How a wallet company makes money: Exodus

Transcript

gmgm welcome to web3 Academy your trusted source for useful and legitimate web3 information so you don't fall behind the internet Revolution I'm Jaybird and always joined by my co-host Kyle reedhead and we believe that web3 is going to change the world that's why we're here to guide the world's top talent down the rabbit hole as you participate contribute and capitalize on the opportunity episode 3 of our wallet series we had JP from Exodus on the show today and I don't know that we're allowed to do favorites in this I mean there's no rules we can do whatever we want Jay but we've already said it yeah this is my favorite I'm just saying I'm

amped up we just finished the recording and I'm amped up it was one a lot of fun super informative and we went deep into like where the space is going to go into the future which is all I've been wanting to do so it's really really good JP's just been in this space for so long we're building in the space and thinking about this stuff for so long that he just kind of sees it and he sees where it's going at least where we think it's going and he's just a true Builder that's what I got from this episode just like he's build mode on all the time and someone who's in build mode all the time just like really understands the stuff and it's just thinking so much about it in terms of just all the different things access has done the way that

they're like bringing Equity to their company to the way that they're trying to monetize to like all these things it was just such an interesting story it was a lot of fun this was a great one yeah I think the three things that stood out to me about this episode were one as you said Kai Hal Exodus did a public offering on chain the first company to do that in America and JP explains that and breaks that down and really is writing the playbook for how that will happen in the future second was the manner in which wallets have such complex ux now but will have much simpler ux in the future and how JP sees that and then finally and this really blew my mind was JP's belief that dapps

will all have their own wallets and how that will play out and how that will lead to the eventual future where everything security all happens through our phones like JP just went so deep and this was a nice conversation around the kind of the business of wallets and the ecosystem of wallets less of like the wallets 101 which I think we covered well with Ledger and brave this is more like where is this whole Space going how are they making money how is this going to be sustainable and then like what are the risk factors of wallets with things like apple and the SEC and I don't know who else needs to have a Google I think in Elon at one point came up like just so many different aspects were brought up in here it was an eye-opening episode for me yeah and JP's got the background

because he first co-founded Exodus about eight years ago he's the CEO of Exodus Exodus is one of the most popular multi-chain wallets that are out there JP's also written and published over 200 open source libraries and written code that's used by Bitcoin currently as well as like many top cryptocurrency softwares that are online today so he's really part of that foundational layer of web3 and blockchain that's going to bring the masses on board in the future and fun fact then maybe this is why I think it's also my favorite episode or one of my favorite episodes is uh Exodus was the first wall that I ever had it's when actually an employee from Exodus

when I was in Mexico introduced me to crypto and he got me download a wallet sent me some heat and basically threw me down the rabbit hole that I still have not came out of so thanks to Davey I just like I don't sleep anymore and all I do is think blockchains and technology and all this stuff so it was my intro into the space Jay anything else you want to add or should we get to our sponsors before we move into this episode let's rock and roll baby let's go the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the creators and yet they are the most neglected web 2 platforms like Facebook Tick Tock and Instagram are all

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thank you for having me here I'm just super excited about what's happening in the industry coming off of East Denver and then unfortunately with kind of the chaos that's been ensuing this week with both silvergate and Silicon Valley Bank despite that chaos I am super excited and bullish for the industry that all of us are in and what we can build and do something great for the world so thank you again for having me here today but before we jump into Exodus just because you brought up East Denver give us in a few sentences what was the vibe what's the feeling coming off of that the vibe was amazing I can't believe like how much energy was there I mean it felt to me like if you were eat Denver you would look around and you would say you'd be

like what bear Market what bear Market is happening but not only that like what's really cool about a lot of crypto conferences is that you know everybody knows that in crypto there's a bunch of d-gens right and so in crypto conferences you see you see a person walking around in like a unicorn costume or whatever and like a completely normal right imagine if you're at like you know Warren Buffett's first yeah all right and hinoma and imagine you see a unicorn walking around you'll be like put the person in a unicorn costume at a crypto conference especially an ethereum conference that is just such a common sight and so again the energy was strong I think everybody felt really good about

being there I heard the attendance numbers I'm probably gonna butcher them slightly but it was something like what like last year they had I think like 20 000 attendance and this year was like 35 000 or so give or take I mean it was just phenomenal phenomenal numbers and again the energy was really strong I'm not sure how to transition from walking around a conference in a unicorn into the origin story of Exodus but here's my attempt let's go back back to the beginning of Exodus give us the origin story of Exodus and really why you decided to found this business and start it and maybe even that leads into your beliefs in crypto which I know you have such passionate beliefs about changing the world and making a better system for

Humanity so yeah give us that story absolutely so it actually does start around let's say I don't know 2014 or so with Exodus and literally I was sitting on my couch I was not wearing a unicorn costume and I was sitting there and I was I don't know probably my sweatpants so I don't know why I distinctly remember watching Schindler's List you know he's sitting there he's in the ring I like I'm just I don't know why I'm watching Schindler's List and I have my laptop open and I'm sitting there and I'm like I gotta do some trades and maybe it's because Schindler's List is a dark movie and then that attitude from trades and so I'm on this exchange I couldn't tell you which one and I'm on this exchange and I noticed there is a coin I think it was called Dark Coin

which now is Dash today is Dash and I was looking in on Queen markercap.com like it was going up and going down I'm like oh this is really cool I'm gonna start speculating on this I'm gonna buy a little bit and sell some later or whatever I've started doing that and I realized like wow this is a lot of fun it is a lot of fun to buy these assets and just kind of watch the price go up and down and do some speculation this is a lot of fun now on this side I was already building a Bitcoin wallet a lot of people don't know this because if you go and you Google coinbolt right now we will see the screenshots of queenbolt and you will go oh my gosh it looks terrible and that coin bolt

