CZ SUING WSJ, Markets Green, LTC Founder Charlie Lee Calls in & Vivek From Etherealize.

Transcript

[music] [music] [music] [music] Thank you. >> [music] >> We'll see you around the timeline.

Feels good to be back. I think The Rollup [music] is one of the most premier media brands in crypto and Andy and Robbie are great experts [music and singing] at everything they talk about and it's my favorite podcast. adding it to my library every day. >> Potentially multi-chain deployments. We are at connect day [music] one here on the test from space. [music] [music] Heat.

[music] [music] Heat. [music] >> [music] [music] [music] >> JP Morgan, Black Rockck, DTCC, Fidelity,

the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. >> He said it. He finally said it. So bullish. >> It is bullish. I'm bullish. We're bullish. [music] >> [music] [music]

>> Heat. Heat. [music] Heat. Heat. [music] Corola [music] is headed to the top. If

we're not already at the top, we're going to the tongue. >> Roll up is my favorite. >> People from all walks of life, all over the world, all over this industry come together for the roll up. [music] [music] [music] >> [music] [music] [music]

>> Zoom out. The institutions aren't coming. They're simply here. It's the golden age of crypto, guys. Get right. Let's go. [music] What is the next? See you on the show. >> Welcome to the Tok live from the Empire State Building. >> Day three. >> Yes, sir. >> We've got a special guest opening the show with us today. The home of the Nest, the creator of the Nest and the tokenization tower, the guy that came up with the idea of the term tokenization tower, Teddy from Plume. Let's give him a round of applause. Let's give him some love, Teddy. Wow, guys. Wow. Thanks for having me on today, man. This is [ __ ]

lit. [laughter] >> Let's go, man. Let's go. >> Bang. >> Let's go, >> man. We got uh obviously you're here. You're part of the uh the inspiration for all of this. The nest is uh a kudos to Plume. Uh I mean, man, what is it what is it like coming in to work every day at the Empire State Building? >> First of all, you know, I want to say thanks for you guys coming in here and bringing some life back to the office. You know, we've been here for the last seven or eight months. There's a few of us in here, but there's nothing better than having your guys' energy in here every day and having different speakers, you know, different uh I guess participants of of the show coming on, but I mean, we're super stoked about the nest. I I think um you know, at least on

the Plume side, we have a bunch of exciting announcements coming out, whether it's on the regulatory side, um on the BD side, on the growth side of things. And so being able to kind of share that news through you guys and work with you guys on a bunch of content and basically work with you guys on a bunch of different strategies in New York as well is going to be an absolute banger. >> Well, we couldn't couldn't have done it without you. >> Yeah, man. I I've been telling you, we are aligned on a thesis, right? This neo finance thesis. It's really just this convergence between digital assets and finance happening at light speed right now. It's happening in New York. It's really clear that New York's become like the capital. It's become the place to be. There's obviously a lot of worldwide global events ongoing right now. We are

blessed to be safe to be here in New York. But talk to us about kind of this convergence from Plume's perspective, right? Like what is this evolution look like from your purview? You're you're speaking to institutions, allocators, asset managers on a day-to-day basis. What do they what does their perspective? What does this mean for the industry? >> Yeah. No, that's a good question. You know, I think from our side, there's a lot of things going on, but I think at the crux of it, everyone's trying to find a way to move into Rabbas to make more money nowadays. You know, in the DeFi space with, you know, the way the markets are trending, yields are pretty compressed. So, right now, this is truly our time to shine. You know, we have a bunch of folks messaging us to get access to our institutional grade assets

like Apollo, Wisdom Tree, um you know, a lot of our partners with, you know, Superstate as well. And the big thing that we're seeing is that these folks, you know, that we're working with, they want distribution. So the supply side wants to meet the the buy side. And what we're seeing right now is a lot of the the capital flight is actually in Asia coming into US institutional grade assets. So I think what we do well um is really lining up a bunch of assets that capital in Asia can kind of invest into and really make this work within DeFi you know alone because you know before we built Nest um you know also I love that this is also called the Nest >> and and the rollup um but before Nest existed this wasn't really possible you

know permissionlessly deploying RWA assets throughout an ecosystem having um you know one of your Nest collateral tokens um used within DeFi to borrow against and swap against and even stake within uh you know RWS in general just wasn't truly a thing before we really built this DeFi ecosystem around RWS as a whole. >> We've uh heard a lot about like institutional looping and and uh you know RWA staking and these sorts of things. Yeah. Um also the idea of highquality assets both speculative and cash instruments with some yield ending up in DeFi vaults and this kind of thing. We've heard a lot about that.

What does that actually look like in practice? It you know like >> like vault season. >> It is vault season. >> It really is. Everyone's talking about this. >> Yeah. And so so you see this you know from from first principles. Is this basically like deposit into a thing like you know an a or a unis swap LP like things that we're accustomed to in the DeFi world. Does it look different when it comes to an institutional scale? How does this look like in practice? Yeah, I mean in practice what it looks like is kind of what you just mentioned, right? You would deposit into an ARA vault, get an LP token out, collateralize it on a lending protocol, borrow more stables against it, and deposit into different art vaults that's, you know, provided on chain. Whether it's like with Nest, for example, there's a vault for Apollo

assets, a vault for Wisdom Tree assets, a vault for Superstate assets as well. But the honest truth is this stuff is still really, really early for our entire industry. I think people are still trying to find ways to crack this on the liquidity side. There's issues with redemptions um and just understanding of RDAs. From my perspective and from what we've been seeing from the plume side of things, it it's still pretty early. It's pretty nent. So, I think what we want to do is actually provide people with the tooling and the educational materials to actually understand what's going on because I think everyone understands how to loop stable coins, right? Everyone understands DeFi, but for some reason when it comes to art, which is pretty funny because it's backed by the largest institutions in the world, people get kind of scared at first, right? They're

like, "Okay, so where's my money going? Is it being bridged offchain? What's actually going on?" But I think as an industry we need to educate folks more on what's actually happening with this flow because it's you know probably the safest flow there is in crypto right now and art have really taken the spotlight over the last few months and this is you know the main main uh subject and point of you know conversation for everyone around the world. Yeah, man. I mean, the one thing that is super compelling and interesting that I've seen from both you and your co-founder Chris is this idea of don't let the institutional funds dump on you.

>> Yeah, exactly. You said that in Hong Kong on stage and everyone's like, "Oh, [laughter] >> don't don't let them dump their RWAs on you." So, >> for those watching who are interested in RWA looping, doing these strategies on chain, what does that even mean? Like, like we're seeing cracks in private credit. We're seeing this kind of shift in the way that institutions are allocating their capital. What does it mean to not let institutions dump on you with their >> RWA? Have the idea that these are high quality assets? So, like wouldn't we want these dumped on us if if they're high quality? But that that's not necessarily the case.

>> Yeah. Exactly. So, one thing we do well is actually providing the disclosures and the information for people to actually try to understand when they're investing into these assets. What I meant on stage at consensus when I said the institutions are here to dump on retail is more so in the sense that you know there's a lot of different trady products being introduced to the crypto markets right now and it's not super clear to folks on you know how these products actually work you know private credit treasuries CLOS's all these products become pretty complex under the hood and so from what we're seeing and you know Andy you mentioned this whole thing with private credit yes there is for certain products that we're seeing for example example, there could be a headline number uh you know, like this

product could offer like five or 7% APY, but under the hood, the nav of the product could be moving pretty aggressively given what's going on in the in the market right now, whether it's macro, whether it's related to tech or AI. So, when I said that on stage in Hong Kong, what I really meant was, you know, people really need to be aware of what they're investing in. And that's kind of where we kind of help bridge the gap because we're providing the tools needed so that when someone invests into a specific institutional fund, they're getting all of their principal plus interest back. And if they're not, then they actually understand what's going on. But I think the institutions are coming in, right, and really just offering these suite of products to people and not saying much in the beginning. So like we're kind of that

middle layer to help people really strike this balance. So today today JP Morgan marked down loan portfolios of PVT credit groups. There were specific private credit loans being used as collateral. More specifically, they're actually marking down software loans. The SAS apocalypse is ongoing. Um people are saying that this is the early kind of signs of a weakening economy of a of cracks in the private credit structure. How does this affect onchain artways? What's your take on this? what's happening in the private credit market right now.

>> That's a good point. I mean, I think what happened with Blue Owl with, you know, Black Rockck recently, too. There's been a lot of attention on private credit. I think that this kind of goes back to what I was saying with, you know, with institutions coming into the space. Um, private credit as a whole, I think it's, you know, it's been a great product over the last few decades, but now people are starting to see that without the right market conditions and cracks in the credit space, um, there are issues sometimes when you want to redeem and get your money out, right? And so, you know, these gating factors, um, these different, um, you know, limits on how much money basically you can take out of different funds, um, you know, it's not super clear to folks, right? And given that AI is having its craze right now in

the markets whether it's like positive or negative um it's creating a lot of rippling effects and you know a lot of P funds are pretty exposed to tech in general um and so there is like a lot of I guess downward implications there but um what we're seeing at least on chain at Plume is you know there there still is interest I think on private credit um we're still educating folks on what makes sense and what doesn't but it's definitely you know I I feel like you know even though it's bad news for the private credit space as a whole. At least it's bringing light to the asset class and people are actually understanding like, okay, like you know, this is something that could be good in this scenario or bad in this scenario, but at least I'm more aware of it now.

And like I'm sure no one really understood or even knew of the name like Blue Owl before any of this happened, right? >> Well, I mean, this news just hit the wire um after JP Morgan had a ton of layoffs as well. >> They announced that. I mean, we've seen Prime Video announce layoffs, a lot of kind of AI related >> layoffs. So, we'll see where this ends up. Teddy, just kind of closing thoughts here on the Nest, what you want to see from the roll up from the industry in this evolution. Um, you know, ju just talk to us about what this is to you. >> Yeah, of course. I mean, I think, you know, Andy, you and Robbie, you guys have really set the tone over the last few months on on crypto Twitter and I love that we're building this, you know,

more Traify type media outlet for folks to really get information to what's going on in our debates. I think education right now in this space is super important and you guys are probably you know the best at pushing out content you know uh naming the neo finance term and building out this entire segment it's um it's a lot and you know I see you guys grinding every day in the office with me as well so we're super excited to be pushing this out with you guys but yes I think you know the nest as a whole will be a great place for us to share a lot of updates from the plume side and we're working with a bunch of partners so we can get our partners in here you guys have a bunch of partners So, it'll be the best place right now for anyone to get

information on anything tokenization related. So, I'm super stoked. Chris is super stoked. Our entire team is super stoked about this. So, thanks for having me on the show today. >> Absolutely. >> Let's go, man. Guys, Teddy Porna, the co-founder of Plume. Guys, we're going to be right back and we're going to get the show started today. Thanks, Teddy. >> Thanks, guys. Appreciate it. [music] >> [music] [music] [music]

[music] >> Heat. Heat. [music] [music] Heat. Heat. [music] [music] [music]

Heat. Heat. [music] [music] [music] [music] >> [music] [music] [music]

[music] [music] >> Hey. [music] [music] Heat. Heat. [music] [music]

>> [music] [music] [music] [music] [music]

>> Heat. Heat. [music] [music] [music] Heat. [music] [music] [music] Heat.

[music] >> [music] [music] [music] [music] >> All righty, guys. We're back. Um Teddy with came in with the air horn with the with the firing. Absolutely. Guys, like

it's [ __ ] lit. >> RWA. >> Teddy's a legend. Look, man. I think uh there's a a lot that is >> going to have to be done in order to like actually make these two worlds connect. Yeah. >> And Teddy's Teddy's one one guy that's actually doing a great job. Eric yesterday was also doing a great job. Um, I mean, Canton's doing incredible things. Plume is doing great things. Yep. These guys are building the connections between these two worlds. That is is how these two worlds are going going to collide. Uh, otherwise, it's just a free-for-all, and we've uh lived in that reality for too long. All right, guys. Today's topics, we got the next day three markets and weather. It's green day today. It's not as warm. The boys aren't sweating so bad. Getting

some AC up in this room. Timeline reactions and news. Plume co-founder join the show. Litecoin creator joins the show. And then Vvec from Etherealiz joins the show. Guys, this is powered by Treasure, one of the best hardware wallets on the market. Guys, if you guys aren't using a Treasure to secure your self-custody crypto assets, what are you doing? Um, and yeah, looking forward to today's show. Before we get into the markets and weather, we're going to tell you about FRA. FRA is the leading stable coin with the future of digital money, open, stable, borderless, fxusd. Check them out at fra.com, guys. it. Like I said, it's a beautiful day today, isn't it, Rob? It's it's 68.

