Bringing Real World Assets On-Chain with KAIO

Transcript

GMGM, welcome to what's going to be another fantastic episode of Devantel. So, if you don't know, Devantel is a 30-minute podcast held every week, allowing founders, hackers, and anyone in between the opportunity to come on the show and showcase what they built. And today, I'm ecstatic to welcome Dr. Pinku Sura, who is the CTO of Kyio. So, if you didn't know, Kyio is a protocol purpose-built for RWAs that enables the distribution of alternative assets through the use of blockchain technology. So, if you stick around for today's episode, you'll get to meet Dr. Srano, learn about Kyio and how they're bringing RWS on chain and how you can get started using it today. All right, let's get into it.

[music] GMGM, welcome to the show, Pinku. I'm ecstatic to have you on today, man. >> Hey, it's great to be on. >> Excellent. Excellent. Uh yeah, so uh we're in store for a great one today, folks. um learning about real world assets on chain with uh Kaio um who are um one of the market leaders in the space uh entertaining some some pretty big names in the [laughter] uh uh finance world. Um but before we kind of get into all that uh great stuff uh Pinku would you just like to give a uh introduction about yourself folks who aren't familiar?

>> Yeah, sure. Yeah. So, uh, as you said, my name is, uh, Pinku Serran, and I'm, uh, currently the CTO at Kaio, but I've only been there for three months. And so, uh, I just want to say that if I get anything wrong, uh, it's my fault. Uh, and, uh, my our marketing person will correct it correct it later. Um, but yeah, uh, you know, uh, uh, yeah. So, you said I was a doctor. I do have a doctorate in computer science. Um, and my background was in, uh, programming languages. uh that was my original work but uh uh over time I've been lucky enough to work on the bleeding edge of all sorts of technology waves that have come uh over my career and uh so I was early in on blockchain um fairly early

on blockchain and uh uh uh but worked on a bunch of other uh cool and different interesting stuff uh in the past. >> Might be a understatement there. Uh I I looked at your uh uh resume and you have quite the tenure. um as a VP at Goldman Sachs. He had a stint with Facebook. He co-founded Ono Finance. No, no small feat. Uh I guess uh could you briefly touch on like some of those experiences and like how they kind of led in led one led into the other and kind of how it led to you um becoming CTO at Kyio.

>> Sure. Sure. So um [clears throat] uh so I worked at uh a company like my introduction to blockchain was at a company called Symbiant and uh they were trying to um they were trying to bring syndicated loans onto a blockchain, right? And syndicated loans is a uh basically a group of banks or other investors who want to uh offer a loan to a company. There's a lead investor. they come up with specialized terms and and so on and so forth. Anyway, this is a very clunky process where they used fax machines and they would send around documents to sign and and all sorts of stuff. And we were trying to bring that uh onchain and find some efficiencies

um by by tokenizing these things, right? Um and uh we ran into a lot of problems uh where the technology was ahead of the legal and regulatory um aspects of these products, right? Um but from a tech from a technical point of view it was a really interesting uh product to work on. So after that I went to Goldman Sachs and it was just more of the same really where um I I uh led a small research group uh looking at uh different ways that we could apply blockchain technology to what Goldman Sachs does. And uh [clears throat] that was an amazing experience because I got to uh wander the halls of uh one of the world's largest banks and ask people

what they do and then try to figure out you know well what would this look like uh tokenized you know and and how do we simplify uh how things worked and and uh in one of my presentations I said that if everything were at Goldman Sachs were tokenized uh it would just be the CEO and I wandering the hall these empty halls uh while blockchains just ran everything autonomously. Um but there again uh the technology um was getting better and better to to um automate these things but uh again the legal and regulatory hurdles were were pretty enormous uh and and that was just uh not going to work. So um after that um

um I the next step in the blockchain saga was uh uh I was a co-founder of Finance and uh so there you know uh the the day we started the goal was uh real world assets. Um and as you can tell that's really the only thing I've ever worked on is real world assets. Um and so with onto finance uh yeah the goal was to try and bring um uh you know more and more products onto the market and by doing it in a startup instead of at at Goldman um we were free of their very uh cautious lawyers uh and so and so that so that allowed to move very very fast to bring products to market and uh and you can see that they

are they're doing uh pretty well now. Um so uh in between uh I worked at Facebook uh where I was working on their AI team and then I was working um at Stanford University where I was doing uh AI work uh on uh using government supercomputers to train uh LLMs uh and and you know AI was hot um and so you know I'm always trying to be on the bleeding edge of whatever is cool at the moment uh and so that's where I got into AI and and a lot of AI training and work with Nvidia research and some other big universities on projects there. Um but um uh I uh I I got back into RWBAS with Kyo and so uh

