Circle CEO Jeremy Allaire Talks USDC, Hyperliquid, and HYPE Bull Thesis

Transcript

You want to know that your digital dollar is liquid, is interoperable, it works everywhere. >> Do you see any sort of overlap in in your plans with USDC across the entire multi-chain ecosystem? >> The hyperlquid community is one of the most dynamic committed communities in in really the history of crypto. How do we become a stakeholder? And you know, we we've begun purchasing hype. >> Welcome back to the room. This is your home to learn from the biggest guests, the brightest minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to the real world.

>> Jeremy Aair, welcome to the show. Welcome to the Rollup TV. Big day for you guys today. Thanks for joining. >> Yeah, I'm I'm super excited to be here, Andy. Love uh love the podcast, love the show, and uh yeah, and it's a great day to be coming on and chatting with you. >> Yeah, man. I appreciate that. So, I'd like to start, I think, uh, with giving you the floor for an opening remarks of sorts, right? Last week, we had the big USDH saga. If you guys haven't seen it on my Twitter, I pinned it. Uh, it should be on there. Did a whole thread and there was so many proposals from the likes of Agora, Paxos, Fracks, and I'm not sure if Circle saw it this way, but it felt like a lot of them were coming for

USDC's lunch in a way. USDC circle your yourself you took time and you built up this article today uh and put that out. So I just like to give you the floor. How how are you feeling? What is the circle view on Hyperlquid? >> Yeah, absolutely. Um well, you know, I I wrote that post just to kind of provide you like some context on sort of how we think about things and and um I think maybe maybe first just you know when we built USDC uh you know we started in 2017, we launched in 2018 the whole idea was you know programmable money would unlock this completely new utility for money in the world. And you know really early on um we focused our energy on partnering

with the protocol developers, the DeFi protocol developers, the builders that were trying to innovate and you know back then those were tiny startups like Uniswap and A and Compound and you know and and and so many so many others and you know I think for us um you know working with teams and projects that are pushing the limits of what can be done on chain has just been foundational to what we do. And so what we've always tried to do is provide a great, safe, trusted, transparent, and most importantly, highly liquid digital dollar that works on chain and works everywhere where people want to have those digital dollars work. And that's sort of been our covenant. And really starting in in 2020, um, you know, as things really started to scale up, um,

we started to see like, okay, there's now new blockchain networks, new ecosystems that were growing. And so we had started with Ethereum and we really saw like okay there's going to be a lot more spaces for this to work and that then you know really has led to over the past you know several years this you know tremendous growth in bringing our infrastructure to these major new platforms and um we've we've done that on like 24 different platforms now I think with hyperlquid it's our our 25th um and you know a lot of people think oh okay this is like okay I now have USDC on here. But I think one of the things I tried to do in the post is sort of explain really what what you're actually getting, right? You're getting um you're

getting our global liquidity infrastructure. You're getting direct pipes from every major financial market center, every major banking system in the world directly into Hyper EVM and and ultimately as as we shared into Hyper Corp. >> And you're getting uh huge amounts of secondary liquidity as well. And and the point I like to make is you know hyperlquid um is one of the most liquid you know platforms uh uh obviously uh on the internet now and um but but ultimately right people who are trading who are investing they're they're they're moving between platforms ecosystems chains venues centralized venues decentralized venues etc. And you want the most um capital efficient way to move your collateral to move your

settlements. And so we've we've achieved that and we've and I I noted like recently like on the biggest centralized exchanges in the world like at the spot and per level like we're basically at par with tether in terms of that that liquidity and that's tens of billions every day and then primary liquidity in the trillions now we've been able to do with USDC and so it's that infrastructure and then it's all the people that kind of like have built on that and plug into that. So we're bringing all of that to the hyperlquid ecosystem and so I think um but you know really like uh it's been incredible to see the growth obviously over the last year and you know several months ago we were like okay this we have to figure

out how to do this but do it in a hyperlquid ecosystem aligned way and so we really started to work with the team and talk about how could we how could we um be a stronger participant in the ecosystem not just like bring the actual you know stablecoin protocols bring USDC bring CCTP like make it all work which is like obviously very very important but like how could we begin to become uh a participant in the ecosystem uh as well and >> I like it I like it >> the ethos is is like there I mean the hyperlquid community is one of the most dynamic committed communities in in really the history of crypto it's really it's really been amazing to watch and so how do we become a stakeholder and you know we we've begun purchasing hype and