I mean, this is not March weather in New York Rob. >> Beautiful. >> I mean, come on. I got a perfect view of the of the One World Trade Statue of Liberties looking up today. Yeah. I mean, we had some uh some great meetings with some of our New York City friends come in yesterday. Uh you know, from around the city. Everyone's got offices here. Uh I saw you sent an article in one of our groups about uh New York City being the center of this industry now. >> Certainly is. Now, I think it's just indicative that New York has been the center of finance. It's always been the center of finance and now this industry is the next evolution of finance. So, it's no surprise that uh we have the center of this industry here in New York City.

>> Yep. >> And shout out to Relay powered by Relay tokenization tower weather. 68 degrees, sunny, a little bit of wind. Relay is powering those crosschain swaps. No matter what the environment is out there today guys >> not too much wind out there. The wind is coming from this fan we have in the corner. [laughter] >> All right, guys. That's the weather for today. Um, looking at the markets, for some reason, we got red on the screen. I was seeing more green. If you're holding Hyperlid, >> we don't have Hyperlid on this. >> You're green today. I think we're up about 7 8% on Hyperlid today. Again, guys, in our first episode, the regime shift, we talked about per stable coins, tokenization, vaults. Um, the big winners here. I put in my journal and Telegram today. I just wrote a quick uh

text. Hype and Sky both absolutely leading the market in the Neoi index. Morpho Centrafuge had a big run on a on a Korea run. Bitcoin's down a bit, but we're above 70. So, I think it's a good day in uh in cryptoland. Uh chain link had a nice bounce near um so yeah, man. >> And remember the regime shift uh is also a progression, right? And so on this timeline, we have the tokenization of these high quality assets happening right now. Y >> Teddy from Plume just came in. he was talking about exactly this >> uh soon enough these things will be I think uh we're going to end up with non-speculative assets treasuries repo markets these sorts of things eclipsing the amount of speculative assets on chain very very soon within a matter of

a couple years those are going to be the primary assets in DeFi then we're going to have those those DeFi products structured uh into vaults and from there there's there's uh quite a bit more that that can come as a result of managing those assets. Yeah, we we had um Prennav from Van on the pod last year who mentioned that he thinks this next kind of cycle, if you will, is going to be led by onchain IPOs. And then earlier this year, we had Santiago on the show and he talked to us about how he thinks like one of his big predictions was that this year some of some of the largest tokens or into next year are going to be from these external brands, right? So I mean the closest thing that I can come up with is only fans

or a >> interesting example there. >> If Stripe decided to do a a token right as part of their onchain IPO or tokenized version of their equity it's really what you're saying and it's we see figures HELOC is number 10 or 12 in the total market cap expect to see more of this. Uh but on the show we're still kind of focused on the investable assets in in the digital asset space. >> Um and those will kind of be a part of that. >> But >> well, Figure is a public company, but they are also looking at launching their tokenized form of equity. Uh so we're going to see that much much uh more over the coming months. Uh and we're going to start to see what it means for a coin and a token to be paired with an equity.

like we're starting to see the regulatory regime as a part of the shift. We're going to be in DC next week talking to a lot of these politicians and these regulators uh and they are coming with their bear spray. If you think that uh bears are going to retain uh solvent uh after clarity gets enacted after some of the things that we're hearing uh if you're a bear watch out for the bears. >> Hyperlid bears are getting absolutely mugged. Let me get an air horn over there. A hyper liquid bears are getting mowged.

>> Absolutely getting mugged. >> The clarity act is literally bear spray for our industry. >> Hey, just wait till we get our boy on the on the cam. Little intern shot. It's coming, guys. Stay tuned. He's mogging on the culture. He's telling us about intern or uh memecoin run runners. We don't I'm not really on deck screener much anymore, but he is. We're going to get him on the show. Guys, we're going to move on. Shout out to Zama powering our digital assets, markets, prices. Before we get to the news today, let me tell you a bit about Near. >> I was hoping that you would tell us a bit more about Near. >> Near.AI, Ironclaw, the Open Claw alternative.

>> Yes. Yes. Uh Ironclaw, >> the blockchain for AI, the blockchain before there was blockchains, AI first company into blockchain, built out an entire L1 as almost a side quest. Uh agents need a place to to conduct commerce. >> Yes, sir. And Ilia being the co-creator of Transformers. Shout out to Near. All right, guys. A lot has happened in the news for the last uh 24 hours. We're we're going to do some education here and then we're we're going to get into the news. Binance is suing uh Wall Street Journal. Um there's been other kind of like private credit cracks that we talked about with Teddy. But first, let's talk about what's on the screen here with Four Pillars on the tokenization side. First of all, shout out to Four Pillars. You guys are doing

great work. We love covering your content. Uh we really thoroughly enjoy it. You guys are doing great research. a lot of awesome coverage in Korea. Would love to have you guys on the show do an event here in the nest. So let's talk about tokenized stocks framework global case studies. >> I mean tokenized stocks and equities are an example of the speculative high quality assets but we do believe that US equities are one of the most high quality asset classes in the world along with the rest of the global stock market. Um this is the speculative category uh after the non-speculative stable coins, tokenized treasuries and repos. Uh we had Eric on here yesterday talking about payroll. Uh examples of non-speculative, but tokenized stocks are something that is getting increasingly more popular. Uh you and I

were having dinner two nights ago. Uh we walked by the New York Stock Exchange. Yes, sir. We did. >> And literally, it's a very impressive building. It takes up a lot of space in uh the financial district of Manhattan. And they decided to put it on a blockchain. Rob's Rob Ces says that the uh the new L1 trade is the NYC is going to be launching in L1 getting retail zero exposure to it. Sounds like sounds like a lot of these new corpor chains as well. Um so guys 2016 here from four pillars tokenized stocks are emerging as the next major RWA category after stable coins and tokenized treasuries. That's, you know, somewhat obvious, but why, right? Last year, we got a lot of uh

regulatory clarity. We've seen Figure take a leap here, but what I think is very important is that we actually get this line in the sand with clarity act done. Uh there's rising institutional crypto adoption, deeper tready interest in onchain finance. And look, global equities are $140 trillion. We talked about this with Eric yesterday, right Rob? I mean, we saw if we can get a little bit of bips of the total market one by one by one, the the the TAM is massive. So, >> look, I I talked to this uh I talked about this with Joe Luben uh on our fireside in Denver. Uh he is working directly with the DTCC talking about how they can potentially tokenize all of the physical stock certificates that are currently in paper in a vault underground with the DTCC. If you aren't

aware, the DTCC does exactly this. they settle on the order of quadrillions in volume, right? And so, uh, their market capitalization does is not in the quadrillions. There's no quadrillion dollar companies, but they take a few bips on all of that settlement volume. And so, think about what the world looks like if Joe Luben is talking about tokenizing those physical stock certificates. They're on the order of quadrillions. Where is he going to tokenize it? It's going to be Ethereum. >> It's gonna be Ethereum. And we're going to talk to VBEC about that today. That is the one note that Ethereum has won.

even all this ETH kind of bearishness. Uh if you're trying to build a business around stable coins around RWAS, uh you're probably going to start with Ethereum and EVM. Obviously, Plume has a blockchain, Plasma, Tempo, Arc are coming out, etc., etc., but this is kind of like the home for the developer sandbox and more. A bit more on on the legislative and regulatory action here. The core problem with traditional stock markets, right? They're slow, costly, intermediate, heavy. They have T+1, T+2 settlements, right? There's limited hours, indirect ownership. As we talked about in the first episode, Hyperlid is going to bring 24/7 tokenized commodity trading to the masses one way or another. Like, it's going to keep hitting Bloomberg headlines. This is

happening, guys. Um, and I was I was thinking yesterday actually, you know, price discovery is an important commodity. Uh, price discovery is happening on Hyperlid. uh we're going to see more and more venues compete for 247 trading because they're not going to be happy about Hyperlid owning this share of the market. I like to think about the rollup as almost like the information price discovery where it happens. Yeah. >> Uh and so we are I I think this is uh first move your advantage to Hyperliquid. We're going to see a lot more companies take flight. >> I agree. All right guys, let's scroll down a bit because I think this is an important educational moment for tokenization at large, right? Like right now you hear a lot of tokenization conversation and there's really four main models of tokenization that I think are important to understand. So if we

keep going down you'll see kind of like how these models look. So right we're scrolling through a lot of the kind of stable coins, US treasuries. We just covered a lot of this >> and then we you know we start with the non-speculative assets because these are the foundation of cash. >> Correct. Correct. >> Then we move into the speculative. >> So you know we talked about how the stock market works. We talked about kind of what that looks like, but I think the the key thing in this um article is the four main models of tokenization, guys. So, let's talk through them. All right, we've got direct tokenization. Direct tokenization tokenizes the stock itself and give gives the the users full rights, right? So this means that you have the full claim on cash flows

whatever the governance rights are. You have uh the fiduciary duty from the company to effectively enrich their shareholders to provide shareholder value. Right? So that's the first model. >> I want to be clear. We're saying this is the first model, but this is the most difficult model to get to because it takes untangling and reshaping the entire cap table of the company. So, we're going to uh kind of go backwards here in terms of how much uh how much fiduciary rights the end shareholder has. But obviously, direct tokenization is sort of the the end state, the end game of tokenization as these things get fully integrated.

>> If we get the behind the scenes shot, we can see the four types of models here on the on the big screen. And basically what what we have is a direct tokenization, entitlement tokenization, indirect tokenization, and perpetual futures. And so we're going to talk about each of those four models. Um I talked about the direct one, Rob. You said how hard it is to actually get that done. >> Yeah. >> Entitlement tokenization I think is is closer to where we currently are. >> So this tokenized rights within an existing market infrastructure, >> right? And so basically we're actually able to have the tokenization of the of the rights of owning a specific equity

within that existing market infrastructure. Right? So this means that basically you have these rights but there it it's kind of limited on the on the location of where these assets are held or how they can be kind of like utilized. But again, you still get more rights than the than the kind of current form that we're seeing, which is the indirect tokenization. So this just gives users economic exposure, but not true stock ownership. So a lot of what you guys are seeing onchain right now is this and this is really important to understand because when you buy ao tokenized equity or an X stock uh you are buying the economic exposure or um basically the

the the uh the delta or the beta of the asset right but you are not getting any of the stock ownership and that is a lot of what the common uh uh tokenization platforms are doing today, >> right? Because it's easy, right? And so I uh you know, the the the proposition here is that >> [snorts] >> uh onchain users want exposure to highquality assets. Yeah. The quickest path to market is to give them exposure to something that is not direct tokenized. And so they're giving uh users indirect tokenization because that will facilitate a quicker path to market. Uh we're seeing and dinari and backed and Robin Hood offer these sorts of assets. Uh and then ultimately the

goal is that these are a stepping stone to more direct tokenization. But because it's so difficult to unwire and rewire all of the cap tables of public companies, that is something that's going to take a lot of time. It's going to take some regulatory clarity as well. So we're going to see that play out over time. Uh obviously secure size and superstate are shooting for that endgame direct tokenization. Then we have uh players like dinari ando that are moving quicker to market. So, they're going to have a first mover advantage, and we're going to see how this this shakes out over time. I do want to be clear about something and how this current stock market works, which is that most of the uh stock certificates when you're just buying on a brokerage like Schwab or

Interactive Brokers or anything like this, you don't actually own the stock. That's the purpose of the DTCC. So even in the current, you know, architecture of the stock market, it still resembles more the indirect or the entitlement tokenization path. It's just happening in a more traditional format. You don't get shipped the physical stock certificate anymore. That's what represents the actual stock in the company, right? If you own that, you would directly own like the direct tokenization. You'd own the asset physically in your own hands. But instead, we have these brokers. they custody the assets and then they pass exposure along to the buyers. So it is still entitlement or indirect uh purchasing of equities even in the current landscape even before we talk

about tokenizing anything. >> Yeah. I mean then the last one here Rob is per obviously >> right and so you raised a funny point about kind of like operating within a brokerage. >> Yeah. you don't actually own the stock in the same way that you know back in the day you would get the stock certificate on the phone in you know in the New York Stock Exchange literally you'd go there you know do the call do the swap now >> you have you're trading with the pieces of paper in the air buy you're on the phone with one hand you got the piece of paper in the other hand >> now we're on pers now we've like speedrun that all the way into crypto with Arthur Hayes's invention per this just tracks price you literally own nothing it's it's most akin into a traditional future in the stock market.