b-o-l-t yes yeah coin bolt and then literally literally guys I was out at a Bitcoin Meetup in Silicon Valley and this person came to me it's like JP I gotta tell you something man coinbolt looks like a five-year-old designed it and and that's what I'm like it looks absolutely terrible so and I was also told at this moment around this moment that you'll never monetize a wallet that's what I've sold constantly by investors you'll never monetize a wallet you'll never find a way to monitor like come on the wallet stores money literally there's got to be a way to monetize it so my background is as an engineer I'm a software engineer by trade and so again you know fast forward here I am sitting on the couch and I'm speculating on these assets and I'm

trying to figure this all out and I knew my co-founder of exes at this time we weren't co-founders yet my co-founder Daniel castanoli he has design expertise from working at Nike BMW Apple Louis Vuitton Disney like he's done a lot of Premium high-end design experience it was like a week later he and I were talking and I said I was trading some assets the other day some Dash and it's so complicated and even worse because of what happened with malgox you have to leave your assets on an exchange or conversely you have to download a number of individual wallets you'd have to download them I wanted to hold Bitcoin

Dash whatever I have to download a wallet for each one he's like I know man I know it's terrible and then as we start talking I'm like well wait a second what if we could team up and we could build a desktop wallet because at this time nobody was building desktop wallets either everybody thought like well Mobile's the future in fact one investor told us he's like if you're not building a mobile wallet we don't want to talk to you I'm like and again remember guys this is a time frame of 2014 2015 in trading at that moment was on exchanges right and on exchanging to people there were no mobile apps to trade on Exchange you did it on a desktop so that's where we started we're like we're gonna build

an experience where a person can easily download Exodus manage an entire portfolio of crypto and then be able to swap from one to the other and that's how this all started and in the swap artists is actually how we make our money but that's where it really really began I just want to set some context for those who don't know Exodus here quickly give us just some basic stats how many wallets you guys have give us some of the found foundation so people understand the size and the scope of accidents yeah absolutely so Exodus first of all we have 3.3 million customers that trust exes to keep their assets safe and it has a company we've got roughly 200 and some people remotely

all over the world all getting paid their salaries in Bitcoin we started this company in 2015 right from the the heart of Nebraska here is where we started again we started as a remote only company back in 2015. in terms of overall swap volume or the lifetime of Exodus we've seen something like it's a little over 10 billion dollars of swap volume in the course of exes so you guys have a desktop wallet talk about what else he has done because since I've been introduced to Exodus which was back in I remember when I was 2019 or 2020. I remember it was just the desktop at the time I think no maybe there was a mobile wallet at that point too and then now you've got it to have an extension and more so kind of walk us through just the different products in the life cycle

absolutely so we started with the desktop product right but we knew people would write us and they'd be like why don't you have a mobile app like you know and then people be like hey I've got a great idea to share with you you should build a mobile app it'll work we're actually working on a mobile app and we'll get it released eventually so it was in the 2019 time frame when we released our mobile app and the mobile app is really the entry point for the mainstream right the mainstream customer is not going to access.com and downloading the desktop app although they can it's just not typically what you see so the mobile app is where it starts with the mainstream in that entry point to crypto that entry point to web

3. now there's an important point to note with the desktop app and some of the experiences that we built for web 3 that didn't take off and didn't get traction what made us ultimately choose to be like we've got to build the web 3 browser extension in Exodus desktop we thought there's a lot of really cool D5 and web 3 cases that are emerging right now and compound.finance compound had just hit the scenes and it was like wow this is the first time where a person can deposit money into a smart contract and actually earn a yield like that's really exciting for the mainstream let's build what we like to think of as a

native experience so what does that mean by a native experience what that means is that inside of x's desktop we built the way for people to go to compound as a branded app and you would see compound as a little app inside of excess desktop and then you could deposit your die your dice dollar stable coin directly in there and earn yield and so we were just so jazzed up about this but by the time we released it the timing on this is actually was terrible because you all remember D5 summer right and when ethereum the Gatsby's and ethereum just win bananas right it's like to do any kind of transaction ethereum it costs like roughly I think

around what maybe 100 or so and so we're like oh no oh no so we've got this compound product and you're depositing your stable coins and you're getting some yield but the gas fees were you know roughly 100 so so we're like we'll just keep it there as like a Showcase of what we're capable of and let's go to another use case we then teamed up with sport X and I don't know if you guys know no sport X you guys know sport X no okay sport X is actually really cool it is really cool mainstream use case sport X allows you to wager on Sports using ethereum and now it's on the polygon Network and you can they have all the games on there and you can go

wager and of course there's some legal restrictions depending upon your jurisdiction where you're located but we're like wait a second Sports wagering is a great mainstream use case let's build an integrated native experience for sports wagering inside of Exodus the timing on this was I think maybe during D5 summer or right around and we're thinking well maybe the utility of this will be so great that people will just like you know I still want to bet and I'm just willing to put up with the the gas fees or whatever and so we built that experience and what we found there is that again if you kind of go back to earlier part of this conversation where I had mentioned that the mainstream they're not as much on XS

desktop because you think about it right if you're watching like here you are you're sitting there you're kind of cozy on your couch you're watching the big game you know and you're like you know I'm gonna place a bed I'm gonna place this next bit you want to do it on your mobile phone you very rarely do like you got your friends over like hold on guys I'm gonna pull up my laptop and then in my bed you're not gonna do that so we made the mistake there and then we were thinking so back you know let's fast forward to the web 3 wallet with the browser extension because we saw that like the world of web3 is blowing up before our eyes in terms of all the new products and services being developed while we would love to build these Integrations

both on the desktop and mobile we know that we're just not going to be able to keep up and at this moment you know like a metamask of phantom for both their credit getting a lot of traction we're like we've got to build an entry point into web 3 and build it so that it's ultimately a seamless experience so that kind of gives a view of our product offerings and kind of again summarize desktop mobile and the web 3 browser and now it's sort of that web3 type of extension wallet and it's a cross chain too so it's on a bunch of different chains I would say the one thing that's interesting about Exodus is when I was introduced to crypto was from an employee at Exodus and he made me download not made me but he asked me to download an exodus wallet and I remember

