DAPPCON 2025: Onchain to Bank Them All: Bringing Real Value to Consumers

Transcript

Okay, while we still uh arrive, um a brief a brief little anecdote. Um a couple of days um we went out for lunch uh on a Monday not far from here and uh with with some colleagues and um I was actually bragging about the title of this panel which is onchain to bank them all. But then my colleague is Yeah. August. Hey, it reminded me of like the Lord of the Rings and one ring to rule them all is actually the villain.

And this is certainly not the story we want to tell uh here uh that crypto is the villain to to lock everyone. And it's actually the opposite. And why is that? Well, um first of all, there is no bank to bank them all globally. There's no global bank. They have different jurisdictions, monetary systems, stuff like that. the infrastructure is not there and so on. Also, that would be quite scary if we have a centralized system with all those data with the possibility to basically unbank everyone in the in the world and one uh um step on a finger. Um however, the vision of banking on chain on chain to bank them all is quite interesting because it is a robust in infrastructure. It gives access to everyone. It has way more

stability uh on the ground level and we can have very very diverse uh different Legos on chain and um therefore so so what what is not sufficient certainly is just to have the globalized settlement layer. What we need is financial legos and those Legos are quite well represented here. Um and we have here Patrick starting with you alone. Let's go that round. Odra um from from cow um which is basically theoretically bringing trading to the billions. Um we have Patrick from Circle bringing money to the billions and we have Theo from Morpho um bringing lending to the billions. And with these crucial Legos, financial Legos on this globalized

settlement layer called blockchain, we indeed can bank all without sacrificing um the core values of crypto. And that's quite a interesting vision. I'm pretty um passionate about that. And in this panel we want to talk about growth um of this ecosystem to finally reach this billion to potentially bank all um what what are kind of thresholds for growth uh or hurdles we have to take um topics like monetization extremely important obviously I as head of revenue at safe um and particularly interested in that um and and other um hurdles we can see obviously with Patrick we have an specialist on on regulation certainly you will get uh one two questions on the beloved ECB and the EU commission

Okay, let's kick it off. Um, Theo, um, let's start with a little bit of a, um, provocative thought. So, I I read a, um, blog post from from Powell, founder of Morpho, and there you're talking about also opening up for KYC pools, maybe some permissions on on Morpho. So, is the path to grow to kind of have black back sorry, blackbox banking now on the chain, silo up, have not this kind of money leos that pluck into each other? Is this your vision of growth? Um, so I think the the vision of K permission KYC like constraints on chain can be like sat level. Either it has to be enforced on the blockchain itself. So the market the liquidity is KID or it

can be enforced at the platform level. So if you think about the Coinbase product we have with them, there's no notion of KYC liquidity. However, in order to use the product from the Coinbase main app, you need to KYC. So the question is should the KYC happen at a platform level? If so there can be multiple KYC we don't really care the liquidity itself is permissionless or do we need to KYC the liquidity if we need to do that there's a couple of way to do it the first way is with mor existing version like v1 so morph is a laying protocol there's a couple of versions to it um it was originally founded three years ago as as a layer on top of a compound then we branched out built something fully like orthogonal to this where we externalized risk management

away from the protocol and now last Thursday we announced more for V2 which is a fixed rate fixed time lending protocol with another book on top and so answering the question of KYC also answer like the question of the underlying like protocol in its current form it's cumbersome to do KYC this is why you have no permission or KYC liquidity on chain I mean very little and it doesn't scale because you need to bootstrap new markets and therefore fragment liquidity in the context of moro v2 because you have an intent book on top you can commit the same liquidity that will respect various conditions. So you could say I'm happy to lend my USDC against normal liquidity or or against like let's say KYC collateral. So by virtue of of saying I can lend against