And so, look guys, I mean, just to close this loop here, wanted to spend some time educating on this because I think it's something that again is not uh really covered enough is right now we are operating within a lens of entitlement tokenization and indirect tokenization as well as perpetual futures. As you guys see on on the screen, Superstates and Securitize are pushing f uh very hard on direct tokenization and we think that the best structural fit as well is direct tokenization. So we agree with four pillars here in time. I think we've got a lot of prerequisites to get there.

Companies like dinari ando are still doing good work in bringing these assets to the the people that want to get exposure to the upside of these assets like we for so long have had well obviously And obviously per as well and Hyperliquid's doing a great job of this. We've just had this era of lowquality assets that were the only things that we could get exposure to on chain. And so you do have memecoin runners that people, you know, get into for, you know, gambling purposes. And then >> back to DeFi summer, boys. >> And so we're we're seeing the land the asset landscape on chain. We're seeing it mature in real time.

>> Yeah. So guys, that's our tokenization education segment of the day powered by the rollup. See you guys uh see you guys later. All right guys, let's get to the next one. Um bit of an oracle incident if I recall correctly. Um so there was a misconfiguration of a cappo oracle for wrapst and a staked ETH pair. So an LP which caused an artificially low price cap and triggered unintended liquidation. So on a there is this E mode which basically if you have it turned on when your collateral and your debt assets are effectively the same type of asset right so stable coins like if you're depositing USDT borrowing USD

uh C >> in this case it was it was you know uh supplying some ETH and it was un it was borrowing some wrapped ETH staked wrapped >> ETH so they should theoretically have the same price or at least those assets should track each other in the same way and So what what a allows you to do is actually to borrow um I think about like a 95% or 99% LTV. >> Exactly. Much higher LTV requirements when you're in E mode because these assets track one another. >> And so on March 10th, there was 345 ETH in losses. However, no bad debt was created. And basically there was a smart contract that used inconsistent constraints. uh a a old 2024 snapshot ratio with a recent timestamp reference

pushed the cap below real market rates. Yeah. Um basically it was limited to 3% growth over 3 days >> and faulty. >> Right. So the a capo is a correlated asset price oracle. It aims to prevent a well-known oracle exploit involving an artificially inflated exchange rate. Obviously because these things are in E- mode or they're supposed to be in E- mode, they would track each other more closely. Uh the reason no bad debt was created is because uh there was overaggressive liquidations. Uh the creation of bad day bad debt is a result of underaggressive liquidations. And so this made the protocol safe, but obviously this was not the intended result here. Uh and so Chaos Labs and

we've had Omar on several times. Uh Chaos Labs is uh working closely with A. They do a lot of the risk management here. Uh and so they are working to uh resolve uh this 345 ETH loss. >> Yeah. All affected users will be fully reimbursed and about 141 ETH has already been recovered. Look guys, I mean this is this is still the state of affairs in DeFi. are still very excited about the uh promise of DeFi and about what it provides. Uh but frankly, there's still these intricate technical uh things that happen, just these events and um there's no other way to describe it than we're we're bringing on innovative new financial primitives,

right? The ability to loop assets that are yield generating at scale in size with super high LTVs. And so that's something that is not currently really possible outside of being on chain on a and so here we are. >> The one thing that happens offchain quite a bit is uh human error. So think about all of the all of the interns that have, you know, made a wrong phone call. They've, you know, pushed this button instead of that button. These sorts of things happen. We're just seeing them happen play out in real time and they're happening in code rather than in, you know, human actions. So uh mistakes happen. Uh shout out to these guys.

Always, you know, reimbursing, you know, these things is is uh the way to get around them. Not every protocol can do that. This one was relatively contained. Only 345 ETH, but A's got a War Chest and Chaos Labs as a friend of the show. >> All right, guys. We're going to move on. Just wanted to cover that because I thought it was particularly pressing. >> Yeah. Next up, we've got DVT. Uh the institutional staking infrastructure standard proposed by the EF. Um we've learned about DVT for a little while. Uh this is when we were deep into the architecture of blockchains. Uh staking uh and this is distributed validator technology. Uh the Ethereum Foundation

is proposing to use a DVT light solution to stake 72,000 ETH. So quite a bit more than the 340 that uh that we just talked about with A. Uh Vitalik says that uh his hope for this project is that in the process uh we can make it maximally easy and oneclick to do distributed staking for institutions. Um you know obviously we we had Eric from Canton in here. He's talking about how super validators want to be part of the network. Uh similarly enough actually Canton's uh model their architecture is almost like this network of networks model actually reminds me a lot of the Ethereum rollup ccentric roadmap obviously we're seeing rollups sort of compress back to the L1 as the L1 scales but I'd imagine as a lot more

institutions require have you know they they have some more uh complex and uh unique use cases between them uh each of these institutions may end up creating their own rollup side chain whatever it is ultimately maintain composability with Ethereum but have specific rules that they'll need to maintain in order to maintain compliance and their their users uh ideal process. Each of them should be staking ETH, right? I I think that is what we're seeing in terms of incentive alignment. Yeah. Uh obviously the the big treasury compre uh have chosen to stake quite a bit of ETH. Um but then we're also going to see in my opinion a lot of institutions come in. There's a lot of ETH bears out

there. Could you pass the bear spray? >> Of course. Of course I can. I This is for anyone hating on ETH because I think you're underestimating Vitalic. He's in war mode. We're seeing the EF make lots more changes. I think the EF is continuing their bullish ascent after their bullish reversal last uh last fall. And I think the EF is uh not going anywhere. I think Ethereum is not going anywhere. We have Larry Frink at BlackRock talking about tokenizing every ETF in the next 3 to 12 months, not just their crypto ETFs. Every ETF from Black Rockck in the next 3 to 12 months. Matt from Bitwise says this is a foregone conclusion. Institutions don't talk in the matter of months if it's not something that is already past

compliance and already a foregone conclusion. And you have Larry Frink talking about one blockchain to rule them all. Yeah, >> he's not talking about a Black Rockck L1 and he's not talking about some alternative L1 to Ethereum. He's talking about Ethereum and he's talking about tokenizing every single ETF in the Black Rockck portfol. >> I love it. But like again, the the issue here with the bear spray for Ethereum is that >> Tom Lee's thesis and this whole thesis around Ethereum is going to be the home of tokenization and stable coins and all the activity is going to happen there.

They're also so much further ahead on quantum uh and AI. I think near is the only blockchain that is competing with Ethereum when it comes to agentic finance. >> Well, there's just no capture there's no value capture mechanism for ETH the asset other than the burn right now and it needs it needs revival on the tokconomic side. Um so this hopefully is a step uh this the the goal is to make distributed institutional staking simple and resilient. And so hopefully that kind of, you know, comes through and happens. And this is 72,000 ETH as you mentioned, Rob. So guys, we've got Charlie Lee joining us today, the Litecoin creator who is an OG. Literally sold uh at a perfect time in 2017. It

was hilarious. It broke Crypto Twitter that day. Has since just contributed to Litecoin, other open source projects. honestly just so interested to hear what the state of this industry is from his perspective. So, uh I'm looking forward to having Charlie on. We got a bit more news to cover as well. Circle US senators as well. Why don't we get to the circle news and then uh come through back to Charlie once he's ready. Um Rob got fired up about ETH there. And uh you know, I think your I think your ETH bags are showing a little bit there. Uh, I think my hyperlid bags are always showing on this show, but we're up today and we're feeling good.

>> How's our uranium doing? >> Uranium's looking all right. I'm still a little underwater, but I have faith. You know, we're going to need a lot of nuclear for this uh AI renaissance. We're going to need a lot more power. Guys, Circle launched gas-free USDC nano payments on testn net. This is built on Circle Gateway. enables ultra small payments for you guessed it AI agents Rob which is well our saving grace in this industry right now if you ask crypto Twitter are we going to be saved yes we are but it's going to become uh the agent finance world is what we're waiting for so uh this eliminates gas fees through offchain aggregation and batch settlement uh it supports multiple networks and circle is just really

pushing forward on this agentic stable coin payments um commerce and finance intersection and frankly we believe that this is an important thing to be part of the so of the show structure as well as just guest and teams that we speak to. It's undeniable that teams like Tempo are pushing this idea of we need 1 billion TPS blockchains, right? We need these massively scaled distributed ledgers to be able to actually facilitate the commerce requirements for agents. Do we or is it a good marketing narrative? I don't know. But it is happening at aggressive speeds right right now. And I think undeniably the the the blockchain activity comprised of

agents versus humans. Whatever that split is, I would argue it's probably like 99.9% humans today. You know, you can anticipate that that slowly but surely BIPS of that is going to be kind of taken over by agents. >> Way less than 99%. I mean, look at sandwich bots, front run bots, all of these. They're not agentic, but they are automatic and bots >> automated. Um, and so that's not human, right? That's not a human-driven transaction. That's something that's already written. >> But I'm talking like a gentic like operating its own capital. >> It's really three buckets. You've got human operated transactions. You've got the current bot landscape which op ultimate is quite a bit of uh the market share when it comes to the transactions pushed through these networks. And then

you have a Gentic which is extreme, you know, is certainly on the rise. Um, you know, we're going to see more and more of this. My only my only thought here is that um you know we we we've talked about AI and how it's there's business opportunities to replace some of the current uh you know business functions with AI. There's you know someone's going to come in. They're going to be you know a very small company and they're basically just going to be the handyman that will help you install your AI workflow. Yeah. >> Uh actually apparently people in SF are charging six grand to set up your open claw which is absolutely nuts. six grand to set up your there are free tutorials online, >> right? So, I think uh I think that is uh you know kind of a flash in the pan. I

think there's going to be some of that but not it's not too defensible. >> Um I do think that uh we're going to see more agents as users, right? So, as we think through agents as the primary function that are pushing through transactions to these networks, uh I think we're going to start to see more user experience uh built for agents. uh we had G Money uh on the show. He's talking about how he built his website so that is more readable by agents rather than humans. And we're going to start to see more and more of this. And so I think just you know a shout to any kind of builder or entrepreneur in the space think about your user and your user experience but have in mind that within the next few years your primary

target users could be more agents than human users. >> Yeah. and build build with that in mind >> and the way that they find websites and operate with smart contracts are different. I was actually on a panel with Shiram and Ilia in SF two three weeks ago and I basically asked Shriram if he thinks that uh building frontends and sexy branded UXes for trading for DeFi is is going to really slow down because like if you're an agent you can really just interact with smart contracts directly. Like you don't really need a trading terminal. You don't really need a a website to like show you around. you just go direct to smart contract or direct to code and do things in a CLI. And so he he gave a

very interesting long-winded answer. Um but essentially he he was kind of like yes the way that discovery is going to happen on chain is going to change. So all right let's keep it moving man. AI is taking over the world. Next we've got >> [laughter] >> uh US senators obviously clarity top of mind. I think we're going to see a lot more market structure evolve. Senators proposed new stable coin yield compromise. This is something that could potentially keep us moving towards the goal. Again, we're going to hear a lot more about this next week. We're going to be in DC. We've got a great lineup.

