#226 Bob Summerwill: Sweetbridge – Rewriting the Operating System for the World Economy

Transcript

[Music] hi welcome to epicenter the show it talks about the technologies projects startup decentralization and the global blockchain revolution my name is the best egg module and I'm a Hanoi today we are covering sweet bridge which is a project that is seeking to create a stable coin and enable participants of the etherium ecosystem to have more liquidity for the assets they might they might possess on our show is Bob Somerville who's been an old

member of the etherium community has worked in the etherium foundation enterprises helium Alliance and now sweet bridge Bob welcome to the show thank you good to be here you've been in the IT industry for a long time and then you transitioned into blockchains with aetherium Ellis tell us how you made this transition into blockchain technology and what attracted you to his helium in particular yeah sure so I started programming when I was 10 years old in 1984 back in the the 8-bit days my my father was a self-taught developer who built a

library and and so shop system for stocktaking of a library at the university worked was bring his computer home in the evenings to work on that curious child well you know what are you doing dad what what's what's this about and so I got quite early there I ended up studying computer science at the University of Leeds computer science and AI and was lucky enough to meet somebody on my course who was working in the games industry so I my first job straight out of university was was

joining Cygnus a Sony subsidiary in the UK and I remember at the time it's not a real job right you can't get paid to like do games like that's not a real thing no always sort of thinking well I'll get a real job at some point but but yeah that was 1996 and ie I moved to Vancouver to to work on FIFA I did 6 FIFA's the 20 Triple A games for EA Sports over those years p-per NBA NHL SSX works in central technology build systems configuration

management automation testing lots and lots of collaboration projects as EA it's got about 10,000 employees you know 20 or so studios around the world so you do get lots of these you know they're quite decentralized in a way you know lots of lots of companies which were independent that we required so you have you know you have different cultures in different different Studios different teams so working on on those collaboration projects I think will really set me up quite well for coming into blockchain so I left EA in in 2014

really sort of feeling the need to do my own things you know no feeling trapped in a in a large hierarchy but acted as though they owned me they owned my brain and my thoughts real inability to work on open source projects to work on on side projects that's really what led me out first into into mobile and and wearables but then I in in 2014 I made a new friend a guy called David LOI we've been into blockchain from very very early that is his first Bitcoin purchases were at 5 cents he used to own

Bitcoin comm many years ago lit that quite well and he he took me along too to be control to the sort of co-working space and a meet-up place here and that was sort of Bitcoin to pointe-noire era you know some ripple just sort of appearing and you know talking about tagging and sidechains you know dreams of all of the things that could be done on top of blockchain but you know none of it was a reality at that point the the etherium white paper had just been released but I mean this is probably January February 2014 so you

know again this sort of talk at that stage but later that year Vitalik was actually in Vancouver coming through spending a day with David that was that was price of their foundation launching still even or crowd sale so yeah I I got to meet metallic in sort of I think it was July 2014 I posted to my facebook page that day you know I I have met a genius nobody none of you will have heard of this guy but he is going to be world-famous in a few years and you know really just saw saw an awful lot of potential there though I

remember saying to him at a time so it's so it's like a single-threaded computer but the whole world how's that gonna scale you know in an era of you know cloud computing and giant resources you've got something that's sort of like a you know an old PC of the 80s it's like well you know I've got ideas on sharding and proof of the state but I I had my own focus at that time and it's like no keep I'll keep my eye on you but you know good good luck young man but then in 2015 I I found myself in in Toronto working in my first real Susan ty job

I joined TV securities to help them with with agile devops and cloud adoption and I took the opportunity to go to meetups there went along to D Central but Jeff Coleman who's doing Technic ripto you know met up with Anthony DiIorio went to Det tech at Mars and pulled passes the remains of Darren you know it was just very evidence me you know they've done it you know we're about to launch main that and and this thing is for real and and I could not not get involved you know but prior to to learning about blockchain I think like many others had

a real sort of journey of will and what's happening with this financial crisis how does money work and elites and know what what on earth is happening to the world you know we powerless pawns I really you know the me blockchain was you know this real a world where we can you know we can pull the controls background to our side of it and you know I'm a developer I can help you know I can actually you know I can actually do a positive proactive thing to try and move things towards this this new paradigm so that's what I did I mean I you know I guess the analogy in my head was some you know if you had met the Miss Torvalds and he said you know I'm doing this this Linux