I've been here as I said I've been here for three months and uh I'm really excited about uh working on um on these products. >> Yeah. Yeah. It's certainly a very hot space now and um yeah, just curious uh what what kind of what kind of brought you back into the RWA world um being on the bleeding edge of AI and researching LLMs which are a hot topic on on on its own. >> Yeah. Yeah. It's uh you know like I said the the technology for for doing a lot of this stuff is getting you know quite mature. uh you know people used to worry that um blockchains couldn't handle the

transaction processing uh required for these real world assets but now many chains have shown that they can go really really fast. There were concerns about security and all these other things but uh the the the the thing that brought me back is I think that the regulatory environment is starting to get a little bit better. You can see that there's movement on stable coins. Uh and once you have stable coins um then I think that there will be movement on um some of these other higher level real world assets. Um and you can see that the banks are um they're very timid uh the banks uh for good reason. But uh JP Morgan for example has a has a big unit that's doing a lot of work in this

area. And uh you have a guy like um Larry Frink from BlackRock who is all in as far as I can tell. He's super excited about tokenizing everything. Uh and so this is uh you know I was out for four years. Uh I'm back in hoping that the regulatory environment has uh is is going to make it uh easier to do this stuff. >> Yeah. Yeah. You hit the nail on the head there. And yeah, I I personally have noticed um RJWA's coming more into the scene. I I like when I first um got into the blockchain space around 2021, I remember there there was some like PC's very high level demos um like people um for example like tokenizing fractional shares of like real estate or whatever.

Um but then it was kind of just like oh this is like a theoretical thing that could happen but there was like lots of red tape yellow tape around it. I guess this time around um late last year and into this year um like you mentioned um that's kind of been laxed and and more and more people are are kind of dipping their toes in RWAs. I guess um from your perspective working in the space so long is there anything that still could be like a hurdle for really letting the floodgates open uh for RWA on chain or do you think it's it's settled enough that um meaningful things can be done?

>> Uh no I think there there's still a long way to go. Um the but you know um uh every time every time the regulatory um environment moves a little bit that gives you space to do something interesting in that in that environment right um but uh there's a long a long way to go. Uh and you know there are problems with how um regulations are always you know centered around some country but blockchains are global right. Uh and so this adds this weird layer of complexity where you say well I have this product but I can only offer it to certain people who have certain characteristics right you're from this country you you um you know are an accredited investor you know you uh

you're not on some on somebody's uh blacklist uh and so on and so forth so um yeah so I would say that there's there's there's a long way to go but there there are some small steps and and we can work in that in that case. >> Yeah. Yeah. It's one one small step at a time uh at least in this space. Um awesome. And I guess um using that as a as a segue um let's get into all things Kaio. Um so in your words I I guess what what's uh what's your elevator pitch of Kaio?

>> Yeah, sure. The um the short version is alternative assets for the masses. Um, but there's a there's a longer version uh which I I think can uh help explain why I joined Kaio. Um, so you know there's there's this there's this very popular uh financial writer from Bloomberg that everybody on Wall Street reads. Uh Matt Lavine is fantastic. Read him immediately. Subscribe to his Bloomberg essays. It's fantastic. Um but anyway um he he has this line where he says that private markets are the new public markets. And the idea here is that the public markets are shrinking and the private markets are so big now that you have a company

like SpaceX that doesn't have to go IPO because they can pull all the money they want um from from private markets, right? But if you're a if you're a regular investor, you have no way to get into those private markets, right? Um, and so the only way to get into those things is to get a private wealth account at a big bank, right? Um, but there the minimum just for them to talk to you is 10 million in assets, investable assets, right? Um, and and that will get you a a cup of coffee really. Um, but if you really want to to get access to the bigger bigger funds, then you you you would need well more than than 20 million or sorry, 10 million.