Uh so, we're going to be bringing you guys exactly, you know, straight from the horse's mouth. Uh right from the center of the governance, uh and who is making the decisions when it comes to clarity >> that'll be Tuesday next week. So, so the the high level here, uh, uh, senators Angela also Brooks and Thorne Tillis are co-leading negotiations on a stablecoin yield compromise. Uh, they're targeting late March, right? So, this is going to come around the conference and and, uh, the digital asset summit as well. Uh, the Senate Banking Committee markup of the digital asset market clarity act after a January postponement. You remember there was a lot of news on this. It got postponed. Now, we're targeting later in March. Uh people are really really pushing to get this done

before the midterms because as we draw closer senators will start to campaign. Congress people will end up moving back to their own own hometowns to further campaign. People are going to get into a much more political mindset. We ultimately grind to a halt. This is the nature of our governance process in the United States. But the proposed framework would permit active activity linked rewards while prohibiting interest on idle stablecoin balances. right now in the Genius Act, this is the gray area. Um, you can pay in you can't pay interest, but you can pay rewards.

And so what's the difference? You know, you you hop in the New York City subway and you see an advertisement for the next NEO bank that's offering 6 and a half%, you know, on your deposits. Is that a marketing expense or is that an interest payment? >> Yeah, >> right. That's the question. It's a very gray area. Uh, and so we want to prohibit interest, but we want to allow activity linked rewards. This is kind of where the compromise is. uh the American Bankers Association that lobby with a lot of bankers rejected an earlier White House compromise on March 5th and Coinbase has withdrawn support for the bill over these restrictions. We all heard about that as well >> which is pretty controversial to be honest. People were on Brian Armstrong's side for backing the crypto ethos and for b you know basically standing up for

stable coin issuers obviously circle and you know just standing up for the space at large. the the other side of the argument. People were like, "Brian, why did you why did you delay the Clarity Act? The market nuked from 97K to like eight to like 66K, I guess, um, on that news." And so, honestly, from my side, I put um a tweet out. I was like, "Look, you got to you got to stand by Brian." Like, I mean, you got to trust in Brian. trust that he's going to know what he's doing, that he wants this industry to win, and that obviously there was something as part of that bill that either weren't a part of his personal and private company interests or just the industry interests at large, which in theory, if you know, if you believe

in the in the kind of uh common good of economics, those should all be kind of incentives aligned. And so, even that aside, just from a character perspective, I think you got to back Brian on that. I'd love to hear more about the common good of economics a little later. >> Oh, it's just like if everyone operates in their own self-interest, then it should it should create a uh enough opportunity for all. Like a bunch of economically good actors, you know, opting to do things that enrich themselves or build their own economic stature creates an environment that there's economic good for all.

>> I look, we've talked on the show before about this idea of uh a similar idea but somewhat uh different is like economic karma. So in that reality if everyone's kind of operating in their own self-interest very capitalistic in nature you could believe that you know you provide uh value for others that value will reciprocally find you as well uh very you know a karma approach to to the kind of economic value that you're talking about. So that that makes a lot of sense. Yeah. Um and then obviously you know just on this clarity act uh the America you know the the American banks are worried that you know there could be capital flight out of the deposits in those banks if stable coins uh you know take off. To me it's like you know >> you innovate before you get disrupted right and so we're seeing Fidelity uh

you know launch their stable coin. Wells Fargo came out just another day day or so ago talking about their stable coin. Yeah WFUSD. I mean, there's going to be a lot to talk about in DC, right? Like, there's going to be the Democrats and the Republicans, but their kind of differentiated views on clarity on the crypto market structure at large. But, I mean, the essence of of those conversations next week, guys, is going to be around what this looks like, like what's actually happening behind the scenes and the intricacies of these bills that aren't just stable coin yield. There's a lot of conversation right now about just stable coin yield.

I think that that's going to evolve as well into conversations about other things in DeFi, other things in trading, other things in custody indexes. So, we're going to try to get to the bottom of what's happening in DC next week. Tuesday, Wednesday, we'll be live from the DC Blockchain Summit hosted by the Digital Chamber. If you guys are there Monday night, we're also hosting an event with the Salana Policy Institute uh and a couple other players uh there on Monday night. So, that should be great as well. I'll probably have to wear a suit and tie. I have my blazers up here. I got my ties out. So, hope you're bringing your suit and tie there, Rob.

>> Planning on it. We're going to see a lot more suits and ties here on the rollup. Got to play the part. Got to fit uh the vibe out here in New York City at the center of finance. >> Yeah, it does feel good to wear these things in in New York. >> Not when it's uh 81° in here. That's our weather forecast for today. If you guys are not aware, the Empire State Building AC is uh in need of a work order. And so we're working on that. It's really there's still a few tweaks to make around here. Uh maybe we'll start adding in a local maybe we'll get a behind thescenes shot. Oh, we're at 81 and a half. So there's a different kind of weather forecast in here than there is out there. Um it's a big work in progress here. You know, people people

are big believers in progress. We we got our bonsai tree today. We got our plant. We got Charlie Lee joining us, guys, in just a second. Um the the creator of Litecoin, >> his his uh username on Twitter is literally Satoshi Light. >> Satoshi Light. Do you think he is Satoshi that there's no way? Huh? >> We should ask him. >> I don't think he's going to take take very well to that. >> No. >> No. >> Why is that? >> I'm not sure. Do you Do you know what's happening with Litecoin? Because that was one of the first things I ever bought.

>> Really? >> Yeah. >> Yeah. I mean, first thing I bought was Bitcoin. Uh, second thing I bought was Monero because our friend that introduced me to crypto was uh, very interested in Monero at the time. Uh, I think third thing I bought was Litecoin. Yeah. >> Yeah. It was like $3 or something. $2. >> Yeah. >> You know, it's still the number 25 by market cap. >> Ah, I mean it's it's the silver to the to Bitcoin's gold. >> It's it's not Ethereum. If you guys think Ethereum Ethereum is digital oil, but uh if Bitcoin is digital gold, Litecoin is the digital silver.

>> The bear spray is working. >> That's what they told us at least in 2017. That was >> 2017 that was the narrative >> uh CT kind of >> man 2017 had characters. The the industry is so different than 2017 now, man. >> It really is. >> Like for better and for worse. >> Yeah. >> In many ways. >> I remember listening to a guy on Twitter named Crypto Coconut. >> Yeah. >> He was just he had all the great takes. Great takes. >> Yeah, incredible takes. And then um you know, within like two months of me getting into crypto, the the Dow >> uh which Vitalic says he wants to bring back. We'll see. I mean, that was like a stain on Ethereum's legacy.

>> Yeah. >> You know, like that is the reason why hack >> is what he's >> the the Dow hack. Yeah. Back in 2016, you guys remember? Well, if you were there, I mean, the Dow was like this incredible. It was going to be the Dow of Dows. is you were going to have this thing. It was almost like the protocol guild is what they kind of have now going on with Ethereum, but it was going to be much more than that. So much ETH was going to be allocated to this thing and then it was going to fund things like the Ethereum Foundation as well as other Dows that were going to get spun out almost like an open- source and then Gitcoin is kind of all of these have been outgrowth of that same idea. Um, and then it got hacked as soon as it

went live. Uh, all of the ETH that was in the contract at the time got drained. Uh it was a large sum of money even at the time. Uh so what happened was that Ethereum was $7. >> Uh I first bought Ethereum it was $711. Uh great number. Uh it went it went up to $23 ahead of the Dow because everyone was like, "Wow, this thing is really exciting." It's back when positive, you know, announcements and and activations actually made made an effect on price.

had the bull markets >> uh $7 to $23. I thought I was a genius. I had had bought Bitcoin. I had bought Ethereum. And then uh and then as soon as the Dow went live, it went from 23 all the way down to I think it was five, maybe even less, maybe like $2 or $3. >> And uh and I was just I had this whiplash effect and I knew I was never going to escape this industry. >> Yeah. The volatility. And so and so what happened afterwards was uh there was this big community like conversation about what we do now there is a very significant portion I think it might have been like five to 15% of Ethereum's total supply at the time got drained from the smart contract and now is in

obviously very bad actor's hands and so it's like okay what do we do we just let the Ethereum protocol exist uh the protocol is immutable and we just let this bad actor have all of this Ethereum >> or do we blacklist this this Ethereum that this that this hacker stole. >> Do the old fork. >> Do the old hard fork. And that's what we did. We we took a vote as a community and everyone who had ETH at the time, what you had to do when you had ETH back in 2016 was you had to run a full node. Yeah. And so it wasn't as easy just owning ETH in a wallet. You had to run a full node. That was how you could own ETH. And so you could signal with your full node as far as which way you wanted to vote. Yeah. And so the community as a

whole, everyone who owned ETH and ran full nodes voted to blacklist the hackers ETH uh and hard fork the chain. That is what created Ethereum Classic is actually the original Ethereum where the the immutable ETH that the hackers stole exists. It's still got a market cap of $1.3 billion. And so that is $1.3 billion of lost value that could have accured to the ETH protocol. >> Yeah. Crazy. >> Crazy. It's a little bit a little bit of E theory lore for you. >> We got Charlie Lee in the back. We're going to bring him up in just a sec.

We're going to take a quick commercial break and be right back, guys. See you when we have Charlie up next on the show live from the nest in New York. [music] [music] >> [music] [music] [music] [music]

>> Heat. >> [music] [music] [music] [music] >> Heat.

>> [music] [music] [music] >> All right, we've got >> All righty, guys. We got Charlie >> here. He is the creator of Litecoin. Welcome to the show, Charlie. Hey, >> guys. Thanks for having me. >> Yeah, man. >> Absolutely. Thanks for coming on. We were just uh telling a bit of the old uh lore from 2016 is when I got involved and uh Andy was around in that time, too. It's around the time when we met as uh freshman in college in the University

of Florida Bitcoin club. So, it's uh our origin story. And uh you were a bit of a legend back then. Still are. >> Thanks. I can't quite hear you. Um, Leo, [clears throat] I think the mic is going in and off for me. >> Yeah, no worries, Charlie. Um, Robbie was just saying that that we've kind of grown together through the University of Florida Blockchain Club and followed a lot of your early work with Litecoin was one of our first investments into the space and just kind of foray at large and yeah, wanted to bring you on today and just kind of chat about your current perspective on the space, how you're

seeing the evolution and uh, growth with Litecoin and more. So I think just kind of starting broadly uh kind of a left field question Charlie since you started the space has gone through a massive cultural change. We're sitting here in the Empire State Building in New York City and there is a complete evolution of the way the digital assets industry in finance is converging versus kind of when we had Litecoin and crypto Twitter in the in the early early genesis it was quite different. Did you expect this industry to play out in the way that it has with ETFs with institutional adoption with Trump with all these things? just give us a sense of what

your purview is of the current state of affairs in the crypto industry. >> Yeah. Well, when I started, this was in uh 2011. So, obviously the the industry has grown like tremendously. Um when I started it was um the it was just Bitcoin, right? It was viewed as kind of a um kind of like toy money, right? Just digital uh play money. People didn't expect too much from it. um nobody knew where it was where it's headed. Um had a lot of potential but nobody was thinking anything remotely like like what we seeing today like institutional adoption ETFs and such. Um just a bunch of kind of geeks and people interested in um

digital money, right? So it's definitely grown incredibly a lot in this past 14 years. >> Yeah, it definitely has. Yeah, I mean it it's just changed so much in a way that is like hard to wrap your head around from that perspective. And I mean Bitcoin itself is obviously an institutional asset now. Uh Ethereum, Litecoin, Ripple, etc., etc. They've really grown. Um I'm curious kind of what you think about the evolution of TPS and scaling. Right. So when it was originally created, Litecoin was this faster, cheaper, better version of the Bitcoin blockchain. And since since Ethereum and since the inception of

smart contracts, we've just kept seeing this kind of commoditization and just growth of wanting to have faster, better speed, higher, more performant blockchains. How do you see this from your perspective? And what does this kind of show for for the evolution of the space at large? >> Yeah. Oh, sorry. Um, yeah. So, the the thing with um with blockchain is it's intentionally um inefficient, right? So, um in order to make it uh decentralized, uh there's inefficiencies with it, right? There's a trade-off. So

of course a centralized system um like Visa, Mastercard or other payment methods would be a lot more efficient, right? Whereas with a decentralized method like Bitcoin, Litecoin um every transaction has to has to be broadcasted to every node across the world and everybody has to um double check everything's okay. So that brings inefficiencies and um it causes transactions to be slower and also to cost more, right? Transactions fees. So um people have been trying to build more TPS on second layer solutions like lightning networks and other things um to kind of have a different trade-off, right? A little bit more centralized

um but it will be faster and and cheaper. So Litecoin has has done a really good job at helping Bitcoin kind of handle the decentralized um load for all the transactions that need decentralization. And we've seen a lot of people use Litecoin um in addition to Bitcoin, right, for for lower fees um for cheaper transactions. Um but in the future as this as this grows um we'll need a lot more different solutions like like lightning network and other um secondary solutions to help with transactions.