thing you know it's just for fun no hey Bobby you know C you know C++ can you help a bit would that have been a good thing to do would that have been fun whether or not it worked out so that's what I did with the widow theorem is I just got involved you know really with boredom you know maybe that can turn into some job later maybe that'd be some paid work maybe I can find something at some startup doing something but instead it turned into you know sort of ushered into the inner sanctum because in late 2015 when foundation was you know nearly running out of money and Gavin the C++ team kind of moved out and formed parity

the the project that I set myself as a starter which was actually seen can I get a theory I'm running on a smartwatch I was building on top of that codebase and the team went away so I went in and helped and and I was the only person in the world that did so then I got hired off we went at some level sort of demonstrates the power of following what you think is cool and scratch your own itch right yeah just like I think this seems to happen twice in your career like you scratched your itch with gaming early on without a financial model per se of and

then you did it with helium and both have worked out quite well for you yeah and I mean III really hope that you know when we are more in a you know the new network paradigm that more people get the opportunity to do that because I think that just both fear and and just financial constraints just stop so many people from doing things that they love that they really care about right so many people just get stuck in a well you know that's a good enough you know if if I do that job you know it won't drive me completely insane and I can have fun um you know in my spare time but you know

basically end up doing 30 40 years of stuff that they don't really care about that much yeah and then you switch to consensus and what the enterprise atiim Alliance know what were you doing there well I mean that act that stories actually started little earlier which was when I had joined the foundation really you know working on that C++ client and really helping to sort of reboot that team you know after the departure of the regional development team and the other thing that popped up in that period was was Hika ledger so i was going to the o'reilly austin conference in May 2016 I you know I just

wanted to go to the conference and and just before that you know hyper ledger had been announced and I mean my first reaction was oh my god it's like your dance turned up at the at the dance club you know you see down the disco and you your dad's come oh my god this is so embarrassing you know like you know they're trying to play it being cool this is gonna be so terrible you know like what's enterprise blockchain gonna be like it's oh my god any way that I see in respect in in retrospect that that was over cynical you know there are a lot of fantastically talented people in in in these in these enterprises as well but but heading into that a spotted that

consensus were part of of hyper ledger and I was like well what's going on there you know I thought consensus were totally aetherium you know what way of way or they didn't why are they in this and what is hyper ledger anyway you know you've got you've got IBM you've got Intel you know you've got digital assets holdings you know and it's like everyone's sort throwing they're throwing their tech in a heap and like are they trying to pick a winner or like what like what is this thing what's going on so I started lurking on the slack and you know trying to try and see what was going on there and then ended up talking to so Joseph Chow and then Andrew Keys and then and then Joe Lubin about you

know what what what do you think is going on or the taiga ledger what what what what does consensus what like this and and that was really quite simple was was well we want to get an etherion code base in there you know we we we think that you know etherium it is is it's a great technology for enterprise you know that the consensus had had their large consulting you know consensus enterprise arm for a good amount of time and it was and it was getting real traction and you know they rightly thought that their room should be part of that but the real barriers to that were were licensing we're finding an apache to permissively license code base that could go in

and I said well I think CPP etherium is MIT license and it turned out not quite to be true there had been an earlier effort at relicensing but I picked that up again you know I when I when I did go down to ask on I set up a an open-source blockchain Meetup invited all the the big coin meetup the etherion means up the blockchain to business meet up people from the IBM lab there you know from tender mint from factum from the conference and and had a really really great kind of meeting i dilated it a blog post called cats and dogs can be

friends and I got to meet Brian Bowan Dorf there as well who's announced as the executive director at oz called the following morning and and and yeah really I started a great friendship with with Brian and with Chris Faris you know who's the fabric lead at that point really really looking to see if we could bridge those communities so I I was working towards relicensing of that CPP aetherium client to see could we get to this wonderful place of saying okay you're you're concerned with public aetherium great tortilla theorem foundation if you want to do enterprise stuff fantastic talk to our partners at the Linux Foundation you know who've done hundreds and hundreds of these

collaboration projects and they can help you battle relicensing effort failed that was not approved by by by parity by by giving would talk to a fair bit about that we reconciled and happy now but it was was a real kind of blow to me at the time and and really that's where the EA came from was the failure of that that initial bridging effort and really that the Jo offered me you know sort of a second voice at that cherry of saying well you know the Grand Union failed but we have enough and surprise that there

in people that we can get together our own consortium and maybe we can move quicker because we're all on the same tech base but the angel saying well what does it take to get to production red you know from where we are with public aetherium what what does it take to get to you know a product that you can stand up in the market you know against kaulder against you know the IBM blockchain offering and saying here's a you know enterprise-grade ready to go there appliance so yeah i works on that for a year between october 2016 and an October 2017 that launching in in February of 2017 I was the vice

