentially has the ability 348 00:17:48.440 --> 00:17:50.799 or the form factor of a stable coin. That seems 349 00:17:50.839 --> 00:17:52.839 very clear to me that like most people are looking 350 00:17:52.880 --> 00:17:55.640 at at that type of form factor as something that 351 00:17:55.680 --> 00:17:59.559 they want to do. Now, the question will be incentives, 352 00:18:00.079 --> 00:18:03.559 right and so you know, is there an incentive for 353 00:18:03.720 --> 00:18:06.160 Walmart to make that open permissionists or is there an 354 00:18:06.200 --> 00:18:08.839 incentive for them to you know, make that a walled 355 00:18:08.839 --> 00:18:12.200 garden right right now? What happens is you know, I, 356 00:18:12.599 --> 00:18:15.200 you know, get a whatever some like you know, a 357 00:18:15.279 --> 00:18:17.960 delta mile right or some sort of loyalty point, and 358 00:18:18.000 --> 00:18:21.839 now I'm like locked into you know, potentially you know, 359 00:18:21.920 --> 00:18:25.680 buying something at at at Starbucks or wherever, right, But 360 00:18:25.880 --> 00:18:28.880 they've already recognized it's already deferred revenue, so it's a 361 00:18:28.880 --> 00:18:31.400 liability on the balance sheet when they gave me that token, 362 00:18:31.839 --> 00:18:34.960 and so actually getting that off balance sheet and getting 363 00:18:34.960 --> 00:18:37.839 that back into the consumer is is actually, uh, it's 364 00:18:37.920 --> 00:18:40.240 an uplift and earning for share for them. So I 365 00:18:40.240 --> 00:18:44.640 actually think that is a clear value add for them 366 00:18:44.680 --> 00:18:47.240 in terms of doing like tokenized loyalty. Then the question 367 00:18:47.279 --> 00:18:48.880 is like who do they actually want to interact with, right, 368 00:18:48.920 --> 00:18:51.720 because like, you know, I'm sure Starbucks does not want 369 00:18:51.720 --> 00:18:53.559 me to be able to want to swap my Starbucks 370 00:18:53.559 --> 00:18:56.519 point for Tim Horton point, right, but maybe they're happy 371 00:18:56.559 --> 00:18:58.200 to do you know, some sort of like go to 372 00:18:58.240 --> 00:19:02.079 market with like the you know, the New York giants, right, 373 00:19:02.640 --> 00:19:05.359 And so I expect there will be called it open 374 00:19:05.640 --> 00:19:11.640 token or somewhat openly semi open like loyalty type tokenized 375 00:19:12.200 --> 00:19:14.759 marketplace that will exist, and we're I mean we're seeing 376 00:19:14.759 --> 00:19:17.440 it right now. Like them, I think FIFA is doing 377 00:19:17.599 --> 00:19:20.759 some like World Cup loyalty on avalanche. And you know, 378 00:19:21.000 --> 00:19:22.720 the only place you can actually guarantee you take it 379 00:19:22.720 --> 00:19:24.279 to the World Cup right now is like through their 380 00:19:24.319 --> 00:19:27.279 loyalty program that is tokenized on Avalanche, and so I 381 00:19:27.319 --> 00:19:28.680 think we're going to continue to see a lot more 382 00:19:28.680 --> 00:19:28.920 of that. 383 00:19:29.119 --> 00:19:32.640 Yeah, that absolutely makes sense, and I'm looking forward to 384 00:19:32.680 --> 00:19:35.519 that that day when we have this interoperbility with the 385 00:19:35.559 --> 00:19:37.839 different tokens. And obviously these companies are going to have 386 00:19:37.880 --> 00:19:40.279 to look at the cohorts and the demographics and make 387 00:19:40.279 --> 00:19:42.680 sure they all align and so forth. But if I can, 388 00:19:43.400 --> 00:19:46.480 for example, just using the Amazon example there, if I 389 00:19:46.480 --> 00:19:50.319 can get an Amazon token and you know, for holding it, 390 00:19:50.359 --> 00:19:53.880 they maybe there's some staking or additional discounts that are added, 391 00:19:54.240 --> 00:19:56.400 and I can even put it in the open market 392 00:19:56.400 --> 00:19:58.519 and sell it or put into DeFi whatever it is, 393 00:19:58.640 --> 00:20:01.640 or lend it out. I don't know, I'm just spitballing here, 394 00:20:01.680 --> 00:20:04.440 but that would be really cool and I would be 395 00:20:04.519 --> 00:20:08.119 more engaged, you know, maybe going to Amazon dot com 396 00:20:08.119 --> 00:20:09.279 more often than I should. 397 00:20:09.799 --> 00:20:13.240 Yeah, I listen, no doubt about it. The I mean, 398 00:20:13.279 --> 00:20:15.519 the vast majority of consumers, even with their loyalty points. 399 00:20:16.000 --> 00:20:17.680 You can actually you can see some data on this. 400 00:20:18.599 --> 00:20:20.799 A lot of people don't use their loyalty points, and 401 00:20:20.839 --> 00:20:24.480