The Foundation for Banking’s Next Evolution | Live From DAS

Transcript

There's going to be a time and a place where it comes where now companies are going to be valued based on how much revenue they generate. What is the underlying value they provide? What is their utility? How can they stay alive? Right now, we're looking at L1s for example that have large market caps, but when you look at how much value they generate, how much revenue they generate as a foundation or as a network as a whole, it's none or it's very little. And that the market I think is going to start maturing. The investors are going to start maturing. the institutional players obviously with that you know maturity are going to start looking at who actually generates revenue and who's only just counting how many views they have on their website. Hey everyone, quick disclaimer before we get into today's episode. Nothing said on Bell

Curve is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only and the views expressed by anyone on the show are solely our opinions, not financial advice. Our guest and I may hold positions in the companies, funds, or projects discussed. All right, Eve, how do you do with your name? Did he get it right? Uh, he was close. All right, cool. The S, but uh, I'm good with that. That's good. Yeah. All right, everyone. We're almost halfway through the afternoon. How's the energy level? How's everyone feeling, guys? Come on. You know, I'm going to ask for more than that. How we feeling?

What's the energy level? Thank you for humoring me. All right, guys. We're going to be talking about the next evolution in banking here and we've got a lot of ground to cover in a relatively short period of time. So I want to kick it over to you first. Eve, can you just give a quick introduction for the audience? So my name is Eve LaRose. I'm the uh CEO and founder of the EOS network foundation as well as Exat, a Bitcoin scaling solution. I've been in the crypto space since 2010. Started mining Bitcoin on my laptop when you could still do that. Fast forward 2015. Uh here I am on stage with uh the great Mike. Oh, thank you very much. Wow. I'm gonna use that as a moniker.

The great mic. No one ever calls me that. Um, so for those of you who are doing the math in the audience, you've been in the space for 15 years. You've seen an enormous amount um happen over the course of the last 15 years. And I'd actually like to we're eventually going to start to a big announcement uh that's coming out of EOS. Uh but you know, one of the themes that I wanted people to pay attention to and dig a little bit more into over the course of this conference is how are investors thinking about uh the space specifically different L1s. Um and how has what has worked with L1's changed over the course of the last 15 years? So can I ask you to put on your history uh cap here because you have a very interesting background being very technical but also

having the perspective of an economist. How has the environment for smart contract platforms changed over the course of the last 15 years? What happened and what made uh L1's work during the kind of ICO meta of 2017 and how does that look different today? I mean yeah 15 years has gone by pretty quickly. Uh there was no gray when when this started. Um you mentioned for example smart contract platforms 15 years ago that was not a thing right when Bitcoin came out um really the only use case that you had with Bitcoin and I would I would argue that even at that time people didn't see Bitcoin so much as a store of value it was more so transfer of or just the proof of concept that you'd be able to transfer um value and so there was really no smart

contract capabilities at that time and so this idea was was pretty basic at first and to put it back in my shoes one of the ways I was introduced to it was just the combination of being able to with others around the world that you don't know being able to to to combine compute power towards something. So if you bring it back to 2008 2009 uh protein folding was a big thing uh protein folding with your computer to be able to contribute to cancer research for example and so Bitcoin was very similar to that in in its very origin states. Fast forward 2015, Ethereum comes about. You've got smart contract capabilities. Still very limited though in terms of no use cases. 2017,

CryptoKitties comes and takes Ethereum down. For the first time really, you have an actual use case that's got so much demand that the product can no longer supply. The industry starts looking at this as maybe this thing has cloud. Maybe this underlying technology could be used for other use cases. we need to try to scale this because it's going to come 2017, crazy demand. Um, and for those who you of you who were there at the time and maybe were there earlier, I remember I thought this is it. We're going to hit mainstream adoption. This is where it's at. We're going to have tons of use cases. Blockchains can finally meet the demand. You've got gen 3 layer 1 blockchains coming about. More

use cases, more scalability. Um I see out summer thousands of projects launching and a cap a a capacity for the first time as well to be able to raise capital on a global level extremely quickly. Too quickly most of the projects are no longer around. But it showcased this idea that you could leverage this technology on a global uh point of view to be able to track participants to contribute towards something and that there was you know trust end to end. Um, and I guess then that brings us up to then 2021 and now 2025 where where I see it, we're completely different from where we've been is we now have institutions that are part of this. Uh, we now have capital that's more mature. We have

players and stakeholders that are also more mature. So there are use cases that they're looking for and what they're looking to do with their their capital and even just in a way legitimizing uh uh blockchain and and the tokens as asset classes that has matured significantly as well. So the use cases are completely different and the kind of people is also very very different. So you go from a a very uh cipher punk uh uh kind of base to now we're seeing Wall Street um and and large family offices and institutions, banks, etc. So it's it's it's been quite a journey. Yeah.