various options. I'm not fragmenting liquidity. I can allocate my liquidity to various like profiles. And we think that's a big unlock because the problem today is like you want to do KYC you need to create net new liquidity that will respect these conditions. Well if you have this or function um it's much more scalable. And and maybe another point to this because I was just thinking um banks can be seen on Mofo as vaults. So they don't necessarily fragment liquidity. They can use the same markets. So you can just say, "Oh, I'm bank A. I'm going to tap into this market. I'm bank B. I'm going to tap into market A and market B." But they still share one market. So the notion of a bank is just more like a virtual layer on top of an existing liquidity network. But the vault doesn't fragment liquidity. So the notion of

silo might be also different if you see a global shared liquidity layer. Okay. So, so you remain permissionless uh for the ones who want to do permissionless define. Yeah. I think maybe the market will evolve in these two pools of liquidity. So, it might not be like every bank has a silo. It's going to have a massive pool of permissionless, a massive pool of permissions, but every bank will tap into the same. And why? Because it's scalable. They can come and have yield immediately and they can tap into liquidity if they want to borrow. And was V2 to drill down a little bit and later you get also some questions on fall asleep. Um, is is V2 meant to cater to institutions their needs for fixed term lending because that's quite I I don't know who who took a house loan.

Uh, I didn't. Uh, but if you do, you have a fixed duration and and a fixed um at least for 10 maybe up to 20 years a fixed interest rate. Um, is V2 an answer to the requirements of Trafi? So V2 is much more general than V1 and so therefore it can cater to anyone the to the same extent you could do what you can do with V1 but better. You could also do like OTC lending on chain. So you could say I'm I'm Julian. I'm happy to lend to um Galaxy. I set up the Galaxy wallet address in a white list when I'm I'm boring and I'm effectively doing like an OTC transaction. It's just using like an onchain infrastructure. So for instance, CV2 has a way to do whatever we can do right now plus use cases which are bespoke and to the same

way like an OTC transaction cannot be done with a lending pool because it's a bespoke transaction. You could do it with like another book. And is this overcolateralized still? You could also do so part of the parameters of of um making an intent on this new lay protocol is like stipulating I'm happy to borrow with X collateral and Y loan assets. You could leave the collateral parameter empty. Effectively, you would be doing um under collateralized, but you need to find someone who will lend to you. Yeah.

Sure. Against this. So it's and I think you know Paul's article is called the price of trust and that's very much what lending is. So you could do underres means oh I'm lending against nothing but you have to trust me and so finding a way to compute what this trust is or to verify it is I think something that we we will have to work on or like work with other partners. I think you know maybe you know world is a good example of this. You use your world ID to do things. I mean I'm not sure but there's going to be like primitives on chain that I think so Moro is bringing trust me bro onchain. That's interesting. Uh sounds a little bit like risk but uh um certainly interesting to discover. I mean opening up tread fight has some potential I would say for

growth on chain. Um so let's talk about um cow. Yesterday on the same stage there was a um talk from flashbots denning uh indic or showing data from dune that flashbots is like this I don't know if it's the super majority but it's the biggest chunk of of origination of retail flow is happening on cow. That's crazy. I think like most people in the in the um audience yesterday I think were underestimating that. I did even though I'm a cow user. So that's that's really cool. But is onchain retail enough and how do you see what what is your way to scale to the billions? We see that with Morpho. Um they have a distribution uh now with Coinbase. Uh we

see that with Circle. They are distributed via um sexes uh centralized exchanges. what's the path to grow to 1 billion users for cow? So, uh today I will not make that uh that announcement that you may be be waiting for um yet. Okay. Uh though it's true that uh going to the path of working with uh with this centralized uh interface and app is uh is something that uh that we are looking into into it. Um though what we are focusing on right now it's uh it's really to to provide the best layer uh for for price discovery. Uh as you mentioned uh on the on the talk