back then he sent me some Ethan like wow wow this is really cool it seemed like a very easy ux and he's like oh and you can get this yield on it and I was like what and he's like yeah and this was the compound things before Deep by summer and I was like what do you mean I get yield on this and I was just like I was actually mind blown but I just remember the it was so intuitive Exodus because it was like when you send it it like makes a little noise of like coins so it's like all these little features that made it seem just like normal to use whereas I remember when I got a metamask while later I was like what is this thing this thing is like an alien you know what I mean so I would say those

were very ahead of the curve on that same with like native putting the actual like D5 protocol in the wallet itself so I could use compounds that I have to go to compound so I think you guys have been very Innovative on a lot of things which has been very interesting to watch over the years one of the things that I think you guys have done that is just I don't know if anyone has done this to be completely honest is the way that you guys have distributed I guess maybe it's equity in the company I don't even know I'm gonna ask you to explain this but your public offering for Exodus basically the equity of the company itself we know what coinbase for example which interested in IPO but you guys did one that's like sort of tokenized but sort of not tokenized and so this is

just very very interesting I'd love for you to explain this to us so we can just kind of understand a little bit further about how you guys are doing this absolutely so let's roll back to let's see it would be the summer of 2020. we were thinking about like okay you know the company is doing pretty good and by pretty good I think by the summer 2020 we had ultimately in Revenue that year we had roughly 10 million Revenue by this moment we ultimately closed 2020 in roughly 20 million in Revenue but we're thinking about like okay we ultimately believe that stocks are going to come to the blockchain this is inevitability and the reason for this is that well us is crypto that we take all this for granted now like if you want to trade on a Saturday night again in your pajamas on

your couch watching A Goofy Movie like you can just do it like you just open up it change whatever you just trade very intuitive to us in additional to that if you got to send your buddy some Bitcoin or ethereum for crypto people it's intuitive like you get the address and you just send press send now if you want to trade stocks on a Saturday night you can't you can't the markets are closed and yes you can get access to some of the Futures markets and stuff like that but you can't do the regular spot trading go buy Tesla on a Saturday night you're at the bar with your buddies and they're talking about Tesla versus rivian and you're like I'm Really Gonna bet on Rivier you're like you know what I'm gonna place a bet on rivian too bam bye

you can't do it on a Saturday night you gotta be like well I'll wait until Monday morning at 8 30 and then I'll maybe it's a good thing I don't know yeah it's Saturday Night Football went into Tennessee yeah you're right you're right you're three shots deep and you're like yeah yeah they're not good that you you can't pass by but even okay so your buddy's like you know why don't I send you some rhythian shares like you can't even do that your buddy can't even do that so we thought about this like what is the experience of what stocks should be and what should Equity be and what is the relationship that companies should have with their Equity shareholders and how can we make all that simple and furthermore given that we're a wallet and we believe that we have billions of

dollars of assets under management and that's kind of like a napkin math calculation from the swap volume and the number of customers we're like we should be able to build an experience where we could do a public offering directly inside of Exodus wallet where there's no no traditional Finance involved at all it's just you come to access wallet you want to buy extra stock no problem you can do it with either Bitcoin ethereum or usdc of course to legally do this in the United States there are a lot of regulatory hurdles to overcome so we found a law firm that actually had experience with at least taking some token offerings to the SEC

but they hadn't yet said well let's take an equity offering to the SEC and the equity really is is a digitized form on the blockchain but they're like actually since it is equity it should be easier for the SEC to understand and get their minds around and I'm like well cool let's start the process and like I said we started it was around summer of 2020. we ultimately submitted our paperwork to the SCC around September of 2020 and the process is Akin it's very similar to doing an IPO in the sense of the amount of grueling effort is required like you gotta have the

financial audits you've got to have a big 200 Page document the the lawyers that are on there that they dig it deep into detail you got to have all that stuff you submit the document and then you kind of have some periods where you're just kind of waiting but simultaneously for us we're like okay we've submitted Off to the Races let's get building got to build this and we have to team up with some partners that have the regulatory licenses that we need to enable this technology so the law firm that we used was Wilson cecini so they helped us out on the legal front and then the partner that we used for the regulatory framework in the crypto piece is securitized right and securitize has technology to actually tokenize securities

and so we we brought these things we package them all up into Exodus and then once the SEC gave what they call it's called a qualification and again anybody can go look this up on the SEC Edgar website you just type in Exodus you can literally see all of our documents in fact we have to now legally file regularly twice a year of our financials audited statements twice a year and so we did this and the SEC gave the qualification this was early April of 2021 and so we sold at this moment time we sold 75 million dollars worth of stock directly inside of excess wallet and now today today the stock is

tokenized on the algor and blockchain and is trading in two places it's trading both on t0 and securitize but the cool thing is is that now we have this world where our stock is available it's not just to accredited investors retail can actually buy X's stock and the cool thing about this is that we can do what's called an uplifting so that means that we can have the stock on the blockchain simultaneously be listed on a National Exchange like the NASDAQ or New York Stock Exchange and so then you can imagine a world where it's like this stock he's on the New York Stock exchanger

