Joshua Frank on how institutions evaluate crypto

Transcript

If they had the money in cash today, would they put it in the token they have now or would they put it in something else? >> What's up everybody? It's LJ Ducet here and welcome to the Milk Road Show, the daily show that tries to spend less time arguing about candles and more time figuring out who's actually building the pipes underneath the market. Today is January 7th, 2025. Bitcoin's on a little bit of a dip, but we do we are still kind of in a start of year rally, let's say, and hopefully it continues. Over the last year, crypto has quietly stopped being just a speculative playground and started becoming infrastructure that Trifi actually wants to plug into. Today's conversation sits right at that intersection where like markets, tokenization, and a lot of institutional capital are starting to kind of come together for what should be

a pretty sweet year. Joshua Frank, the CEO of the Thai, joins us to talk about what institutions are really watching, why Canton suddenly matters in the top 20 chain and how the crypto infrastructure is bringing all that together. Today's episode is brought to you by Reserve ETFs, the onchain equivalent of ETFs, chain link, which links the web 3 to Wall Street, and Bridge sends stablecoin payments instantly simple global friction-free. Joshua, welcome back to the show, man. Okay, so listen, the burning question for me, for you, you came on five months ago. You spoke with Jay. It was August 18th and you said that the market rally at the time felt like we were more in the seventh inning than the first. How do you feel now?

>> Well, if uh sharing my screen here, can we pull this up? I feel like >> I don't I don't normally make calls, but I feel like that's pretty good. You said I was on August 18th. >> August 18th. Yeah. >> We ran up to, you know, about 120 and a couple months after, and we've dumped since then. So, I think saying we were in the seventh inning was was was pretty close, maybe close to the eighth or ninth. So, yeah, I mean, I think clearly we've gone from being in a in a in a bit of a a bull market to more of a bare market now. I I think there's a combination of things that are to blame for that. I think one of the biggest things was just how asinine and insane all of the DATs got and how ridiculous they've got and now the fact that

they're all trading below MNAV and that created temporary artificial uh you know buy pressure on assets and that's kind of starting to slow down and I think the question you know is really who is the net new buyer for tokens right and I think that's a question you always have to ask yourself is okay we have the Bitcoin ETF we have the ETH ETF we have the Salana ETF we have other you know single ETFs as well as some multi-asset products that are coming to market now. And I think they're going to have demand and people are going to invest in those in the retirement accounts, things like that. But the question is who is the net new buyer of altcoins? And I think the fact that there is not a good answer to that question is why we're kind of in a bare market right now because you know

you know who is who is here who's coming in and actually to visualize that for you right if you think about the market generally you have kind of two sides of the market. You have your institutional market participants and you have your retail market participants. And I think you know from a retail perspective you know what's been hard is that historically you know retail has gotten burned right if we look at when retail was last in the market it was kind of memecoin mania you know retail was part of NFT mania and a lot of the different kind of manias that we have speculative manas that we have in crypto and they've been getting burned and and and in order to create long-term sustainable price action retail also needs to succeed. It can't just be institutions. By the way, institutions aren't necessarily succeeding right now, just to be very

clear. Um, so I think the first part is retail. The second part is institutional. And I think one thing that's very telling on institutions. So one thing that we track at the TAI is how much capital crypto funds are raising. And if I share my screen here, we have this chart on capital raised by crypto funds. And you can see in 2021 2022, and this is just specifically for US-based crypto funds, they have to file what's called form DNDA filings with the SEC, which is what we track. You can see, you know, after 2021, 2022, there really has not been a big increase in capital coming into the space. And it's really important that that capital comes in. And a lot of the capital that's come in has come into venture. But that creates problems because you see all of these big venture rounds that get

announced, all these investors come in, then the token launches, and there's no liquid funds or hedge funds there to buy up the token. And so the challenge is we have a plethora of venture funding. And the way that venture funds and venture capital is deployed, it's deployed over a number of years. So the capital that was raised in 2022, we're probably at the tail end of that capital being deployed, you know, it could be two, threeyear deployment cycles, maybe it can get extended. And so the question is who is the net new buyer? Who's coming in? Who's coming to buy your bags? And I think until that question gets gets gets a better answer or you know we get we have a 2021 style you know 2020 2021 COVID you know style rates are cut you know incredibly you know sty checks