yesterday uh we have uh we have potentially uh the best uh the best liquidity finding in the in the market and this is this is where where we are going also uh further than just these these big actors Coinbase etc. um we are part of the of the crypto ecosystem and what we're doing also is to is to partner with uh with our um friends of the uh of the ecosystem let's say uh we have a partnership to uh together and this is also how we we look to uh to find for for retail the on boarding the next billion uh will not be so easy because the Next

billion is not yet on Coinbase. Um what's what will what will happen to on board the next billion? It's either going through this uh this hybrid system where you have a D5 layer and then potentially a centralized interface uh that is like no susp etc etc uh because this is where user are today. Though in my very personal opinion uh uh in the being in the DeFi ecosystem, we should uh at all cost avoid going there with with these uh these new banks and actually propose uh the same type of service uh that they

are uh knowing that in DeFi in crypto we have this this problem of user experience and of what user experience UX and uh and it's true that this actor are actually providing what is best uh on the market. I see. Um Patrick, you are in a decently successful um multinational corporation. Uh um um but in that you have a particularly interesting job and I think this perspective on on regulation is as I don't know I I looked it up again. It's a quite complex title. Let me see it.

it's senior director EU strategy policy at circle. Everyone knows you from Twitter I believe at least during the years of of Mika. So um there's a lot of buzz um on on on Bloomberg and everyone in crypto and and stable coins in everyone's mouth and I must say I'm personally shocked that Trafi is shocked about crypto because for us it's a little bit like a continuous growth. We see all these Legos coming together and we are already using crypto every day at least I via Nosis Pay and um is there what is what is the situation in the ECB and the EU commission now seeing all this B tread really waking up um I remember um the funny guys at the ECB constantly having these extremely funny

blog posts um among others they said like Bitcoin's last stand when it kind of I know reached first time 70,000 or something like that now we had above 100 So like what are these people doing now? Do they get it now? Um yes. So I mean f first of all thanks a lot for having me Yan. It's great to be back and share the stage with you. It's been a while. Um so I would say the the main difference if you look at what happened in in Europe is that those discussions were mostly theoretical a few years ago. I mean to some extent they haven't evolved that much those discussions right because even back in the day 2019 Libra white paper we were discussing potentially

billions of people coming online and use stable coins through WhatsApp and Facebook and others um and to some extent the discussions are similar to those but this time let's say five or six years later they are underpinned by data and by transactions that are happening in the real world and that at this stage I I think are undeniable for for anyone for um us as the industry but also for the larger tradefi institutions for regulators etc. If you look at if you look at one example corporate treasury spacex and others so large you know publicly listed companies using stablecoin for treasury operations. If you look at Visa, Mastercard being able to integrate

stable coins for settlement with with merchants. Um, if you look at large, you know, neo banks and other like massive fintexs adopting stable coins like new bank and Brazil and others, I think this is the stage where there's just there's no way back, right? The the adoption path is clear. Um and this is what now those entities also at the policy and the regulatory level are confronted with. Um in Europe I would say we have come up with the Mika framework that sets you know the broader context. There's good things in it.

There's things that hopefully in the future will be addressed and and and adjusted. But I think it it gives us and it gives also Trafi um the clarity they need to tap into the space. And I mean probably those actors aren't aren't at SafeCon or at Dapcon today, but almost every major bank including every major European bank is currently sitting behind the scenes and discussing what their stable coin strategy is. That might be launching one, that might be um partnering with stablecoin issuers for the reserve bank part um that might be orchestrating stable coin payments. So everyone um is discussing how to get involved and that's that's quite exciting. Yeah. And um I think there was

yesterday the announcement with JP Morgan deposit token launching on on base which is yet one of these news coming in right yeah I think it's it's hard to keep up with the news and um to some extent we'll have to just get used to more and more announcement every day and I think what what we or what I am mostly focusing on is um you know beyond the the the announcement and the news and the headlines is just looking at the data And um if you look at Visa dashboards, if you look at new reports from from from Artimus, from C cast Castle Adventures, the thing that excites me most is that at at this point it's it's being used. It's not only, you know,