>> Yeah. Yeah. Yeah. I mean the there's this current ongoing push around agentic finance and what that looks like and people are claiming that we're going to need 1 billion TPS blockchains. Do you buy into this AI agent type onchain? What's a contrarian take about AI that you have? >> Um this sorry about the the need of higher DPS. >> Yeah. like like do you think that this intersection of agents and and blockchains is going to happen at scale?

Do you buy into this kind of idea of this of this convergence generally? Like what's your what's your view? >> I think not just not just AI, right? Just in general the kind of the world's need for doing decentralized transaction will will grow over time. So um blockchains have to adapt and be able to support that. Yeah. Charlie, what um when you first got involved, what was it that stuck out to you about this industry that ultimately back in 2011 struck your interest and and gave you the idea to invent Litecoin?

>> Yeah. When I first got into the space, um I was kind of hooked on um the idea of a better form of money, right? So, we've seen like gold used as money, um fiat currencies obviously, and there just seeing like fiat currencies being inflated away over time and people kind of losing um their money is kind of heartbreaking to me. So seeing something like Bitcoin where the supply is fixed and nobody no company, government or individual can can inflate the money and cause everyone to um everyone's money to devalue over time is something that is very compelling to me. Something that

seems like it's a better version of gold. Um so that's that's kind of what got me into into Bitcoin and cryptocurrencies. And [clears throat] today the US has a national debt upwards of $ 36 trillion. Inflation came in today pretty much uh as expected 2.4%. But we are steadily growing into what Ray Dallio is calling this uh death spiral of a global debt cycle and we're in the late innings of that. Do you agree with Ray Dalia that we are in the late innings of a global debt spiral?

And if so, is it too too late to do anything about it? Or what should we do about it? >> Um, well, the the great thing is with Bitcoin, Litecoin, you can now you can opt out of the of the system, right? You can hold your wealth in in money that is not um being devalued over time. Um, so that's that's a great solution for for people, right? And I I do think that um I mean throughout our history fiat currencies have have never lasted longer than like 200 years something like that right so the US dollar and other fiat currencies currently are getting to that stage I don't know how much longer it can last um but the end is pretty clear to me like um

yeah it's it's going to it's not going to be pretty and the best part is um you don't have to play this game Right. Um because there's there's a solution now. >> Yeah. Do you think that the um current state of affairs in digital assets has lost the original ethos that you speak about with regards to an alternative, a plan B? Do you think that that that the entire industry has been co-opted by institutional folks and uh capital allocators and speculators who don't really understand the core premise of why blockchain exists and why decentralization is important?

>> Um I don't think totally. I think I mean there's always going to be people going to be people speculating in the space um investing in just to just kind of to make more money, right? and not believing in the um what's so powerful about about Bitcoin and Litecoin, about the cryptocurrency. But that's that's fine, right? Because in the end um the system still is still here and it still works, right? You can people can like buy and sell Bitcoin and on Coinbase and never actually send it, never actually touch it. But the great thing is that you can always um pull it out and and actually uh store the Bitcoin yourself and and use it and spend it, right? So

that's the best part is you can always um kind of opt out of centralized systems to to to go back to decentralized. >> Yeah, that that is one thing that uh I think people are, you know, now going to gold, physical gold. Uh we're seeing more and more central banks. Um, obviously Bitcoin is a lightweight version of that. The transferability allows for a lot more uh commerce to take place, but I guess the what am I trying to say? The product market fit of this asset class as used for money hasn't quite taken off. Um, you know, you were there when we had, you know, the block wars, the big blocks versus the little blocks and Roger Ver and

Bitcoin Cash and all these things. Um, what is your interpretation of Satoshi's vision? Pun not intended, right, with Craig right and the and Bitcoin SV, but you know, Bitcoin is a peer-to-peer, you know, cash system, uh, as Satoshi calls it in the white paper. Do you think we took the right path to to ultimately achieve a, you know, fiat replacement currency? >> Yeah, I think it's it it has taken quite a bit of time. um people are not using it as much as I'd hope they would um like spending um cryptocurrency as as real money. Um because that's because the the incumbent is so strong, right?

It's so easy to use like credit cards um to spend money that it's you really have to have a system that is um that is much better, right? Much simpler and much easier and it's it's tough to beat. So, um yeah, I think but over time like right now the store value narrative is is winning, right? Um if you kept uh your money in Bitcoin, Litecoin, cryptocurrency over the past um 10 years, um your wealth has has not been devalued. If anything, it's has gone up, right? So, the store value narrative is the first and foremost like biggest strength in cryptocurrency right now. um the means of payment is is yet to come,

but I do I do believe over time people will start to see um we will people will start to spend cryptocurrency a lot more than they do today. And whether that's like um converting it to to stable coins and sending stable coins to to to merchants or or something else, but it will become e more and more easy to to actually spend. And that's kind of the ultimate goal for uh for money. >> Yeah, Charlie, we saw institutions accumulate uh about 4 million Litecoin over the last year or so. Uh you know, I think the there was the LTCC ETF launch as well as some DATs. What does this

look like, Charlie? like when you guys are interfacing with institutional allocators, capital allocators, what does these conversations look like and what is driving the demand for Litecoin right now from those allocators? >> Um, they're seeing Litecoin as an alternative asset class to Bitcoin, right? Something that is um uh that has test has stood the test of time, right? The Litecoin has uh was launched in 2011 and it has um the network has stayed up since then like zero downtime for uh 14 to close to 15 years which is um kind of unheard of in the space. So um given the track record and also um the fact that people are

using Litecoin for for transactions even more so than Bitcoin um due to the fast transactions and lower speed that um it's it's a compelling narrative to for people to invest in this asset class. >> Yeah. Yeah. And and is the time frame for these allocators is this like years, decades? H, you know, what's to stop them from just turning around, losing conviction, and and selling? >> Um, to be honest, I'm not I'm not in the kind of in the um institutional space myself, so I don't know like what exactly they're thinking. Um, but given that Litecoin um kind of the the position Litecoin in

this space, um I don't see why people would kind of lose interest in it. Um, if anything, Litecoin has become in terms of payments has become like more and more used over the past few years. Um, yeah, it's it's kind of it's Litecoin is has been um it's kind of quietly um doing its own thing and um be becoming very very successful in terms of people using it um for transaction and for payments.

>> Yeah. Yeah. What, >> you know, you mentioned you're not uh more so on the on the institutional side. Charlie, what what are you most focused on and excited about these days as it pertains to Litecoin, Bitcoin in the space? >> Um these days, for the past few years, we've been working on um a solution for privacy and fungeibility on Litecoin. Um uh so for a little bit a little bit of background um fungeibility is the is the idea that um it doesn't matter which like what coins you have you can um each litecoin is same and equal to every other Litecoin.

Um so this is very important factor for for money right if you're spending like a trillion dollar bill it shouldn't matter which tran dollar bill you put on your wallet it should be worth exactly the same. Um and that's a feature that is that was missing originally from Bitcoin and Litecoin because how public the blockchain is. Every um coin has a um uh transaction history behind it and people can easily see and they can uh discriminate against certain bitcoins. For example, if you send Bitcoin from a darknet marketplace to an exchange, they might notice that and and ban you because they don't want to support um due to uh money laundering

anti-moneyaundering laws. They don't want to support that, right? [clears throat] So, that's not great for for money. Um so, to add funggeability, we have to add a bit of privacy to the blockchain. And that's something that we've been working on on Litecoin. We launched Mb which is a um second layer solution on top of Litecoin that lets people transact more privately and have more fungibility. Um so that's something that we believe is kind of the future and we're working hard on making that as as seamless as possible.

>> Yeah, very very cool. Could you just tell us more about like what's possible now? you know, we we've seen with the advent of Ethereum, obviously people want to do things with their new asset class. Uh maybe they're not using it so much in the physical world, you know, day-to-day using it as cash, but it is an instrument to, you know, use in the broader financial system. Uh people are lending it, borrowing, exchanging, and ultimately driving yield on it. Are these all the same components that are now possible with Litecoin, with MB? um talk us through what are some of the components that uh are still to be built out.

>> Uh yeah, so like there are people building on top of Litecoin to add more decentralized finance solutions um very similar to Ethereum and even connecting to the to the Ethereum network. So there's um for example, there's something called LITV VM um which uh we're working closely with. It's a Litecoin virtual machine that enables smart contract capabilities and and other web3 applications um such as like yield um etc. to and it will connect with with the Ethereum virtual machine. Um so there there are others building on top of Litecoin doing similar things. Um yeah, I think we'll start to see more and more people um doing that kind of stuff on Litecoin and

um kind of connecting to the smart contract um ecosystem. >> Yeah. Um, Charlie, as we kind of come to a close here, um, it's kind of an off-the-wall question. Like, you know, Ross Albert got pardoned. The entire sentiment around the space has shifted almost like a paradigm shift in the last few months to years. You know, what what is from just I'm just curious about your reaction from how you've seen the space evolved since you got into it in 2011 till now 2026.

Sorry, I I didn't catch the question. >> Just a curious about your your reaction to the how the space has evolved over the last recent years. Sentiment around crypto has shifted quite a bit. Um I remember when Ross Olrich got uh you know pardoned in in recent months. Uh that was thought of as unheard of uh in the early days. >> Uh yeah. So um there's definitely less focus on um um so yeah so yeah like years ago right a lot of focus was was on like darknet marketplaces like Silk Road um how

that's like kind of the only thing that is um that is useful that where Bitcoin is is useful for right >> um but we're seeing that change that area change over time where um >> it's not just um Bitcoin is not just useful for for buying drugs online, right? It's it's actually um a better form of money. Um it's more it's decentralized and it's uh it's a good store of value and good means of payments, right? Not just for because and because it's it's better money and that's why um places like Circle uses it. Um, and then also it's it's good that the f there has been a lot less um um [clears throat] bad things like

exchanges getting hacked um over the past few years. Um we're starting to see more and more um people pay attention to securing the their exchanges and the the systems to prevent hackers and uh scammers. So I'm glad to see less of that these days than like years before. Yeah, me too. Totally agree. I mean, I think there's been a shift in the in the way that the space has evolved and just generally kind of like how people are thinking about it in many good ways and many negative ways. Uh Charlie, last thing for you from me. Uh we have guys like Tim Draper predicting 250K per Bitcoin. Uh other kind of OG Bitcoin maxis calling out for the 1 million

target. Are are we on track for these kind of logarithmic growth of the crypto asset space? We we kind of hit about 4.2 4.4 trillion in the highs in October last year. Where do you think we go? I is 10 trillion something that happens before the end of the decade, 25 trillion, 50 trillion. How does this kind of crypto market cap eventually be realized in the space? What needs to happen? what how do you think about the uh kind of economic nature of of of the space as we evolve?

>> Yeah. So, I mean, I've always had been very um uh kind of very optimistic about about Bitcoin, right? And about cryptocurrency. Um so, if you look at I mean, I always compare it to like the uh the gold market cap, right? Um I see Bitcoin um representing like all of crypto being um very similar to to gold, right? It's people call it digital gold. And for it to eventually replace gold as um kind of the most trusted monetary asset class.