Um but as an example um so I I I had a private wealth account and um or have and uh they were willing to offer me shares of SpaceX uh two years ago, right? Um and so that was a way that I could get into uh into an investment that nobody else nobody else could or most most people can't, right? There are also, you know, for example, my broker offered me a uh a way to buy into a fund that was uh purchasing uh shares of sports teams all around the world, right? So, football, American football, uh NBA, hockey, whatever, soccer, no, that's regular football. Um um but again this fund

is you can't get into it unless you have a certain you know a certain level of assets. But then the fund came with all kinds of strange restrictions that you had to have you had to have a minimum investment size. Uh you had you could only uh withdraw a certain amount at certain times but only if the fund allows you. Um, so there were all these weird restrictions and things and I think this is a long-winded way to say that when Kaio came knocking, I had just I had just looked at all of these funds that I was interested in, but they were, you know, very complicated. They were uh had so many restrictions. The minimum investments were extremely high. Uh, and this is certainly something that the the

larger um group of people who are maybe between$2 and $10 million uh that they have no access to. And so I think what Kyle's long-term vision is is to allow people in that group uh to be able to access these kinds of funds and um invest in things that only the professionals can invest in and rich people can invest in, right? And that means um lowering the u minimum investment size um and then making it easier to get in and out of these these uh these funds.

And so that's uh that's sort of the long-term goal of what what Kaio is doing. I think that's I think that's a really important step for uh a certain class of investors. >> Uh 100% 100%. And uh it looks like you guys are already working with some some pretty big names like Laser Dig, Laser Digital, Raven Howard, Black Rockck like you mentioned. I guess um um for for folks watching today, like I guess how how does it work? um are these like tokens that each of these um big names are kind of managing and uh under these tokens you have some assets or like I guess how does the um how does the underlying infrastructure kind of work there? Yeah. So the mechanics are um you

know sort of as you would expect is that the fund is really exists in the real world right and uh whenever you p purchase a token then uh the real world assets are held in a custodial account um and and sort of matched onetoone with the token right the the we still um because you know because of the way things work we still have all the complexity of these old funds you know the old fund structures about when you can invest and when you can withdraw and all that. And so we've encoded all of these rules into the smart contracts directly, right? So now if you if you want to if you want to buy uh you can buy, but you you have to um you have to go through our web app, you have to you

know get approved and and so on and so forth and then you'll be able to purchase and you'll be able to invest in the fund. Um and similarly if you want to withdraw you have to go to the fund you have to m you know get a certain date on which you can uh withdraw. Now that's basically replicating what the real world funds you know how they work. The real uh opportunity that we have here is that once you get a token you can plug into the world of DeFi uh on on whatever chain you want. So those tokens can be moved to other chains and if there if you want to get uh loans um where you use that where you stake that as an ass as collateral you can do that um and and any other things that you want to do with in the DeFi space you

can do uh with those tokens. >> Interesting. And um a question from the crowd on on this topic. Uh I guess um Lucas asks is Kaio similar to pre-tock tokens anthropic open API uh open AI etc uh available on some dexes like Jupiter? So I guess um uh to your earlier point of like you being able to buy um SpaceX um a couple years back. Do you have some pre preIPO um assets available to purchase on Kaio?

>> Yeah. So right now Kaio is focused on um alternative asset funds. So uh you know again if you read Matt Lavine you can read a lot about private credit funds and how private credit is kind of uh encroaching on the space of what banks normally do. banks, you know, it used to be if if you were a big company, you wanted a loan, you'd go to JP Morgan, but private credit funds have stepped in there. Um, and they're they're able to offer yields that you can't really get um anywhere else, right? Uh, and so, yeah, to to the to the question that's that's being asked there. Um, yeah, KA was focused on alternative asset funds and not on um these sorts of mirror stocks of of private uh private stocks.

Gotcha. >> Or preipo shares. >> Great question. Thank you, Lucas. And uh great answer. Uh I guess shifting gears a little bit uh and um catering a little bit more to our our developer audience. um in terms of uh available um SDKs or tools APIs um what's available for the developer audience to be able to plug into Kyio and and bring these real world real world assets um to their deps and apps.