being announced. Yeah. And um yeah, I I can't wait to see 12 months from now where we will be. Yeah. And what makes me most excited is um the first use cases we can see with Zeal. I don't know if we have Hannis today here. He's definitely at DevCon. um uh that you combine those all those Legos right now, right? You have a stable coin and you can with a click of a button uh let your stable yield up to certain demands will be liquid all the time when you pay or the other way around you put up your rep ETH or rep staked ETH let that yield and you lend against this position and and this is this is my vision for open fight. This is my vision for the billion people coming on chain because it's just so much better than what banking uh can

can do. Um, so I think I I'll not make the voice. Um, but everyone knows the MOO. Okay. Do you guess so, right? Okay. So, it's the MOO uh from uh cow swap with a which is quite recognizable I would say. And uh since you you already touched on that topic of UX, um being recognizable is probably not enough. Um, when I look into uh when I use cow swap, which is obviously the go-to um um ex exchange uh decks uh as we yesterday learned um I see things like what solver solved my problem, my intent. Okay. Um what is the refund? Um and I'm just

wondering is this the language new retail, it's not in crypto, it's not visiting DevCon will understand. And um caveat I think you know what I mean. I think it's not. Um what what is needed to bring in more people? Make it as concrete as possible. Yeah, this is a this is a really good point. Um new people have zero understanding of uh of what what's crypto, what's possible, uh what are the the benefits, but also what are the the pain points. and um and you're mentioning the the refund and uh the whole um the whole uh me uh situation on on blockchain is something

that does does not exist uh otherwise and um and it's true that up to now our our value proposition was uh targeting uh crypto users. We are developing crypto product for crypto users. That's the the little echo chamber and and this crypto user would clearly understand and we have now the the proof that that they understood the the point and um so today if we really want to uh to on board the the rest the rest of the world is first uh to explain um the benefits of of crypto what people can do uh with uh

with their with their crypto assets. Then uh it's really about educating them on how it works, what are the dangers and this is actually something that uh that we are working on now. We are creating this uh this whole uh educative content uh to actually get all these new people that are interested for whatever reason uh with with crypto market defy product for them to understand what's going on. And I do I do believe that here there's a there's something missing for the whole uh the whole ecosystem. As I just said before the up to now we are really developing uh product for

ourselves because we made money in crypto and we have to uh we have to uh to put this money at work but we cannot stay in this uh in this in this stage. We really need to educate and this is the path we are we are taking now. Yeah. Maybe reflecting to what Lucas uh um said before this talk here and and what we um in in safe labs also need to master is like really take the people uh their hand and and guide them through this ecosystem of crypto. I mean um I I guess most of you use also safe wallet but who of you would guide your best friend who's not working in crypto to use safe wallet first despite you being convinced it's the right product right

so mo like many of us look into the same problem and we really need to um solve this UX problem um tio um moro made a lot of noise um through uh your and you were also referring to the um integration with Coinbase uh I with uh it's on base you put up CB BTC as collateral you lend USDC nice connection to Patrick again um against that is the path only via like we just seek to be integrated in the big existing either fintex like Robin Hood or or um centralized um crypto players is this the path to growth and the only one it's difficult to say exactly what's going to happen in the

next 10 years however you as you described like what new users come to where it's easy and where the UX is best and when the rate is great and so I think you have to just specialize as what you're best at. So for instance in the case of Moro we could have a front end which is incredibly beautiful where you have one option for USDC and one click done. But as we discussed many times whenever you go to MOF you have 16 options you have to understand what the collateral is. It's cumbersome and we we we kind of just trying to think okay what's our role and what do we want to achieve here? are we going to be best at building a liquidity network with like depth and credit rates and we're going to let like fintex neo banks just a wrapper on top of these products do the