It would uh it would be become the market cap will reach gold's market cap, right? Gold's market cap right now is something like 30 36 trillion. So kind of that is the target. um how long it will take for us to get there uh nobody knows, right? But I would think within the decade or so. >> Yeah. Yeah. >> The market cap of gold within a decade um what is that a five or 6x from here? >> Yeah. The gold's, you know, ran quite a bit, Charlie. Um and obviously silver has too and and people are kind of considering these new asset classes now with all the instability in the world as as well. Actually lied to you. One last question. How do you think about the

political instability and the global kind of like entropy accelerating in the space in the world, right? Like how do you think is that a good thing for uh digital assets in this kind of plan B? Is it a bad thing? How do you think from the investment perspective the global instability and just accelerating randomness uh affects investors perspective on crypto assets? >> I think over the long long run it's good. Um but short term um some it could it could be negative. Um we've seen people um kind of I've we've seen gold kind of be kind of the go-to asset class when there's instability in the world.

Bitcoin has not kind of taken us um taken over that yet. So um but over time over time it will. >> Yeah. Yeah. Charlie, totally agree. Charlie, thank you so much. Really appreciate you coming on the show and spending time with us today. >> Yeah. Always appreciate talking to a real legend such as yourself. >> Yeah, of course. Thanks for having me. >> Thanks, Charlie. See you next time. Thanks. >> Yep. >> All righty, guys. We got VC from Etherealized coming on the show up next year. Looking forward to having him on, guys. We're going to take a quick break, get him set up, and we'll be right back with you guys. See you.

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[music] [music] [music] [music] >> Welcome back to another episode of Stabled Up, our premier weekly show covering the ins and outs of digital dollars, stable coins, and the future of decentralized finance. show is made possible by FRA and FRA is powering the financial engine of the internet powering F FRXUSD and genius compliant stable coins. This is the stablecoin

super cycle made possible by FRA. Now enjoy stabled up our weekly stable coin show. All righty guys, welcome to stabled up episode 23 powered by our friends at FRA with their F FRXUSD product and more stable coin products that they've been developing for quite a while. We've got VC Raman of Etherealize in the space today. VC, second ever guest in the nest. Welcome to the tokenization tower. >> Thanks for having me. It's spectacular up here in New York. Love to be here. >> Definitely.

>> Absolutely, man. I mean, you've been here for a while. Uh we um are coming to understand what it means to be at the center of the world, the center of finance. like can you guess just just give us a sense of like your experience being here and and working here and what it what it takes what it means to be working here in New York City amongst you know the the most prominent institutions in the world. >> So New York City for me has been the most inspiring city ever. It's the engine room for the financial system globally. And so there's a reason you've had me on before. I'm always pretty perma bullish and there's a reason.

Because when you're in New York, the you see the energy, you see the you see the talent, you see the flow of money, you see what's happening. And it's impossible not to be bullish. And now the coolest thing that's happened is the headquarters for the blockchain ecosystem is now also coming to New York. So now we're here in New York having the financial sector and the blockchain sector converging and it's it's spectacular. I'm happy you guys are set up here and it's it's always good to be in New York. >> Yeah, man. Well, VC, let's talk stable coins. Let's talk the rise of tokenized assets on Ethereum. Uh, glad to have you on. Welcome to the show. Um, the rise of stable coins has happened primarily on Ethereum, both Tether Circle with USC

Sky has really grown. Why do you believe building a stable coin business is best on Ethereum? Is it is Ethereum the best place or where is the best place to build a stablecoin business? Um, and how do you think about building a stablecoin business on chain? >> So, I think stable coins are the first and most important product market fit for blockchains to hit mass adoption both institutionally and with retail. And stable coins unlock all of the use cases which tokenized assets, DeFi, everything else will follow. The reason I've been pounding the table on Ethereum for for a while now. And the reason my conviction is the highest it's ever been and only increasing is because we've seen this movie before with the

internet. So we've seen iterations where every corporation had their own internet and nothing talked to each other and nothing connected and in the end the entire institutional world and retail world chose the public internet to put all their information on. Now we're seeing that speedrun with blockchains. So, where is the safest, most secure place to put your stable coins to put your assets on? It's the big public secured decentralized global blockchain where you have the most distribution access. That's hands down Ethereum. >> And, you know, we're we're seeing this this convergence play out in real time.

I'm also seeing it as almost like an like an evolution, which is t tends to happen around these cycles. Um, first we're tokenizing a lot of these assets. We have stable coins and cash instruments. Now we're tokenizing both non-speculative in terms of treasuries, stables, but then also speculative assets with tokenized equities. Um, after we have all of these high quality assets, both speculative and non-speculative onchain, they end up in DeFi protocols. >> Exactly. >> And and there's two core components to this that I want I really want to get your your take on. The four the first is that Ethereum is a home for DeFi. We have Ethereum has the most TVL by that metric. Um it's the safest, it's the most resilient by almost every metric.

Ethereum is the home of DeFi. The second core component here with regards to the tokenization of high quality assets is BlackRock, one of the leaders in the ETF business, has talked about tokenizing every single one of their ETFs in the next 3 to 12 months. Cannot stress this enough. We had uh Matt from Bitwise say this is a foregone conclusion when these institutions are talking about a timeline of months. These things are actually happening. It's not an announcement of announcement some you know thing that might happen later on. So >> when Black Rockck tokenizes all of their ETF stack, not just their crypto ETFs, but every single one. And they're talking about, you know, one blockchain to rule them all. Larry Frink is very, you know, he's kind of toing this this

idea. And Ethereum is the home of DeFi. like these three things orbiting around each other. Can you just help put together what once these three pieces do converge, what does this picture truly look like? It looks like the internet moment for the financial sector all converging to Ethereum. I mean, it's impossible not to be bullish now. Obviously, prices are down. I'm not going to sugarcoat that. But if you crypto has this bad habit of linking prices to performance of networks the network has never been stronger has never been more resilient has never been more future proof to scale having layer 2's plugged in and ready for the institutional moment than right now.

>> Yep. >> Asset price will follow. I mean it's a that's a foregone thing and that that's just a matter of when not if but coming back to what does this mean? Larry think is a pioneer in the space. He's been a visionary and his voice is heard and listened to by everyone else on Wall Street that's outside of this window. So the banks look at the asset managers looking at he's one of the leaders um that's that's digital assets forward. And when he tokenized Bidd um their money market fund on Ethereum before there was regulatory clarity before Gendler uh before we got out of the Gendler SEC that set the standard for Ethereum to be the default. Ever since then, the amount of money market funds on Ethereum has has multiplied. The amount of stable coins on on Ethereum

has multiplied. And now Larry Finn coming and saying, "Okay, we need one common blockchain." So we don't have fragmentation. So all tokenized assets can be in one place. That means Ethereum, it's the best setup for it. And that means we're going to see the real power of interoperability of the application layer of the DeFi systems. Like you said, they're not just the most they're not just the safest and most secure. They've been battle tested. So there is the most amount of precedent. So institutions will go where there there's the most amount of precedent. I have no doubt that's Ethereum. And we're about to see a renaissance really really soon.

>> Okay. So VC, let me push back on the value side of this because I I think I totally agree and the audience will totally agree that on the actual where Ethereum and where the stable coins are going to live are going to be on Ethereum. They they will be on Ethereum. all the tokenized assets will be there'll be a lot of transaction volume. There will be a lot of TVL and DeFi. Obviously, Ethereum has the burn which captures a lot of gas fees. For better or for worse, the L1's gas fees are the lowest they've been in years, which for from a user perspective, it's great.

It's everyone's happy about it, right? But from a burn perspective, it doesn't help the tokconomics of Ethereum. I think there's a bit of hole in the current Ethereum thesis that just because we get all the stable coins and all the tokenized assets onto Ethereum that's going to lead to a higher ETH price. I'm sure you've heard this before. This is not your first time, but help me debunk this. Why is this thesis true? Like how is this actually going to happen? Talk to us about what that looks like to capture that value rather than just kind of like this mimemetic we have all the stable coins, we have all the tokenized assets, we're the best. Okay, so I'm not going to give you a mimemetic answer. I'll give you two answers that I think are very important and very

institutional focused. First off, Bitcoin has become an institutional holding. There will not just be one institutional asset that's allocated to in the digital asset space. ETH is the other one. So, we're already seeing it. Harvard had uh allocation to the Bitcoin ETF and they actually sold some to rotate into ETH ETF. That's separate from I'm not linking it to activity. I'm not linking it to the growth of stable coins. I think all of those are very good for Ethereum obviously, but ETH is going to be a core holding. And if you think of store values in the space, there's one that's proof of work, that's digital gold, that's Bitcoin, and that's great. And there's one that's proof of stake with a yield, that's also a core portfolio holding institutional allocations increasing to eat the asset, which is inevitable as Ethereum grows.

That's the driver for price. That's that's the new buy interest. Tom Le's one, ETFs are another just being an up portfolio allocation. So that's one that's how that's how um ETH price grows by becoming the next store of value not tied to the network. I'm just speaking independently. The second and I think this thesis hasn't landed for a while but it's going to if we think as we've discussed here that most tokenized assets that are high value are going to be on Ethereum. Most stable coins are going to be on Ethereum. Tokenized assets and stable coins are all rooted to real world trust assumptions. So every single asset has some sort of onch offchain record. So there's a point of trust for every tokenized assets. As tokenized assets on Ethereum grow, there's only one asset that's global,

that's trustless, that can be used to move between these these trusted assets. So if you think about collateral, if you think about the global ecosystem all coordinating uh and the financial sector all choosing this is the medium of exchange that we're going to trade through, ETH is the only asset that is not linked to something offchain. That's really really valuable. If you think in the future if everything's going to be tokenized, you need a neutral asset where the US can trade with Singapore can. Let's think really really big, ETH is that asset that again it's it's early for that. But as that happens, ETH reprices to become a multi-t trillion dollar asset because it's trustless collateral that no one can censor.

That's worth a lot for the financial sector. >> I got to say, man, those are both semi mimemetic answers. like how is ETH the asset going to acrue the value from stable coins from payments from tokenization right now we have the burn I know Vitalics working on other things and the EF has had this very very big change but people are wondering like I'm holding ETH I'm staking it um what what is going to drive this direct value acroal from all this transaction activity all these institutions is there a direct driver or should we stop thinking about it that way and just open our minds to this more kind of okay there's going to be an institutional

driven bid there's going to be this neutral asset and this is enough to basically create a store of value asset over long term >> I think again I I don't want to sugarcoat the fact that we're not tying the value of ETH to transactions I think that that that's a mistake and that that suppresses the potential of ETH the asset the trustless collateral for the global economy multi-trillion dollar store of value asset like gold. Gold is mimetic. Bitcoin honestly is mimetic too. So >> ETH belongs in that camp. That being said, let's come back to your question.

When the world's transactions, the world's tokenized assets, the world's stable coins are all on ETH and its layer twos. Transaction fees, no one's onboarded yet. No one's using the chain yet. It's all going to come. The institutions are telling you it's all going to come. Yeah, transaction fees are going to go up a lot. The yield's going to go up a lot. So it will drive value at scale. If you think about Ethereum right now is in its Amazon moment where it's onboarding customers, where it's very cheap to use and it's safe to use and it's the most neutral platform. That's the best customer onboarding pitch that you can possibly give. Once customers are here, fees are going to be higher, revenue is going to be higher and it will solve itself. But what I'm trying to do is separate from the fact that of course I think activity

is going to go up. Of course I think fees are going to go up. Of course I think the burn's going to go up and the yield's going to go up. But separate from all of that, I'm trying to separate the conversation, say ETH belongs in the category as Bitcoin and gold. >> Yeah. H how much consumer behavior needs to change in order to accomplish this vision. Um right now so many users are currently interacting with Bitcoin and Ethereum through centralized exchanges. Um, when we have tokenized digital assets and stable coins, will people be using the chain directly or will we just be batching up a lot of consumer activity and then making rather small changes to the to the underlying ledger?