I think you know there'll be more we have to say about that over time but you can see we've started to do that um you know we are very you know very much exploring becoming a validator and participating in in a different way uh you know as a validator um and then I think the other is we're launching incentive programs for hip 3 builders we want to see the the hip 3 innovation is is incredible the the number of products and services that are building on top of this core you know breakthrough both at a liquidity level but frankly at a functional level as is incredible. We're already working with a bunch of teams. We'll have more to say about that over time, but we want to invest in teams alongside this and support them in their growth. And our

goal is continue to, you know, provide a great, you know, digital dollar infrastructure for the hyperlquid ecosystem and then invest in the community as a stakeholder, invest in the teams that are growing on this. And so as of today, uh, you know, USDC CCTP v2, uh, which is extremely fast and interoperable, is live on Hyper EVM. Um, you know, this was planned. We talked about it a while ago and when, you know, some of the noise happened a week ago, I sort of said, "Hey, you know, we're we're going to be there." But like, you know, I think, you know, let the dust settle and we're launched, right? So, I think, um, we feel great about it. Um and I you know I I think my my own view is that uh the the the activity that's

going to come out of this ecosystem is is going to continue to just be high velocity really high quality and the structural innovation of a per market protocol and obviously hyperbm itself and the composability that comes with that like it is a it's a structural breakthrough in the way finance works and obviously like all of finance uh you know kind of housing all of finance the the the core the core vision like it is a structural innovation and so it's like a new building block on the internet and a new markets building block on the internet and so I'm you know personally as someone who's been you know interested in sort of this concept of programmable money for 12 years trying to activate that you know being able to

participate in this ecosystem which is pushing the limits of that in really exciting ways is is really awesome. Yeah, I mean I think without a doubt there there needed to be some sort of material response from Circle in this situation which is just a it speaks to the like the level of achievement that Hyperlid has gotten to from really what what's felt like a very core crypto ethos perspective. I mean, there's a ton of things that you can think about, but I think like just this this entire uh lore that they have of how it was created and then that coming into the new administration this year with better regulatory clarity. it really was just

kind of a a situation where Hyperlid was able to amass such a strong staying power and moat now that um there's just a lot to gain from circle having a strong presence there and I'm glad that you mentioned the kind of alignment or just like the deepening of the roots because native USDC on hyper EVM is great native e or native USDC on hyper core will be amazing. >> Yes. um doing, you know, allocating to hyperlquid, becoming a validator, contributing into the the builder code ecosystem. I think a lot of these a lot of these are what the community wants to hear. And one thing that I asked a lot of the um people doing proposals last

week and and that I'd like to ask you is what did the USDH ticker mean? Right? Because it's essentially just a ticker. You know, some could say that you guys missed the train on this. Others may argue is just a ticker. USDC is clearly very very dominant on Hyperlquid. When you were thinking about the USDH ticker, what did that actually mean to you? Um a and how do you how did you kind of reconcile with wanting to go about things this way? >> Yeah, I mean look um you know USDC is one of the most important tickers in uh in the whole world. Uh and you know I think we're consistently you know one of the fourth most liquid and traded digital assets in the world. Um and we've been we've been we've been growing that. I mean if you look at the the growth uh in the last year you know

trailing 12 months USDC has grown about 106%. uh and and the transaction volumes have grown enormously and the liquidity has grown enormously and so and we're scaling in into that and so you know we we have this in incredible globally available infrastructure and digital dollar and that's our product right so um I think we want to continue to to support and build and grow that product and I think for you know for participants in the broader uh you know crypto economy you know they they want um what I like to think of as like crossplatform um digital dollars, right?

