The Bull Case For Global Stablecoin Adoption with Jelena Djuric

Transcript

the brands, the companies, and you know, and to be clear, and the financial institutions will be able to issue the stablecoins, or it's going to be just the regulated financial institutions, and nothing in between. Is the big money in issuing these stablecoins? Is that like the big breakthrough like for like the business model here? Not just like financial entities can take advantage of of stablecoins, but brands can. You know, any businesses can, you know, one of the examples I like to give is like Kim Kardashian. She should have her own stablecoin. Welcome back to the Rollup, your home for techno talks and open conversations that shape the modular future. Nothing on today's show is to be construed as financial advice. You can see our full disclosures list at therollup.co/ventures.

Sit back, relax, and enjoy today's episode after a quick word from some of our awesome partners. The intersection of AI and crypto is moving fast, and soon an agent will be managing your on-chain transactions for you. But without guardrails, it's a disaster waiting to happen. New Enclaves agents to your intent with cryptographic proofs and real penalties if they slip. Learn more at magic.newenclaves. All right, y'all know we're in New York City, first podcast at the Rollup studio here. Yes. Thank you so much for having me. Yes. Kind of hard to find, though. Kind of hard to find. The Uber dropped me off in a completely different location, and the Google Maps doesn't properly geo-locate you in the city, I've found.

actually backwards. Mine's reverse. It's I I walk one way, and the and the Google Maps tells me that I'm going the other way. Right, so like the blue dot isn't like pointing in the right direction. Yeah, that also happens to me, so. Noble can fix this. Noble can fix this. Yeah, it's all about you know, just triangulating data. Not that we do that necessarily, but yeah. Well, thanks for coming out, and it was good to see you a couple days ago as well at the Paradigm office, just kind of hanging out. You were working there. I know they do a great job of supporting their founders. Yes. Um so, we had a lot to talk about today. Stablecoins are the hottest thing on in in terms of crypto PMF, I mean, it is the number one currently. I don't know any stablecoins right now, unfortunately. I am all in. We are We

are pumping. So, you may be a little bit disappointed in that, but we got a lot to cover. Before we get into all that, I'd like to just understand your story a bit better. You know, and kind of what you were up to before you got into crypto and and really just kind of yeah, how we got here. So, who is Yelena? Great question. Still trying to figure her out. Uh Aren't we all? Yeah. So, I guess like we can take it back to the kind of early days. I I feel like especially a lot of us have been in crypto for a while had like an origin story of like why they got you know, interested in this in the in this technology in this like alternative you know, call it alternative financial system. For me it goes back to pretty much when I was born born in Toronto.

Grew up in Serbia kind of closely after I was born. And that was the 90s early 90s. So, a lot of things were happening in the Balkans at that time. There were two civil wars one in Bosnia one in Kosovo. A lot of currency inflation a lot of breaking down of you know, societal institutions and structures and trust and I I guess like you know, even though I would have you know, by the time we left Serbia I would have been 5 years old even though I was quite young it made a big impact around you know, just trusting institutions you know, really became you know, eventually obsessed with governance. Right? Why do societies break down? Right? Why why overnight can you know, we go from a system of you

know, peace and you know, relative prosperity to total you know, societal dysfunction. So, I guess you could say that those early days made a big impact on me and then you know, eventually that led me down to Bitcoin and you know, eventually to to kind of what we're currently trying to build with Noble. But yeah, I would say like growing up in like a war-torn society can make a huge impact on your the way you just like view kind of your government, institutions, you know, things like this. So, the your world view is shaped primarily, you know, in the early days by existing in this kind of wartime. And this goes from like economically to socio-politically.

It's even just like culturally, right? With your with your friends, family. Do you Do you think you have a chip on your shoulder because of the like where and how you grew up or what Were you the other underdog growing up? Are you the only child? Kind of What's your Like like What's the stitch there? Yeah, it's a good question. I mean, I have I have two brothers, so I'm one of three. I would say growing up in an immigrant household in general. And I mean, this is the case for many families in the US and Canada, you know, across the world. I think that definitely, you know, can lead lead to a chip on your shoulder. You know, I I never like to you know, play a victim. I never like to say woe is me.

But, you know, if you kind of think about Again, like seeing your community, your family even, like being impacted by these like forces that are much greater than you and having like zero control over the outcome. You know, people still take initiative, people have some sovereignty, right? My parents did flee, you know, they did you know, start over in Canada and you know, have that traditional immigrant experience. But, hearing those stories I think definitely makes an impact. I wouldn't say it's like a chip on my shoulder necessarily, but it is something that Again, like makes you skeptical of the world and again, like those in power. And as I said, whether those are politicians or institutions or banks,

just makes you skeptical. Yeah, I think even more so today as well, right? And so, you You're Canadian, my family's all Canadian. I'm basically half Canadian. You're basically Canadian. Yeah, I'm half Canadian. And we have There's been quite a bit of family chatter recently with regards to the Trump stuff and the relationship between the the US and Canada, and so it's it's like right now it's in our faces more than ever, especially with with social media, just the the the amount of kind of instability, which I which I think has led to cryptos crypto kind of getting to a bigger stage now, and we'll we'll we'll get into that, but we all right, so we got you from your childhood kind of days, then you moved to Canada and got deep into academia.

Maybe this was like your way of of kind of putting yourself into what you you wanted to be in the future, maybe it was your way of of kind of like pushing back. You you decided to go deep into academia and study quite a few subjects. Yeah. about that journey a bit. Yeah, so again like going deep into this interest of mine, which is like governance, right? Like how do we you know, everything from like the local to the global and everything in between. And so that took me to a degree around political economics, international studies, really wide variety of disciplines in the sense that there's a lot of kind

of crossover, so you know, I I did some econ, I did some political studies, I did some you know, languages even, and you know, humanities, philosophy, things like this. And I always wanted an education that was very classically actually liberal in in in a lot of ways, right? Very like critical thinking, a lot of like analytical thought, but also very interdisciplinary. So you know, I've always like been a big reader. Actually I wanted to do law like a lot of people in my position. When you're like a good student and you're like academically involved, I wanted specifically to do international law. I actually interned in The Hague at the United Nations at the International Criminal Tribunal for the former Yugoslavia, got to work on the defense

team actually for uh of their convicted um criminals Really? uh which was really interesting. Um and yeah, that was amazing. Again, I'm I like to be like in reality. I like to think about systems of power. I like to think about again like governance. I like to think about, you know, different like structures, whether those are legal in nature or financial in nature. Uh well, you know, now that's obviously what my interest. So, yeah. Anyways, and then all this time in intellectually stimulating things and then ended up on the magic internet money.