coming in people dumping money into risk assets and other things. I think that's a question that and I'm not saying I have an answer to it. I wish I had an answer that I could share share with you but I think people need to ask well where is the money coming from? And you also have this combination of there's no new money coming in from retail and there's no new money coming in that institutions are raising combined with the fact that there are more tokens in the market which is naturally going to create problems. And I think what is going to end up happening in the long run and we're already starting to see this is you're going to have some real winners and you're going to have some real losers right in a market where there's no new capital it's it's going to be capital rotating and it's going to

be figuring out where where you want that capital to be deployed. You know, one thing that I think people forget also about that co time, Joshua, is that retail is just sitting at home getting whatever govern government assistance like the checks or you know, whatever their country was doing at the time outside of the US and that boredom was was ripe for let's do something different. Maybe let the world's ending so let's let's gamble a bit, right? And that was a that was a boom time for crypto. But I want to ask you, Joshua, that retail, you know, maybe they got rinsed by by memecoins, but I think there's also a big narrative that they rotated to something else, right? It feels like everything else popped off last year and didn't crash as hard nearly as crypto in that pullback in the fall. Do you think that that's what's

happened? And is that something that institutions have been part of? >> Yeah. Well, I mean, keep in mind the the institutions is a very big word and so there's crypto institutions and there's traditions. Crypto institutions are primarily deploying into tokens. Some of the crypto institutions, quote unquote, and I mean asset managers, hedge funds, they're also buying crypto-related equities, which is a bit different and something that they weren't doing before. So, some of them maybe are trading mining companies, they're trading DAT, they're trading Coinbase, they're trading bullish stock or whatever, you know, whatever that Circle, whatever that public company might be, that might have pulled some of the capital uh genuinely out of out of token markets. Uh but yeah, I think certainly retail interest has changed and new dollars have gone in different

directions, right? I mean, silver and gold have gone absolutely berserk. Obviously, they're pulling back a little bit, but yeah, I mean, I think I think, you know, the market is missing its next narrative to have a ripping bull market. Or maybe it's just never going to happen again. And and that doesn't mean that tokens aren't going to go to inch up and move up and there won't be, you know, tokens that 10 or 100x. I think that certainly could still be the case, but, you know, we might not see what happened in 2021 again. >> Milk Road is hiring a head of product. If you've built real products and you think like an owner and you want full control over tools, research and community used by millions of investors, this role is for you. Check the link below and apply today.

>> So, so tell me a little bit more about this institutional bit though because from what I understand, institutions think in like decades, not in uh days like retail does. Right. So, you're talking about completely different scales. Is that something where you're so you're telling me that you're not going to see this this explosion of price but a slow maybe some price action but then a slow creep up over time. >> Depends what you mean because institutions is a super big word. A hedge fund sometimes thinks in milliseconds, right? They might not even be thinking in days. They're they're they're they're trading right actively.

So when you say institutions it depends like do we mean you know endowments and pensions and you know teachers you know teachers retirements and things like that that's long-term capital right that's capital that's slowly starting to come into Bitcoin and slowly starting to come into ETH and a little bit on the altcoins and that's going to primarily you'll see those flows in through ETFs you're not going to see that come into spot but that's still going to create spot buy pressure I think that's still there I think that's still going to grow I still think that's the beginning But then there's, you know, altcoins in the rest of the market. And the reality is for these institutions to want to engage with the rest of the market, assets have to be large enough for them to be interested and they have to be liquid enough, right? So if you're looking at

token, you know, 756 by market cap and it's a $30 million token that trades 500 grand a day. The reality is there might be a hedge fund that's really excited about it, but if that hedge fund is managing $50 billion, it's too small of a position for them to be interested and to get involved with it, right? And so we need to see the entire market continue to grow cuz like right now institutions can trade Bitcoin, they can trade ETH, they can trade Salana, they can arguably trade anything in the top 10 or top 15 and obviously depends again on what that institution is, but we need to see the overall growth of the market and maybe the way that they trade it is through in the future it could be multi-asset ETFs, right? So you know in the future maybe you have an ETF that's