distribution for work for us and frankly I think we we we believe that the the latter will bring the most growth over like you know the medium term and so I don't think it's about like oh do we do we don't care about UX it's like who can do it better and so our thesis is you know like the mullet which is defy in the back fintech in the front Why? Because they just as you said they're better at us than us to do this. And you know if you look at the way abstraction is going I think we're getting to a path which is like a merge of the defy ethos which is a web3 wallet per user. So you know on Coinbase someone is on the main app but what happens to them is like whenever they enter this borrow product a Coinbase web3 wallet a smart wallet

will be like spun out on their behalf from which they have the private keys and so I think the the we kind of like sort of going to converge into like a hybrid model which is going to be genuine like backend onchain auditable unstoppable but like the product managers of Apple Robin Hood like Coinbase who actually are great at like creating user flows and a testament of this is like okay this is theoretical if we look at numbers the Coinbase product which is powered by MO has I think 700 million as collateral with 400 million USDC borrowed in like four months you know that's successful like for like anchain products so there's to me there's the thesis or the theory and it's like okay when we launch a product

using this this thesis does it work and the data as you saw like if we look at data it's actually working like extremely well so maybe you know it seems like that's the path that's that's has the most impact and I think that's what we care about like impact. I think this like it's been in the media talked a lot about this distribution game um and whether to look um for distribution via these tradefi or established players or the new ones. There's there's a funny funny thing when you talk about this today but maybe you remember that Patrick. So we have this in in in Schutgat where Porsche is from um and among other big companies um there's Bzuk which is the like a local exchange they are 150 years old and um back then

in 2018 19 I think they got their um license for custodying crypto and trading crypto. At the same time, Coinbase came into the German market or European market and the question was like who going to win the race of end customers for trading crypto in Germany or maybe even in Europe. what today sounds quite funny I guess like most of you have not heard about digital exchange um is actually was really a debated question because is is the um one who's um with 150 years of experience all the licenses better to adopt tech or is it easier if you have the tech like Coinbase to adopt license and and distribution stuff like that the race is made no question about that

Coinbase won that um but so so who won the the new paradigm When we look into mobile banking, it was not the established banks or the established direct banks who were digital first banks like in Germany, DAB, comirect, something like that who won the race for mobile. No, it was Revolute and and and um and 26 and new bank and whatsoever. Um, so I hope uh this is my crypto heart and I think at Devcon you can say that that the big big winners of crypto and openfi will rather the be the zeals and based apps and and nosis HQs um than the already big established players but maybe someone

who's a little bit in the middle because you're really neutral Patrick you're providing money to everyone right you see a lot of adoption in in in centralized exchanges like Coinbase but also in DeFi USDC is basically the DeFi token. If you would have to bet your money on one of those buckets, where do you think over the next 10 years will you see more growth and more demand for USDC? Established players or new players? I think it's hard hard to make that distinction to some extent because as Theo mentioned those words was to some extent at least I think they will converge and so um just to take one example right let's say the the morpho pool um you you just you know

collateralize your Bitcoin or your ETH and you take out a loan in let's say USDC or maybe in the future EURC as we're here in Europe. I'm pretty sure that in the future the Euro C or the USCC that you borrow you might potentially use it to then for example buy a house over here in the in the real world so to say and that those kind of services will rather be provided by existing traditional financial market players potentially banks and others um so to some extent I think it's it's hard to make the distinction and those two worlds will will grow in parallel for sure what you mentioned with respect to distribution is that for the money layer itself and we at circle we see ourselves

as building the money layer the money protocol for the internet um liquidity and network effects are incredibly strong I mean they have been strong already for traditional let's say e-money um I think we all use PayPal over here in Germany because everyone uses it right it's by far the most successful um e-money product over here and to some extent I think That's even stronger for um the tokenized money layer and the internet because you have the money network effect building on a let's say platform or tech network effect. So one network effect building on top of the other. Um and this is uh th this is super important for you know how how we think about who will use our

stable coins. what we try to serve and what we try to build is the most liquid, the most usable and the most regulated money layer on the internet. And then be it DeFi, be it Trafi, um companies, developers that that's by the way often times it's not known, but circle also builds a ton of developer products um so wallet products, smart contract, smart contract um um services, etc. So I also encourage everyone here to to check out build on circle our discord for example. Um but so everyone can just tap into that money protocol and money Lego and and and choose and pick whatever they want and then we believe those use cases will reinforce themselves.