chair of the technical steering committee the aim they're just getting together by enterprises and startups and saying well hey we'll what can we build what you need but how do you get to how do you get to done it's a fascinating story on how you came to your current role with sweet bridge and and I agree I mean that I I think that for aetherium to succeed over the long term it does need you know it does need to have a solid public network but it also needs to have a product that can can be sold to into to enterprise and that it was production-ready as you said so moving

on to the sweet bridge you know perhaps a good way to start is to to quote the CEO of sweet bridge I was I was watching talks earlier so one of the great things about sweet bridges you guys published these talks on YouTube but there was a few out will link to them in the show notes but in so Scott Nelson said that that see that sweet bridge is a series of protocols over multiple years that will bring liquidity in all forms to capital assets and talents within supply chains so could you help us unpack that statement what is it that he means here I mean the the reason I moved to sweet bridge was not unhappiness at consensus an EAA but

really seeing a you know a bigger and a more impactful mission which was really making you know the promise of blockchain technology for the social impact and change on the world you know come to reality you know I ended up at sweet bridge on the recommendation of Benedicta he actually referred me recommended me and when I started talking to them you know I I really realized what you know again I can't not do it sorry I'm jumping again you know sort of into you know into the void a little bit

but but but really you know I I am I'm compelled to act yet again because you know when you look at what you have going on with with public blockchain you know even even with you know wherever that is now whatever the market cap of of all of those are three what is that 3 320 billion you know that that blockchain is small compared to traditional financing and financing is small compared to supply chain because really supply chain it's it's it's two thirds of the world's economy fifty four

trillion dollars a year touching the lives of three billion people because it's everything physical you know it's you know getting away from your little geek asphere on the computers you know that there's actually people in the world doing physical things moving things around I think a good way to look at it is if it's anything that you didn't grow or produce yourself it came from a supply chain so like unless you're picking your tomatoes from your garden and you're carving out your own furniture from trees that grow in your backyard if it's if it's a product that you own or consume it's coming from a supply chain and that's that's essentially every flaw in our lives right well yeah well it's civilization I

guess you know we used to live in huts and you would do all your stuff and cut your own wood and you know growing your own food and so on but you know we're way past that and you know the reality is that most people are utterly utterly dependent on other people for nearly all of the goods and services that make up their lives and and and that's that interrelationship is a good thing you know that allows you to to specialize and to have you know best best economies but but yeah you know supply chains are probably an area that's has benefited the least from technical innovation you know they really are here's your easier

clipboard with your paper things and filling in your stuff and so on but though I mean you say supply chain but you could really say Commerce or business really it's it's almost that broad a physical business you know anything which is not purely digital I mean I guess I mean our in our profession we get used to being so digitally native but you don't think about that stuff but you know most people on the planet are are absolutely not know it is there around around physical things and and retail and shipping and and so on so you know there's just really huge huge impact that you can have by applying this

technology to to that area as it's its future and so can you expand on what he means when he says that it will bring liquidity so how does sweet bridge bring liquidity into global commerce and you know perhaps explain why global commerce isn't liquid for sure yeah well so I mean really the reason for that is that unlike in your personal life where you just buy things and pay for them the majority of business transactions are

irin I make an order somebody you know supply is the the the goods or services for that order and then they send an invoice and they're paid later so there is this this trade financing gap where you know that's fantastic but I have an order of a you know a million tons of coffee beans from you know from Starbucks or what-have-you but you've got to go and like find the money for that somewhere and you know that carries on down the chain that the the big corporations that are at the top of the supply chain have incredible access to credit you know large companies can very easily you know do

new bond issuance or whatever just lend money at a great interest rate but as you go out and out towards the edges of these networks and especially into developing markets you don't have that access to credit so you know the World Bank says that the number one barrier to world trade is systemic lack of access to to credit you know that that large you know the assumptions that we have I guess as consumers even in the west of well of course I can get a credit card of course sucking down mortgage also I could get a business loan you know maybe the terms I'm gonna be what I would like but you know it's gonna be okay as long as my credits all right I'm gonna get access to that you know I I will be able

to to start a business I you know I can get you know lend some money to get my orders in and then I'll get paid later so that's a complete block blocker to a lot of the world you know that you people are reliant on on loan sharks to get the smallest amounts of money now this is why microwave financing has been so impactful is you know necessarily talking about a lot of money that people need to just start something they they just don't have a hundred bucks or whatever they go down the warehouse to get a pallet of something so what that what Scott's talking about with with liquidity solution is that we we have a real fantastic opportunity with blockchain of being able to take