a basket just like the S&P 500 which I'm sure a lot of your listeners hold. I hold, you know, you know, you might as well, right? That's a basket of the top 500 equities. Maybe that's the way that people are going to get exposure in the future, which, you know, creates a tremendous amount of buy pressure for the for the crypto market as well. >> So Joshua, you you you generally sound bearish. You said we're in a bare market and that's fine. What are some reasons that you're bullish? >> Yeah. Well, I think institutions are certainly more excited about crypto than retail is. And when I say institutions, I mean traditions rather than crypto institutions. I mean, one network that we've seen and and we've been intimately involved with is Canton network. We've seen a ton of traction there. This morning, JP Morgan announced that they

launched JP Morgancoin on Canton network. There is a a private basically forum post that NASDAQ is becoming a super validator on Canton and is building on the network. They also invested in the network. The DTCC similarly has run pilots on the network. They've gotten involved. uh and the fact that the DGCC and NASDAQ just invested in the company digital asset which has a tremendous amount of exposure and is a company behind Canton and is now going to be earning Canton tokens. I can't think of a time where a company like NASDAQ has actually held a token or received a token. Uh and I think that's thing that's really exciting and and and Canton I think is at the forefront of this from a from you know digital asset as a company has Goldman Sachs as an investor. It has JP Morgan as an

investor. It has all these big institutions and and I'm happy to talk about what Canton is and and why it's exciting and and you know why all these people are involved but I think there are other chains that are starting to see traction as well. You know we saw Morgan Stanley launched the Salana ETF uh yesterday and now they expanded and they're doing ETH as well and they had done Bitcoin. So I think you're seeing like the institutions aren't scared of price. They're building they're getting involved and that's much more longterm. So I think in the long run that's something to be excited about. I think the question is whether an institution using a chain means price will go up and I think that comes down to we need to have fundamentals in crypto. We need to see not just usage but we need to see

revenue being driven right you know by these networks. So the way Canton works is when somebody transacts on the network, it creates burn and it reduces the supply, right? And so I think we need to see things like that buybacks and burn, you know, buybacks, you know, broadly as well and and see an actual effect of these institutions tokenizing, right? Just just because of the fact that institution has put $500 million worth of something on a chain doesn't create any demand for the token necessarily. So I think it's got to be that combined with an actual usage of the token. H >> So how do retail people play this, right? Because like you're saying, you know, our audience, listen, we have some really sharp people in the audience. A lot of them like know what's going on.

They listen to every word. They know all these narratives. They're still holding their bitcoins and their ETH and their their Salanas and their majors and maybe some other alts and and whatever. Maybe they've got some Coinbases from Robin Hood to get exposure to that. I don't know what they're doing. I'm just assuming they've got all those bases covered. But what you're talking about is like, okay, you have institutions outside of those launching their own tokens, launching their chains, doing launching their ETFs. what what is the how do you approach this as a retail person to try and take in all this information and kind of ride that institutional wave? >> Yeah, I mean I think you need to think with your head and not your bags. And so, you know, I think one thing that I always tell people to ask themselves is if they had the money in cash today,

would they put it in the token they have now or would they put it in something else? And I think that's a really important question and I struggle with that. Everyone struggles with that, right? But oftentimes, you know, in your heart or not in your heart, you know, in your head, maybe in your heart you like the position, but in your head, you know it's the wrong decision. I think you need to start thinking more and I think the market is starting to become a lot smarter and more intelligent. And I think it will over time. It's not going to happen tomorrow. It's not like revenue is the number one thing that matters and buyback's number one thing that matters. But you need to start really looking into and understanding well what is the supply schedule of the token? How much more token is going to

come to market? How much demand is there? If you see an institution doing something on the chain, is it actually going to create buy pressure on the token? Is that going to create burn pressure on the token? Like thinking about it from more of an economic lens of like, okay, there are a lot of projects out there that have talked about institutional this, institutional that for the last 8 years. Do they have practical things that they can show for that or is it just conversation and talk that maybe this could happen in the future? And so I think it's looking at these announcements, looking at what's coming out and basically trying to understand, you know, how substantive those announcements are. The amazing thing now is we all have AI tools, find an announcement, plug it into the AI tool and ask what it means for the price