Literally, yes. And And you know, like the governance thing is like it's it's tied together. Yeah, it's absolutely tied together. Like So, everybody I think has a falling in love story with crypto. Mhm. Um for some people that's making money and I don't think that's like the best way to fall in love with crypto. I actually think it's about the uh like philosophy or the actual like, you know, the the underlying technology even. For me, it was um more on the philosophical side of of Bitcoin. So, like yeah, when I first read the white paper, I was like in still in university. That's why I thought I wanted to be a lawyer.

Doing all of these internships, all of these academic pursuits. Um and then I read the white paper and it was like, "Oh my god, this is like the most beautiful, elegant kind of obvious um you know, answer to whether that was like, you know, Occupy Wall Street or just general disillusionment with um you know, again like uh capitalism or even with uh again the the traditional financial system. It just to me answered a lot of questions, like this idea of peer-to-peer global money without financial intermediaries where like anyone can participate um was incredible and then you kind of got down the rabbit hole of like, "Okay, but you know, how does the Bitcoin blockchain like work?" And like what are like yeah,

what is proof of stake and or sorry, uh proof of work um and all of these um kind of different consensus uh you know, designs. And then I mean, that was a rabbit hole into Ethereum and then, of course, like proof of stake and then eventually Cosmos and so, yeah, I mean, Bitcoin is like, I guess like the gateway drug for a lot of people. I hope actually that still remains to be the case cuz I think with like the newer generation, maybe they don't see Bitcoin as like the most impressive thing cuz there's so much other stuff going on in crypto, but for me back then, this was like 2015, uh, it was only Bitcoin and Ethereum at that point. Um, and there's also a Toronto angle to this as well cuz Ethereum was founded in Toronto and there's a lot of local meetups. So, I guess yeah, your

code to your point, like, yeah, how do you go from like wanting to be a lawyer, studying like, you know, international, like, you know, uh, economics and political systems to magic internet internet money might seem like kind of a weird, uh, connection, but it comes down to like systems thinking, governance, how do these systems operate and yeah, things like this. So, you then come into crypto, um, and you identify some sort of problems. Maybe you could just like lay the groundwork for your view of crypto when you entered. So, 2015, you're looking at Bitcoin, you're looking at the space and then eventually you decide to to, you know, build something called Noble, um, right? And so, the thing that I'm trying

to understand here a bit is what what what did you feel that Noble like why Noble right? Like why is this the idea that you wanted to pursue? Yeah, so, I mean, it is a long, um, history between like being a university student, you know, reading the Bitcoin white paper to, um, you know, founding Noble in early 2023, but so, basically, it's it's a few things, right? Um, you know, first, like Bitcoin like as a concept, as a philosophy, you know, that like served obviously as like the foundation for like, you know, why a blockchain's important, right? Um, Bitcoin as the application, the Bitcoin blockchain as like the protocol. Okay, then we go into Ethereum, right? That's where you have in programmability, that's where you have this like very

burgeoning ecosystem of developers and you know, smart contracts and and DeFi and eventually NFTs. Um and then that's kind of when where I like let's say shifted gears to Bitcoin is the most amazing thing in the world to what else can you kind of build um you know, on top of these systems. Um so yeah, eventually I uh found a job in the space like full-time. That was at Dfinity early days 2018. Um you know, that was the or days of like ETH killers. Which like I feel like we've kind of come to full circle, too.

didn't Dfinity launch at like 250 billion or something wild back in the day? Yes. That was a legend I was not Were you there? Not when they launched. That was during COVID. I Okay, that would have been nuts. I had left at that point, but I was there very early days. I was I want to like under 20 employees type of thing. But yeah, they raised a bunch of money. I I would actually say their vision for like blockchains and scalability is actually closest to like what Solana has achieved. Okay. Okay, but back then um there was still a lot of competition around that. Like the ETH killers.

was still a thing, right? It was a thing. Right, right. I remember And yeah, it was really interesting. Um but being at Dfinity, working alongside like amazing like like computer scientists and cryptographers and you know, distributed systems engineers and researchers, my role was uh on actually the community side. Like how do you make these concepts like um you know, accessible and exciting and how do you onboard developers and how do you um you know, again, think of like these protocols are fascinating and and they're performant and there's a lot of money that goes into developing these again, these systems, but what are they for? Like what is the app? So, that's where what I was doing for for a few years.

Um and then eventually found my way to Cosmos and then while I was kind of in the Cosmos ecosystem, I of course started Noble and we can talk about um kind of of what Noble is and why I decided to work on this, but yeah, basically like being in the space for yeah, 7-8 years at this point full-time, you see um you you you just see like what matters and what matters are apps and use cases and I know that sounds so obvious, but uh a lot of people don't focus on that and they don't even build companies around that. They build companies around again, like infra, you know, scaling, but we've solved those things. We didn't not solve them in 2018 to be clear when Infinity was, you know,

you know, when I was working at Infinity. Um but now we have. So, let's build the useful stuff. All right, so we're getting a little spicy here. I'd like to understand your current purview of the Cosmos ecosystem and what's going on. So, there's quite a bit of there's a lot of memes on on Twitter about Cosmos got everything right, but he's just always way too early. And so, you know, a good example is obviously there is native interrupt baked into this application chain Mhm. orientation, IBC with app chains. Ethereum is was, you know, what in like 2020 was like, "Okay, now we're going to scale with with roll-ups." Which is effectively horizontal scaling. Then, you know, now Ethereum's running into the interrupt problem which Cosmos, you know foresaw.

Yes. Um that was obvious. Now, you know, there's further implementations of the technology that it seems like Cosmos has been ahead of, but somehow too early. Yeah. What is the state of Cosmos right now in your view and and uh how how near and dear is Cosmos to your heart? Wow, spicy indeed. Um okay, what is the state of Cosmos right now? So, yes, like there is this like crypto Twitter meme, Cosmos was right all along. Some people say it was too early. Some people will say, "Actually, we have Cosmos at the perfect moment."