NASDAQ and then it's also in your Exodus wallet or your web3 wallet or any algorand wallet you can have the stock just sitting there and then this unlocks a world where like I said stock on the blockchain makes it as easy as cryptocurrency you can send it back and forth you can trade it on these platforms a lot of really cool things for companies if a company wanted to a company could be like you know what these quarterly dividends that most companies pay out we're not going to do quarterly dividends we're going to do dividends every hour yeah that's what this technology unlocks you can also say you know what like because like voting right now with governance and stocks you have to you get an email

from like Fidelity or Robin Hood like hey voting's coming up for the blot you know the quarter blah blah blah you know and it's just like it's slow slow town right traditional Financial it's just slow in the world of crypto and stocks on crypto because people vote anytime any day whatever right it's just literally signing you know it's like I have the stock in my wallet and everybody all of us are familiar with the web 3 wallets and how they work the browser extensions right it's just you know you see a voting and if you participate in governance you already understand how this works you can vote and all of a sudden you know pops up yes no yes and companies can leverage this technology to do more frequent voting to have more closer relationships you could

even create a VIP program for your stockholders right and then you can bring in the world of nfts like there's so much that you can do and this is just the tip of the iceberg so hopefully that gives a flavor of kind of the journey that we've taken and this is just the beginning it does and that's so cool and so Innovative and there's so many different ways that we can go with that I think the one thing that stands out from that to me though is we talk about how crypto or web3 is like bad ux and I say that in quotations for those listening but think about what you just explained to make your company go public for others to invest in it you know you got to hire all these lawyers all these costs it takes all this paperwork whatever whereas in crypto I can

literally click one button and have a token that's how easy it is do you know what I mean so it's like in some use cases maybe the ux is not so great in others it's actually like orders of magnitude better and in terms of like financial services and things like that it's such a big difference have any other companies been doing what you guys have done like is this sort of like are you guys writing the Playbook here or we are writing the Playbook as we speak we were right in the Playbook as we speak so there is no other company in the United States that has their common stock available to retail there's no other company United States how did you guys get Gary Gensler on your side what's going on what else can you my old my old my boy Gary he doesn't like

custodial exchanges right you heard him the other day he said not your keys not your coins right that's why he's such a fan interest okay I want to see the door give me a call I want to stay on the business side for a second I think the other episodes we've done we've talked a lot about wallets and what they are and Etc and I think what's really interesting here with you guys is one because you're public you have to explain all this stuff anyway and you have to say your revenues and your users and all that whereas others don't and so I'm interested to understand when you first started building wallet you said an investor came to you and said you can't monetize a wallet no way you said you have and you do it through the swap function I'm wondering if you can walk

us through one that and how you guys make revenues there and what that's been like and how that's been growing or not growing Etc and then maybe talk about like what other opportunities are there for wallets to make this a sustainable business because I do think wallets are going to be very competitive in the future there's already a bunch and there's only more and coinbase just launched while it as a service like that's going to take things to another level so talk to me about that Dynamic a little bit how you make sure that this is sustainable and how you guys are in revenues et cetera it does roll back to the early days when yeah these investors were saying like yeah you will not monetize a wallet but it was that moment when we had we supported more than one asset when we started we had Bitcoin

Litecoin and Dogecoin ethereum hadn't even been released yet I think ethereum had done their token offering yet we started back then and we met Eric Voorhees who is the founder of shapeshift we knew who he was and whose shapeshift was he did not know who we were and so what was cool is that they had an open API and shape-shift they were one of the Pioneers in creating the swap Services you could go to their website and you could say like you know what I'm gonna swap Bitcoin for ethereum but their original use case is really interesting the original use case was to allow websites to accept all coins instead of Bitcoin so if a website only accepts Bitcoin shapes should be like no problem we're

gonna give you this API so instead of accepting Bitcoin you could accept Litecoin and Dogecoin and some of the other coins at that moment of time but it just so happened that that infrastructure could be used for the swap service so we started building this in we met Eric in a conference in Omaha in 2015. he and I were both on a panel together you know I talked about the panel and we told him like yeah we're building this wallet and we've got shapeshift integrated and just check it out he saw he's like whoa this looks amazing and he said he's like guys I would love to invest in this and help you guys get some traction and get going I'm coming off of so many investors saying you'll never mind as well I was so many of them and one of them is like not only I

invest in this I'm gonna help you I'm gonna help you get to that level of success so given at this moment in time Daniel and I did not have for money we were trying to like make this work you know it just didn't have much money and so here we are where Daniel and I are in Omaha shapeshift at this time of this was in Denver and so we were able to just get in our car and we would drive to the shape-shift offices in Denver and then we would meet with them and we you know get feedback or whatever and then we would drive back in the same day again because we didn't have the money so we're talking about hadn't done the Omaha to Denver drive that's roughly an eight-hour drive so we're traveling 16 hours in a day just

to get feedback and really to make this product take off at one point in time we were shapeshift's biggest affiliate in terms of how it works so again since we are a self-custodial wallet we are not doing the swaps ourselves we act as an affiliate behind the scenes for these exchange API providers and today and I'll get to other monetization opportunities here in a second but today Exodus has the sophistication that we have an aggregator that Aggregates a number of swap providers from a number of them in decentralized exchanges all bundled into one and so what this allows the experience for the customer is that

Exodus can look and see like ah okay this partner over here let's say like a one inch they are servicing this asset at a better rate than say this partner over here and then we can say this part over here is actually fulfilling this asset better than this one over here and so we can kind of shape that experience so a consumer can come use exodus the customers really don't care who they're using they don't care it's like oh I hear this Bonk coin on Solana is hot I want Bonk and I'm gonna get Bonk you know however I don't care what is provided through and so that's why we just make it a seamless experience for customers so that's the exchange part of the business and that is today where we make

roughly 95 percent of our Revenue to give a figure on that like in 2021 the total revenue of excess was I believe it was 95.8 million in 2021 we don't have numbers audited for 2022 yet but that number is roughly these are unaudited numbers as roughly about 50 million and again that's the total total business there are other ways that wallets can monetize and the other ways are through Fiat on-ramp and off ramps right like today this is becoming more a popular thing because if you rewind to pre FTX collapse people were not as attuned to like self-custody being so important

yeah they were new like yeah they heard about Mount gox and that was a problem they heard about you know Voyager was kind of having issues they they hadn't heard about them these failures but everybody believed that if you have an exchange that is the gold standard and and you have a Founder that just is putting themselves out there as a very trusted founder a trusted face we're working with Regulators we are sponsoring Arenas we were doing all this stuff giving to charity right we're getting to jittery right we're doing all this great stuff I get it I totally get it why people believe in that and myself felt the same way I was like no FDX is the greatest exchange ever changed ever that's literally what I felt but we know how the story turns out

one million people guys one million people have their money stuck in FTX one million people lost their money at least for now and if you've read those stories about people saying they put their life savings and FTX and how they lost you know twenty thousand ten thousand their kids college safe what a terrible thing and so people are waking up to the importance of self-custody and it was post FTX where people started thinking like oh no no it doesn't matter like look CZ seems like a great guy but