um in as said at the beginning or like in a few questions before um it saved the head of revenue and we we we all in or like many companies in web 3 need to figure out how to make money. Um the times of the web 3 kumbaya where you just like live off your funds from the ICO are over. Um, it's also to be confident enough to make money with your project and uh and demand money for your customers somewhat. This is maybe of also another proof point of product market fit. Um, but it may also be a little bit more difficult than in banking, right? Where you lock people up and you get the card only when you pay and money is sticky and the account is

sticky. So people will pay if you just collect the fee and they will do it. Um but it is important especially for for circle uh since you are not kind of yeah maybe money is a use case but I I think more tangible use cases trading or lending right so you need those protocols on chain that create use cases why people would then use their stable coins in those use cases with right um so what do you do at circle or is this is this relevant for you that you see that your partners can also monetize because After all, you will live like you will have a more healthy P&L if if like more people can monetize with the usage of your services. Yeah. You know,

of of course I mean what we try to do is really to build a powerful flywheel effect and you know to make developers use our product that then leads to liquidity on chain that makes users use our product that you know builds user demand that then brings for example banks or fintex to build services on top of that product because they see their users and and all these actors they reinforce themselves. So developers um potentially try fintech players, users and there's different angles to that. I mean for sure partnerships play play pay play play a massive role and I think um everyone's well aware of of of circles um distribution partnerships of our

massive amount of partners. We have a circle alliance um partnership program so to say with hundreds if not thousands at this stage of of partners out there with whom we work. But then it's also about how to make our products just the most usable and the most liquid. That's also part of the equation. And in that respect, we have our developer team that builds on, you know, developer relations, um, developer toolkits, um, and all that all that's needed on that front. And I think you need to play all these different avenues if you want to be successful as the money layer of the internet. Um because wi without distribution you can be the most regulated stable coin in the world or

you can be the best product in terms of how the technical stable coin is built but not many people will use it. So you need all the different you need you need I mean I think regulation and compliance you know you you need to check the box you need to be strong there especially when it comes to um internationalizing your operations product and tech make it as usable as easy to plug in as possible and then distribution of course um to we just launched the landing feature shout out to the safe team uh who worked on that so in safe you can now on the left panel hit the earn button and and earn money on your stables uh and and many other assets like rep staked ETH. Uh we do

that with the help of of Ken who um sponsor the the widget and and in the background there are more for vaults um by the curator stakehouse. really cool and all like many people can earn here right kill does earn we earn a cut on the on the performance fee um and it's also stakehouse but one protocol sitting now at 4 billion which is more for does not monetize so like how to make sure you still exist in 10 years so we um are we sitting at seven not four now we're sitting at 7 billion now not four but it's okay then defy lama is not up to date overnight it's kind of important why why I'm saying not being picky but I think our business has a similar aspect to the one of of Patrick

which is network effects. So Moro will join in value as long as the network is big and the bigger the network the more network effects there is and the the more we can be eligible to take a fee at some point. The path is do we want to grow or do they want to make revenue right now more could make six million a year if we were to take like something like a 10% fee on on the yield. uh some of our competitors choose to take a 20% fee and and create a massive sprint between the borrow and the land side. We think that's more of like a short-term view. And so I think the path for us is like let's grow the network to I don't know 100 billion. Not sure exactly what this metric is but and take a few basis point. So that's much more similar to