of the token, right? Like you can you can ask these questions and you can get amazing answers, right? Um, you know, by asking AI tools and I think it's going to make everyone a much better researcher as well. >> I like that. A little bit of a little bit of DIY. I think that that's still a little bit over people's heads, but I think I think that that >> I don't think so. You see it think people do it? >> Well, no. I mean, you see you see a big announcement that comes out, right? X company like Morgan Stanley launched the Salani ETF. You want to understand what that means. Go into chat, go into Grock, go into to Claude, maybe use a couple different ones and ask, you know, what does this mean for the token? How much demand is there? And you should also

start looking at these products, right? So you can go on Gayscale's website, you can go on Fidelity's website, you can go on Franklin Templeton's website, you can see how much aum they have in these different products. And if you see an ETF is launched for your favorite altcoin, we'll try to look at something that's similar, right? If an ETF is launched for coin 20, look at coin 24, 25, 18, 17 by market cap. Look at the other ETFs. How much buying pressure did it actually create? Is it is there $100 million within the ETF? Because if it's $100 million, maybe that's not exciting. Or is there $500 million? is there is there demand for these things, right?

And you can you can track and monitor them, but the reality is we're also in an illquid market and there can be one big fund that decides they want to get involved and gets excited about crypto that puts a billion dollars into the space, then all of a sudden everything rips, right? I mean, that's just the reality of the space that we're in is when assets are illquid, it doesn't take much to move them quite significantly. >> ETFs provide investors with a structured, disciplined, and diversified approach to crypto, which is cool, but the world is moving on chain. We need a crypto native equivalent. That's exactly what Reserve's decentralized token folios bring to the table. Reserve ETFs are rule-based baskets of crypto assets packaged into a single token like Coin Market CMC 20, crypto's version of the S&P 500. Go to milkroad.com/reserve to find out what's on offer. Sure,

tokenized financial products are the future, but there is a big sticking point. They all need to speak to each other. This is a tough problem to solve. But chain link does exactly that. It's the universal language for financial markets, linking Wall Street to web3, banks to blockchain, and so much more. See how Chainlink is linking the world by going to milkroad.com/chainlink. Mhm. Mhm. No, I like that. No, that's fair. Yeah. Okay. Yeah. People, do do your own research. Okay. Listen, get off get off your butt. You can't just listen to Milkroad all the time. We give some some good insight, but like Joshua is saying, you could do some of this yourself.

>> I'm saying don't listen to me. Like, don't listen opinion. >> Well, here's here's a question for you. maybe something you give us more insight into. Um, you're kind of give us like the, you know, the DIY way to research some of these things and kind of learn more about them. What's what do institutions do when there's big announcements like, okay, JP Morgan announces this, this other company's going to go do that. This is what they're going to look into. Or even the companies that are launching these ETFs, why what data or metric do they care about that maybe is something that retail doesn't really think about or see the same way?

>> Yeah, I mean, I think there's two things, right? And it comes down to to how fast you trade or you move in and out of positions, right? If you're a hedge fund that's thinking in terms of milliseconds, that's very different than if you're a, you know, a VC that maybe is going to buy a liquid token and hold it for 5 years, right? And so it depends. If you're long-term oriented, all of this is noise, right? I think the stuff that's not noise is when you see these announcements compounding one on top of another on top of another, and they're not just announcements, there's substance behind them. like assets are actually moving on chain. They're actually going to use the chain. That's going to drive demand for the network.

People are going to need the coin to actually transact and do these things. Like in order to do something, this bank actually needs to physically hold and burn the token to make these transactions. Like that's the kind of things that they want to look into is is peeling back the onion and looking at what's going on beyond the headline. I think that's really important. But then there's also the the firms that trade on a on a high frequency and they'll see an announcement come out and they'll want to you know they'll respond to that right away like you know there's a new partnership that X and you know X partnered with with Z that an ETF is being launched for this token and they'll just put a trade on for a few minutes or for a few hours right and so it really it really just depends uh and

it depends on the firm right you know I think a lot of you know funds that take more of a fundamental driven approach and obviously a lot of them are our clients we have the Thai terminal which is the most comprehensive institutional data platform in crypto. We service about 500 institutional customers. And so, you know, our clients really vary in terms of the types of stuff they're looking at, right? Guys that are much more long-term oriented, they're looking at, you know, how many developers are working on the chain? Is that number growing over time? Is that tricking? How many app applications are being launched on a chain? Is that growing? Is that shrinking? Is there actual usage of the chain? Is there demand? I think one of the biggest things is understanding is is there demand once incentives dry up.