I I mean like Finance I I don't know Brian Armstrong I have a lot of respect for what coinbase has accomplished and and what they've brought the ecosystem and how they innovate even with their L2 base hip of the hat to them however trusting your money in a custodial Exchange is a risk is a risk that people should not take and so self-custody has been become such a more popular thing and so back to we were talking about monetization coming back to monetization now you want to build an experience where a person can just download Exodus or any self-custodial wallet trust metamask whatever right there's a lot of good

options out there and you want to have an experience where a person doesn't have to leave to get access to the world of cryptocurrency and so that's the key so wallets have an opportunity to really build that build that on-ramp off-ramp infrastructure so a person can safely feel like I'm in the comfort of my self-custodial wallet I am in control and I know that nobody can take my money no matter what happens in the crazy world of of banks collapsing and exchanges and those sorts of things is that like your Apple pay feature that you guys have where I can basically just go straight from my I don't even know if it's Apple pay but I can go straight for my credit card or my bank right into my

access wallet we do not have that feature enabled currently but we had that yes it was over a year and that was the best on-ramp experience ever so like you you could literally download Exodus buy Bitcoin Apple pay pops up done that was incredible it was it was absolutely incredible we are looking to bring that back this year is there some challenges we're working through but we are looking to bring that back this year is that regulatory challenges or is that Tech challenges yeah or is it Apple they're great great questions great questions it is actually fraud challenges that's what it is it's fraud challenges right so there's a couple companies that were

excited to partner with and work with that we're still we're still working out the details on how these are going to come together but these these Partnerships are going to come together and we believe that by bringing these Partnerships together we're going to create an experience that minimizes the fraud to the point where it's just like we can offer it again and then the fraud is almost non-existent and then we can provide that seamless experience imagine if you want to get into the world D5 right let's let's go back to compound as we were speaking earlier and I know that like Ave and there's other big big platforms there if you're a consumer you see like yeah right now banks are offering High interest rates right well through treasuries and money markets you can get a higher interest rate than what

you could before we all know that's temporary we all know that the FED is going to Pivot eventually and they're going to drop interest rates back to zero that's going to happen so when you think about the world of defy and you think about something as simple as getting you know two and a half three and a half four and a half percent on your money that becomes really compelling and so as a mainstream customer you just want to be able to I'm going to download access download any wallet right bam I'm going to transfer money over one to two clicks done mainstream experiences are really important right but right now we've got to get an exchange you got to go through kyc all that then you can get once you get that set up you can get the crypto then you move it to yourself because

it's like such a pain but question if you're looking to build these features well you guys have to also find a way to do kyc that if it's in the US or how would you guys get around that yeah no absolutely like the kyc on the on-ramps off ramps that never goes away you cannot make the go away but what's unique about Exodus is that we can do kyc better than anybody else and the way that we can do it is in frictionless ways where the kyc is still happening it just feels like it doesn't feel like as invasive right listeners out there a little Alpha for you while listeners which will benefit the entire Community okay so a lot of kyc systems right now this is where like again this is how we think of a user experience where they go wrong where we

won't what they make you do is they say okay here's the form type in your name type in your date of birth type in your region all that good stuff then in the next screen they say upload your passport or ID it's stupid your item pays all that information right you don't need to have a customer type all that stuff in all you need to do is say ID bam done that's it so things like that again there's many of those things of how we think about user experience and reducing the friction so that mainstream people are just like I want that crypto I want that penguin or whatever I'm going to get or that we can reduce the refriction and so that's

how we think about it and it's those little things that really make the difference and actually I remember when I was talking to Davey from your company he was like okay we're launching our web 3 version of Exodus and he was like download it let me know what you think the greatest thing from is such a small detail but I was like wow this makes such a big difference was when you download that for any other web3 wallet immediately you download your let's say metamask ball and it's a here's your seed phrase go store it somewhere people like I don't even have any crypto in Europe I don't know what that is whereas you guys didn't do that and I remember messing with like Why didn't it tell me to write down my seed phrase he's like just wait he's like put some money in it

I put some money in then he goes hey you should write down your seed phrase and I was like oh genius such a simple little detail and I was like how do they not do that like it makes so much sense so I really actually appreciate the thought you guys are putting into ux because those little things make a big difference for a new customer I think that are coming into the space all right get cozy another story time I will keep this one off shorter but uh okay so that was born out of a time again and I sound terrible because I keep bringing up bars okay this is four out of time where you live in Nebraska it's okay we understand uh here I am I'm in a bar and I'm having a cocktail and my buddy's there he's like JP I hear that I need to get into

some Bitcoin and we didn't have our mobile wall at this moment in time we just had our desktop wallet and and he's like I hear a guy to get into some Bitcoin and buy some Bitcoin how should I do that which wallet should I get I'm like well let's download one right here you download one I will send you some Bitcoin through one of the other wallets I was using because again we didn't have a mobile wallet and we went through a number of wallets and they were all asking to write down 12 word secret phrases over and over and over again it's like whoa when you go to the car dealership like you don't want to sign a bunch of paperwork before you want to take it for a test bit you just want to be like I like this Camaro or whatever I