Like if I if I'm going to get a music subscription, like I don't want it to just work on like the Samsung phone I have or whatever I have. I want it to work on every device. So I get Spotify and I just know like they're going to do the work to make sure that Spotify works on every new device that comes out or Netflix the same thing. Like I have a Netflix subscription and like every TV, every screen, refrigerator screens, whatever it is, like it's it's like everywhere. Like yes, it is. And actually they have like 300 engineers I'm told uh that all they do is just keep building support for Netflix on devices. And so >> like we think that cross-platform digital dollars are the same. Like you you want to know that your digital dollar is liquid is interoperable. It works everywhere. Whether you're using

base and you're using a payment app or you're using, you know, a like you're using a new uh X42 aentic payment and you've got to like move your digital dollars and make payments or you're, you know, you're you're building um in a completely separate ecosystem. You're you're you're moving uh to use a a large consumer wallet like Binance wallet. Like whatever you're doing, you need to work and you don't want to have to think about that. And and that's that's at an enduser level. that's really important but also like at a trader level right um and and you know liquidity and capital efficiency are paramount like that's the most important thing uh for people and so we bring that we already have that and we bring that and now I think by deepening our investment deepening our

integrations like we're actually we're bringing that benefit to the hyperl community now bridge USDC which has been there to date has been you know really important in fact like you know the the the liquidity and avail availability and the and the rails that USC already had in the world is sort of why it started with that, right? It sort of it helped it helped as like a bootstrapping model for for a market like like Hyperlid as well. And so um I think they're very synergistic. I think um you know kind of globally available digital dollar market infrastructure that just is and that we're just like you know the hyperl comm community should know like we're literally like building out infrastructure in every bank major

banking system in the world and every geography in the world and we're doing all the heavy lifting to make sure that it works you know legally in Japan and Singapore and Hong Kong and UAE and Europe and the UK and all these places so that people who want to come in can do that and have that access and so that's a huge investment that we make and and then you know what we end up with is like there's a public internet utility which is the stablecoin network that we have and anyone can connect to that anyone can use that and that's that's really beneficial and so for us is the ticker right we don't we don't need another ticker like USDC is the ticker and I think the important thing and we we really tried to make this clear is like what's very clear for for

for Hyperlid and for the hyperlquid community is that stakeholder uh participation that alignment uh with the community participation in different ways investing in growth together like that's what's important and that's what we're doing. Then Jeremy I gotta I gotta push back and say okay from the hyperlquid perspective the community sees this you know this 5.5 billion dollars in USDC onchain with an estimated let's call it you know around 200 million in revenue per year from the current interest rates being around four and a half fiveish percent 4.25 25 now you know USD >> coming fast >> coming down fast right which is a whole

another conversation um you know what what do you have to say to the people who have been kind of taken off their feet by this idea of a stable coin which goes back to the assistance fund which goes back to buybacks a buybacks have been very sexy recently hyperlid has really been the only one to pull it off at scale but everybody wants to do it everybody body wants to get it where we're in this kind of new era of thinking of of crypto businesses and onchain businesses. What what would you say to the community who have been uh who who are really excited about this idea of stable coin revenue going to the hyperlid assistance fund uh versus how it is today with USDC?

>> Yeah, I mean look um like we've just started like what I'll call like our our economic participation in in as a stakeholder. And so like as I made clear in our blog post, there's more to come. And like I I just like this is this is what I can say today. And and so like um I think my my view is uh like there is a lot of innovation in the way in which like platforms uh you know you know participate in value, return value etc. Hyperlquid is is leading the way and so there's there's more to come from circle. I would say also um I mean look um you know what we build as a company is this internet utility and it's a

super valuable and useful internet utility and everyone gets a benefit from that internet utility. There's now like this public internet utility for storing and moving dollars at scale that's interoperable and available and legal all around the world and any person can connect to that. any developer can build on that on any network and that's amazing and like we're building that and we want to keep building that and like we also need to make money like part of it is like we you know the crypto community should want Circle to be successful and profitable so we can continue to grow and invest and build amazing infrastructure and products and the like. And so you know we don't look at it as like there's this zero sum game and and the like. It's like I think part of what my post also was trying to do is