>> Yeah. So right now um there aren't really um tools for developers to get involved in this uh because the you know [clears throat] the tokens uh have certain restrictions on them uh as I said because of the regulatory uh space that they exist in. And so uh we are we are trying to open up and and make those tokens available to in in the DeFi space so that if you're building a DeFi product you'll be able to use these tokens uh in there. Now we are opening up APIs where uh uh in the in the near future at two levels. So right now there's an institutional offering and if you're an institution and you want to offer your funds and and and have them

tokenized and participate in this sort of DeFi marketplace um you can use our web app to do that. Um but with the with the APIs that we're going to release um uh dealers of these funds will be able to plug into the APIs and start um integrating the onchain services that we offer into their own internal service uh internal um applications right now. So so that is an SDK that's really targeted towards um funds right uh dealers of those funds. there's going to be another set of APIs for our retail product. So, uh this is mostly a legal

hurdle and not a technical hurdle. But the question is right now if you want to buy one of these funds, you have to be an accredited investor. It is possible however to create an index fund of these of these um alternative assets that we can then allow to be traded um by retail investors without being an accredited investor. Now in that aspect then we are going to offer API so that people can uh mint and redeem these tokens. Um and that is the prim the primary target of that is to allow distribution of these tokens into different um into different uh um different avenue different areas right um so that's

something that if you are a developer working in the working in the um working in the space then you might be able to use those APIs to get access to our retail products uh called cash um which we're going to we're going to have a wait list next week uh so if you're interested you can go to the wait list next week and sign up for it. Uh and then once we release the cash token, um you'll be able to buy those and and and do things with them. Uh but that's but that would be our our our two main avenues uh currently they're working on to allow developer access to our products.

>> Amazing. And uh yeah, I guess a a bit of alpha uh for the folks watching uh today or listening today. Um yeah, definitely keep your eyes peeled for that wheat list if you want to get get into it. Um, and I guess, uh, um, would you say like some of that, um, um, on the retail side, would you say some of that yellow yellow tape, red tape hurdles that we're speaking about earlier, are are some of the things kind of like prolonging that or or make it more difficult to kind of um, make make this accessible to um, the retail side of the the spectrum?

Um well, you know, we have uh lawyers who have uh made done a heroic job of getting this stuff cleared. Um and so yeah, there's a lot of red tape um to to making this work. Um but the offering that we'll have is is going to be uh you know the first version is going to be an index fund that contains you know several of these these products but I think in the future you'll see a number of these retail products that will offer different levels of sort of risk return profile so you can choose uh you know uh what you you can choose the sort of product that you're interested in

>> right yeah for sure and Um, I guess in terms of um the competitive landscape of of of the space, uh, what would you say is Kyio's edge over over the competition? What what's the secret sauce, so to speak? >> Yeah. So um Kyio is um is going to be a protocol that exists onchain that or it is um that is going to be relatively open, right? And I think this is one distinction with some of our competitors where a lot of what they do um the rules that are required in order to control uh

where the tokens go and who's allowed to buy them and trade them and so on and so forth. A lot of those rules are kept uh offchain, right? So if you want to do something then you know you have to trigger this offchain process that says okay uh that goes onchain and says yes this this person is allowed to do this action right by putting a lot of that stuff onchain um then when we participate in DeFi products there isn't this this weird delay about you know whether or not you know how how your DeFi protocol interact with these tokens because the smart contracts know the rules and they will immediately um uh act act on those things. So, I think that the way that the the way that our smart contracts work on these products

will allow for more uh compos uh than some of our competitors. >> Excellent. Excellent. And yeah, I mean, I've taken a look um at the docs and some some of the the product features of Kaio, and it certainly looks like that's going to be the case. Um, and uh, I guess I I know I know you you mentioned you you just joined recently. Um, but being being in the space for as long as you have, um, I guess what is your, um, long-term vision for Kaio, um, between where it is today and perhaps maybe like five years down the line.

>> Well, five years is a long time. >> Let's hope that Kaio is still around in five years. Uh um but you know um in in the next year I think um Kaio already has a pipeline of uh lots of really um interesting interesting uh funds and high quality funds that we want to offer um for institutional traders to be able to deal to be able to use them on on chain but then to package them up for retail investors to get access to them, right? uh through this similar sort of fund structure. Uh and so, you know, I think uh retail customers should keep an eye on Kyio to see uh the the sort of

products that we're going to offer in the next in the next year. Um five years is is tough, right? Because every time the regulatory landscape gives us a little bit more breathing room, it means that we can offer uh a bunch of really interesting products that that um that would appeal to to um not just uh retail investors but can also simplify the process for um institutional investors who are onchain, right? So that they're not encumbered by all these weird rules that I keep talking about. Um, so I think five years from now, I'm hoping that um that that the regulatory u that there's more breathing room there