don't know why I picked America maybe I'm from Nebraska right I like this Camaro I want to take this Camaro for a spin or whatever you don't want to well you got to sit down and sign a bunch of paperwork and Phil you're just like no just let me take it for her test drive so with these wallets that friction should be reduced because when you don't have money in it especially in a secure like a mobile a much safer bet to do it that way so that was one of the things where we call it the bar or Pub test can you get somebody into crypto in less than 30 seconds and if you ask them to write down a 12 word secret phrase you fail absolutely let's continue on the ux side just for one more question I'm curious your thoughts on like maybe into

the future and take it as far to the Future as you like what are the other things that we sort of like I don't know either get rid of like I don't know seed phrases Ox slash whatever 50 different numbers like there's no way that my mom or someone is ever going to use these things to understand it talk to me about your vision of like where you think well let's go in terms of ux and how we start to make these things much easier for people to use when it comes to just really really simplifying this there's so many opportunities so people believe often that like education is enough to really get people to get out of custodial exchanges it's not education is not enough you've got to make the experience so damn good 10

times better for people to be like okay I'm going to use your self-custodial platform before I use a custodial Exchange and so it all starts with the 12 word secret phrase right like that's the first entry point that a lot of people experience friction and so there's still a lot of work to be done here but right now Exodus unfortunately still you know yes we don't have the friction up front but when you deposit money it's like hey better write down that 12 word secret phrase because it's still an important thing to help a consumer capture but ideally we get to a world where you download Exodus and you just start using it and you can always find the 12 word secret phrase if

you want it you can always find it but you don't have to write it down and so we're seeing some interesting Trends with wallets a lot of wallets right now are starting to recommend an iCloud backup and on the surface on the surface that feels like a good decision here's the problem though the problem is is that with the iCloud backup you got to put in a password your own password that you generate and I get it I get it because these wallets are thinking well wait a second we can't just not have a password on because if their iCloud is compromised then they lose some money so we got to put a password on it these wallets are missing is that people choose the same passwords if you are using the your iCloud password is probably the same password you're going

to use for that c Trace right so this is where it gets really interesting with things like multi-signature technology MPC which is very technical a little more technical than probably we want to go into you can leverage these Technologies where you can make it in such a way where a person can download Exodus or any wallet and just automatically backup iCloud using another key and you can do a bunch of things to really protect this 12v phrase so that's one example so then you brought up another example you brought up addresses right so imagine maybe you're trying to get your your mom into crypto you know everybody talks about get their moms into crypto right she downloads a wallet and you're like hey Mom give me your address and she's like

well son you already know my address you know where I live and you're like oh your crypto address give me your Bitcoin address and she's like oh okay and then she's looking at and as you mentioned earlier right zero Extra bubble you know and it's confusing and not to mention some of the coins they don't have checksum encodings in the addresses and what that means is that if you screw up a letter or number say your mom doesn't know how to copy and paste right and she types it in she types it in for some reason you know 30 characters whatever she types it in and she messes up a couple letters and you're like okay Mom you know I sent you twenty dollars

in Bitcoin and she's like oh I never got it and you you're like well and you're like oh no it's a long address oh no no no Brynn I get it for some listeners like wow most chains have you know checksums this is true most do so that is mostly a solved problem that some do not really will we got to get away from is we've got to come to a more user friendly experience where it's just a matter of connecting with somebody you know a contact right like it could be as simple as contacts in your phone it can be usernames most people are probably familiar with like an ens or an Unstoppable domains but those carry their own ux challenges

that people are not really thinking about so let's just take ens for a minute I actually don't have this name but let's pretend it was jp.eath and remember we're talking about mainstream people here let's pretend I'm a mainstream person jp.e that's my name I register it I'm feeling really proud about it I'm showing jp.e everywhere the problem with that is is that as a mainstream person I have to remember to go in and re-register jp.eath at some point in time right you know whether it's a year two or three year I have to go re-register that and again wallets can help this but that's still not a user-friendly thing like jp.eath is due for registration like a domain I think it can be better I think when you intuitively think about these connections you should think about

it in the terms of again the contacts in your phone and maybe again it's something as simple as like a username like kind of a telegram username or something like that but these sorts of things have got to be released for consumers to just make a very seamless experience it's so interesting to talk about the ux being such a challenge so I want to zoom forward to the future right now wallets are used mostly to manage money they're used mostly to manage crypto and you know you spoke about how you first built Exodus in that use case and that's what most wallets have built in so far however use cases for web 3 are every day there's something new coming in and so we're going to need wallets to manage much

more than just our finances and our money we're going to need to manage our identity our social graph our nfts our tickets Our member passes all these different things how do you see that playing out will there be one wallet to rule them all will we have many different wallets we'll even call them wallets I get asked this question so many different ways so I'll let you jump in and take it the direction yeah great question so our vision is fundamentally this that you should be able to have all your digital Assets in one app right it should be that simple right I should be able to be like oh there's my Bitcoin there it is there's my Tesla stock there it is

because we're in a future where Tesla stock is on the blockchain right oh there's my weird penguin nft with the sunflower there it is right there's my concert tickets they're all right there as you mentioned the digital assets right all in one application and again this is a little more technical but if I go and I take an LP position right I give money to a Smart contract like an Ave or a compound or whatever and I get these LP tokens a wallet needs to intuitively tell me what that means right it just shouldn't say like these weird token numbers it's just say like ah I've got three eth and 300 usdc in this liquidity pool and it's generating this much interest so that's

what has to happen inside the interface that's one aspect of managing your digital asset but I do see a future where the phone itself he's the guardian of these keys because the phone has the ability to provide that hardware and in that safety unlike a software can ever do right so people I know a lot of people are really bullish on Hardware wallets you know it's like whether you got a treasure or Ledger and they're very popular and today they're fine products I don't see the mainstream carrying around a ledger or a trace or a hard wall I don't see it I don't see it the way I see it is that ultimately your phone is the one that becomes your