say like hey guys like building and scaling this infrastructure is a is a massive effort. It's it's an enormous effort and it's not like we're done. um like we're g we're just gonna like keep keep going and and pushing the boundaries of that and at the same time I think um participate and give back in a sense in a way that is unique and and we we want to we want to you know we want to hear from the community and and look we're going to keep putting you know our money where our mouth is so to speak and I think the community will be able to see like how important and significant of a of a stakeholder is circle and I hope that we're one of the most important infrastructure partners to the entire hyperl liquid ecosystem. I

really think we we can be and will be um and um I mean I think we we already are just in terms of the utility that's there but like I think that go forward as this builds and scales and becomes a platform and lots of people you know spawn other you know things on it like we we want to um we want to innovate in that as well. Introducing extended exclusively on Stark, a nextgen ps trading platform live today with 50 plus trading pairs from crypto to tradi. You get the best experience on chain today. Deposit in the community vault for attractive returns EMV compatible and engage in unified margin spot trading lending and per trading. Yeah, I think the, you know, the notion that aligned

incentives create, you know, shared value, create a, you know, a better future for those involved. You know, I heard that from the Paxos, uh, team last week when they, you know, had originally pushed for 95%, right? And even some of the community was like why why you know why why why but at the end of the day the the if you want a really robust battle tested strong stable coin liquidity provider on hyperlquid it is USDC. Yeah I mean there is no answer to that uh that is otherwise. Um and at the end of the day >> native markets won which makes sense.

There's a lot of talk about whether or not the proposals even needed to happen. um you know and whether or not native markets wasn't was going to win from the beginning anyhow but I think at the end of the day the community wants to have the deepest liquidity and the best possible experience to scale massively and I don't see how we get there without having a >> a big provider come to us and really try because Jimmy what I'm getting at is like you know you said this is the beginning of your economic interaction in in Hyperlid and when the big dog talks sometimes you just listen and I know people will immediately just think, oh, you know, buying Hyperlquid. But when Circle comes in, there's, as you've explained, there's a lot of other things

that can be provided to the ecosystem outside of just, you know, accumulated hype. >> 100%. And and yes, there there many dimensions to that. Uh there's product, there's infrastructure, there's partnerships, there's incentives, there's how we participate from an economic perspective with hype. there's how we participate ultimately evaluating kind of on this validator side. Um and it's like this is this is nasonent. I mean how how how long has this been around right? So, so it's nent and you know we've we've had the benefit of of like working with major platforms as they've grown like Coinbase or Binance or others and and I think we work with many of the biggest platforms in the world not just like cryptonative but like Visa and Mastercard as well like in

the payment space or you know like we're working with the biggest traditional capital markets company ICE uh you know uh on on like how does USDC get used as collateral clearing and settlement for like traditional traditional derivatives and they're working across platforms and each one is unique. Each each relationship we have is unique and I think obviously given the the the way that Hyperlid exists as a community and the importance of stakeholder participation engagement, the way we've approached this is also unique um and uh and hopefully values aligned.

>> Jeremy, I do have to ask about some of the uh different ways you're looking at the circle ecosystem. We, you know, couple years back, Circle was USDC. It was a, you know, deeply integrated with Coinbase, uh, in a variety of different ways. Um, now it's grown out to be, you know, really a massive kind of tech technology service, you know, fintech, if you will, provider across the crypto space, across the world. Um, obviously quite, you know, a lot of dominance here in the US. Recently, you guys have also put out this Arc Chain announcement and have and and we had the CTO of Circle uh Nquil on last week.