Um you know, for me like kind of going back to maybe just like the way my brain works, Cosmos is like effectively like a philosophy or a vision for how to build blockchains. It doesn't prescribe the steps. It doesn't say, "Okay, well, to be a Cosmos project, you have to do step one, step two, step three." It's basically, you know, you have these like, you know, parts of the stack, like, right? Everything from, you know, be content the the consensus engine, which is Tendermint. It's a BFT consensus model that is the gold standard even today for proof-of-stake systems, right?

Then you have like governance baked into that. Then you have the VM, the application layer, right? You have things like the Cosmos SDK, which is like a toolkit for, again, building blockchains. Uh you have IBC, as you mentioned, which is the interop layer. Okay, so, like, I guess the state for me of Cosmos is we have like the stack, okay? We have this like template, but no one is in charge of in a top-down fashion saying, "This is how you build an app in Cosmos." Or this is how you build a chain. And so, you have this like interesting kind of relationship that manifests between like those that are in charge of the Cosmos ecosystem, right? Which is like basically now the Interchain Labs team, which is

an evolution of the Interchain Foundation, which is the Cosmos version of the Ethereum Foundation. Um but then you have all these builders that are, you know, either forking parts of the stack or, you know, aligning with with with with Cosmos, the original Cosmos chain, which is the Atom Atom chain, the Cosmos Hub, or decide just to go their own separate way. And because it's so open source, because there is no one template, um you know, you do have all of these like debates around like value accrual right? I don't know. I don't really care about that anymore.

Maybe that's a spicy take. Um I just think like the stack is here to stay. There are so many teams invested um around the stack. And yes, like, it is important if you are like developing, um you know, the Cosmos Hub, yes, you should have to about value accrual. But if you're not, uh which obviously Noble is its own separate independent sovereign chain, then you know, you have like a separate road map and there are probably points of convergence and points of alignment, but other times there aren't and I think that's like totally fine.

Yeah, it's kind of a similar situation with Ethereum and the L2s. Yes. With regards to Yeah. So that's like another thing that Cosmos foresaw. I would actually argue that is way worse than what we have in Cosmos. So the L2 L1 Ethereum is far worse. Far worse. Far far worse because there is like genuinely just because the like the network topology is like this thing where you have like the Ethereum mainnet and you have like ETH the token which is obviously like such a you know big part of the Ethereum ecosystem and held by you know many many people and then the L2s I think um you know what whether it's a competition around block space or again just like the fee models, I think

it creates actually worse power dynamics than Cosmos because in Cosmos you have like genuine sovereignty with the app the app chains and technically every Cosmos chain is an L1 like Noble. Whereas like in Ethereum it's a little bit more of like a house of cards scenario. That's like the what I picture when I think of like the L2 L1 L3 like dynamics. Maybe that's not the most accurate way to think about it but but yeah, you could I mean sure it's like similar in some sense. Yeah, you know I see it as like the Ethereum dynamic right now is very like it's very vertical as in L1 L2 L3 etc.

Yeah, whereas Cosmos is you guys there's been this like map of zones idea where it's much more of like this kind of like security zone layout and it's more of like social graph looking thing right versus like this like hierarchical type of structure. Correct. Yeah, I mean it's like when you look at like the Twitter like like for example the Twitter network like social graph like there's like nodes, right? similar to Cosmos. accounts, right? And like thought leaders and everything Are you a thought leader? I don't I do not like that term. Are you a thought leader? I'm not a KOL. No, definitely not.

Okay. Yeah. All right, let's talk stablecoins. Yeah, let's talk stablecoins. Let's do it. if you look at the growth of stablecoins on Ethereum, I think in like since 2020, it's it's absolutely up only. Ethereum's price hasn't necessarily reflected that quite yet, but that's just Ethereum. You know, USDC, Tether, name yours, they are just absolutely exploding. Recently Stripe has just announced stablecoin accounts with in Stripe. Yeah. For me and I'd love to understand from you kind of like where my mental model fits within yours. For me like the biggest idea and breakthrough here for stablecoins is the democratization of access to USD worldwide.

Mhm. The the access to the yields that treasuries or holding USD can give you. Payments, so cross-border, fast, cheap with like basically the settlement times of like 1/100 of banks or you know, from 2 days to 2 minutes, right? And then having something to have an on-chain stable dollar access to for your everyday user. Yeah. So that's like the breakthrough here and then you like you take this to the next kind of order of thought and it's like Okay. Those who issue stablecoins also have a massive basically like step function of a business model and of this kind of like one, it grows the USD's dominance, but

two, it it will grow for example if Stripe launches their own stablecoin or you know, Circle has has USDC, they now have this this entire like distribution channel through all their holders. So that's like my current mental model for why it's so impactful. Mhm. did I get right? What did I miss? Um, you know, what is your like bull case for stable coins? Yeah, I mean, that covers a lot of it. Um, let's just also quickly take a look back at what's transpired and I feel like in crypto we're always like go, go, go. We forget like how far we've come. So, 5 years ago, 20 January 2020, the market cap of stable coins was 5 billion. Today it's 240 billion.

Um we many predict in the next 5 years, so up to 2030 or and beyond will be a 1 1.5 2 trillion dollar market. So, yes, I mean, there's this race, right? You see like the banks, um, you know, lobbying obviously legislators here in the US and also, of course, crypto entities as well. There's a race to capture that market. Um, okay. I'll tell you what like what I think is like interesting and like maybe how to like think about like the overall growth of the sector. To me there's like two possible outcomes, um, which makes sense. And the they're as follows. Either you're going to have um, a situation, um, kind of, you know, enforced by regulators where only banks, traditional financial

institutions, regulated issuers will be able to, of course, um, you know, become issuers of these stable coins and they'll, you know, you won't have quite a oligopoly, but you'll have like a very tightly controlled market and you can argue like in that scenario that the banks will be like the winners because they already have the deposits. Like they already like have the customers. Obviously, Circle has a bunch of customers, so does Tether, but I mean, compared to the banking system, like it's, you know, obviously like way, way, way, way, way smaller, relatively speaking. Or, okay, that's like one scenario. Or, you're going to have literally tens of thousands of issuers where you're going to have this like system where, you know, not just like financial entities can take advantage of of stable

coins, but brands can. Um, you know, any businesses can, you know. One of the examples I like to to is like Kim Kardashian. She should have her own stable coin. You should have a Kim coin where, you know, she has her brand, she has her audience, she has her channels, she has her, you know, products that, you know, people, you know, people buy, you know, from her, you know, brand. And, you know, why is the medium of exchange, you know, USD when it could be Kim coin and she could actually program Kim coin in a way where, you know, you could do rewards, right? You could do like certain kind of incentivization. do, um, you know, even, um, you know, I don't know if Kim coin would necessarily want to do this, but

you could have a system, like you could program rules in in in into the transfer of dollars, right? Um, and and also again it like really allows you to tap into that like much more global, kind of, you know, user base and so or customer base in this case. So, it's like, okay, do we believe that only financial institutions and banks are going to control the issuance of these stable coins or is the issuance going to be on the distributor, the brand, the product that actually, you you know, purchase or interact with a stable coin.