Hardware wallet again at the hardware level right and to get to that world I think there's going to be a number of steps I think in between I think these daps creating one about that but I think there's gonna be a number of steps and then I think that I don't actually see Google or Apple embracing this technology fast enough it'll have to be a player in this space or a player that is all already like very forward thinking like just to give a quick example on what I mean by that if you go to you know when Elon Musk bought Twitter right and there was these rumors that Apple's removing Twitter from the App Store and he's like we will build a phone if we have to when a person like Elon says we will build a phone if we

have to you know he's serious right like you see this like I will put an offer to buy Twitter and you're kind of like I think he's serious but I don't know whatever and the dude goes and buys Twitter right he goes and buys Twitter so when he's saying now like we will build a phone if we have to this is a very forward-thinking person that has the resources means to do it it could also be an industry player that has established such a big Network effect they said like wait a second Apple and Google continue to block us 30 tax on buying a digital asset like buying nft stuff get out of here with that we're not okay with that we have a big network of 500 million customers

we've got to go build a phone and compete with Apple and Google because we are native to this industry and we understand how to build an experience so I think that somebody will do that someday I completely agree so when when Exodus phone you guys going to be the one to do it for us and you're not that crazy now one of my lips are gonna be tight on that one so let's talk about these risks for a second actually because we had this conversation with brave and it was quite interesting of if you're a browser extension wallet technically the browser could actually just like delete sorry but you can't use it anymore now not all browsers but like Google could do this for example right and then we take it a

next step further where okay I don't want to be a browser extension I want to be an app and this is the uniswap thing that happened last week of hey we're going to launch our own wallet it looks amazing and looks all great and everything's cool they try to watch it and apple just goes and we're not gonna let it happen well it can be blocked by the browser well it can be blocked by the App Store what was is your guys thoughts on that because you guys obviously had an app wallet so okay you know what now you've gotten approval by Gary ensler and by Apple what are you guys doing right that no one else can do in this space first of all but like what are your thoughts on that and kind of you know is it just the only solutions we got to build a new phone or what do

you think great question so yeah that our solution we got Gary Gensler on speed dial we got Tim Cook over to Apple Kyle too that's the solution no okay so more seriously kind of rolling back to where you started you said that brave is a browser and browser extension that they have control they do and unfortunately Google right now when we submit an update to our web3 browser extension wallet we have to wait at least 10 days before that update gets released it is insane it's absolutely insane that Google takes along Apple now with their manual review process when you submit an app update to Apple to their credit they've got it down in less than 12 hours and sometimes within a few hours so Apple the tip of the hat to you

for however you figured I'd do that Google get your together because you're going to get disrupted so yes moving into an ecosystem of apps what this allows these gaps to do is have more control over the experience for the customers end to end so I think it's a really powerful concept for dapps to consider and if you're a Dap founder out there and you think you want to build a wallet get a hold of me JP access.com get a hold of me send me an email we might be able to help you with that so anyways these daps out there they're building I think unit swap is going to start a trend here I actually think that a lot of dapps are going to start doing this and they're going to do it because again customer experience having that experience end to end with the customer

and then building that relationship with customers so I know your question was more about like approvals and submission we'll come to that here in just a second but actually having that relationship with customers is important imagine if you're open C and right now bids are happening on nfts for mainstream people you actually have to go to openc and long oh there's a bid okay right open C should control that experience and just be able to send a push notification hey you got a bid on your penguin or whatever like they get in there and accept or reject or whatever it is you're really bullish on pudgy Penguins I way overuse that example eat Denver and we've asked that same thing over and over and over again I literally actually

did not own any Punchy Penguins you know what I should go and buy pudgy Penguins because it is my go-to I just think very funny so to approval yeah here's the thing you have to understand the App Store process and unit swap will eventually figure this out they will get it figured out they will know what Apple likes to see what they don't want to see how they want you to present things to customers they definitely they don't want you to present like what seems kind of scammy I actually got a call from an app store reviewer we had this beautiful video in the App Store and we submitted an update and they're like we're sorry we're rejecting your app right now I'm like oh no what now what what is it and they're like please give this person a call and of course it's app review store

team and like yes you can imagine getting a hold of them is really tough I felt like a crazy ex-girlfriend I was pressed and sent over and over and over like oh not answering not answering not answer leaving that leave a message I'm trying to get a hold of you hey what's going on you know because I want to know what's going on finally get a hold of the person and the person says oh we see that you have this video on the App Store and the video looks more like a promotional video and we don't like those and I'm probably mischaracterized it to some degree so forgive me Apple legal if you're watching too okay but it was something like you have a promotional video and we don't want that we just want you if you're gonna have a video just highlight a feature or two

and just leave it at that don't go through the whole thing about customer service and all this beautiful experience and all that just highlight the features and we're like oh that's it that's why you blocked the submission that's it well we'll just I'll remove the video immediately and then we'll go back and redo it and then it's just and the person's like oh great okay then we'll accept it and we'll be fine so you've got to work with apple long enough to get these kind of responses to know how to navigate that mindful that's why I think so many dapps are going to come into this ecosystem and they're going to be like ah shoot and they're gonna get punched in the face by Apple and you just really gotta know how to navigate it but this is also the whole problem with this right like you've talked

already about the importance of self-custody in terms of finances and we don't have to ask them we don't have to trust anyone we just can have our money and we can send it and do things with it on Saturday nights whenever we want and now you're like okay for me to launch my app my business which relies on all of this I've got to get friends with apple and I've got to listen apple and it's like that sucks we need to think about that I hate it I absolutely food it I had the aspirations for us to build a phone someday and and when I tell people that they think I'm crazy so that's why I typically don't share that thing but because I get it like from today like oh you're a software company and that's a hardware company so far away and get it