uh with regulations and and that will allow us to do uh more interesting things. >> Yeah, cross fingers. Yeah, it's it's a really weird really weird sector where it kind of goes back and forth a lot and as as soon as you think there's progress being made, something happens that takes you like two steps back um which is unfortunate. Um but um uh in any in any case, I'm sure things will work themselves out um eventually. Um how long it takes, who knows? Um, >> yeah, it's a >> Well, I I'll just add that um my my my partner wrote a book uh 20 years ago about um the uh about electronic markets and you know, you think about like

NASDAQ and all that, but before that it was all paper trading, right? And um this whole transition from doing paper trading and and people literally taking stacks of stock certificates between banks on Wall Street that that process of converting that into the digital market that everyone takes for granted today um actually took an enormously long time and it depended on some pretty significant regulatory changes to make that work. Um, and and this is all behind the scenes that nobody ever notices because you go to your Robin Hood app and you say, "Buy me 10 Tesla and it just works, right?" But there's all this weird stuff going on in the background that you never know about.

Um, and I think we're going to see the same thing here in um in in uh the sort of tokenization space that uh the technology is going to be well ahead of of where of of where the market's going to be, but it's it's going to take a while for both the the regulators to ease up and for the marketplace to get used to it and and start taking baby steps in that direction. Um and so yeah, it won't be done in five years, but it'll be better in five years.

>> Yeah, I I 100% agree. It's just Yeah, it's just uh we just got to wait got to wait a little bit more. Um and uh as uh as we're coming to time here, um for our aspiring um founders in the audience today, um coming from someone like yourself who's um has quite the tenure and as a former founder himself, uh what would you give as like a key piece of advice um for somebody who's looking to perhaps start their own company today or um get them off that fence of like just starting starting starting their passion project.

>> Uh yeah, it's um it's actually pretty easy. Uh you build something people want and that's about it. Um there's a there's a whole lot of good advice at like for example, if you go to Y Combinator and you look at the the library of of essays and material and videos that they have, um that's pretty good and it's really simple advice. Build something that people want. Um but people don't do that. Uh you can see that in the AI space right now where people say well I have this AI thing. What would be a cool thing to build u but they don't have a they don't have a customer in mind. They don't have somebody who's you know excited about the thing that you're you're building.

Uh and so I think you know if we if we loop that back into into Kaio um you know I think obviously marketing is a big big part of that uh uh to get the word out but I think that this is a product where you have a shrinking public market of investable uh investable things. Um, and most of the the the smart money is going into all of this private markets, um, private assets. You know, there's a long list of acronyms for all of these products. And, um, and and I think that, you know, Kaio is well positioned to build something that people will want once they find out about how markets are really moving in

the future. >> Excellent answer. Couldn't agree more. And uh I guess as we conclude here um what's the best way for people watching listening today to keep up to date with all things Kyle? Um is there a Discord X uh X channel or X account they should be following? >> Yes. Uh all of those things exist somewhere. Uh and so the easiest way to get access to those things is to go to uh our website uh ky kio.xyz XYZ. And over there you'll find links to our Twitter where our uh amazing marketing person uh keeps everybody informed about what's going on. Um at Kyio, uh there's also a Telegram um uh group that's been

set up and you can get access to that from the website also. Um and I think uh the big thing to to keep an eye out for is the the um the weight list for our retail product. And so if you sign up for that, we can let you know uh when things are open and uh and and give you early access or or give you access to the product as soon as we're uh as soon as we uh release that. >> Amazing. Yeah. Amazing. And folks, all that information will be in the description of u the podcast below. So definitely um you'll want to check that out. And uh with that, uh Pinku, just thank you so much for taking the time out of your day to come chat with us today. I really enjoyed our convo and

I'm really glad people um watching today, listening today had an opportunity to learn a bit a little bit more about yourself as well as uh that little deep dive around Kaio as well. >> Yeah, thanks for uh thanks for having me on and it was a it was it was a real pleasure. >> No, thank you so much. All right. All right, folks. Uh, with that I want to wish everybody a very happy Friday, happy weekend wherever you may be and we will catch you back here next week for another great episode of Devon Tell. Till then have a good one folks. Cheers.