Um, so that's kind of the way I think about it. So, and anything in the middle doesn't make sense, right? Like I don't think the regulators are going to be like, okay, well, you know, you're going to have like the banks that can issue stable coins and then maybe like Starbucks and Walmart. It's like, no. Either like the, you know, again, like the brands and the companies and, you know, and to be clear, any financial institutions will be able to issue these stable coins or it's going to be just the regulated financial institutions. Nothing in between. So, so in these two outcomes, it feels like we're almost talking about two separate things here though, like the Kim example or the brand example almost feels like tokenization of a loyalty. It feels like a like almost every brand could have it its own form of currency per se.

But the stable coin would be the currency. But that's going to be like like a US like a USD based like currency effectively? I mean that that that's the idea. That's the idea, right? Because if you're thinking about like the consumer brand uh relationship, obviously people want to feel comfortable. Like they want to uh you know, feel like like their motive like ex- currency of exchange is something familiar to them. And also again, like it's almost like in the situation like the brand becomes like a like a might little bank Yeah exactly. because they can actually tap into the yield uh that's like uh you know, the collateral the yield of the collateral that backs this stablecoin in this case, right?

Okay, so that's what we're getting to. And that's an additional revenue stream. why it's going to be stablecoins, basically. Not just like a coin that has that isn't backed. Correct. Okay. So I mean, it is an extension though of like what we've been talking about in crypto for a long time, which is like yeah, tokenized loyalty rewards, things like this. But it's way more powerful because it actually like taps into like the real um yeah, real like real kind of financial system and the real incentives of uh something like a, you know, proliferating a US dollar stablecoin that's backed by treasury bills.

I'm glad you brought that up. I I met a team in Hong Kong that is doing this at scale already with malls and vendors in Asia. Super cool. And fortunately, our fund was able to just do a small check, and they are they are they are in with some of the biggest names that we you know, I can't I'm not going to say now, but they are in and they have this product already like live and working, and it's scaling big time. And they have you know, they have you know, you go to the store in the mall and you buy with the with their uh specific currency. It's all in the same app. It's very easy. You just load it with your cash, but then you transact with the with that coin. The then you have like this membership balance based on this. So

Yeah. A lot of really interesting things happening there. And and just like also as like like these are like out of the box, like creative applications. like stablecoins in the current sense. This is like a tokenized yeah, yeah. But what I was going to say just very quickly, but like just look at like business like like Walmart. Like like they're This is like one of the best examples that stable coin proponents like to give. Like how much does Walmart give up to credit card fees and interchange fees and like all of like literally billions. And if they like controlled I mean they could to be clear like use a USDC like it doesn't have to be like a Walmart coin necessarily, but just just for on that element like these businesses you know save money you know can reinvest into like useful you know

useful stuff not like just paying you know Visa or or kind of the banks all these fees. So anyways there's just so many applications. beginning I said I don't have any stable coins, but now that I'm thinking about it we definitely have like stable coins in a multi-sig that's just like sitting there not earning any yield. That's unfortunate. Yeah it's just like all right. So all right. So let's talk about stable coin yield then. Let's talk about Noble. So we have So Noble's introducing this idea of this yield bearing stable coin with USDN. Yep. You guys are getting close to 100 million in deposits.

So you guys have a ton of yield being paid out every single block basically every single day. Um how did this come up? What's the kind of value prop here? And yeah what's the what's your kind of what's your core market? Who's who's depositing? Why are they depositing? Yeah. Innovating finance global institutional and on chain. Deep liquidity to drive capital efficiency. Now maximize yields on institutional grade liquid staking with mETH. Unlock trillion dollars of capital via fBTC.

All of this secured by Mantle's treasury of billions in stables and ETH capital pools. This entire ecosystem is coordinated by a vast network of season VCs that are aiming to create the next generation of banking and financial technology. This is Mantle. Tell us through this a bit. So, um the yield-bearing stablecoin space is uh I mean, we're just at the beginning of this of this segment, right? Like call it like a subsegment of like the stablecoin market. I think like we're at like somewhere between 5 and 10 billion, but uh really just starting. Uh so, why did we start Noble Dollar? It's a great question. Uh we started Noble first as a

protocol for issuance. So, we partnered with um you know, Circle and Ondo and and Minereum and others just to pretty much make it easy for these issuers to go direct to uh consumer, direct to end application. So, we did that in the Cosmos ecosystem. That was very successful. As we were thinking a lot about stablecoin kind of uh you know, design and uh you know, the proliferation of stablecoins on chain, again like whether that's in DeFi or in other use cases, uh we started to form a partnership with this team called M0. And they just had a model that really uh spoke to us. Uh and so, Noble Dollar, to be clear, is a uh token um

uh on top of the M0 stack. So, we did not like if fully invent like the this uh kind of Noble Dollar mechanism, which I can describe. We leveraged the M0 model which the way that I like to put it is if like Maker DAO and like Circle kind of like had a baby, this would be like the M0 model in the sense that it's a multi-issuer model. They have this token called M. Approved distributors like Noble can take that M, white label it, and have full control over the underlying yield. That underlying yield are Treasury bills in the same way that USDC and USDT are. But the difference with this yield is it can be passed on to end users, and it could be composed in in really interesting ways. Like we all we all understand, you just said, you have a bunch of stablecoins in a multi-sig

wallet, you're not earning yield. That's the case for No, sad. That's the case for 90% of the market, right? What what like 90% of you know, 240 billion, right? That that's that's just the the reality. from from DeFi summer. So I'm like a little bit more careful nowadays. But what's great though is that things have gotten safer and better. Things have gotten safer, right? As I said, like like Noble Dollar, again, leveraging uh the powerful um kind of design of M Zero. Uh it's it's Treasury bills. So these are Treasury T-bills held in special purpose vehicles, bankruptcy remote, uh in real financial institutions, um you know, uh in in you know, again, in the same way that, you

know, USDC and Tether are collateralized by Treasury bills. So, yeah, USDN um again, we we only started about 2 months ago. So that's when we launched it. Uh we're almost at 100 million of TVL. And the thing that we really want to kind of uh champion is uh this composable yield element. Okay. Um so, you know, it's a dollar stable coin. There are uh there there is a 4.2% yield rate. But what you can do with that 4.2% is uh completely up to the distributor. Okay. So And sorry, when you say distributor, who's the distributor?