And you know, it strikes me that even going back to when I entered the industry in 2017, you know, all of these bet like Goldman Sachs, I remember listed a there's like 10 things that we think are going to be built on the blockchain and there were money market funds on the blockchain and real estate on the blockchain. And you know, after a couple of years, people sort of laughed at that. But maybe a lot of the new constructions that are being built today, you look at a morpho vault that you can kind of squint at that and that looks a little bit money market fundike. And maybe they were just a little bit early and they didn't get the form factor 100% exactly right. But you know, EOS, I think one of the things that it got right uh very very early on was that

one big layer which is very fast and cheap actually makes quite a bit of sense. And so when you look at the smart contract landscape today, it's obviously much more heterogeneous, much more diverse. There are more smart contract platforms. So how do you evaluate the sort of competitive landscape of different L1s today and how that's changed over time? So if you bring it back to let's say Gen 3, layer 1 blockchains where uh the idea was all about scalability, low cost, reliable. Um one of the things that's very different from now and and what you know from then is everybody was really focused on TPS. Everything was about how many transactions can you handle? Uh, and I'm sure you've heard, you know, people were comparing to what does Visa require in a particular day? And I

forget what it is, like 6,000 transactions per second. Forget the number. And people were all aiming at that. That was the ceiling. If you can hit that, you can run Visa on your blockchain. Um, and people were really focused on on that part in terms of smart contracts. People weren't really focused on the usability of the products back then. So they were more obviously very techfocused, very techheavy, but very little thought given to the actual products and that's also something we've seen a shift in the smart contract platforms. I'd say in the last 3 years or so has been a considerable shift towards and making products um very userfriendly. So for a long time you could tell the difference between a

blockchain product or a native web 2 application. It was quite obvious to a certain extent. It's still very much that way but a lot of innovation has gone in in that field where projects were building and um trying to leverage blockchain from an endto-end perspective in their products. So inserting blockchain everywhere everything needed to build be built on the blockchain. the pendulum switch back to maybe certain components need need to be leveraging uh this piece of technology for its inherent you know uh uh features and functions but not all of it uh uh you know need to to be built on blockchain so that shift has also occurred in the last couple of years and I think those smart contract platforms have made that

shift and now we're seeing much better products uh userfacing where you've in a way essentially abstracted away blockchain from it so maybe help us square, you know, where you see us sitting at this moment in time and whether or not you see it as being an inflection point because, you know, if we had been hosting this conference back in 2017, you know, we might have been talking a little bit, you know, higher level, a little bit more about ideals, some of that libertarian value. Um, and instead what we're talking about today is how are we bringing, you know, hundreds of billions or trillions of dollars on chain and institutions have a very different set of requirements in terms of, you know, what they need for things like KYC, AML, that type of thing. And so how do you kind of square

some of the early you know even design and construction of EOS right being a public chain uh which is permissionless um with what we're going to need to onboard institutional capital moving forward. So I there's a few trends I think that have happened in the last year and a half or so that are quite key to where we are today and where I see the opportunities lie in the future. Uh for one um we started seeing about two years a year and a half two years ago that a lot of the builders shifted away from Ethereum and a little bit away from Salana to a certain extent back towards Bitcoin. Bitcoin by far largest asset class um and to a certain extent the one that was somewhat left sitting idle for a while. And I don't mean that in a

negative way. I mean that what can you do with your Bitcoin? You can buy, you can hold, ideally you don't sell. Maybe you could earn a little bit of yield on it, but even that is quite new. So, you really couldn't do anything with it. If you want to start doing things with your digital assets, Ethereum is really where it was at or at least the Ethereum ecosystem. Um, and about a year and a half ago or so, we started seeing a shift in the industry where a lot of people started building Bitcoin scaling solutions. In part, we built one. So, we built Exat uh which currently has about $650 million worth of Bitcoin uh locked up in TVL and the the idea there is to be a Bitcoin transport layer and that I would think is one of the pillars that I saw you know is kind of key to what I'm