I understand but my background I also have electrical engineering major so I do understand some of that Nuance but I would love if somebody did it faster this is why when Solana released the sagaphone I talked to totally over aslana he told me about this I was like oh my gosh I am so glad you're doing this because somebody needs to pave the way to do this because the whole fact as you mentioned asking for permission to send your money or to use apps for experience it's crazy town you should just be able to download the apps that you want and just get started so somebody's got to do it so just to bring back what you said if each daph launches their own wallet which is probably why you're giving out

your email to dafs because you want them to contact you it's probably why coinbase just launched wallet as a service I can see that path but does that mean that we're all going to have thousands of wallets hundreds of wallets like that seems like the worst ux yeah I great great question no you will have a number of different apps for sure but you do that already today right like you might have a telegram you might have a Twitter Gmail you might have Google Docs whatever apps you use today on your phone you already probably have 30 to 40 apps maybe even more I'm sure some people out there listening are like oh man if he saw my phone I've got a thousand apps on here like there's some people out there like that right the technology should be so good

that when you download let's say like an openc app or a uniswap app that you're not all of a sudden creating a new 12 word secret phrase for each one it's in the phone yes it's in the phone as it's protected and it's just for you as a consumer you're all if you're doing is you're saying like yes share this information right with openc yes share this information with uniswap that's all you're doing because that's what we want right like we all want that it is so painful to manage so many accounts so many logins so many passwords and keep it all safe and as you said people just end up using the same password with every account which doesn't make it safe

so we all want that single account to manage it all I guess I just can't wrap my head around how I'll Trust You the protest is going to be able to I think what you're saying is like every app you'll have a wallet in but the seed phrase for that of the things securing it underneath is the hardware itself and so like you might have 20 different wallets as we call them today but they're all the same thing and they're all secured by one seed phrase right and that seed phrase is in your phone that's exactly right you nailed it because think about it this way okay when you're going to buy let's say you're going to go buy a coffee at Starbucks or you're going to order something from Amazon you're not thinking like oh shoot I gotta share my credit card with each

like you're just it this system is good enough whether you're using Apple pay or a credit card or whatever it is and then there's technology now like privacy.com or whatever where I think you can have fake credit cards that are like proxy credit cards amount like it's good enough today that you're not thinking about that worry or concern you want to go to Amazon and order a new vacuum bam done you have a clean room here in a few days wheels are turning and I know we got a certain wrapping up so I just have one more question then yeah sure does the way that you're seeing this goes like right now if I want to interact with some application over here and I need to use my I don't know Phantom wallet for it but it doesn't have any money in it I gotta go send it from

let's say my ledger or something right and I gotta like fund it over there maybe swap into a certain token so that I can go and do X thing if we have all these wallets and all these different apps but they're all under the the one seed phrase are all interconnected in some way and I want to go use my I don't know Reddit or something but I don't have any money in there just automatically something money from somewhere else just gets into there swaps through the right token and like I never had to worry about any of that just did it seamlessly is that your big deal yes you got it you got it and both in terms of exposing that information to these apps like you as the consumer should have that choice like yep I want to share this access information bam

approve and then I can actually deny it later like ah I don't know that I want to use this thing anymore I'm going to go to another managed place in the phone or whatever reject and then it can no longer access or do anything so yeah absolutely that is that's how it should work and then on top of that as you said that if I'm going to interact with these experiences right again if I'm buying a board eight this time I'm not buying a pudgy penguin I'm buying it right I'm not thinking about oh do I have enough ease for the gas fees the wallet in technology the infrastructure should abstract all of that and make it so you still don't even have to think about it it's like the value you want from that dap as we know it today app is we'll know it tomorrow

should just be a one-click experience and the infrastructure should provide all that for you I think we gotta start to wrap up although I also have many questions we'll have to get you back on for another one because we could go so deep this could be a two-hour episode but we gotta stick to our time everyone's got stuff to do I want to get a chance to show where do you want to send people whether it be to find Exodus wallet developers whoever in your ecosystem or stakeholders that you want to contact you the floor is yours yeah I appreciate that so as I mentioned yeah if you are a Dap developer and you are interested or thinking about building the wallet you can send me an email personally at JP exodus.com additional to that if you

guys want to check out you go to our website exodus.com itself and then on Twitter is twitter.com forward slash Exodus underscore IO and when we actually have the Twitter Exodus handle but there was a whole weird thing where unfortunately a hacker grabbed it and then we got it back and then not Elon Musk won't lock it and so I'm trying to trying to make it happen so yes Exodus underscore IO is where you find us on Twitter and you'll get all the updates there web 2 companies eh I know classes Elon moves too it's like come on Elon yeah okay uh we usually do a speed round but we're overtime so I'm just gonna ask one speed around question which is our favorite question to ask if you had a billboard that one billion

people were going to see what would you write on it oh geez okay um to believe that you have to be motivated to take action I think is the biggest lie ever told so to believe that you have to be motivated to take action is the biggest lie ever told choose discipline try to shorten that up a little bit I think a lot of people believe that like oh I'm not motivated today I'm gonna get amped up yeah oh I gotta get amped up to do this and my job sucks and whatever it's like if you wake up today and you're like you know what I'm just gonna commit to one thing whether it's you're gonna get in the gym in the morning or even walk around the block it'd be the smallest thing or do five push-ups whatever it is and you choose that discipline

and then you build on top of it the next day and the next day and the next day when you look back at yourself a year later and then two years and three years five years you will have transformed yourself to be a much better person and I believe in doing that you'll be your best self and you have the capacity to go and change the world so that's why I would go with something like that Well Done Right On The Spot too I didn't even give warm-up questions well done just swim for it and nailed it JC this has been a blast thanks so much for joining us this has been a lot of fun guys to all of our listeners thanks so much for listening in we got one more episode coming up in the wallet series next week with Argent if you haven't

already listened to the past two in the wallet series go back and check out Ledger and brave and JP definitely gonna be hitting you up for another show probably six months or so whenever you build the phone you got six mics you can do that right all right we're gonna have this done next month [Laughter] have a great day JP thanks so much all right thanks guys thank you for listening to web3 Academy we hope this helps you along your web 3 journey and if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this

podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one