The protocol, the the DeFi protocol, yeah. So so you so so basically USDN can then be used in other protocols, and that's where the the composable yield is coming from. Exactly. And that's the next phase of Noble Dollar. So kind of the existing TVL, that's really just within the Noble Chain right now. Uh we're running, you know, kind of a campaign, but really people are going to see like the real power behind USDN once it's uh used in um destination like in other applications. Pendle and stuff like that. Exactly. Morpho vaults, um you know, uh we have a really interesting campaign we're going to um run with the Hyper EVM community kind of as a as a way to get to the uh into into that ecosystem. And basically, like if you just think about

like the economics of like any crypto application that has like a bunch of stablecoin liquidity, right? Like, there's a huge opportunity cost because that protocol can't tap into that uh real yield. Right. Um and so, like, if you're a perp sex, for example, and you have, you know, a billion dollars of you, you know, uh stablecoins on your on your chain or on your on your decks, and um you know, uh you are in control of you know, uh kind of like governance, and you can kind of influence the direction, you're giving up, you know, uh 42 million or whatever, like, per per year.

Yeah. That could be reinvested into, I don't know, a community into a community funding mechanism that could be used by the core team to just like reinvest into the product, that could be used to, you know, various like incentive incentive campaigns. Um so, it's an opportunity cost, right? Um And so, we actually see USDN as this like alternative uh for protocols that you know, have this like kind of, you know, scale or I mean, even those that are like just starting out, right? Like Like, when you're running a business, like, you know, like, every dollar counts. Like, like, you want to be um you know, very thoughtful about that.

So, uh we see Noble Dollar as this like very interesting stablecoin that can create this like flywheel, where, you know, yield gets passed on, the protocol can decide, you know, whether that's a DAO or the core team or even like a validator set, they can decide, okay, this is where we want the yield to go. Uh this is why, and you can program that literally, uh you know, in a in native way on chain. Um and you can again reinvest that that yield revenue into things that make the application better. Mhm. Uh which again is like a very powerful um concept. And it's real yield, Yeah.

right? This isn't like some weird esoteric Right. risky, high leverage stuff. So, the yield comes from T-bills. Yeah. Um the USDN is built on M0's stack, which is audited, battle-tested, and it's not a new concept here. It is a rebasing format here. Um then the goal is basically and and what you're doing is you're going out and going to the the DeFi apps across different ecosystems. Providing them either for their idle assets or for their users to have this this yield-bearing stablecoin that they can effectively, uh you know, either hold, use, put into LP pools, uh collateralize, etc. Um and so the goal is basically to bring this this idea of if you're having if you hold idle stablecoins as a business, as a

user, as as an entity on chain, then you may as well be earning yield on those stablecoins with effectively the same amount of risk. I mean, there's a slightly more risk when it comes to some contracts and things, sure, but effectively you're holding the a the same asset backed by the same the same uh yield-bearing treasuries. Now, Jerome Powell in the last Treasury meeting or Fed meeting was like Tuesday, did not raise or did not cut rates. Uh so, the terminal rate I think is between like 4 to 4.25 or 4.75 or 4.5. Um that's where it's at now.

So, that's where a lot of your yield's coming from is from the higher rates. In a in a proposed world of a lower rates, how does this model kind of stack up and what are you going what is your thoughts on the yield just slowly declining if you have lower rates? And kind of, you know, is that are you preparing for that? Is that what you're expecting to happen? How How are you going to kind of like uh play that out? Yeah, I mean, it's interesting to like speculate on like kind of these macro conditions. Um I think uh for us, like our as as like Noble, right? As like the kind of team driving this like Noble model of of of stablecoin issuances and you know, eventually stablecoin like app

development. Like what we care about is basically like scale. Like there is a bit of a I wouldn't say like race, but there is a bit of like a push to um you know, substantiate that like uh first of all, dollar stablecoins are here to stay. So, even if the yield like There's definitely a race, by the way. Yeah, there's definitely a race. Even if like the yield rate goes down, like the dollars are here to stay, right? And so, what what what do you care about at that point? Uh well, first of all, if they're again like crypto-native, DeFi-native, they're composable, there are like ways to like you know, like even have uh you know, yield on like a non-yield bearing stablecoin, whether that's like in lending markets, or whether that's even potentially like a multi-collateral model, right? Like the thing about Noble

Dollar is it's it's like highly highly like flexible. Like of course, uh you know, we're really relying on the M0 kind of stack, but realistically like every um kind of like user that we have, every application that we have, um we do have like a lot of um obviously uh influence around just like the collateral piece, but right now like we're doing like the like least risky thing ever, which is just like T-bills. So, really what what you care about is distribution, uh and and owning that relationship with the end user, and having that like like tight um um kind of uh like direct connection to the end user. And I feel like for Noble, that's actually mostly what we care about. So, having like a UI, having like a strong brand,

having like useful applications, such that yes, if like the real yield rate goes down, and like the T-bill rate goes down, there are there is like that like kind of existing kind of customer base that you can like you know, continue to you know, expand on in interesting ways. Just poking the bear a bit over here. Yeah, that's good. I It's important. I mean, do you What do you think? Do you think um rates are coming down anytime soon? down, but they're not going to get ba- down like to where they have been. So, and there's there's going to be a massive amount of new customers coming on chain for stable coins.