the business model of like a payment network like Visa. I think Visa takes a few basis point per transaction per settlement. They don't take a 20% you know like like fee. And so our vision is let's have the best rate experience. Um we like privately funded until then. And at some point when the network is going to be big enough uh and kind of like unfockable because the the real thing for us is like if we charge too big fee we create an incentive to people to fork the morph code which is open source and like build a competing network but if the network is 100 billion it's anyone who's trying to build a defi protocol know that bringing a billion on chain is difficult to a new venue 100 is almost impossible. So I think there's going to be a moment where like we reach a

critical point where it's hard too hard to fork or too expensive to fork and therefore we can charge a fee. Okay. So growth first monetization later. Yeah. And as you said the right now there's still people taking fees on MFO which is uh what makes us what makes the MO design interesting where the risk management therefore like the value of of managing liquidity is being charged by V creators and vault creators then have agency to do fee sharing the same way circle does. So you could say how I want to work with safe on this product. I will share 50% of my fee with safe.

They put me as an exclusive creator. Like they have their own business model. So you still have this logic of of incentivizing the people building on top. But we as the network for now just don't take any cap. Okay. Okay. I see. So basically you plant a tree in your garden. On this tree there are fruits and that attract people. You want to have people in your garden but you will not eat the own fruit at the moment. Exactly. We just plant more trees. Okay. So then let's go to cow because they also stand in gardens. Um what what's I don't know um um like um what's your distribution not with regards to we had this question before like being integrated into a big company but rather like um like the mechanics of distribution for cow. Uh what's your plan to incentivize a distributor like a

wallet to integrate you? Are there things like monetization for your customers that you think of that will help you distribute? Yeah. Yeah. Of course, there's no there's no doubt uh here we really need to uh to incentivize a partner. So, how does it uh how does it work? The protocol itself is uh is is making a fee. Now, car protocol is quite uh quite profitable and um and uh a lot of partners that are not yet able to uh to monetize their their D5 products are actually very happy to um to integrate a swap button or or a more detailed interface on their on their own interface. And um and here the the model

is quite uh quite simple as you were saying. It's about uh giving a cut uh a share of the of the protocol fee to uh to to the partner and uh and this is this is really uh working well for us and um and we we can yeah distribute our product quite uh quite well. So yeah it's basic revenue sharing model. Okay I see. Um I would like to touch on especially with you Patrick on this aspect of self- custody. Um you were very kind placing me next to uh uh circle CEO uh Jeremy on a dinner in Berlin last autumn I think.

Uh so I had the pleasure sitting next to him for 3 hours. Quite exciting. Um I gave gave him some tips for for going public and he he did well. Um no um jokes aside um Circle has the trust of Wall Street and with that I don't mind less mean the the IPO and and stocks but rather to be integrated with um Black Rockck to be integrated with stocklisted uh um publicly listed Coinbase. Um, how much emphasis do you put on self- custody? Because I think certainly we at SAFE and the NOS ecosystem, people here at Dcon, we we know the value of self- custody, but is this understood in in

the broader ecosystem of your enterprise partners or is this just like a nice international settlement layer, but for them this value of self- custody can also be sacrificed? So I mean first of all I would have preferred you say you enjoy having dinner with me and sitting next to me but anyway uh put that put put that aside. No I totally I mean self-custody I think is one of the cornerstones of what we all do right without it um we wouldn't be where we are. Um and so I ultimately I think it's about choice and it's about options. We at Turko, we have uh our own products that allow companies, for example, to

plug in and then to provide self-custody wallets to their users. Um it's called programmable wallets. It's one of those products that um our tech services, you know, provide and that anyone can can tap into. But even independent of of of that own product, if you know, we look at our partners like Coinbase and others, um self- custody play a massive role. Um, and I think I I don't have the the latest numbers, but I would probably say I think a year or two ago, 75% something around that was in uh smallalish self-custody wallets. So, it's for us it's a primary way to distribute our stable coins into parts