If incentives are there and incentives are creating demand, which could be an airdrop or some other form of, you know, grant or incentive, like is this real activity or is this just incentivized activity? Because if it's just incentivized activity, which a lot of things in crypto are naturally that's going to that's going to have an expiration and it's going to end, right? And so they're looking for, you know, more long-term signals, more long-term growth. And obviously, it depends on the asset. Like I'm talking a lot about L1's and L2s, but if we want to talk about DeFi, it could be, you know, how much are deposits growing for a lending borrowing protocol. Are they sustainably growing over time? Is the number of depositors growing over time? Are depositors concentrated? Is there one large depositor or is it is it varied?

Right? And so there there's so many different ways that you can slice and dice data. And the reality is no one agrees on how to do it. So the problem is in equity markets, you can look at revenue, you can look at IBIDA, you can look at earnings. There are things that people agree to generally right that doesn't like Palunteer trades at a way higher multiple of earnings than other companies because of their strategic importance to the US government but like broadly speaking things trade within a range and and telecom stocks trade similar trade similarly and you know tech stocks trade similarly and whatever but in crypto we haven't yet gotten to that point but I think we are converging and I guess my argument is that even if we even if the market doesn't value fundamentals as more institutions come into the

market, they will value fundamentals. And I think it's important to have that mindset coming in because it might not be 6 months from now, it might not be a year from now or two years from now, but in the long run, ultimately the projects are going to succeed or the projects that have a use for the token where people need to buy it in order to transact on the network. >> What What's the in your opinion the worst metric that people tie to? Like what's one thing you see it on the timeline, you're like, "God, why are people talking why people so obsessed with this?" like fear and greed index or like one of those, you know, like something that you're just like, ah, why do people so obsessed with this? Or even maybe some of your clients come to you and they're like, listen, I saw this

number. Look, the reality is the Bitcoin dominance, blah, blah, blah. You know, like what what do people what do you think is like >> the reality is if enough people believe something, it's true, right? So, if enough people believe in trading the simple the 50-day simple moving average, then that becomes reality. If enough people believe in the fear and greed index, that becomes reality, right? And so and obviously there's there's there's differences there. Bitcoin is moving because of micro strategy and large bi there's a lot more factors in play with Bitcoin in and some of these other assets. Um yeah, but there's been so many metrics over time. Um I I think the biggest mistake is using one metric in isolation. Um I think you need to think about things more holistically. Like if

somebody just says, "Well, this network has a ton of transactions." To me, that's a vanity metric. What does that mean? Like, do they have like they have 100 million transactions? Okay. Are 99.9 million of those 1-centent transactions? If they are, then that's a vanity metric. It's [ __ ] It could be fake transactions. Are they bought a transaction? Are they real? So, I'm I'm just a believer in as as much data as you can get. Obviously, you don't want to be overwhelmed, but it's really peeling back the onion and not just like don't just see a metric and react to that. See a metric and understand what's actually behind that metric and and start peeling back the onion.

>> Okay. Yeah, that makes sense. I think that's that's definitely a good way to look at it. I like that you didn't you you weren't willing to single out one thing that you >> Well, I I singled out transactions as a metric. I think that's >> Yeah, that's fair. Yeah, transa you did. Yeah, you're right. You you did say transactions. U Okay, let's talk about uh some of your business news, man. I know that um obviously like all this is coming from insight that you have from working with all these institutions. Like you said, the TAI has 500 institutional clients. So, obviously this isn't coming from speculation. This is what you're you're hearing every single day. You guys also just made a pretty big move. Uh tell me about that.