>> Great guy, great you know, great explainer. Um and I'm just curious, do you see any any sort of uh you know overlap in in your plans with USDC across the entire multi-chain ecosystem and Hyperlid um with ARC? uh like how do you kind of see USDC with regards to your multi-chain approach and then this kind of native chain arc? >> Yeah, for sure. So, I think like kind of back to the back to the um kind of earlier comment which is like you know we we we want to provide um a consistently available set of protocols and infrastructure that work on all of the best platforms in the world. And so that's like implementing Circle Mint,

which is our our fundamental like financial market infrastructure piece of what we do, implementing our wallet infrastructure, implementing our stablecoin protocols, including USDC, EURC, CCTP, Circle Gateway, which is a big innovation in terms of the UX of of crosschain user experiences. Like those those commitments are there and they're major. And and I think um you know that that's just like fundamental to what we do. I think what um with ARC and I know you had Nikail on. I watch the show. It was really enjoyable. Great job interviewing him. Uh but um uh you know for for us I think we have found um in the stable coin finance space you know very specifically for payments and for

payment applications and for you know regulated financial institutions like banks or capital markets companies um or traditional payments companies that want to go stablecoin native that there are very specific requirements that they have um and and those are slightly different than you know what you see out of other other chains. And so we want to make sure that um for for those companies who are trying to build stablecoin payment native applications that we have a great experience for them um that uh that they can build on and um and so you know that the architecture of ARC uh you know really reflects that um and you know this is this isn't like a zero- sum game like I look at this as

like you know it's it's there's there's a lot of this in in in in the internet space as a whole like you know like Google apps work everywhere, not just on Chrome or you know uh or not just on Android or you know you know flip flip that around right you know Apple TV used to be only in the puck and now Apple TV is like on your Samsung TV like you know all these things and so um interoperability crossplatform reach making those these utilities as useful as possible on as many platforms as possible is really important but we also you know as we build like CPN which is the kind of our our um onchain payment network. Like we we have feature needs that go deep and we're kind of you know

we're we're kind of integrating those down at the blockchain layer so that that you know we can create a a really strong international money movement network that you know that works at scale for traditional um you know intermediaries that are trying to move money around and replace the existing legacy systems that we have for moving money. So that is sort of a different thing and I think one of the things and this is just like a general reflection is that you know I like to say that the the the the internet uh colliding with the global financial system it's like it's the biggest market that the internet has ever collided with. Like the internet collided with communications. Here we are today. We're doing this thing right? You know uh the

internet you know collided uh with with with retail commerce. The internet collided with software distribution. Look at this cool software brow app in a browser. Pretty awesome. I got my start like building platforms for people building software and browsers. But like the internet's collided with these software industry is big. Communications industry is big. Media industry is big. Retail commerce is big. The financial system is huge. It is. >> It's the biggest of them all. Okay. And so the TAM >> is like the biggest of them all. And I actually argue that just like with the internet, like the amount of communications that happens in the world today is like a millionx larger than the amount of communications that happened before you had all these open internet platforms. You know, the the the amount

of information available to the world is like probably a billionx what it was before you you had these internet platforms. And so my view is not only is the global financial system the biggest TAM that the internet has ever collided with but I think as a result of the internet you know becoming the financial system that the financial system and the activity of it is very likely going to like be many many orders of magnitude larger like it's going to drive growth and you know people talk about like where's growth going to come from AI robotics I think it's going to also come from a higher velocity financial system where risk is better managed where there's more transparency, more programmability like this is a huge

unlock in utility. And I guess the ultimate point and and how does this relate to the comment and question that you had is that um like >> just if if it's that big like there's going to be so many amazing platforms that get built. >> Yeah. >> Like can how many how many great web apps and web services and mobile apps are there? There are so many like how many great companies have been built on the internet in all of these fields. How many great companies are there that are that fundamentally like do commerce on the internet from this way or that way or this way or that way? And so my view is like we're all trying to do this together. We're all trying to build this new financial system on the internet together. And we're going to have different virtual machines and stacks

and protocols and we're and we're going to do this. It's this incredibly creative space and I think like we're gonna some we're going to do some of our own stuff and we're going to do stuff together and we're going to just try and drive that and I think we're all committed to this idea of bringing all finance on chain and I think that's huge and so I you know I I we're we we place bets where we think there's going to be great outcomes where we can grow alongside a community or alongside an ecosystem and we're making that bet here obviously uh and it's but was it's with that spirit and that perspective in mind.