existing assets that people do have an essentially locking those up you know tokenizing those and locking up on chain and then what you can do is is that you can you can borrow against those but without needing a counterparty that's that the key difference of the proposition of sweet bridges is this this idea of being able to to lend it yourself money but secured on assets which you already have so stepping away from that sort of ursery well you know if you want access to credit you know you have to give me title on your house and you know I

basically that people are taking their cut because they have access to credit that you don't so they basically borrow you you know they'd sorry they lend you either their own money or or or credit that they have access to and then you will pay for that you know so in the worst case that's that's a loan sharking or payday loans and so on and even in in in what we would consider is the best cases say in the west of well great I can have a mortgage and I can buy a house isn't that brilliant well not really because they take hundreds of thousands of dollars worth of interest away from you and I mean it's over a long term so you don't

notice it so much but you know that's that's how the financial world has become is is is really you know certain institutions or individuals have easy access to credit and they they lend that out and they just accumulate all the money can you explain how one can lend himself or herself money like how I walk us through how so let's for instance say I have like maybe the simplest example I have land and I want to borrow money against that land walk us through how this works because there's there's something about that I'm not clear here

like who's rent who's lending the money yeah and what interest you know would and who's benefiting from this so I mean essentially who's lending it is is nobody is lending it you are minting it and I mean that's how faaaat works is is you know a central bank all the commercial banks you know through the rights that they have through the central bank will they create new money that's how how lending works is is money is magic out of thin air and is lent to its interest but what's been different is that's been an ability which which only you know sovereign nations have

have been able to do but with with blockchain anyone convinced tokens anyone can menu you currency so that's how it works with sweet bridges that you you have a real asset behind it you know so isn't it isn't funny money no it's not completely made-up you know there is a there is a real-world asset that's sitting behind it and you're not you know actually you know you're not doing a fractional reserve kind of ten times lend or or what have you you know you you haven't asked a real asset behind that but you are you are minting new coins and those are bridge coins and there will be repayment terms if you

don't make your repayment terms then your your your asset will be pulled away from you but not by a bank but into the network you know it would be it would you know that ownership will be taken into the network and then you know there'll be some resale mechanism but yeah you were essentially you are minting new coins you there you go you can you can exit that value to US dollars and do something with it but you know when you you repay it well that closes the thing off and out of out of that you can close the thing off I mean you know that's something that can but can never happen with

fractional reserve you know Frank you know sovereign debt can never be repaid on it because it's you've got interest on top of that lending and well where's that interest coming from well nowhere it can't come from anywhere where the set up they have on sweet bridges is that those bridge coins can be closed bows back off again and the interest that you have paid was really just it's it's just paying for you know the cost of that machine the networking so essentially like from a user experience perspective if I have ether can imagine this sweet bridge system the

early systems that you're building is I can sort of deposit my e sir correct and if I if I die if I deposit $1,000 worth of either what is it like to e sir now so if I deposit to e servers $1,000 into the smart contract I'm gonna get $1,000 worth of bridge coin well it won't be that much no because what you would be doing at that point is you'd be having a hundred percent loan so you know you you depending on on the asset class there's only gonna be a certain amount that you can lend against this I mean you know it I guess the dynamics there are very

similar to margin land you know you don't want to leverage yourself up too much or if the asset value drops you're gonna get margin called and you're gonna lose your money so I'm not sure exactly what ratios that are going to end up being but yeah the initial product will have ether and Bitcoin in the wallet and you will be able to borrow against that to a certain ratio and then the scenario really is that you you know you do have you know a cell line and you hit the the cell line then yeah you're gonna get partially liquidated or you can fund it up before you get close to it I don't know if there's gonna be some waiting time but yeah essentially you know you

are you are having a a margin lend against that crypto asset and yourself up too much because it is fun it is fungible and will sell so it could be I lock I lock to Issa and I get let's say $500 $500 worth of bridge going out and now the question is what is bridge coin right like what is this thing I'm getting $500 worth of well you're getting something that you can exchange for US dollars that is essentially like a u.s. dollar stable coin though they're not stable point in the same synthetic way as as pretty much all of the other stable

points that there are in that this is an asset backed asset so what you can do there is is the oh you could you can exit that out of fiat or you can keep it and hold it so you know the other the other piece which this liquidity layer is all for is really it is for building these you know these supply chain ecosystems on top of it it's really building what's been described as an overlay world economy in that native cryptocurrencies are not really suitable for betrayed because of both the deflationary aspect the hotlink that they are you know they're not they're not designed to be used you want to want