seeing coming. The second one with the ETFs coming about last last January that really brought about a flow of capital that was as I mentioned earlier mature very different institutionalized focused um and so it's a different type of investor a different type of stakeholder uh within the networks and then that third piece with the new um administration here in the US we're seeing for the first time symbolisms and I guess signs of uh a little bit of uh taking the foot off of the industry and being able to let it innovate a little bit. Obviously, legislation uh takes time to be able to put in place, but right now at least that symbolism that to a certain extent America is is is open for business uh in the crypto sense

kind of completes the the two previously that I mentioned whereby I think web 3 banking and open finance as a whole is really about to lift off and that brings us to you know our rebrand. Yeah. So why don't you tell us a little bit about this rebrand? this is the the big announcement here u that we've been building to so yeah give us the high level what uh what's behind this rebrand give us the details so EOS was launched six and a half years ago not by us uh at that time I was a validator on the network and we helped launch the network but I was on the community side on the on the technical side of things and EOS without getting into too much detail was kind of left to the side for a period of time there was no development or very

little development and no funding EOS didn't have a foundation EOS didn't have uh kind of a centralized entity that could help uh you know guide the network and foundations as a whole in in in layer ones are you know quite standard um EOS didn't have one so three and a half years after launch after seeing that you know things were not going to change and there was really no improvement on that front I created the foundation we essentially started this rebranding process at first we didn't own any of the IP we didn't own any of the social media we didn't even own the IP uh related to the the GitHub repo So slowly we had to start this rebrand process and essentially the functions and the features that we've added over the last three and a half years have all

been in a particular direction. The investments that we've made, the portfolio companies that that we've been uh fostering. Um all of the the the products that we've even built, everything has been in that web 3 banking space. And that last piece of the rebrand is changing the name and changing the token ticker. Uh and so today we're announcing and uh I guess I'm announcing it now. The name of EOS is going to be Vulta. Uh Vulta has you know etmology terms of uh blockchain ledger. So the obvious connection there. First thing you think of when you hear Volta is a vault. So you got that finance that security. Yos has been running for six and a half years with literally zero downtime, no hacks. Um and then a bunch of other uh reasons.

But essentially, we're rebranding to be able to close that gap between who we are, where we come from, and more importantly, where we're going. Uh, and where we're going is really where we see this opportunity in that web 3 banking open finance space. And so, let's talk about that open finance space. So, the new name is Vault. Do we have a ticker? Uh, we do have a ticker, but we're only going to announce it early May. All right, cool. So, stay tuned for that the alpha there, folks. But, uh, all right. So within this open open banking and open finance space um you know I would love to get a sense from you on how you see uh vulta or just different L1's competing basically like what are the different the axes of differentiation that you have there can be speed and performance I think is one maybe one is

customizability you know what you offer your apps uh maybe something is like in the way of compliance go to market you know what are the important axes that you want to compete on here so one I mean there are multiple but I think um one of the important ones is where you're uh where you're regulated. So for us uh the EOS network foundation was incorporated in Canada. Um the idea was always to be able to and at the time it was very easy. A lot of companies incorporate obviously in Cayman's BVI that type of thing. But we wanted to ensure that we were in a in a jurisdiction whereby there are frameworks where there are guidelines.

And I don't mean so much in the crypto sense because there still really aren't any, but in the traditional sense where you're limited in what you can do and you have regulations and you need to buy by certain standards. Um, and so we wanted to set that up and I think that that's going to be really key when it comes to banking sector. Canada is renowned for its banking sector. It's one of our things. It's it's one of the things that we do. Stable democracy, maybe a little bit less in the last couple of of weeks. that's a different story but stable democracy uh strong financial products big retail market and so being local there was really really important and I think where you base your products is going to be equally important so in that banking space being able to offer different license or