>> Yeah, I mean we're going to, you know, I think multiple trillions of total stable coin market cap likely by end of next year, early the following year. Arthur Hayes has a infamous uh hyperlquid 126x from here if we get to a $10 trillion market cap of stable coins by the end of the decade or something. We all know where this is going uh in terms of total total adjustable market and and stable coins have frankly done a massive massive perception boost for our space over the last year and a half. It's truly it's truly changed a lot and I appreciate your kind of blue ocean grow the pie mentality. So I think I just like last thing for you on the hyperlquid side just to close this loop.

>> Sure. No. I mean this is a a subjective question but like would you say your personal conviction in and let me just give some context so we've seen perplexes a lot I mean I've been in the space for eight years you've been in probably longer um you know in even in in 2017 Arthur Hayes created BitMEX then we had the evolution of the D of like >> I ran Paloniacs in 2018 and >> there you go Palonia Exactly and then you know then it it kind of scaled into uh you know they have like the GMXs and the Vertexes and DYDXs and then now you've got Hyperlquid and there was a whole slew of people coming after them.

>> My question to you is from a from just like a personal investor perspective uh you know speaking not financial advice. nothing that you've that you've said or going to say is financial advice. Like what what would be your conviction in hyperlquid knowing that a lot of the perplexes of the past have kind of failed to keep their staying power due to a successor being just better? Um you know what makes Hyperl different? If so, what is your conviction level in this platform being around and let's say you know scaling its revenue, scaling its TAM over the next five years? Yeah, I mean um I I mean I have a couple thoughts on that. I think you know the first is obviously like you know the the the team like solved like fundamental

trade-offs between like performance, safety, liquidity, user experience like like fi finding that and doing that is like really hard and so like kudos like incredible right I think the the you know you know can someone replicate this? is this just you know whatnot like there's going to be competition like we all we all experience it in everything right there's going to be competition when there's giant markets there's competition right so so I think um what I would say though is that you know the concept of you know really taking the innovation and and turning it into itself a composable programmable protocol that you can derive and build

on and take this market structure innovation and make it a building block for any market in the world is really really powerful. It's really really powerful and I think you know it's a platform play and platform plays are about developer flywheels and liquidity flywheels and I think they've got that going right now. It's it's very early in that journey. I mean, hyper EVM is relatively new and the builder community and the builder codes and and the HIP 3 all it's relatively new but it has a lot of promise uh to to to you know to be a driver of of growth on this platform and so I think um you know prior uh you know prior uh you know perex models whether

centralized or decentralized did not have that uh going they they did they did not make that platform play successfully and and so that's really to me a a fundamental difference here and it's again one of the reasons why it's so attractive for circle as well. >> Yeah. I mean I mean I can just look up Phantom um and I'll let you go here but but they I think they just tweeted 10 billion dollars of volume I believe was the stat. Yeah. >> Yeah. 10 billion in I mean it's maybe been six weeks and >> builder codes enable them to basically just do a little bit of backend front end engineering and then basically they they now have a full stack per deck on their app.

>> I mean it's incredible. So like you know you know I like I'm not on the discords like you are but like the number like from my own team that is like the the like the number of uh of of like builder code and hip three projects that are spinning up right now is is pretty significant. So that's a good that's a that's a good early indicator. >> Maybe we'll have to give Brian Armstrong a call and tell him just to you know build some build some builder codes. Why build your own person? you know, like to the whole point of like you kind of build across these ecosystems, you got to do it. So, >> Jeremy Aair, CEO of Circle, co-founder, thank you for your article today to the Hyperlid community. Uh we all enjoyed the don't believe the hype tweet. We knew that that was not going to be the

end of the saga. So, we're glad that that you were able to come out and uh yeah, provide more clarity and really just show a strong significant interest in the community economically, socially, uh you know, from dev tooling all the way to infrastructure. Um it's been a pleasure to have you on. >> Thank you, Andy. Take care. >> All right, Jeremy. Cheers, man. Bye-bye.