to hold on to them they're valuable but also just the the volatility you know signing a contract saying well in one year I will give you one Bitcoin for this service is just a massive currency risk but no idea what that's actually going to be so it's really not suitable for signing business contracts in cryptocurrency it's just too much of a volatility risk but if you have something which is you know essentially pegged to US dollar euro that's that's workable so there will be multiple bridge coins that's the other thing to say is everything that we've

been talking about so far is really been focusing on US dollar but there will be multiple bridge coin you know react so this in principle is not too different from the thing that was attempted by bitshares like the bitshares created the bit USD and the bit CNY it had exactly the same mechanism and then later on maker Dow came on the scene in a big way and they have exactly the same mechanism except they add a certain feature on top which is that should a lot of defaults in the system happen so it's like people came in and locked ether and got British Qin

out and if he falls down radically it falls on a lot then they they have this other piece which is the MKR share the shareholders would bail out the system essentially and re collateralize it so likes like the liquidity part of suite bridge appears to be similar to bitshares spit USD and similar to make a Dow but - this kind of insurance system so so yeah I mean maker are you know I guess a you know a sister brother sibling project with sweet bridge so Kenny Kenny Kenny ro is an advisor to

sweet as well you know who was there at maker or train as well I met with both the DAP hub and maked owl teams in Cancun at DEFCON 3 the sweet bridge tokens are built on that pub code you know we you know we don't have a formal partnership but we and I could I'd like to we've just both been busy you know because I think that you know there's a lot of similarities but yeah just a just a different economic model really in it the initial building on top of

ether a Bitcoin piece of sweet bridge it is similar to existing things but it's part of a much much broader vision where it's really just getting the you know getting the pipes lined up with the simple case I mean another key advisor for sweet bridge has been a Gupta in that his material project for legally enforceable small contract is a you know a fundamental building block for you know all of the more interesting parts of sweet bridge which is really bringing off chain assets into into the pan which is I mean that's really where you're

gonna get the stability is is not by just trying to get to stability synthetically but by having a you know a broad set of real world assets which are stable you know like real estate like factoring of invoices you know like lending against stock you know or basically anything you know really the you know the ultimate vision is is all the assets in the world should should come on chain and that's really how you have stability so the the idea here it is okay is easy to imagine me locking up to Weezer and getting $500 worth of British

coin out right like all of the primitives for for this transaction are already built but what sweet bridge would ultimately want to enable is I don't have either I have something that is it's a quote-unquote a real-world claim on something else so the example could be by the way like I've actually worked in supply chain for most of my professional life alright so you're gonna show me then no there's nothing to school really like I'm pretty familiar with with this with this problem so the problem is like this so I used to work in the vaccines industry supply chain and the issue is this so

the Mexican government let's say the Mexican government wants to buy two hundred thousand doses of vaccines and that 200,000 doses of vaccine is there gonna cost twenty million dollars we're gonna ship them the vaccines and all we get from the Mexican government is just a paper that says they're gonna pay you twenty million dollars sixty days later that's it that's the paper we have you don't have money in the bank account so we have all of these papers from all of our customers essentially but on the other side to actually manufacture the vaccine we need to buy stuff and when we go and want to buy stuff there are some some places where

you can buy stuff and you can tell them oh we will pay you 60 days later because that's when our customers will pay us but then there are other places where this this just does not work right so you have to give them money immediately whereas the money that you're gonna get will come 60 days later so there's this mismatch so ultimately like what a big company like know what this needs is hey somebody take these pieces of paper from me but give me actual dollars on my bank now today so I'm going to receive 20 million dollars in 60 days but take this piece of paper and give me 18 million dollars today because I'll use that 80 million to buy other things and this is a very practical bread-and-butter

problem and so the idea here what seems to me is you want to allow that kind of transaction to happen on chain right like so the simpler transaction is lock ether Gate Bridge going out but then the more complex transaction you want is here is no waters that locks twenty million dollars worth of this paper that somebody will pay us in sixty days they can lock that in and they can get bridge going out so this is ultimately what you want to enable yes yeah and I mean the so what material is doing them and how that's fundamental is beyond assets which are already on chain

there's a huge amount that we can do with with this this legal bridge mechanism of saying well in in a hundred and fifty jurisdictions around the world you to parties to an agreement can agree to legally binding arbitration in case of a dispute called the New York Accords that was signed in the 1950s really to facilitate will trade and really I guess came out of maritime law you know if a goes down in the middle of the ocean in international waters what do you do you know who pays for who who gets what how does that happen and and the answer is arbitration you know

that that would go to some maritime lawyers who will look at what the contract was signed and will come to some determination and then that will be you know legally enforced and that mechanism is is the intended mechanism for making smart contracts legally enforceable through material is saying well when you sign a legal agreement between two companies or whatever doing something you are going to sign a real-world contract you know in a given jurisdiction according to their local law you are going to have a real-world big-name law firm who are gonna write