holding different license in different jurisdictions to be able to offer products I think will be key to that so I think to a certain extent gone will be the days where people are based in jurisdictions that are favorable for crypto but will limit them when it comes to being able to offer real world financial products. Um there's sure there's going to be some gaps that are going to be filled but in general if you want to operate uh in the US and offer products within the US most likely you will need to have uh incorporation within the US and be compliant within the US and if you're a new market a new product on the market with no history that's going to in my opinion hinder you versus somebody who's been maybe based there for five six years has a track record or even longer than that and will

be able to go to market with a product. Uh the second one when you talk about speed um and reli reliability from our point of view speed is important but I would say that the combination of speed and reliability in terms of price so predictability is even more important if you're running a business one of the hardest things that could be is when sure you have low cost but in times of congestions costs vary time costs go up I think it's more important to have predictable cost than it is to have the absolute lowest cost and so for cost.

We've got really really low costs, sub sub penny costs for transactions, for example, but the predictability of those costs I think is one of our inherent features. Customizationless uh you know blockchain, but we're able to have permission gardens within in that banking space and in a financial space. Having permission gardens is going to be really important for you to be able to do a uh AML KYC. Uh if you're working with large institutions and they want to offer, for example, yield on their Bitcoin and they want to create a particular walled environment to be able to do so, you're going to need to have mechanisms that allow for that. So that flexibility, that customizability, I think, is that third one. Awesome. All right, Eve, uh I know we got to wind down here in a couple minutes. Can I ask

you a spicy question? Sure. Why do you think in the future investors will hold L1 tokens? So, I think something that's been different this cycle as opposed to last cycle is you haven't seen many with the one exception being Salana uh existing L1s meet new all-time highs either in dollar terms or their uh BTC terms. And so, I think rightly investors are saying why you've heard this sort of time and time again today on the main stage of well if I could just hold BT like BTC if I think it's going to do a 5x why would I hold something else? So why will investors hold other L1's in general but also potentially Vulta? That's a good question. I um so I previous to to to blockchain uh I started building

computers when I was 6 years old and in the 90s I was around I was building websites and for those of you who were there at the time especially in the in the uh investor space companies used to be valued by how many views they had on their websites. the market eventually matured and the amount of views that you had on your website were no longer the right way to be able to evaluate a company and now we have P ratios for example. I think we're at a time in blockchain where companies are still largely valued on how many views they have on their website as a metaphor. Most of them are speculative. There's going to be a time and a place where it comes where now companies are going to be valued based on how much revenue they generate. What is the underlying value

they provide? What is their utility? How can they stay alive? Right now we're looking at L1s for example that have large market caps but when you look at how much value they generate, how much revenue they generate as a foundation or as a network as a whole, it's none or it's very little. And that the market I think is going to start maturing. The investors are going to start maturing. The institutional players obviously with that you know maturity are going to start looking at who actually generates revenue and who's only just counting how many views they have on their website. So, you think it's some form of yield, revenue, fees, earnings sort of statistic for L1? Sure. Yeah, I think that's going to be part of it. Um, there's no way that uh we're going to keep in this kind of trend of uh, you

know, high market caps based on really no substance, nothing. It's nice, it's new, it fosters innovation, but at some point that's going to shift. Yeah, I tend to agree with you on that as well. Like I think I mean even when you look people love to talk about store value and gold and crypto treasuries are another form of value. They just do it with yield. They're basically staked dollars is another way of thinking about it as well. So all right Eve I know we've got we're in our last uh 60 seconds here. So I don't know folks want to follow along with the work that you guys are doing at Vault or just keep up to date or if you could give us like one something interesting or new on the horizon maybe uh you know something for folks to grab on to like close us down

here. Sure. Well, if you if you are holding EOS right now, at some point you're going to be able to uh swap that over to Vulta, but in the meantime, we've got two trading competitions. Uh so we've got one uh that's just launching today, I believe, with Binance, and we've got another one tomorrow with Pancake Swap. Um so those are interesting for those who have tokens and want to do something with them. Outside of that, we've got XSAT. If you've got some Bitcoin and you want to earn some yield on it, please head over to exat.network in order to reach me, Big Beard Samurai. Pretty easy to remember. Uh so on uh X and uh Telegram and otherwise yeah just reach out to EOS network Foundation. I love the big beard samurai. All right guys uh please give Eva a big round of applause. Thanks you

for doing this. Thanks Mike.