I think that Ethereum and its layer 2s have hit the amount of scale where they can support consumer activities and that's only going to grow with the really inspiring Ethereum road map to ZKify the base layer to have ZKVM built in to bring the magic of mathematics and cryptography to finance. So the real benefit comes from using the chain. I think that there's been a stop gap because of lack of infrastructure and lack of technological improvement to actually use the chain to its fullest potential. The ironic part is uh Danny my co-founder said this is >> we found that the biggest customers of decentralization and the biggest customers of the chain are ironically the institutions and and not retail because retail is used to being behind

guardrails. >> As institutions unlock the potential of what the chain can accomplish, individuals will too. That's the best thing is Ethereum scales like software. Someone like a JP Morgan can use Ethereum. Someone that lives in a remote country can use Ethereum and they can have equal access and that's powerful. That's the end potential. It will not be a centralized intermediary guarded future. That's that's a dystopian future and Ethereum's potential is way bigger. >> I love that we're just going through all the mental models right now and all the narratives and all the calculations and you know everything that you read on Twitter or or in blogs or here on podcast. I'll just throw another one at you. We are here in Manhattan in the Empire State Building. There was once an idea that blockchains were like cities,

right? That that there were different kind of jurisdictional requirements for different blockchain execution environments. At a certain point, Ethereum was interrelated to the Manhattan of the blockchain design, right? It it it was for the people who were working in this space, large capital managers, allocators. the the fees were more expensive than other kind of uh cheaper faster chains. >> This is all the the L1, >> right? There's rollups that maybe like different economic zones around Manhattan. Yeah. >> Right. And so now we've kind of gone through the rollup centric roadmap for several years. Uh kind of activities coming back to the L1 in a in a stronger way. Still a lot of activity on L2s. Is this Manhattan NYC

kind of analogy, is that correct? Is Ethereum kind of like is the block space akin to the Manhattan lifestyle, culture, way of living? How do you kind of think about these blockchains as cities idea? Now, >> I still love it. I love analogies. I think [laughter] and I'm a New York bull. I like what does New York do is it attracts innovation. It attracts hunger. It attracts a lot of very very positive bullish thinking about the future and then we export those ideas to the world. The world operates on the US financial infrastructure and if the US wants to keep that lead which it will it has to export stable coins it has to adopt

blockchain infrastructure that's happening at the fastest pace I've ever seen and it's not just governmental it's institutional too. So once again, Ethereum as being the New York is going to be able to export its culture of being neutral, of being decentralized. Ethereum didn't pick political sides. Ethereum didn't um didn't become biased. Ethereum kept its values this whole time. It's still the most decentralized. It's still the most and it's still scaling to be the biggest blockchain with the ZK future. It still has the L2 ccentric roadmap the institutions can plug into which are flourishing. I think the Robin Hood chain this year is going to be a spectacular success. So everything's hitting and it's just like in New York. Everything hits and people always love to call for the death in New

York and guess what? New York's the best it's ever been and Ethereum is also the best it's ever been. >> Yeah. I I um you know you mentioned how the exports of the city, the exports of Ethereum, everything is starting to hit. Um we've also talked about the exports of crypto. We've also said how crypto as we know it is effectively dead. Crypto tends to refer to the altcoin complex uh which we believe is you know primarily cooked is a lot of the infrastructure with no product market fit but the exports of crypto the stable coins the the the blockchain itself these you know digital assets tokenization these things are very much alive um and so I'm curious uh I if you tend to agree with this and if so how like what are the

exports of our industry that institutions primarily resonate with is it the compos oability? Is it the liquidity effects? Is it lowering settlement times? What are the primary exports of our industry that resonate with institutions? I think the simplest way to put it is Ethereum brings new revenue upside and it brings a lot of cost cuts and there is no company in the entire world that doesn't want to do that. And it's very similar to AI. It's everyone needs to adopt AI ASAP because it increases new revenue lines and it cuts a lot of costs. Now throw in the money layer which is Ethereum and that coupled with AI means we're going to reshape how every single business exists. Every business is going to need to and already has an AI strategy. Every

business is building an Ethereum strategy. And so what does that bring? It bring our exports are new innovation. Our exports are going to be new jobs. Our exports are going to be new types of products. And beneath the hood of all that are things like lower settlement times and fewer trust assumptions and using math instead of using uh manual spreadsheets and we know I go through the list every day of operational processes that everyone around us in New York has to go through at the banks and asset managers and Ethereum actually upgrades all of that. So, it's a very positive some technology. But I will say the other thing we're exporting and this is why I want to come back to I agree with your take that most altcoins are are they they've sucked liquidity out of the system and it's and there's been that's why we've been in a bare market

for coins even though we've been in the biggest bull market ever secularly for blockchains and that's going to keep continuing. But one of the exports from Ethereum is ETH the asset just like Bitcoin exports Bitcoin the asset as a store of value. Coming back to it, we need to decouple >> ETH the asset. It's an excellent application. Vitalic actually called it one of the most important applications for Ethereum. Um that is the store of value that we're going to export as a portfolio asset and all of the operational efficiencies and revenue that Ethereum unlocks and we're seeing that right now. So that that's already here.

>> Can you run down like maybe a top three or top five? Like you mentioned you're you're looking at the bank processes. I think people are hearing this. We've been talking a lot about this. You increase revenues, you lower your expenses. That's what every company wants in their bottom line. What are some of those processes that banks and asset managers are going through on a day-to-day basis that they can make more efficient using blockchain and Ethereum? >> Um, Excel gets replaced, which is a very very big thing because Excel is the is the global database. >> This guy's got his cloud bot going on. [laughter] >> Excelss don't talk to each other. I mean, having your data in one place, having your money and your assets in one place is the biggest unlock because people don't need it. It reduces time from reconciling excels. It sounds like

a very small problem but it actually causes errors. It causes a lot of money movement of fat fingers and that gets all reconciled with one real-time database which is trustable and can hold valuable assets and that's the important part is you need to be able to trust a system with high value assets. Right now it was Excel because people trust it within their walled gardens. Ethereum is the platform that actually can hold all this. So that that's one. The second payments. I mean, people still send wires. It's it's mind-boggling. And that's the first thing that's the first shoe to drop. And that's why you're seeing every bank is either registering their own stable coin, working on consortium stable coins, working on a stable coin strategy. That's very, very obvious. That's such an easy

improvement. And the last thing is digitizing actual assets. So, I mean, everyone's not tokenizing stocks. That's excellent. Stocks are already quite efficient, but now they can become 24/7. Now, they become digital. Now, a lot of the manual things that the DTC has to has to keep doing manually become automated. And so, yeah, the DTC and NASDAQ and ICE, they're all working on tokenizing their stocks. And what's that what is that going to do? That's going to cut their costs. That's going to cut their operational overhead, their back office, and it's going to increase revenue because they can start making their own DeFi protocols. They can start to say, you know what, let's distribute stocks on AMMs and in lending protocols.

And that's going to be a revenue driver. So, again, the tools are all here and everything's ready. And now we're going to hit the adoption inflection point. >> Yeah. Yeah. I I'd like to ask you what that looks like from kind of like investors perspective, from a from a valuation perspective, thinking about the DeFi protocols and their respective assets. They have tons of different models with regards to buybacks, revenues, burns, etc. But right now I think the entire industry is thinking about running uh valuation kind of like thought processes on DeFi assets as they are now with cryptoon only capital digital asset capital only. So like Bitcoin or Rap Bitcoin, ETH, stables, you know, like the A chain link, um,

etc., etc., right? Those are the assets that are in in a in morpho in Sky in all of these kind of um asset managers on chains, lending protocols, etc. What does the change in valuation methodology look like? and talk to us about the TAM opening when it's not just crypto assets on chains, when it's not just digital assets, but it's any and all tokenized assets. I think you've said you expect stable coins to 7 750 billion onchain as well as tokenized treasuries upwards of 50 billion as well. These are these are your words, not mine. I'm more bullish than you here, but I guess we're adjusting the >> Yeah, I'm higher than keep going.

[laughter] Okay. So when those come on chain, what does that look like for not ETH asset and not Ethereum but these DeFi assets? How do you think about they like their transformation? >> I'm max bullish a and morpho and unis swap. This is the renaissance. I mean they've been battle tested. They've set and when I say Ethereum is the best place for business that means for the DeFi applications too. I'm not just saying that Wall Street comes in. Everything that's been built and battle tested. I mean, all these founders have been in the trenches, um, like like Stani and Hayden and everything, and they've been building the most battle tested protocols on Ethereum. They're about to see the biggest revenue uplift they've ever had because the TAM, like you said, and I I I think I'm higher. I think stable coin uh, AUMM is going to

5x on um, on Ethereum. I think tokenized assets are going to 5x. And so, these are going to be hundreds of billions if not trillions of assets that are going to come to the chain. And they're going to plug into things like a and morpho. I mean, we've already seen Apollo, >> Black Rockck, right? They've already done it. >> I mean, uh, Black Rockck put Bidd on UNIS swap. Apollo is working with Morpho. These are already happening. So, these DeFi valuations are going to go bonkers and and that's a good thing. I mean, that it just means that now by having more assets and more ways to create utility and show the use cases of blockchains. Yeah, I'm a I'm DeFi got me into the system, DeFi got me into Ethereum, and now is DeFi's inflection point. So I'm I'm quite bullish. Defi >> totally man. And and same here, right?

Like we started in 2020. It was it was DeFi summer and DeFi was very very very interesting, ve very novel, very unique, very kind of wild west. Went through like a two to threeyear phase where it was kind of usurped by the L1 trade or the L2 trade and now it feels like it's right back. Um, so I guess maybe a more difficult question here is is there a world where their DeFi protocol tokens can outpace the valuation of the underlying blockchain? Perhaps not Ethereum, but other blockchains. Do you expect to see a valuation mismatch change where there's going to be the apps of the ecosystem rising above the underlying infra and L1's? I know that's kind of like the hot thing to say right

now, but like realistically like is there a world where the a morphos skirups etc etc rise to higher valuations than the you know all L1's or L2s? >> Absolutely. I don't even think that's a controversial statement. I think that that's the most positive sum outcome is where the applications where you're seeing institutional adoption and hundreds of billions if not trillions of assets at the end of the day flowing through. They should capture a lot of value and and the app layer is really important. A blockchain is nothing without its applications. A blockchain is nothing without its assets. And a blockchain is nothing without it security and decentralization. And so yeah, obviously I think Ethereum benefits from all of this. And again, Ethereum is bigger than just a platform.

It's infrastructure and ETH is an asset store value. So, let's let's move that aside. But every single one of these DeFi tokens, now that they're hitting their institutional moment, too. I mean, again, Stani went through the trenches and the SEC came knocking on his door, SC came knocking on Uniswap's door. All of that is now behind us. >> Yeah, these these DeFi tokens I I think are set up for rerating in a very, very large way and they're going to capture huge market share. And I'm glad that we have so much so many applications and so much precedent built on Ethereum. It's good for ETH, but the app layer should flourish. the app layer should fly and it should outperform anything else that doesn't have as much product market fit and utility as DeFi has today.

>> What do you think Ethereum can be doing better? >> It's a great question. My >> There we go. >> Yeah. Yeah. You stomped me for one because it's it's it's been a lot of years of um it's been a tough few years for ETH the asset and people love to look at Ethereum as as the dinosaur and now Ethereum's value is finally showing itself. So, it's one of those moments I'm like, "This is finally the inflection point to be like max bullish, but what could it be doing better?" Um, continuing to be top of mind share for new young developers, continuing to say that this is the coolest place to build. Um,

I focus a lot on finance and financial outages. I've been in New York 15 years. I worked on Wall Street for 12. So, I mean, I know the product market fit when I see it there. And it's very exciting to me, but Ethereum is bigger than just finance. So the AI ecosystem, Ethereum needs to win that. I mean, it's it's that that's a must-win. And Ethereum is >> yeah, >> the most useful platform to have money and high value assets in. So when you ask all the agents where you're going to transact, they actually say they all output Ethereum. We need to keep it that way. People building new applications, that needs to come to Ethereum. Ethereum is it needs to be cool rather than >> boring. It can't be branded like IBM. It has to be branded like Apple. So, that's what it can that's what it can do better

and we're all going to help drive it. But, um, but it's important. It's important to keep inspiring new talent and I want innovation. When people think of innovation, I want them to think of AI and I want them to think of Ethereum. >> Yeah. Something that you spoke about earlier was Tom Lee and Bitmine being this kind of like institutional buyer. Like looking holistically at the at the DAT landscape. You've really got Sailor, Tom Lee, and the rest. Uh obviously Sharplink Joe doing great work. Those guys are crushing. There's there's a couple other solid Ethats, but there's been some stuff happen. ETHZilla, Peter Teal left and it was kind of weird.