Yeah. So, like I think it where the question is kind of missing the forest from from the trees. Like, oh, does a 1% cut matter? Like, well, does that affect the billions and billions of dollars that are coming on chain? So, Yeah. So, I think I think that's kind of I mean, I think that's that's what you shared. Now, you also segued into a really good point, which was around the end the ownership of the end users. So, you guys have just recently announced app layer, which is a chain that is meant for basically USDN and the entire Noble stack helps you get your distribution out there. And again, helps you have this kind of home base where you can have this customizable execution environment, EVM based chain built on Celestia as a sovereign roll up. What's your what's your thoughts there? What's what's the

road map to kind of launching that? Why? And this will kind of get into some some of like the business model questions that I have, stuff like that. Yeah. So, when we started Noble, we made sure it was an extremely purpose-built, like minimalistic, secure, dedicated environment for issuance of these stable coins. We didn't want to compromise like anything when it came to that like singular focus. Like, in this very fragmented world of, you know, many sovereign chains all communicating over IBC, how do you get USDC and other stable coins from point A to point B in like the best way possible? Okay. So, we did that. We did a very good job of that. We've gone to over 600 million of TVL. We've got last

year we did about 8 to 9 billion dollars of transaction volume. It's been a success so far. But, what we realized, you know, as like the stable coin kind of market is heating up and there's so much more like interest and enthusiasm and also trust in these like crypto assets, which like let's not forget like trust is like the one thing that we actually should be you know, promoting there's been exactly striving for because there's been just so much you know, bad stuff that have happened. Stable coins are kind of saving grace right now. They're kind of saving our ass.

They're saving yeah. They really are. Yeah, I mean it's it's really interesting just to see like the speculation of crypto being decoupled from stable coin growth. Correct. Stable coin growth is like up only whereas actually the speculative elements are basically down. Not down only but down from previous points in time. So Yeah basically we decided okay, we need to have an environment and this kind of goes back to like my interest in blockchains. Like we have to have an environment that's you know, programmable where we can launch like really interesting kind of user facing applications that you know, take advantage of of the noble dollar, right? As as as

a stable coin that of course we support but also that we can build experiences around the stable coins like like the euro for example. Like there's actually not a lot of liquidity of euro stable coins right now because there just isn't good pricing, there isn't good like deep liquidity pools, there just isn't an experience around like getting like the euro into the hands of you know, people that want the euro um And so this app layer was like this dream that we had where it's like oh my god, there's so many things missing you know, whether that's like euro dollar markets, whether that is like interesting safe yield products with like noble dollar, you know, whether that's like you know, even like better

like lending products. Like let's just have an app layer have an like a dedicated environment where we could experiment with those things. Cool. Um yeah, so a lot of like you know, protocols like like projects they start off with like a general purpose like layer one or like a general purpose like chain that they like they like want everything, right? Like like want like like every app, every use case. Um we literally did the office and we started with like one use case. Perfect. Yeah, one specific use case. It's like kind of kind of, you know, maybe not the most, you know, sexiest thing in the world, but it was really valuable to so many projects, so many partners of ours, which is like this like stablecoin issuance piece.

Yep. Um and then we said, "Okay, uh now we see what's missing. We see what's needed and let's um let's have this like second back Let's have this like alternative place where we can like, you know, deploy a lot of these applications." Yeah. So, I was listening to uh DeFi DeFi Dad's pod with uh Mads from Maven 11 yesterday and he was talking about how they're very bullish about opinionated infra and how the best app builders are now kind of essentially blurring the lines between apps and infra and just building building essentially verticalizing their app into an opinionated infra stack and then having control of that and being able to, uh you know, do the things that you're trying to do with like a very, like one

being opinionated from a technical perspective. So, Celestia EVM, etc. But two being opinionated from like a product and a product market fit and a distribution perspective. Um so, excited to kind of see how that rolls out and I think you're thinking about it in the right way and that is aligned with our thesis around like, "Okay, as long as we get like the interop piece right and as long as we can you guys can nail distribution, having opinionated infra, having your your own stack and then having a specific use case, I think will serve you well." One 1,000%. I mean, and when I like bring up these numbers like, you know, the TVL that we, you know, grew with uh the the Cosmos Layer 1, right? Around the issuance and the transaction volume and all of the like none of this was

like inevitable, to be clear. Like it's because we had to take opinions on like and like we had to make just key decisions around that stack, right? And the fact that we were minimalistic, the fact that we, you know, didn't don't have an EVM. Like we don't have an EVM. It's a Cosmos SDK chain, right? There is no uh there are no like smart contracts on on Noble. Like the fact that we like our fundamental like focus was interop, fungibility. How do you solve for like the fungibility uh issue with like routing and issue. Yeah, and I mean I don't know if you realize this, but in Cosmos there is actually Tether as well. In Cosmos with the Kava chain.

Yes. And they've barely made a dent because they just didn't care about issuance. cared about was like their general kind of purpose like all-encompassing kind of DeFi, um you know, L L1. obvious back then. Like the issuance thing was I mean it was obvious to you, maybe, but I don't think it was obvious to everybody. I think people like see like, "Woah, like Kava, they've been around, right? Like they have like EVM. Okay, they have this partnership with Tether. Like inevitably they're going to do a good job of like, you know, you know, supporting Tether liquidity in Cosmos." And like and like no, right?

Because of like what you just described around like not being opinionated on the Yeah. uh on on the stack. And and again like, yeah. So, that's exactly like uh what Noble is is trying to achieve, right? Um like this kind of verticalization, yeah, between like the infra and then also the app layer. But um you know, we have like obviously some time to get there. Um but we believe that the Celestia model uh for our purposes is the the best model possible. And uh you know, the Celestia kind of again vision, stack, like like around like sovereignty and around all of these things is like also very similar to the Cosmos vision. So, we just feel very like aligned with that entire uh team. And um and so, yeah, that's why we're

deciding to launch this sovereign roll-up um yeah, on on Celestia. Yep, I think the minimalistic vision is also equally shared amongst both teams. So, what's the uh what's the agenda here? How how are you guys looking on the development of the app layer? And uh what's the road to mainnet? And then what is the app layer business model? What is the revenue model? What is that? Yeah. Like Yeah, well maybe we'll have to chat again in like a couple of months or something around like some of those pieces that you just described, but no there's quite a lot there. So okay, we're launching the app layer probably in September. I mean Cool.