>> Yeah, we just acquired um one of the larger uh and more established staking providers called Staken. It's staking without a G. S A K I N. Uh and we're super excited about that. The general gist and idea for anyone who doesn't know what staking is. And anyone who has assets and doesn't know what staking is should know what staking is. That doesn't mean you need to stake with us. You can stake with any provider that you you choose. But staking basically the general idea is proofofstake networks have an inflation rate right and more tokens are created every year just like the US government prints more cash every single year and in order to be able to participate in that you need to stake your tokens uh or delegate your tokens to a validator which helps secure the network and in exchange for doing that

you receive rewards. So different networks like Ethereum for example has a 2 and a half to 3%ish staking reward rate which is inflation on the network and if you're not staking your assets you're missing out on that network inflation that's occurring. So you're basically just like your dollar becomes less you know worth less every year your ETH is going to become worth slightly less every year just by nature of the fact that there's more ETH that's being created every single year. And so Staken is a staking provider with more than $1 and a half billion dollars worth of assets under delegation, which means assets that different individuals and companies will delegate uh to stake into stake. And and we've acquired them. And the reason that we acquired them is staking is increasingly becoming a commodity, right? There are so many

different staking providers out there. There are you could go look up Salana or ETH or any of these assets. There are hundreds and hundreds of validators. They're really not differentiated, right? you know, they have very similar, you know, rewards that they'll pay customers. They have similar infrastructure. They have similar track records. All of that stuff is kind of all the same, similar promises. But we've built an incredibly differentiated business. We have the Thai terminal, which is, you know, the most trusted institutional data platform. We put on, you know, four institutional conferences a year. We have APIs and we have data sets. And the whole idea is basically to start bundling services, right? You're staking your assets anyways. move these assets to us and you can get you know preferential access to different products and services that we offer uh which is cool without paying you know

any more money. You can think of it as like stake now pay never you know the idea basically it becomes a way to access you know services that you know you would otherwise have to you know pay you know a tremendous amount of money to access. Why don't people stake? Why both institutions and retail, why why do they not stake and just if they're going to hold Ethereum or something like that for they're like, I'm holding this for 20 years, 10 years, why don't they stake and get that 3%. >> Um, I think that might just be a knowledge gap in some cases and knowing that you should be staking. There's also unbonding periods on certain networks. So, for example, if you wanted to stake Polka Dot, there's a 30-day unbonding period. Um, and so it takes a while to actually unstake. So, if you saw price

ran up and you really wanted to sell an asset, you might have to wait. certain assets are much easier. Certain assets are a matter of hours or days. So there's a there's a there's a liquidity premium um or an illquidity premium to being able to stake, but you can also, you know, hold like, you know, ST or one of the other like liquid stake tokens uh as well. Um and we work with those guys and we we can we can do that for for you if that's something that's interesting to anybody. And I think the you know, I think it's primarily that uh but most the institutions are staking. Most of the ETF providers are now offering staking as part of their ETFs. That was just a matter of getting SEC approval.

So, I mean, the majority of networks generally, not the majority, but a huge percentage of networks assets are staked. And also, it just depends on like what the reward rate is. Like, if the reward rate is 15%. You you you should be staking. If it's 2%, maybe you're like, I value the liquidity over staking the asset. Uh and and with a lot of, you know, funds, you know, they're trading on on, you know, if you're trading every day, every minute, every hour, you know, if you're going to get one 365th of a 2% return, it's probably not worth it for you. So, it just depends on the the time horizon of of of the of the person.

>> You clearly see like staking as something that has a bit of a knowledge gap, but it's clearly something that people are ready to do, right? So, that's obviously that's why you guys acquired this thing because you realize it's something you can grow and people are going to want to do, right? Well, for us it's actually our clients are already staking and they're staking with other providers and they can bring the stake to us in order to get access to things that they would have otherwise paid for. And so for us it's not about there. By the way, as as an individual, you can stake with us. You can go to stakein.com sda kin.com and you can stake and there about 50,000 individuals that do. But at at our core, you know, we're really focused on the institutional market and a lot of those guys are uh are already staking.

And what what is another like line of business that you would want to add if anything, right? Because this is something you're adding for your current clients because you want to capture their staking business. What else? What what is what is the other thing if you could go acquire another company or build something else as a part of business? What what would that be that you think institutions would want to do with you? >> Yeah, I mean, well, one thing we've announced and it's not it's not uh launched yet is we basically have built a compliant version of a messenger app or a compliant competitor to Telegram. So, one of the biggest problems in crypto is everyone interacts on Telegram. However, that introduces a tremendous amount of of problems because I don't know about you, but I get I get messaged all the time by these random