of the world that benefit the most from that and are potentially not able to access your tradition traditional bank services. And now with you know just your phone in a pocket you can download a safe custody wallet and not be banked in the traditional sense of onboarding with a bank but you can access financial services you can you know receive USC you can send it you can spend it that's you know another another layer that we see massive traction with all the credit cards being launched and you know um and being able to spend stable coins directly from them. So a at this point I think we are we we are reaching soon a world where

with a self-custody wallet in your pocket powered by stable coins you're able to save spend send receive and also invest your money and at this stage I think we're coming closer to whatever vision or philosophy this entire space is is is trying to reach of you know the title says it of of essentially banking banking the billions and and making sure that anyone can can benefit from from that opportunity to access financial services. Yeah. So, it's I think a little bit of a success to have this corporate guy here singing tone uh singing the song of self- custody. I appreciate very much. Thank you. Um so, one last question before we wrap up with

a a small uh um round of of teasing uh questions that you will have to answer with one word. I just want to ask Theo um if you now go into fixedterm lending maybe um you have this permissionless deployment of Walts basically almost every collateral can be on Morpho um you may go into underolateralized loans uh uh with this kind of slogan of trust me bro uh in the blog post from from your founder literally it's it's written I didn't uh um hallucinate here so do you think um that there will be um a major excuse Excuse me, my French. Um um that invites the regulator because some integrators will funnel their users

money to the vault with the highest yield and the highest yield likely comes with the highest risk and like how what's the role? Do you think you have responsibility for protecting customers and maybe not giving everyone access to this permissionless pool of risk? Um well, first I bet on your French. French. French is a beautiful language. I think we lost him on the mic. I can just speak louder. Oh, no. It's okay. To the same.

Thank you. I'm back. So, as I said, we are like a marketplace for let's say risk or risk free. I think the people that should like distribute specific products should do their own risk assessment of like which pool or which vault should be distributed and then compensate and their user if anything happens. So if you think about like the way Coinbase did their product the market itself is encoded at 86% LTV. That means roughly you can borrow 7x your money. Coinbase was like that might be too much. We were going to cap this at five. So what happens is that you have a primitive on chain and you have someone on top that says I'm just going to like change this a little bit so that it suits my own risk requirements. But Moro again Moro is like a liquidity network um a parameter or like a market

or vault that's been deployed by someone who's like a risk expert. These decisions are and therefore composition if there's as you said a major up uh we think they should be taken care of at the layer above. And the fact of having a super simple primitive means on top you can build anything. Yeah. to the same extent I think Coinbase is releasing soft liquidation. If the price of BTC drops like massively their user going to be soft liquidity prior to the the kind of like 86 I just mentioned and like the the the cost of this liquidation will be minus them almost nothing. So I think depending on what you're trying to protect for you can just build a product that respects these requirements.

That's very much also uh how we see see things in self custody. Ultimately there's a lot of responsibility on the user. Um, so closing round with one. You're only allowed to uh answer with uh either a date or yes, no. Uh, Patrick, for you it's a yes, no. Kids born today, will they ever use non-crypto-based payments? Yes or no? Yes. Okay. Damn. Okay, um, when will all Euro stocks uh trade on cow your stocks stocks? So, basically blue chip um stocks. Moo. So, moo rhymes too soon. So I guess we'll have it soon. Tio um when will uh people get a house loan um maybe under

collolateralized on morpho over collaterized already uh under collateralized 12 months. Okay, that's cool. All right, final remarks. Uh we learned from like three very important companies uh of our infrastructure of our ecosystem um that the infrastructure is coming together. I think uh it's it's a great shot we get at banking with one system really a billion of people and um we are coming closer uh to that day by day. We at Safe Wallet want to play a crucial role for that. We want to establish ourselves as the global treasury account. Giving basically USD access to to basically everyone self custody is extremely important for that.

We call that open fi.