These are shifting goal posts Okay. as everybody knows timelines but we're pretty aggressive. So we are looking at September launch for the app layer which is really exciting. The plan really is to proliferate USDN in in that interim period. So we're in May you know, in the next few months. There's a lot of interesting things we're doing just like in parallel, right? Around USDN, right? Like some of the things I described around like the kind of DeFi use cases. You know, those already exist and we we will be partnering with the morphos of the world, pendles of the world, etc. which you know, I'm I'm just excited about because we've been cosmos builders for so long. We can now really you know, expand into that whole, you know, world of

There's a lot going on over there. Yeah yeah that There's a lot of like whales over there. There's a lot of interest. There's a lot of people that Yeah, a lot of like innovation, a lot of like, you know, a lot of yeah, a lot of just interesting things. So yeah, we so then the app layer will be in September um and we're honestly we're still thinking about like the flagship app for the app layer cuz we don't want to run the strategy which again you see other teams do and I really don't think it works anymore where they like build it and they will come. They're like oh like let's just like partner with like let's just like give grants to like all these like these like 20 teams and like hope that like one of them like builds the killer app. I actually think you should

like own like at least the initial go to market like like you know, internally or at least like like be very involved if you do partner with a third party dev team. Yeah. So we're thinking about what that could look like. We are thinking about lending. We are thinking about tokenized RWAs. We are thinking about just like some some improvements around like like the DEX model. So yeah, there's still a lot there to come but it'll be fun. Yeah, exciting. Now, just kind of zooming out out of Noble and out of the app layer into the broad stablecoin landscape.

So, as I was saying, we've seen a ton of adoption from outside the space, TradFi, Stripe, PayPal. PayPal Fidelity and I just think it's going to keep accelerating. I mean, recently, we even saw Mark Zuckerberg on stage like 2 days ago, I think, talking about how Meta wanted a a stablecoin. Again. 3 years after Libra. Yeah. What's weird though is that the genius act a couple days ago just got rejected from the I think the Congress didn't accept the bill or something. And Howard Lutnick, one of the you know, Trump's advisers on the financial side, he came out and said basically that this is a huge mistake that in order to proliferate the US dollar dominance, that we need to be the that we need to

pass this or we we need to get regulatory clarity on stablecoins and be the leader in the digital assets, which is so great to hear from our perspective, but also a little bit weird as to why the genius act wasn't passed. And kind of compounding on that, there's there's these weird regulatory moats with Circle versus Tether. There's like these different like niches for stablecoins. There's just a lot happening. Yeah. My my my general thought here is that this space just grows exponentially into 2025 and 2026. I think Circle has 80 or 90 billion outstanding. Tether is like 150 billion or something like that. I think there's like a couple others that are going to be picking up. So, Yeah.

You said 1.5 trillion, 2 trillion. I'm just curious like where So, you have this dual kind of stablecoin mental model. I'm curious how you are thinking about what the growth is going to look like, whether it be in the regulatory sense for stablecoins, as well as with these other companies. Like where do we go in a broad sense from here for for stablecoins as an industry? Yeah, it's a really really good question. So, yeah, right now the market about 85% of the entire stablecoin market is circling tether. So, yeah, 15% is our other players. Athena actually is within that category. You can argue whether that's a real stable like fundamentally a stablecoin.

You know, there's PayPal USD. You know, there's other there's of course Noble Dollar and there's others. Basically, I think like the demand like like at this point like has to be app driven, right? So, I do like foresee. I don't know exactly when this will be, but I do foresee for example a new entrant right? That will kind of come into the space that will be a crypto native like fintech basically. Like a crypto native global from day one Revolut type of business.

Look at Revolut like Venmo. Like think of your favorite fintech that's like you know dominant. Yeah, so I think like that will be probably like a huge catalyst. Like I don't know where that Yeah. So, like somebody with outside distribution already brings stablecoins to all of their audience. That Yes, exactly. That's like Stripe, but that's that's something different than what you're saying. That's like the other side of the coin of like what I'm saying which is like a a net new player. thing. Yeah, a new a new thing. Yeah, because like if you look at like like Revolut is like one of my favorite examples.

They you know are they exist. They've existed for like 10 10 years or so. Obviously, they're like you know in many markets. They're it's a British company originally based in the UK. But they had to kind of go out and get like approvals in different jurisdictions. That takes a lot of money. You know, that's resource intensive. I imagine again like fintech type product type business, but it's crypto native from day one and it's stablecoin native from day one where you you don't have these costs to adoption uh, you know that you typically think of like on the legal, compliance, regulatory side because stable coins in of themselves like like at their core are, of course, global and peer-to-peer.

Yeah exactly. And you don't need all of these like intermediaries and all of these like uh, kind of approvals that you traditionally need. So, I think like that's one thing that will lead to it, um, you know, kind of the the 5x that we're talking about. Um, but then of course all the also the existing players, right? Although I I I don't know, it's interesting. Maybe it's too early to say, but look at PayPal, right? Yeah. Their hasn't really taken off that well. Yeah, and that's one of the best incumbents you can think of that would take advantage of, um, stable coins. There's about like 3,000, 4,000 active wallets.

I wonder why. Um, you know, I think their go-to-market, um, was less around let's convert our like existing customers of which there are obviously Yeah, it was more around like getting crypto people that are already in there. And all of like the yield farming stuff and a lot of the like, um, incentives there. So, you know, that's interesting. Um, But they're an issuer, right? They're the issuer of PYUSD. Well, they work with, uh, Paxos. Uh, yeah. So so is the big money in in issuing these stable coins? Is that like the big breakthrough like for the business model here?

Well, right now like that is a very profitable business cuz as we were talking about earlier that's, uh, you know, with with high rates Of course. printing money. going to get squeezed. Like there's going to be so many of them as you were saying right? Correct. And so in my opinion, um, and you know, others kind of can have corroborated this, the the money will be, uh, on the UI and whoever owns that relationship. Whoever owns that brand and that relationship. the noble play. That's exactly what we're trying to achieve. Okay. So, so right now the the the issuers are absolutely doing very very well and it's very obvious that other other people will kind of come in and just like chop at the margins until it's a bit more of like a fair game. I think Tether has been dominating basically and Circle basically.