There was a a a Bitcoin guy, Joseph Bailey, I think did some interesting cross entity uh absorption. I I just don't know where this goes. What's your honest opinion on Bitmine and how the stock trades, ho how the company's being ran? Where does this go for all the ETH holders who are constantly seeing Tom Lee out there buying buying buying buying? Like are we is this our sailor? Is this something that that we should be fully backing publicly being strong about careful about? What's your take on that landscape?

>> Yeah, so the power law played out just like any innovative wave. you see a huge wave and and there's a mania and then and then there's a quick reckoning and there's a few that rise to the top and that played out very very quickly for the DATs but that's also it's healthy it's healthy to have a reset and have sustainable growth Tomley has been buying $100 million of ETH for several weeks for a long time he is he is the sailor equivalent and and he has an excellent voice and he knows the value proposition and he's a champion for ETH and I think we should all be behind him because he knows the value he knows where this is going and He thinks in exponentials. He's the one that says this is this must be the stable coin chain. So maybe I should buy like that's

that that's what you needed. There are a lot of other there's a lot of other good firepower in the space though like Luben and Sharplink and and Andrew Keys is going to go live soon. So I mean these are these are heavyweights. These are OGs. And what they're going to do is they're going to help amplify the value of ETH to institutions. And that's why I think ETH is going to become a core holding for institutions. That's why going back to your question, it's never evading a question. The value is going to grow on Ethereum a lot. transaction to go up a lot, but ETH is rerating to become an institutional asset and that's a lot of that's because of Tom Lee and the other DATs, but yeah, it's going to be a few of ETH people and it's sailor for Bitcoin and that's excellent.

>> So, one thing that Rob says a lot and and that we think about is that have these DATs not just created a dilutive force on the market such that if I want to get exposure to ETH, I can buy ESP, Bitine, the ETH E, any of the ETH ETFs. I can go on Kraken, Coinbase, etc., buy ETH there or I can go on unis swap onchain and actually buy onchain. How do you think about whether these dats are dilutive to the buying pressure from retail on ETH? Is it a a dilution or is it all kind of the same at the end of the day such that like there's more than 120 million ETH or whatever it is or there's more than 21 Bitcoin because there's all these like derivatives that you can buy. Is that a right way to

think about it or or is that just wrong? I don't I don't think so because all of it re leads back to buying spot ETH. So I mean buying Bit mine just means that Bit Miner buying Bit Mine stock means they're going to go have more mnab to go buy more ETH with. So it just depends on the vehicle. And this goes back to your earlier question. >> The people that will value ETH natively on chain ironically are the biggest customers of decentralization. It's the institutions. It's where can they hold assets in in a trustless manner that can't be censored which is their own collateral. That's ETH. Retail wants rappers. Retail wants different ways of accessing. And the good part is the Ethereum ecosystem is given every single menu. Like you said, you can buy ETH on Uniswap natively. Great. Maybe that ends up being the institutional case. Retail

wants to own ETH in their 401k. Fine. Then do ETHA the the Black Rockck ETF or do Bit Mine and get some levered exposure to ETH. But all of this is a creative. I'm very positive. I don't think it's diluted at all. I think it creates more buying pressure, more buying sources, and I think it's I think it's ultimately very good. What are uh the two or three things that you're most excited about within the Ethereum ecosystem this year? Clarity Act comes to mind. Um you know, there's tokenization. Like I mentioned, Black Rockck wants to tokenize all of their ETFs this year. Um is there like one or two things that really peique your interest?

>> Yeah. Um it was cool because last summer about this or about this time last summer, I was uh testifying in Congress about the Clarity Act and now it's coming to fruition. So that'll be that'll be excellent for unleashing innovation beyond like I want Ethereum to win, but I want all the applications on Ethereum. I want all the tokens on Ethereum to win too. And that will give clarity, for lack of a better term, about how those tokens can be treated. The good part is the CFTC is getting very vocal about how to classify tokens. Yes, has been super super um uh supportive. So we're going to see a lot of innovation anyway, but Clarity Act will put into law. So that's it's very very important. Just like stable coin, the Genius Act legitimized stable coins and now a year later we're going to see the inflection point. The

Clarity Act will unleash tokenization and you can't put that genie back in the bottle. And so it is important to get these things into law. That's the first thing. And the second thing is I'm just excited for us to see our exponential inflection point which people have been waiting for for a very long time. It's been it's been a tough few years of of waiting for adoption, waiting like we all been driving towards is here. So, I'm waiting for stablecoin uh TVL to be a trillion plus. I'm waiting for RWA TVL to be a trillion plus. And that's when we find product market fit. And yeah, I'm just excited after all this time. People thought I was crazy for a while, but I'm excited that I think Ethereum is going to be the backbone of the financial system and that's going to get solidified this year.

>> On on clarity, uh Andy and I are going to uh the DC blockchain summit next week. Nice. >> Uh we're going to be live streaming from the conference speaking to a bunch of senators and politicians and we've had Hester Pur on the show. I saw >> hope to see her, you know, out there again. We'll we'll have some CFTC people on as well. >> Like, are there questions? What what questions should we be asking? Like, what do you want to hear, right? Like, you know, if you're not going to DC, like, you know, what what do you think the the industry needs to know or should be talking more about? Uh we'll we'll we'll be there to ask those questions. I think we have the most open but also the most responsible regulatory um window that we've ever had and maybe maybe will

have for a while. So I think now we're supposed to push as much responsible innovation but be on the frontier as much as possible. What does that mean? Let's ask them what is helpful to innovate in America. One example is privacy. So I believe very firmly that blockchain systems at the base layer have to be open just like the internet's open but you can build privacy layers on top. What does the SEC FTC think about ZK? We talked to them about it a lot. They're they're excited TLDDR but how do we incorporate how do we be on the frontier of ZK? How do we not lose the the technological race and let ZK go elsewhere before we embrace it? What kind of um systems can we adopt for identity, for privacy, for data privacy,

etc. and and linking all that to blockchain. So the frontier of ZK, Ethereum has always led on that. Ethereum's been a but we should continue to push the push the boundaries on it. And the second thing is how do we responsibly integrate all these institutional assets that we're bringing and have them be distributable to to retail like the the real potential of blockchains. It would be a little sad if it just end up being institution to institution. There was no open benefit. Then then what's the point of Ethereum at the end of the day? We want to responsibly be able to take AC assets that only Wall Street's had access to and give Main Street access to those two in the right responsible way with the right disclosures but make it all programmatic. So how can we think about innovating in that future? That's that's

I think the win that everyone wants to see. Everyone wants more distribution. Everyone wants more asset velocity. Um blockchains enable that. Let's work with regulators and figure out the right rules for it and bring the right technology. And I think again ZK and privacy should be a big part of that conversation. >> Definitely. Incredible. >> Yeah. I mean, I think everyone's excited about the ZK aspect of of the Ethereum road map. It it's feels like this technology has been so aggressively invested into, built out, built out and it's kind of adjacent to blockchain and crypto as an, you know, as it exists, but but it's so perfectly tied in, right? It's so it's such a nice kind of holy matrimony there. More more on the kind of regulatory clarity front. I'm viewing clarity as like this line in the

sand in this current bare market as well as in the current structure of regulation. People are saying that we really want to get this done before the midterms and obviously we want to have firm regulation done uh prior to the next actual election of of the president. There was a big standoff though between Brian Armstrong and the broader regulatory uh you know House of Representatives SEC CFTC and it seemed like he stood his ground because he did not want to budge on the stable coin yield part of the uh kind of of the bill which was probably because of his private interest but also because you want to think because of the public interest of the entire industry. There

was a lot of controversy there. Bitcoin went to 97K at that point and then dropped all the way down to 66 once the once once the market realized that that this wasn't gonna happen. What's your take on Brian Armstrong's position in DC? How much of an influence do you think he really has? And is does he have too much power? >> So, first off, I don't think Bitcoin's crash was due to the Clarity Act not passing. I think we're just in a macro a weird macro liquidity spot which is all going to resolve soon for the next cycle and so so no it is soon because the money printer always there's always a money printer that's like one of the things that will always be true in monetary policy is there's always going to be a money printer and that's going

to that's going to come to life soon I mean it's uh so take that aside take the price aside I think Brian Armstar and Coinbase have been some of the the most important proponents of driving responsible regulation innovation for crypto for the last 1015 years. I think we all owe him a lot and I think he is thinking bigger than just Coinbase. I think he's thinking about the future of the space. So I think everything Coinbase does, Coinbase was the lone party fighting the Gansler SEC and they're the only ones that that were that stepped up and fought back and we all owe them for that. So um I don't want to comment on on whether Coinbase and Brian's stance is right or wrong. I think they're all going for the most positive sum outcome. I think the point to hammer home is the Clarity Act's

important. The claria act gives encodes into law how tokens are treated, but stable coins are already in law. And what does stable coins being in law do? It makes public blockchains put in the law. So, we're in a good spot. I mean, I don't want to say that if the Clarity Act doesn't pass, we're it's it's all roses, but we're going to be fine. Uh, I don't think you can put stable coins back in the box. Too many institutions, too many every fintech company, everyone's integrating them. That it's like undoing email. Like, no one's going to go from email back to to sending paper mail. No one's going to go from stable coins back to back to physical wires. Um, that adoption moment's happening. It'd be nice to have Clarity Act to put to pour fuel in the fire for more types of DeFi tokens, but tokeniz

tokenization's happening regardless. Stable coins are happening regardless. Public blockchain adoption is happening regardless. Ethereum is now irreversible and um I'm quite happy about that. >> Love it. Yeah. Um, last thing from my side on the Ethereal size, on the Etherealiz side, what's the state of affairs now? what are you guys doing? What's the conversations looked like? How has the kind of pendulum been swinging from your internal operations from uh you know ETH was at 5K now it's at 2K the the adoption is flying there's been a lot of developments on the tech side like how do those conversations look and kind of what's the state of affairs on institutional interest in public blockchains in Ethereum um and

what are you doing to kind of push this forward >> right we're the busiest we've ever been the most intense in the good way period we've ever had. It's the most amount of um inbounds. I used to have to make outbounds about Ethereum. Now it's all inbounds saying we need this, we need this, teach us about this. It's goes from things like presenting Ethereum to a bunch of Hong Kong regulators to um following up on the regulatory front in the US to to doing institutional tours all around Wall Street all day and running around in the suit. So you guys are wearing suits, too. It's it's the best it's ever been. And so honestly, I haven't noticed the price drop from 5K to 2K for institutional adoption. I've obviously felt it in my wallet, but um

but I [clears throat] think that'll come back. I think it's it I have the most conviction I've ever had, but it's because we see all the data points. We see what's happening and we've been building. There's so much infrastructure that needs to be built. >> The ZK frontier, we're making a big bet that that's the future of privacy. I think that there are other chains that are choosing not to use ZK and we're choosing that Ethereum is going to be all ZK enabled and it's like betting against AI. Do you really want to bet against ZK? That's a it's a so so we're making some big bets. We're making some big technological pushes, but we're building the infrastructure to help accelerate. I want more tokenized assets on Ethereum. I want more stable on Ethereum. We're going to whatever doesn't exist, we'll build it and and we

have the most amount of adoption we've ever seen. >> Incredible. VC, thanks so much for coming on, man. Absolute pleasure. Uh, we got a can of bear spray here. >> Ethereum bears. [laughter] >> I think you'll love that one. >> Any Ethereum bears, we have uh we have this when they enter the office. >> That's amazing. I [laughter] don't think we need this in New York. >> No. No. I think you're right. >> I think I think I think >> No bears here. >> No bears here. >> That's incredible. No, thank you for having me. I love this new office. I'm so happy you're in New York in the capital of of the world and the capital of Ethereum shortly.

>> Absolutely. >> Definitely, man. >> Well, thanks so much. Uh this is >> ladies and gentlemen that wraps us up. >> That wraps up TV >> stabled up >> episode number 23. Guys, thank you for tuning in. See you guys tomorrow live from the tokenization tower, >> the Empire State Building. >> See you guys. [music] >> [music]