that digital version of that for a given asset class you know sort of as a template you know fill in the names and details and so on you are going to digitally sign that and hash it anchor it and there you go that would those lawyers though would be paired with smart contract all others who are writing the smart contract you know really implementation of like well what's the flow chart what the states this thing can go through you know if this and two of you signed that and then it's in this state and if it fails it can come out and that you're really you know you're digitizing a contract but you also agree to arbitration in case of dispute and what that means is so save

that contract is you know is this kind of factoring you know agreement yes we agree we will pay it and so on you have something there which which is legally enforceable you know in case of dispute there you can take that to the arbitrators and they will take that to the local court and the court will rubber-stamp it and know you you own these yeah over that was the house yet you you tokenized your house but yeah that that really was a real token you know someone can't say that was just silly internet money thing you know I'm not leaving my home well yeah you are because you signed an agreement and that's legally enforceable

and I mean like anything else like you know most things never ever get too cool but the fact that you have got that you know the the the force of the state at the end of the line that gives you the confidence of businesses to to be happy to sign a you know a smart contractor a digital signature of a legal text and feel you know secure in doing that so really you we've we've got to the paperless office you know it's happened we can actually have these things you know on the computers we have enough of that digital infrastructure plus enough of a

of a tie to the real-world law that you can but you can do do commerce on on computers and I mean is it it's no different really to something like you know DocuSign you know it's just taking the thing a step beyond plus using smart contracts for enforcing the actual logic so so yeah that material bridge should then let you all meant things which are already on chain with nearly everything which is jurisdictionally bound can can be done using that pattern a third area that we haven't go into scope but I think we probably should at some point

is is is more like what Oracle eyes are doing where you have things which are sort of like physical bearer assets you know the idea of having you know a Rolex watch of our gold or something with a cryptographic seal on it you know you can do proof of possession I think that's another kateri gig another couturier again is that legal bridge is assuming that you're living somewhere where you have the rule of law and having title to a house you know is gonna work if you're in Somalia doesn't really matter possessions nine-tenths the law at that point but I think all

three of those are are gonna have roles to to bring things on chain and really bringing them on chain is just getting them in a malleable form right where they're on the computers and you can do stuff faster yeah so I sort of understand division I personally have I have concerns about the stability of the British coin but we won't go into it because you mentioned that you personally are not in the economic side of it but actually in the building structure side of it yeah so the people to talk till there are mortals on ket sorry sorghum and Alex bulk and a coin front and and Scott Nelson and David

Henderson CFO they've done a lot of thinking it's just not in my head okay okay but I do get the value proposition of of this of this approach so the value proposition to me is is very clear because last year I invested in a start-up in India the problem that the startup solves like wants to solve is essentially the problem of supply chain liquidity right so what they what they're doing is they're working in the construction industry so so in the construction industries I imagine like I'm a builder right I have to build this

whole building right and then I have customers to which I will sell like flats in this building but in actually in order to build this building I need like cement I need like steel I need all of these raw materials so generally what ends up happening is the Builder gets these raw materials and then promises to pay 60 days later that same thing now that creates a lot of strain on the company that is making the cement right like it has shipped all the cement out where it's not going to get this money anytime soon so the interesting bit here is so the cement company essentially has these papers from builders that they will pay

that they'll pay them 60 days later and they want to sell this paper and get actual money actually dollars very quickly it's the same no artists problem is the same as the Builder problem in India is the same but what is striking is no artists is usually able to sell these papers at a discount of 2% so if what is expecting 20 million dollars out they'll say hey we'll give you a discount of 3% but take these papers and give us the money but like that same cement company in India will need to offer a discount of 25% in order to get the papers of their hands and that's the difference

between a developed economy and a developing economy so what this translates into is there's there's many businesses that can work in a developed economy but will not work in a developing economy because that cost the haircut you have to you have to admit is just so big and the interesting bit about like sweet bridge and these approaches is we are potentially bringing a global pool of liquidity to bear on this problem so no matter what where that person is from here's this global system that is going to bring this liquidity to do any company that has this particular problem so maybe

ultimately it's gonna make this kind of financing cheaper for all firms in the world rather than have this unequal distribution that companies in some countries have it easier and in others they don't absolutely I mean I enough that was something that the hugely appeal to me is is really you know it's it's apparent level playing field is you know the existing world economic system you know it it's effectively economic colonialism you know continued that there is you know this this systemic economic suspect you know suppression which means you you just can't get out