But then you're saying like the next step is like okay, why compete on the issuance game unless you have essentially a massive bank roll or huge edge or something like that. Go and be the place where these people actually day-to-day use it and that's where you think like the next stage of value will come from. Like I feel like we've talked about this before, but I really want to see a global Venmo take off. Like I want to see like Like I don't The fact that we don't have this still actually does blow my mind on some level cuz we are in the ground game and we have seen the improvements to scalability and like fees and I mean I guess like now like we're ready for this. But yeah, I mean our sovereign roll-up will be 100 millisecond block times. It'll be super cheap.

You know, this is like the infra that I To To the earlier point around like verticalizing infra and apps, this is the infra you need to have the global Venmo right? So maybe now is you know, the perfect time. But that that's where I see that market going. So you It's going to be the future crypto native Venmos of the world that really benefit, I think. I'm throwing a curveball here. So kind of aligned with your entrance into the space, I got in like 2017 was reading like books Blockchain Revolution and Truth Machine, these types of books.

Actually just had Alex Tapscott on the podcast who's who's the writer of one of them, which was great. It was a full circle moment there and I remember just getting into being like, okay, like not you know, sovereign money, non-state money, building for a alternative system. And so I put out a tweet the other day it was like hot takes stablecoins are incredibly good for crypto in the short to mid-term, but absolutely terrible in the long term. And I got a lot of heat for it. People were yelling at me for it. Kind of stuff crypto Twitter loves. Yeah, yeah, exactly. Definitely popped off. But I had a chance to explain myself and basically what I came to was that And Kobe put out a tweet also. Actually no, I think it was It was Kobe or either Vance that was like, hey, we need to

like there's a couple things that we need to solve for humanity. One was about AI and the other was like post-fiat money. And so this is kind of like what I'm getting at. Like so stablecoins now, all the benefits that I kind of laid out and that you've explained, they're great. They're bringing so much more attention, capital, they're democratizing access. Great. But I I didn't get into crypto to build USD on chain. Like I got into crypto to, you know, kind of build something that isn't reliant on central bankers, on governments. And I think you can relate to this coming from, you know, your background. And so like my take is that I want to embrace stablecoins for all that they are for the foreseeable future, promote them, be a part of it. But at some point I see something shifting where it's like

there's some post-fiat kind of currency or something, whether it's it can't be Bitcoin cuz it's just not going to happen, but like like I I am just I am in that business and in that mindset for like, you know, maybe 25 years down the line or 50 years down the line. Now you get into this conversation and you get into fiat collapse and you get into doomer conversation circles, you get into Bitcoin or maxicon, like, you know, those types of circles. So I I don't really know, like I haven't really rounded out this thought, but like I just wanted to present that to you because I find that to be like compelling from like a perspective of what are we really building here?

It's it's so relevant. Um people forget that Bitcoin uh Bitcoin's rise to prominence uh was cultural. Uh right? It was post uh 2008. It was post um you know, we you know, Occupy Wall Street. It was, you know, the world the the days of WikiLeaks, the days of, you know, cyberpunks like being all over mainstream media, you know, whether you're Julian Assange or even Edward Snowden on some level. And so the rise and like the adoption of Bitcoin was cultural, actually. I I fundamentally believe that. And so to your point, okay, what is like the post-fiat, like post fiat world look like? I think will have to come from culture. Okay? So we can't

like you know, like there will always be a minority of like you know, a minority that can like eventually lead the zeitgeist, but like unless there's that leap where you do become part of like the zeitgeist or part of like a large enough movement where you know, like in the Bitcoin case where it can really you know, become the dominant in Bitcoin's case like the dominant cryptocurrency. Like you're you're you can't like retrofit culture is like what I'm trying to say.

Yes. So, in this case, okay, what is what are the cultural political, social things that happen where yes, a post-fiat world like manifests or is like predestined in some sense? I mean, okay, I I have like a hot take on this even though obviously we've talked a lot about US dollar stablecoins. Um honestly like potentially like the collapse of the US empire would likely to this. Okay, and I don't think like we are actually anywhere close to that in our lifetime. Like I don't believe I'll ever see that, but you you you see like signs of it.

Like you see like like on a micro level, right? Like there are countries all over the world that are scrambling for stablecoin legislation because they see the Trump administration taking a hard focus at they're leading stablecoin, you know, um they're advocating for for stablecoin regulations. And why are these countries like Korea for example all of a sudden rushing to do that? Well, US dollar dominance is is is continues to kind of be a threat to sovereignty for a lot of these nations. Um I'm not describing a post-fiat world cuz the the these are all fiat currencies, but what I'm trying to describe is that like it has to come from some political social cultural

event that and you know, Bitcoin was like economic, right? With with with with 2008 and and that's going to I think indicate what comes next. So, yeah, actually on that level what I foresee in like the coming, you know, few years, like very soon, is just uh alternatives to USD stablecoins. Like, the euro, the yuan, the yen, etc. where uh you can have um you know, similar kind of economies and applications like grow, uh you know, around these like local fiat currencies Yeah, I also see like very hyper localized currencies like you said Kim coin.

Yeah. Right? Like like extrapolate that to like neighborhoods, certain restaurants, small, etc. So, I think like that like I think the I don't know if globalism was a a factor of the last couple presidencies in the states or like the way that the world has been thinking, but it seems like we're shifting towards more like localism and local localized currencies, localized culture. Yeah. Excited to kind of like see how that plays out and it's a tough one to kind of scratch your head around about like, okay, how does this going to play out? But, um I just I I I was making that that point yesterday with Robbie on the TV show. I was like, man, we're crossing the chasm and ironically, stablecoins are what's bringing us to the mainstream in the in a huge way.

Yeah. But, like it's not my end game and he was he was not happy about it, so. Well, I'll just say one thing, like if you recall in the in the Bitcoin white paper, um payments were discussed. Peer-to-peer payments. It was the thing. It was the application for Bitcoin. Uh and you know, that's interesting. Bitcoin is not used for I mean Certainly not. I've paid for stuff in Bitcoin, but like that's not a common thing that I do, obviously, and that most people do. So, you know, private stablecoins, something I'm very interested in on on to your point around like uh you know, values and kind of principles of like why we got into the space, like making sure there's like robust private kind of privacy-preserving alternatives to like you know, the current um offerings um are important. So,

yeah, it's a it's a good thought exercise. the thanks for the thought experiment. And I appreciate you coming on. Um it's been a great conversation and excited for you to go to Consensus next week and then more to come on on the app layer. Thanks so much for having me. It was a pleasure.