accounts. You know, there's all sorts of fishing attempts. I've had so many of my friends hacked. So, like my friends will get hacked. They'll send me a countly link. It turns out it's a scammer trying to send me a link to then download, you know, Zoom, which then hacks my computer and steals my crypto. And so it's become a massive problem um communicating as an industry on Telegram. It's a huge security risk, right? You know, there's there's fraudsters, there's spam. I get added to all these random group chats that I don't want to be added to. People find me. And so we basically were like enough is enough. This is not a way for especially as the market institutionalizes and your JP Morgans of the world, your Morgan Stanley's, your Wells Fargo, your Bank of America of the world to come into the market. That's

not something that they're going to be able to use or they're going to be able to accept. And so we basically have built a compliant B2B enterprise messaging app. And so the idea is basically when you come on the app, you have to verify that you own the company. So you go through a simple verification of email, but then you can also go through KYB like know your business. And we'll basically say this is Coinbase. Coinbase is who they say they are. This is, you know, whoever whatever the other entity is that comes onto the application. And then you can basically message other known entities and you can be confident in who you're messaging with. And there's a lot of other really cool things that it does and it enables uh you know it enables you one huge problem that we have as an industry you

know we have sales pe people at my company and naturally some of those sales people leave over time. We have hundreds of customers. Those sales people are in chat rooms with hundreds of customers. When they leave all of a sudden there's 200 telegram chat rooms that go unanswered. So you have the ability on the app to reassign chats if somebody leaves a company to create teams. So for example, if you want to go message with a big exchange, they might have an OTC desk team or a custody team or any of these other teams that you can go and you can message and you can communicate with. And so we've spent uh over a year building this. There's a lot more to it than just that with, you know, about 50 people on the team working towards this goal. So it's been a it's been a massive endeavor for us.

Uh but we think it's needed and and tons of compliance related features. So it's connected to what's called global relay which is what all the banks use and all the you know large institutions when they you know trade on Bloomberg or on Symphony or any of these other platforms and and that's because and not a lot of people know this but the banks were fined five plus billion dollars for trading on WhatsApp and you know uh Skype and other instant messaging applications in the past and so there's a need to to move to compliant audited you know chat where you know who you're dealing with things like that. So that's something we're very excited about.

We're really excited about anything that's really at the center of connectivity and bringing institutions together and being kind of the center point, you know, the centerpiece for that. >> I like that, man. I'm still we're still like a Discord kind of people at Milk Road and even that is is challenging to to manage. Uh but I know I was chatting with you in Telegram before doing the podcast and that also is is is is a bit of a hellscape uh to use. Not chatting with you, but >> it's a great app. It's a great app. I use it. >> It's good. It does the trick. It's not it's it's not it's not the right app for businesses to do business with one another on.

>> No. No. Definitely. Put it that's a good way to put it for sure. Stable coins are the biggest use case in crypto right now. But let's be real. Using them on chain is still way too complex. That's exactly the problem Bridge is solving. Recently acquired by Stripe. Yep, that's Stripe. Bridge helps businesses send, store, accept, and launch stable coins instantly. Explore the future of global financial infrastructure at milkroad.com/bridge. Okay, Joshua, I want to wrap this up. Let's uh let's circle all the way back to um you know, your thoughts on the market and everything. You painted a bearish picture for us at the start.

You're painting clearly a bullish long-term picture because you're here. You're you're you're acquiring businesses with like a really long-term view for you and your clients. Tell me where if we have you back in a year, where are we going to be at in crypto? Yeah, I mean I think you're going to continue to see institutions pour into the market. You're going to see more and more of that. I mean, the surprise Morgan Stanley ETF filing yesterday is is that's pretty [ __ ] cool. And you know, you're you're seeing I think Black Rockck maybe said today or yesterday, this is just the start for us, right? And so you're going to see more and more I mean NASDAQ hasn't announced what they're doing on Canton Network, but you can see there's a governance proposal that was approved and it's all like private what they're actually doing. But

I I'm sure that's going to come out in the market. It's going to be really exciting to see what NASDAQ's doing, what the DTCC is doing, and what others are doing. So, I think you're going to see continued growth in institutional adoption of digital assets, not just from a purchasing the token perspective, but from a tokenization perspective, from using blockchains and real enterprise use cases. And I think the biggest thing we're looking for forward to is there's going to be a lot of M&A and a lot of consolidation. I think there's going to be a lot of M&A of companies buying other companies, but I wouldn't be surprised if your favorite token starts buying companies too or starts buying other tokens. So that's thing that I, you know, I also think will start happening this year.