of it you know you're carrying a giant load on your back and it just and it just negatively impacts the whole of humanity you know it's it's it's you know we it's quite obscene with the you know with all of the affluence and and resourcing that there isn't world you know that people are you know living in fear you know that you have starvation homelessness lack of access to education and health care when we've been living in a world of abundance it's just incredibly poorly distributed and really that's by design obviously so

let's not do that we really have an opportunity I think with with with blockchain to to build a fairer and better system for everyone so let's move on to so we've spent a bit of time spending on a liquidity aspect of a sweet bridge but there are other components to this to this protocol I think it's safe to say that the liquidity part of the protocol is is the perhaps the most important but let's spend a little bit of time on the other components can you describe very briefly sort of the other layers and what role

they play yeah sure so you know I guess that the the the big thing to say about sweet boots as a whole is that sweet bridge itself is not looking to build any product it's it's looking to build protocols and alliances ecosystems for all sorts of things to arise on top the you know the background of most of the founders of sweet bridge is deep deep experience in in supply chains financing settlement you know basically facilitating the process of join amounts

of contracts and invoices for major supply chains and you know something that Scott Nelson was saying that CEO was that he's been doing smart contracts for 10 years but you know without blockchains it was it was really automation of contracts you know digitization of contracts and verification that you know these contract terms are being met and people are being paid and the thing is being settled out so while you know the majority of the focus is is on this liquidity beast it's really because you need that to get to the next bits which

are you know the really the wheelhouse of the principles of the founders of suite bridge which is really these the settlement and supply chain pieces but you need that stable you know base to be able to get to those so really the next layer there is is a settlement yeah which is really well if you have that economic basis what you can have is you can have a series of companies which are basically agreeing to you know to interact with each other in in bridge coin you know that they are

all living in that overlay world economy of a more liquid but stable currency where you can make contracts with each other on that basis so the Alliance the sweeper Alliance is a group of partner companies within this sort of growing ecosystem who are basically looking to dog food and live within this this new paradigm and starting with the liquidity protocol but but building up from there so yeah they'd be the second layer protocol

though they're really the idea of layers implies that you know you have a single linear set of stages he going through it which is also not the case you know sweet Pajar are encouraging others to build on top but you know build your own layers there's no there's no magic answer here the the web of will trade is probably one of the most complex systems there isn't really you're talking about business process automation and it's going to be a very heterogeneous set up so and that really starts to manifest in terms of blockchain technology at that settlement layer in that liquidity as we have it right now is a theory and main

net but when you get up to that settlement layer and you start getting to actual supply chain technologies you know that's where we start working with fabric fabric Composer probably Corder and probably any other other blockchain tech leads to to get plugged in and also non blockchain ones as well you know there will be sass legacy things which are going to have value from connecting into liquidity wall connecting into settlement where settlement is really saying well hey here is a here is a a web of of these contracts which have been agreed who's gonna pay who and when does that happen and how does that

happen you know that that is both a mixture of something that you can have on a person track basis but some of those are perhaps you know outside of that you know if you if you have this this this web of suppliers well who gets paid first if somebody has not paid their suppliers and they have some money coming in well does it go to there or does it go round them you know what well where does that happen but you know that that is a common problem as well in supply chains is that you get dragged down by your partners you know you have a situation

where somebody owes you for something and they haven't paid it yet are you gonna stop supplying them as if you stopped supplying them that might kill them even more and that might mean you never get the money you know so this is a very common problem is is your business partners end up having problems and they drag down you know there there are others with them hmm but that's something again where you model the thing as a network on you know with more you know more free market pieces you can you can probably start you know decoupling things quite significantly you're not necessarily having to do you know hey you're my only supplier for

this and I'm gonna sign up you know three-year exclusive deal with you well no like I'm just gonna get things from wherever whoever can supply them you know you can end up with a lot more fluid kind of network and and really hopefully isolate some of that damage a lot more where okay you're you're going down you know you you haven't paid your suppliers well maybe the money gets routed around you you know maybe the network just routes routes around it right you've got it an Internet round round the damage kind of you know analogy going on in these financial networks as well hopefully isolate the damage more than has been the case traditionally where you have got very very rigid you know painful relationships

cool so um the sweet British project is doing an icy Oh as well right so tell us about the ICO and what is the token that is being offered for sale yeah so the the crown sale that we have ongoing has been running since December it's going through going through different phases different different tranches and what's being sold is is sweet coin so there there are there are two tokens in in the economic model there is bridge coin which is this stable point there really there's multiple Bridge Point Bridge