>> Are we supposed to be buying Canton Network since since it's clearly the in one of the institutional favorites here? Like is this should we be pouring into this? I feel like we haven't really done any episodes or covered Canton Network, but clearly they they they are in the ear of these huge companies. >> I don't give any investment advice about buying buying tokens, not tokens. I'm just I guess it's something I got to explore on my own or ask our pro team to to look into because this is something we keep seeing it in the news and clearly they're kind of like a chain of choice. So I I want to know what's going on here. Uh and this is something we should we should look at.

>> The general idea to give the TLDDR on why people are choosing it as a as a high level is it has a lot of privacy features baked in. So for anyone who doesn't know, Canton was started by a company called Digital Asset. Digital Assets's been around for 10 years. They've existed. They've raised hundreds of millions of dollars and they basically had 50 different banks and institutions building on their private permission subn networks. And the whole idea was with Canton network is these banks couldn't interact or these institutions couldn't interact with one another because they had these permission networks. So imagine you had a Gleman network and GMAN wanted to interact with JP Morgan. Goldman would need a run for JP a node for JP Morgan on their blockchain. JP Morgan would need to run a node for Goldman in order for them to interact. What Canton

network introduces is what's called the global synchronizer which basically allows these separate networks to start communicating to one another. And what Canton is really focused on is privacy. And so one of the biggest, you know, one of the biggest challenges is if you're an institution like when you put your money in Chase Bank, you don't want or expect to see that publicly. You don't want to see how much money is floating around there. So with Canton, the way that the network works is you can only see the amount of Canton used in a transaction. But if for example USDC is used that data is all private. So I can see that you know there was a transaction from you know this bank to the Fed and it used this many tok you know and and like there was one Canton coin used to pay gas but I can't see

what actually happened behind the scenes and that privacy preserving feature and the fact that they spent years building for institutions has gotten a lot of these institutions comfortable with it. So they're not trying to build like yes it's a decentralized permissionless network but there's definitely guard rails around that and they're not trying to compete with Ethereum. I mean that's not what they're trying to do. They're trying to build a network where institutions can actually feel comfortable and you're seeing that in the news you know coming on chain and actually doing uh you know doing things and interacting with the network. And there are other networks that I think are also doing a great job with this just to be very clear. So they're they're not the only one but I think certainly they've had the most success.

>> I'm going to throw this to our pro team. We need a we need a pro report which is like our our really in-depth like crypto reports that come out once a week for for paying members for pro members only. I'm going to ask them for a report about all this stuff. We've done tokenization stuff in DTCC, but I want to know like who the who these players are like Canton what the bull and bear cases are for each one because I think that that's that's definitely worth some dig digging into for us for us for us for us people. Joshua, the work you're doing is fantastic. So you it's not something I think you have to worry about as much. Thank you so much for coming on the show man. I think it's been awesome to get your insight and kind of hear from the,

you know, somebody who's boots on the ground working with the institutions every day building products for them. So, uh, thanks for coming on and and and hopefully we come on hopefully next time you're on, we're in the first inning of what you feel is is a nice run coming in the future. >> I am I am I I I have purchased tokens recently. So, for my perspective, >> for my perspective, I'm >> We're going to extras. >> I'm slowly deploying into into this market. So, I'm uh I don't think you can time bottoms and we could go down more, but I like look Bitcoin, if you like Bitcoin at 125, why do you not like it at 90 if you're thinking long long term, right? Like >> that's the golden question, right? Uh all right, Joshua, thank you so much, man.

>> All right, thanks for having me on. If y'all are making swaps or trades right now, highly recommend you check out Milkroad Swap. This is a DEX that we built in partnership with Cow Protocol. Why do we build it? Not to make money, just honestly. So we could have a place to do our swaps for the lowest fees that we could find. This is the fees on Ethereum, Arbitum, and Bass are only.15% fees. Uh this is a huge difference from uh other centralized exchanges that charge half a percent or even up to 1.2% fees on their swaps. Also, you can swap on Salana all at swap.mmillgro.com.

Check it out today. You won't be upset. And you can join me in my favorite place to make swaps on chain. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milk Road daily and pro newsletters and start investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.