coin u.s. u.s. dollars bridge point euro so on and the second token is a sweet coin which is a discount token model now a discount token model is really very very interesting and and a little different to a utility token in that the the economics of a discount model are really really aligning incentives in the the value that you have from a discount token is using it you know if you use these discount tokens well you get discounts if you don't use them then you don't you know so ha telling gift cards

is a bit stupid you know you can but really you're not well served to do that so both the point heavy sort of kyc manual kyc processor you have together with that discount toad model discount token models have really made sweet bridge really quite different to an awful lot of the other projects out there in that we are really quite repellent to speculators which is great because that's not what we're looking for you know we're not we're not about itself in Richmond we're about building a better world and

building a better economic model and really the people that we're looking for to buy sweet coin of people who want to use sweet coin who want to you know use use that liquidity model or do their own you know crowdfunding that's another thing that we have is that the is that the platform that we built you know is being offered again as a sort of you know crown tail and a box kind of solution to you know to companies on and in in this wheat bridge alliance or or we want to join that who who see value in

that in that discount token bottle which is really on the basis it's on a it's on of so Scott was telling me it's it the the valuation is on a on a five-year sort of basis that you you know using your discounts over over that term should there should be sort of a wash so yeah really the model is that you know anyone can use the protocols you know at a low interest rate that will depend on the asset class and have exact numbers it's a vary by country as well but then you can apply these tokens to reduce your rates all the way down to zero you know so you can have interest-free lending the other thing there as well is

that we are looking to set up our own Fiat gateways so you could also get you know fee free Fiat exchange if you do want to exit it okay cool so with regards to how you'll be launching this so how will people be able to use this platform at the beginning so what is sort of your go-to-market strategy how will you launch yep so they'd be the initial product which was slated for q1 that was only two weeks left so maybe that isn't happening was well or is that

we'll have a mobile app which is your you know your your your wallet and that you can deposit Bitcoin and ether in that and that you can that you can lend against those that you've been been Bridgepoint that is the that's the initial MVP the the sweet coin has been minted that happened in in January some people who were in the earlier rounds of the sale you know have requested that that be you know sent to their own wallets you know they want to keep on a

ledger or what have you they are both sweet coin and bridge between our EFC 20 compatible tokens so you can do that if you want but the thing is that moving it outside in that way as basically unque why seed it it's you know it's taken it out so you know those those tokens as they are or pretty pretty worthless at secondary state you know we are not looking to go to exchanges we're not looking to list I guess the you know there's a risk that you have a rogue exchange just choosing to do that anyway but those those are on kyc tokens they can't be used for their purpose

you know you can't use the discount token unless you're inside the system so really again that's another repel speculators kind of approach you know you could sell or if those tokens to somebody who who would go through that process again you know who had been KY seed and could show hey I have acquired more tokens can I you know get these blessed back in but you know that's a that's you know again a slow manual process so really the aim is is to build you know a closed ecosystem though that's closed to people

within you know within that Alliance within the customization or not it's not a company silo it's a projects I know a community silo and that really those where you do have bridges to Fiat but that will be done by creation of new legal entities to do that in a you know in a regulatory compliant way so really not looking to have any speculative elements in any of this that would really be a novel approach to to launching a coin I'd say if you manage to pull that off well thank you

so much for coming on the show today Bob who's great to talk about both street bridge and looking forward to seeing how this how this vision gets rolled out I mean cuz it is quite a grand vision oh yeah as our listeners will probably have have understood after after this interview so thank you so much and we look forward to seeing how Street bridge will uh will evolve no worries and I would thoroughly recommend that everyone have a look at that there is a fantastic video of Scott Nelson and been a good shoeing through all of this stuff it's it's an hour and 40 minutes long it's an

absolute epic you know head-to-head meeting of the minds really talking through an awful lot of yeah I watch that I mean I watch part of it earlier because it was quite long but as I said you you guys put out these these worst fight videos out of them that sort of talks I guess which are very interesting where where you going depth into some of all some of these issues with so the economics but also the technical aspects so we'll link to those in the show notes yeah I mean tons of videos tons of blog posts and and yeah lots of depth I mean another thing that really appealed to me in the first place is that some of the

very first public releases from sweet bridge were a series of blog posts on core values and core beliefs you know that really this is a you know a really deeply ethical you know big vision thing and that was really very unique to me great well thanks again and thank you to our listeners for once again to nhien we release new episodes of Everest Center every week you can subscribe to the show on iTunes SoundCloud your favorite podcasts app on iOS or Android and you can also watch the video version of the show on YouTube if you're interested in getting in touch with us you can do so now on our channel which is epicenter doc TV slash skitter where you can speak

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